Item 1.01. Entry into a Material Definitive Agreement.
On October 28, 2021, Movado Group, Inc. (the "Company"), together with Movado
Group Delaware Holdings Corporation, Movado Retail Group, Inc. and Movado LLC
(together with the Company, the "U.S. Borrowers"), each a wholly owned domestic
subsidiary of the Company, Movado Watch Company SA and MGI Luxury Group S.A.
(collectively, the "Swiss Borrowers" and, together with the U.S. Borrowers, the
"Borrowers"), each a wholly owned Swiss subsidiary of the Company, and MGI
Luxury Group B.V. and Movado Group Nederland B.V., each a wholly owned
Netherlands subsidiary of the Company, as guarantors (the "Guarantors"), entered
into an Amendment No. 3 to Credit Agreement (the "Amendment") with the lenders
party thereto and Bank of America, N.A., as administrative agent (in such
capacity, the "Agent"), which amends the Company's Amended and Restated Credit
Agreement dated as of October 12, 2018 by and among the Borrowers, the
Guarantors, the lenders party thereto and the Agent. The Amendment, among other
things, (i) extends the maturity of the $100.0 million senior secured revolving
credit facility (the "Facility") provided under the Credit Agreement from
October 12, 2023 to October 28, 2026, (ii) provides for the netting of up $25.0
million of unrestricted cash and cash equivalents held in accounts in the United
States in the calculation of the consolidated net leverage ratio, (iii)
increases the general investment basket from $20.0 million to $35.0 million per
fiscal year, with carryforward of up to $20.0 million of the unused capacity in
any fiscal year to the immediately succeeding fiscal year permitted so long as
no event of default exists or would result from any investment using such
carryforward and the consolidated net leverage ratio does not exceed 2.0 to 1.0
on a pro forma basis, (iv) reduces the LIBOR floor from 1.0% to zero, (v)
reduces the commitment fee by 0.05% per annum when the consolidated net leverage
ratio is greater than 0.75 to 1.0 and (vi) establishes SONIA as the benchmark
for borrowings in Sterling and SARON as the benchmark for borrowings in Swiss
Francs, and provides that the Agent may replace LIBOR with a comparable or
successor benchmark for borrowings in U.S. Dollars.
The Facility includes a $15.0 million letter of credit subfacility, a $25.0
million swingline subfacility and a $75.0 million sublimit for borrowings by the
Swiss Borrowers, with provisions for uncommitted increases of up to $50.0
million in the aggregate subject to customary terms and conditions. As of
October 28, 2021, no loans were drawn, and approximately $307,000 in letters of
were outstanding, under the Facility. As of October 28, 2021, availability under
the Facility was approximately $99.693 million.
This summary does not purport to be complete and is qualified in its entirety by
reference to the Amendment, which will be filed as an exhibit to the Company's
Form 10-Q report for the fiscal quarter ending October 31, 2021.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an
Off-Balance Sheet Arrangement of a Registrant.
The information set forth under Item 1.01 above is incorporated into this Item
2.03 by reference.
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