AMENDMENT NO. 1 TO ASSET PURCHASE AGREEMENT
This Amendment No. 1 to Asset Purchase Agreement (this "Amendment") is made and
entered into this February 22, 1999 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." All
capitalized terms which are used but not otherwise defined herein shall have
meanings specified in the Agreement (as defined below).
W I T N E S S E T H :
WHEREAS, Sellers, Buyer and Piaget Swiss are parties to that certain
Asset Purchase Agreement, dated as of December 22, 1998 (the "Agreement");
WHEREAS, Sellers, Buyer and Piaget Swiss desire to amend the Agreement
to exclude from the Purchased Assets those Spare Parts (the "Excluded Spare
Parts") that Movado has identified as necessary for the completion of repair to
and service of (i) those Piaget Watches of customers of Sellers or of consumers
in Movado's possession (such Watches in Movado's possession at the Closing Date,
hereinafter referred to as the "Consumer Watches"), (ii) those Watches and
Jewelry identified on Schedule C annexed hereto which are not included in the
Purchased Assets but which the parties hereto have agreed, subject to the
conditions contained herein, will be sold to Buyer to the extent such Watches
and Jewelry are in saleable condition at the end of the Term (as defined herein)
(the "Repaired Watches") and (iii) those Watches which are not included in
Purchased Assets and which the parties hereto have agreed will not be sold to
Buyer at the end of the Term (the latter, including any Watches returned
pursuant to a settlement of any account receivable retained by Sellers as
contemplated by Section 4.1(f) of the Agreement, being referred to as "Retained
Watches");
WHEREAS, the Excluded Spare Parts are not included in Inventory, are
not and will not be included in the Preliminary Draft Closing Statement or the
Draft Closing Statement;
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WHEREAS, Sellers, Buyer and Piaget Swiss desire that, for a period of
five (5) weeks following the Closing (the "Initial Term," or as the same may be
extended as provided in Section 4(a), the "Term"), Sellers utilize the Excluded
Spare Parts, along with any Additional Spare Parts (as defined herein) to repair
the Consumer Watches, Repaired Watches and the Retained Watches;
WHEREAS, neither the Repaired Watches nor the Retained Watches are
included in Inventory, and are not and will not be included in the Preliminary
Draft Closing Statement or the Draft Closing Statement;
WHEREAS, it is desired by the parties hereto that at the conclusion of
the Term, Buyer shall purchase from Sellers (i) all Excluded Spare Parts in
Sellers possession (at their net book value but excluding the cost of repairs or
refurbishments made by Sellers), (ii) all Additional Spare Parts which remain in
Sellers' possession at the end of the Term and (iii) all Repaired Watches to the
extent such Repaired Watches are in saleable condition;
WHEREAS, the parties hereto furthermore desire to amend Section 3.1,
Section 4.1(e) and Section 7.6 and Schedules 2.1.1(vi) and 5.5(a) of the
Agreement; and
WHEREAS, the parties hereto desire to change the Closing Date.
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements contained herein and other valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
1. Repair of Consumer Watches; Additional Spare Parts.
(a) Notwithstanding anything in the Agreement to the contrary,
including, but not limited to, Section 2.1.2(iii) of the Agreement, during the
Term Sellers shall complete any required service or repair to the Consumer
Watches.
(b) To facilitate the repair of Consumer Watches, Sellers
shall retain the Excluded Spare Parts and such Excluded Spare Parts will not be
included in Purchased Assets. Accordingly, the Preliminary Draft Closing
Statement and the Draft Closing Statement shall not include any listing of the
Excluded Spare Parts.
(c) The parties hereto agree that the individual and
collective net book values of the Excluded Spare Parts shall be determined using
the same methods and principles as are required to be utilized to determine the
net book value of the Purchased Assets in accordance with the Agreement.
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(d) To the extent additional Spare Parts are required during
the Term to facilitate the repair of Consumer Watches as contemplated by this
Section 1, the repair of Repaired Watches as contemplated by Section 2, or the
repair of Retained Watches to be sold in Sellers' outlet stores as contemplated
by Section 4.1(f) of the Agreement (including, with respect to the Retained
Watches, any additional Spare Parts required after the Term), Buyer shall,
promptly, subject to commercial availability, upon request of any Seller, sell
such Spare Part to Seller at the price equal to the net book value (determined
in accordance with the Agreement) of such Spare Part as reflected on the Draft
Closing Statement or the Closing Statement, as time has made applicable. Such
Spare Part(s) shall be referred to hereinafter as "Additional Spare Parts."
