EXHIBIT 3
AMENDMENT
to
STOCK AND ASSET PURCHASE AGREEMENT
AMENDMENT to Stock and Asset Purchase
Agreement, dated as of August 27, 1996, by and among
CYGNE DESIGNS, INC., a Delaware corporation ("Seller"),
CYGNE GROUP (F.E.) LIMITED, a Hong Kong corporation and
wholly owned subsidiary of Seller ("CGFE"), ANNTAYLOR
STORES CORPORATION, a Delaware corporation ("ATSC") and
ANNTAYLOR, INC., a Delaware corporation and wholly owned
subsidiary of ATSC ("Buyer"). Capitalized terms used but
not otherwise defined herein shall have the respective
meanings set forth in the Purchase Agreement (as defined
below).
W I T N E S S E T H
WHEREAS, Seller, CGFE, ATSC and Buyer are
parties to that certain Stock and Asset Purchase
Agreement, dated as of June 7, 1996 (the "Purchase
Agreement"), providing for, among other things, the sale
by Seller to Buyer of the Assets and the sale by Seller
and CGFE to Buyer of the CAT Shares for the aggregate
Purchase Price specified in the Purchase Agreement;
WHEREAS, under the terms of the Purchase
Agreement, a portion of the Purchase Price to be paid to
Seller, on its behalf and on behalf of CGFE, consists of
the number of validly issued, fully paid and
nonassessable shares of ATSC Common Stock having an
aggregate market price (based on the Average Trading
Price) of $36.0 million, but in no event greater than 2.5
million shares;
WHEREAS, under the terms of the Purchase
Agreement, either Seller or Buyer may terminate the
Purchase Agreement if the transactions contemplated
thereby are not consummated on or before August 30, 1996;
and
WHEREAS, the parties are desirous of amending
and supplementing the Purchase Agreement as set forth
herein.
NOW, THEREFORE, in consideration of the mutual
agreements set forth herein and for good and valuable
consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties agree as follows:
1. Section 1.2(a)(i) of the Purchase
Agreement is hereby amended in its entirety to read as
follows:
"(i) the number of validly issued, fully
paid and nonassessable shares of common stock,
par value $.0068 per share, of ATSC ("ATSC
Common Stock"), rounded to the nearest whole
share, equal to the quotient obtained by
dividing (a) $36.0 million by (b) the Average
Trading Price of the ATSC Common Stock (the
"Stock Consideration"); provided, however,
that, except as provided in the next sentence
of this Section 1.2(a)(i), the number of shares
of ATSC Common Stock to be issued shall in no
event exceed 2.5 million shares (the
"2.5 Million Cap"). In the event that on the
Closing Date (x) the 2.5 Million Cap is
triggered and (y) the aggregate value, based on
the Average Trading Price, of 2.5 million
shares of ATSC Common Stock is less than
$32.5 million, then ATSC shall issue as the
Stock Consideration the number of shares of
ATSC Common Stock, rounded to the nearest whole
share, equal to the quotient obtained by
dividing (A) $32.5 million by (B) the Average
Trading Price of the ATSC Common Stock;
provided, however, that the number of shares of
ATSC Common Stock to be issued shall in no
event exceed 3 million shares. The number of
shares of ATSC Common Stock, if any, issued in
excess of the 2.5 Million Cap shall be
hereinafter referred to as the "Additional
Shares". Notwithstanding the foregoing, in
lieu of the issuance by ATSC of all or a
portion of the Additional Shares, if
applicable, Buyer may, in its sole discretion,
deliver the dollar amount in cash (the
"Additional Cash") equal to the product
obtained by multiplying (aa) the number of
Additional Shares not to be issued by ATSC by
(bb) the Average Trading Price. As used in
this Agreement, the term "Stock Consideration"
shall include the amount of the Additional
Cash, if any, delivered in lieu of Additional
Shares. As used in this Agreement, the
"Average Trading Price" shall mean the average
of the high and low sale prices of the ATSC
Common Stock on the New York Stock Exchange
Composite Tape (or as reported on any other
exchange on which the ATSC Common Stock is then
listed) on each of the 10 consecutive trading
days ending on the trading day immediately
prior to the Closing Date;"
2. The Purchase Agreement is hereby amended
to add a new Section 1.5(q) which reads in its entirety
as follows:
"(q) a wire transfer of Federal or other
immediately available funds in an amount equal
to the Additional Cash, if applicable."
3. The last paragraph of Section 1.5 of the
Purchase Agreement is hereby amended in its entirety to
read as follows:
"The wire transfers pursuant to
subparagraphs (b) (c) (d) (e) and (q) above
shall be made by a single wire transfer to an
account designated in writing at least two (2)
business days prior to the Closing Date by
Seller."
