================================================================================
ASSET PURCHASE AGREEMENT
by and among
S.A. ANCIENNE FABRIQUE
XXXXXXX XXXXXX ET CIE.,
PIAGET (INTERNATIONAL) S.A.,
VLG NORTH AMERICA INC.,
MOVADO GROUP, INC.,
MOVADO GROUP OF CANADA, LTD.,
NAW CORPORATION
and
N.A. TRADING S.A.
Dated: December 22, 1998
================================================================================
TABLE OF CONTENTS
Page
----
1. Definitions......................................................1
1.1 Certain Defined Terms......................................1
1.2 Other Definitions..........................................3
2. Closing Transactions.............................................5
2.1 Sale and Purchase of Assets; Assumption of Liabilities.....5
2.2 Termination of Movado's Guarantor Obligations..............7
2.3 Payments...................................................7
3. Pre-Closing Procedures...........................................8
3.1 Settlement of Accounts.....................................8
3.2 Physical Inventory.........................................9
3.3 Confirmation of Accounts Receivables.......................9
4. Closing Adjustments.............................................10
4.1 ..........................................................10
(a) Preliminary Draft Closing Statement..................10
(b) Methodology..........................................10
(c) Draft Closing Statement..............................10
(d) GAAP.................................................11
(e) Post-Closing Finalization of Draft Closing Statement.12
(f) Retained Accounts Receivable.........................14
4.2 Post-Closing Settlement...................................14
5. Representations and Warranties of the Sellers...................15
5.1 Due Incorporation and Qualification.......................15
5.2 Authority to Execute and Perform Agreements...............15
5.3 Lease Agreement and Assumed Contracts.....................15
5.4 Accounts Receivable.......................................16
5.5 Rights; Properties; Assets................................16
5.6 Statement of Accounts Receivable and Fixed Assets.........17
5.7 Legal Proceedings.........................................17
5.8 Inventory.................................................17
5.9 Undisclosed Liabilities...................................17
5.10 Absence of Certain Changes or Events......................17
5.11 No Broker.................................................18
5.12 Representations and Warranties on Closing Date............18
6. Representations and Warranties of Buyer, PISA and SAAF..........18
6.1 Due Incorporation.........................................18
6.2 Corporate Power...........................................18
6.3 No Broker.................................................19
6.4 Representations and Warranties on Closing Date............19
i
Page
----
7. Covenants and Agreements........................................19
7.1 Conduct of Business.......................................19
7.2 Preservation of Business..................................20
7.3 Litigation................................................20
7.4 Corporate Examinations and Investigations.................20
7.5 Premerger Notification....................................21
7.6 Delivery of the Purchased Assets..........................21
7.7 Performance of the Assumed Liabilities....................21
7.8 Release of Security Interests.............................22
7.9 The Lease Agreement.......................................22
7.10 No Use of Piaget Name.....................................22
7.11 Employees.................................................22
7.12 Conditions to the Obligation of the Parties to Close......23
7.13 Conditions to the Obligation of Sellers to Close..........23
7.14 Conditions to Obligation of Buyer to Close................23
7.15 No Violation of Distributorship Agreements................24
7.16 Section 1445 of Code......................................24
7.17 Resale Certificate........................................24
8. Survival and Indemnification....................................24
8.1 Survival..................................................24
8.2 Indemnification...........................................25
8.3 Notice to Indemnifying Party..............................26
9. Miscellaneous...................................................27
9.1 Publicity.................................................27
9.2 Notices...................................................27
9.3 Transaction Expenses......................................28
9.4 Further Assurances........................................28
9.5 Entire Agreement..........................................29
9.6 Waivers and Amendments....................................29
9.7 Governing Law.............................................29
9.8 Jurisdiction and Venue....................................29
9.9 WAIVERS OF JURY TRIAL.....................................30
9.10 No Assignment.............................................30
9.11 Counterparts..............................................30
9.12 Exhibits and Schedules....................................30
9.13 Headings..................................................30
9.14 Confidentiality...........................................30
9.15 Severability..............................................30
9.16 Third Parties.............................................30
ii
Schedule 2.1.1(i) Previously-Owned Watches
Schedule 2.1.1(iii) Active Accounts Receivable Payment Terms
Schedule 2.1.1(vi) Assumed Contracts
Schedule 2.1.2(iv) Retail Incentive Program
Schedule 2.3.1(b) Purchase Price Allocation
Schedule 3.3 Accounts Receivable Confirmation Methodology
Schedule 4.1(d) Movado GAAP Methodologies and Principles
Schedule 5.3 Required Consents
Schedule 5.4(b) Returns
Schedule 5.5(a) Non-Salable Quality Watches, Jewelry and Spare Parts
Exhibit A-1 Form of Escrow Agreement
Exhibit A-2 Form of Escrow Release and Trademark Agreement
Exhibit B Statement of Accounts Receivable and Fixed Assets
Exhibit C Form of Xxxx of Sale, Assignment and Assumption Agreement
Exhibit D Form of Releases
Exhibit E-1 Form of Opinion of Counsel to Buyer
Exhibit E-2 Form of Opinion of Counsel to Piaget Swiss
Exhibit F Form of Opinion of Counsel to Sellers
Exhibit G Form of Press Release
iii
ASSET PURCHASE AGREEMENT
------------------------
AGREEMENT dated as of December 22, 1998 by and among S.A. ANCIENNE
FABRIQUE XXXXXXX XXXXXX ET CIE., a company incorporated under the laws of
Switzerland ("SAAF"), PIAGET (INTERNATIONAL) S.A., a company incorporated under
the laws of Switzerland ("PISA"), VLG NORTH AMERICA INC., a company organized
under the laws of the State of New York ("Buyer"), MOVADO GROUP, INC., a company
incorporated under the laws of the State of New York ("Movado"), MOVADO GROUP OF
CANADA, LTD., a company incorporated under the laws of Canada ("Movado Canada"),
NAW CORPORATION, a company incorporated under the laws of the State of Delaware
("NAW"), and N.A. TRADING S.A., a company incorporated under the laws of
Switzerland ("NA Trading"). Movado, Movado Canada, NAW and NA Trading are
sometimes referred to collectively as "Sellers" and individually as a "Seller."
SAAF and PISA are sometimes referred to collectively as "Piaget Swiss."
In consideration of the mutual agreements, covenants, representations
and warranties contained in this Agreement, the parties agree as follows:
1. Definitions.
1.1 Certain Defined Terms. As used herein, the following terms shall
have the meanings ascribed below:
"Action" means any action, suit, inquiry, proceeding, charge,
arbitration or investigation by or before any court or governmental or other
regulatory or administrative agency or commission.
"Active Account" means an account of Sellers in respect of the Piaget
Business in which the customer on such account has purchased Watches or Jewelry
within the twelve month period preceding the date of this Agreement.
"affiliate," with respect to any person, means and includes any person
controlling, controlled by or under common control with such person;
"Boutique Agreement" means the Agreement, dated as of February 27,
1996, as amended by a side letter of the same date, between PISA and NAW (as
assignee of Movado), pursuant to which PISA has granted NAW the right to operate
a retail store under the trade name PIAGET at 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx
Xxxx;
"Canadian Distributorship Agreement" means the Distributorship
Agreement, dated as of February 11, 1992, among PISA, SAAF and Movado Canada,
pursuant to which PISA has appointed Movado Canada as its sole and exclusive
importer and distributor of watches and jewelry bearing the PIAGET trademark in
Canada;
2
"Caribbean Distributorship Agreement" means the Distributorship
Agreement, dated as of February 11, 1992, among PISA, SAAF and Movado, pursuant
to which PISA has appointed NA Trading as its sole and exclusive importer and
distributor of watches and jewelry bearing the PIAGET trademark in certain
Central American and Caribbean countries;
"Consent and Assumption Agreement" means the Consent and Assumption
Agreement dated December 21, 1998 among PISA, SAAF, Movado and NAW;
"Consignment Agreement" means the Consignment Agreement, dated as of
August 30, 1996, between PISA and NAW (as assignee of Movado), pursuant to which
PISA delivered to Movado certain inventory of watches and jewelry bearing the
PIAGET trademark on a consignment basis;
"Distributorship Agreements" means the US Distributorship Agreement,
the Canadian Distributorship Agreement and the Caribbean Distributorship
Agreement;
"Escrow Agent" means United States Trust Company of New York or
successor escrow agent under the Escrow Agreement;
"Escrow Agreement" means the Escrow Agreement, dated the Closing Date
among Buyer, SAAF, Sellers and the Escrow Agent, in the form of Exhibit A-1;
"Escrow Release Agreement" means the Escrow Release and Trademark
Agreement, dated the Closing Date, among SAAF, PISA, Movado, NAW, Movado Canada,
and NA Trading in the form of Exhibit A-2;
"Jewelry" means the jewelry manufactured by or for SAAF and marketed by
PISA under the trademark PIAGET;
"knowledge" means, with respect to any party, the knowledge, after due
inquiry, of any officer, director or shareholder of such person;
"Lease Agreement" means the Lease Agreement, dated February 18, 1996,
between Movado and Lexington Building Co L.P. for the space occupied by the
Piaget Boutique;
"lien" or "encumbrance" means and includes any lien, pledge, mortgage,
security interest, claim, lease, charge, option, right of first refusal,
easement, adverse claim affecting title or any other encumbrance whatsoever;
"Movado Consignment Contracts" means the consignment contracts listed
on Schedule 2.1.1(vi) and any similar contracts entered into prior to Closing
with the approval of Buyer as contemplated by Section 7.1;
3
"person" means any individual, corporation, partnership, firm, joint
venture, association, joint-stock company, trust, unincorporated organization or
other entity;
"Piaget Boutique" means the retail store established and operated
pursuant to the Boutique Agreement;
"Piaget Business" means the business conducted by Sellers pursuant to
the Distributorship Agreements, the Boutique Agreement and the Consignment
Agreement;
"Piaget Communications Materials" means the various communications
materials sent to Sellers at no cost that are still in the possession of Sellers
as of the Closing;
"Piaget Consigned Goods" means the Watches, Jewelry and Spare Parts on
consignment with Sellers pursuant to the Consignment Agreement;
"Prime Rate" means a fluctuating rate equal to the prime rate of
interest announced, from time to time, by The Chase Manhattan Bank as its
domestic prime rate (or equivalent thereof).
