AMENDMENT
TO
ASSETS PURCHASE AND SALE AGREEMENT
THIS AMENDMENT TO ASSETS PURCHASE AND SALES AGREEMENT (the "Amendment"),
dated to be effective as of March 23, 2001, is entered into between Food For
Health Co., Inc., an Arizona corporation ("Seller"), AMCON Distributing
Company, a Delaware corporation, ("Shareholder"), and Tree of Life, Inc., a
Delaware corporation ("
("Buyer") (collectively, the "Parties"), in order to amend that certain Assets
Purchase and Sale Agreement (the "Purchase Agreement"), among the Parties
dated March 8, 2001 (the "Purchase Agreement").
RECITALS:
A. According to the Purchase Agreement, certain schedules and exhibits of
the Purchase Agreement were to be updated as of the 23rd of March, 2001 (the
"Closing Date"). The Parties have agreed to amend and update such schedules
to the Purchase Agreement as set forth herein.
B. According to the Purchase Agreement, certain conditions and
obligations of the Parties' were to be completed as of the Closing Date.
However, conditions and obligations remain outstanding and the Parties agree
to amend and waive such conditions to closing of the Purchase Agreement as set
forth herein and confirm the agreements of the Parties regarding the
resolution of all outstanding issues.
AGREEMENTS:
NOW, THEREFORE, in consideration of the recitals and agreements herein and
other valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Parties agree as follows:
1. The Purchase Agreement is amended to replace the following Exhibits
and Schedules with those Exhibits and Schedules attached hereto:
Exhibit D Instruments of Transfer
Exhibit F Letter of Credit
Exhibit G Opinion of Seller's and Shareholder's Counsel
Exhibit I Hawaiian Water Company Agreement
Schedule 1.1(a) Inventory Owned by Seller
Schedule 1.1(b) Accounts Receivable of Seller
Schedule 1.1(c) Vendor Receivables of Seller
Schedule 1.1(d) Fixed Assets
Schedule 1.1(e) Prepaid Expenses
Schedule 1.1(f)(ii) Customer Contracts of Seller
Schedule 1.1(i) Intellectual Property of Seller
Schedule 1.3(b) 800 Code Inventory
Schedule 1.5 Prorations
Schedule 3.13 Litigation
Schedule 3.15 Inventory on Consignment
Schedule 3.16(b) WARN Wage Expenses
Schedule 3.28 800 Code Inventory of Seller as of Closing
Schedule 10.14 Hired Employees
Schedule 10.15(e) Compensation, Employee Wages, Benefits and
Taxes
2. Section 2.4(f) of the Purchase Agreement is hereby amended to provide
only as follows:
(f) Letter of Credit. At any time within 10 days after the Closing,
Seller shall deliver to Buyer an irrevocable standby letter of credit in favor
of Buyer in the amount of $500,000 with a term of 12 months after the Closing
Date (the "Letter of Credit"), to secure Buyer against Losses regarding which
there has been a final determination under the procedure set forth in Section
8.5 or under that certain Indemnification Agreement between the Parties dated
March 23, 2001 ("Indemnification Agreement"). The Letter of Credit (i) shall
be in the form attached hereto as Exhibit "F" and (ii) shall be issued by
LaSalle National Bank, N.A. Buyer may draw under the then current Letter of
Credit in an amount equal to so much of any Indemnification Claim as defined
in this Agreement or the Indemnification Agreement, as is accepted by Seller
(by failure to object or otherwise). If no final determination of the
validity and amount of all or any portion of a timely and outstanding
Indemnification Claim has occurred by one month before the expiration date of
the then current Letter of Credit, Buyer may give notice to Seller to cause
the bank that issued that Letter of Credit to extend that Letter of Credit or
obtain a new Letter of Credit for an additional 12 months, in the amount of
the lesser of the balance of the Letter of Credit and that Indemnification
Claim (the "Balance"). If Buyer gives such notice, Seller shall cause that
bank so to extend or issue the new Letter of Credit. If Buyer does not
receive within 10 days before the expiration date of the then current Letter
of Credit sufficient evidence that such Letter of Credit has been so extended
or new Letter of Credit issued, Buyer may draw the Balance under the Letter of
Credit and hold the proceeds from such draw in an interest-bearing escrow
account, for the purposes for which the Letter of Credit is furnished to
Buyer. This process may be repeated for successive terms of one (1) year
until such time as there are no timely and outstanding Indemnification Claims
under this Agreement or the Indemnification Agreement that remain unsatisfied.
