EXHIBIT 4.5
EXECUTION COPY
EXECUTION COPY
AMENDMENT TO
NOTE PURCHASE AND
PRIVATE SHELF AGREEMENT
THIS AMENDMENT (this "Amendment") TO THAT CERTAIN Note Purchase and Private
Shelf Agreement, dated as of March 21, 2001 (herein called the "Note
Agreement"), between The Prudential Insurance Company of America ("Prudential")
and Movado Group, Inc., a New York corporation (the "Company"), IS ENTERED INTO
as of March 21, 2004, by the Purchasers (as defined in the Note Agreement) and
the Company.
WHEREAS, the Company and the Purchasers party thereto have executed and
delivered the Note Agreement;
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 Note Agreement;
WHEREAS, capitalized terms used herein and not otherwise defined shall have
the meanings set forth in the Note Agreement; and
WHEREAS, the Company has requested the amendment of certain provisions of
the Note Agreement, and the 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 Note Agreement. The Purchasers and the Company hereby agree
as follows:
(a) The Note Agreement is hereby amended by deleting the text in clause (i)
of Paragraph 2A(2) which reads "the third anniversary of the date of this
Agreement (or if such anniversary is not a Business Day, the Business Day next
preceding such anniversary" and replacing it with the following text in its
entirety: "March 21, 2007".
(b) The Note Agreement is hereby amended by deleting the heading of
Paragraph 6C which reads "Limitations on Debt" and replacing it with
"Limitations on the Incurrence of Debt."
(c) The Note Agreement is hereby amended by amending and restating
Paragraph 6D as follows:
"6D Limitations on Debt. The Company covenants that it will not permit, at
any time,
(i) Priority Debt to exceed 20% of Consolidated Total Capitalization; and
(ii) the sum of aggregate amount of Consolidated Funded Debt and Excess
Current Debt to exceed 55% of the sum of Consolidated --- Total Capitalization
and Excess Current Debt."
(d) The Note Agreement is hereby amended by amending and restating clause
(i) of the definition of "Reinvestment Yield" set forth in Paragraph 10A thereof
and as follows:
"(i) the yield(s) reported as of 10:00 A.M. (New York City time) on
the Business Day preceding the Settlement Date with respect to such
Called Principal, on the display designated as "PX1" on the Bloomberg
Financial Markets Services Screen (or such other display as may
replace page "PX1" on the Bloomberg Financial Markets Services Screen)
for actively traded U.S. Treasury securities having a maturity equal
to the Remaining Average Life of such Called Principal as of such
Settlement Date,"
2. Representations and Warranties of the Company. The Company hereby:
----------------------------------------------
(a) Repeats (and confirms as true and correct) as of the date hereof, for
the Purchasers' benefit, each of the representations and warranties set forth in
Paragraphs 8A, 8C, 8E, 8G, 8H, 8I, 8J, 8K, 8L, 8M, 8N, 8O, 8P, 8Q, 8R, 8S and 8T
of the Note Agreement, and further agrees that by this reference such
representations and warranties are hereby incorporated herein (as though set
forth herein) in their entirety;
(b) Further represents and warrants as of the date hereof that:
(i) no Default or Event of Default has occurred and is continuing;
(ii) the Company and the Guarantors have the corporate or equivalent
power to execute and deliver this Amendment, and to perform the provisions
hereof, and this Amendment has been duly authorized by all necessary
corporate or equivalent action on the part of each such Person;
(iii) this Amendment has been duly executed and delivered by the
Company and the Guarantors and constitutes such Person's legal, valid and
binding obligation, enforceable in accordance with its terms, except as
such enforceability may be limited (x) by general principles of equity and
conflicts of laws or (y) by bankruptcy, reorganization, insolvency,
moratorium or other laws of general application relating to or affecting
the enforcement, of creditors' rights;
(iv) no consent, approval, authorization or order of, or filing,
registration or qualification with, any court or administrative or
governmental body or third party is required in connection with the
execution, delivery or performance by such Person of this Amendment;
(v) the Company has furnished Prudential with the audited consolidated
and consolidating balance sheets of the Company and its Subsidiaries at
January 31, 2001, January 31, 2002 and January 31, 2003 and the related
consolidated and consolidating statements of income and cash flows and
changes in shareholders' equity for each of the years in the three-year
period ended January 31, 2003, all reported on by
2
PriceWaterhouseCoopers LLP; and the unaudited consolidated balance sheets of
the Company and its Subsidiaries at October 31, 2003 and the related
consolidated and consolidating statements of income and cash flows and
changes in shareholders' equity for the nine months ended October 31, 2002
and October 31, 2003. All of such financial statements (including any
related schedules and/or notes) are true and correct in all material
respects (subject, as to interim statements, to changes resulting from
audits and year-end adjustments) and fairly present the consolidated
financial position and the consolidated results of the operations and
consolidated cash flows of the corporations described therein at the dates
and for the periods shown, all in conformity with generally accepted
accounting principles applied on a consistent basis (except as otherwise
stated therein or in the notes thereto stated) throughout the periods
involved. None of the Company and its Subsidiaries has any contingent
liabilities, liabilities for taxes, unusual forward or long-term
commitments or unrealized or anticipated losses from any unfavorable
commitments which are substantial and material in amount in relation to the
consolidated financial condition of the Company, except as referred to or
reflected or provided for in the financial statements. Since January 31,
2003, (i) there has been no change in the assets, liabilities or condition
(financial or otherwise) of the Company or any of its Subsidiaries, other
than changes which have not been, either in any case or in the aggregate,
materially adverse to the Company and its Subsidiaries taken as a whole and
(ii) neither the business, operations, affairs nor any of the properties or
assets of the Company or any of its Subsidiaries have been affected by any
occurrence or development (whether or not insured against) which has been,
either in any case or in the aggregate, materially adverse to the Company
and its Subsidiaries taken as a whole.