"property" means real, personal or mixed property;
"Spare Parts" means spare parts and components for Watches and Jewelry
manufactured by or for SAAF;
"Statement of Accounts Receivable and Fixed Assets" means the statement
of such assets as of November 30, 1998 prepared by Sellers and attached hereto
as Exhibit B;
"Trademark Agreement" means the Trademark Agreement, dated as of
February 11, 1992, between SAAF and NAW (as assignee of Movado).
"U.S. Distributorship Agreement" means the Distributorship Agreement,
dated as of February 11, 1992, among PISA, SAAF and NAW (as assignee of Movado),
pursuant to which PISA has appointed NAW as its sole and exclusive importer and
distributor of Watches and Jewelry in the U.S. Territories (as defined in the US
Distributorship Agreement); and
"Watches" means the watches manufactured by or for SAAF and marketed by
PISA under the trademark PIAGET.
1.2 Other Definitions. When used in this Agreement, the following terms
shall have the meanings ascribed to them in the Section noted below:
4
Defined Term Section No.
------------ -----------
Accounts Receivable 2.1.1
Arbitrator 4.1
Assumed Contracts 2.1.1
Assumed Liabilities 2.1.2
Closing 2.4
Closing Date 2.4
Closing Statement 4.1
Code 2.3.1
Disputed Matters 4.1
Distributorship Assets 2.1.1
Distributorship Assets Purchase Price 2.1.4
Draft Closing Statement 4.1(c)
Escrow Account 2.3.2
Escrow Deposit 4.2
Estimated Price 2.3.1
FIFO 5.8
GAAP 4.1(d)
Holdback 2.3.2
HSR Act 2.4
Indemnifiable Losses 8.2
Indemnifying Party 8.3
Indemnitee 8.3
Inventory 2.1.1
Inventory Date 3.2
July Statement 5.8
Notice of Disagreement 4.1(c)
Permitted Assertions 4.1(c)
Post-Closing Settlement 4.2
Preliminary Draft Closing Statement 4.1
Promotional Materials 2.1.1
Purchased Assets 2.1.1
Purchase Price 2.1.4
Review Period 4.1(e)
Workpapers 4.1(c)
5
2. Closing Transactions.
2.1 Sale and Purchase of Assets; Assumption of Liabilities.
2.1.1 Sale of Assets. On the terms and subject to the
conditions contained herein, at the Closing, Sellers shall sell, transfer,
assign, convey and deliver to Buyer, and Buyer shall purchase and acquire from
Sellers, all of Sellers' right, title and interest in and to all of the
following assets, properties and rights existing on the Closing Date and used in
or related to the Piaget Business, wherever located, free and clear of all
encumbrances (the "Purchased Assets"):
(i) Sellers' inventory of Watches, Jewelry and Spare
Parts (including the previously-owned Watches bearing the trademark PIAGET but
no more than those such previously-owned Watches listed on the inventory list
attached hereto as Schedule 2.1.1(i)), other than such Watches, Jewelry and
Spare Parts that, as of the Closing Date, have been sold in the ordinary course
of the Piaget Business (the "Inventory"). Notwithstanding the foregoing,
Inventory shall not include Piaget Consigned Goods.
(ii) all sales support materials, including, without
limitation, Espaces corresponding to Active Accounts and displays, purchased by
Sellers from PISA pursuant to the terms of the Distributorship Agreements (not
including the Piaget Communications Materials) (the "Promotional Materials");
(iii) the accounts receivable of Sellers arising out
of the sale of Watches, Jewelry and Spare Parts (a) included in the Statement of
Accounts Receivable and Fixed Assets or (b) that arose, or will arise, after the
date of the Statement of Accounts Receivable and Fixed Assets and (in the case
of clause (b) only) if arising after the date hereof, (1) originate from Active
Accounts and (2) provide for payment terms as set forth on Schedule 2.1.1(iii),
and which (in the case of clauses (a) and (b)), are confirmed in accordance with
Section 3.3 or, if the confirmation of an account receivable in accordance with
Section 3.3 is a Disputed Matter, such account receivable if, pursuant to
Section 4.1(e), the parties agree or Arbitrator determines that it has been
confirmed in accordance with Section 3.3 (the accounts receivable described in
clauses (a) and (b), the "Accounts Receivable");
(iv) all of the installations, furniture and fixtures
at the Piaget Boutique that are not owned by PISA;
(v) the Lease Agreement and any prepaid rent
thereunder;
(vi) the contracts listed on Schedule 2.1.1(vi) that
are in effect on the Closing Date, together with any contracts or agreements
entered into by any of Sellers with the approval of Buyer as contemplated by
Section 7.1, and for which consent to assignment, if necessary, has been
obtained (or for which the requirement to obtain such consent has been waived by
Buyer), including the Movado Consignment Contracts (collectively, the "Assumed
Contracts");
6
(vii) the Boutique Agreement;
(viii) the Consignment Agreement;
(ix) the Caribbean Distributorship Agreement;
(x) the Canadian Distributorship Agreement; and
(xi) the U.S. Distributorship Agreement (including
the right to use the name "Piaget" pursuant thereto) (the U.S. Distributorship
Agreement, together with the foregoing items (vii) through (x), the
"Distributorship Assets").
Notwithstanding the provisions above, Inventory included in the Purchased Assets
includes only (i) previously-owned Watches if listed on Schedule 2.1.1(i), (ii)
such Inventory that conforms to Section 5.5(a) (excluding for purposes of this
clause (ii), the previously-owned Watches referred to therein and any Watches,
Jewelry or Spare Parts set forth on Schedule 5.5(a)), and (iii) such other
Inventory which is listed on Schedule 5.5(a) (including as amended by agreement
of Buyer and Sellers after the date hereof), to the extent Buyer and Sellers
agree prior to Closing on the cost of any necessary refurbishment of such item
of Inventory listed on Schedule 5.5(a), as amended, and such cost is deducted
from the net book value reflected in the Draft Closing Statement and the Closing
Statement of the particular item of Inventory.
2.1.2 Assumption of Liabilities. (a) At the Closing, Buyer
shall assume the following liabilities and obligations of Sellers to the extent
existing after the Closing Date (the "Assumed Liabilities"):
(i) all liabilities and obligations of Sellers to
Piaget Swiss under the Distributorship Agreements, the Boutique Agreement and
the Consignment Agreement arising after the Closing Date;
(ii) all liabilities and obligations of the Sellers
under the Lease Agreement and the Assumed Contracts accrued as of the Closing
Date, which shall be set forth on the Closing Statement, or arising after the
Closing Date;
(iii) the after-sales service and warranty
obligations of Sellers as set forth on warranty cards provided by PISA to
Sellers with each such item relating to Watches and Jewelry sold by Sellers
pursuant to their rights under the Distributorship Agreements and the Boutique
Agreement;
(iv) the accounts payable of Sellers with respect to
the Piaget Business, which are set forth on the Closing Statement, including,
all amounts payable pursuant to any retail incentive program associated with the
U.S. Distributorship Assets, the terms of which are set forth on Schedule
2.1.2(iv);
(v) the New York City Rent or Occupancy Tax in
respect of the space utilized by the Piaget Boutique accrued through the Closing
Date, which shall be set forth on the Closing Statement;
7
(vi) the amounts payable with respect to co-op
advertising set forth on the Closing Statement as an accrual for the liability
for co-op advertising; and
(vii) the amounts payable of Sellers with respect to
gift certificates relating to the Piaget Boutique, which shall be set forth on
the Closing Statement.
(b) Anything in this Agreement to the contrary
notwithstanding, Buyer does not assume, and shall not in any way be liable or
responsible for, any liabilities or obligations of Sellers other than the
Assumed Liabilities.
2.1.3 Xxxx of Sale, Assignment and Assumption Agreement. In
confirmation of the foregoing assignment and assumption, at the Closing, Buyer
and Sellers shall execute and deliver a Xxxx of Sale, Assignment and Assumption
Agreement in the form of Exhibit C.
2.1.4 Purchase Price. Upon the terms and subject to the
conditions contained in this Agreement, Buyer will pay to Sellers:
(a) the aggregate purchase price for the Purchased Assets,
other than the Distributorship Assets, which shall be an amount in U.S. dollars
equal to (i) the net book value (determined in accordance with this Agreement)
of the Purchased Assets, other than the Distributorship Assets, reflected on the
Closing Statement minus (ii) $2,750,000, payable as, and subject to the
adjustments, set forth in Sections 4.1 and 4.2; and
(b) the aggregate purchase price for the Distributorship
Assets (the "Distributorship Assets Purchase Price" and together with the
purchase price set forth in Section 2.1.4(a), the "Purchase Price"), which shall
be $11,000,000.
2.2 Termination of Movado's Guarantor Obligations. Effective as of the
Closing Date, Movado's obligations under the Consent and Assumption Agreement as
guarantor of NAW shall terminate and be of no further force and effect except in
respect of the Trademark Agreement.
2.3 Payments.
2.3.1 Payment of Purchase Price.
(a) Upon the terms and subject to the conditions contained in
this Agreement, on the Closing Date, Buyer shall pay to Sellers the following
amounts, less the Holdback (as defined below), as an estimate of the Purchase
Price:
8
(i) an amount in cash equal to the net book value of
the Purchased Assets (determined in accordance with this Agreement), other than
the Distributorship Assets, as reflected on the Draft Closing Statement, minus
$2,750,000 (the "Estimated Price"); and
(ii) an amount in cash equal to the Distributorship
Asset Purchase Price.
(b) The parties hereto agree to the allocation of the Purchase
Price and Assumed Liabilities made in accordance with section 1060 of the
Internal Revenue Code of 1986, as amended (the "Code"), as set forth in Schedule
2.3.1(b) (or in an amended Schedule 2.3.1(b) to reflect any adjustments pursuant
to Section 4.2(b)) attached hereto. The parties hereto shall report the purchase
and sale of the Purchased Assets pursuant to this Agreement for all tax purposes
consistent with such allocation and shall take no position to the contrary
thereto in any tax return (including any amended tax return), any proceeding
before any taxing authority or otherwise.
2.3.2 Holdback. $1,000,000 of the Purchase Price (the
"Holdback") shall be paid by Buyer to the Escrow Agent for deposit in the Escrow
Account (as defined in the Escrow Agreement) at the Closing for disbursement to
the Buyer and or Sellers in accordance with the provisions of Section 4.2 and
the provisions of the Escrow Agreement.