Except as otherwise provided in this Agreement or the Indemnification
Agreement, nothing in this section, and no action or inaction of Buyer under
this section or with regard to the Letter of Credit or substitute therefor,
shall be construed to limit Buyer's remedies against Seller or Shareholder for
Losses, except to the extent of the proceeds of any draw actually received by
Buyer for its own account (as opposed to being received by Buyer to be held in
escrow hereunder).
3. The last sentence of Section 1.4 of the Purchase Agreement is amended
to state only as follows: An amount equal to $8,337,390.98 shall be paid to
Seller in current funds by wire transfer on the Closing Date to one or more
accounts designated by Seller; an additional payment of $500,000 shall be paid
to Seller in current funds by wire transfer to one or more accounts designated
by Seller immediately upon receipt by Buyer of the Letter of Credit required
by Section 2.4(f).
4. The condition of Section 6.16 of the Purchase Agreement is waived as a
precedent to closing by Buyer, provided that Buyer represents and warrants
that it has requested a tax clearance certificate with respect to the payment
of taxes in the states of Arizona, Florida and Texas and agrees it will
continue diligently to seek such certificates and will provide them to Seller
reasonably soon after they have been obtained.
5. All receivables of Seller from Arizona Health Foods are Excluded
Receivables.
6. Seller shall prepare and file promptly the appropriate UCC-3
Statements of Change transferring to Buyer its lien rights in the UCC-1
Financing Statements described in Schedule 1.1(f)(ii).
7. All references on the Agreement to AMCON Distributing Company, Inc.
are amended to state the correct name of that corporation, AMCON Distributing
Company.
8. Words and terms defined in the Agreement shall have the same meanings
when used in this Amendment, except as otherwise indicated.
9. This Amendment is not intended for and shall not be construed for the
benefit of any party not a signatory hereto. This Amendment shall be binding
upon, and inure to the benefit of the parties hereto and their respective
successors and assigns. This Amendment and the Purchase Agreement and the
Indemnification Agreement constitute the entire agreement (including all
representations and promises made) among the Parties with respect to the
subject matter hereof and no modification or waiver shall be effective unless
in writing and signed by the party to be charged. Except for this Amendment,
the terms and conditions set forth in the Purchase Agreement and the
Indemnification Agreement shall remain in full force and effect.
10. Certain leased vehicles and trailers are not in the condition as
represented and warranted by Seller and Shareholder under Section 3.15.
Seller and Shareholder agree that Buyer may take possession of the same and
audit the same for damage within 30 days of Closing. Seller and Shareholder
agree that they shall be responsible for reimbursing Buyer for the costs of
any repair to such vehicles in order to conform to such representations and
warranties.
11. The parties to the Agreement acknowledge that there are issues to be
resolved and matters to be completed post-closing. Each of the parties to the
Agreement hereby agree to offer maximum cooperation with each other in an
ongoing diligent manner to complete all such matters required to be concluded
or obtained by the terms of the Agreement and to consummate the transactions
and matters contemplated either by the Purchase Agreement or by the terms of
this Amendment.
12. Section 10.7 is amended to insert, after the first reference to "this
Agreement": "together with the Indemnification Agreement dated as of March
23, 2001 between Buyer, Seller and Shareholder."
13. The parties acknowledge that the Agreement with respect to the
Hawaiian Water Company Contract has not been completed. The parties agree
that they, along with Hawaiian Water Company, shall cooperate with each other
to negotiate and execute a mutually acceptable agreement, substantially in the
form and substance set forth as Exhibit "I" attached hereto with such changes
as may be agreed upon by the parties, as soon as practicable but by no later
than July 1, 2001.
IN WITNESS WHEREOF, Buyer, Seller and Shareholder have caused their
signatures to be hereunto subscribed, all as of the day and year first above
written.
TREE OF LIFE, INC. ("BUYER")
By: Xxxxx X. Xxxxxx
-------------------------
Xxxxx X. Xxxxxx,
Senior Vice President
Natural Food Div. Ops.
FOOD FOR HEALTH CO., INC. ("SELLER")
By: Xxxxx Xxxxxxx
-------------------------
Xxxxx Xxxxxxx, President
AMCON DISTRIBUTING COMPANY ("SHAREHOLDER")
By: Xxxxxxx X. Xxxxxx
-------------------------
Xxxxxxx X. Xxxxxx, Chairman