(vi) Schedule 8A to this Amendment sets forth a complete and correct
list as to each of the Company's Subsidiaries as of the date hereof.
(vii) except as described therein, Schedule 8D to this Amendment sets
forth a complete and correct list of all outstanding Debt of the Company
and its Subsidiaries as of January 31, 2004. There exists no default or
temporary waiver or default under the provisions of any instrument evidence
such Debt or of any agreement relating thereto;
(viii) (A) the Company and each of its Subsidiaries has (to the extent
material to the Company and its Subsidiaries taken as a whole) good and
indefeasible title to its respective real properties (other than properties
which it leases) and good title to all of its other respective properties
and assets, including the properties and assets reflected in the balance
sheet as at October 31, 2003 (other than properties and assets disposed of
in the ordinary course of business), subject to no Lien of any kind except
Liens permitted by Paragraph 6B of the Note Agreement, and (B) all leases
necessary in any material respect for the conduct of the respective
businesses of the Company and its Subsidiaries are valid and subsisting and
are in full force and effect;
(ix) neither the Company nor any of its Subsidiaries (A) is listed on
the Specially Designated Nationals and Blocked Persons List (the "SDN
List") maintained by the Office of Foreign Assets Control, Department of
the Treasury ("OFAC"), or on any other list of terrorists or terrorist
organizations maintained pursuant to any of the rules and regulations of
OFAC or pursuant to any other applicable Executive Order (such other lists
are referred to herein, collectively, as the "Other Lists"; the SDN List
and the Other Lists are referred to herein, collectively, as the "Lists"),
(B) has been determined by competent authority to be
3
subject to the prohibitions contained in Executive Order No. 13224 (Sept.
23, 2001) or any other similar prohibitions contained in the rules and
regulations of OFAC or in any enabling legislation or other Executive
Orders in respect thereof, (C) is owned or controlled by, or acts for or on
behalf of, any person on the Lists or any other person who has been
determined by competent authority to be subject to the prohibitions
contained in Executive Order No. 13224 (Sept. 23, 2001) or similar
prohibitions contained in the rules and regulations of OFAC or any enabling
legislation or other Executive Orders in respect thereof, and (D) is
failing to comply in any material way with the requirements of Executive
Order No. 13224 (Sept. 23, 2001) and other similar requirements contained
in the rules and regulations of OFAC and in any enabling legislation or
other Executive Orders in respect thereof; and
(x) neither the Company nor any Guarantor has any defenses, offsets or
counterclaims against any of their obligations under or in respect of the
Note Agreement or the Subsidiary Guarantee.
3. Acknowledgement and Consent of Guarantors. Each Guarantor hereby acknowledges
that it has reviewed the terms and provisions of the Note Agreement, the Notes,
the Subsidiary Guarantee and this Amendment and consents to the amendment to the
Note Agreement effected pursuant to this Amendment. Each Guarantor confirms that
its Subsidiary Guarantee will continue to guarantee to the fullest extent
possible the payment and performance of all guaranteed Obligations (as defined
in each Subsidiary Guarantee). Each Guarantor acknowledges and agrees that (a)
its Subsidiary Guarantee shall continue in full force and effect and that its
obligations thereunder shall be valid and enforceable and shall not be impaired
or limited by the execution or effectiveness of this Amendment, and (b) (i)
notwithstanding the conditions to effectiveness hereof, such Guarantor is not
required by the terms of the Note Agreement, the Notes or the Subsidiary
Guarantee to consent to the amendments to the Note Agreement effected pursuant
to this Amendment, and (ii) nothing in the Note Agreement, the Notes or the
Subsidiary Guarantee shall be deemed to require the consent of any such
Guarantor to any future amendments to the Note Agreement.