2.4 Closing. Upon the terms and subject to the conditions contained in
this Agreement, the closing of the purchase and sale of the Purchased Assets and
the other transactions contemplated hereby (the "Closing") shall take place at
the offices of Xxxx, Weiss, Rifkind, Xxxxxxx & Xxxxxxxx, 0000 Xxxxxx xx xxx
Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000-0000, at 10:00 a.m., local time, on the later
of (a) February 15, 1999 or (b) the tenth business day following the expiration
or earlier termination of the applicable waiting period under the
Xxxx-Xxxxx-Xxxxxx Anti-Trust Improvements Act of 1976, as amended, and the rules
and regulations promulgated thereunder (the "HSR Act") (the time and date of the
Closing being referred to herein as the "Closing Date").
3. Pre-Closing Procedures.
3.1 Settlement of Accounts. (a) Seven (7) business days prior to the
Closing Date, Piaget Swiss and Sellers shall prepare a statement setting forth
in reasonable detail the calculation of all outstanding debit and credit
balances between Piaget Swiss, on the one hand, and Sellers, on the other hand,
arising from the operation of the Distributorship Agreements, the Boutique
Agreement and the Consignment Agreement, based upon the latest available
financial information as of such date. Sellers and Piaget Swiss shall cooperate
in, and provide any documentation necessary to, the preparation of such
statement. At the Closing, Piaget Swiss shall pay to Sellers an amount equal to
the net amount owed by Piaget Swiss to Sellers, or Sellers shall pay to Piaget
Swiss the net amount owed by Sellers to Piaget Swiss, in each case as agreed by
the parties. Such amounts shall be paid in accordance with the
9
same currencies as previously used between the parties under the applicable
agreements. If the parties are unable to agree on the amount of outstanding
debit and credit balances, then any undisputed amount shall be paid to the
relevant party or parties at Closing, and the resolution of the disputed amount
shall be determined by the parties after the Closing, or, if there is no
resolution within thirty (30) business days thereafter, referred to the
Arbitrator, and finally resolved, in accordance with the procedures set forth in
Section 4.1(e). Any amounts required to be paid pursuant to a resolution of any
such dispute shall be paid to the relevant party by delivery to the party
entitled thereto of a certified or bank cashier's check or wire transfer of
funds in the amount of the balance due promptly following such resolution (but
in any event no later than the date of the Post-Closing Settlement).
(b) The matters relating to the settlement of accounts in this
Section 3.1 are separate and distinct from those items to be included in the
Closing Statement and there shall be no duplication or overlap with respect
thereto.
3.2 Physical Inventory. As of the date ten (10) business days prior to
the Closing Date (the "Inventory Date"), Sellers shall have completed a physical
inventory of the Inventory as of the date thereof for all locations and no sales
of Inventory shall be made (other than at the Piaget Boutique or by the
consignees holding Inventory as set forth below) after the date thereof. Buyer
and its representatives shall be permitted to observe the taking of the physical
inventory. Furthermore, Buyers and its representatives shall be permitted to
conduct a pre- Closing audit of all physical inventory, including inventory
counting and quality control, in the presence of Sellers and their
representatives and may also conduct a pre-Closing and/or post-Closing audit of
the Workpapers (as defined in Section 4.1(c)) and other documentation as
reasonably requested by Buyer's representatives to complete Buyer's due
diligence review as set forth in Section 7.4. All inventory count adjustments
shall be agreed to at the time of the taking of the audit of physical inventory
by Buyer so that such adjustments, if any, may be reflected in the Preliminary
Draft Closing Statement (as defined below) and the Draft Closing Statement (as
defined below). Except as provided hereunder, all Inventory on consignment
pursuant to the Movado Consignment Contracts shall be recalled prior to the
physical inventory. Notwithstanding the foregoing, Inventory on consignment
pursuant to consignment agreements with the Neiman Marcus Group, shall remain in
the possession of the Neiman Marcus Group, shall be included on the Preliminary
Draft Closing Statement and the Draft Closing Statement based upon inventory
records and shall be confirmed as soon as possible after the date hereof. Any
Watches, Jewelry or Spare Parts returned prior to the Closing Date without
proper authorization from Sellers shall be promptly returned by Sellers to the
party attempting to return such item, and such item shall not be considered to
be an item of Inventory nor shall there be any adjustment to Accounts Receivable
with respect to such unauthorized return except as may be appropriate as a
result of applying the confirmation procedures contemplated by Section 3.3.
3.3 Confirmation of Accounts Receivables. The parties hereto agree that
a process of confirming Accounts Receivable in accordance with the methodologies
provided for in Schedule 3.3 will take place as soon as practicable
10
after the date hereof and shall end by the latest time by which Buyer is
required to respond to the Preliminary Draft Closing Statement in accordance
with 4.1(c).
4. Closing Adjustments.
4.1 (a) Preliminary Draft Closing Statement. Three (3) business days
following the Inventory Date, Sellers shall prepare in good faith and deliver to
Buyer and Piaget Swiss a preliminary draft of the Closing Statement, which shall
include a detailed listing, including the aggregate book value and physical
location, of all of the Purchased Assets (other than the Distributorship Assets
and the Lease Agreement), arriving at the net book value thereof, and a listing
of the estimated Assumed Liabilities to be included on the Closing Statement
(the "Preliminary Draft Closing Statement") in each case, as of such third
business day (except for Purchased Assets contained within the Piaget Boutique,
which shall be as of the Inventory Date or any later practicable date.) The
Preliminary Draft Closing Statement shall be prepared in accordance with GAAP
and shall include the net book value of the Purchased Assets (other than the
Distributorship Assets and the Lease Agreement), reduced by the amount of the
estimated Assumed Liabilities to be included on the Closing Statement, and,
without limitation, shall include provisions for (i) the New York City Rent or
Occupancy Tax in respect of the space utilized by the Piaget Boutique accrued
through the Closing Date and (ii) Accounts Receivable from, accounts payable to,
and Inventory on consignment pursuant to consignment agreements with, the Neiman
Marcus Group.
(b) Methodology. The methodology used in calculating the
aggregate book value of the Purchased Assets (other than the Distributorship
Assets and the Lease Agreement) in the Preliminary Draft Closing Statement shall
take into account: (i) Inventory as of the Inventory Date consistent with the
procedures contemplated by Section 3.2 and determined in accordance with GAAP,
(ii) Accounts Receivable based on the Statement of Accounts Receivable and Fixed
Assets with appropriate adjustments to add those Accounts Receivable
contemplated by Section 2.1.1(iii) and to subtract those Accounts Receivable
that have been paid or written off in the ordinary course of business during the
period from December 1, 1998 through and including the Inventory Date (or such
later date prior to the Closing Date as may be practicable), and (iii) all other
such Purchased Assets (other than the Distributorship Assets and the Lease
Agreement) based on the Statement of Accounts Receivable and Fixed Assets with
appropriate adjustments to reflect acquisitions and dispositions of such
Purchased Assets from the period from December 1, 1998 through and including the
Inventory Date (or such later date prior to the Closing Date as may be
practicable). The Assumed Liabilities to be included on the Preliminary Draft
Closing Statement shall be a good faith estimate (after exercising reasonable
diligence) of the amounts thereof to be included on the Closing Statement.
(c) Draft Closing Statement. The Preliminary Draft Closing
Statement, as adjusted pursuant to this Section 4.1(c), shall be used for
determining the amount payable by Buyer at the Closing in accordance with
Section 2.3.1(a), but shall not be deemed to be the final Closing Statement
except as set forth in Section 4.1(e). Simultaneously with and/or prior to
delivering the Preliminary Draft
11
Closing Statement to Buyer, Sellers will provide to Buyer workpapers in support
of all evidence of, and calculations with respect to, the Purchased Assets and
Assumed Liabilities included in the Preliminary Draft Closing Statement (the
"Workpapers"). Such Workpapers should include, but not be limited to,
documentation rolling forward the Statement of Accounts Receivable and Fixed
Assets to the Inventory Date, Inventory summarization valuation based upon the
physical inventory as of the Inventory Date, and other workpapers and supporting
documentation in reasonable support of any other Purchased Assets and Assumed
Liabilities included in the Preliminary Draft Closing Statements. After Buyer
has received the Preliminary Draft Closing Statement and all the Workpapers,
Buyer shall indicate in writing to Sellers, within five (5) business days
thereafter, those items, if any, on the Preliminary Draft Closing Statement with
which Buyer, in good faith, is in disagreement (a "Notice of Disagreement"). Any
such disagreement may be based only upon an assertion (without duplication) that
(i) the Preliminary Draft Closing Statement was not prepared in accordance with
GAAP, (ii) based on the physical inventory referred to in Section 3.2 and
Buyer's audit thereof, there is a discrepancy between the actual Inventory and
the Inventory reflected in the Preliminary Draft Closing Statement, (iii) there
is a breach of a representation or warranty contained in Sections 5.3, 5.4, 5.5,
5.7, 5.8 or 5.9 or the first or second sentence of Section 4.1(d), (iv) the
Preliminary Draft Closing Statement contains accounts receivable that have not
been confirmed in accordance with Section 3.3, or (v) the Preliminary Draft
Closing Statement contains a mathematical error on the statement or in the
calculations used in arriving at the items contained therein (such assertions
(i)-(v), "Permitted Assertions"). Prior to Closing, Buyer and Sellers shall
attempt in good faith to reconcile such disagreement(s). To the extent that any
such disagreements are able to be reconciled during such period, appropriate
adjustments shall be made by Sellers to the Preliminary Draft Closing Statement,
and, to the extent any such disagreement is not able to be reconciled prior to
Closing, the Preliminary Draft Closing Statement shall be adjusted to reflect
the average of the determination of Sellers and the determination of Buyer (and
specifically, with respect to any accounts receivable to which Buyer asserts
have not been confirmed in accordance with Section 3.3, one-half of Sellers'
good faith valuation of such accounts receivable shall be reflected thereupon),
and any unresolved disagreements shall be reconciled post- Closing pursuant to
the procedures described in Section 4.1(e), provided, however, that any accounts
receivable that Buyer asserts are not confirmed in accordance with Section 3.3
may, at Sellers' option, exercised at any time until final determination by the
Arbitrator, be retained by Sellers and not included in the Draft Closing
Statement. The Preliminary Draft Closing Statement as adjusted in accordance
with this Section 4.1(c), and delivered at Closing, shall be referred to as the
"Draft Closing Statement."
