ASSET PURCHASE AGREEMENT





THIS ASSET PURCHASE AGREEMENT (the "Agreement"), has been entered into

as of February 8, 2001 by and 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").



WHEREAS, Seller desires to sell to Buyer, and Buyer desires to

purchase from Seller, substantially all of the business assets of

Seller on the terms and conditions set forth herein;



NOW, THEREFORE, in consideration of the foregoing, and of the

representations, warranties, covenants, and agreements contained

herein, the parties hereto, intending to be bound, hereby agree as

follows:



                           ARTICLE 1



                    PURCHASE AND SALE OF ASSETS



Section 1.01 PURCHASE AND SALE OF ASSETS.  On the terms and subject to

the conditions set forth herein, Seller agrees to sell, convey,

transfer, and assign and deliver to Buyer, and Buyer agrees to

purchase, receive, assume, and accept, good and marketable title to

all of the assets used or otherwise useful to the business of the

Seller, whether tangible or intangible, real, personal, or mixed,

including without limitation:



    (a) all good, saleable and turning inventory held for resale by

Seller as of the  Valuation Date (as defined herein)(the "Inventory").

For purposes hereof "good, saleable and turning inventory" is defined

as inventory items that are merchantable and fit for sale, not

damaged, defective or obsolete and that the Seller has been

consistently able to sell within a three-month period.  Buyer shall

provide written notice to Seller at Closing (defined herein) detailing

all items excluded from Inventory;



    (b) all accounts receivables, other trade receivables, merchandise

credits, rebates receivable, vendor receivables and return credits of

the Seller that are current and within terms as of the Valuation Date

(as defined herein), but not including items that are to be paid by

electronic funds transfer directly to Seller's account (the "Accounts

Receivable") that will be guaranteed by the Seller and the

Shareholders as provided in Section 1.06 hereof;



    (c) all machinery, equipment, telephone and computer systems (both

hardware and software), fixtures, plant and structures, improvements

to leased property and plant and structures located thereon, vehicles,

trailers, furniture, tools, office supplies, warehouse supplies,

accessories and miscellaneous items of personal property used by the

Seller in the business (the "Fixed Assets");



    (d) all agreements and contracts (except those set forth in

Schedule 1.01 which are specifically not assigned to, or assumed by,

the Buyer), leases (including equipment and capital leases),

instruments, security interests, guaranties, warranties and other

intangible property of the Seller (the "Intangible Property");



    (e) all trademarks, service marks, logos, trade names (including,

without limitation, the name "Merchants Wholesale Inc.") and all

derivations thereof and all applications, registrations, and renewals

in connection therewith), copyrights (including applications,

registrations, and renewals in connection therewith, plus any trade

secrets and confidential business information (including ideas,

research and development, know-how, formulas, processes and

techniques, technical data, designs, drawings, specifications,

customer and supplier lists, pricing and cost information, and

business and marketing plans and proposals relating to the business

activities of the Seller (in whatever form or medium) and records

related thereto (the "Intellectual Property");



    (f) all permits, licenses, orders, registrations, certificates,

variances, and similar rights obtained from governments and

governmental agencies relating to the business of the Seller (the

"Permits"); (such assets being collectively referred to herein as the

"Assets").  Notwithstanding the foregoing, the Seller is not selling,

and the Buyer is not buying cash and marketable securities, prepaid

expenses or deposits of Seller as of the Closing Date, contracts or

agreements set forth in Schedule 1.01, or shares of stock or other

interests in any subsidiary of the Seller (the "Excluded Assets").



Section 1.02  ASSUMPTION OF LIABILITIES.  In connection with the sale

of the Assets to Buyer, Buyer will assume those liabilities of the

Seller specifically set forth in Schedule 1.02 hereto.  Buyer will not

be responsible for any liabilities, liens, claims, obligations, or

encumbrances of Seller, contingent or otherwise, other than those

specifically described in Schedule 1.02 and the Assets shall be sold

and conveyed to Buyer free and clear of all liabilities, liens,

claims, obligations, and encumbrances, except as set forth on

Schedule 1.02.  Without limiting the generality of the foregoing and,

except as set forth on Schedule 1.02, in no event will Buyer assume or

otherwise be responsible or liable for any or the following types of

liabilities or obligations:



    (a) any costs or expenses of the Seller or the Shareholders

incurred in negotiating, entering into and carrying out its or their

obligations under this Agreement;



    (b) any income, sales, property, franchise, use or other tax of

Seller or any Shareholder arising out of or resulting from the sale of

the Assets pursuant to this Agreement or any transaction of Seller or

any Shareholder prior to or subsequent to the execution of this

Agreement;



    (c) any costs and expenses incurred by Seller or any Shareholder

in connection with the operation of the Seller after the Closing (as

defined herein) or the liquidation and dissolution of the Seller;



    (d) any liability relating to, or arising out of the use or

ownership of the Excluded Assets;



    (e) any obligations or liabilities arising under any employment

agreements or employee incentive plans (including, but not limited to

any accrued vacation or sick leave) or any other employee cost of

Seller including any obligation to contribute to, or any liability in

connection with, any employee benefit plans maintained by the Seller

for its employees, former employees, retirees, their beneficiaries or

any other person ("Employee Benefit Plans"), and any continuation

coverage (including any penalties, excise taxes or interest resulting

from the failure to provide continuation coverage) required by

Section 4980B of the Internal Revenue Code of 1986 ("Code"), due to

qualifying events as defined therein, occurring on or before the

Closing or any liability arising out of any disputes, claims or

threatened claims between the Seller and its employees or former

employees;



