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Exhibit 10.36
(BANK OF AMERICA LOGO)
as of December 12, 2005
Movado Group, Inc.
650 From Road,
Paramus, NJ 07652
Dear Sir or Madam:
We are pleased to advise you that Bank of America, N. A., successor
by merger to
Fleet National Bank (the "Bank") hereby agrees to consider requests
from Movado
Group, Inc. (the "Company") from time to time, for short-term loans
("Loans")
and documentary letters of credit for the importation of
merchandise inventory
("Letters of Credit"). Any extension of credit hereunder (whether a
Loan or a
Letter of Credit) shall be made available at the sole discretion of
the Bank but
in any event subject to the following: (a) the Bank shall have
determined that
money market conditions are favorable for it to acquire loan
assets, (b) the
Bank shall continue to be satisfied with the Borrower's business,
financial
condition and prospects and the condition and prospects of the
industry in which
the Borrower is engaged, (c) the Bank shall have received Company's
most current
quarterly and annual financial statements and any other financial
information
regarding the Company which the Bank shall reasonably request from
time to time,
and (d) the Company shall have maintained and be maintaining a
satisfactory
relationship with the Bank and:
Loan and Letters of Credit Requests: Each request for a Loan and/or
Letter of
Credit will be, at the Bank's option, reviewed by the Bank and an
independent
credit analysis and assessment will be made each time a request is
received. In
the event that the Bank agrees to lend pursuant to any such request
by the
Company, any such Loan shall be evidenced by the promissory note
enclosed with
this letter (the "Note") and be subject to the conditions therein
contained and
in any other documentation in form and substance satisfactory to
the Bank. The
Bank may respond to any request for a Loan or Letter of Credit for
a stated
amount with a Loan or Letter of Credit for a different amount, date
or maturity,
or may decline to respond entirely.
Maximum Amount of Loans and Letters of Credit: The aggregate amount
of Loans and
Letters of Credit at any time outstanding shall not exceed
$20,000,000 and the
maximum amount of Letters of Credit at any time outstanding shall
not exceed
$2,000,000.
(US OLYMPIC TEAMS 2000-2004 LOGO)
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Expiration and Maturity Date: Requests for extensions of credit
must be made on
or before June 16, 2006. All Loans will be payable on June 16,
2006. All Letters
of Credit shall expire no later than 180 days from issuance.
Interest Rate: Loans shall bear interest, at the Company's
election, at a rate
per annum equal to either (i) a fluctuating rate equal to the Prime
Rate, or
(ii) such other fixed rate as may be agreed upon between the
Company and the
Bank for an interest period which is also then agreed upon (a Loan
bearing
interest at this rate is sometimes called an "Agreed Rate Loan").
The term
"Prime Rate" shall be as defined in the Note, Interest shall be
payable monthly
in arrears based on a 360-day year and, for Agreed Rate Loans, on
the last day
of the applicable Interest Period.
Letter of Credit Fees: Letters of Credit shall be issued at the
Bank's standard
fees and charges in effect from time to time therefor.
Additional provisions:
All obligations of the Company owing to the Bank shall continue to
be
unconditionally guaranteed by all active domestic subsidiaries of
the Company
(collectively, the "Guarantors") pursuant to the Bank's standard
form of
guarantee (collectively, the "Guarantees").
The Company shall continue to provide the following to the
Bank:
The consolidated and
consolidating balance sheet for the Company and its
subsidiaries, consolidated and consolidating statement of income
and
consolidated statement of cash flow: (i) audited and certified
without
qualification by accountants satisfactory to the Bank, within 120
days of
fiscal year end and (ii) certified by the Company's chief
financial
officer, within 75 days of the last day of each fiscal quarter.
Notices of defaults.
Such
other statements and reports as shall be reasonably requested by
the
Bank.
This letter agreement replaces, supersedes, amends and restates in
its entirety
the letter agreement from the Bank to the Company dated October 31,
2005, as
amended.