(d) GAAP. As used in this Agreement, any references to GAAP
shall refer to U.S. generally accepted accounting principles and methodologies
(as applied by Movado and its subsidiaries on a consolidated basis), consistent
with and including, without limitation, those principles and methodologies set
forth on Schedule 4.1(d), which principles and methodologies Movado represents
and warrants are consistent with those principles and methodologies used in the
preparation of Movado's (i) consolidated audited financial statements for the
fiscal year ended
12
January 31, 1998 and (ii) consolidated unaudited financial statements contained
in its Form 10-Q for the quarterly period ended July 31, 1998 (subject to normal
fiscal year-end adjustments) (such principles and applications referred to
collectively herein as "GAAP"). Movado represents and warrants that Movado's
consolidated financial statements for the fiscal year ended January 31, 1998 and
for the fiscal quarter ended July 31, 1998 were prepared in accordance with U.S.
generally accepted accounting principles consistently applied throughout the
periods involved (subject, in the case of the quarterly financial statements, to
normal fiscal year-end adjustments). The principles and methodologies set forth
on Schedule 4.1(d) shall be determinative in the interpretation of the term
"GAAP," as used herein, whether or not it is in accordance with any other
interpretation of "U.S. generally accepted accounting principles." The
references in this Agreement to the Preliminary Draft Closing Statement, the
Draft Closing Statement and the Closing Statement being "prepared in accordance
with GAAP" shall mean that such closing statements are prepared using the
principles and methodologies referred to in this Section 4.1(d).
(e) Post-Closing Finalization of Draft Closing Statement. The
Draft Closing Statement shall, if necessary, be adjusted by Sellers, in
accordance with GAAP, for any increases or decreases in the Purchased Assets or
the Assumed Liabilities between (i) the date as of which such Purchased Assets
and Assumed Liabilities were recorded on the Draft Closing Statement and (ii)
the Closing Date, and if so adjusted, shall become final and binding the tenth
(10th) business day following the Closing, unless Buyer (A) shall, prior to
Closing, have given Sellers a Notice of Disagreement pursuant to Section 4.1(c),
which was not completely reconciled prior to Closing, or (B) after Closing,
amends such Notice of Disagreement or, if no Notice of Disagreement was
previously delivered, initially delivers a Notice of Disagreement to Sellers.
Any amendment to, or initial delivery of, such Notice of Disagreement
contemplated by clause (B) of the previous sentence shall be delivered within
ten (10) business days following the Closing (the "Review Period") and shall be
limited only to Permitted Assertions. Notwithstanding the foregoing, if all
Workpapers are not received by Buyer on or prior to the third (3rd) business day
following the Closing Date, then in lieu of the tenth (10th) business day
referred to in the first preceding sentence of this Section 4.1(e), there shall
be substituted a number of business days equal to the sum of ten (10) and the
number of days after such third (3rd) business day that have elapsed until the
business day as of which all Workpapers are received by Buyer. Buyer shall
inform Sellers of any Workpapers not yet received as of the third (3rd) business
day after the Closing Date. For this purpose, a list of the required Workpapers
will be provided in good faith by Buyer to Sellers at the Closing. Any
disagreement on remaining Workpapers to be delivered after the Closing shall be
resolved in good faith between Buyer and Sellers by the fifth (5th) business day
following the Closing Date. If there is any further disagreement as to whether
all Workpapers have been delivered by such fifth (5th) business day, the matter
may be submitted to the Arbitrator by either Buyer or Sellers. Buyer's review of
the Draft Closing Statement may also include reviewing additional Workpapers, as
described above, and the financial books and records of the Piaget Business and
interviewing management personnel, such review to take place in the Review
Period. Sellers shall fully cooperate with Buyer in making such personnel
available and providing access to such records during the Review Period. If a
Notice
13
of Disagreement was received under Section 4.1 (c) or was amended or delivered
in accordance with the foregoing, then the Draft Closing Statement and the
values reflected therein, as adjusted if necessary, shall become final and
binding upon the parties upon the earlier of (x) the date the parties hereto
resolve all differences, if any, they may have with respect to any matter
specified in the Notice of Disagreement and agree in writing that the Draft
Closing Statement, as adjusted if necessary, is correct and (y) the date all
Disputed Matters (as defined herein), if any, are finally resolved by the
Arbitrator. During a period of ten (10) business days following the Review
Period, Buyer and Sellers shall attempt to resolve in writing any differences
that they may have with respect to any matter specified in the Notice of
Disagreement, as amended (if applicable). If Buyer and Sellers reach written
agreement with respect to all such matters set forth in the Notice of
Disagreement, but such agreement differs in any way from the Draft Closing
Statement, then Sellers shall prepare and deliver a revised Closing Statement
reflecting all changes necessitated by such written agreement.
If at the end of such ten (10) business day period, Buyer and Sellers
have failed to reach written agreement with respect to all of such matters, then
all such matters specified in the Notice of Disagreement as to which such
written agreement has not been reached (the "Disputed Matters") shall be
submitted to and reviewed by an arbitrator (the "Arbitrator"), which shall be a
U.S. accounting firm with an international reputation having no other
relationship with any party hereto during the past five (5) years. The
determination of the Arbitrator shall be final and binding on the parties
hereto. The identity of the Arbitrator shall be determined mutually by Movado's
independent public accountants and Buyer's independent public accountants; and
if such accountants cannot agree as to the identity of the Arbitrator, then each
accounting firm shall select one nominee and the parties shall choose the
Arbitrator by lot. The Arbitrator, which shall review the Disputed Matters in
its New York City location, shall consider only the Disputed Matters. Either
Movado (on behalf of Sellers) or Buyer may, at its option, submit to the
Arbitrator, with a copy to the other party, a written statement of its position
as to the Disputed Matters, such statement to be delivered no later than ten
(10) business days after the appointment of the Arbitrator. In addition, either
party may make an oral presentation to the Arbitrator as to the Disputed
Matters; provided that the other party shall have a right to be present at such
oral presentation. The Arbitrator shall be instructed to act promptly to resolve
all Disputed Matters and to issue a written decision not more than thirty (30)
days after the later of (x) its appointment or (y) its receipt of written
statements or oral presentations, if applicable, and such written decision with
respect to all Disputed Matters shall be final and binding upon Buyer and
Sellers.
Upon receipt of the Arbitrator's written decision, Sellers shall issue
a revised Closing Statement reflecting all changes necessitated by the
Arbitrator's written decision. If any Disputed Matter concerns an account
receivable that Buyer has asserted has not been confirmed in accordance with
Section 3.3, and the Arbitrator determines in favor of Buyer with respect to
such account receivable, such account receivable shall be retained by Sellers,
not included in the Closing Statement and not purchased by Buyer hereunder. The
fees and expenses of the Arbitrator with respect to the settlement of all
Disputed Matters shall be borne equally by Buyer and
14
Sellers. As used herein, the term "Closing Statement" shall refer to the Draft
Closing Statement in the form in which it becomes final in accordance with the
foregoing procedures.
(f) Retained Accounts Receivable. Any account receivable
retained by Sellers in accordance with Section 4.1(c) or 4.1(e) may be settled
in whole or in part by Sellers by taking a return from the retailer of all or
any portion of the Watches, Jewelry and/or Spare Parts for which the account
receivable was created; provided, that, such Watches, Jewelry and/or Spare Parts
to be returned are the same Watches, Jewelry and/or Spare Parts listed on the
original invoice from Sellers to retailer. Beginning May 1, 1999, during the
first thirty (30) days of each of Movado's fiscal quarters, representatives of
Buyer and of Sellers shall negotiate with respect to the price and other terms
of sale to Buyer of any such Watches, Jewelry and/or Spare Parts returned to
Sellers in accordance with the previous sentence during the previous fiscal
quarter of Movado. Any such items not purchased by Buyer after such
negotiations, or any Watches, Jewelry or Spare Parts included on Schedule
5.5(a), as amended after the date hereof, which are not purchased by Buyer
pursuant to the terms of part (iii) of the last paragraph of Section 2.1.1 may
be sold by Sellers in any of their outlet stores.
4.2 Post-Closing Settlement. (a) If any post-closing adjustment is
required to be made pursuant hereto, the settlement thereof (the "Post-Closing
Settlement") shall take place on the fifth (5th) business day following the date
upon which the Closing Statement becomes final and binding upon the parties or
at such other time as Buyer and Sellers may mutually agree in writing. The
parties hereto shall deliver a copy of such Closing Statement to the Escrow
Agent on the next business day after the Closing Statement becomes final.
(b) If the Purchase Price for the Purchased Assets (other than
the Distributorship Assets and the Lease Agreement), reflected on the Closing
Statement is less than the Estimated Price and (i) the amount of such difference
is less than the Holdback, then the Escrow Agent shall pay, on the date of the
Post-Closing Settlement, the amount of such difference to Buyer from the Escrow
Deposit (as defined in the Escrow Agreement) and shall pay, on the date of the
Post-Closing Settlement, the balance of the Escrow Deposit to Movado (on behalf
of Sellers), or (ii) the amount of such difference is equal to or greater than
the Holdback, then the amount of such difference shall be paid to Buyer on the
date of the Post-Closing Settlement first by the Escrow Agent from the Escrow
Deposit, and then by Movado by a certified or bank cashiers's check, or a wire
transfer of funds in an amount of any balance, together with interest at the
Prime Rate on such balance. If the Purchase Price for the Purchased Assets
(other than the Distributorship Assets and the Lease Agreement), reflected on
the Closing Statement is greater than the Estimated Price then, on the date of
the Post-Closing Settlement, the full amount of the Escrow Deposit shall be paid
to Movado (on behalf of Sellers) by the Escrow Agent from the Escrow Account and
Buyer shall pay to Sellers the amount of any additional balance, together with
interest at the Prime Rate on such balance, by a certified or bank cashier's
check, or a wire transfer of funds. Any payments made pursuant to this Section
4.2 (other than interest payments) shall be treated as an adjustment to the
15
Purchase Price of the relevant Purchased Assets, and the purchase price
allocation described in Section 2.3(b) shall be appropriately amended.
5. Representations and Warranties of the Sellers. Sellers jointly and
severally represent and warrant to PISA, SAAF and Buyer as follows:
5.1 Due Incorporation and Qualification. Each Seller is a corporation
duly organized, validly existing and in good standing under the laws of its
jurisdiction of incorporation and has the corporate power and lawful authority
to own, lease and operate its assets, properties and business and to carry on
its business as now conducted.
