LOAN AND SECURITY AGREEMENT
THIS LOAN AND SECURITY AGREEMENT (as amended, modified or supplemented
from time to time, this "Agreement") made as of June 1, 2001, by and
between LaSalle Bank National Association (in its individual capacity,
"LaSalle"), a national banking association, with its chief executive
offices located at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ 60603-
4105, for itself, as a Lender, and as Agent ("Agent"), for all lenders
that are now or hereafter parties to this Agreement (the "Lenders"),
Congress Financial Corporation (Central), an Illinois corporation
("Congress"), as a Lender with its principal office located at ▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, and AMCON
Distributing Company, a Delaware corporation ("Borrower"), with its
chief executive office located at ▇▇▇▇▇ ▇ ▇▇▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇▇▇▇
▇▇▇▇▇.
WITNESSETH:
WHEREAS, prior hereto, LaSalle made certain loans, extensions of
credit and other financial accommodations to Borrower pursuant to that
certain Loan and Security Agreement dated February 25, 1998, by and
between LaSalle and Borrower, as amended from time to time (the "Prior
Loan Agreement");
WHEREAS, LaSalle and the other Lenders desire to amend and restate the
Prior Loan Agreement pursuant to the terms of this Agreement; and
WHEREAS, Borrower may, from time to time, request Loans from Agent or
any other Lender, and the parties wish to provide for the terms and
conditions upon which such Loans, if made by Agent or any other Lender
pursuant hereto, shall be made.
NOW, THEREFORE, in consideration of any Loan (including any Loan by
renewal or extension) hereafter made to Borrower by Agent or any other
Lender, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged by Borrower, the parties
agree as follows:
1. DEFINITIONS:
(a) "Account", "Account Debtor", "Chattel Paper, "Documents",
"Equipment", "General Intangibles", "Goods", "Instruments,
"Inventory", and "Investment Property" shall have the respective
meanings assigned to such terms, as of the date of this Agreement, in
the Illinois Uniform Commercial Code.
(b) "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, Borrower, (ii) which beneficially
owns or holds five percent (5%) or more of the voting control or
equity interests of Borrower, or (iii) five percent (5%) or more of
the voting control or equity interests of which is beneficially owned
or held by Borrower.
(c) "Agent" shall mean LaSalle or its successor appointed pursuant
to Paragraph 15 of Exhibit A, acting in its capacity as Agent for, and
on behalf of all Lenders.
(d) "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 permitted or required to
close.
(e) "Collateral" shall mean all of the property of Borrower
described in paragraph 4 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.
(f) "Default Rate" shall mean the rate per annum equal to the
highest rate applicable to the Loans from time to time, plus two
percent (2%).
(g) "Eligible Account" shall mean an Account owing to 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 Borrower, 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 Borrower
in the ordinary course of 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 Borrower in
the ordinary course of Borrower's business, and such Goods have been
completed in accordance with the Account Debtor's specifications (if
any) and delivered to the Account Debtor, 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 Borrower has possession of,
or 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 for invoices with seven (7) day terms
or less or sixty (60) days past the invoice date 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 for invoices with seven (7) day terms or less or sixty
(60) days past the invoice date 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 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 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 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) 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 Borrower at its election; or (z) 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;
(xi) it is an Account which arises out of a sale made in the
ordinary course of Borrower's business;
(xii) the Inventory, the sale of which gave rise to such
Account, was delivered by Borrower to an Account Debtor at a location
of Borrower identified on Exhibit B or shipped to an Account Debtor at
an address located within the United States of America and, to the
knowledge of Borrower, no such Inventory was to be shipped out of the
United States of America by such Account Debtor;
(xiii) 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 Borrower
to the manufacturer thereof for a full refund), as with sales made on
a ▇▇▇▇-and-hold, guaranteed sale, sale on approval, sale or return or
consignment basis;
(xiv) 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 Borrower contained in this
Agreement;
(xv) it is not an Account which, when added to a particular
Account Debtor's other indebtedness to 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 subparagraph 1(xv) shall be Eligible Accounts to the
extent of such credit limit); and
(xvi) 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.
(h) "Eligible Cigarette Inventory" shall mean (i) Eligible
Inventory of Borrower consisting of cigarettes which are acceptable to
Agent in its sole discretion for lending purposes and (ii) cigarette
tax stamps which are acceptable to Agent in its sole discretion for
lending purposes. Without limiting Agent's discretion, Agent shall,
in general, consider:
(i) Eligible Inventory consisting of cigarettes to be Eligible
Cigarette Inventory unless such cigarettes 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 jurisdictions tax stamps thereto renders
such cigarette inventory ineligible; and
(ii) cigarette tax stamps to be Eligible Cigarette Inventory if
such tax stamps have been paid in full with good funds by the Borrower
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 tax stamps
shall be ineligible.
(i) "Eligible Inventory" shall mean Inventory of 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, all of the following requirements:
(i) it is owned by Borrower, 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 B
(or other locations of which Agent has been advised in writing
pursuant to subparagraph 10(c) hereof) and is not in transit except to
the extent that it may be in transit to another location listed on
Exhibit B on vehicles owned by Borrower;
(iii) it is held for sale or lease or furnishing under contracts
of service, and 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 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
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 Borrower contained in
this Agreement.
(j) "Environmental Indemnity Agreement" shall mean that certain
Environmental Indemnity Agreement of even date herewith executed and
delivered by Borrower to the Bank, as amended or restated from time to
time.
(k) "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 Borrower's business or facilities owned or operated by
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.
(l) "ERISA" shall mean the Employee Retirement Income Security Act
of 1974, as amended, modified or restated from time to time.
(m) "Event of Default" shall have the meaning specified in
paragraph 12 hereof.
(n) "GAAP" shall mean generally accepted accounting principals
consistently applied from time to time.
(o) "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).
(p) "Indemnified Party" shall have the meaning specified in
paragraph 14 hereof.
(q) "Interest Period" shall have the meaning specified in
paragraph 3 of Exhibit A of the Agreement hereto.
(r) "Issuing Bank" shall mean LaSalle or any other financial
institution acceptable to Agent.
(s) "Lender" or Lenders" shall mean individually and collectively,
LaSalle, Congress and any other person who becomes a party to this
Agreement pursuant to Paragraph (16) of Exhibit A.
(t) "Letter of Credit" shall mean any letter of credit issued by
Issuing Bank on behalf of Borrower.
(u) "Letter of Credit Obligations" 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 a Loan hereunder.
(v) "Liabilities" shall mean any and all obligations, liabilities,
indebtedness, Rate Hedging Obligations and Letter of Credit
Obligations of Borrower to Lenders and/or Agent of any and every kind
and nature arising under this Agreement, any Letters of Credit or the
Other Agreements, 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.
(w) "LIBOR Rate" shall mean with respect to any LIBOR Rate Loan
for any Interest Period, a rate per annum equal to the offered rate
for deposits in United States dollars for a period equal to such
Interest period as it appears on Telerate page 3750 as of 11:00 a.m.
(London time) two Business Days prior to the first day of such
Interest Period. "Telerate page 3750" means the display designated as
"Page 3750" on the Telerate Service (or such other page as may replace
page 3750 of that service or such other service as may be nominated by
the British Bankers' Association as the vendor for the purpose of
displaying British Bankers' Association interest settlement rates for
United States dollar deposits.
(i) "LIBOR Rate Loans" shall mean the Loans bearing interest at
the rate set forth in paragraph 3(b) of Exhibit A of the Agreement.
(ii) "Loan Documents" shall mean, collectively, this Agreement and
the Other Agreements.
(iii)"Loans" shall mean all loans and advances made by or on behalf
of Lenders to or on behalf of Borrower hereunder, including, without
limitation, the Revolving Loan.
(x) "Lock Box" and "Lock Box Account" shall have the meanings
specified in paragraph 7 hereof.
(y) "Maximum Revolving Loan" shall have the meaning specified in
paragraph 1 of Exhibit A.
(z) "Maximum Loan Amount" shall mean, with respect to any Lender,
the maximum amount of Loans which such Lender has agreed to make and
Letters of Credit with respect to which such Lender has agreed to
participate, on an aggregate basis, pursuant to the terms and
conditions of this Agreement, as set forth on the signature page
hereto or in an Assignment and Acceptance Agreement executed by such
Lender.
(aa) "Obligor" shall mean Borrower and each other Person who is or
shall become primarily or secondarily liable for any of the
Liabilities.
(bb) "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 Borrower or
any other Person and delivered to Agent and/or any Lender in
connection with the Loans, the Letters of Credit and the other
transactions described in this Agreement, as each of the same may be
amended, modified or supplemented from time to time.
(cc) "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 Borrower and,
if Borrower is a partnership, the general partner of Borrower.
(dd) "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 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 Borrower's ability to use
such real property for its intended purpose in connection with
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
specifically permitted by the Requisite Lenders in writing; (vi)
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:
(vii) liens for taxes not yet due or for taxes which are being
contested in good faith and by appropriate proceedings and for which
adequate reserves are being maintained; and (viii) liens arising in
connection with a Permitted Real Estate Financing, provided that such
liens only attached to the real estate financed thereby.
(ee) "Permitted Real Estate Financing" shall mean any sale and
leaseback of any real estate owned in fee simple by Borrower on the
date hereof and any financing secured solely by real estate owned by
Borrower in fee simple on the date hereof; provided, that in
connection with any such financing, Borrower shall have caused the
Person providing such financing to execute landlord and/or mortgagee
agreements in favor of, and in form and substance satisfactory to,
Agent.
(ff) "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.
(gg) "Prime Rate Loans" shall mean the Loans bearing interest at
the rates set forth in paragraph 3(a) of Exhibit A of the Agreement.
(hh) "Pro Rata Share" shall mean at any time, with respect to any
Lender, a fraction (expressed as a percentage in no more than four (4)
decimal places), the numerator of which shall be the Maximum Loan
Amount of such Lender at such time and the denominator of which shall
be the aggregate amount of the Maximum Loan Amounts of all Lenders at
such time.
(ii) "Rate Hedging Obligations": shall mean any and all obligations
of Borrower 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 Borrower 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.
(jj) "Requisite Lenders" shall mean at any time Lenders having, in
the aggregate, Pro Rata Shares of at least sixty-six and two-thirds
percent (66.67%) at such time.
(kk) "Revolving Loan Limit" shall have the meaning specified in
paragraph 1 of Exhibit A.
(ll) "Revolving Loans" shall mean the loans provided by the Lenders
to Borrower from time to time pursuant to Section 2(a) of this
Agreement.
(mm) "Revolving Notes" shall mean, collectively, the promissory
notes executed and delivered by Borrower to each Lender from time to
time in the principal amount of such Lender's Pro Rata Share of the
Revolving Loans in the form of Exhibit C attached hereto.
(nn) "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 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 Borrower or any partnership of which Borrower is
a general partner.
(oo) "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 (i) to be paid by
Agent and/or (ii) to be withheld or deducted from any payment
otherwise required hereby to be made by Borrower to Agent; provided,
that the term "Tax" shall not include any taxes imposed upon the net
income of Agent.
(pp) "Term" shall have the meaning specified in paragraph 9 hereof.
(qq) "Title" shall mean any certificate of origin, document,
instrument, certificate or agreement specified by the applicable
jurisdiction that evidences the interest in a Vehicle (whether new or
used, owned or leased) of Borrower.
(rr) "Vehicle" shall mean any automobile, cargo van, truck or
trailer to which title thereto is evidenced by a Title.
2. LOANS.
(a) Revolving Loans.
(i) Subject to the terms and conditions of this Agreement
(including Exhibit A) and the Other Agreements, during the Term, from
the date hereof, through and including May 31, 2004, each Lender,
severally and not jointly, shall, absent the occurrence of an Event of
Default, make its Pro Rata Share of revolving loans to Borrower as
Borrower shall from time to time request up to such Lender's Pro Rata
Share of the Maximum Revolving Loan (the "Revolving Loans"); provided
that Agent may, but shall not be obligated to, make such Revolving
Loans to Borrower on behalf of Lenders as a "Disproportionate Advance"
(as defined below). The aggregate unpaid principal balance of all
Revolving Loans outstanding at any one time will not exceed the lesser
of (i) the Revolving Loan Limit, or (ii) the Maximum Revolving Loan
minus the outstanding Letter of Credit Obligations. The Revolving
Loans shall bear interest at the rates set forth in paragraph 3 of
Exhibit A. All Liabilities shall be repaid upon the earlier to occur
(i) the end of the Term, if any party elects to terminate this
Agreement as of the end of any such term, and (ii) the acceleration of
the Liabilities pursuant to paragraph 13 of this Agreement. If at any
time the aggregate outstanding Revolving Loans exceed the Revolving
Loan Limit or the Maximum Revolving Loan less the Letter of Credit
Obligations, or any portion of the Revolving Loan exceeds any
applicable sublimit set forth in Exhibit A, Borrower shall
immediately, and without the necessity of a demand by Agent, pay to
Agent such amount as may be necessary to eliminate such excess and
Agent shall apply such payment to the Revolving Loans; provided, that
if the outstanding principal balance of the Revolving Loans exceeds
the Revolving Loan Limit or any portion of the Revolving Loans exceeds
any applicable sublimit set forth in Exhibit A (an "Interim Advance"),
Agent may, in its sole discretion, permit such Interim Advance to
remain outstanding and continue to advance Revolving Loans to Borrower
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 Advance does not exceed $3,000,000, and (ii) the aggregate
outstanding principal balance of the Revolving Loans does not exceed
the Maximum Revolving Loan. If the Interim Advance is not repaid in
full within thirty (30) days of the initial occurrence of the Interim
Advance, no further advances may be made to Borrower without the
consent of the Requisite Lenders until the Interim Advance is repaid
in full. Borrower hereby authorizes Agent, in its sole discretion, to
charge any of 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. LaSalle hereby assigns to Congress,
without representation, warranty or recourse of any kind (except that
LaSalle represents and warrants to Congress that LaSalle has title to
such Revolving Loans free and clear of any liens or encumbrances
created by or through LaSalle), Congress' Pro Rata Share of the
outstanding Revolving Loans.