If the terms of this letter are acceptable to you, please indicate
your
acceptance by signing and returning the enclosed copy of this
letter and
documentation to the Bank on or before December 12, 2005. This
letter shall be
unenforceable against the Bank unless so signed and returned on or
before such
date.
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Please contact us if you have any questions. We look forward to
continuing our
relationship.
Very truly yours,
BANK OF AMERICA, N. A.,
Successor by merger to Fleet National
Bank
By: /s/ Rich Williams
------------------------------------
Name: Rich Williams
Title: Credit Products Officer
ACCEPTED AND AGREED
ON DECEMBER 12, 2005
MOVADO GROUP, INC.
By: /s/ T F Michno
---------------------------------
Name: T F Michno
Title: General Counsel
Guarantor signatures on next page
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Each of the guarantors indicated below hereby consents to this
letter agreement
and reaffirms its continuing liability under its respective
guarantees in
respect of the above letter agreement and all the documents,
instruments and
agreements executed pursuant thereto or in connection therewith,
without offset,
defense or counterclaim (any such offset, defense or counterclaim
as may exist
being hereby irrevocably waived by each such guarantor).
MOVADO RETAIL GROUP, INC.,
a New Jersey Corporation
By: /s/ T F Michno
------------------------------------
Name: T F Michno
Title: General Counsel
MOVADO LLC,
a Delaware Limited Liability Company
By: /s/ T F Michno
------------------------------------
Name: T F Michno
Title: General Counsel
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BANK OF AMERICA, N.A.
SUCCESSOR BY MERGER TO FLEET NATIONAL BANK
AMENDED AND RESTATED
PROMISSORY NOTE
$20,000,000.00
As of December 12, 2005
No
later than JUNE 16, 2006 (the "Maturity Date"), for value
received,
MOVADO GROUP, INC., having its principal office at 650 From Road,
Paramus, New
Jersey 07652 (the "Borrower"), promises to pay to the order of BANK
OF AMERICA,
SUCCESSOR BY MERGER TO FLEET NATIONAL BANK, having an office at
1185 Avenue of
the Americas, New York, New York, 10036 (the "Bank"), at such
office of the Bank
or at such other place as the holder hereof may from time to time
appoint in
writing, in lawful money of the United States of America in
immediately
available funds, the principal sum of TWENTY MILLION and 00/100
DOLLARS
($20,000,000.00) Dollars or such lesser amount as may then be the
aggregate
unpaid principal balance of all loans made by the Bank to the
Borrower hereunder
(each a "Loan" and collectively the "Loans") as shown on the books
and records
of the Bank. The Borrower also promises to pay interest (computed
on the basis
of a 360 day year for actual days elapsed) at said office in like
money on the
unpaid principal amount of each Loan from time to time outstanding
at a rate per
annum, to be elected by the Borrower at the time each Loan is made,
equal to
either (i) a fluctuating rate equal to the Prime Rate, which rate
will change
when and as the Prime Rate changes and which such changes in the
rate of
interest resulting from changes in the Prime Rate shall take effect
immediately
without notice or demand of any kind (a Loan bearing interest at
this rate is
sometimes hereinafter called a "Prime Loan"), or (ii) a fixed rate
as may be
agreed upon between the Borrower and the Bank (an "Agreed Rate")
for an Interest
Period which is also then agreed upon (a Loan bearing interest at
this rate is
sometimes hereinafter called an "Agreed Rate Loan"); provided,
however, that (a)
no Interest Period with respect to an Agreed Rate Loan shall extend
beyond the
Maturity Date, (b) if any Interest Period would otherwise end on a
day which is
not a Business Day, that Interest Period shall be extended to the
next
succeeding Business Day and (c) if prior to the end of any such
Interest Period
of an Agreed Rate Loan the Borrower and the Bank fail to agree upon
a new
Interest Period therefor so as to maintain such Loan as an Agreed
Rate Loan
within the pertinent time set forth in Section 1 hereof, such
Agreed Rate Loan
shall automatically be converted into a Prime Loan at the end of
such Interest
Period and shall be maintained as such until a new Interest Period
therefor is
agreed upon. Interest on each Loan shall be payable monthly on the
first day of
each month commencing the first such day to occur after a Loan is
made hereunder
and, together with unpaid principal, on the Maturity Date. Interest
on Agreed