5.2 Authority to Execute and Perform Agreements. Each Seller has the
full legal right and power and all authority and approval required to enter
into, execute and deliver this Agreement and the other instruments and
agreements contemplated hereby and to perform such Seller's obligations
hereunder and thereunder and to consummate the transactions contemplated hereby
and thereby. This Agreement and the other instruments and agreements
contemplated hereby have or, if they are to be delivered on the Closing Date,
will have been duly executed and delivered by the Sellers and constitute, or
will constitute, the valid and binding obligations of each Seller enforceable in
accordance with their terms, except as enforceability may be limited by
applicable bankruptcy, insolvency or other similar laws affecting the
enforcement of creditors' rights generally and by general principles of equity
relating to enforceability. Except as required by HSR Act, no approval or
consent of any foreign, federal, state, county, local or other governmental or
regulatory body, and no approval or consent of any other person is required in
connection with the execution and delivery by Sellers of this Agreement, the
other instruments and agreements contemplated hereby or the consummation and
performance by Sellers of the transactions contemplated hereby or thereby. The
execution and delivery of this Agreement, the consummation of the transactions
contemplated under this Agreement, and the performance by Sellers of this
Agreement in accordance with its terms and conditions, will not (a) conflict
with or result in the breach or violation of any of the terms or conditions of,
or constitute (or with notice or lapse of time or both would constitute) a
default under (or give rise to any right of termination, cancellation, or
acceleration under), (i) the Certificate or Articles of Incorporation or By-Laws
of Movado, NAW or comparable organizational documents of NA Trading or Movado
Canada, (ii) any instrument, contract or other agreement by or to which any
Seller is a party or by or to which it or its assets or properties are bound or
subject, (iii) any statute or any regulation, order, judgment, decree, license
or permit of any court or governmental or regulatory body or (b) result in the
creation of any encumbrance upon any of the Purchased Assets under any of the
terms, conditions, or provisions of any instrument, contract or other agreement
to which any Seller is a party or by which any Seller (or the respective assets
or properties thereof) are bound or subject.
5.3 Lease Agreement and Assumed Contracts. Movado has delivered to
Buyer a true and complete copy of the Lease Agreement and true and complete
copies of the Assumed Contracts. The Lease Agreement and each of the
16
Assumed Contracts is in full force and effect, and the relevant Seller is not
in, nor has the relevant Seller given or received notice of, any default or
claimed, purported or alleged default, or facts that, with notice or lapse of
time, or both, would constitute a default (or give rise to a termination,
cancellation or acceleration right) on the part of any party in the performance
of any obligation to be performed under the Lease Agreement or any of the
Assumed Contracts. Except as set forth on Schedule 5.3, no approval or consent
of any person is needed in order that the Assumed Contracts and the Lease
Agreement continue to be in full force and effect following the consummation of
the transactions contemplated by this Agreement. Except as set forth in Schedule
5.3 hereto, there are no service or maintenance contracts to which Movado is a
party affecting the premises occupied pursuant to the Lease Agreement. Except as
described in Schedule 5.3 hereto, there are no sub leases, licenses, or similar
arrangements entered into by Movado affecting all or any portion of the premises
covered by the Lease Agreement. Except for such consents set forth on Schedule
5.3 which shall have been obtained on or prior to the Closing Date, no consent
of the lessor under the Lease Agreement to the assignment contemplated by this
Agreement is required to vest in the Buyer all of the rights of Movado under the
Lease Agreement upon such assignment.
5.4 Accounts Receivable. (a) The Accounts Receivable reflected in the
Statement of Accounts Receivable and Fixed Assets represent valid obligations to
Sellers in respect of sales made in the ordinary course of business and the
Accounts Receivable reflected in the Draft Closing Statement and the Closing
Statement will represent valid obligations to Sellers in respect of sales made
in the ordinary course of business. Except as reserved on the Closing Statement,
all Accounts Receivable do not and will not contain accrued interest on past due
balances. No account debtor with respect to an Accounts Receivable has, or will
have as of the Closing Date, any right of reduction by way of set-off or
otherwise against any amount of Accounts Receivable deriving from amounts owed
to it pursuant to the marketing or sale of merchandise unrelated to the Piaget
Business.
(b) Schedule 5.4(b) sets forth a complete list of all legally
binding obligations of Sellers to accept returns of merchandise as of the date
hereof, including the general terms of such obligations. Schedule 5.4(b) shall
be revised as of the Closing Date and, as so revised, will supersede the
schedule attached hereto but only to the extent that such revisions are properly
reflected in the Draft Closing Statement in accordance with the third paragraph
of Section VI of Schedule 4.1(d).
5.5 Rights; Properties; Assets. (a) Except for previously-owned Watches
listed on Schedule 2.1.1(i) or as set forth in Schedule 5.5(a) (as such Schedule
5.5(a) may be revised by agreement of Buyer and Sellers prior to Closing),
Sellers' inventory of Watches, Jewelry and Spare Parts are in salable condition,
or may be made so with replacement of batteries, minor polishing, or exterior
cleaning.
(b) Sellers own outright and have good and marketable title to
all of the Purchased Assets, in each case free and clear of any lien or other
encumbrance.
17
(c) The Sellers have, and at the Closing will have, complete
and unrestricted power and the unqualified right to sell to Buyer and to assign,
transfer and deliver to Buyer, and upon consummation of the transactions
contemplated by this Agreement, Buyer will acquire, good, valid and marketable
title to, the Purchased Assets, free and clear of all encumbrances; and Sellers
are presently in peaceable possession of such Purchased Assets in quiet
enjoyment thereof. There are no imperfections of title, charges or encumbrances
of any kind relating to such Purchased Assets.
5.6 Statement of Accounts Receivable and Fixed Assets. The Statement of
Accounts Receivable and Fixed Assets represents Sellers' good faith estimate, as
of its date, of the Accounts Receivable and fixed assets to be included in the
Closing Statement as of the Closing Date.
5.7 Legal Proceedings. None of Sellers is a party to any, and there are
no pending or, to Sellers' knowledge, threatened, Actions against or otherwise
affecting any of the Purchased Assets or challenging the validity or propriety
of the transactions contemplated by this Agreement or the other instruments or
agreements contemplated hereby which, if adversely determined, would,
individually or in the aggregate, prevent or materially delay the performance by
any of the Sellers of any of its obligations pursuant to this Agreement or the
other instruments or agreements contemplated hereby. As of the date hereof,
there is no injunction, order, judgment, decree or regulatory restriction
imposed upon Sellers or the Purchased Assets which would, individually or in the
aggregate, prevent or materially delay the performance by any Seller of any of
its obligations pursuant to this Agreement or the other instruments or
agreements contemplated hereby.
5.8 Inventory. In the case of specific items of finished goods
Inventory that are to be reflected in the Draft Closing Statement and the
Closing Statement and that were also included in the July 31, 1998 inventory
valuation previously delivered by Sellers to Buyer (the "July Statement"), the
per unit cost of all such items to be reflected in the Draft Closing Statement
and the Closing Statement will not exceed the per unit cost thereof reflected in
the July Statement. The same inventory valuation method (including the
methodology of determining first in/first out ("FIFO") cost) utilized by Movado
is, and since January 31, 1998 has been, consistently applied among all brands
of finished goods inventory (it being understood that Buyer (or any
representative of Buyer or the Arbitrator) shall have no rights whatsoever to
inspect the books and records of Movado with respect to any such other brand).
It shall be a condition to closing hereunder that Buyer shall have received
prior to the Closing Date a letter from Movado's independent accountants
(subject to reasonable scope and procedures) confirming the accuracy of the
representation and warranty contained in the preceding sentence.
5.9 Undisclosed Liabilities. None of Sellers know of any basis for
assertions against any of them relating to the Purchased Assets, or against the
Purchased Assets directly, which will not be fully reflected or reserved for in
the Closing Statement.
18
5.10 Absence of Certain Changes or Events. Since the date of the
Statement of Accounts Receivable and Fixed Assets, there has not been: (a) any
damage, destruction or loss, whether covered by insurance or not, materially and
adversely affecting the Purchased Assets, (b) any sale, transfer or other
disposition of the Purchased Assets or any cancellation or waiver of any claims
in respect thereof by Sellers other than in the ordinary course of business or
(c) any encumbrance upon any of the Purchased Assets, or any agreement by
Sellers, whether in writing or otherwise, to take any such action.
5.11 No Broker. No broker, finder, agent or similar intermediary has
acted for or on behalf of any of the Sellers in connection with this Agreement
or the transactions contemplated hereby, and no broker, finder, agent or similar
intermediary is entitled to any broker's, finder's, or similar fee or other
commission in connection therewith based on any agreement, arrangement or
understanding with any Seller or any action taken by either of them.
5.12 Representations and Warranties on Closing Date. The
representations and warranties contained in this Section 5 shall be true and
correct on and as of the Closing Date with the same force and effect as though
such representations and warranties had been made on and as of the Closing Date.
6. Representations and Warranties of Buyer, PISA and SAAF. Buyer, PISA
and SAAF jointly and severally represent to Sellers as follows:
6.1 Due Incorporation. Each of Buyer, PISA and SAAF is duly organized,
validly existing and in good standing under the laws of its jurisdiction of
incorporation and has the corporate power and lawful authority to own its assets
and properties and to carry on its business as now conducted.
6.2 Corporate Power. Each of Buyer, PISA and SAAF has the full legal
right and power and all authority and approval required to enter into, execute
and deliver this Agreement, and the other instruments and agreements
contemplated hereby, and to perform its obligations hereunder and thereunder and
to consummate the transactions contemplated hereby and thereby. This Agreement
and the other instruments and agreements contemplated hereby have or, if they
are to be delivered on the Closing Date, will have been duly executed and
delivered and constitute, or will constitute, the valid and binding obligations
of Buyer, PISA and SAAF enforceable in accordance with their terms, except as
enforceability may be limited by applicable bankruptcy, insolvency or other
similar laws affecting the enforcement of creditors' rights generally and by
general principles of equity relating to enforceability. Except as required by
HSR Act, no approval or consent of any foreign, federal, state, county, local or
other governmental or regulatory body, and no approval or consent of any other
person is required in connection with the execution and delivery by Buyer or
Piaget Swiss and the consummation and performance by Buyer or Piaget Swiss of
this Agreement and the other instruments and agreements contemplated hereby of
the transactions contemplated hereby or thereby. The execution and delivery of
this Agreement, the consummation of the transactions contemplated under this
Agreement, and the performance by Buyer and Piaget Swiss
19
of this Agreement in accordance with its terms and conditions, will not conflict
with or result in the breach or violation of any of the terms or conditions of,
or constitute (or with notice or lapse of time or both would constitute) a
default under, (i) the Certificate or Articles of Incorporation or By-Laws (or
comparable organizational documents) of Buyer or Piaget Swiss, (ii) any
instrument, contract or other agreement by or to which any of Buyer, PISA or
SAAF is a party or by or to which it or its assets or properties are bound or
subject, (iii) any statute or any regulation, order, judgment, decree, license
or permit of any court or governmental or regulatory body.