4. Effectiveness of Amendment. This Amendment shall become effective upon the
date each of the following conditions thereto is satisfied:
(a) receipt by the Purchasers of counterparts of this Amendment, executed
and delivered by each of the parties hereto,
(b) receipt by the Purchasers of:
(i) Certified copies of the resolutions of the Board of Directors of
the Company and each Guarantor, authorizing the execution and delivery
of this Amendment, and of all documents evidencing other necessary
corporate action and governmental approvals, if any, with respect to
this Amendment;
(ii) a certificate dated the date hereof of the Secretary or an
Assistant Secretary and one other officer of the Company (together
with such evidence thereof as may be reasonably requested by the
Purchasers) certifying that (A) the certificate of such Person
previously delivered pursuant to Paragraph 3A(iii)(a) of the Note
Agreement continues to be true, current and correct and (B) the
Certificate of Incorporation and
4
By-laws of such Person previously delivered pursuant to Paragraph
3A(iv)(a) of the Note Agreement continue to be in full force and
effect and have not been modified or amended in any respect (in each
case, except as specifically set forth therein, which modifications or
amendments shall be in form and substance acceptable to the
Purchasers);
(iii) a corporate good standing certificate for the Company from the
Secretary of State of New York dated of a recent date;
(iv) favorable opinion of Timothy F. Michno, Esq., General Counsel of
the Company, dated the date hereof, satisfactory to the Purchasers and
in form and substance substantially identical to Exhibit E-1 to the
Note Agreement. The Company hereby directs such counsel to deliver
such opinion(s) and agrees that each Purchaser receiving such an
opinion will and is hereby authorized to rely on such opinion; and
(v) such additional documents or certificates with respect to legal
matters or corporate or other proceedings related to the transactions
contemplated hereby as may be reasonably requested by the Purchasers.
(c) the representations and warranties contained in Section 2 above shall
be true on and as of the date hereof, and there shall exist on the date hereof
no Event of Default or Default;
(d) the Company shall have paid Prudential Investment Management, Inc. (and
Prudential Investment Management, Inc. shall have received) on the date hereof a
facility fee in the amount of $15,000;
(e) all corporate and other proceedings taken or to be taken in connection
with the transactions contemplated hereby and all documents incident thereto
shall be satisfactory in substance and form to the Purchasers, the Purchasers
shall have received all such counterpart originals or certified or other copies
of such documents as it may reasonably request;
(f) the execution and delivery of this Amendment shall (i) not violate any
applicable law or governmental regulation (including, without limitation,
Section 5 of the Securities Act or Regulation T, U or X of the Board of
Governors of the Federal Reserve System) and (ii) shall not subject any
Purchaser to any tax, penalty, liability or other onerous condition under or
pursuant to any applicable law or governmental regulation;
(g) counsel for the Purchasers shall be satisfied as to all legal matters
relating to this Amendment, and the Purchasers shall have received from such
counsel favorable opinions as to such legal matters as they may request; and
(h) the Company shall have made all requests, filings and registrations
with, and obtained all consents and approvals from, the relevant national,
state, local or foreign jurisdiction(s), or any administrative, legal or
regulatory body or agency thereof, that are necessary in connection with this
Amendment and any and all other documents relating hereto, and the transactions
contemplated hereby.
5
6. Miscellaneous.
-------------
(a) This Amendment may be executed in any number of counterparts and by any
combination of the parties hereto in separate counterparts, each of which
counterparts shall be an original and all of which taken together shall
constitute one and the same agreement.
(b) This Agreement shall be governed by, and construed in accordance with,
the laws of the State of New York.
6
IN WITNESS WHEREOF, the parties have caused this Amendment to be executed
and delivered by their respective officers thereunto duly authorized as of the
date first above written.
MOVADO GROUP, INC.
By: /s/ Frank Kimick
----------------
Name: Frank Kimick
------------
Title: V.P. & Treasurer
---------------
THE PRUDENTIAL INSURANCE
COMPANY OF AMERICA
By: /s/ Yvonne Guajardo
-------------------
Name: Yvonne Guajardo
---------------
Title: Vice President
--------------
CONSENT AND ACKNOWLEDGEMENT OF GUARANTORS
-----------------------------------------
MOVADO RETAIL GROUP, INC., (as
successor by merger with SwissAm, Inc.)
By: /s/ Ray Stuart
--------------
Name: Ray Stuart
----------
Title: President
---------
MOVADO LLC
By: /s/ Eugene J. Karpovich
-----------------------
Name: Eugene J. Karpovich
-------------------
Title: Sr. V.P. CFO
------------
7