(ii) Contemporaneously herewith, the Borrower shall execute and
deliver to each Lender a promissory note in the form of Exhibit C
attached hereto in the principal amount of such Lender's Pro Rata
Share of the Revolving Loan.
(b) All Loans. All Loans shall, in Agent's sole discretion, be
evidenced by one or more promissory notes in form and substance
satisfactory to Agent. 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 Lenders. Neither Agent nor any Lender
shall be responsible for any failure by any other Lender to perform
its obligations to make advances hereunder approved by Agent, and the
failure of any Lender to make its Pro Rata Share of any Loan hereunder
shall not relieve any other Lender of its obligation, if any, to make
its Pro Rata Share of Loans hereunder nor require such other Lender to
make more than its Pro Rata Share of any Loans hereunder. If Borrower
makes a request for a Loan as provided herein Agent, at its option and
in its sole and absolute discretion, shall do either of the following:
(i) Advance the amount of the proposed Loan to Borrower
disproportionately (a "Disproportionate Advance") out of Agent's own
funds on behalf of Lenders, and request settlement in accordance with
paragraph 5 of Exhibit A such that upon such settlement each Lender's
share of the outstanding Loans (including, without limitation, the
amount of any Disproportionate Advance) equals its Pro Rata Share; or
(ii) Notify each Lender by telecopy or other similar form of
teletransmission of the proposed advance on the same Business Day
Agent is notified by Borrower of Borrower's request for an advance
pursuant to this paragraph 2 of this Agreement or within one Business
Day thereafter. Each Lender shall remit, to the demand deposit
account designated by Borrower, on or prior to twelve o'clock noon,
Chicago time, on the Business Day immediately succeeding the date of
such notification or with respect to an advance which is to be a LIBOR
Rate Loan, on the date such advance is to be made, immediately
available funds in an amount equal to such Lender's Pro Rata Share of
such proposed Loan.
If and to the extent that a Lender does not settle with Agent as
required under clause (ii) of this subparagraph 2(b), (i) Borrower
agrees to repay to Agent forthwith on demand such amount required to
be paid by such Lender to Agent, together with interest thereon, for
each day from the date such amount is made available to Borrower until
the date such amount is repaid to Agent, at the interest rate
applicable at such time for such Loans; provided, that Borrower's
obligation to repay such advance to Agent shall not relieve Lender of
its liability to Agent for failure to settle as provided in clause (i)
of this subparagraph 2(b), and (ii) such Lender shall pay to Agent,
for its own account, interest on such amount for each day from the
date such settlement was due until paid by such Lender or Borrower at
a rate per annum equal to the overnight Federal Funds Rates.
3. FEES AND CHARGES. Borrower shall pay to Agent, for the benefit of
Agent and Lenders, in addition to all other amounts payable hereunder,
the fees and charges set forth in Exhibit A. It is the intent of the
parties that the rate of interest and the other charges to Borrower
under this Agreement 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 Lenders may lawfully charge 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 Borrower.
4. GRANT OF SECURITY INTEREST TO AGENT.
(a) As security for the payment of all Loans now or in the future
made by Agent or Lenders to Borrower hereunder and for the payment or
other satisfaction of all other Liabilities, 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 Borrower, whether now or hereafter owned,
existing, acquired or arising and wherever now or hereafter located:
(1) all Accounts (whether or not Eligible Accounts) and all Goods
whose sale, lease or other disposition by Borrower has given rise to
Accounts and have been returned to, or repossessed or stopped in
transit by, Borrower; (2) all Chattel Paper, Instruments, Documents
and General Intangibles (including, without limitation, all patents,
patent applications, trademarks, trademark applications, tradenames,
trade secrets, goodwill, copyrights, copyright applications,
registrations, licenses, franchises, customer lists, tax refund
claims, claims against carriers and shippers, guarantee claims,
contracts rights, security interests, security deposits and rights to
indemnification); (3) all Inventory (whether or not Eligible
Inventory); (4) all Goods (other than Inventory), including, without
limitation, Equipment, vehicles and fixtures; (5) all Investment
Property; (6) all deposit accounts, deposits and cash; (7) any other
property of Borrower now or hereafter in the possession, custody or
control of Agent, 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 (8) 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 Borrower's books and records relating to any of
the foregoing and to Borrower's business. All liens granted to Agent
hereunder and under the Other Agreements and all Collateral delivered
to Agent hereunder and under the Other Agreements shall be deemed to
have been granted and delivered to Agent, for the benefit of Agent and
Lenders, to secure the Liabilities.
(b) LaSalle hereby assigns to the Agent, for the benefit of the
Agent and the Lenders, without representation, warranty or recourse of
any kind, all of LaSalle's right, title and interest in and to the
security interests and liens in and to the Collateral granted by
Borrower to LaSalle pursuant to the Prior Loan Agreement, and all
Uniform Commercial Code financing statements executed and delivered by
the Borrower to LaSalle in connection therewith.
5. PRESERVATION OF COLLATERAL AND PERFECTION OF SECURITY INTERESTS
THEREIN. Borrower shall, at Agent's request, at any time and from
time to time, 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 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 for the benefit of Agent
and Lenders (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. Borrower irrevocably hereby makes, constitutes and
appoints Agent (and all Persons designated by Agent for that purpose)
as Borrower's true and lawful attorney and agent-in-fact to execute
and/or 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.
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.
6. POSSESSION OF COLLATERAL AND RELATED MATTERS. Until an Event of
Default has occurred, Borrower shall have the right, except as
otherwise provided in this Agreement, (i) in the ordinary course of
Borrower's business, to (a) sell, lease or furnish under contracts of
service any of Borrower's Inventory normally held by Borrower for any
such purpose, and (b) use and consume any raw materials, work in
progress or other materials normally held by Borrower for such
purposes 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 Borrower and (ii) to consummate
such other sales and dispositions of Collateral permitted under
subparagraph 11(k) hereof.
7. COLLECTIONS.
(a) Borrower shall direct all of its Account Debtors serviced out
of its Omaha, Nebraska, St. Louis, Missouri and Quincy, Illinois
locations to make all payments on the Accounts directly to one or more
post office boxes (each, a "Lock Box'") designated by, and under the
exclusive control of, Agent, at LaSalle or at another financial
institution acceptable to Agent. Borrower shall establish one or more
accounts (each a "Lock Box Account") in Agent's name with LaSalle or
such other financial institution acceptable to Agent, into which all
payments received in a Lock Box shall be deposited, and into which
Borrower will immediately deposit all payments received by Borrower
for Inventory, services or the disposition of other Collateral in the
identical form in which such payments were received, whether by cash
or check. If Borrower, any Affiliate or Subsidiary, any shareholder,
officer, director, employee or agent of Borrower or any Affiliate or
Subsidiary, or any other Person acting for or in concert with Borrower
shall receive any monies, checks, notes, drafts or other payments
relating to or as proceeds of Accounts or other Collateral, 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 a Lock Box Account or such other account as the
Agent may from time to time direct (each an "Other Account"). If any
Lock Box Account or Other Account is not established with LaSalle, the
financial institution with which such Lock Box Account or Other
Account is established shall acknowledge and agree, in a manner
satisfactory to Agent, that the amounts on deposit in such Lock Box
Account or Other Account are the sole and exclusive property of Agent,
that such financial institution has no right to setoff against such
Lock Box Account or Other Account or against any other account
maintained by such financial institution into which the contents of
the 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
such Lock Box Account or Other Account on a daily basis as such funds
are collected. Borrower agrees that all payments made to such Lock
Box Account or Other 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 LaSalle until the earlier of
(i) the last 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 held in such cash collateral account may be disbursed,
at Borrower's discretion, to Borrower so long as after giving effect
to such disbursement, Borrower's availability under paragraph 1 of
Exhibit A of the Agreement at such time equals or exceeds the
outstanding Liabilities at such time. If any Lock Box Account or
Other Account is established with LaSalle, Borrower agrees to pay all
fees, costs and expenses in connection with opening and maintaining
such Lock Box Account or Other Account and depositing for collection
by LaSalle any check or other item of payment received by Agent on
account of the Liabilities. All of such fees, costs and expenses
shall constitute Liabilities hereunder, shall be payable to Agent by
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 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 Borrower's behalf. For the purpose
of this paragraph, Borrower irrevocably hereby makes, constitutes and
appoints Agent (and all Persons designated by Agent for that purpose)
as Borrower's true and lawful attorney and agent-in-fact (i) to
endorse 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 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 Borrower's mail is deposited,
and open and process all mail addressed to Borrower and deposited
therein.
(b) Agent may, at any time and from time to time after an Event of
Default has occurred, 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 Borrower's Accounts or
other amounts owed to Borrower by suit or otherwise; (ii) exercise all
of Borrower's rights and remedies with respect to proceedings brought
to collect any Accounts or other amounts owed to Borrower; (iii)
surrender, release or exchange all or any part of any Accounts or
other amounts owed to 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 Borrower
or other amount owed to Borrower upon such terms, for such amount and
at such time or times as Agent deems advisable; (v) prepare, file and
sign Borrower's name on any proof of claim in bankruptcy or other
similar document against any Account Debtor or other Person obligated
to Borrower; and (vi) do all other acts and things which are
necessary, in Agent's sole discretion, to fulfill Borrower's
obligations under this Agreement and to allow Agent to collect the
Accounts or other amounts owed to 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 Borrower's 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.
(c) For purposes of calculating interest, Agent shall, on the day
of receipt by Agent at its office in Chicago, Illinois of 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, 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.
(d) Agent, in its sole discretion, without waiving or releasing
any obligation, liability or duty of 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 Borrower to Agent on demand and,
until paid, shall bear interest at the highest rate then applicable to
Loans hereunder.
(e) Promptly upon Borrower's receipt of any portion of the
Collateral evidenced by an agreement, Instrument or Document,
including, without limitation, any Chattel Paper, 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 Borrower's attorney and agent-in-
fact, to endorse or assign the same on Borrower's behalf.
8.SCHEDULES AND REPORTS.
(a) Within ten (10) days after the close of each calendar month,
and at such other times as may be requested by Agent from time to time
hereafter, Borrower shall deliver to Agent (i) a schedule identifying
each Account and which Accounts constitute Eligible Accounts together
with copies of the invoices when requested by Agent (with evidence of
shipment attached) pertaining to each such Account, for the month (or
other applicable period) immediately preceding; and (ii) such
additional schedules, certificates, reports and information with
respect to the Collateral as Agent may from time to time require.
Agent, through its officers, employees or agents, shall have the
right, at any time and from time to time in Agent's name, in the name
of a nominee of Agent or in Borrower's name, to verify the validity,
amount or any other matter relating to any of Borrower's Accounts, by
mail, telephone, telegraph or otherwise. All costs, fees and expenses
incurred by Agent in this regard shall constitute Liabilities, payable
on demand.
(b) Without limiting the generality of the foregoing, Borrower
shall deliver to Agent, at least once a month (or more frequently when
requested by Agent), a report with respect to Borrower's Inventory.
Borrower shall immediately notify Agent of any event causing loss or
depreciation in value of Borrower's Inventory in excess of
$100,000.00.
(c) All schedules, certificates, reports and other items delivered
by Borrower to Agent hereunder shall be executed by an authorized
representative of Borrower and shall be in such form and contain such
information as Agent shall specify.
9. TERMINATION. This Agreement shall be in effect from the date
hereof until May 31, 2004 (the "Term"); provided, however, that the
security interests and liens created under this Agreement and the
Other Agreements shall survive until the repayment in full of the
Liabilities. At such time as Borrower has repaid all of the
Liabilities and this Agreement has terminated, Borrower shall deliver
to each Lender and Agent a release, in form and substance satisfactory
to such Lender or Agent, of all obligations and liabilities of such
Lender or Agent and its officers, directors, employees, agents,
parents, subsidiaries and affiliates to Borrower, and if Borrower is
obtaining new financing from another lender, Borrower shall deliver
such lender's indemnification of Agent, in form and substance
satisfactory to Agent, for checks which Agent has credited to
Borrower's account, but which subsequently are dishonored for any
reason or for automatic clearinghouse or wire transfers not yet posted
to Borrower's account.