6.3 No Broker. No broker, finder, agent or similar intermediary has
acted for or on behalf of Buyer, PISA or SAAF in connection with this Agreement
or the transactions contemplated hereby, and no broker, finder, agent or similar
intermediary is entitled to any broker's, finder's, or similar fee or other
commission in connection therewith based on any agreement, arrangement or
understanding with Buyer, PISA or SAAF or any action taken by any of them.
6.4 Representations and Warranties on Closing Date. The representations
and warranties contained in this Section 6 shall be true and correct on and as
of the Closing Date with the same force and effect as though such
representations and warranties had been made on and as of the Closing Date.
7. Covenants and Agreements. The parties covenant and agree as follows:
7.1 Conduct of Business.
7.1.1 From the date hereof through the Inventory Date, Sellers
shall conduct the Piaget Business in the ordinary course and, from the date
hereof through the Closing Date, Sellers, without the prior written consent of
Buyer, shall not (i) terminate, amend or waive any right under the Lease
Agreement or any of the Assumed Contracts, (ii) waive any right of material
value to the Piaget Business or (iii) sell, abandon or make any other
disposition of the assets or properties included within the Purchased Assets, or
grant or suffer any lien or other encumbrance on any of the Purchased Assets, or
enter into or amend any contract or other agreement to which the Purchased
Assets are bound or subject, other than (A) sales of Inventory in the ordinary
course of business and in accordance with the first sentence in Section 3.2,
except that Sellers shall not enter into new consignment agreements without
Buyer's prior written consent, or (B) as otherwise contemplated herein.
7.1.2 Notwithstanding anything to the contrary in Section
7.1.1, from the date hereof through the Closing Date, with respect to the Piaget
Business, without the prior written consent of Buyer, Sellers shall not: (i)
provide for payment terms on Accounts Receivable other than as set forth on
Schedule 2.1.1(iii), or except as set forth on Schedule 5.4(b), agree to any
arrangement permitting the return of goods; (ii) continue business in respect of
the Piaget Business with the Piaget Business accounts identified by Sellers in
the Statement of Accounts Receivable and Fixed Assets as having a bad debt
reserve posted in connection therewith, except on a cash basis; (iii) open any
new Piaget Business accounts or reactivate any Piaget Business accounts that are
not Active Accounts; (iv) during the period after the date
20
hereof through January 8, 1999, hire, terminate or relocate any employees of the
Piaget Business, or increase in any manner the rate of compensation of any such
employees or increase the rates or terms of any bonus, insurance, pension or
other employee benefit plan, payment or arrangement made to, for or with any
such employees, except for any such increase which is substantially consistent
with any increase applicable to all Sellers similarly situated employees
generally; (v) make any reservations or any other commitments for advertising
with respect to the Piaget Business scheduled for publication after the Closing;
(vi) confirm any orders that cannot be supplied before the Closing Date; (vii)
except as set forth on Schedule 5.4(b), accept any return of inventory from an
account that is not an Active Account; or (viii) accept any return of inventory
from any Active Account unless (1) such return is identified in the Closing
Statement as a deduction against Accounts Receivable as set forth in Schedule
4.1(d), (2) such Inventory to be returned is the same Inventory listed on the
invoice, and (3) payment with respect to such inventory to be returned is owed
on the date of return.
7.2 Preservation of Business. From the date hereof through the Closing
Date, subject to Section 7.1, Sellers shall use commercially reasonable efforts
to preserve their respective business organization relating to the Piaget
Business intact, keep available the services of each of their present officers,
employees, consultants and agents who are responsible for the conduct of the
Piaget Business, maintain the present suppliers and customers of the Piaget
Business and preserve the goodwill of the Piaget Business (including by
continuing to make customer repairs).
7.3 Litigation. Sellers shall promptly notify Buyer and Piaget Swiss of
any lawsuits, claims, proceedings or investigations which are threatened or
commenced after the date hereof against any Sellers or against any officer,
director, employee, consultant or agent of the Piaget Business with respect to
the affairs of Sellers relating to the Piaget Business.
7.4 Corporate Examinations and Investigations. Prior to the Closing
Date, Buyer and Piaget Swiss each shall be entitled, through its employees and
representatives (including auditors and attorneys), to make such investigation
of the property and such examination of the books, records and financial
condition of the Piaget Business as Buyer and Piaget Swiss wish, including the
interviewing of management personnel of the Piaget Business. Any such
investigation and examination shall be conducted at reasonable times and under
reasonable circumstances and Sellers shall cooperate fully therein. In order
that Buyer and Piaget Swiss may have full opportunity to make such business,
accounting and legal review, examination or investigation as it may wish of the
business and affairs of the Piaget Business, each Seller shall furnish the
representatives of Buyer and Piaget Swiss during such period with all such
information concerning the affairs of the Piaget Business as such
representatives may reasonably request and cause its officers, employees,
consultants, agents, accountants and attorneys to cooperate fully with such
representatives in connection with such review and examination and to make full
disclosure to Buyer of all material facts affecting the Purchased Assets. If
this Agreement terminates, Buyer and Piaget Swiss and their respective
affiliates shall keep confidential and shall not use in any manner any
information obtained from
21
Sellers concerning their assets, properties, operations and business, unless
readily ascertainable from public or published information, or trade sources, or
already known or subsequently developed by Buyer independently of any
investigation of Sellers, or received from a third party not under an obligation
to Sellers to keep such information confidential.
7.5 Premerger Notification. Promptly and in any event within ten (10)
business days following the execution and delivery of this Agreement, Movado and
Buyer, or their respective ultimate parent entities, shall file notification and
report forms with respect to the transactions contemplated by this Agreement
under the HSR Act. In connection with such filings, the parties hereto shall, in
cooperation with each other, and as promptly as reasonably practicable from time
to time hereafter, make all such further filings and submissions, and take such
further action, as may be required in connection therewith. Each party shall
furnish the others all information in its possession necessary for compliance by
the others with the provisions of this Section 7.5.
7.6 Delivery of the Purchased Assets. Upon completion of the audit of
the physical inventory by Buyer as provided in Section 3.2, Sellers shall
package and crate, in a manner suitable for shipment, the Inventory and, except
as otherwise agreed in advance by Sellers and Buyer, the Furniture and Fixtures,
the Promotional Materials and the Piaget Communications Materials, and arrange
for the delivery thereof to a Brinks bonded warehouse until the Closing and,
immediately after the Closing, upon the delivery of a release by Sellers to
Brinks, to a United States location or locations designated by Buyer.
Arrangements for security and insurance shall be reasonably acceptable to Buyer.
Notwithstanding the foregoing: Sellers shall not be required to ship any
Inventory located in Canada or Switzerland (as to which Inventory Buyer shall
take possession at its place of location at 00 Xxxxxxxx Xxxxx, Xxxxxxx, Xxxxxxx,
Xxxxxx L-3ROG4 or Xxxxxxxxxxxxxxx 0, Xxxxxxxx, Xxxxxxxxxxx CH-2540,
respectively, simultaneously with or shortly following the Closing) or any
Piaget Consigned Goods, Promotional Materials, Piaget Communications Materials
or any Inventory, Furniture and Fixtures located at the Piaget Boutique. All
out-of-pocket expenses and costs incurred by Sellers in connection with the
delivery of the Inventory, the Piaget Consigned Goods, the Promotional
Materials, the Piaget Communications Materials and Furniture and Fixtures from
their locations in the United States on the Inventory Date to Brinks and from
Brinks to Buyer's designated location in Dallas, Texas shall be paid one-half by
Sellers and one-half by Buyer. Promptly following receipt thereof Sellers will
forward to Buyer any payments that Sellers receive after the Closing Date in
respect of the Accounts Receivable. The Sellers shall each, as applicable, on
the Closing Date instruct all obligors in respect of all the Accounts Receivable
to send all payments in connection with such Accounts Receivable directly to
Buyer after the Closing Date at the address provided to Sellers on or prior to
the Closing Date.
7.7 Performance of the Assumed Liabilities. Buyer agrees that it will
faithfully, timely and fully perform the Assumed Liabilities. Prior to Closing,
Buyer shall notify Sellers of the address to which Sellers should forward any
requests for service or warranty claims assumed pursuant to Section 2.1.2(iii)
pending as of
22
the Closing or received by Sellers following the Closing (together with the
related Watches, Jewelry or Spare Parts, as applicable), and any other
communications received by Sellers relating to the Assumed Liabilities.
7.8 Release of Security Interests. Sellers shall take all reasonable
actions necessary to fully release, at the Closing or as promptly as possible
thereafter, the security interests in Inventory which is and will remain on
consignment with customers of Sellers under the Movado Consignment Contracts,
including the delivery to Buyer at the Closing of UCC assignments in form and
substance sufficient to assign to Buyer the UCC-1 financing statements filed by
Sellers in connection with such consignment contracts.
7.9 The Lease Agreement. Prior to the Closing, Buyer and Sellers shall
cooperate to satisfy all conditions to the assignment of the Lease Agreement, as
set forth therein, and to obtain from the lessor a full release of Movado from
its obligations under the Lease Agreement.
7.10 No Use of Piaget Name. From and after the Closing Date, none of
Sellers shall use or authorize, either expressly, orally or tacitly, the use of
the name "Piaget," or any variant or derivative thereof in any activity for any
commercial purposes; provided, however, that the foregoing shall not prevent (a)
Sellers from displaying, selling or otherwise distributing in any of its outlet
stores any Watches, Jewelry or Spare Parts acquired through the settlement of
any account receivable retained by Seller pursuant to, and in the manner
contemplated by, Section 4.1(c) or (f) or any Watches, Jewelry or Spare Parts
included on Schedule 5.5(a), as amended after the date hereof, which is not
purchased by Buyer pursuant to the terms of part (iii) of the last paragraph of
Section 2.1.1 and thus is retained by Sellers, or (b) use by Sellers of the name
"Piaget" (i) in connection with any publicity, release or announcement
contemplated by Section 9.1, (ii) as part of disclosures regarding the Piaget
Business required by law or the rules of any stock exchange, or (iii) in
connection with descriptions of Movado's corporate history, including, without
limitation, in customary presentations regarding Movado's current and prior
businesses to analysts, underwriters and in other similar circumstances.
