7. DEBT:

The Company primarily finances its operations through a credit facility agreement with Bank of America (the "Facility") and long-term debt agreements with banks.

CREDIT FACILITY

	2013		2012

Revolving portion of the Facility, interest payable at 2.14% at September 2013	$	14,841,712	$	14,353,732

The Facility included the following significant terms at September 2013:

•: A July 2018 maturity date without a penalty for prepayment.
•: $70.0 million revolving credit limit.
•: Loan accordion allowing the Company to increase the size of the credit facility agreement by $25.0 million.
•: A provision providing an additional $10.0 million of credit advances for certain inventory purchases.
•: Evergreen renewal clause automatically renewing the agreement for one year unless either the borrower or lender provides written notice terminating the agreement at least 90 days prior to the end of any original or renewal term of the agreement.
•: The Facility bears interest at either the bank's prime rate, or at LIBOR plus 125 - 175 basis points depending on certain credit facility utilization measures, at the election of the Company.
•: Lending limits subject to accounts receivable and inventory limitations.
•: An unused commitment fee equal to one-quarter of one percent (¹/4%) per annum on the difference between the maximum loan limit and average monthly borrowings.
•: Secured by collateral including all of the Company's equipment, intangibles, inventories, and accounts receivable.
•: A financial covenant requiring a fixed charge coverage ratio of at least 1.0 as measured by the previous twelve month period then ended only if excess availability falls below 10% of the maximum loan limit as defined in the credit agreement.
•: Provides that the Company may not pay dividends on its common stock in excess of $1.00 per share on an annual basis. There is no limit on dividend payments provided that certain excess availability measurements have been maintained for the thirty day period immediately prior to the payment of any such dividends or distributions, and immediately after giving effect to any such dividend or distribution payments, the Company has a Fixed Charge Coverage Ratio of at least 1.10 to 1.0 as defined in the credit facility agreement.

LONG-TERM DEBT

In addition to the Facility, the Company also had the following long-term obligations at fiscal 2013 and fiscal 2012 as follows:

	2013		2012

Note payable to a bank ("Real Estate Loan"), interest payable at a fixed rate of 2.99% with monthly installments of principal and interest of $38,344 through June 2017 with remaining principal due July 2017, collateralized by three distribution facilities	$	4,407,901	$	4,729,031
Note payable, interest payable at a fixed rate of 4.00%, with quarterly installments of principal and interest of $226,874 through June 2014		667,779		1,526,821
Obligation payable, interest payable at a fixed rate of 4.96% with monthly installments of principal and interest of $448.		—		2,657

		5,075,680		6,258,509
Less current maturities		998,788		1,182,829

	$	4,076,892	$	5,075,680

The aggregate minimum principal maturities of the long-term debt for each of the next five fiscal years are as follows:

Fiscal Year Ending

2014	$	998,787
2015		341,191
2016		351,383
2017		3,384,319

	$	5,075,680

Market rate risk for fixed rate debt is estimated as the potential increase in fair value of debt obligations resulting from decreases in interest rates. Based on the borrowing rates currently available to the Company for bank loans with similar terms and average maturities, the fair value of the Company's long-term debt approximated its carrying value at September 2013.

Cross Default and Co-Terminus Provisions

The Company's owned real estate in Bismarck, ND, Quincy, IL, and Rapid City, SD, is financed through a term loan with BMO Harris, NA ("BMO") which is also a participant lender on the Company's revolving line of credit. The BMO loan contains cross default provisions which cause the loan with BMO to be considered in default if the loans where BMO is a lender, including the revolving credit facility, is in default. There were no such cross defaults at September 2013. In addition, the BMO loan contain co-terminus provisions which require all loans with BMO to be paid in full if any of the loans are paid in full prior to the end of their specified terms.

Other

AMCON has issued a letter of credit in the amount of approximately $0.4 million to its workers' compensation insurance carrier as part of its self-insured loss control program.