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AMENDMENT TO ASSET PURCHASE AGREEMENT
THIS AMENDMENT TO ASSET PURCHASE AGREEMENT entered into as of February
26, 1999 (this "Amendment"), by and among THE SOURCE INFORMATION MANAGEMENT
COMPANY, a Missouri corporation (the "Buyer"), MYCO, INC., an Illinois
corporation, and RY, INC., an Illinois corporation (MYCO, Inc. and RY, Inc.
referred to collectively as "Sellers" and individually as a "Seller"). The Buyer
and the Sellers are referred to collectively herein as the "Parties."
WHEREAS, the Parties have executed an Asset Purchase Agreement dated as
of February 19, 1999 (the "Purchase Agreement"); and
WHEREAS, the Parties desire to amend the terms of the Purchase
Agreement.
Now, therefore, in consideration of the mutual promises herein made,
and in consideration of the representations, warranties, and covenants contained
in the Purchase Agreement, the Parties agree as follows:
1. Section 2(c) of the Purchase Agreement shall be deleted in its
entirety and replaced with the following:
(c) Initial Purchase Price. The Buyer agrees to pay to the Sellers at
the Closing $12 million in cash and 134,615 shares of Buyer Stock (the "Initial
Purchase Price"). The Initial Purchase Price shall be allocated between Sellers
as provided in Exhibit B.
2. Section 2(f) of the Purchase Agreement shall be deleted in its
entirety and replaced with the following:
(f) Additional Purchase Price. MYCO will be entitled to receive as
additional consideration hereunder (the "Additional Purchase Price") 250,000
shares of Buyer Stock if Source-Myco, Inc.'s earnings before interest, taxes,
depreciation and amortization ("EBITDA") for the twelve (12) month period
immediately following the Closing hereunder (the "One Year EBITDA") exceeds Four
Million Dollars ($4,000,000). In the event that the One Year EBITDA does not
exceed Four Million Dollars ($4,000,000), the Additional Purchase Price shall be
reduced by 150,000 shares of Buyer Stock and by one (1) additional share of
Buyer Stock for each Ten Dollars ($10) by which One Year EBITDA is less than
Four Million Dollars ($4,000,000); provided, however, that the Additional
Purchase Price will not be reduced to less than zero. For purposes of
calculating One Year EBITDA, (i) if products are transferred from MYCO to the
Buyer or a subsidiary of the Buyer and sold by the transferee to a consumer,
MYCO will be credited with the selling price at which such products are sold to
the consumer rather than with the inter-company transfer price, and (ii) if
front-end fixtures are sold by the Buyer or any subsidiary of the Buyer to any
of the retailers listed on Schedule A attached hereto for use at a location and
for a purpose to which and for which MYCO had previously sold front-end fixtures
in response to an order given to MYCO by the Buyer, MYCO will be credited with
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an amount equal to the EBITDA directly attributable to that sale by the entity
selling such fixtures.
Buyer shall provide MYCO, within forty-five days after the expiration
of the twelve (12) calendar month (March, 1999 through February 2000) period
described above, with a copy of Source-Myco's financial statements prepared
(except as provided in the preceding paragraph) in accordance with Source-Myco,
Inc.'s customary accounting practices, which shall comply with generally
accepted accounting principles ("GAAP") (and which practices, unless they are
not in accordance with GAAP, MYCO shall not have the right to object to),
including an EBITDA schedule, for the twelve (12) month period immediately
following the Closing hereunder (the "Calculation"). If MYCO notifies Buyer in
writing that it accepts the Calculation, or if MYCO fails to object thereto in
writing on or prior to the 15th day after the date on which the Calculation is
delivered to it, the Calculation shall be deemed to have been accepted by MYCO,
and Buyer shall deliver to MYCO the number of shares of Buyer Stock representing
the Additional Purchase Price.
If MYCO, prior to the 15th day after delivery to it of the Calculation,
delivers a written objection thereto to Buyer (subject to the condition on
objection contained in the preceding paragraph) and if the Parties are unable to
agree to the Calculation within fifteen (15) days after such written objection,
the Parties shall retain the services of an independent accounting firm of
national reputation (the "Auditor") to determine the amount of the Additional
Purchase Price. If the Parties are unable to agree on selection of the Auditor,
the Auditor shall be selected by the independent accountants then performing
audit services for the Buyer. Buyer and MYCO shall each bear 50% of the fees and
other expenses of the Auditor. All Parties shall cooperate with the Auditor and
provide it with all records and documentation the Auditor may reasonably request
in order to determine the Additional Purchase Price. The determination of the
Auditor shall be final and binding on all Parties.
3. Exhibit E to the Purchase Agreement, titled "EBIDTA Schedule" shall
be deleted in its entirety. Any reference to Exhibit E in the Purchase Agreement
shall also be deleted.
4. All other terms and provisions of the Purchase Agreement shall
remain in full force and effect.
[Signature Page Follows]
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IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as
of the date first above written.
The Source Information Management Company
/s/ S. Xxxxxx Xxxxxx
By:_____________________________________________
S. Xxxxxx Xxxxxx
Chairman and Chief Executive Officer
MYCO, Inc.
/s/ Xxxxxx Xxxxx
By:_____________________________________________
Xxxxxx Xxxxx
President
RY, Inc.
/s/ Xxxxxx Xxxxx
By:_____________________________________________
Xxxxxx Xxxxx
President
