Exhibit 2.2
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FIRST AMENDMENT TO
ASSET PURCHASE AGREEMENT
AND REAL ESTATE PURCHASE AGREEMENT
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This First Amendment to Asset Purchase Agreement and Real Estate Purchase
Agreement (the "Amendment") is made as of October 29, 1998, by and among
SMITHWAY MOTOR XPRESS, INC., an Iowa corporation ("Buyer"); JHT, Inc., a
Minnesota corporation ("JHT"), JHT LOGISTICS, INC., a Minnesota corporation
("Logistics"), Bass Brook Truck Service, Inc., a Minnesota corporation ("Bass
Brook"), and JERDON TERMINAL HOLDINGS, LLC ("Jerdon"), a Minnesota limited
liability company (individually a "Company" and together the "Companies"); and
Xxxxx X. Xxxxxxx, Xxxxx Xxxxxxx, Xxxxx Xxxxxxx, Xxxxx Xxxxx, and Xxxxx X.
Xxxxxxx, shareholders or members of the Companies (individually a "Shareholder"
and together the "Shareholders").
RECITALS
The parties previously entered into that certain Asset Purchase Agreement
and that certain Real Estate Purchase Agreement each dated September 23, 1998
(together the "Agreements"). Certain events have transpired since the execution
of the Agreements that the parties wish to reflect in writing.
TERMS
NOW, THEREFORE, in consideration of the foregoing recitals and the mutual
covenants, representations, and warranties herein contained, and upon the terms
and conditions hereinafter set forth, the parties hereto agree as follows:
A. Amendment of Agreements. The provisions of this Amendment shall
supplement and amend the Agreements as specifically stated herein. If there is a
conflict between this Amendment and the Agreements, this Amendment shall
control. Except as stated herein, the Agreements shall continue in full force
and effect. Capitalized terms used herein and not otherwise defined herein shall
have the meanings ascribed in the Asset Purchase Agreement.
B. Purchase and Rental of Real Estate. Buyer shall purchase the Real
Estate from Jerdon for $645,000. Such amount shall be paid first to creditors to
retire all obligations and remove all Liens relating to the Real Estate, with
the remainder to be paid to Jerdon. The closing of such transaction (the "Real
Estate Closing") shall occur on the first business day immediately following the
occurrence of both of the following; (i) receipt of the final Phase I
environmental assessment on the Real Estate from American Engineering and (ii)
Buyer's reasonable satisfaction that either (a) there are no significant
environmental problems with Real Estate or (b) that such problems have been
fully remediated by the Companies and the Shareholders or adequate provision has
been made by the Companies and the Shareholders for all remediation costs. The
real estate purchase price shall be delivered via wire transfer to Abstract
Service Company of Grand Rapids, Minnesota, as closing agent for the Real Estate
Closing. Buyer shall lease the Real Estate pursuant to the lease attached hereto
as Exhibit 4 which provides the following: (i) Buyer shall pay Jerdon $100 per
day in rent for use of the Real Estate payable at the Real Estate Closing; (ii)
rental payments shall commence on the Closing, as hereinafter defined, and
terminate on the day immediately preceding the Real Estate Closing; and (iii)
Buyer shall promptly pay all utilities and insurance on the Real Estate from the
Closing through the day immediately preceding the Real Estate Closing. Real
estate taxes shall be prorated as of the Real Estate Closing. All risk of loss
to the Real Estate shall remain with Jerdon through the Real Estate Closing. At
the Real Estate Closing, the Companies shall deliver or cause to be delivered to
Buyer a general warranty deed to the Real Estate in substantially the form
attached as Exhibit H to the Asset Purchase Agreement. The parties have been
informed by American Engineering that the Phase I is expected to be finalized on
or before November 6, 1998.