4. Section 5.17(a) clause (ii) of the
Purchase Agreement is hereby amended in its entirety to
read as follows:
"(ii) promptly and duly call, give notice of,
convene and hold an annual meeting of stockholders
of Seller ("Annual Meeting") and shall hold such
meeting as soon as practicable after the date on
which the Proxy Statement (as hereinafter defined)
is cleared with the Commission;"
5. Section 5.17(b) of the Purchase Agreement
is hereby amended to delete the date "August 15, 1996"
from the last line thereof and to insert in lieu thereof
the date "September 26, 1996".
6. Section 6.1(d) of the Purchase Agreement
is hereby amended to delete the date "June 30, 1996" from
the first sentence thereof and to insert in lieu thereof
"the Closing Date."
7. Section 8.1(g) of the Purchase Agreement
is hereby amended to delete the date "September 29, 1996"
and to insert in lieu thereof the date "September 29,
1995."
8. Section 9.1(b) of the Purchase Agreement
is hereby amended to delete the date "August 30, 1996"
from the first line thereof and to insert in lieu thereof
the date "September 30, 1996."
9. The Purchase Agreement is hereby amended
to add a new Section 9.1(d) which reads in its entirety
as follows:
"(d) by Seller, if, on the Closing Date,
the value of the Stock Consideration, including
the value of any Additional Shares and
Additional Cash issuable or payable pursuant to
Section 1.2(a)(i) hereof, does not equal at
least $32.5 million."
10. The first sentence of Section 9.2 of the
Purchase Agreement is hereby amended in its entirety to
read as follows:
"In the event of the termination of this
Agreement and the abandonment of the
transactions contemplated hereby pursuant to
Section 9.1(b), 9.1(c) or 9.1(d) hereof,
written notice thereof shall forthwith be given
by the party so terminating to the other party,
and this Agreement shall terminate, and the
transactions contemplated hereby shall be
abandoned, without further action by Seller or
Buyer."
11. Seller represents and warrants to ATSC and
Buyer that each of Seller and CGFE has all requisite
corporate power and authority to enter into this
Amendment and to consummate the transactions contemplated
hereby. The execution, delivery and performance of this
Amendment and the consummation of the transactions
contemplated hereby have been duly authorized by all
necessary corporate action on the part of each of Seller
and CGFE. This Amendment has been duly executed and
delivered by each of Seller and CGFE, and this Amendment
constitutes a valid and binding obligation of each of
Seller and CGFE enforceable against each of Seller and
CGFE in accordance with its terms, except that (a) such
enforcement may be subject to any bankruptcy, insolvency,
reorganization, moratorium, or other laws, now or
hereafter in effect, relating to or limiting creditors'
rights generally and (b) the remedy of specific
performance and injunctive and other forms of equitable
relief may be subject to equitable defenses and to the
discretion of the court before which any proceeding
therefor may be brought.
12. ATSC and Buyer represent and warrant to
Seller and CGFE that each of ATSC and Buyer has all
requisite corporate power and authority to enter into
this Amendment and to consummate the transactions
contemplated hereby. The execution, delivery and
performance of this Amendment and consummation of the
transactions contemplated hereby have been duly
authorized by all necessary corporate action on the part
of each of ATSC and Buyer. This Amendment has been duly
executed and delivered by each of ATSC and Buyer, and
this Amendment constitutes a valid and binding obligation
of each of ATSC and Buyer, enforceable against each of
ATSC and Buyer in accordance with its terms, except that
(a) such enforcement may be subject to any bankruptcy,
insolvency, reorganization, moratorium, or other laws,
now or hereafter in effect, relating to or limiting
creditors' rights generally and (b) the remedy of
specific performance and injunctive and other forms of
equitable relief may be subject to equitable defenses and
to the discretion of the court before which any
proceeding therefor may be brought.
13. Except as specifically amended and
supplemented hereby, the Purchase Agreement shall
continue and remain in full force and effect in
accordance with its terms. From and after the date
hereof all references in the Purchase Agreement to the
"Agreement," "hereunder," "hereof," "herein" or words of
similar import shall mean and be a reference to the
Purchase Agreement as amended by this amendment.
[Signature Page Follows]
IN WITNESS WHEREOF, the parties hereto have
executed this Amendment to Stock and Asset Purchase
Agreement as of the day and year first above written.
CYGNE DESIGNS, INC.
By: /s/ Irving Benson
Name: Irving Benson
Title: President
CYGNE GROUP (F.E.) LIMITED
By: /s/ Irving Benson
Name: Irving Benson
Title: Director
ANNTAYLOR STORES CORPORATION
By: /s/ Paul E. Francis
Name: Paul E. Francis
Title: Executive Vice President-
Finance and Administration
ANNTAYLOR, INC.
By: /s/ Paul E. Francis
Name: Paul E. Francis
Title: Executive Vice President-
Finance and Administration