Rate Loans shall also be payable on the last day of each Interest
Period
applicable thereto. The Borrower further agrees that upon and
during the
continuance of an Event of Default and/or after any stated or any
accelerated
maturity of Loans hereunder, all Loans shall bear interest
(computed daily) at,
(i) with respect to Agreed Rate Loans, a rate equal to the greater
of 2% per
annum in excess of the rate then applicable to Agreed Rate
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Loans and 2% per annum in excess of the rate then applicable to
Prime Loans,
payable no later than the Maturity Date, and (ii) with respect to
Prime Loans, a
rate equal to 2% per annum in excess of the rate then applicable to
Prime Loans,
payable no later than the Maturity Date. Furthermore, if the entire
amount of
any principal and/or interest required to be paid pursuant to this
Note is not
paid in full within ten (10) days after the same is due, the
Borrower shall
further pay to the Bank a late fee equal to five percent (5%) of
the required
payment. In no event shall interest payable hereunder be in excess
of the
maximum rate of interest permitted under applicable law. If any
payment to be so
made hereunder becomes due and payable on a day other than a
Business Day, such
payment shall be extended to the next succeeding Business Day and,
to the extent
permitted by applicable law, interest thereon shall be payable at
the then
applicable rate during such extension.
All
payments made in connection with this Note shall be in lawful money
of
the United States in immediately available funds without
counterclaim or setoff
and free and clear of and without any deduction or withholding for,
any taxes or
other payments. All such payments shall be applied first to the
payment of all
fees, expenses and other amounts due to the Bank (excluding
principal and
interest), then to accrued interest, and the balance on account of
outstanding
principal; provided, however, that after the occurrence of and
during the
continuance of an Event of Default, payments will be applied to the
obligations
of the Borrower to the Bank as the Bank determines in its sole
discretion. The
Borrower hereby expressly authorizes the Bank to record on the
attached schedule
the amount and date of each Loan, the rate of interest thereon,
Interest Period
thereof and the date and amount of each payment of principal. All
such notations
shall be presumptive as to the correctness thereof; provided,
however, the
failure of the Bank to make any such notation shall not limit or
otherwise
affect the obligations of the Borrower under this Note.
In
consideration of the granting of the Loans evidenced by this Note,
the
Borrower hereby agrees as follows:
1.
Loan Requests. Requests for Prime Loans and Agreed Rate Loans may
be
made up until 1 p.m. on the date the Loan is to be made. Any
request for a Loan
must be written. The Bank shall have no obligation to make any Loan
hereunder.
2.
Prepayment. The Borrower may prepay any Prime Loan at any time in
whole
or in part without premium or penalty. Each such prepayment shall
be made
together with interest accrued thereon to and including the date of
prepayment.
The Borrower may prepay an Agreed Rate Loan only upon at least
three (3)
Business Days prior written notice to the Bank (which notice shall
be
irrevocable) and any such prepayment shall occur only on the last
day of the
Interest Period for such Agreed Rate Loan.
3.
Indemnity; Yield Protection. The Borrower shall pay to the Bank,
upon
request of the Bank, such amount or amounts as shall be sufficient
(in the
reasonable opinion of the Bank) to compensate it for any loss,
cost, or
reasonable expense incurred as a result of: (i) any payment of an
Agreed Rate
Loan on a date other than the last day of the
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Interest Period for such Loan; (ii) any failure by Borrower to
borrow an Agreed
Rate Loan on the date specified by Borrower's written notice; (iii)
any failure
of Borrower to pay an Agreed Rate Loan on the date for payment
specified in
Borrower's written notice. Without limiting the foregoing, Borrower
shall pay to
Bank a "yield maintenance fee" in an amount computed as follows:
The current
rate for United States Treasury securities (bills on a discounted
basis shall be
converted to a bond equivalent) with a maturity date closest to the
term chosen
pursuant to the Fixed Rate Election as to which the prepayment is
made, shall be
subtracted from Cost of Funds in effect at the time of prepayment.