(e) Sellers shall fully repair all existing Consumer Watches
during the Term. With respect to any service or repair work to Consumer Watches
covered by the applicable after sales services and warranty obligations as set
forth on warranty cards provided by PISA to Sellers with each such Consumer
Watch, Sellers shall invoice Buyer at the end of the Term for Sellers' standard
service costs, including parts and labor incurred in connection therewith, which
such amount shall be paid promptly thereafter by Buyer to Sellers.
2. Repair of the Repaired Watches and Retained Watches.
(a) During the Term, the Sellers shall also utilize the
Excluded Spare Parts and the Additional Spare Parts to repair the Repaired
Watches and Retained Watches such that by the end of the Term the Repaired
Watches shall be put in saleable condition. The parties agree that the Repaired
Watches and Retained Watches are among those Watches included on Schedule
5.5(a), and accordingly will not be considered Inventory and are not and will
not be included on the Preliminary Draft Closing Statements and the Draft
Closing Statement.
(b) The parties hereto agree that the individual and
collective net book values of the Repaired Watches shall be determined using the
same methods and principles as are required to be utilized to determine the net
book value of the Purchased Assets in accordance with the Agreement (but
excluding the cost of refurbishment or repairs by Sellers).
3. Withdrawal of Repaired Watches. Any Repaired Watches that are not in
compliance with the representations and warranties contained in Section 6 of
this Amendment, shall not be included in the Additional Purchased Assets as
defined in Section 4(b) below and their net book values shall not be included in
the Additional Purchase Price (as defined in Section 4(d) below). Such retained
Repaired Watches shall be considered a Retained Watch and included on Schedule
5.5(a) as pertains to future sales of such Watch by Sellers.
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4. Sale and Purchase of Repaired Watches, Excluded Spare Parts and
Additional Spare Parts.
(a) Although it is the parties' intention that all necessary
repairs to the Consumer Watches, the Retained Watches and the Repaired Watches
will have been completed by the end of the Initial Term, in the event Movado
notifies Buyer that additional time is needed to complete any such repairs the
parties agree to extend the Initial Term accordingly, but not shorter than one
week intervals.
(b) On the terms and subject to the conditions contained
herein, at the expiration of the Term, 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 (i) all of the Repaired
Watches (to the extent in saleable condition), (ii) any remaining Excluded Spare
Parts and (iii) any remaining Additional Spare Parts (the items described in
clauses (i), (ii) and (iii), the "Additional Purchased Assets").
(c) In confirmation of the foregoing assignment, at the
expiration of the Term, Buyer and Sellers shall execute and deliver a Xxxx of
Sale and Assignment Agreement in form and substance satisfactory to the parties.
(d) Upon the terms and subject to the conditions contained in
this Amendment, Buyer will pay to Sellers the aggregate purchase price of the
Additional Purchased Assets, which shall be an amount in U.S. dollars equal to
(i) the net book value of any remaining Excluded Spare Parts, (ii) the amount
paid by Sellers to Buyer for any remaining Additional Spare Parts and (iii) the
net book value of the Repaired Watches in saleable condition which are being
sold to Buyer (the "Additional Purchase Price"), in each case without inclusion
of the cost of repairs or refurbishment by Sellers.
5. Payment of Additional Purchase Price.
(a) Upon the terms and subject to the conditions contained in
this Amendment, at the expiration of the Term, Buyer shall pay to Movado, on
behalf of Sellers an amount in cash equal to the Additional Purchase Price.
(b) If the parties are unable to agree on the amounts of any
necessary refurbishing of the Additional Purchased Assets pursuant to Section
6(a) of this Agreement, then any undisputed amount shall be paid to Sellers at
the end of the Term, and the resolution of the disputed amount shall be
determined by the parties after the end of the Term, or if there is no
resolution within thirty (30) business days of the end of the Term, referred to
the Arbitrator, and finally resolved, in substantial accordance with the
procedures set forth in Section 4.1(e) of the Agreement.
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(c) The parties hereto agree to the allocation of the
Additional Purchase Price made in accordance with Section 1060 of the Code in
proportion to the allocation of the Purchase Price and Assumed Liabilities in
the Agreement.
(d) Conditions to the Obligation of the Parties to Close. The
respective obligations to effect the transactions contemplated hereby shall be
subject to 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 Amendment or the transactions
contemplated hereby and the condition that consummation of the transactions
contemplated hereby not being prohibited by any law or regulation, and that the
parties hereto shall have performed and complied with the agreements contained
in this Amendment required to be performed and complied with by them at or prior
to the expiration of the Term.
(e) Conditions to the Obligation of Buyer to Close. The
obligation of Buyer to effect the actions contemplated hereby shall be further
subject to the following condition, which may be waived by Buyer: the
representations and warranties contained in Sections 6(a-c) of this Amendment
shall be true and correct as of the final date of the Term as though such
representations and warranties had been made on and as of the final date of the
Term.
