EXHIBIT 10.28
WAIVER AND AMENDMENT
THIS WAIVER AND AMENDMENT, dated as of the 27th day of
February, 2004, among MOVADO GROUP, INC., a New York corporation (the "Parent");
CONCORD WATCH COMPANY S.A., Swiss corporation ("Concord"); MOVADO WATCH COMPANY
SA, Swiss corporation ("MWC"); each of She Lenders which is a signatory to the
Credit Agreement referred to below; and JPMORGAN CHASE BANK, as Administrative
Agent, as Swingline Bank and as Issuing Bank.
Preliminary Statement
A. Reference is made to the Credit Agreement dated as of
June 17, 2003 among the Parent, Concord, MWC, the Lenders thereto and JPMorgan
Chase Bank, as Administrative Agent, as Swingline Bank and as Issuing Bank (the
"Existing Credit Agreement"), All capitalized terms used In this Waiver and
Amendment and not defined herein shall have the respective meanings ascribed to
them in the Existing Credit Agreement.
B. In connection with the acquisition by Concord of Ebel
SA and the acquisition by the Parent and certain Subsidiaries of in connection
with the worldwide business Related exclusively to the Ebel brand, all as set
forth in that certain Share Purchase and Transfer of Assets and Liabilities
Agreement dated as of December 22, 2003 between Sofidiv SAS and Concord (the
"Acquisition Agreement"), the Borrowers have requested a waiver of a certain
provision of the Existing Credit Agreement and certain amendments to the
Existing Credit Agreement.
NOW, THEREFORE, for good and valuable consideration (the
receipt and sufficiency of which are hereby acknowledged), the parties hereto
agree as follows:
ARTICLE 1. PARTICULAR WAIVER AND AMENDMENTS
Section 1.1. Capital Contribution to New Subsidiary. The
Lenders hereby waive the restriction contained in Section 8.5 of the Existing
Credit Agreement so as to permit MWC to make capital contributions of up to
76,875,000 Swiss francs in the aggregate to MGI international, Ltd., Provided
that (a) MGI International, Ltd. uses the capital contributions to make loans to
(i) Concord for the purpose of enabling Concord to consummate the transaction
contemplated by the Acquisition Agreement, (ii) other Subsidiaries (other than
the Subsidiary Guarantors) for the purpose of enabling them to consummate the
acquisition of the Ebel Assets as provided under the Acquisition Agreement and
(iii) Subsidiaries in connection with the Core Business; and (b) MGI
International, Ltd. is and remains a wholly-owned Subsidiary of MWC. Such waiver
is limited strictly as written and shall not apply to, or entitle the Borrowers
(or any of them) to any waiver or consent in respect of, any other or further
noncompliance with the same or any other provision of the Existing Credit
Agreement, now or on any future occasion.
Section 1.2. Debt Limitation. Section 8.1 (d) of the Existing
Credit Agreement is hereby amended so as to read as follows:
(d) Debt of the Parent to any Subsidiary; and Debt of
any Subsidiary to the Parent or to another Subsidiary,
provided that the aggregate amount at any time outstanding of
all Debt of Subsidiaries to the Parent or to other
Subsidiaries does not exceed the sum of (i) the outstanding
amount of the loan in the amount of 61,500,000 Swiss francs
made by MGI international, Ltd. to Concord for the purpose of
enabling Concord to consummate the transaction contemplated by
the Acquisition Agreement, plus (ii) twenty percent (20%) of
Consolidated Tangible Net Worth at the time of determination."
Section 1.3. New Defined Term. Section 1.1 of the Existing
Credit Agreement is hereby amended by adding thereto the following defined term:
"Acquisition Agreement' means the Share Purchase and
Transfer of Assets and Liabilities Agreement as of December
22, 2003 between Sofidiv SAS and Concord,"
Section 1.4. List of Subsidiaries. The list of Subsidiaries
of the Parent set forth on Schedule III of the Existing Credit Agreement is
hereby amended by adding thereto the following, each of which is formed under
the of the jurisdiction opposite Its name:
Ebel, SA - Switzerland
SwissWave Europe SA - France
MGI International, Ltd. - Bermuda
Ebel Deutsehland gmbh - Germany
Swissam UK Limited - United Kingdom
SA de l'lmmeuble, rue de la Paix 101 - Switzerland
The last sentence of such Schedule III applies to each of the foregoing
Subsidiaries; provided, however, that the shares of Ebel, SA will not be owned
by the Parent or any of its Subsidiaries until the closing of the acquisition by
Concord of Ebel, SA.
Section 1.5. Change in Address. The address of JPMorgan Chase
Bank set forth on its signature page of the Existing Credit Agreement is hereby
amended by changing the phrase "Attention: Mr. Leonard D. Noll" (in the three
places such phrase appears) to "Attention: Mr. Dennis McSherry".