If the result
is zero or a negative number, there shall be no yield maintenance
fee. If the
result is a positive number, then the resulting percentage shall be
multiplied
by the amount of the principal balance being prepaid. The resulting
amount shall
be divided by 360 and multiplied by the number of days remaining in
the term
chosen pursuant to the Fixed Rate Election as to which the
prepayment is made.
Said amount shall be reduced to present value calculated by using
the above
referenced United States Treasury securities rate and the number of
days
remaining in the term chosen pursuant to the Fixed Rate Election as
to which
prepayment is made. The resulting amount shall be the yield
maintenance fee due
to Bank upon the payment of an Agreed Rate Loan. Each reference in
this
paragraph to "Fixed Rate Election" shall mean the election by
Borrower of Loan
to bear interest based on an Agreed Rate. If by reason of an Event
of Default,
the Bank elects to declare the Loans and/or the Note to be
immediately due and
payable, then any yield maintenance fee with respect to an Agreed
Rate Loan
shall become due and payable in the same manner as though the
Borrower has
exercised such right of prepayment.
For
the purpose of this Section 3 the determination by the Bank of
such
losses and reasonable expenses shall in the absence of manifest
error, be
conclusive if made reasonably and in good faith.
4.
Increased Costs. If the Bank reasonably determines that the effect
of
any applicable law or government regulation, guideline or order or
the
interpretation thereof by any governmental authority charged with
the
administration thereof (such as, for example, a change in official
reserve
requirements which the Bank is required to maintain in respect of
loans or
deposits or other funds procured for funding such loans) is to
increase the cost
to the Bank of making or continuing Agreed Rate Loans hereunder or
to reduce the
amount of any payment of principal or interest receivable by the
Bank thereon,
then the Borrower will pay to the Bank such additional amounts as
the Bank may
reasonably determine to be required to compensate the Bank for such
additional
costs or reduction. Any additional payment under this section will
be computed
from the effective date at which such additional costs have to be
borne by the
Bank. A certificate as to any additional amounts payable pursuant
to this
Section 4 setting forth the basis and method of determining such
amounts shall
be conclusive, absent manifest error, as to the determination by
the Bank set
forth therein if made reasonably and in good faith. The Borrower
shall pay any
amounts so certified to it by the Bank within 10 days of receipt of
any such
certificate.
5.
Warranties and Representations. The Borrower represents and
warrants
that: a) it is a corporation duly organized, validly existing and
in good
standing under the laws of
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the state of its incorporation and is qualified to do business and
is in good
standing under the laws of every state where its failure to so
qualify would
have a material and adverse effect on the business, operations,
property or
other condition of the Borrower; b) the execution, issuance and
delivery of this
Note by the Borrower are within its corporate powers and have been
duly
authorized, and the Note is valid, binding and enforceable in
accordance with
its terms, and is not in violation of law or of the terms of the
Borrower's
Certificate of Incorporation or By-Laws and does not result in the
breach of or
constitute a default under any indenture, agreement or undertaking
to which the
Borrower is a party or by which it or its property may be bound or
affected; c)
no authorization or approval or other action by, and no notice to
or filing
with, any governmental authority or regulatory body is required for
the due
execution, delivery and performance by the Borrower of this Note,
except those
as have been obtained; d) the financial statements of the Borrower
heretofore
furnished to the Bank are complete and correct in all material
respects and
fairly represent the financial condition of the Borrower and its
subsidiaries as
at the dates thereof and for the periods covered thereby, which
financial
condition has not materially, adversely, changed since the date of
the most
recently dated balance sheet heretofore furnished to the Bank; e)
no Event of
Default (as hereinafter defined) has occurred and no event has
occurred which
with the giving of notice or the lapse of time or both would
constitute an Event
of Default; f) the Borrower shall not use any part of the proceeds
of any Loan
to
