AMENDMENT NO. 1 TO STOCK PURCHASE AGREEMENT
Exhibit 2.4
AMENDMENT NO. 1
This Amendment No. 1, made as of December , 2007 (this “Amendment”), amends the Stock
Purchase Agreement (the “Stock Purchase Agreement”) made as of October 30, 2007, by and among
Quiksilver, Inc., a Delaware corporation (“Quiksilver”), Rossignol Ski Company, Inc., a Delaware
corporation (“Seller”), Xxxxx Xxxxxxxxx Golf Company, Inc., a California corporation (“Company”),
and SRI Sports Limited, a Japanese corporation (“Buyer”). For purposes of this Amendment,
capitalized terms used but not otherwise define herein shall have the meanings ascribed to such
terms in the Stock Purchase Agreement.
RECITALS
A. Section 4.11 of the Stock Purchase Agreement provides that the parties may agree to
adjustments to the Restructuring (prior to the Closing), including without limitation, adjusting
the Restructuring plan such that the shares of one or more of the Acquired Companies are not
contributed or sold by Quiksilver (or its Affiliates) to the Company prior to Closing, but instead
are directly purchased by Buyer at Closing.
B. As part of the Restructuring, effective October 31, 2007, Riviera SNC was converted to a
société par actions simplifiée under the laws of France and is now known as Riviera S.A.S. For
purposes of this Amendment and the Stock Purchase Agreement, Riviera S.A.S. will continue to be
referred to as Riviera SNC.
C. The parties desire that pursuant to Section 4.11 of the Stock Purchase Agreement the
Restructuring be adjusted to cause Riviera SNC, Cleveland Golf Canada Corp. and Cleveland Golf Asia
YK to be direct wholly-owned subsidiaries of Seller, with Cleveland Deutschland GmbH and Belfry
Golf remaining direct wholly-owned subsidiaries of Riviera SNC. Consequently, at the Closing,
Buyer will purchase directly from Seller all of the outstanding shares of the Company, Riviera SNC,
Cleveland Golf Canada Corp. and Cleveland Golf Asia YK.
D. Pursuant to Section 11.8 of the Stock Purchase Agreement, the Stock Purchase Agreement may
be amended or modified in whole or in part at any time prior to the Closing Date by an agreement in
writing between Buyer and Quiksilver.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual representations, warranties and agreements
contained herein and in the Stock Purchase Agreement, and in accordance with Section 11.8 of the
Stock Purchase Agreement, the parties to the Stock Purchase Agreement agree as follow:
ARTICLE I
AMENDMENTS
AMENDMENTS
1.1 Amendment to Recital A. Recital A of the Stock Purchase Agreement is hereby
deleted and amended to read in its entirety as follows:
“Seller owns all of the issued and outstanding shares of capital
stock of the Company as of the date hereof, and Seller will own at
the Closing all of the issued and outstanding shares of capital
stock of each of the Company, Riviera SNC, Cleveland Golf Canada
Corp. and Cleveland Golf Asia YK (collectively, the “Shares”), and
Riviera SNC owns as of the date hereof and will own at the Closing
all of the issued and outstanding shares of capital stock of each of
Belfry Golf Limited and Cleveland Deutschland GmbH.”
1.2 Amendment to Section 1.1. Section 1.1 of the Stock Purchase Agreement is hereby
deleted and amended to read in its entirety as follows:
“Subject to the terms and conditions set forth in this Agreement, at
the Closing, Seller will sell and transfer to Buyer, and Buyer will
purchase from Seller, the Shares, which shall constitute all of the
outstanding shares of capital stock of each of the Company, Riviera
SNC, Cleveland Golf Canada Corp. and Cleveland Golf Asia YK, in
exchange for the Purchase Price.”
