EXHIBIT 10.3
EXECUTION COPY
OMNIBUS AMENDMENT
TO
NOTE PURCHASE AND
PRIVATE SHELF
AGREEMENTS
THIS OMNIBUS
AMENDMENT (this “ Amendment ”) TO EACH OF THAT
CERTAIN Note Purchase and Private Shelf Agreement, dated as of
March 21, 2001 (as amended by that certain Amendment, dated as of
March 21, 2004, and as the same may be further amended,
supplemented or otherwise modified from time to time, the “
2001 Note Agreement ”), between The Prudential
Insurance Company of America (“ Prudential ”),
Movado Group, Inc., a New York corporation (the “
Company ”), and the other Purchasers (as defined in
the 2001 Note Agreement, the “ 2001 Purchasers
”) party thereto AND THAT CERTAIN Note Purchase and Private
Shelf Agreement, dated as of November 30, 1998 (as the same may be
amended, supplemented or otherwise modified from time to time, the
“ 1998 Note Agreement ”; each of the 1998
Note Agreement and the 2001 Note Agreement a “ Note
Agreement ” and, collectively, the “ Note
Agreements ”; capitalized terms used herein but not
otherwise defined herein shall have the meanings set forth in the
respective Note Agreement) between Prudential, the Company and the
other Purchasers (as defined in the 1998 Note Agreement, the
“ 1998 Purchasers ” and, collectively with the
2001 Purchasers, the “ Purchasers ”) party
thereto IS ENTERED INTO as of June 5, 2008, by the Purchasers and
the Company.
WHEREAS , the Company and the Purchasers party thereto
have executed and delivered the respective Note
Agreements;
WHEREAS , Movado Retail Group, Inc., a New Jersey
corporation and successor by merger with SwissAm, Inc. (“
MRG ”), and Movado LLC, a Delaware limited liability
company (“ Movado LLC ”, and together, with MRG,
the “ Guarantors ”), have each guaranteed the
obligations of the Company under the respective Note Agreements;
and
WHEREAS , the Company has requested the amendment of
certain provisions of each Note Agreement, and the respective
Purchasers have indicated their willingness to agree to such
amendments subject to certain limitations and conditions, as
provided for herein;
NOW,
THEREFORE , in
consideration of the foregoing premises, the mutual covenants and
agreements contained herein, and other good and valuable
consideration, the parties hereto agree as follows:
1.
Amendments to 2001 Note
Agreement . The
2001 Purchasers and the Company hereby agree as follows:
(a) The 2001 Note
Agreement is hereby amended by amending and restating Paragraph
2A(1) in its entirety as follows:
“2A(1). Facility
. Prudential is willing to consider, in its sole
discretion and within limits which may be authorized for purchase
by Prudential and Prudential Affiliates from time to time, the
purchase of Shelf Notes pursuant to this Agreement. The
willingness of Prudential to consider such purchase of Shelf Notes
is herein called the “ Facility ”. At
any time, $70,000,000.00, minus the aggregate principal
amount of Shelf Notes purchased and sold pursuant to this Agreement
prior to such time, minus the aggregate principal amount of
Accepted Notes (as hereinafter defined) which have not yet been
purchased and sold hereunder prior to such time, is herein called
the “ Available facility Amount ” at such
time. NOTWITHSTANDING THE WILLINGNESS OF PRUDENTIAL
TO CONSIDER PURCHASES OF SHELF NOTES, THIS AGREEMENT IS ENTERED
INTO ON THE EXPRESS UNDERSTANDING THAT NEITHER PRUDENTIAL NOR ANY
PRUDENTIAL AFFILIATE SHALL BE OBLIGATED TO MAKE OR ACCEPT OFFERS TO
PURCHASE SHELF NOTES, OR TO QUOTE RATES, SPREADS OR OTHER TERMS
WITH RESPECT TO SPECIFIC PURCHASES OF SHELF NOTES, AND THE FACILITY
SHALL IN NO WAY BE CONSTRUED AS A COMMITMENT BY PRUDENTIAL OR ANY
PRUDENTIAL AFFILIATE. NOTWITHSTANDING THE WILLINGNESS OF
THE COMPANY TO CONSIDER SALES OF SHELF NOTES, THIS AGREEMENT IS
ENTERED INTO ON THE EXPRESS UNDERSTANDING THAT THE COMPANY SHALL
NOT BE OBLIGATED TO MAKE OFFERS TO SELL SHELF NOTES, OR TO REQUEST
RATES, SPREADS OR OTHER TERMS WITH RESPECT TO SPECIFIC SALES OF
SHELF NOTES, AND THE FACILITY SHALL IN NO WAY BE CONSTRUED AS A
COMMITMENT BY THE COMPANY.”