10. REPRESENTATIONS, WARRANTIES AND COVENANTS. Borrower hereby
represents, warrants and covenants that:
(a) the financial statements delivered or to be delivered by
Borrower to Agent and Lenders at or prior to the date of this
Agreement and at all times subsequent thereto accurately reflect in
all material respects the financial condition of Borrower, and there
has been no material adverse change in the financial condition, the
operations or any other status of Borrower since the date of the
financial statements delivered to Agent and Lenders most recently
prior to the date of this Agreement;
(b) (i) the office where Borrower keeps its books, records and
accounts (or copies thereof) concerning the Collateral, Borrower's
chief executive office and all of Borrower's other places of business,
locations of Collateral and post office boxes and locations of bank
accounts (other than those bank accounts at LaSalle) are as set forth
in Exhibit B; and (ii) Borrower shall promptly (but in no event less
than ten (10) days prior thereto) advise Agent in writing 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 Borrower's books, records
and accounts (or copies thereof), the opening or closing of any post
office box of Borrower or the opening or closing of any bank account;
(c) the Collateral, including, without limitation, the Equipment
(except any part thereof which Borrower shall have advised Agent in
writing consists of Collateral normally used in more than one state)
is and shall be kept, or, in the case of vehicles, based, only at the
addresses set forth on Exhibit B, and at other locations within the
continental United States of which Agent has been advised by Borrower
in writing;
(d) if any of the Collateral consists of Goods of a type normally
used in more than one state, whether or not actually so used, (i)
Borrower shall immediately give written notice to Agent of any use of
any such Goods in any state other than a state in which Borrower has
previously advised Agent such Goods shall be used, and (ii) such Goods
shall not, unless Agent shall otherwise consent in writing, be used
outside of the continental United States;
(e) Borrower has not made, and shall not make, any loans or
advances to any Affiliate or other Person except for (i) advances to
employees, officers and directors of Borrower for travel, salaries or
bonuses and other expenses arising in the ordinary course of
Borrower's business, and, (ii) provided no Event of Default then
exists, (a) loans to Hawaiian Natural Water Company, a Hawaiian
corporation ("Hawaiian Natural"), in an aggregate principal amount not
to exceed $2,000,000.00 outstanding at any time, and (b) other
advances to Borrower's Subsidiaries, other than Hawaiian Natural, in
an aggregate principal amount not to exceed $500,000.00 outstanding at
any time.
(f) each Account or item of Inventory which Borrower shall,
expressly or by implication, request Agent to classify as an Eligible
Account, as 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, and Borrower
shall promptly notify Agent in writing if any such Eligible Account,
Eligible Inventory or Eligible Cigarette Inventory shall subsequently
become ineligible;
(g) Borrower is, and shall at all times during the Term be the
lawful owner of all Collateral now purportedly owned or hereafter
purportedly acquired by 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;
(h) 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.
Borrower's execution, delivery and performance of this Agreement and
the Other Agreements does not and shall not conflict with the
provisions of the organizational documents of Borrower, any statute,
regulation, ordinance or rule of law, or any agreement, contract or
other document which may now or hereafter be binding on Borrower, and
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 Borrower's property (other than
Permitted Liens) under any existing indenture, mortgage, deed of
trust, loan or credit agreement or other agreement or instrument by
which Borrower or any of its property may be bound or affected;
(i) there are no actions or proceedings which are pending or
threatened against Borrower which might result in any material adverse
change in its business, property, assets, operations or condition,
financial or otherwise, and Borrower shall, promptly upon becoming
aware of any such pending or threatened action or proceeding, give
written notice thereof to Agent;
(j) (i) Borrower has obtained and shall maintain all governmental
consents, franchises, certificates, licenses, authorizations,
approvals and permits, the lack of which would have a material adverse
effect on its business property, assets, operations or condition
financial or otherwise; and (ii) Borrower is and shall remain 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 its business, property,
assets, operations or condition, financial or otherwise;
(k) all written information now, heretofore or hereafter furnished
by Borrower to Agent and Lenders is and shall be true and correct as
of the date with respect to which such information was or is
furnished;
(l) Borrower is not conducting, permitting or suffering to be
conducted, nor shall it conduct, permit or suffer to be conducted, any
activities pursuant to or in connection with which any of the
Collateral is now, or will (while any Liabilities remain outstanding)
be owned by any Affiliate; provided, however, that Borrower may enter
into 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 Borrower than the terms upon which
such transfers or transactions would have been made had they been made
to or with a Person that is not an Affiliate and, in connection
therewith, may transfer cash or property to Affiliates for fair value;
(m) Borrower's name has always been as set forth on the first page
of this Agreement and Borrower uses no tradenames, assumed names,
fictitious names or division names in the operation of its business,
except as otherwise disclosed in writing to Agent; Borrower shall
notify Agent in writing within ten (10) days of the change of its name
or the use of any tradenames, assumed names, fictitious names or
division names not previously disclosed to Agent in writing;
(n) with respect to Borrower's Equipment: (i) Borrower has good
and indefeasible and merchantable title to and ownership of all
Equipment; (ii) Borrower shall keep and maintain the Equipment in good
operating condition and repair and shall make all necessary
replacements thereof and repairs thereto so that the value and
operating efficiency thereof shall at all times be preserved and
maintained; (iii) Borrower shall not permit any such items to become a
fixture to real estate unless such real estate is owned by Borrower
and is subject to a mortgage in favor of Agent or to become an
accession to other personal property; and (iv) Borrower, immediately
on demand by Agent, shall deliver to Agent any and all evidence of
ownership of, including, without limitation, certificates of title and
applications of title to, any of the Equipment;
(o) this Agreement and the Other Agreements to which Borrower is a
party are the legal, valid and binding obligations of Borrower and are
enforceable against Borrower in accordance with their respective
terms;
(p) Borrower is and shall remain solvent, is and shall be able to
pay its debts as they become due, has and shall continue to have
capital sufficient to carry on its business, now owns and shall
continue to own property having a value both at fair valuation and at
present fair saleable value 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;
(q) Borrower is not now obligated, nor shall it create, incur,
assume or become obligated (directly or indirectly), for any loans or
other indebtedness for borrowed money other than the Loans, except
that Borrower may (i) borrow money from a Person other than Agent or
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 Requisite
Lenders is executed and delivered to Agent relative thereto;
(ii) maintain any present indebtedness to any Person which has been
disclosed to Agent in writing and consented to in writing by Agent;
(iii) incur unsecured indebtedness to trade creditors in the ordinary
course of Borrower's business; (iv) incur purchase money indebtedness
or capitalized lease obligations in connection with capital
expenditures permitted pursuant to subparagraph 11(p) of this
Agreement; (v) incur indebtedness constituting Permitted Real Estate
Financing; and (vi) incur indebtedness to Gold Bank in a principal
amount not to exceed $2,000,000.00 which shall be unsecured or secured
only by real estate;
(r) Borrower does not own any margin securities except as
disclosed in Borrower's Form 10-K for the period ending September 30,
2000, 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;
(s) except as otherwise disclosed in writing to Agent, Borrower
has no Parents, Subsidiaries or other Affiliates or divisions, nor is
Borrower engaged in any joint venture or partnership with any other
Person;
(t) Borrower is duly organized, validly existing and in good
standing in its state of organization and 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;
(u) Borrower is not in default under any material contract, lease
or commitment to which it is a party or by which it is bound, nor does
Borrower know of any dispute regarding any contract, lease or
commitment which would have a material adverse effect on its business,
property, assets, operations of condition, financial or otherwise;
(v) there are no controversies pending or threatened between
Borrower and any of its employees, other than employee grievances
arising in the ordinary course of business which would not, in the
aggregate, have a material adverse effect on its business, property,
assets, operations or condition, financial or otherwise, and 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 its
business, property, assets, operations or condition, financial or
otherwise;
(w) Borrower possesses, and shall continue to possess, adequate
licenses, patents, patent applications, copyrights, service marks,
trademarks, trademark applications, tradestyles and tradenames to
continue to conduct its business as heretofore conducted by it;
(x) (i) Borrower has not 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 any Environmental Law or
any license, permit, certificate, approval or similar authorization
thereunder and the operations of the Borrower comply in all material
respects with all Environmental Laws and all licenses, permits,
certificates, approvals and similar authorizations thereunder; (ii)
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 the Borrower's
knowledge threatened, and Borrower shall immediately notify Agent upon
becoming aware of any such investigation, proceeding, complaint,
order, directive, claim, citation or notice and take prompt and
appropriate actions to respond thereto, with respect to any non-
compliance with or violation of the requirements of any Environmental
Law by the 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 the Borrower or its business,
operations or assets or any properties at which the Borrower has
transported, stored or disposed of any Hazardous Materials; (iii)
Borrower has no 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; and (iv) without limiting the generality of the
foregoing, Borrower shall, following the determination by Agent that
there is non-compliance, or any condition which requires any action by
or on behalf of Borrower in order to avoid any non-compliance, with
any Environmental Law, at 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 result of such tests, a proposed plan for
remediation and an estimate of the costs thereof; and
(y) Borrower has paid and discharged, and shall at all times
hereafter promptly pay and discharge 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 and will promptly notify the Agent of (i) 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 the Borrower, any benefits of which are, or are required
to be, guaranteed by the PBGC; (ii) receipt of any notice from the
PBGC of its intention to seek termination of any Plan or appointment
of a trustee therefor and (iii) its intention to terminate or withdraw
from any Plan; provided, that Borrower shall not terminate any Plan or
withdraw therefrom if such withdrawal or termination shall result in
any liability to Borrower.
(z) Borrower represents, warrants and covenants to Agent and
Lenders that all representations and warranties of Borrower contained
in this Agreement (whether appearing in paragraphs 10 or 11 hereof or
elsewhere) shall be true at the time of Borrower's execution of this
Agreement, shall survive the execution, delivery and acceptance hereof
by the parties hereto and the closing of the transactions described
herein or related hereto, shall remain true until the repayment in
full and satisfaction of all of the Liabilities and termination of
this Agreement, and shall be remade by Borrower at the time each Loan
is made pursuant to this Agreement.
11. ADDITIONAL COVENANTS OF BORROWER. Until payment and satisfaction
in full of all Liabilities and termination of this Agreement, unless
Borrower obtains Requisite Lenders' prior written consent waiving or
modifying any of Borrower's covenants hereunder in any specific
instance, Borrower agrees as follows:
(a) Borrower shall at all times keep accurate and complete books,
records and accounts with respect to all of 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 B;
(b) Borrower agrees to deliver to Agent the following financial
information, all of which shall be prepared in accordance with
generally accepted accounting principles consistently applied: (i) no
later than forty-five (45) days after the end of each of the first
three quarters of Borrower's fiscal year a balance sheet, operating
statement and reconciliation of surplus of Borrower, which quarterly
financial statements may be unaudited but shall be certified by the
Chief Financial Officer of Borrower; (ii) no later than one hundred
twenty (120) days after the end of each of Borrower's fiscal years,
audited annual financial statements with an unqualified opinion by
independent certified public accountants selected by Borrower and
reasonably satisfactory to Agent and (iii) contemporaneously with the
financial statements, a duly completed certificate and annual
financial statements, a duly completed certificate dated the date of
such financial statements, in form and substance satisfactory to Agent
and signed by an authorized officer of Borrower, containing
calculations of Borrower's compliance with the financial covenants
contained in this Agreement and Exhibit A;
(c) Borrower shall promptly advise Agent and each Lender in
writing of any material adverse change in the business, property,
assets, operations or condition, financial or otherwise, of Borrower,
the occurrence of any Event of Default hereunder or the occurrence of
any event which, if uncured, will become an Event of Default hereunder
after notice or lapse of time (or both);
(d) Agent, or any Persons designated by it, shall have the right
to call at 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 Borrower's books, records,
journals, orders, receipts and any correspondence and other data
relating to Borrower's business, the Collateral or any transactions
between the parties hereto, and shall have the right to make such
verification concerning Borrower's business as Agent may consider
reasonable under the circumstances. Any Lender may, at its own
expense accompany Agent in any such inspection. Borrower shall
furnish to Agent such information relevant to Agent's or any Lender's
rights under this Agreement as Agent shall at any time and from time
to time request. Borrower authorizes Agent and each Lender to discuss
the affairs, finances and business of Borrower with any officers,
employees or directors of Borrower or with Parent or any Affiliate or
the officers, employees or directors of Parent or any Affiliate, and
to discuss the financial condition of Borrower with Borrower's
independent public accountants. Any such discussions shall be without
liability to Agent, any Lender or to Borrower's independent public
accountants. Borrower shall pay to Agent all customary fees and out-
of-pocket expenses incurred by Agent in the exercise of its rights
hereunder (provided that such fees and out-of-pocket expenses incurred
by Bank pursuant to this subparagraph 11(d) after the date hereof
while no Event of Default exists shall not exceed $15,000.00 in any
calendar year), and all of such fees 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;
(e) 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 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. 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 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, Borrower
shall cause to be executed and delivered to Agent an assignment of
proceeds of its business interruption insurance policies. 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. Any proceeds of insurance paid directly
to Borrower shall be used by Borrower to repair or restore the damaged
or lost property which gave rise to the insurance claim. Borrower
irrevocably makes, constitutes and appoints Agent (and all officers,
employees or agents designated by Agent) as 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 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; and
(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 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 delivered to Agent, together with evidence of
payment of all premiums therefor; each such policy shall contain an
endorsement showing Agent and each Lender as additional insured