7.11 Employees. (a) At such times as are mutually convenient to both
Buyer and Sellers, Sellers shall permit Buyer, or representatives of the Buyer
to, (i) meet with the employees employed at the Boutique (including the
watchmaker) and the employees named on the list of employees previously given to
Buyer regarding the possibility that such employees of the Sellers will be
transferred to the employment of Buyer, and (ii) distribute to such employees
such forms and other documents relating to employment of Buyer after the Closing
as Buyer shall reasonably request. Sellers shall take such action or so permit
such action to be taken by a date sufficiently in advance of the Closing so as
to provide the Buyer with a reasonable amount of time to interview any such
employee whose employment may be transferred to Buyer as of the Closing Date.
(b) Sellers will promptly reimburse Buyer and otherwise hold
Buyer harmless from and against all direct and indirect costs, expenses and
23
liabilities of any sort whatsoever arising from or relating to any claims by or
on behalf of present or former employees of Sellers in respect of severance pay
and similar obligations relating to the termination on or prior to the Closing
Date of such employee's employment.
(c) The parties hereto agree that, with respect to claims from
any employees whose employment is transferred to Buyer for workers' compensation
and all claims from such employees under Sellers' employee benefit programs by
such employees working for Sellers arising out of events occurring on or prior
to the Closing Date, whether insured or otherwise (including, but not limited
to, workers' compensation, life insurance, medical and disability programs),
Sellers will, at their own expense, honor or cause their insurance carriers to
honor such claims in accordance with the terms and conditions of such programs
or applicable workers' compensation statutes without interruption
notwithstanding the employment by Buyer or any such employees after the Closing
Date.
7.12 Conditions to the Obligation of the Parties to Close. The
respective obligations to effect the transactions contemplated hereby shall be
subject to (a) the condition that none of the parties hereto shall be subject to
any order, decree or injunction of a court of competent jurisdiction which
prohibits any of the transactions contemplated by this Agreement or the
transactions contemplated hereby, (b) the expiration or termination of all
applicable waiting periods relating to the HSR Act, (c) the consummation of the
transactions contemplated hereby not being prohibited by any law or regulation
and (d) the delivery by the appropriate parties at Closing of Releases in the
form of Exhibits D-1 and D-2.
7.13 Conditions to the Obligation of Sellers to Close. The obligation
of Sellers to effect the actions contemplated hereby shall be further subject to
the following conditions, which may be waived by Sellers:
(a) at or prior to the Closing, Piaget Swiss and Buyer shall
have performed and complied with the agreements contained in this Agreement
required to be performed and complied with by it at or prior to the Closing and
Sellers shall have received a certificate to that effect signed by Piaget Swiss
and Buyer; and
(b) Sellers shall have received opinion of Skadden, Arps,
Slate, Xxxxxxx and Xxxx LLP, counsel to Buyer, and from Xxxxxx Xxxxxxxx, counsel
to Piaget Swiss, each dated the Closing Date, with respect to the matters set
forth in Exhibits E-1 and E-2 hereto, which opinion shall be in form and
substance reasonably satisfactory to counsel to Sellers.
7.14 Conditions to Obligation of Buyer to Close. The obligation of
Buyer to effect the transactions contemplated hereby shall be subject to the
following conditions, which may be waived by Piaget Swiss or Buyer:
(a) at or prior to the Closing, Sellers shall have performed
and complied with the agreements contained in this Agreement required to be
24
performed and complied with by them at or prior to the Closing, and the
representations and warranties of Sellers set forth in Sections 5.1, 5.2, 5.3,
5.5(b) and (c), 5.7, 5.9, 5.10 and 5.11 shall be true and correct in all
material respects (except those representations that are qualified as to
materiality, which shall be true and correct) as of the Closing as though made
at and as of the Closing (except as otherwise contemplated by this Agreement),
and the Buyer shall have received certificates to the foregoing effect from
Sellers with respect to each of the foregoing;
(b) Buyer shall have received opinion of Xxxx, Weiss, Rifkind,
Xxxxxxx & Xxxxxxxx, counsel to Sellers, dated the Closing Date, with respect to
the matters set forth in Exhibit F hereto, which opinion shall be in form and
substance reasonably satisfactory to counsel to Buyer;
(c) Sellers shall have obtained any required consents and
approvals necessary for the due and valid assignment by Sellers, as applicable,
to Buyer of the Lease Agreement and the Assumed Contracts, and no such consent
shall contain any condition that materially adversely affects or will materially
adversely affect Buyer's ability to enjoy the full benefits of such Assumed
Contracts or Lease Agreement, and Buyer shall have received from Sellers copies
of each such consent.
(d) At or prior to Closing, the Escrow Release Agreement and
the attachments thereto, including the Instruction Release Letter in the form
attached hereto, shall have been executed and delivered by the parties thereto,
Sellers and the other parties thereto shall have instructed the Escrow Agent (as
such term is defined in the Escrow Release Agreement) to appear at the Closing
with the Trademark Assignments (as such term is defined in the Escrow Release
Agreement), and the Trademark Assignments (as such term is defined in the Escrow
Release Agreement) shall have been released from escrow; and
(e) The representations and warranties of the Sellers set
forth in the Escrow Release Agreement shall be true and correct as of the
Closing.
7.15 No Violation of Distributorship Agreements. The parties hereto
agree that none of the agreements comprising the Distributorship Assets shall be
deemed to have been breached by any party hereto solely by virtue of actions (or
the absence of actions) required by or otherwise contemplated by this Agreement.
7.16 Section 1445 of Code. Sellers agree to prepare and to deliver to
Buyer such affidavits or certifications as are necessary to exempt the
transactions contemplated by this Agreement from the provisions of Section 1445
of the Code. It is understood that to the extent such affidavits or
certifications are not provided to Buyer prior to the Closing, Buyer will be
entitled to deduct and withhold the amount required by Section 1445 of the Code.
7.17 Resale Certificate. At Closing, Buyers shall deliver to Sellers
any necessary resale certificate and related documentation.
25
8. Survival and Indemnification.
8.1 Survival. The representations and warranties provided for in this
Agreement shall survive the execution of this Agreement for a period of eighteen
(18) months from the Closing Date for the benefit of the parties hereto and
their successors and assigns; provided however, that (a) the representations and
warranties contained in Section 5.5 (a) shall not survive beyond the Closing,
(b) the representations and warranties set forth in the first and second
sentences of Section 4.1(d) shall survive the Closing only with respect to
matters set forth in the Notice of Disagreement in accordance with the
procedures of Section 4.1 and until such matters are resolved in accordance with
such procedures, including, if applicable, submission of Disputed Matters to the
Arbitrator, and (c) the representations and warranties contained in Section
5.5(b) and (c) shall survive without any limitations on time. At the end of the
applicable survival period set forth above, Sellers or Buyer, as the case may
be, shall, without further action as to such representations and warranties, be
deemed to have fully released each other from any and all responsibilities
arising thereunder unless during such period the one party shall have notified
the other party in writing of the nature and particulars of any claimed breach
by the other party and that party's intent to seek an award for damages or other
available remedies for such breach.
8.2 Indemnification. (a) Sellers, jointly and severally, shall
indemnify, defend and hold harmless Buyer, PISA and SAAF, and their respective
affiliates and assigns, and the respective directors, officers and employees of
each of the foregoing persons and entities, from and against any and all claims,
demands or suits (by any person, entity or group, including, without limitation,
any governmental agency), losses, liabilities, damages, obligations, payments,
costs and expense, paid or incurred (including, without limitation, the
reasonable costs and expenses of any and all actions, suits, proceedings,
demands, assessments, judgments, settlements and compromises relating thereto
and reasonable attorneys' fees in connection therewith) (individually and
collectively "Indemnifiable Losses") relating to, resulting from or arising out
of:
(i) liabilities or obligations (whether absolute,
accrued, contingent or otherwise) which were not expressly assumed by Buyer
pursuant to Section 2.1.2;
(ii) except as otherwise provided in the second
sentence of Section 8.1, any breach of any representation or warranty of Sellers
contained in or made pursuant to this Agreement or the instruments or agreements
contemplated hereby or any facts or circumstances constituting such a breach;
(iii) any breach of any covenant or agreement of
Sellers contained in this Agreement;
(iv) any failure by any party hereto to comply with
the "bulk sales" laws or other similar laws of any jurisdiction, domestic or
foreign, applicable to the transactions contemplated by this Agreement; and
26
(v) any breach by any of Sellers of any
representation or warranty or covenant or agreement of Sellers made in the
Escrow Release Agreement.
(b) Buyer, PISA and SAAF, jointly and severally, shall
indemnify, defend and hold harmless Sellers and their respective affiliates and
assigns, and the respective directors, officers and employees of each of the
foregoing persons and entities, from and against any and all Indemnifiable
Losses relating to, resulting from or arising out of:
(i) any breach of any of the representations or
warranties contained in or made pursuant to this Agreement or the instruments or
agreements contemplated hereby or any facts or circumstances constituting such a
breach;
(ii) any breach of any covenant or agreement of
Buyer, PISA or SAAF contained in this Agreement;
(iii) any breach by SAAF of any representation or
warranty or covenant or agreement of SAAF made in the Escrow Release Agreement;
and
(iv) the liabilities and obligations that Buyer
expressly assumed pursuant to Section 2.1.2.
(c) Any amounts of Indemnifiable Losses required to be paid
pursuant to this Section 8 shall be treated by the parties hereto as an
adjustment to the Purchase Price for all tax purposes and the parties hereto
shall take no position contrary thereto in any tax return (including any amended
tax return), any proceeding before any taxing authority or otherwise. No person
will be entitled to indemnification under this Section 8 for matters resolved in
accordance with Section 4.