(b) The 2001 Note
Agreement is hereby amended by deleting the text in clause (i) of
Paragraph 2A(2) and replacing it with the following text in its
entirety: “June 5, 2011”.
(c) The 2001 Note
Agreement is hereby amended by amending and restating Paragraph
5K(2) in its entirety as follows:
“5K(2). The Company covenants
that if at any time after the date of this Agreement any Domestic
Subsidiary guarantees or provides collateral in any manner for any
Indebtedness of the Company under the Credit Agreement, it will
simultaneously cause such Domestic Subsidiary to guarantee or
provide such collateral for the notes equally and ratably with all
indebtedness guaranteed or secured by such Domestic Subsidiary for
so long as such Indebtedness is guaranteed and pursuant to a
guarantee substantially in the form of Exhibit D hereto,
together with an opinion of counsel substantially in the form of
paragraphs 1, 3 and 4 of Exhibit E-1 hereto. Upon
the execution and delivery of such guarantee, such Domestic
Subsidiary shall become a Subsidiary Guarantor.”
(d) The 2001 Note
Agreement is hereby amended by amending and restating Paragraph 6A
in its entirety as follows:
“6A
Intentionally Omitted. ”
(e) The 2001 Note
Agreement is hereby amended by amending and restating Paragraph 6C
in its entirety as follows:
“6C
Maintenance of Average Debt Coverage Ratio. The
Company shall not permit, as of the last day of any fiscal quarter
of the Company, the Average Debt Coverage Ratio for the period of
four consecutive fiscal quarters ending on such day to be greater
than 3.25 to 1.0.”
(f) The 2001 Note
Agreement is hereby amended by amending and restating Paragraph 6D
in its entirety as follows:
“6D
Limitations on Priority Debt. The Company
covenants that it will not permit, at any time, Priority Debt to
exceed 20% of Consolidated Total Capitalization.”
(g) The 2001 Note
Agreement is hereby amended by amending the flush language at the
end of Paragraph 6E to read in its entirety as follows:
“
provided , that at the time of such merger, consolidation,
sale, transfer or disposition and after giving effect thereto there
shall exist no Default or Event of Default; and provided ,
further , that in the case of the transactions described in
clause (iv) above, (a) if such continuing, surviving or acquiring
corporation is a corporation organized under the laws of Canada,
the United Kingdom, Switzerland or any local governmental authority
of any of the aforesaid jurisdictions, provision satisfactory to
the Required Holders shall be made in respect of any tax issues
arising out of such transaction and (b) the Company shall have
delivered to the holders of the Notes an opinion of counsel
satisfactory to the Required Holders and an Officer’s
Certificate each to the effect that the foregoing provisions have
been complied with.”
(h) The 2001
Note Agreement is hereby amended by amending Paragraph 6K to delete
the phrase “and the Company could not incur an additional $1
of Funded Debt pursuant to the provisions of paragraph
6C(iv)”.
(i) The 2001 Note
Agreement is hereby amended by amending Paragraph 6L to replace
“2.50” with “3.50”.