6. Representations and Warranties of the Sellers. Sellers jointly and
severally represent and warrant to PISA, SAAF and Buyer as follows:
(a) At the end of the Term, the Additional Purchased Assets
shall be in saleable condition, or, to the extent any Additional Purchase Assets
are not in saleable condition, the Buyer and Sellers shall have agreed prior to
the end of the Term on the cost of any necessary refurbishment of such
Additional Purchased Assets, and such cost shall have been deducted from the net
book value of such Additional Purchased Assets.
(b) Sellers own outright and have good and marketable title to
the Repaired Watches and Excluded Spare Parts, and at the end of the Term shall
have good and marketable title to the Additional Spare Parts, in each case free
and clear of any lien or other encumbrance.
(c) The Sellers have (except with respect to the Additional
Spare Parts) and at the end of the Term will have (including the Additional
Spare Parts), 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 the Agreement, as amended, Buyer will acquire
good, valid and marketable title to, the Additional Purchased Assets, free and
clear of all encumbrances; and Sellers are presently in peaceable possession of
the Repaired
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Watches and Excluded Spare Parts in quiet enjoyment thereof. There are no
imperfections of title, charges, or encumbrances of any kind relating to the
Repaired Watches and Excluded Spare Parts.
7. Delivery of the Additional Purchased Assets. The delivery of the
Additional Purchased Assets shall be completed in a manner suitable to Buyer and
Sellers. All the expenses incurred in connection with such delivery of the
Additional Purchased Assets shall be paid one-half by Sellers and one-half by
Buyer.
8. Notwithstanding anything else contained herein, all risk of loss or
damage to the Purchased Assets shall pass to Buyer upon delivery of the
Purchased Assets by the Seller to the carrier of choice selected by the Buyer
immediately following the Closing.
9. Continuation of Returns to Consumers. Inasmuch as the parties
anticipate that for some time following Closing consumers will probably continue
to send Watches requiring service to Movado, the parties agree that so long as
any such Watches are received by Movado, any such Watches will be forwarded via
insured, registered mail (in envelopes and packaging to be provided to Movado
free of charge by Buyer) to Buyer and that all costs associated therewith,
including without limitation the costs of insurance and mailing, shall be
reimbursed to Movado by Buyer. Movado shall insure each such Watch for at least
the wholesale value thereof.
Movado shall bear all risk of loss to such Watches while in the
possession of Movado and Buyer shall bear all such risk of loss after delivery
by Movado of such Watches into possession of the carrier. Movado will, in
addition, at the request of Buyer, send to each consumer returning any such
Watch, a form letter informing such consumer that the Watch has been forwarded
to Buyer. All such form letters shall be furnished to Movado by Buyer and Buyer
shall reimburse Movado for the cost of mailing such letters.
10. Amendment to Section 3.1. In the third sentence of Section 3.1(a),
the words "At the Closing" shall be hereby replaced with the words "At a date no
later than four (4) business days following the Closing."
11. New Schedules 2.1.1(vi) and Schedule 5.5(a). Effective hereby,
Schedule 2.1.1(vi) shall be replaced with new Schedule 2.1.1(vi), attached as
Schedule A hereto and Schedule 5.5(a) shall be replaced with new Schedule 5.5(a)
attached as Schedule B hereto.
12. Closing Date. Effective hereby, Section 2.4 of the Agreement shall
be amended such that the Closing shall take place on February 22, 1999.
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13. Other Provisions Unchanged. Except as specifically amended hereby,
all other terms and conditions of the Agreement shall remain in full force and
effect. To the extent that the Agreement includes such terms as "herein,"
"hereto," "in this Agreement" and the like, such terms shall be interpreted to
refer to the Agreement, as modified by this Amendment.
14. Counterparts. This Amendment may be executed in separate
counterparts, each of which shall be an original and all of which taken together
shall constitute one and the same instrument.
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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/ Xxxx X. Xxxxx, Xx.
--------------------------
Name: Xxxx X. Xxxxx, Xx.
Title: Vice President
MOVADO GROUP, INC.
By: /s/ Xxxxxxx X. Xxxx
-----------------------
Name: Xxxxxxx X. Xxxx
Title: Chief Operating Officer
MOVADO GROUP OF CANADA, LTD.
By: /s/ Xxxxxxx X. Xxxxxx
-------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Secretary
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NAW CORPORATION
By: /s/ Xxxxxxx X. Xxxxxx
-------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Secretary
N.A. TRADING S.A.
By: /s/ Xxxxxxx X. Xxxx
-----------------------
Name: Xxxxxxx X. Xxxx
Title: Chief Operating Officer
