EXHIBIT 2.2
ADDENDUM TO ASSET PURCHASE AGREEMENT
This Addendum is made this 30th day of May, 2001, between AMCON
DISTRIBUTING COMPANY, a Delaware corporation ("Buyer"), MERCHANTS
WHOLESALE INC., an Illinois corporation ("Seller"), and ROBERT J.
LANSING and MARCIA S. LANSING, the sole shareholders of Seller (the
"Shareholders"). On February 8, 2001, Buyer, Seller and the
Shareholders entered into an Asset Purchase Agreement. The Asset
Purchase Agreement is hereby amended, effective May 1, 2001, as
follows:
1. The last sentence of Section 1.01 of the Asset Purchase
Agreement is amended to state as follows: Notwithstanding the
foregoing, the Seller is not selling, and the Buyer is not buying cash
and marketable securities of the Seller as of the Closing Date,
contracts or agreements set forth in Schedule 1.01, personal property
located at 3840 West River Drive, Davenport, Iowa (provided such
property is not included in the Quincy fixed asset ledger as of the
Closing Date) or shares of stock or other interests in any subsidiary
of the Seller (the "Excluded Assets").
2. Section 1.03 of the Asset Purchase Agreement is amended and
restated in its entirety to read as follows:
Section 1.03. PURCHASE PRICE. The purchase price (the
"Purchase Price") for the Assets will be payable by Buyer to Seller as
follows:
(a) An amount in cash, payable at the Closing, equal to
$1,000,000:
(i) plus the aggregate manufacturers' wholesale list
price (less applicable cash discounts) for all good,
saleable and turning Inventory held by Seller as of
the Valuation Date;
(ii) plus the book value, determined as of the
Valuation Date, of all current Accounts Receivable;
(iii) plus an amount equal to the principal amount of
the GE Capital loan being assumed by Buyer pursuant to
Section 1.02;
(iv) plus the depreciated book value of the Fixed
Assets as of the end of the last monthly accounting
period ending prior to the Valuation Date, less any
capitalized labor costs and less any debt or capital
lease obligations, other than GE Capital obligations,
assumed by Buyer relating thereto;
(v) plus the book value of certain assets classified
as prepaid expenses on the books of Seller as of the
Closing Date (which, as of March 23, 2001, approximated
$108,465);
(vi) less the total amount of any of Seller's
liabilities assumed by Buyer pursuant to Section 1.02,
including the GE Capital loan.
(b) An additional $3,550,000 payable in cash in
installments of $900,000 on each of the first three
anniversaries of the Closing Date with a final installment
of $850,000 on the fourth anniversary of the Closing Date;
provided, that the payment of each such installment on the
due date thereof shall be subordinated to Buyer's
obligations under its various credit facilities with its
primary lending institution; and, provided further, that
Buyer's obligation to make payments pursuant to this
Section 1.03(b) shall be reduced by (i) any payments made
by Buyer after the Closing Date to fulfill its guarantees
to vendors that deliver inventory to Seller prior to the
Closing Date but are not paid by Seller within normal
terms after the Closing Date that are not assumed by Buyer
pursuant to Section 1.02,(ii) any reimbursement amounts
owed by Seller or the Shareholders to Buyer for
uncollected Accounts Receivable pursuant to Section 1.06
hereof, (iii) any indemnification amounts owed by Seller
or the Shareholders to Buyer pursuant to Section 6.02
hereof, and (iv) any indemnification amounts owed by the
Shareholders to Buyer pursuant to Section 9(b) or
Section 12 of the Real Estate Purchase Agreement, as
amended, by and among Buyer and the Shareholders.
3. Section 1.04 of the Asset Purchase Agreement is hereby
deleted in its entirety.
4. Section 1.05 of the Asset Purchase Agreement is hereby
deleted in its entirety.
5. Section 1.08(a) of the Asset Purchase Agreement is hereby
amended as follows:
Section 1.08. THE CLOSING.
(a) Time and Place. Subject to the terms and
conditions of this Agreement, the closing under this
Agreement (the "Closing") will take place on or before
June 1, 2001 (the "Closing Date"), at the offices of the
Seller at 2517 Ellington Road, Quincy, Illinois, at 9:00
a.m., or at such other time, date or place as Buyer and
Seller may agree. For purposes of this Agreement, the
Closing Date is referred to herein as the "Valuation
Date."
6. A new paragraph (h) is hereby added to Section 4.02 of the
Asset Purchase Agreement which reads as follows:
(h) Release of Mortgages and Security Interests. Immediately
upon satisfaction of the deferred payments to Seller pursuant to
Section 1.03(b) of the Agreement, Seller shall execute and deliver any
termination statements, releases of mortgage, affidavits or other
documents required to remove any mortgage or security interest the
Seller may have in Buyer's property.
7. A new paragraph (i) is hereby added to Section 4.02 of the
Asset Purchase Agreement which reads as follows:
(i)Access to Information. From and after the Closing Date,
Buyer shall grant Seller access to any historical information in its
possession relating to the operations of Seller.
8. For purposes of the Asset Purchase Agreement, Buyer hereby
waives the requirement for a binding commitment from its lender with
respect to the financing of the Purchase Price as required by Section
5.01(j) of the Asset Purchase Agreement.
9. Buyer agrees that such items of inventory that are excluded
from Inventory purchased by Buyer pursuant to Section 1.01(a) shall be
allowed to remain in the Quincy warehouse through July 31, 2001
without any storage or handling fees. Seller agrees to allow Buyer to
use the Seller's Davenport, Iowa facility as a cross-dock through July
31, 2001.
10. Except as set forth in this Addendum, the terms and
conditions set forth in the Asset Purchase Agreement shall remain in
full force and effect.
[Signatures on following page]
IN WITNESS WHEREOF, the parties hereto have executed this Addendum and
caused the same to be duly delivered on their behalf on the day and
year first written above.
AMCON DISTRIBUTING COMPANY
By: Kathleen M. Evans
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Kathleen M. Evans, President
MERCHANTS WHOLESALE INC.
By: Robert J. Lansing
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Robert J. Lansing, President
SHAREHOLDERS:
By: Robert J. Lansing
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Robert J. Lansing
By: Marcia S, Lansing
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Marcia S. Lansing