1.3 Amendments to Section 1.2. Sections 1.2 is hereby deleted and amended to read in
their entirety as follows:
"(a) The purchase price payable to Seller for the purchase and sale
of the Shares (the “Purchase Price”) shall be $132,500,000 less (a)
the Offset Amount and (b) the aggregate amount of the Change in
Control Obligations (the Purchase Price as so reduced, the “Closing
Cash Amount”). The Purchase Price and the Closing Cash Amount shall
be subject to further adjustment as required pursuant to Section
1.3.
(b) The parties acknowledge and agree that the Purchase Price has
been determined on a cash-free, debt-free basis and in furtherance
thereof, agree that, subject to the satisfaction or waiver of each
of the conditions specified in Article VII, the following actions
and payments shall be made in the following order:
(i) On the fourth (4th) Business Day prior to the anticipated
Closing Date as agreed by Quiksilver and Buyer (the “Anticipated
Closing Date”), Quiksilver and its Affiliates (other than the
Acquired Companies) shall:
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(A) cause the Acquired Companies not to incur any additional
Intercompany Payables and Debt (as defined below); and
(B) not incur any additional Intercompany Receivables (as
defined below).
(C) For purposes of this Section 1.2:
(1) Liabilities of the Acquired Companies to Quiksilver or any
of its Affiliates (other than the Acquired Companies), including
without limitation (a) any accounts payable by any Acquired Company
to Quiksilver or its Affiliates (other than the Acquired Companies)
and (b) any indebtedness for borrowed money (and any interest
thereon) payable by any Acquired Company to Quiksilver or its
Affiliates (other than the Acquired Companies) are collectively
referred to as the “Intercompany Payables and Debt”.
(2) Liabilities of Quiksilver or any of its Affiliates (other
than the Acquired Companies) to any of the Acquired Companies are
collectively referred to as the “Intercompany Receivables.”
(3) The amount by which any indebtedness for borrowed money,
and interest thereon, of the Acquired Companies owed to any Person
other than Quiksilver and its Affiliates (other than the Acquired
Companies) (“Third Party Debt”) and Intercompany Payables and Debt
as of the Anticipated Closing Date exceeds the Intercompany
Receivables as of the Anticipated Closing Date is referred to as the
“Offset Amount”;
(ii) Not less than three (3) Business Days prior to the
Anticipated Closing Date, Quiksilver shall notify Buyer in writing
of the following amounts, each as of the Anticipated Closing Date:
(A) the Intercompany Payables and Debt; (B) the Intercompany
Receivables; (C) the Offset Amount, including the exact amounts of
the Offset Amount owed to Quiksilver and each of its Affiliates
(other than the Acquired Companies), expressed in United States
dollars (US$) calculated in accordance with Section 1.2(e), and
identifying such Quiksilver Affiliates and their respective account
information; and (D) the Change in Control Obligations, including
the exact amounts, and calculations thereof, to be paid to the
applicable employees;
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(iii) Immediately prior to the Closing, Quiksilver and its
Affiliates shall offset the Intercompany Payables and Debt and the
Third Party Debt against the Intercompany Receivables (which
remaining amount shall be the Offset Amount);
(iv) On the Closing Date, Buyer shall pay on behalf of the
applicable Acquired Companies their respective portions of the
Offset Amount, by wire transfer of immediately available funds in
amounts and to accounts designated by Quiksilver, with the total of
all such wire transfers equaling the Offset Amount;
(v) On the Closing Date, Buyer shall pay (A) the Closing Cash
Amount less the CG Canada Escrow Amount (as defined herein) to
Quiksilver by wire transfer of immediately available funds to an
account designated by Quiksilver, and (B) the CG Canada Escrow
Amount to the Escrow Agent (as defined herein) to an account
designated by the Escrow Agent; and
(vi) On the Closing Date, Buyer shall provide the principal
amount of the Change in Control Obligation Loan to the Company by
wire transfer of immediately available funds to an account of the
Company designated by the Company.