8.3 Notice to Indemnifying Party. If any party (the "Indemnitee")
receives notice of any claim or other commencement of any action or proceeding
with respect to which any other party (or parties) is obligated to provide
indemnification (the "Indemnifying Party") pursuant to Section 8.1 or 8.2, the
Indemnitee shall promptly give the Indemnifying Party notice thereof. Such
notice shall be a condition precedent to any liability of the Indemnifying Party
under the provisions for indemnification contained in this Agreement. The
Indemnifying Party may compromise or defend, at such Indemnifying Party's own
expense and by such Indemnifying Party's own counsel, any such matter involving
the asserted liability of the Indemnitee. In any event, the Indemnitee, the
Indemnifying Party and the Indemnifying Party's counsel shall cooperate in the
compromise of, or defense against, any such asserted liability. Both the
Indemnitee and the Indemnifying Party may participate in the defense of such
asserted liability and neither may settle or compromise any claim over the
objection of the other. If the Indemnifying Party chooses to defend any claim,
the Indemnitee shall make available to the Indemnifying
27
Party any books, records or other documents within its control that are
necessary or appropriate for such defense.
9. Miscellaneous.
9.1 Publicity. The parties shall issue a press release concerning this
Agreement in the form of Exhibit G. No other publicity, release or announcement
concerning this Agreement or the transactions contemplated hereby may be made by
any party without advance approval of the form and substance thereof by Sellers,
Buyer and Piaget Swiss, except as may be required by law or the rules of any
stock exchange on which the shares of such party may be listed or which contains
only the substance of the press release.
9.2 Notices. Any notice or other communication required or permitted to
be given hereunder shall be delivered by hand or sent by facsimile transmission
(immediately followed by a confirmation copy in writing), or sent, postage
prepaid, by registered, certified or express mail, or reputable overnight
courier service, and shall be deemed given when so delivered by hand or sent by
facsimile transmission, or if mailed, three days after mailing (one business day
in the case of express mail or overnight courier service), as follows:
(i) if to Buyer, to:
VLG NORTH AMERICA INC.
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Xxxx Xxxxx
Facsimile: 000-000-0000
with a copy to PISA and SAAF and a copy to:
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxxx Xxxxxxxxx, Esq.
Facsimile: 000-000-0000
(ii) if to PISA or SAAF, to:
Piaget (International) S.A.
00 Xxxxx xx Xxxxx
0000 Xxxxxx
Xxxxxxxxxxx
Attention: Xxxxxx Xxxxxxx
Facsimile: 00-00-000-00-00
28
with a copy to:
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxxx Xxxxxxxxx, Esq.
Facsimile: 000-000-0000
(iii) if to Movado, NAW, NA Trading or
Movado Canada, to:
Movado Group, Inc.
000 Xxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Attention: Xxxxxxx Xxxxxx, Esq.
Facsimile: 000-000-0000
with a copy to:
Xxxx, Weiss, Rifkind, Xxxxxxx & Xxxxxxxx
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000-0000
Attention: Xxxxxx X. Xxxxxx, Esq.
Facsimile: 000-000-0000
9.3 Transaction Expenses. Except as specifically provided in this
Agreement, Buyer and Piaget Swiss, on the one hand, and Sellers, on the other
hand, agree that each of them shall bear its own direct and indirect expenses
incurred in connection with the negotiation and preparation of this Agreement
and the consummation and performance of the transactions contemplated hereby.
Sellers shall be responsible for the timely payment of, and shall, indemnify and
hold harmless Buyer, PISA, SAAF and their respective affiliates and assigns
against, all transfer (including real property transfer taxes), recording, ad
valorem, documentary, gross receipts, and similar taxes and liabilities
(including interest penalties and additions to tax) arising out of or in
connection with or attributable to the consummation of the transactions
contemplated hereby. Buyer shall be responsible for the timely payment of, and
shall indemnify and hold harmless Sellers and their respective affiliates and
assigns against all sales and uses taxes with respect to Purchased Assets not
covered by the resale certificate required by Section 7.17 (including interest,
penalties and additions to tax) arising out of or in connection with or
attributable to the consummation of the transactions contemplated hereby. The
indemnification procedures set forth in Section 8 shall be applicable hereto.
9.4 Further Assurances. Each of the parties shall execute such
documents and other papers and perform such further acts as may be reasonably
required or desirable to carry out the provisions hereof and the transactions
contemplated hereby. Seller agrees to cooperate with Buyer and provide
information to Buyer with respect to customer accounts and other commercial
issues in connection
29
with the Piaget Business as may be reasonably requested by Buyer, PISA or SAAF
from time to time after the Closing and use reasonable efforts to otherwise
assist Buyer in the collection of Accounts Receivable.
9.5 Entire Agreement. This Agreement (including the Exhibits and
Schedules hereto) contains the entire agreement among the parties with respect
to the subject matter hereof and supersede all prior agreements, written or
oral, with respect thereto.
9.6 Waivers and Amendments. This Agreement may be amended, modified,
superseded, canceled, renewed or extended, and the terms and conditions hereof
may be waived only by a written instrument signed by the parties or, in the case
of a waiver, the party waiving compliance. No delay on the part of any party in
exercising any right, power or privilege hereunder shall operate as a waiver
thereof, nor shall any waiver on the part of any party of any right, power or
privilege hereunder, nor any single or partial exercise of any right, power or
privilege hereunder, preclude any other or further exercise thereof or the
exercise of any other right, power or privilege hereunder. The rights and
remedies herein provided are cumulative and are not exclusive of any rights or
remedies which any party may otherwise have at law or in equity.
9.7 Governing Law. This Agreement shall be governed and construed in
accordance with the laws of the State of New York applicable to agreements made
and performed entirely within such state.
9.8 Jurisdiction and Venue.
(a) Any action or proceeding arising out of or relating in any
way to this Agreement, shall be brought and enforced in the courts of the United
States for the Southern District of New York, or, if such courts do not have, or
do not accept, subject matter jurisdiction over the action or proceeding, in the
courts of the State of New York. Each of the parties hereby irrevocably consents
to the personal jurisdiction of each such court in respect of any such action or
proceeding. Each of the parties hereby irrevocably appoints (and undertakes
periodically to reappoint in accordance with New York Civil Practice Rule 318) C
T Corporation System, which currently maintains an office situated at 0000
Xxxxxxxx, Xxx Xxxx, Xxx Xxxx, 00000, as its agent to receive service of process
or other legal summons for purposes of any such action or proceeding. In
addition, each of the parties hereby irrevocably consents to the service of
process in any such action or proceeding by the mailing of copies thereof by
registered or certified mail, postage prepaid, return receipt requested, to it
at its address as provided for notices hereunder. The foregoing shall not limit
the right of any of the parties to serve process in any other manner permitted
by law or to obtain execution or enforcement of any judgment in any other
jurisdiction.
(b) Each of the parties hereby irrevocably waives (i) any
objection that it may now or hereafter have to the laying of venue of any action
or proceeding arising under of relating to this Agreement in any court located
in the
00
Xxxxxxx xx Xxxxxxxxx, Xxxx xxx Xxxxx xx Xxx Xxxx, (xx) any claim that a court
located in the Borough of Manhattan, City and State of New York is not a
convenient forum for any such action or proceeding relating to this Agreement,
and (iii) any claim relating to this Agreement that it is not subject to the
personal jurisdiction of the courts of the United States for the Southern
District of New York or of the courts of the State of New York located in the
Borough of Manhattan, City and State of New York.
9.9 WAIVERS OF JURY TRIAL. EACH OF THE PARTIES TO THIS AGREEMENT HEREBY
IRREVOCABLY AND UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR
PROCEEDING RELATING TO THIS AGREEMENT.
9.10 No Assignment. This Agreement is not assignable except that Buyer
may assign its rights and obligations under this Agreement, in whole or in part,
to any of its affiliates, provided that no such assignment shall release Piaget
Swiss or Buyer from their obligations hereunder.
9.11 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.
9.12 Exhibits and Schedules. The Exhibits and Schedules to this
Agreement are hereby made a part of this Agreement as if set forth in full
herein.
9.13 Headings. The headings in this Agreement are intended solely for
convenience of reference and shall be given no effect in the interpretation of
this Agreement.
9.14 Confidentiality. Neither Sellers nor Buyer will disclose
internally or externally the terms and conditions set forth in this Agreement,
except as set forth in Sections 7.10 and 9.1, except to its employees and agents
with a need to know, and except as otherwise specifically contemplated by this
Agreement.
9.15 Severability. Any term or provision of this Agreement which is
invalid, illegal or unenforceable in any jurisdiction shall, as to that
jurisdiction, be ineffective to the extent of such invalidity, illegality or
unenforceability without rendering invalid or unenforceable the remaining terms
and provisions of this Agreement or affecting the validity, legality or
enforceability of any of the terms or provisions of this Agreement in any other
jurisdiction. If any provision of this Agreement is so broad as to duration,
activity, subject or otherwise as to be unen forceable, such provision shall be
construed by limiting and reducing it so as to be enforceable to the maximum
extent allowed by applicable law.
9.16 Third Parties. Except as specifically set forth or referred to
herein, nothing herein expressed or implied is intended or shall be construed to
confer upon or give to any person or corporation other than the parties hereto
and their successors or assigns, any rights or remedies under or by reason of
this Agreement.
31
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
S.A. ANCIENNE FABRIQUE XXXXXXX
XXXXXX & CIE
By: /s/ Xxxxxxx X. Xxxxxxxxx
----------------------------
Name: Xxxxxxx X. Xxxxxxxxx
Title: Attorney-in-Fact
PIAGET (INTERNATIONAL) S.A.
By: /s/ Xxxxxxx X. Xxxxxxxxx
----------------------------
Name: Xxxxxxx X. Xxxxxxxxx
Title: Attorney-in-Fact
VLG NORTH AMERICA INC.
By: /s/ Xxxxxxx X. Xxxxxxxxx
----------------------------
Name: Xxxxxxx X. Xxxxxxxxx
Title: Attorney-in-Fact
MOVADO GROUP, INC.
By: /s/ Xxxxxxx Xxxx
--------------------
Name: Xxxxxxx Xxxx
Title: Executive Vice President/
Chief Operating Officer
MOVADO GROUP OF CANADA, LTD.
By: /s/ Xxxxxx Xxxxxxxx
-----------------------
Name: Xxxxxx Xxxxxxxx
Title: Director
32
NAW CORPORATION
By: /s/ Xxxxxxx X. Xxxxxx
-------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Secretary/Attorney-in-Fact
N.A. TRADING S.A.
By: /s/ Xxxxxxx Xxxx
--------------------
Name: Xxxxxxx Xxxx
Title: Director
