EXHIBIT 10.18
SECOND ADDENDUM
This Second Addendum to the Asset Purchase Agreement, as modified by
the Addendum dated November 10, 1996 (collectively, the "Agreement") by and
between The Natural Baby Company, Inc. and Xxxxxx Xxxx Co., Ltd. is entered into
by and between the parties and Kid's Stuff, Inc. ("KIDS"), effective as of
April 27, 1997.
Whereas, Kids Stuff, Inc. has requested additional time beyond April
30,1997 within which to close the purchase of assets; and
Whereas, The Natural Baby Company, Inc. is willing to extend the
closing date in accordance with the terms set forth herein.
Now, therefore, for and in consideration of the mutual promises and
covenants contained herein, the parties agree as follows:
1. The Purchase Price set forth in Paragraph 2.1 of the Purchase Agreement is
increased by:
(a) the additional amount of $150,000, which shall be payable at Closing
in the form of wired funds or cashiers check;
(b) by an amount based upon "Calculated Profit" before federal income
taxes from the closing date through December 31, 1997 in excess of
$300,000. The Calculated Profit shall be defined as merchandise
sales, net of returns and allowances, for the period of time from
the closing date through December 31, 1997, multiplied by the
average percentage of profit before federal income taxes for the
twelve months preceding the closing date.
The foregoing Calculated Profit shall be determined by KIDS on or
before April 14, 1998, and the amount of the Purchase Price
adjustment determined in accordance with the foregoing shall be
payable as follows: (1) one-fourth on or before April 14, 1998; (2)
one-fourth, plus interest, on or before April 14, 1999; (3)
one-fourth, plus interest, on or before April 14, 2000; (4) and, the
remaining one-fourth, plus interest, on or before April 14, 2001;
(v) the balance unpaid as of April 15, 1998 shall be evidenced by a
promissory note from KIDS bearing simple interest at the rate of
eight percent (8%) per annum;
(c) the issuance at Closing to Seller of 70,000 shares of KIDS common
stock, which shall bear restrictions against transfer for a period
of not more than two years and shall be valued at $3.50 per common
share. Seller shall execute a subscription agreement substantially
in the form attached hereto as Exhibit A.
3. Xxxxxxx X. Xxxxxx shall personally guarantee the first two years of the
$250,000 promissory note being issued to the Seller pursuant to Paragraph
Two of the November 10, 1996 Addendum.
4. On or before Closing, KIDS shall reimburse Seller for up to $750 in legal
fees for legal services rendered by Xxxx Xxxxx, Esq. to Seller.
5. Upon execution hereof, KIDS shall deliver to Seller a promissory note in
the amount of
$87,500 payable to Seller, which shall be canceled at Closing. In the
event Closing does not occur on or before June 30, 1997, Seller shall
retain said Note as liquidated damages. Buyer may deliver to Seller the
sum of $50,000 by wire transfer or cashiers check on or before June 15,
1997 in lieu of said $87,500 note, which amount shall be credited against
the Purchase Price at Closing and retained by Seller as liquidated damages
in the event Buyer fails to Close on or before June 30, 1997.
5. Following Closing, KIDS shall relocate the operations of the Natural Baby
Catalog on or before June 30, 1997 from its present facility at 000 Xxxxxx
Xxxxxx, Xxxxxxx, XX.
6. The Final Closing Date is hereby extended to June 30, 1997, at the latest.
KIDS shall attempt to cause the Final Closing Date to occur on the last
day of a month, however, the parties acknowledge that Final Closing Date
shall occur within five business days subsequent to the closing of the
public sale of securities of KIDS by VTR Capital, Inc. Further, the
parties agree that the escrow closing previously effected by the parties
shall be maintained.
5. Paragraph 2.3(b) of the Purchase Agreement is hereby modified by deleting
the modification set forth in Paragraph 5 of the (first) Addendum to the
Purchase Agreement and reinstating the original provisions of Paragraph
2.3(b) of the Purchase Agreement.
6. Buyer shall provide Seller with a copy of all documents requested by
Seller relating to the pending public offering of securities by Seller.
Agreed and Accepted
The Natural Baby Company, Inc
By: /s/ XXXXXX XXXXXX
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Xxxxxx Xxxxxx
Vice President
/s/ XXXX XXXXXX /s/ XXXXXX XXXXXX
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Xxxx Xxxxxx Xxxxxx Xxxxxx
Kids Stuff, Inc.
/s/ XXXXXXX X. XXXXXX
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Xxxxxxx X. Xxxxxx
President