(c) As promptly as reasonably practicable and no later than ten (10)
Business Days after the Closing, the Company shall pay the Change in
Control Obligations to the applicable employees by wire transfer of
immediately available funds subject to any withholding, federal,
state or local income, or other employment taxes and other payroll
deductions required by applicable Legal Requirement; provided that
payment of the Change in Control Obligation to Xxxx Xxxxxxx shall be
subject to his execution of a general release in favor of the
Company as contemplated by his employment agreement with the
Company.
(d) Within five (5) Business Days after the Closing, Buyer and
Quiksilver shall determine as of 12:01 a.m. (local time) on the
Closing Date in each location in which the applicable bank account
is located, the aggregate cash balance of the bank accounts of the
Acquired Companies, which for the avoidance of doubt shall be net of
all outstanding checks or similar instruments issued on such bank
accounts at such time but not yet reflected as a deduction in the
cash balances of such bank accounts (the “Closing Acquired Company
Cash”). An amount equal to the Closing Acquired Company Cash shall
be promptly paid by Buyer, or an Affiliate of Buyer, to Quiksilver
by wire transfer of immediately available funds to an account
designated by Quiksilver.
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(e) All amounts payable under this Section 1.2 shall be in United
States dollars (US$) and shall be calculated, if and as necessary,
based on the cross rates as reported by The Wall Street Journal
(online edition) (the “Exchange Rates”) on the fourth (4th) Business
Day prior to the Anticipated Closing Date.”
(f) In the event that the Closing does not occur within two (2)
Business Days of the Anticipated Closing Date, Quiksilver and Buyer
shall agree on a new Anticipated Closing Date and, for purposes of
this Section 1.2, references to the Anticipated Closing Date shall
mean such new Anticipated Closing Date.
1.4 Amendment to Section 1.3. Section 1.3 of the Stock Purchase Agreement is hereby
amended by the addition of Sub-section (i) as follows:
“For the avoidance of doubt, the term “consolidated” for the
purposes of this Section 1.3 and the definition of Company Working
Capital means the aggregated or combined balance sheets, statements
of income or other financial statements of each of the Acquired
Companies as if such Acquired Companies (other than the Company)
were consolidated in the balance sheet, statement of income or other
financial statements of the Company.”
1.5 Amendments to Section 1.5.
(a) Section 1.5(a)(i) of the Stock Purchase Agreement is hereby deleted and amended
to read in its entirety as follows:
“certificate(s) representing the Shares duly endorsed (or
accompanied by duly executed stock powers), or other analogous
transfer instruments or documentation to effect the transfer of the
Shares to Buyer at the Closing under applicable Legal Requirements,
with requisite stock or share transfer stamps, if any, attached;”
(b) Section 1.5(a)(v) of the Stock Purchase Agreement is hereby deleted and amended
to read in its entirety as follows:
“certificates dated as of the Closing Date from Quiksilver, Seller
and/or the Company, as applicable, duly executed by such Person’s
Secretary, certifying: (A) that attached thereto is a true, correct
and complete copy of the Organizational Documents of the Company,
Riviera SNC, Cleveland Golf Canada Corp. and Cleveland Golf Asia YK,
as in effect on the date of such certification; (B) that the
Organizational Documents of the Company, Riviera SNC, Cleveland Golf
Canada Corp. and Cleveland Golf Asia YK, have not been amended since
the
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delivery of this Agreement, except that the Organizational Documents
of Riviera SNC have been amended to convert it to an SAS; and (C)
that attached thereto is a true, correct and complete copy of all
resolutions adopted by the boards of directors or other equivalent
body and, where required, the stockholders of such Person
authorizing the execution, delivery and performance of this
Agreement and the transactions contemplated hereby, and that all
such resolutions are still in full force and effect; and . . .”
