Item 1.01 Entry into a Material Definitive Agreement.
On February 3, 2023, LOL Foods, Inc. ("LOL Foods"), a wholly owned subsidiary of AMCON Distributing Company (the "Company"), and HF Real Estate, LLC,
a wholly owned subsidiary of the Company ("HF" and, together with LOL Foods, the "Borrowers"), entered into a Loan and Security Agreement (the "Loan Agreement") with BMO Harris Bank N.A. ("BMO"), as administrative agent, and the lenders party
thereto. The Borrowers entered into the Loan Agreement in connection with the closing of the acquisition described in Item 2.01 below and used the proceeds thereunder to partially fund the acquisition.
The Loan Agreement provides for a $40 million senior secured asset-based revolving credit facility (the "ABL Revolver"), secured by substantially all
of the Borrowers' assets, including accounts receivable, intangibles, inventory, deposit accounts and real property, excluding certain equipment. Outstanding amounts under the Loan Agreement bear interest at rates per annum equal to, at the
Borrowers' election, SOFR or an alternate base rate, plus a core interest rate mark-up based on excess availability. The Loan Agreement will mature on February 3, 2026, at which time all amounts borrowed under the ABL Revolver will be payable
in full unless otherwise refinanced.
The Borrowers may prepay amounts borrowed under the Loan Agreement at any time without penalty. The Loan Agreement also includes an unused commitment
fee provision and is subject to customary covenants and a minimum fixed charge ratio.
Contemporaneously with entering into the Loan Agreement with BMO, LOL Foods also entered into an equipment loan financing arrangement with Bank of
America Leasing and Capital, LLC ("BALC") pursuant to which BALC made a $7 million term loan to LOL Foods secured by various equipment (the "BALC Equipment Financing"). The BALC Equipment Financing has a fixed interest rate and is payable over
a 60-month term. The proceeds of the BALC Equipment Financing were used to partially fund the acquisition described in Item 2.01 below.
In addition, on February 2, 2023, the Company and certain of its subsidiaries entered into an amendment (the "Amendment") to their existing revolving
credit facility (the "Existing Facility") with Bank of America, N.A. and BMO. The Amendment amended the Existing Facility to, among other things, provide lender consent to the acquisition described under Item 2.01 below, including the use of
proceeds thereunder to partially fund the acquisition.
The foregoing descriptions of the ABL Facility and the Amendment do not purport to be complete and are subject to, and qualified in their entirety
by, reference to the full text of the ABL Facility and the Amendment, copies of which will be filed with the Securities and Exchange Commission as exhibits to the Company's Quarterly Report on Form 10-Q for the quarter ending March 31, 2023.