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 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 Borrower 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 Borrower's interests or pay any claim made by or
against Borrower with respect to the Collateral. Such insurance may
be more expensive than the cost of insurance Borrower may be able to
obtain on its own and may be cancelled only upon Borrower 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 Borrower to Agent and,
until paid, shall bear interest at the highest rate then applicable to
Loans hereunder;
(f) Borrower shall not use the Collateral, or any part thereof, in
any unlawful business or for any unlawful purpose or use or maintain
any of the Collateral in any manner that does or could result in
material damage to the environment or a violation of any applicable
Environmental Laws; shall keep the Collateral in good condition,
repair and order; shall permit Agent and each Lender to examine any of
the Collateral at any time and wherever the Collateral may be located;
shall not permit the Collateral, or any part thereof, to be levied
upon under execution, attachment, distraint or other legal process;
shall not sell, lease, grant a security interest in or otherwise
dispose of any of the Collateral except as expressly permitted by this
Agreement; shall not settle or adjust any Account identified by
Borrower as an Eligible Account or with respect to which the Account
Debtor is an Affiliate without the consent of Agent, provided, that
following the occurrence of an Event of Default, Borrower shall not
settle or adjust any Account without the consent of Agent; and shall
not secrete or abandon any of the Collateral, or remove or permit
removal of any of the Collateral from any of the locations listed on
Exhibit B (or such other locations as Borrower shall have notified
Agent in writing pursuant to subparagraph 10(c) hereof), except for
the removal of Inventory sold in the ordinary course of Borrower's
business as permitted herein;
(g) all monies and other property obtained by Borrower from Agent
and/or Lenders pursuant to this Agreement shall be used solely for
business purposes of Borrower;
(h) 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;
(i) 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 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 Borrower's financial statements; (ii) the contesting of any
such payment does not give rise to a lien for taxes; (iii) 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 Borrower fails to prosecute such contest with
reasonable diligence, Agent may apply the money so deposited in
payment of such taxes. If Borrower fails to pay any such taxes and in
the absence of any such contest by 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 Borrower to Agent on demand, and, until paid, shall bear
interest at the highest rate then applicable to Loans hereunder;
(j) Borrower shall not 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;
(k) Borrower shall not, without the prior written consent of the
Requisite Lenders, (i) enter into any merger or consolidation; (ii)
sell, lease or otherwise dispose of any of its assets other than in
the ordinary course of its business and other than asset sales and
dispositions involving assets with a value of less than $250,000.00 in
any transaction or series of related transactions, provided that the
proceeds of all such dispositions, net of reasonable out-of-pocket
disposition expenses, are applied to the Liabilities; (iii) purchase
the stock or all or substantially all of the assets of any Person or
division of such Person; or (iv) enter into any other transaction
outside the ordinary course of 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 (including any
rights, options or warrants with respect thereto) for consideration in
excess of $100,000 in the aggregate during any calendar year, 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 made pursuant to the terms of
Borrower's employee stock option plan;
(l) Borrower shall not declare or pay any dividend or other
distribution (whether in cash or in kind) on any class of its stock or
on account of any equity interest in Borrower nor shall Borrower
redeem, retire, purchase or otherwise acquire all or any portion of
the stock of Borrower, except that, provided no Event of Default then
exists, Borrower may (1) redeem stock of odd lot shareholders in an
amount not to exceed $50,000.00 per calendar year, and (2) pay
dividends to its shareholders for Borrower's 2001 fiscal year in an
amount not to exceed twelve cents ($0.12) per share of Borrower's
stock;
(m) Borrower shall not 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;
(n) Borrower shall not amend its organizational documents in any
manner which could have an adverse effect on the Agent, Lenders or
their interest in any Collateral or change its fiscal year or enter
into a new line of business materially different from Borrower's
current business;
(o) Borrower shall reimburse Agent and Lenders for all costs and
expenses, including, without limitation, legal expenses and reasonable
attorneys' fees, incurred by Agent and, after the occurrence of a
Default or Event of Default, Lenders in connection with the (i)
documentation and consummation of this transaction and any other
transactions between Borrower and Agent, 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) syndication of the Loans; (iii) collection,
protection or enforcement of any rights in or to the Collateral; (iv)
collection of any Liabilities; and (v) administration and enforcement
of any of Agent's or Lender's rights under this Agreement. Borrower
shall also pay to Agent for its own account and not for the benefit of
the other Lenders, all normal service charges with respect to all
accounts maintained by Borrower with Agent and any additional services
requested by Borrower from Agent. All such costs, expenses and
charges shall constitute Liabilities hereunder, shall be payable by
Borrower to Agent on demand, and, until paid, shall bear interest at
the highest rate then applicable to Loans hereunder;
(p) Borrower shall not purchase or otherwise acquire (including,
without limitation, acquisition by way of capitalized lease), or
commit to purchase or acquire, any fixed asset if, after giving effect
to such purchase or other acquisition, the aggregate cost of all such
fixed assets purchased or otherwise acquired would exceed
$3,000,000.00 during any fiscal year of Borrower; and
(q) Neither Borrower nor any Affiliate shall use any portion of
the proceeds of the Loans, either directly or indirectly, for the
purpose of (i) purchasing any securities underwritten or privately
placed by ABN AMRO Securities (USA) Inc. ("AASI"), an affiliate of
LaSalle, (ii) purchasing from AASI any securities in which AASI makes
a market, or (iii) refinancing or making payments of principal,
interest or dividends on any securities issued by Borrower or any
Affiliate, and underwritten, privately placed or dealt in by AASI.
12. DEFAULT. The occurrence of any one or more of the following
events shall constitute an "Event of Default" by Borrower hereunder:
(a) the failure of any Obligor to pay any of the Liabilities when
due or declared due by Agent;
(b) the failure of any Obligor to perform, keep or observe (i) any
of its covenants contained in paragraphs 4 or 6 hereof, subparagraphs
10(b), 10(c), 10(e), 10(g), 10(q), 11(c), or 11(k) hereof or paragraph
8 of Exhibit A, or (ii) any of its other covenants, conditions,
promises, agreements or obligations of such Obligor under this
Agreement or any of the Other Agreements and such failure shall
continue for ten (10) Business Days after Agent's notice to Borrower
of such failure;
(c) 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's business,
property, assets, operations or condition, financial or otherwise;
(d) [Reserved]
(e) the making or furnishing by any Obligor to 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;
(f) the loss, theft, damage or destruction of any of the
Collateral with a value in excess of $200,000.00 (to the extent not
covered by insurance), or (except as permitted hereby) sale, lease or
furnishing under a contract of service of, any of the Collateral;
(g) the creation (whether voluntary or involuntary) of, or any
attempt to create, any lien or other encumbrance upon any of the
Collateral, other than the Permitted Liens, or the making or any
attempt to make any levy, seizure or attachment thereof;
(h) 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
thirty (30) days after the commencement of such proceedings;
(i) 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 thirty (30) days after the commencement of such proceedings;
(j) the entry of any judgment or order 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;
(k) 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 or corporation;
(l) 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 pursuant to which such Person has
guaranteed to Agent and/or any other Lender the payment of all or any
of the Liabilities or has granted Agent and/or any other Lender 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;
(m) the institution in any court of a criminal proceeding against
any Obligor, or the indictment of any Obligor for any crime; and
(n) any material adverse change in the business, property, assets,
operations or condition, financial or otherwise of any Obligor, as
determined by the Agent in its reasonable judgment.
13. REMEDIES UPON AN EVENT OF DEFAULT.
(a) Upon the occurrence of an Event of Default described in
subparagraph 12(h) or 12(i) 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 Agent or the 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 Borrower's 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 Borrower's premises without cost to Agent. At Agent's
request, Borrower shall, at Borrower's 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 Borrower.
Borrower recognizes that if 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
reasonably and properly given if given at least five (5) calendar days
before such disposition. Any proceeds of any disposition 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 Loan shall be fully satisfied prior to applying such
proceeds to Borrower's Rate Hedging Obligations owed to LaSalle.
14. INDEMNIFICATION. Borrower agrees to defend (with counsel
satisfactory to Agent or a Lender, as applicable), protect, indemnify
and hold harmless Agent, 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 Borrower 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, Borrower 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 Borrower, be added to
the Liabilities of Borrower and be secured by the Collateral. The
provisions of this paragraph 14 shall survive the satisfaction and
payment of the other Liabilities and the termination of this
Agreement.
15. 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 (i) in the
case of Agent and LaSalle shall be sent to it at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, Attention: Asset Based Lending
Division, (ii) in the case of any other Lender, to its address set
forth in the signature page hereto or in an Assignment and Acceptance
Agreement whereby such party becomes a Lender pursuant to Paragraph 16
of Exhibit A, and in the case of Borrower shall be sent to it at its
principal place of business set forth on the first page of this
Agreement or as otherwise directed by Borrower in writing. All
notices shall be deemed received upon actual receipt thereof or
refusal of delivery.
16. CHOICE OF GOVERNING LAW; CONSTRUCTION; FORUM SELECTION. This
Agreement and the Other Agreements are submitted by Borrower to Agent
and each Lender for Agent's and such Lender's acceptance or rejection
at Agent's principal place of business as an offer by Borrower to
borrow monies from Agent and Lenders now and from time to time
hereafter, and shall not be binding upon Agent and Lenders 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, 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. BORROWER HEREBY
CONSENTS AND SUBMITS TO THE JURISDICTION OF ANY LOCAL, STATE OR
FEDERAL COURTS LOCATED WITHIN SAID CITY AND STATE. Borrower hereby
irrevocably appoints and designates the Secretary of State of
Illinois, whose address is Springfield, Illinois (or any other person
having and maintaining a place of business in such state whom Borrower
may from time to time hereafter designate upon ten (10) days written
notice to Agent and whom Agent has agreed in its sole discretion in
writing is satisfactory and who has executed an agreement in form and
substance satisfactory to Agent agreeing to act as such attorney and
agent), as Borrower's true and lawful attorney and duly authorized
agent for acceptance of service of legal process. Borrower agrees
that service of such process upon such person shall constitute
personal service of such process upon Borrower. BORROWER HEREBY
WAIVES ANY RIGHT IT MAY HAVE TO TRANSFER OR CHANGE THE VENUE OF ANY
LITIGATION BROUGHT AGAINST BORROWER BY AGENT IN ACCORDANCE WITH THIS
PARAGRAPH.
17. CAPITAL ADEQUACY. If after the date hereof, either (i) any change
in or in the interpretation of any law or regulation is introduced,
including, without limitation, with respect to reserve requirements,
applicable to Agent, any Lender or any other banking or financial
institution (each a "Funding Bank") from whom any of the Lenders
borrow funds or obtain credit, or (ii) a Funding Bank or any of the
Lenders complies with any future guideline or request from any central
bank or other governmental authority or (iii) a Funding Bank or any of
the Lenders determines that the adoption of any applicable law, rule
or regulation regarding capital adequacy, or any change therein, or
any change in the interpretation or administration thereof by any
governmental authority, central bank or comparable agency charged with
the interpretation or administration thereof has or would have the
effect described below, or a Funding Bank or any of the Lenders
complies with any request or directive regarding capital adequacy
(whether or not having the force of law) of any such authority,
central bank or comparable agency, and in the case of any event set
forth in this clause (iii), such adoption, change or compliance has or
would have the direct or indirect effect of reducing the rate of
return on any of the Lenders' capital as a consequence of its
obligations hereunder to a level below that which such Lender could
have achieved but for such adoption, change or compliance (taking into
consideration the Funding Bank's or Lenders' policies with respect to
capital adequacy) by an amount deemed by such Lender to be material,
and any of the foregoing events described in clauses (i), (ii) or
(iii) increases the cost to Agent, the Issuing Bank or any of the
Lenders of (A) funding or maintaining the Loans or (B) issuing, making
or maintaining any Letter of Credit or of purchasing or maintaining
any participation or subparticipation therein, or reduces the amount
receivable in respect thereof by Agent or any Lender, then Borrower
shall upon demand by Agent, pay to Agent, for the account of each
applicable Lender, additional amounts sufficient to indemnify the
Lenders against such increase in cost or reduction in amount
receivable. A certificate as to the amount of such increased cost and
setting forth in reasonable detail the calculation thereof shall be
submitted to Borrower by the applicable Lender, and shall be
conclusive absent manifest error.
18. 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.
19. POWER OF ATTORNEY. 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.
20. CONFIDENTIALITY. Borrower, Agent and Lenders hereby agree and
acknowledge that any and all information relating to Borrower which is
(i) furnished by Borrower to Agent and Lenders (or to any affiliate of
Agent or Lenders); and (ii) non-public, confidential or proprietary in
nature, shall be kept confidential by Agent and Lenders or such
affiliate in accordance with applicable law; provided, however, that
such information and other credit information relating to Borrower (i)
may be distributed by Agent or such affiliate to and may be exchanged
among, Lenders, any such affiliates, or Agent's or Lender's, or such
affiliate's directors, officers, employees, attorneys, affiliates,
assignees, participants, auditors and regulators; (ii) may be
furnished to any prospective assignee or participant in the Loans,
provided such prospective assignee or participant agrees to be bound
by the provisions of this paragraph 20; (iii) may be furnished to any
other person in connection with Agent's or any Lender's exercise of
its rights under this Agreement and the Other Agreements; and (iv)
upon the order of a court or other governmental agency having
jurisdiction over Agent or such affiliate, to any other party.
Borrower and Agent and Lenders further agree that this provision shall
survive the termination of this Agreement.
21. COUNTERPARTS. This Agreement 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.
22. WAIVER OF JURY TRIAL; OTHER WAIVERS.
(a) 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 BORROWER,
AGENT OR ANY LENDER OR WHICH, IN ANY WAY, DIRECTLY OR INDIRECTLY,
ARISES OUT OF OR RELATES TO THE RELATIONSHIP BETWEEN BORROWER AND
AGENT OR ANY LENDER. IN NO EVENT SHALL AGENT OR ANY LENDER BE LIABLE
FOR LOST PROFITS OR OTHER SPECIAL OR CONSEQUENTIAL DAMAGES.
(b) Borrower hereby waives demand, presentment, protest and notice
of nonpayment, and further waives the benefit of all valuation,
appraisal and exemption laws.
(c) BORROWER HEREBY WAIVES ALL RIGHTS TO NOTICE AND HEARING OF ANY
KIND PRIOR TO THE EXERCISE BY AGENT OF ITS RIGHTS TO REPOSSESS THE
COLLATERAL OF BORROWER WITHOUT JUDICIAL PROCESS OR TO REPLEVY, ATTACH
OR LEVY UPON SUCH COLLATERAL.