C. Removal of Underground Storage Tanks. Buyer shall assume the existing
contract between JHT, Inc. and Independent Petroleum Service, Inc. with a date
of acceptance of September 15, 1998 by delivery of written notification to
Independent Petroleum Service, Inc. and shall receive the benefit of the $5,543
prepayment under such contract already made by JHT. Buyer shall direct and
control the removal and, if desired, replacement of the underground storage
tanks located on the Real Estate. Buyer shall pay any costs of such removal and
replacement up to a maximum of $24,000, subject to downward adjustment as
described herein; provided that the Shareholders and Companies shall bear 100%
of the cost necessary to fill the tank sitting under the shop floor located on
the Real Estate and bring the tank into compliance with Environmental Laws and
such amount shall be paid by Buyer and subtracted from the $24,000 (the "Buyer
Amount"). In addition, after Buyer has paid the Buyer Amount, all costs to
remediate environmental conditions or otherwise to bring the Real Estate into
compliance with Environmental Laws shall be borne by the Shareholders and
Companies. If not promptly paid by the Shareholders and the Companies, Buyer may
pay any amounts owing on behalf of the Companies and the Shareholders and offset
such amounts against the Goodwill Payment owing the Companies. In connection
with such removal and replacement, Buyer shall reasonably consider the advice
and wishes of the Companies and the Shareholders and the Companies and the
Shareholders shall provide reasonable cooperation.
D. Remediation of Environmental Matters. The Companies and the
Shareholders shall be responsible for all remediation costs to the Real Estate
that are based upon conditions existing on the Real Estate or on violations of
Environmental Laws occurring prior to the Real Estate Closing; provided that
Buyer shall be responsible for the costs of any violation caused by it between
Closing and Real Estate Closing. The Companies and the Shareholders shall
promptly take all actions that are necessary to bring the Real Estate into
compliance with all Environmental Laws, with the exception of those items
addressed in C above as being Buyer's responsibility. The Companies and the
Shareholders shall be responsible for all out-of-pocket expenses incurred by
Buyer of every kind and character including fees and expenses of attorneys and
experts and costs of enforcing this obligation. Such amounts may be offset
against the Goodwill Payment owing the Companies.
E. Reimbursement for Removal, Remediation, or Related Costs.
Notwithstanding what costs are reimbursable under Environmental Laws,
reimbursement to Buyer, the Companies, or the Shareholders under any
Environmental Laws shall be shared by the parties pro-rata based upon the
percentage of the total costs incurred by each party under C and D above and the
prorated portion of any amounts received shall be paid promptly upon receipt to
the appropriate party.
F. Health Insurance. From and after Closing, Buyer, or its assignee, shall
offer health insurance coverage on the same basis as the existing coverage
provided by the Companies. Buyer is not assuming, and shall not be deemed to
assume, any of the Companies' obligations for health insurance and COBRA
coverage.
X. Xxxx XxXxxxx Contract. The amount set forth in the Payoff Letter from
Rand XxXxxxx shall be deducted from the Purchase Price under the Asset Purchase
Agreement and retained by Buyer following Closing (the "Retained Amount"). Buyer
shall not pay the Retained Amount to Rand XxXxxxx as directed in the Payoff
Letter. Logistics shall continue its contractual agreement with Rand XxXxxxx
through December 31, 1998. Buyer shall make the monthly contract payments of
approximately $1,941 due November 1, and December 1, 1998 to Rand XxXxxxx on
Logistics' behalf from the Retained Amount and pay any remaining Retained Amount
to Rand XxXxxxx on or before January 15, 1999. Buyer may, at its option,
thereafter assume such contract with the consent of Rand XxXxxxx. Buyer is not
assuming and shall not be deemed to assume any obligations under such contract
arising prior to or contemporaneously with the Closing, including the initial
contract fee of approximately $90,000 financed by Logistics over the term of the
contract. At Closing, Buyer shall pay Logistics the prorated portion of the
$15,500 annual fee for 1998 that was previously paid by Logistics to Rand
XxXxxxx.
H. Purchase Price for Transferred Assets. Exhibit A to the Asset Purchase
Agreement among the parties is amended as revised on Exhibit 1 attached hereto;
provided all schedules to such Exhibit A are not amended except as provided in
Paragraph L hereof.
I. Goodwill Payment. Section 1.3 of the Asset Purchase Agreement among the
parties is deleted in its entirety and replaced with new Section 1.3, which
shall read as follows:
"1.3 Goodwill Payment. Buyer shall purchase the goodwill relating to
the Companies' business by delivering the following amounts to the Company
designated by the Shareholders (the "Goodwill Payment"):
1.3.1 At Closing, $1,082,280 shall be delivered;
1.3.2 On February 1 and May 1, 1999, $35,285, shall be
delivered;
1.3.3 On August 1 and November 1, 1999, $60,285 shall be
delivered; and
1.3.4 On February 1, May 1, August 1, and November 1 of 2000,
$60,285, minus the "Adjustment Amount," if applicable, shall be
delivered. The Adjustment Amount is $31,408 and shall apply only if
revenue generated from Buyer's service to Xxxxxxx is less than
$3,120,000 for the period from Closing to the first anniversary of
Closing."
