EXHIBIT 10.02
ADDENDUM
This Addendum to the Asset Purchase Agreement (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., effective as of November 10,
1996.
Whereas, Xxxxxx Xxxx Co., Ltd. has requested additional time beyond
January 3, 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 the amount of $350,000, which shall be payable at Closing as
follows: $100,000 cash or certified funds and the $250,000 evidenced by a
promissory note from Kid's Stuff, Inc. containing the terms set forth in
Paragraph 2.
2. The Promissory Note shall be in the amount of $250,000, bear interest at
Eight percent (8%) per annum, with annual payments of interest only, in arrears
for three years, then followed by five annual payments of Fifty Thousand Dollars
($50,000), plus accrued interest, payable on the fourth, fifth, sixth, seventh
and eight anniversaries of the execution of the Promissory Note. The Promissory
Note shall be convertible into unregistered shares of the common stock of Kid's
Stuff, Inc. at the election of the holder, in whole or in part, at $5.00 per
share. The Promissory Note may be prepaid at any time without penalty, upon
thirty days written notice from Kid's Stuff, Inc. Such conversion is contingent
upon exemption from registration of the shares issued upon conversion. Kid's
Stuff, Inc. shall bear the expense of exemption from registration promptly upon
notice of conversion from the holder.
3. Xxxx Xxxxxx, Xxxxxx Xxxxxx, The Natural Baby Company, Inc. and Xxxxxx Xxxx
Co., Ltd. hereby consent to the assignment of the Purchase Agreement, the Xxxxxx
Xxxxxx Non-Compete Agreement and the Xxxx Xxxxxx Consulting & Non-Compete
Agreement by Xxxxxx Xxxx Co., Ltd. to its wholly owned subsidiary, Kids Stuff,
Inc., with out waiving or releasing Xxxxxx Xxxx Co., Ltd. from any of its
obligations or duties under the foregoing agreements. Xxxxxx Xxxx Company, Ltd.
hereby assigns all of its right, title and interest in the Purchase Agreement to
Kids Stuff, Inc.
4. The Final Closing Date is hereby extended to April 30, 1997, at the latest.
The Company 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 Stuff, Inc. by VTR Capital, Inc. Further, the parties agree
that an escrow closing shall be made within ten (10) business days prior to the
effective date of the registration statement of
Kid's Stuff, Inc. in connection with its pending public offering. Unless the
Final Closing Date is within fifteen business days from the effective date of
Kids Stuff, Inc.'s registration statement, Sellers may terminate the
transaction. At the escrow closing all deliveries required by the Seller's and
Buyers other than cash and notes shall be delivered to escrow agent. Between the
date of Escrow Closing and the Final Closing, business shall be conducted for
the benefit of Buyer by Seller and the Seller Shareholders. The parties hereto
agree that Xxxxxxxx & Shohl, LLP shall serve as Escrow Agent for the Escrow
Closing.
5. Paragraph 2.3 (b) of the Purchase Agreement is hereby modified by addition of
the following: Provided, however, that the purchase price shall be adjusted
pursuant to this section as follows:
(i) An adjustment shall be made under this paragraph 2.3(b) for any increase or
decrease in the tangible net worth from 12/31/95 to 12/31/96;
(ii) If there is a decrease in the tangible net worth between 12/31/96 and
Closing which is greater than 105% of the decrease from 12/31/95 to the date
]one year prior to Closing, a second adjustment shall be made decreasing the
Purchase Price by the difference between:
(a) 105% of the decrease in tangible net worth from 12/31/95 to the date one
year prior to closing; and,
(b) the actual decrease in tangible net worth from 12/31/96 and Closing.
6. Paragraph 2.3 of the Purchase Agreement is hereby modified as follows: Any
adjustment to the Purchase Price shall be reconciled by adjusting the principal
amount of the Promissory Note issuable pursuant to Paragraph 2 of this Addendum.
The parties agree to deliver and execute such documents as reasonably required
to effect this provision.
Agreed and Accepted
/s/ XXXX XXXXXX /s/ XXXXXX XXXXXX
--------------------------- --------------------------------
Xxxx Xxxxxx Xxxxxx Xxxxxx
Xxxxxx Xxxx Co., Ltd.
/s/ XXXXXXX X. XXXXXX PRESIDENT
--------------------------- --------------------------------
by Title
The Natural Baby Company, Inc.
/s/ XXXXXX XXXXXX PRESIDENT
--------------------------- --------------------------------
by Title
Kid's Stuff, Inc.
/s/ XXXXXXX X. XXXXXX CHIEF EXECUTIVE OFFICER
--------------------------- --------------------------------
by Title