(d) Agent's and Lender's failure, at any time or times hereafter,
to require strict performance by Borrower of any provision of this
Agreement or any of the Other Agreements shall not waive, affect or
diminish any right of Agent or Lenders thereafter to demand strict
compliance and performance therewith. Any suspension or waiver by
Agent and Lenders 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 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 Borrower 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 Lenders unless such
suspension or waiver is in writing, signed by a duly authorized
officer of Agent and Lenders and directed to Borrower 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, LASALLE BANK NATIONAL ASSOCIATION,
a Delaware corporation a national banking association,
as Agent and a Lender
By-------------------------- By----------------------------
Its------------------------- Its---------------------------
Pro Rata Percentage: 72.7273%
Maximum Loan Amount: $40,000,015.00
CONGRESS FINANCIAL CORPORATION
(CENTRAL), an Illinois corporation,
as a Lender
By----------------------------
Its---------------------------
Pro Rata Percentage: 27.2727%
Maximum Loan Amount: $14,999,985.00
Address: ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
EXHIBIT B
BUSINESS AND COLLATERAL LOCATIONS
Attached to and made a part of that certain Loan and Security
Agreement of even date herewith between AMCON DISTRIBUTING COMPANY
("Borrower") and LASALLE BANK NATIONAL ASSOCIATION, as Agent and a
Lender and all other Lenders now or hereafter a party to the Loan and
Security Agreement.
A. Borrower's Business Locations (please indicate which location is
the chief executive office and at which locations originals and all
copies of Borrower's books, records and accounts are kept).
1. ▇▇▇▇▇ ▇ ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇ ▇▇▇▇▇ (Chief Executive Office and Location where originals
and all copies of Borrower's books, records and accounts are kept)
2. ▇▇▇▇ ▇▇▇▇ ▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
3. ▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
4. ▇▇▇▇ ▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
5. ▇▇▇ ▇ ▇▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
6. ▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
7. ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
8. ▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
9. ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
B. Other locations of Collateral (including, without limitation,
warehouse locations, processing locations, consignment locations) and all
post office boxes of Borrower. Please indicate the relationship of such
location to Borrower (i.e. public warehouse, processor, etc.).
1. N/A
C. Bank Accounts of Borrower (other than those at LaSalle):
Bank (with Address) Account Number Type of Account
1. ▇▇▇▇▇ Fargo 9440210031 Depository
2. ▇▇▇▇▇ Fargo Bank 9440210081 Depository
3. ▇▇▇▇▇ Fargo Bank 9440210073 Depository
4. ▇▇▇▇▇ Fargo Bank 9440101127 Depository Sweep
5. ▇▇▇▇▇ Fargo Bank 1155061101 Depository
6. ▇▇▇▇▇ Fargo Bank 1155034613 Depository
7. Bank of America 332200017152 Depository
8. Bank of America 583000051772 Depository
9. Bank of America 060110410320 Depository
▇▇.▇▇▇▇ of America 5045241065 Depository
▇▇.▇▇▇▇ of America 32200017152 Depository
EXHIBIT C
FORM OF REVOLVING NOTES
$-------------------- As of June 1, 2001
FOR VALUE RECEIVED, the undersigned, AMCON Distributing Company, a
Delaware corporation (the "Borrower"), on or before May 31, 2004,
promises to pay to the order of _______________________ (the "Lender")
at c/o LaSalle Bank National Association, as Agent for the Lenders,
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, in lawful money of
the United States of America and in immediately available funds, the
principal amount of ________________________ and __/100 Dollars
($__________), or such lesser amount as may then constitute the
Lender's Pro Rata Share of the unpaid aggregate principal amount of
the Revolving Loans.
The outstanding principal balance of the Borrower's Liabilities to
Agent for the benefit of the Lender under this Note shall be payable
pursuant to the terms of the Loan Agreement.
The Borrower further agrees to pay interest at said office, in like
money, on the unpaid principal amount owing hereunder from time to
time from the date hereof on the dates and at the rate specified in
the "Loan Agreement" (as defined below).
If any payment on this promissory note becomes due and payable on a
day other than a Business Day, the maturity thereof shall be extended
to the next succeeding Business Day, and with respect to payments of
principal, interest thereon shall be payable at the then applicable
rate during such extension.
This promissory note is one of the Revolving Notes referred to in that
certain Loan and Security Agreement dated as of June 1, 2001, as the
same shall be amended, restated or otherwise modified from time to
time (the "Loan Agreement"), among the Borrower, the Lender, certain
other financial institutions parties thereto and LaSalle Bank National
Association, as agent ("Agent"), and is subject to, and entitled to,
all provisions and benefits thereof and is subject to optional and
mandatory prepayment in whole or in part as provided therein.
Capitalized terms used herein without definition shall have the
meanings given to such terms in the Loan Agreement. The Loan
Agreement, among other things, provides for the making of Revolving
Loans by the Lender to the Borrower from time to time in an aggregate
amount not to exceed at any time outstanding the U.S. dollar amount
first above mentioned.
Upon the occurrence of any one or more of the Events of Default
specified in the Loan Agreement which have not been waived by the
Agent pursuant to the Loan Agreement, the Agent may take any or all of
the following actions, without prejudice to the rights of the Agent,
the Lender or any holder of this Note to enforce its claims against
the Borrower: (a) declare all Liabilities due hereunder to be
immediately due and payable (except with respect to any Event of
Default set forth in subparagraphs 12(h) or 12(i) of the Loan
Agreement, in which case all Liabilities due hereunder shall
automatically become immediately due and payable without the necessity
of any notice or other demand) without presentment, demand, protest or
any other action or obligation of the Lender; and/or (b) immediately
terminate the Loan Agreement and the loan commitments thereunder; and
at all times thereafter, all loans and advances made by the Lender
pursuant to the Loan Agreement shall be at the Lender's sole
discretion, unless such Event of Default is cured or waived.
This promissory note is secured by the Loan Agreement and other
collateral documents more particularly described in the Loan
Agreement.
The Borrower hereby waives presentment, demand, protest and notice of
any kind. No failure to exercise, and no delay in exercising any
rights hereunder on the part of the holder hereof shall operate as a
waiver of such rights.
The Borrower (and each one of them, if more than one) hereby
authorizes the Agent and the Lender to charge any account of the
Borrower for all sums due hereunder. Credit shall be given for
payments made in the manner and at the times provided in the Loan
Agreement. It is the intent of the parties that the rate of interest
and other charges to the Borrower under this Note shall be lawful;
therefore, if for any reason the interest or other charges payable
hereunder are found by a court of competent jurisdiction, in a final
determination, to exceed the limit which the Lender may lawfully
charge the Borrower, then the obligation to pay interest or 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 by the Lender to the Borrower.
The principal and all accrued interest hereunder may be prepaid by the
Borrower, in part or in full, at any time; provided, however, that the
Borrower shall pay the prepayment fee as provided in the Loan
Agreement, if any.
The Borrower waives the benefit of any law that would otherwise
restrict or limit Agent, the Lender or any affiliate thereof in the
exercise of its right, which is hereby acknowledged, to set-off
against the Liabilities, without notice and at any time after the
occurrence of an Event of Default, any indebtedness matured or
unmatured owing from Agent, the Lender or any affiliate thereof to the
Borrower. The Borrower waives every defense, counterclaim (other than
any claim which, if not made as a counterclaim, would be waived by
Borrower) or setoff which the Borrower may now have or hereafter may
have to any action by Agent or Lenders in enforcing this Note and/or
any of the other Liabilities, or in enforcing Agent's rights in the
Collateral and ratifies and confirms whatever Agent and Lenders may
do pursuant to the terms hereof and of the Loan Agreement and with
respect to the Collateral and agrees that Agent and Lenders shall not
be liable for any error in judgment or mistakes of fact or law except
with respect to acts of gross negligence or wilful misconduct.
The Borrower, any other party liable with respect to the Liabilities
and any and all endorsers and accommodation parties, and each one of
them, if more than one, waive any and all presentment, demand, notice
of dishonor, protest, and all other notices and demands in connection
with the enforcement of Agent's and the Lender's rights hereunder.
The loan evidenced hereby has been made and this Note has been
delivered at Chicago, Illinois. THIS NOTE 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, and shall be binding upon the
Borrower and the Borrower's legal representatives, successors and
assigns (and each of them, if more than one). If this Note contains
any blanks when executed by the Borrower, the Agent is hereby
authorized, without notice to the Borrower to complete any such blanks
according to the terms upon which the loan or loans were granted.
Wherever possible, each provision of this Note shall be interpreted in
such manner as to be effective and valid under applicable law, but if
any provision of this Note shall be prohibited by or be invalid under
such law, such provision shall be severable, and be ineffective to the
extent of such prohibition or invalidity, without invalidating the
remaining provisions of this Note.
To induce the Lender to make the loan evidenced by this Note, the
Borrower (i) irrevocably agrees that, subject to Agent's sole and
absolute election, all actions arising directly or indirectly as a
result or in consequence of this Note or any other agreement with the
Agent, any Lender, or the Collateral, shall be instituted and
litigated only in courts having its situs in the City of Chicago,
Illinois; (ii) hereby consents to the exclusive jurisdiction and venue
of any State or Federal Court located and having its situs in said
city; and (iii) waives any objection based on forum non-conveniens.
IN ADDITION, THE LENDER AND THE BORROWER (OR ANY ONE OF THEM, IF MORE
THAN ONE) HEREBY WAIVE TRIAL BY JURY IN ANY ACTION OR PROCEEDING WHICH
PERTAINS DIRECTLY OR INDIRECTLY TO THIS NOTE, THE LIABILITIES, THE
COLLATERAL, ANY ALLEGED TORTIOUS CONDUCT BY THE BORROWER AND AGENT OR
ANY LENDER OR WHICH IN ANY WAY, DIRECTLY OR INDIRECTLY, ARISES OUT OF
OR RELATES TO THE RELATIONSHIP BETWEEN THE BORROWER AND AGENT OR ANY
LENDER. In addition, the Borrower agrees that all service of process
shall be made as provided in the Loan Agreement.
As used herein, all provisions shall include the masculine, feminine,
neuter, singular and plural thereof, wherever the context and facts
require such construction.
AMCON Distributing Company,
a Delaware corporation
By:--------------------------
Title:-----------------------
EXHIBIT D
ASSIGNMENT AND ACCEPTANCE CERTIFICATE
This Assignment and Acceptance (the "Assignment and Acceptance") is
executed as of--------------------,------------------between ---------
------------("Assignor") and ------------------------- ("Assignee").
W I T N E S S E T H
WHEREAS, Assignor is party to a Loan and Security Agreement dated as
of June 1, 2001 (as may be amended from time to time, the "Agreement")
among AMCON Distributing Company ("Borrower"), LaSalle Bank National
Association, as a Lender ("LaSalle") and as agent ("Agent") for itself
and each other Lender (as defined in the Agreement), Congress
Financial Corporation (Central), an Illinois corporation ("Congress"),
as a Lender, and all other parties now or hereafter Lenders under the
Agreement;
WHEREAS, Assignor has agreed to assign a portion of its loans and
other financial accommodations to Borrower pursuant to the Agreement
to Assignee;
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 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 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, Agent and any other Lender are strictly limited
to those obligations under the Agreement unless otherwise explicitly
provided for herein. Upon the Assignment Effective Date (as defined
below), Assignee's Maximum Loan Amount shall be as set forth below
Assignee's signature hereto. After giving effect to the assignment
hereunder, Assignor's remaining Pro Rata Share and Maximum Loan
Amounts 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:
(1) 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;
(2) 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;
(3) 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
(4) 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.
(5) Assignor represents and warrants to Assignee that Assignee's
Pro Rata Share of the 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
(a) 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 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 the 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 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.
(b) 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 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.
(c) Assignee (x) agrees that it will perform all of the
obligations which by the terms of the 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 Agreement.
(d) 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.
(e) 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.
(f) 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.
(g) All payments hereunder or in connection herewith shall be
made in Dollars and in immediately available funds, payable to the
account of Assignor at its office as designated in the Agreement.
(h) 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 Loan Limit and any outstanding
Loans assigned under this Assignment and Acceptance in the manner
contemplated by the Agreement.
(i) All representations and warranties made herein and
indemnities provided for herein shall survive the consummation of the
transactions contemplated hereby.
[Remainder of Page Intentionally Left Blank]
IN WITNESS WHEREOF, the parties hereto have executed this Assignment
and Acceptance as the date first above written.
(ASSIGNOR)
By-----------------------------
Title--------------------------
Pro Rata Share: ---------%
Maximum Loan Amount: $-------
(ASSIGNEE)
By-----------------------------
Its----------------------------
Pro Rata Share: ---------%
Maximum Loan Amount: $--------
Acknowledged and Agreed to this ____
day of ------------, 2001
LASALLE BANK NATIONAL ASSOCIATION,
as Agent
By:-------------------------------
Its:------------------------------
Exhibit A-Special Provisions
Attached to and made a part of that certain Loan and Security Agreement
(including all Exhibits thereto, the "Agreement") of even date herewith by and
among AMCON Distributing Company ("Borrower"), LaSalle Bank National
Association as a Lender ("LaSalle") and as Agent("Agent") for all lenders that
are now or herafter parties to this agreement (the "Lenders"), and Congress
Financial Corporation (Central), an Illinois corporation ("Congress"), as a
Lender.