J. The Closing. All transactions contemplated by the Asset Purchase
Agreement, with the exception of the Real Estate Closing, shall be consummated
at a closing to be held at 11:00 a.m. Central Time via telephone conference call
on October 30, 1998, or such other time or means as the parties may agree (the
"Closing"). Xxxxxxx Law Firm, P.C. shall act as closing agent and hold all
signed documents necessary to consummate the Agreements and this Amendment
pending facsimile confirmation from Xxxxx Xxxxx or Xxxxxx Xxxxx Xxxxxxx that it
may release all closing documents to the appropriate parties.
K. Right to Indemnification or Offset Not Affected by Knowledge. The
Buyer's right to indemnification, offset, or other remedy based on any
representations, warranties, covenants, and obligations contained in the
Agreements as amended hereby will not be affected by disclosure on any schedule
or by any investigation conducted with respect to, or any knowledge acquired (or
capable of being acquired) at any time, whether before or after the execution
and delivery of this Amendment, with respect to the accuracy or inaccuracy of or
compliance with, any such representation, warranty, covenant, or obligation. The
waiver of any condition based on the accuracy of any representation or warranty,
or on the performance of or compliance with any covenant or obligation, will not
affect the right to indemnification, offset, or other remedy based on such
representations, warranties, covenants, and obligations.
L. Omission of Schedules. Schedule A-3 to the Asset Purchase Agreement is
amended to add thereto the listing of Qualcomm units on Exhibit 2 attached
hereto. Schedule A-2 to the Asset Purchase Agreement is deleted and replaced
with Exhibit 3 attached hereto.
M. Inventory Count and Office Equipment Verification. Section 8.8 of the
Asset Purchase Agreement is amended to provide that the inventory count and
office equipment verification shall be conducted by Buyer no later than November
6, 1998, rather than prior to Closing.
N. Counterparts. This Amendment may be executed in any number of
counterparts and any party hereto may execute any such counterpart, each of
which when executed and delivered shall be deemed to be an original and all of
which counterparts taken together shall constitute but one and the same
instrument. This Amendment shall become binding when one or more counterparts
taken together shall have been executed and delivered by the parties. It shall
not be necessary in making proof of this Amendment or any counterpart hereof to
produce or account for any of the other counterparts.
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Signature Page Entitled "First Amendment To
Asset Purchase Agreement Among
Buyer, the Companies, and the Shareholders" Follows
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Signature Page to First Amendment
To
Asset Purchase Agreement
Among
Buyer, the Companies, and the Shareholders
IN WITNESS WHEREOF, the parties hereto have duly executed this Amendment
on the date first written.
THE SHAREHOLDERS THE COMPANIES
JHT, INC., a Minnesota corporation
/S/ XXXXX X. XXXXXXX By: /S/ XXXXX XXXXXXX
Xxxxx X. Xxxxxxx, Individually Xxxxx Xxxxxxx, Chief Executive Officer
/S/ XXXXX XXXXXXX
Xxxxx Xxxxxxx, Individually JHT LOGISTICS, INC.,
a Minnesota corporation
/S/ XXXXX XXXXXXX By: /S/XXXXX XXXXXXX
Xxxxx Xxxxxxx, Individually Xxxxx Xxxxxxx, President
/S/XXXXX XXXXX
Xxxxx Xxxxx, Individually BASS BROOK TRUCK SERVICE, INC., a
Minnesota corporation
/S/XXXXX X. XXXXXXX By: /S/XXXXX X. XXXXXXX
Xxxxx X. Xxxxxxx, Individually Xxxxx X. Xxxxxxx, President
BUYER JERDON TERMINAL HOLDINGS, LLC, a
Minnesota limited liability company
SMITHWAY MOTOR XPRESS, INC.
By: /S/XXXXX X. XXXXXXX
By: /S/XXXXXXX X. XXXXX Xxxxx X. Xxxxxxx, Manager
Xxxxxxx X. Xxxxx, President
LIST OF EXHIBITS
Exhibit 1 Amendment to Exhibit A of Asset Purchase Agreement