    (f) any noncompliance by the Seller with any applicable laws,

rules and regulations, including without limitation, those relating to

employment and labor management relations and provisions thereof

relating to wages and the payment thereof, hours of work, collective

bargaining agreements, and workers' compensation laws;



    (g) any claim arising out of violations of any environmental laws

or out of any events, actions or omissions, of whatever nature or

type, occurring or existing prior to Closing;



    (h) any contingent or unknown liability of the Seller;



    (i) any liability, obligation or cost resulting from any claim or

lawsuit or other proceeding relating to the Assets or naming Seller,

or any successor thereof, or the Shareholders as a party arising out

of events, transactions or circumstances occurring or existing prior

to Closing; or



    (j) any claim against Buyer or Seller, which claim is based, in

whole or in part, upon the failure of Seller or Buyer to comply with

laws applicable to bulk transfers.



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 the sum

of:

        (i) 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) the book value , determined as of the Valuation Date, of

all current Accounts Receivable; and



        (iii) 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 assumed by Buyer relating thereto.



    (b) an additional $5,750,000 payable in cash in installments of

$900,000 on each of the first four anniversaries of the Closing Date

and in a final installment of $2,150,000 on the fifth 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



    (c) a contingent amount (the "Earnout Consideration") which will

be payable pursuant to the terms and conditions of Section 1.04

hereof.



Section 1.04  EARNOUT CONSIDERATION.  The Earnout Consideration will

be payable in cash on the fifth anniversary of the Closing Date and

will be equal to $250,000 if, but only if, the installation of all

rack, track and associated computerization equipment to be installed

in the building located at 2517 Ellington Road, Quincy, Illinois (the

"Property") has been completed in accordance with the plans and

specifications delivered by the Seller and is operating to the

reasonable satisfaction of the Buyer on or before the later of

(i) May 1, 2001, or (ii) the date of Closing.



Section 1.05  PAYMENT FOR ADDITIONAL CUSTOMERS AND RELATED ITEMS.



    (a) In addition to the payment of the Purchase Price, Buyer and

Seller agree that Buyer will pay Seller an amount equal to 1.5% of:



        (i) the annual net sales generated by customers of Seller or

its affiliates which, as of the date of this Agreement, are not

presently receiving products shipped from the Property ("Transitioning

Customers") but that Seller transitions to the Property between the

date of this Agreement and May 1, 2001, inclusive (the "Transition

Period"), and which continue to use Buyer as their primary supplier

for a period of at least six months after the Closing Date

("Transitioning Customer Sales"), less



        (ii) annual net sales generated by customers of Seller as of

December 2, 2000 that are no longer customers of the Seller on the

Closing Date, other than Wareco, Western Oil and any customer who

generated gross margin of less than 4.5%, less $10,000,000 ("Lost

Customer Sales").



    (b) For purposes of this Section 1.05, the annual net sales of a

Transitioning Customer or a Lost Customer will be determined from the

Seller's accounting records and will be equal to the net sales

actually made by the Seller (or Seller's Subsidiary, Merchants

Wholesale of Iowa, Inc.) to (i) such Transitioning Customer during the

twelve calendar months ending prior to the date on which such

Transitioning Customer first purchases product from Buyer (the

"Customer Transition Date") or (ii) to such Lost Customers during the

twelve calendar months ended December 2, 2000.  For Transitioning

Customers and Lost Customers that were not a customer of the Seller or

Seller's Subsidiary for twelve full months, annual net sales will be

equal to the annualized sales made to such Transitioning Customer of

Lost Customer by Seller or Seller's Subsidiary during the period

ending prior to the Customer Transition Date or December 2, 2000,

respectively.  Unless otherwise agreed by the Buyer and the Seller, no

amount will be due with respect to any Transitioning Customer if the

sales from Seller or the Subsidiary to such Transitioning Customer

from which annual net sales are calculated did not generate a gross

margin of at least 4.5% for the Seller or its Subsidiary.  The amount

due under this Section 1.05 will be payable in cash on the fifth

anniversary of the Closing Date.



Section 1.06  COLLECTION AND GUARANTEE OF ACCOUNTS RECEIVABLE.



    (a) Seller and Buyer acknowledge and agree that Buyer is

purchasing the Accounts Receivable.  For purposes of determining

whether an Account Receivable owed by a particular customer has been

collected, payments received from that customer by Buyer shall be

credited and applied on a "first-in, first-out" basis unless the

customer disputes in writing the previous amount owed on or before the

date payment is made and designates the application of the payment to

a specific invoice. Absent such written dispute and designation by the

customer, the payment shall be applied to the oldest outstanding

Account Receivable.



    (b) If any Accounts Receivable is not collected by Buyer within

sixty (60) days of the Closing Date, then Buyer shall give the Seller

and the Shareholders written notice thereof.  The Seller and the

Shareholders shall reimburse a portion of the Purchase Price to the

Buyer in an amount equal to the full amount of such uncollected

Accounts Receivable within five (5) days of such notice.



    (c) Seller shall have the right to inspect the books and records

of Buyer to verify the application of customer payments to the

Accounts Receivable.  Buyer shall provide Seller notice of any changes

to customer payment terms presently existing between Seller and its

customers.  Buyer agrees to maintain adequate records of the

transactions contemplated by this Agreement and shall provide access

to its records in the event of a discrepancy.



    (d) In the event that the Buyer subsequently receives payment with

respect to Accounts Receivable for which it has been reimbursed by

Seller or the Shareholders under this Section 1.06, Buyer shall hold

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