CREDIT TERMS
1. REVOLVING LOAN LIMIT: Each Lender, severally and not jointly, agrees to
make its Pro Rata Share of the Revolving Loans to Borrower as Borrower shall
from time to time request, subject to the terms and conditions set forth in
the Agreement, up to the sum of the following sublimits (the "Revolving Loan
Limit"):
(a) 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 Borrower's business)
of Borrower's Eligible Accounts; plus
(b) Up to eighty-five percent (85%) of the lower of the cost or market
value of Borrower's Eligible Cigarette Inventory; plus
(c) Up to seventy percent (70%) of the lower of the cost or market value
of Borrower's Eligible Inventory (other than Eligible Cigarette Inventory);
minus
(d) All Letter of Credit Obligations; minus
(e) The outstanding principal amount of all term Loans provided by Lenders
to Borrower from time to time; minus
(f) Reserves in an amount equal to one hundred fifty percent (150%) of the
maximum market exposure under the Borrower's Rate Hedging Obligations
agreements, determined by Agent in its sole discretion on a quarterly basis
(or more frequently if desired by Agent in its sole discretion); minus
(g) Such reserves as Agent elects, in its sole discretion, to establish
from time to time;
provided, that the aggregate amount of Revolving Loans pursuant to
subparagraph (c) above shall in no event exceed Twenty-Five Million and No/100
Dollars ($25,000,000.00); and
further provided, that the outstanding Revolving Loans shall in no event
exceed the lesser of Fifty-Five Million and No/100 Dollars ($55,000,000.00)
(the "Maximum Revolving Loan"), or the Revolving Loan Limit, except for
Interim Advances and as such amount may be decreased by Agent from time to
time, in its sole discretion, following the occurrence of an Event of Default.
Congress hereby consents to the Agent increasing the Maximum Revolving Loan
from time to time to an amount not to exceed $70,000,000.00, provided that at
all times Congress' Maximum Loan Amount is not increased without Congress'
prior written consent. Nothing herein shall be deemed a commitment by the
Agent to increase the Maximum Revolving Loan.
2. LETTERS OF CREDIT:
(a) Subject to the terms and conditions of the Agreement, including
Exhibit A, and the Other Agreements, during the Term, Agent shall, absent the
occurrence of an Event of Default, from time to time request that Issuing Bank
issue, upon Borrower's request, commercial 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). The undrawn face
amount of each outstanding Letter of Credit shall automatically reduce, dollar
for dollar, the amount which Borrower may borrow pursuant to paragraph 1
hereof. Payments made by Issuing Bank to any Person on account of any Letter
of Credit shall constitute Loans hereunder. At no time shall the aggregate of
the Revolving Loans by Agent and Lenders to Borrower plus the Letter of Credit
Obligations be in excess of the lesser of the Revolving Loan Limit and the
Maximum Revolving Loan.
(b) Borrower agrees to pay to the Issuing Bank, on demand by the Issuing
Bank, the Issuing Bank's normal and customary administrative charges in
effect, from time to time, for issuing and administering any Letters of Credit
and if not so paid each Lender shall, without regard to any other provision of
the Agreement or any of the Other Agreements, any defense that Borrower may
have to its obligation to pay the Issuing Bank in connection with such charges
or any defense any Lender may have in connection with the participation
described in subsection (d) below in connection with any Letter of Credit pay
the Issuing Bank for such Lender's Pro Rata Share of such charges, and any
payments so made by Lenders to Issuing Bank shall be deemed to be Loans. Each
Lender (other than a Lender that is the Issuing Bank) acknowledges and agrees
that it shall not be entitled to any of the administrative charges of the
Issuing Bank. Borrower further agrees to pay Agent, for the benefit of
Lenders (and to be apportioned among Lenders as provided in paragraph 5 of
this Exhibit A), a letter of credit fee equal to one-twelfth of one percent
(1/12th of 1%) per month of the daily average of the aggregate undrawn face
amount of the outstanding Letters of Credit which letter of credit fee shall
be paid monthly in arrears on each date that interest is due hereunder.
(c) Borrower agrees to reimburse the Issuing Bank, on demand by the
Issuing Bank, for each payment made by the Issuing Bank under or pursuant to
any Letter of Credit and if not so reimbursed each Lender shall without regard
to any other provision of the Agreement or any of the Other Agreements, any
defense that Borrower may have to its obligation to reimburse the Issuing Bank
in connection with such payment or any defense any Lender may have in
connection with such payment or any defense any Lender may have in connection
with the participation described in subsection (d) below in connection with
any Letter of Credit, reimburse the Issuing Bank for such Lender's Pro Rata
Share of such payment, and any payments so made by Lenders to Issuing Bank
shall be deemed to be Loans. Agent may provide for the payment of any
reimbursement obligations and any interest accrued thereon by advancing the
amount thereof to the Issuing Bank on behalf of Borrower as a Loan.
(d) Immediately upon the issuance of a Letter of Credit in accordance with
the Agreement, each Lender shall be deemed to have irrevocably and
unconditionally purchased and received from the Issuing Bank, 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 Borrower with respect thereto). Borrower agrees to reimburse each of Agent
and each Lender for any expense it may incur in connection with any Letter of
Credit and agrees to reimburse each of Agent and each Lender for any payment
made by Agent or any Lender to the Issuing Bank, except for any liability
incurred or payment made as a result of Agent's or such Lender's gross
negligence or willful misconduct.
3. 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 (a) or (b) below:
(a) With respect to Revolving Loans, LaSalle's publicly announced prime
rate (which is not intended to be LaSalle's lowest or most favorable rate in
effect at any time) (the "Prime Rate") in effect from time to time. Interest
shall be payable on the last business day of each month, in arrears. Each
rate of interest set forth herein shall increase or decrease with each
increase or decrease in the Prime Rate, effective on the effective date of
each such change in the Prime Rate.
(b) With respect to Revolving Loans, One Hundred Seventy-Five (175) 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 thirty (30), sixty (60), ninety (90) or one hundred
eighty (180) days, as selected from time to time by Borrower by irrevocable
notice (in writing, by telex, telegram or cable) given to Agent not less than
three (3) Business Days prior to the first day of each respective Interest
Period; provided that: (i) each such period occurring after such initial
period shall commence on the day on which the immediately preceding period
expires; (ii) 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
(iii) if for any reason Borrower 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 and on the date of any
payment hereon by Borrower.
(c) Notwithstanding the foregoing, upon the occurrence of an Event of
Default, 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.
4. OTHER LIBOR PROVISIONS:
(a) Subject to the provisions of the Agreement, Borrower shall have the
option (i) 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, (ii) 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; (iii) 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 (iv) 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 subparagraphs 4(b) or 4(c) of this Exhibit A or if
an Event of Default has occurred.
(b) Agent's determination of LIBOR as provided above shall be conclusive,
absent manifest error. Furthermore, if Agent determines, in good faith (which
determination shall be conclusive, absent manifest error), prior to the
commencement of any Interest Period that (i) U.S. Dollar deposits of
sufficient amount and maturity for funding the Loans are not available to
Agent or any Lender in the London InterBank Eurodollar market in the ordinary
course of business, or (ii) 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 to be LIBOR Rate Loans or the Loans bearing interest at the rates set
forth in subparagraph 3(b) of this Exhibit A shall not represent the effective
pricing to Lenders 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 and (x) all
existing LIBOR Rate Loans shall convert to Prime Rate Loans upon the end of
the applicable Interest Period, and (y) no additional LIBOR Rate Loans shall
be made until such circumstances are cured.
(c) 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, any
Lender or their respective lending offices (a "Regulatory Change"), shall, in
the opinion of Agent or any Lender, make it unlawful for Agent or any Lender
to make or maintain LIBOR Rate Loans, then Agent shall promptly notify
Borrower and (i) 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 (ii) no additional LIBOR Rate Loans shall
be made until such circumstance is cured.
(d) 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 Borrower in its request (other than as a result of a
default by a Lender), Borrower agrees to indemnify Agent and Lenders against
any loss (including any loss on redeployment of the deposits or other funds
acquired by Agent and Lenders to fund or maintain such LIBOR Rate Loan), cost
or expense incurred by Agent and Lenders as a result of such prepayment.
(e) If any Regulatory Change (whether or not having the force of law)
shall (i) 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; (ii) 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 Borrower to Agent or any Lender
hereunder (other than a change in the taxation of the overall net income of
Agent or any Lender); or (iii) 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 Borrower shall pay to Agent and Lenders, on
demand, such additional amounts as Agent and Lenders shall, from time to time,
determine are sufficient to compensate and indemnify Agent and Lenders from
such increased cost or reduced amount.
(f) Agent and Lenders shall receive payments of amounts of principal and
interest with respect to the LIBOR Rate Loans free and clear of, and without
deduction for, any Taxes. If (1) Agent or any Lender shall be subject to any
Tax in respect of any LIBOR Rate Loans or any part thereof or, (2) Borrower
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
Borrower of such Tax and Borrower shall provide Agent and Lenders with a
statement detailing the amount of any such Tax actually paid by Borrower.
Determination by Agent and Lenders 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 any
Lender, Agent or any Lender shall reimburse Borrower 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.
(g) Unless otherwise specified by Borrower, all Loans shall be Prime Rate
Loans.
(h) No more than eight (8) Interest Periods may be in effect with respect
to outstanding LIBOR Rate Loans at any one time. Each LIBOR Rate Loan shall
be in an amount not less than One Million and no/100 Dollars ($1,000,000.00),
and in integral multiples of Two Hundred Fifty Thousand and No/100 Dollars
($250,000.00); provided, however, not more than two (2) LIBOR Rate Loans
outstanding at any time shall be in an amount less than Five Million and
no/100 Dollars ($5,000,000.00).
5. 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 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 Borrower or
constituting a settlement by such Lender of a previous Disproportionate
Advance made by Agent on behalf of such Lender to Borrower). 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 three (3) Business Days of receipt thereof by Agent, payments
to be applied to interest on the Loans shall be paid to each Lender, subject
to any adjustments for any Disproportionate Advances as provided in paragraph
2 of the Agreement so that Agent shall receive interest on the
Disproportionate Advances and each Lender shall only receive interest on the
amount of funds actually advanced by such Lender;
(b) Within three (3) Business Days of receipt thereof by Agent, payments
to be applied to the letter of credit fee set forth in subparagraph 2(b) of
this Exhibit A shall be paid to each Lender in proportion to its Pro Rata
Share; and
(c) Within three (3) Business Days of receipt thereof by Agent, payments
to be applied to the minimum usage fee or commitment fees set forth in
paragraph 6 of this Exhibit A shall be paid to each Lender in proportion to
its Pro Rata Share.
Notwithstanding the foregoing, if a Lender has failed to remit its Pro Rata
Share of any Loans required to be made pursuant to paragraph 2 of the
Agreement or has failed to make a settlement payment to Agent pursuant to this
paragraph 5 of Exhibit A, no payment under clause (a), (b) or (c) of this
paragraph 5 of Exhibit A shall be made to such Lender by Agent at any time
such Lender's share of the outstanding Loans is less than such Lender's Pro
Rata Share.
6. FEES AND CHARGES:
(a) Minimum Usage Fees: Borrower shall pay to Agent, for the benefit of
Agent and Lenders, an unused line fee of one-quarter of one percent (1/4th of
1%) per annum of the difference between the Maximum Revolving Loan and the
average monthly loan balance of the Revolving Loans plus the average monthly
outstanding Letter of Credit obligations, which shall be fully earned by Agent
and Lenders and payable monthly in arrears on each day that interest is
payable hereunder. Said fee shall be calculated on the basis of a 360 day
year.
(b) Commitment Fee: Borrower hereby agrees to pay to Agent, for the
benefit of Agent and Lenders a Loan commitment fee in the amount of Three
Hundred Thousand and no/100 Dollars ($300,000.00), which fee shall be fully-
earned and non-refundable as of the date of the initial advance under the
Agreement (the "Fee"). The Fee shall be paid as follows: (1)
contemporaneously with the initial advance under the Agreement, an amount
equal to One Hundred Thousand and no/100 Dollars ($100,000.00), (2) on the one
year anniversary of the date of the Agreement, an amount equal to One Hundred
Thousand and no/100 Dollars ($100,000.00), and (3) on the two year anniversary
of the date of the Agreement, an amount equal to One Hundred Thousand and
no/100 Dollars ($100,000.00). Upon the occurrence of an Event of Default, at
the Agent's option and with notice to the Borrower, the remaining balance of
the Fee shall become immediately due and payable.
7. ADDITIONS AND CHANGES TO COVENANTS:
(a) Permitted Investments. Notwithstanding the provisions of subparagraph
11(m) of the Agreement, Borrower may invest in (i) commercial paper of a
domestic issuer rated at least "A-1" by Standard & Poor or "P" by ▇▇▇▇▇'▇; and
(ii) certificates of deposit of one (1) year or less issued by Agent or any
Lender or any parent, affiliate or subsidiary of Agent or any Lender.
(b) Checking Account Provisions. Borrower shall maintain its general
checking and controlled disbursement account with LaSalle. Normal charges
shall be assessment thereon. Although no compensating balance is required,
Borrower must keep monthly balances in order to merit earnings credits which
will cover LaSalle's service charges for demand deposit account activities.
(c) Hawaiian Natural Water Company. Borrower hereby covenants unto the
Agent that the balance of the intercompany advances made by the Borrower to
Hawaiian Natural Water Company, a Hawaiian corporation, shall not at any time
exceed $2,000,000.00.