ARTICLE 2. MATTERS GENERALLY
Section 2.1. Fee. Contemporaneously with the execution and
delivery of this Waiver and Amendment, the Borrowers shall pay a nonrefundable
waiver fee to the Administrative Agent for the Rateable benefit of the Lenders
in the aggregate amount of $37,500. Such fee shall be in addition to all other
amounts required to be paid by the Borrowers under the Existing Credit Agreement
and this Waiver and Amendment.
Section 2.2. Representations and Warranties. Each of the
Borrowers hereby represents and warrants as follows (provided, however, that
such representations and warranties by each Foreign Subsidiary Borrower shall be
as to such Foreign Subsidiary Borrower only):
(a) All the representations and warranties set
forth in the Existing Credit Agreement and in the other
Facility Documents are true and complete on and as of the date
hereof (with the same effect as though made on and as of such
date).
(b) No Default or Event of Default exists.
(c) No Borrower has any offset or defense with
respect to any of its obligations under the Existing Credit
Agreement or any of the Notes or any other Facility Document,
and no Borrower has any claim or counterclaim against any
Lender, the Swingline Bank, the issuing Bank or the
Administrative Agent whatsoever (any such offset, defense,
claim or counterclaim as may now exist being hereby
irrevocably waived by the Borrowers).
(d) This Waiver and Amendment has been duly
authorized, executed and delivered by the Borrowers.
Section 2.3. Guarantor Consent. The Subsidiary Guarantors
shall execute this Waiver and Amendment in the space provided below to indicate
their consent to the terms of this Waiver and Amendment.
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Section 2.4. Expenses. The Borrowers shall pay all reasonable
expenses incurred by the Administrative Agent in connection with this Waiver and
Amendment, including (without limitation) the reasonable fees and disbursements
of counsel for the Administrative Agent.
Section 2.5. Continuing Effect. Except as otherwise expressly
provided in this Waiver and Amendment, all the terms and conditions of the
Existing Credit Agreement shall continue in full force and effect. All the other
Facility Documents also shall continue in full force and effect.
Section 2.6. Entire Agreement. This Waiver and Amendment
constitutes the entire of the parties hereto with respect to a waiver or
amendment of the Existing Credit Agreement pertaining TO the subject matter
hereof, and it supersedes and replaces all prior and contemporaneous
agreements, discussions and understandings (whether written or oral) with
respect to such waiver and amendment.
Section 2.7. Counterparts. This Waiver and Amendment may be
executed in two or more counterparts, each of which shall be deemed to be an
original, but all of which taken together shall constitute one and the same
agreement.
Section 2.8. Effectiveness. This Waiver and Amendment shall
not become effective unless and until it shall have been executed and delivered
by the Borrowers, the Administrative Agent and the Lenders (which execution and
delivery may be evidenced by telecopies).
IN WITNESS WHEREOF, the parties hereto have executed this
Waiver and Amendment as of the day and year first above written.
MOVADO GROUP, INC.
By: /s/ Frank V. Kimick
-----------------------------------------
Name (Print): Frank V. Kimick
Tile: VP & Treasurer
CONCORD WATCH COMPANY S.A.
By: /s/ Kurt Burki
-----------------------------------------
Name (Print): Kurt Burki
Title: President
By: /s/ Emre Kurtoglu
-----------------------------------------
Name (Print): Emre Kurtoglu
Title: Director of Finance
MOVADO WATCH COMPANY SA
By: /s/ Kurt Burki
-----------------------------------------
Name (Print): Kurt Burki
Title: President
By: /s/ Emre Kurtoglu
-----------------------------------------
Name (Print): Emre Kurtoglu
Title: Director of Finance
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JPMORGAN CHASE BANK, as Administrative Agent,
as Lender, as Swingline and as Issuing Bank
By: /s/ Dennis Mc Sherry
-----------------------------------------
Dennis Mc Sherry
Vice President
FLEET NATIONAL BANK
By: /s/ John C. Auth
-----------------------------------------
John C. Auth
Vice President
THE BANK OF NEW YORK
By: /s/ Susan M. Graham
-----------------------------------------
Susan M. Graham
Vice President
CITIBANK, N.A.
By: /s/ Anthony V. Pantina
-----------------------------------------
Anthony V. Pantina
Vice President
CONSENTED TO BY SUBSIDIARY GUARANTORS:
MOVADO RETAIL GROUP, INC.
By: /s/ Timothy F. Michno
---------------------------------
Name (Print): Timothy F. Michno
Title: General Counsel
MOVADO LLC
By: /s/ Timothy F. Michno
---------------------------------
Name (Print): Timothy F. Michno
Title: General Counsel
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