(c) Section 1.5(a)(vi) of the Stock Purchase Agreement is hereby deleted and amended
to read in its entirety as follows:
“a certificate executed by a duly authorized officer of Quiksilver
certifying that upon consummation of the transactions contemplated
hereby (including the actions and payments required pursuant to
Section 1.2(b)), (a) the Acquired Companies will be free and clear
of all indebtedness for borrowed money and any interest thereon owed
to any Seller Affiliate or any other Person (other than Buyer or an
Acquired Company), (b) no Acquired Company will have outstanding any
accounts receivable from, or accounts payable to, any Seller
Affiliate, and (c) upon completion of the actions contemplated by
Section 1.2(c) all Change in Control Obligations shall be paid in
full.”
(d) Section 1.5 of the Stock Purchase Agreement is hereby amended by the addition of
Sub-section (c) as follows:
“Buyer will cause to be delivered to each Quiksilver Affiliate
designated by Quiksilver pursuant to Section 1.2(b)(iv), by wire
transfer of immediately available funds, the portion of the Offset
Amount applicable to such Quiksilver Affiliate, with the total of
such wire transfers equaling the Required Buyer Intercompany Loan.”
(e) Article I of the Stock Purchase Agreement is hereby amended by the addition of
Section 1.6 as follows:
“As soon as reasonably practicable and no later than ten (10)
Business Days of Closing, Buyer will cause the Company to deliver to
each of Xxxxxxx Xxxx, Xxxx Xxxxxxxx, Xxxxx Xxxxxxx and Xxxx Xxxxxxx
by wire transfer of immediately available funds, their applicable
portion of the Change in Control Obligations in satisfaction of the
Company’s obligation to pay the Change in Control Obligations set
forth in Section 1.2(c), with the total of such wire transfers
equaling the Change in Control Obligation Loan, subject to any
withholding, federal, state and local income, or employment taxes
and other payroll deductions required by
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applicable Law; provided that payment of the Change in Control
Obligation to Xxxx Xxxxxxx shall be subject to his execution of a
general release in favor of the Company as contemplated by his
employment agreement with the Company.”
1.6 Amendment to Section 2.3. The fourth (4th) sentence of Section 2.3 of
the Stock Purchase Agreement is hereby deleted and amended to read as follows:
“On the Closing Date, all of the outstanding equity securities of
Belfry Golf Limited and Cleveland Deutschland GmbH will be owned of
record and beneficially by Riviera SNC, free and clear of all
Encumbrances.”
1.7 Amendment to Section 4.11. Section 4.11 of the Stock Purchase Agreement is hereby
deleted and amended to read as follows:
“The parties acknowledge and agree that none of the Acquired
Companies, other than the Company, are direct subsidiaries of Seller
as of the date of this Agreement. Prior to the Closing, Quiksilver
and its Affiliates intend to restructure the ownership of the
Acquired Companies to cause Riviera SNC, Cleveland Golf Canada Corp.
and Cleveland Golf Asia YK to be direct wholly-owned subsidiaries of
Seller (the “Restructuring”). For the avoidance of doubt, all of
the issued and outstanding shares of stock of Belfry Golf Limited
and Cleveland Deutschland GmbH shall be held by Riviera SNC as of
the Closing. The allocation of the Purchase Price with respect to
each of the Company, Riviera SNC, Cleveland Golf Canada Corp. and
Cleveland Golf Asia YK is set forth in Exhibit D.”
Exhibit D to the Stock Purchase Agreement is attached hereto as Annex 1.
1.8 Amendment to Exhibit A.
(a) The definition of Required Buyer Intercompany Loan set forth in Exhibit A of the
Stock Purchase Agreement is hereby deleted and amended to read as follows:
"'Required Buyer Intercompany Loan‘ — means the loans from Buyer to
the Acquired Companies to be made on the Closing Date in accordance
with Section 1.2(b) through the payment of each Acquired Company’s
portion of the Offset Amount, in an aggregate amount equal to the
Offset Amount.”
(b) The definition of Current Liabilities set forth in Exhibit A of the Stock Purchase
Agreement is hereby deleted and amended to read as follows:
"'Current Liabilities‘ — accounts payable of the Acquired
Companies. For the avoidance of doubt, Current Liabilities will
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not include accrued liabilities, intercompany payables, or the
Change in Control Obligations.”