8. FINANCIAL COVENANTS:
Fixed Charge Coverage Ratio Covenant: Borrower shall maintain a "Fixed Charge
Coverage Ratio" (as defined below) of not less than 1.1 to 1.0 as determined
on the last day of each fiscal quarter of Borrower for the four fiscal quarter
period ending on such date. For the purposes hereof, (i) "Fixed Charge
Coverage Ratio" shall mean, for any period, the ratio of EBIDTA for such
period to Fixed Charges for such period, (ii) "EBIDTA" shall mean, for any
period, the sum of (A) net income (or loss) for the applicable period of
measurement determined in accordance with GAAP, plus (B) any provision for (or
less any benefit from) income and franchise taxes included in the
determination of net income, plus (C) interest expense deducted in the
determination of net income, plus (D) amortization and depreciation deducted
in the determination of net income, and (iii) "Fixed Charges" shall mean, for
any period the sum of, without duplication (A) scheduled payments of principal
and all credit availability reductions during such period with respect to all
indebtedness (including capitalized leases) of Borrower, plus (B) scheduled
payments of interest during such period with respect to all indebtedness
(including capitalized leases) of Borrower, plus (C) all capital expenditures
during such period for the purchase or other acquisition of fixed or capital
assets, plus (D) payments during such period in respect of income or franchise
taxes.
(b) Debt Service Coverage Ratio Covenant: Borrower shall not permit
Borrower's "Debt Service Coverage Ratio" (as defined below) determined on the
last day of each fiscal quarter hereafter for the four fiscal quarter period
ending on such date to be less than 1.5 to 1.0. For the purposes hereof,
(i) "Debt Service Coverage Ratio" shall mean, for any period, the ratio of
"Net Cash Flow" (hereinafter defined) for such period to Debt Service for such
period, (ii) "Net Cash Flow" shall mean, for any period, the sum of (A) net
income (or loss) for the applicable period of measurement determined in
accordance with GAAP, plus (B) depreciation deducted in the determination of
net income, and (iii) "Debt Service" shall mean, for any period, the sum of,
without duplication (A) scheduled payments of principal and all credit
availability reductions during such period with respect to all indebtedness
(including capitalized leases) of Borrower, plus (B) scheduled payments of
interest during such period with respect to all indebtedness (including
capitalized leases) of Borrower.
(c) Senior Debt to EBITDA: Borrower shall maintain a "Senior Debt to
EBITDA Ratio" (as defined below) of less than 6.0 to 1.0 at all times,
determined on the last day of each fiscal quarter of Borrower for the four
fiscal quarter period ending on such date. For the purposes hereof, (i)
"Senior Debt" shall mean, at any time of determination, the principal amount
of all Liabilities (including capitalized leases) of Borrower to the Lenders
outstanding at such time, and (ii) "EBIDTA" shall mean, for any period, the
sum of (A) net income (or loss) for the applicable period of measurement
determined in accordance with GAAP, plus (B) any provision for (or less any
benefit from) income and franchise taxes included in the determination of net
income, plus (C) interest expense deducted in the determination of net income,
plus (D) amortization and depreciation deducted in the determination of net
income.
(d) Tangible Net Worth: Borrower's "Tangible Net Worth" (herein defined)
shall not at any time be less than the "Minimum Tangible Net Worth"
(hereinafter defined). "Minimum Tangible Net Worth" shall mean $7,000,000.00
at all times from the date hereof through the date upon which the Agent
receives Borrower's 2001 fiscal year-end audited financial statements. As of
the day the Agent receives Borrower's fiscal year-end audited financial
statements, beginning with the 2001 audited financial statements and
continuing each year thereafter, "Minimum Tangible Net Worth" shall mean the
Minimum Tangible Net Worth during the immediately preceding period, plus
seventy-five percent (75%) of the difference between Borrower's net income as
set forth on such fiscal year-end audited financial statements and any
dividends paid by Borrower to its shareholders based upon such audited
financial statements. "Tangible Net Worth", for purposes of this
subparagraph, shall mean Borrower's shareholders' equity (including retained
earnings) less the book value of all intangible assets 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, all as determined under GAAP applied
on a basis consistent with the financial statements dated March 31, 2001,
except as set forth herein;
(e) Fill Rate Percentage: Borrower shall maintain a "Fill Rate Percentage"
(hereinafter defined) of not less than 93% calculated on a weekly basis.
"Fill Rate Percentage" shall mean the percentage determined by dividing (1)
the total dollar amount of inventory delivered by the Borrower to its
customers each week into (2) the total dollar amount of the orders which
correspond to such deliveries.
(f) Calculations: All calculations of the financial covenants contained in
this paragraph 8 of this Exhibit A shall be made in conformity with GAAP.
9. DELIVERY OF BORROWING BASE CERTIFICATE: Borrower shall, on or before the
third Business Day of each week, deliver to Agent a duly completed certificate
(in form and substance satisfactory to Agent) signed by the chief financial
officer of Borrower certifying the Eligible Inventory, Eligible Cigarette
Inventory and Eligible Accounts of Borrower as of the last day of the
immediately preceding week (each such certificate being a "Borrowing Base
Certificate").
10. DELIVERY OF ADDITIONAL REPORTS: Borrower shall, on or before the third
Business Day of each week, deliver to Agent a report certified by an
authorized officer of Borrower detailing, as of the end of the previous week
(a) Borrower's tobacco inventory by amount and type, (b) Borrower's ineligible
tobacco Inventory by amount and type and (c) the tax stamp reserve. Borrower
shall also deliver to Agent, on or before the 15th day of each month, a report
certified by an authorized officer of Borrower (i) detailing Borrower's non-
tobacco Inventory by amount and type as of the end of the previous month, (ii)
Borrower's ineligible non-tobacco Inventory by amount and type as of the end
of the previous month, and (iii) showing the calculation of Borrower's "Fill-
Rate Percentage" for the previous month.
11. VEHICLES: Borrower shall execute such financing statements and other
documents or instruments (and pay all taxes, other than nominal filing fees,
and all other extraordinary costs of filing or recording the same in all
public offices deemed necessary by Agent) and do such other acts and things,
as Agent may, from time to time, request to establish and maintain a valid
first priority security interest in any of the Vehicles, free of all other
liens, claims and rights of third parties whatsoever (other than Permitted
Liens), to secure the payment of the Liabilities.
12. CERTAIN RESTRICTIONS: Borrower shall not enter into any agreement which
restricts the ability of Borrower to (a) enter into amendments, modifications
or waivers of the Agreement or any of the Other Agreements, (b) sell, transfer
or otherwise dispose of its assets, (c) create, incur, assume or suffer to
exist any lien upon any of its properties, (d) create, incur, assume, suffer
to exist or otherwise become liable with respect to any indebtedness, or (e)
pay any dividend other than as permitted in Section 11(l) of the Agreement;
provided, however, capital leases or agreements governing purchase money
indebtedness which contain restrictions of the types referred to in clauses
(b) or (c) with respect to the property covered thereby shall be permitted to
the extent allowed in the Agreement.
13. CONDITIONS TO CLOSING: Agent shall be under no obligation to consummate
the transactions contemplated by the Agreement until each of the conditions
listed in this paragraph 13 has been satisfied. Whenever a condition contained
herein requires delivery of an agreement or other document to Agent, each such
agreement or other document shall be in forth and substance satisfactory to
Agent in its sole discretion.
(a) Landlord's and Mortgagee Agreements: Borrower shall assist the Agent
in obtaining a Landlord's Agreement from each lessor or mortgagee of
property(ies) set forth on Exhibit B to the Agreement. All Landlord's
Agreements shall include a copy of the relevant lease.
(b) Environmental Indemnity: Borrower shall execute and deliver to the
Agent the Environmental Indemnity Agreement.
(c) Mortgagee's Waiver: Borrower shall cause to be executed in favor of
Agent and delivered to Agent a Mortgagee's Waiver from each mortgagee, if any,
of Borrower's owned real property(ies) set forth on Exhibit B.
(d) Attorney's Opinion Letter: Borrower shall cause to be executed and
delivered to Agent an Attorney's Opinion Letter.
(e) Promissory Notes: Borrower shall have executed and delivered to
Lenders such promissory notes evidencing the Loans as the Agent shall request.
(f) Resolutions: Agent shall have received from each corporate Obligor,
copies of resolutions of each Obligor's Board of Directors authorizing the
execution, delivery and performance of the Agreement and the Other Agreements
to which it is a party, certified by its corporate secretary.
(g) Consents: Agent shall have received certified copies of all documents
evidencing any necessary corporate action, consents and governmental
approvals, if any, with respect to the Agreement and the Other Agreements.
(h) Incumbency and Signatures: Agent shall have received certificates of
the Secretary of each of the corporate Obligors certifying the names of the
officer or officers of such Obligor authorized to sign the Agreement and the
Other Agreements to which it is a party, together with a sample of the true
signature of each such officer. Agent may conclusively rely on each such
certificate, until formally advised by a like certificate of any changes
therein.
(i) Lock Box and Other Account Agreements: Agent shall have received the
Lock Box Agreements and other depository account agreements required under
paragraph 7 of the Agreement, duly executed and delivered by Borrower and each
financial institution party thereto.
(j) Forms UCC-1 and UCC-2; Termination Statements; Searches: Agent shall
have received UCC-1 Financing Statements and UCC-2 Financing Statements naming
Borrower as debtor and Agent, for the benefit of the Lenders, as secured party
with respect to the Collateral, together with such UCC-3 Termination
Statements necessary to release any and all liens and other rights of any
Person in any of the Collateral (other than with respect to Permitted Liens),
and other documents as Agent deems necessary or appropriate shall have been
filed in all jurisdictions that Agent deems necessary or advisable. Certified
copies of uniform Commercial Code Requests for Information or Copies (Form
UCC-11), dated a date reasonably near to the Closing Date, listing all
effective financing statement, (including financing statements filed by Agent)
which name Borrower as debtor (under its corporate and trade names), together
with copies of such financing statements. Results of on-line searches of the
records of the United States Patent and Trademark Office for Borrower's
trademarks and patents.
(k) Insurance Certificates, etc.: Agent shall have received certificates
from Borrower's insurance carrier evidencing that all required insurance
coverage is in effect, designating Agent as an additional insured and lender's
loss payee.
(l) Constitutive Documents: Agent shall have received certified copies of
each corporate Obligor's Certificate or Articles of Incorporation, certified
by the Secretary of State of its state of incorporation as of a recent date,
together with good standing certificates from such Secretary of State and good
standing certificates from the Secretaries of State of each other State in
which such Obligor is qualified to transact business, and By-laws of each
corporate Obligor certified by the Secretary of such Obligor as of the date
hereof.
(m) No Adverse Change Certificate: Agent shall have received a certificate
of the president or chief financial officer of Borrower, certifying that there
have been no material adverse changes in the financial condition of Borrower
since March 31, 2001, and that there is no litigation pending which would
prevent or seek to prevent consummation of the financing arrangements
contemplated by the Agreement and the Other Agreements.
(n) Solvency Certificates: Agent shall have received, from each Obligor, a
certificate as to the solvency of such Obligor executed by the president or
chief financial officer of such Obligor.
(o) Termination of Liens; Payoff Letters: Agent shall have received
evidence satisfactory to it in its sole discretion of the termination of all
existing liens on the assets of Borrower (including any mortgages on
Borrower's real property) other than Permitted Liens and the repayment of all
indebtedness of Borrower other than indebtedness permitted hereunder.
(p) Subordination Agreements: Agent shall have received a duly executed
subordination agreement from Merchants Wholesale Inc.
(q) Asset Purchase Agreement: The Borrower shall deliver to the Agent,
proof, in form and substance satisfactory to the Agent, that (1) all of the
conditions precedent to consummating the asset purchase set forth in that
certain Asset Purchase Agreement dated February 8, 2001, by and among the
Borrower, Merchants Wholesale Inc., an Illinois corporation, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ (the "Asset Purchase Agreement"), have been fully
satisfied, other than the payment of the purchase price set forth in the Asset
Purchase Agreement.
(r) Excess Revolving Loan Availability: Borrower shall deliver to the
Agent proof, in form and substance satisfactory to the Agent, that (1)
Borrower's "Excess Revolving Loan Availability" (hereinafter defined) shall be
not less than Five Million and no/100 Dollars ($5,000,000.00) immediately
after satisfying (1) all obligations of Borrower to Merchants Wholesale Inc.,
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ under the Asset Purchase Agreement
(other than the deferred portion of the purchase price, including the "Earnout
Consideration", as defined in such Asset Purchase Agreement) and all other
amounts required to be funded on the proposed date of the initial advance
hereunder, and (2) all costs and expenses incurred by Borrower in connection
with the initial closing of the transactions referenced in the Agreement.
"Excess Revolving Loan Availability" shall mean the amount by which the lesser
of the Revolving Loan Limit or the Maximum Revolving Loan for Borrower exceeds
the aggregate outstanding principal balance of the Revolving Loan.
(s) ISDA Master Agreement Amendment, Assignment and Assumption: Borrower
shall deliver to the Agent an original fully executed Amendment, Assignment
and Assumption Agreement by and among LaSalle, Borrower and Merchants
Wholesale Inc.
(t) Satisfaction of other Obligations. All obligations of Merchants
Wholesale, Inc., Merchants Wholesale of Iowa, Inc. and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ to
LaSalle Business Credit, Inc. and Congress shall be paid and satisfied in
full. All obligations of ▇▇▇▇▇▇▇▇▇▇ Natural Foods, Inc. to LaSalle shall be
paid and satisfied in full.
(u) Other Agreements: Agent shall have received such other agreements,
documents and instruments as the Agent may request.
14. CONDITIONS TO ALL LOANS AND ADVANCES. Agent's obligation to make the
initial Loans and each subsequent Loan and to continue, or convert any Loan
into any other type of Loan is subject to the following additional conditions
precedent:
(a) No Default, etc.: (i) No Event of Default or event or condition which,
with the giving of notice or passage of time or both would constitute an Event
of Default shall have occurred or will result from such Loan and (ii) the
representations and warranties contained in the Agreement and each Other
Agreement shall be true and correct in all material respects as of the date
hereof, and shall be true and correct as of the date of any subsequent Loan
with the same effect as though made on the date thereof.