(j) The 2001 Note
Agreement is hereby amended by amending Paragraph 7A by amending
and restating clause (xvi) thereof in its entirety as
follows:
“(xvi) if at any time the capital stock of
the Company owned by the Grinberg Group represents less than 25% of
the voting power of (x) all outstanding capital stock of the
Company and (y) all outstanding securities and rights that are then
convertible into or exchangeable for capital stock of the Company
or upon the exercise of which capital stock of the Company will be
issued in respect of such securities or rights;”
(k) The 2001 Note
Agreement is hereby amended by amending Paragraph 10B by adding the
following definitions in their appropriate alphabetical
order:
““ Average Debt Coverage
Ratio ” means the ratio of (i) the sum of indebtedness
for borrowed money, indebtedness for the deferred purchase price of
property or services (excluding trade payables in the ordinary
course of business; and excluding wages or other compensation
payable to employees of the Company or any of its Restricted
Subsidiaries in the ordinary course of business), obligations
arising under acceptance facilities, and obligations as lessee
under Capital Leases (in all cases) of the Company and its
Restricted Subsidiaries on a consolidated basis as of the last day
of each fiscal quarter for four consecutive fiscal quarters,
divided by four, to (ii) consolidated earnings before interest
expense, taxes, depreciation and amortization of the Company and
its Restricted Subsidiaries on a consolidated basis for such period
of four consecutive fiscal quarters. For purposes of
this definition only, if such clause (ii) is less than one dollar,
it shall be deemed to be one dollar.”
““ Control ” means the
possession, directly or indirectly, of the power to direct or cause
the direction of the management or policies of a Person, whether
through the ownership of voting securities, by contract or
otherwise, and the terms “Controlling” and
“Controlled” shall have meanings correlative
thereto.”
““ Grinberg Group ”
means the group consisting of Gedalio Grinberg, his spouse, each of
their estates and their issue; and Efraim Grinberg, his spouse,
each of their estates and their issue; and every Person (other than
an individual) Controlled by any of the
foregoing.”
““ Lender ” and “
Lenders ” shall have the meaning specified in the
Credit Agreement.”
(l) The 2001 Note
Agreement is hereby amended by amending Paragraph 10B by deleting
the definitions of “ Clean Down Period ” and
“ Excess Current Debt ” and by replacing the
definitions of “ Credit Agreement ” and “
Unrestricted Subsidiary ” in their respective
entireties as follows:
““ Credit Agreement ”
shall mean the Credit Agreement dated as of December 15, 2005, by
and among the Company, Movado Watch Company SA and MGI Luxury Group
S.A., the Lenders party thereto and JP Morgan Chase Bank, N.A., as
Administrative Agent for said Lenders, and any amendment,
modification or supplement thereto, or replacement or refinancing
thereof.”
““ Unrestricted Subsidiary
” shall mean any Foreign Subsidiary not identified on
Schedule 8A and any other Foreign Subsidiary until designated as a
Restricted Subsidiary in accordance with the provision of paragraph
6K, provided, however, that any Subsidiary designated as an
Unrestricted Subsidiary must also be designated as such under the
Company’s Credit Agreement.”
(m) The 2001 Note
Agreement is hereby amended by replacing the “Authorized
Officers for Prudential” contained in the Information
Schedule in its entirety as follows:
Paul Meiring,
Managing
Director
(212) 626-2060
Paul Price,
Managing
Director (973)
802-9819
Yvonne
Guajardo, Vice
President (212)
626-2050
Engin Okaya,
Vice
President (212)
626-2042
1114 Avenue of
the Americas
2.
Amendments to 1998 Note
Agreement. The
1998 Purchasers and the Company hereby agree as follows:
(a) The 1998 Note
Agreement is hereby amended by amending and restating Paragraph
5K(2) in its entirety as follows:
“5K(2). The Company covenants
that if at any time after the date of this Agreement any Domestic
Subsidiary guarantees or provides collateral in any manner for any
Indebtedness of the Company under the Credit Agreement, it will
simultaneously cause such Domestic Subsidiary to guarantee or
provide such collateral for the notes equally and ratably with all
indebtedness guaranteed or secured by such Domestic Subsidiary for
so long as such Indebtedness is guaranteed and pursuant to a
guarantee substantially in the form of Exhibit D hereto,
together with an opinion of counsel substantially in the form of
paragraphs 1, 3 and 4 of Exhibit E-1 hereto. Upon
the execution and delivery of such guarantee, such Domestic
Subsidiary shall become a Subsidiary Guarantor.”
(b) The 1998 Note
Agreement is hereby amended by amending and restating Paragraph 6A
in its entirety as follows:
“6A
Intentionally Omitted. ”
(c) The 1998 Note
Agreement is hereby amended by amending and restating Paragraph 6C
in its entirety as follows:
“6C
Maintenance of Average Debt Cov
