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AMENDMENT
TO
ASSET PURCHASE AGREEMENT
AMENDMENT, dated as of the 30 th day of January,
2007, to the Asset Purchase Agreement (the "APA"), dated July 11,
2005, by and among G-III Leather Fashions, Inc., a New York
corporation ("Buyer"), G-III Apparel Group, Ltd. ("G-III"), Stusam,
Inc., a New York corporation formerly known as Winlit Group, Ltd.
("Winlit"), David Winn ("Winn") and Richard Madris ("Madris")
(Winlit, Winn and Madris are collectively referred to as the
"Winlit Group").
RECITALS:
WHEREAS, Buyer, G-III, Winlit, Winn and Madris are parties to
the APA pursuant to which Buyer purchased certain assets and the
business and operations of Winlit;
WHEREAS, the APA provides that Buyer shall make certain Earn Out
Payments to Winlit or its assigns;
WHEREAS, the parties desire to combine the Division with a
portion of the operations of the Marvin Richards division of Buyer
and, as a result, amend provisions of the APA related to the Earn
Out Payments;
NOW, THEREFORE, in consideration of the mutual promises and
agreements contained herein, the parties hereto agree as
follows:
1.
Definitions . All capitalized terms not otherwise
defined herein shall have the meanings given to them in the
APA.
2.
Amendments to APA . The APA is hereby amended as
follows:
(a)
Definitions for the new terms "Combined Division", "EBITA" and
"Winlit EBITA" are inserted into Section 1 of the APA as
follows:
" Combined Division means, as of February 1, 2007,
the combined operations of the Division and Buyer’s
Marvin Richards division, excluding operations related to the
Calvin Klein licenses."
" EBITA means the Combined Division’s
earnings before interest and taxes and amortization of intangibles,
which shall be equal to the net sales of the Combined Division less
(i) cost of sales, including royalties and license fees, except for
$100,000 to be paid to Guess?, Inc. with respect to the years
ending January 31, 2008 and 2009 and (ii) the expenses set forth on
Schedule A attached hereto, but only if and to the extent such
expenses are actually incurred by the Combined Division, all as
determined in accordance with Buyer’s accounting procedures
in preparing internal financial statements for Buyer’s
divisions."
" Winlit EBITA means,
with respect to the years ending January 31, 2008 and 2009, an
amount equal to the product of (i) EBITA and (ii) 0.53."
(b)
The definition of the term " Direct Operating Income " or
" DOI " appearing in Section 1 of the APA is hereby amended
by (i) adding the phrase "with respect to the period ending January
31, 2006 and the year ending January 31, 2007", after the word
"means" and (ii) deleting "2008 and 2009" in clause (i).
(c)
Section 2.4(b) of the APA is hereby amended and restated in its
entirety as follows:
"(b)
Subject to the provisions of clauses (i) through (iv) below,
Buyer also agrees to pay to Winlit or its assigns for the period
beginning on the Closing Date and ending on January 31, 2006 and
for each of the one-year periods ending on January 31, 2007, 2008
and 2009 (each an " Earn Out Period " and collectively, the
" Earn Out Periods ") such additional amounts (each an "Earn
Out Payment and collectively, the " Earn Out Payments ") if
minimum DOI (the " Minimum DOI ") or minimum Winlit EBITA
(the " Minimum Winlit EBITA "), as applicable, is
achieved in each period as follows: (i) with respect to the period
ending January 31, 2006, provided the Division achieves a Minimum
DOI for that period of at least $4.0 million, an amount equal to
fifteen percent (15%) of the Division’s DOI for that period;
provided, however, that if the Division achieves a DOI of at least
$5.5 million (the "Target") for the period beginning on the Closing
Date and ending January 31, 2006, then the amount shall be equal to
twenty-five percent (25%) of the Division’s DOI for that
period; provided, further however, that in determining the
Division’s DOI for the period beginning on the Closing Date
and ending January 31, 2006 (for all purposes under this Agreement
including but not limited to calculating the DOI to determine the
Earn Out Payment and determining whether the Division has achieved
the Minimum DOI and/or the Target for such period), an amount equal
to $245,000 shall be added to the actual DOI for such period; (ii)
with respect to the period ending January 31, 200
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