(b) Litigation: Agent shall not have determined that any existing or
threatened claims, litigation, arbitration proceedings or governmental
proceedings could have an adverse impact on the ability of any Obligor to
perform its obligations under the Agreement or any Other Agreement to which it
is a party.
(c) No Injunction: No law or regulation shall have been adopted, no order,
judgment or decree of any governmental authority shall have been issued, and
no litigation shall be pending or threatened, which in the judgment of Agent
could enjoin, prohibit or restrain, or impose or result in the imposition of
any material adverse condition upon, the making or repayment of the Loans or
the consummation of the transactions contemplated hereby and by the other
Agreements.
(d) Borrowing Base Certificate: Agent shall have received the duly
completed Borrowing Base Certificate most recently required to be delivered
under paragraph 9 of this Exhibit A.
15. 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 the Agreement, this Exhibit "A"
and the notes and Other Agreements 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 the Agreement or any of the Other
Agreements for the ratable benefit of Lenders. Agent may perform any of its
duties hereunder by or through its agents or employees.
(ii) The provisions of this paragraph 15 are solely for the benefit of
Agent and Lenders, and neither Borrower 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 the 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
Borrower or any other Obligor.
(b) Nature of Duties of Agent: Agent shall have no duties or
responsibilities except those expressly set forth in the Agreement. Neither
Agent nor any of its officers, directors, employees or agents shall be liable
to any other Lender 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 the Agreement a
fiduciary relationship in respect of any Lender; and nothing in the Agreement,
expressed or implied, is intended to or shall be so construed as to impose
upon Agent any obligations in respect of the Agreement 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 the Agreement, Agent shall have no 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. To the extent any appraisals of any of the assets of
Borrower are made by an independent third party appraiser pursuant to the
Agreement, such appraisals shall provide that they may be relied upon by Agent
and Lenders.
(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 the Agreement or any notes or the
financial or other condition of Borrower or any other 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 the Agreement or
the notes, or the financial condition of Borrower or any other Obligor, or the
existence or possible existence of any Event of Default, unless specifically
requested to do so in writing by any Lender.
(d) Certain Rights of Agent: Agent shall have the right to request
instructions from the Requisite Lenders or all Lenders, as applicable pursuant
to paragraph 17 of this Exhibit A, by notice to each Lender. If Agent shall
request instructions from the Requisite Lenders or all Lenders, as applicable,
with respect to any act or action (including the failure to act) in connection
with the Agreement or the Other Agreements, Agent shall be entitled to refrain
from such act or taking such action unless and until Agent shall have received
instructions from the 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, neither Borrower nor any 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 the
Requisite Lenders or all Lenders, as applicable.
(e) Reliance by Agent: 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 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 Borrower with respect to matters concerning Borrower), 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 reimbursed and
indemnified by Borrower, 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 the 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.
(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 Borrower or any Affiliate of Borrower
as if it were not performing the duties specified herein, and may accept fees
and other consideration from Borrower for services in connection with the
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 the
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:
(i) Agent may, upon thirty (30) Business Days' notice to Lenders and
Borrower, resign at any time (effective upon the appointment of a successor
Agent pursuant to the provisions of this subparagraph 17(i)) by giving written
notice thereof to Lenders and Borrower. Upon any such notice of resignation,
the Requisite Lenders shall have the right, upon five (5) days' written notice
to Agent, Lenders and Borrower, to appoint a successor Agent. If no successor
Agent shall have been so appointed by the 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' written 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 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 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 the Agreement. After any retiring Agent's resignation
hereunder as Agent, the provisions of this paragraph 17 shall inure to its
benefit as to any actions taken or omitted to be taken by it while it was
Agent under the Agreement.
(j) 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 the Agent or the Requisite
Lenders in accordance with the provisions of the Agreement or the Other
Agreements, and the exercise by the Agent or 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 the Agreement or 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, execute any release of Agent's security interest in any
Collateral, except for releases relating to dispositions of Collateral (x)
permitted by the Agreement or (y) in connection with the repayment in full of
all of the Liabilities by Borrower and the termination of all obligations of
Agent and Lenders under the Agreement and the Other Agreements; provided, that
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, transfer or foreclosure.
(iii) To the extent, pursuant to the provisions of this subparagraph
15(j)(iii), Agent's execution of a release is required to release its lien
upon any sale and transfer of Collateral which has been consented to in
writing by the Requisite Lenders or all Lenders, as applicable, or otherwise
permitted hereunder, 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.
(iv) Agent shall have no obligation whatsoever to Lenders or to any
other Person to assure that the Collateral exists or is owned by Borrower 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 paragraph 15 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.
(k) Actions with Respect to Defaults: In addition to Agent's right to
take actions on its own accord as permitted under the Agreement, Agent shall
take such action with respect to an Event of Default as shall be directed by
the Requisite Lenders or all Lenders, as applicable pursuant to paragraph 17
of this Exhibit A so long as such directions are not contrary to the terms of
the Agreement or applicable law; 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. Each
Lender agrees that no Lender shall have any right individually to (a) realize
upon any of the security interests created by the Agreement or the Other
Agreements; (b) to enforce any provision of the Agreement or the Other
Agreements or (c) to make demand under the Agreement or any Other Agreement
except that, during the continuance of any Event of Default, each Lender is
hereby authorized by Borrower at any time or from time to time, with
reasonably prompt subsequent notice to the Borrower (any prior or
contemporaneous notice being hereby expressly waived) to set off and to
appropriate and to apply any and all (A) balances held by such Lender at any
of its offices for the account of a Borrower or any of its Subsidiaries
(regardless of whether such balances are then due to such Borrower or its
Subsidiaries), and (B) other property at any time held or owing by such Lender
to or for the credit or for the account of a Borrower or any of its
Subsidiaries, against and on account of any of the Liabilities, except that no
Lender shall exercise any such right without the prior written consent of
Agent. Any Lender exercising a right to set off shall, to the extent the
amount of any such set off exceeds its Pro Rata Share of the amount set off,
purchase for cash (and the other Lenders shall sell) interests in each such
other Lender's share of the Liabilities as would be necessary to cause such
Lender to share such excess with each other Lender in accordance with their
respective Pro Rata Shares. Borrower agrees, to the fullest extent permitted
by law, that any Lender may exercise its right to set off with respect to
amounts in excess of its Pro Rata Share of the Liabilities and upon doing so
shall deliver such excess to Agent for the benefit of all Lenders in
accordance with the respective Pro Rata Shares of the Lenders.
(l) 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 Borrower or any
other Obligor, the Requisite Lenders, any Lender or any other Person under or
in connection with the Agreement or any Other Agreement except (i) as
specifically provided in the Agreement or any Other Agreement or (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;
notwithstanding the foregoing, the Agent shall automatically deliver the
following information to the Lenders without the necessity of each Lender's
request therefor: each Borrowing Base Certificate, the documents delivered
pursuant to Section 10 of this Exhibit, the documents delivered pursuant to
Section 8 of the Loan Agreement and the financial statements delivered
pursuant to Section 11(b) of the Loan Agreement.
(m) Demand: Agent shall make demand for repayment by Borrower of all
Liabilities owing by Borrower hereunder, after the occurrence of an Event of
Default, upon the written request of the 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 the Agreement.
16. ASSIGNABILITY:
(a) Borrower shall not have the right to assign the 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
Borrower.
(c) Each Lender may, with the consent of Agent, which shall not be
unreasonably withheld, but without the consent of any other Lender, assign all
or a portion of its rights and obligations under the Agreement to one or more
(i) commercial banks organized under the laws of the United States, or any
State thereof, and having combined capital and surplus of at least
$500,000,000; (ii) commercial banks organized under the laws of any other
country that is a member of the OECD or has concluded special lending
arrangements with the International Monetary Fund associated with its General
Arrangements to Borrow, or a political subdivision of any such country, and
having combined capital and surplus of at least $500,000,000, so long as any
such bank is acting through a branch or agency located in the United States;
(iii) finance companies, insurance companies or other financial institutions
or funds (whether corporations, partnerships, trusts or other entities) that
are regularly engaged in the United States in making, purchasing or otherwise
investing in commercial loans in the ordinary course of its business and
having combined capital and surplus of at least $500,000,000 or with respect
to any funds with total assets under its management in excess of $250,000,000;
and (iv) any other Person other than an Affiliate of the Borrower approved by
the Agent and the Borrower, such approval not to be unreasonably withheld;
provided, that (x) 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 in the form attached to the
Agreement as Exhibit E (an "Assignment and Acceptance"), and a processing and
recordation fee of Two Thousand Five Hundred and No/100 Dollars ($2,500.00) to
be paid by the assignee, (y) no such assignment shall be for less than Five
Million and No/100 Dollars ($5,000,000.00), or if less, such assigning
Lender's entire interest under the Agreement, and (z) LaSalle may not make an
assignment that would result in LaSalle having a Loan commitment less than
Congress' Loan commitment (except if LaSalle assigns all of its Loan
commitment to an affiliate or to another Person in connection with a
disposition of its portfolio of loans). 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 (the "Acceptance Date"),
(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 paragraph 14 of the Agreement which will survive) and
be released from its obligations under the 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 the 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 the Agreement or
Other Agreements or the execution, legality, validity, enforceability,
genuineness, sufficiency or value of the 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 Borrower
or any other Obligor or the performance or observance by Borrower or any other
Obligor of its obligations under the Agreement, (iii) such assignee confirms
that it has received a copy of the Agreement, together with copies of the
financial statements referred to in subparagraph 11(b) of the 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 the Agreement, (v) such
assignee appoints and authorizes Agent to take such action as agent on its
behalf and to exercise such powers under the 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 all of
the obligations which by the terms of the Agreement are required to be
performed by it as a Lender.
(e) Agent shall, maintain at its address referred to in paragraph 15 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 Maximum Loan Amounts 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 Borrower, Agent and Lenders may treat each Person whose name is
recorded in the Register as a Lender hereunder for all purposes of the
Agreement. The Register and copies of each Assignment and Acceptance shall be
available for inspection by Borrower 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 E to the Agreement, (i)
accept such Assignment and Acceptance, (ii) record the information contained
therein in the Register and (iii) give prompt notice thereof to Borrower.
Within five (5) Business Days after its receipt of such notice, Borrower 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 an
amount equal to the Maximum Loan Amount of such assignee 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 Maximum Loan
Amount of such assigning Lender. 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 the date of the relevant Assignment and
Acceptance 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,
Borrower or any other Lender) to one or more parties, in or to all or a
portion of its rights and obligations under the Agreement (including, without
limitation, all or a portion of its Maximum Loan Amount or the Loans owing to
it); provided, that (i) such Lender's obligations under the Agreement
(including, without limitation, its Maximum Loan Amount hereunder) shall
remain unchanged, (ii) such Lender shall remain solely responsible to the
other parties hereto for the performance of such obligations, (iii) Borrower,
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 the
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 the Agreement except to the extent such amendment or
waiver would (A) extend the final maturity date or the date for the payments
of any installment of fees or principal or interest of any Loans in which such
participant is participating, (B) reduce the amount of any installment of
principal of the Loans in which such participant is participating, (C) reduce
the interest rate applicable to the Loans in which such participant is
participating, or (D) reduce any fees payable hereunder.
(h) Each Lender agrees that, without the prior written consent of Borrower
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 Borrower.
17. AMENDMENTS, ETC.: No amendment or waiver of any provision of the
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 Borrower and the Requisite Lenders, or if Lenders shall
not be parties thereto, by the parties thereto and consented to by the
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, unless in writing and
signed by all Lenders, shall do any of the following: (i) increase the Maximum
Loan Amounts of Lenders or subject Lenders to any additional obligations to
extend credit to Borrower, (ii) reduce or eliminate the principal of, or
interest on, the Loans or any fees hereunder, (iii) postpone any date fixed
for any payment in respect of principal of, or interest on, the Loans or any
fees hereunder or under the Agreement or waive an Event of Default for non-
payment thereof, (iv) change the Pro Rata Shares of Lenders, or any minimum
requirement necessary for Lenders or the Requisite Lenders to take any action
hereunder, (v) amend or waive this paragraph 17, or change the definition of
the Requisite Lenders, (vi) increase the advance rates for Eligible Accounts,
Eligible Inventory or Eligible Cigarette Inventory originally stated herein or
(vii) except in connection with the financing, refinancing, sale or other
disposition of any asset of Borrower permitted under the Agreement, release or
subordinate any liens in favor of Agent, for the benefit of Lenders, on any of
the Collateral and provided further, that no amendment, waiver or consent
affecting the rights or duties of Agent under the 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, the consent of Borrower
shall not be required for any amendment, modification or waiver of the
provisions of paragraph 17 of this Exhibit A.
18. NONLIABILITY OF AGENT AND LENDERS: The relationship between Borrower, on
the one hand, and Lenders and Agent on the other, shall be solely that of
borrower and lender. Neither Agent nor any Lender shall have any fiduciary
responsibilities to Borrower.
IN WITNESS WHEREOF, this Exhibit A has been executed as of the 1st day of
June, 2001.
LaSalle Bank National Association AMCON Distributing Company
as Agent and Lender a Delaware corporation
By------------------------------ By----------------------------
Title--------------------------- Title-------------------------
Congress Financial Corporation
(Central), an Illinois corporation,
as a Lender
By-----------------------------
Its----------------------------