1.9 Amendment to Article VI. A Section 6.9 is hereby added to the Stock Purchase
Agreement as follows:
“6.9 Clearance Certificates.
(a) Seller agrees to take all reasonable steps to obtain and
deliver to Buyer as soon as possible after the date hereof a
certificate issued by the Minister of National Revenue (Canada)
under subsection 116(2) or (4) of the Income Tax Act (Canada), as
applicable, in respect of the sale of the outstanding shares of
Cleveland Golf Canada Corp. (the “CG Canada Shares”) to Buyer with a
certificate limit that is not less than the aggregate Purchase Price
attributable to the CG Canada Shares as set forth in Exhibit D (the
“CG Canada Price”).
(b) Buyer and Seller agree that Buyer shall hold back from the
CG Canada Price an amount equal to 25% of the CG Canada Price (the
“CG Canada Escrow Amount”) pending receipt of such certificate, and
the CG Canada Escrow Amount in escrow under the terms of a Section
116 Escrow Agreement to be entered into by Buyer and Seller with a
third-party escrow agent (the “Escrow Agent”) at or prior to the
Closing. Buyer and Seller agree that such amounts shall be further
disposed of under the terms of such Section 116 Escrow Agreement.
1.10 Partial Waiver of Condition Precedent to Buyer’s Obligation to Close. Buyer
hereby waives Quiksilver’s obligation pursuant to Sections 1.5(a)(iv) and 7.2(b) of the Stock
Purchase Agreement to deliver at the Closing the written resignation of Xxxx Xxxxxxxx as
Representative Director of Cleveland Golf Asia YK; and Quiksilver agrees to cause Xxxx Xxxxxxxx to
rescind prior to the Closing his written resignation dated as of November 7, 2007, which would be
effective upon the Closing.
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ARTICLE II
GENERAL PROVISIONS
GENERAL PROVISIONS
2.1 Stock Purchase Agreement Remains in Full Force and Effect. Except as expressly
amended or modified by this Amendment, all provisions of the Stock Purchase Agreement remain in
full force and effect and nothing in this Amendment shall otherwise affect any other provision of
the Stock Purchase Agreement or the rights and obligations of the parties thereto.
2.2 Reference to Stock Purchase Agreement. Any reference to the Stock Purchase
Agreement therein shall refer to the Stock Purchase Agreement as amended or modified by this
Amendment.
2.3 Conflicting Terms. In the event of any inconsistency or conflict between the
Stock Purchase Agreement and this Amendment, the provisions of this Amendment shall govern and
control.
IN WITNESS WHEREOF, the parties have executed and delivered this Amendment effective as of the
date first written above.
| “QUIKSILVER” | ||||||
| QUIKSILVER, INC., a Delaware corporation | ||||||
| By: | ||||||
| Name: | Xxxxxxx X. Exon | |||||
| Title: | Secretary and General Counsel | |||||
| “BUYER” | ||||||
| SRI SPORTS LIMITED, a Japanese corporation | ||||||
| By: | ||||||
| Name: | Ryochi Sawada | |||||
| Title: | Representative Director and Chairman | |||||
SPA Amendment No. 1
Signature Page
Annex 1
This Annex 1 sets forth Exhibit D to the Stock Purchase Agreement.
EXHIBIT D
ALLOCATION OF PURCHASE PRICE
| Acquired Company | Allocation (US$) | |||
Cleveland Golf Canada Corp. |
2,765,250 | |||
Cleveland Golf Asia YK |
1,102,841 | |||
Riviera SNC |
2,795,116 | |||
(incl. Belfry Golf Limited and Cleveland Deutschland GmbH) |
||||
Xxxxx Xxxxxxxxx Golf Company, Inc. |
71,984,458 | |||
Annex – 1
