Exhibit 10.4

 

AMENDED AND RESTATED GUARANTY AGREEMENT

 

Borrower:

 

Bank:

 

 

 

Fossil Partners, L.P.

 

Wells Fargo Bank, National Association

2280 N. Greenville Avenue

 

1445 Ross Avenue, 3rd Floor

Richardson, Texas 75082-4412

 

MAC T5303-031

Attention: Mike L. Kovar

 

Dallas, Texas 75202

Fax: (972) 498-9448

 

Attention:

Marguerite C. Burtzlaff

 

 

 

Vice President

 

 

Fax: (214) 969-0370

 

 

 

(herein called “Borrower”, whether one or more)

 

(herein called “Bank”)

 

1.             FOR VALUE RECEIVED, and in consideration of credit and financial
accommodations extended, to be extended, or continued to or for the account of
Borrower, and for other good and valuable considerations, the undersigned,
jointly and severally if more than one (hereinafter called “Guarantor” or
“Guarantors”, whether one or more), absolutely and unconditionally guarantees
the prompt and punctual payment and performance when due (whether at its stated
maturity, by acceleration or otherwise in accordance with the loan documents) of
the Guaranteed Obligations (hereinafter defined) of Borrower to Bank, as
provided herein.  This is a continuing guaranty applicable to and guaranteeing
any and all indebtedness, obligations and liabilities of every kind and
character of Borrower to Bank, whether now existing or hereafter arising,
whether due and owing or to become due and owing, howsoever created or arising
or evidenced, whether joint or several, or joint and several, whether absolute
or contingent, and all renewals, extensions, and rearrangements of such
indebtedness, obligations or liabilities, including any and all amounts owing or
which may hereafter become owing thereon or in connection therewith, including,
without limitation, any and all amounts of principal, interest, attorneys’ fees,
costs of collection and other amounts owing thereunder (hereinafter called the
“Guaranteed Obligations”).  In addition to and without limiting the generality
of the foregoing, each Guarantor hereby expressly acknowledges and agrees that
the “Guaranteed Obligations” shall include, without limitation, all loans and
other indebtedness at any time and from time to time owed or owing by Borrower
to Bank under or in connection with (a) that certain Loan Agreement dated as of
September 23, 2004, by and among Borrower, Guarantors, certain other entities
affiliated with Borrower and Bank, as such Loan Agreement has been amended and
may be amended, increased, modified, supplemented, renewed, extended, restated
or replaced from time to time (the “Loan Agreement”) and any other loan
agreement, credit agreement or other credit facility with Borrower at any time
and from time to time, and (b) that certain Fifth Amended and Restated Revolving
Line of Credit Note dated November 19, 2008, in the maximum original principal
amount of $140,000,000 made by Borrower payable to the order of Bank, as such
promissory note may be amended, increased, modified, supplemented, renewed,
extended, restated or replaced from time to time (the “Note”) and any other
promissory note executed by Borrower and payable to Bank at any time and from
time to time.

 

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2.             Each Guarantor hereby waives marshaling of assets and
liabilities, sale in inverse order of alienation, notice of acceptance of this
Guaranty and of any indebtedness, obligation or liability to which it applies or
may apply, and waives presentment and demand for payment thereof, notice of
dishonor or nonpayment thereof, notice of intention to accelerate, notice of
acceleration, protest and notice thereof and all other notices and demands,
collection or instigation of suit or any other action by Bank in collection
thereof including any notice of default in payment thereof or other notice to,
or demand of payment therefor on, any party.  Further, each Guarantor expressly
waives each and every right to which it may be entitled by virtue of the
suretyship law of the state of Texas, including without limitation, any rights
it may have pursuant to Rule 31, Texas Rules of Civil Procedure, Articles 1986
and 1987, Revised Civil Statutes of Texas and Chapter 34 of the Texas Business
and Commerce Code.

 

3.             Each Guarantor jointly and severally agrees to pay to Bank its
collection costs, including any additional amount for reasonable attorneys’
fees, but in no event to exceed the maximum amount permitted by law, if the
Guaranteed Obligations are not paid by Guarantor upon demand when due as
required herein or if this Guaranty is enforced by suit or through probate or
bankruptcy court or through any judicial proceedings whatsoever, and, should it
be necessary to reduce Bank’s claim to judgment, such judgment shall bear
interest at the maximum rate allowed by applicable laws.

 

4.             This is an absolute and unconditional guaranty of payment and not
of collection, by each Guarantor, jointly and severally in each and every
particular, and each Guarantor waives any right to require that any action be
brought against Borrower or any other person or entity.  Should Bank seek to
enforce the obligations of any Guarantor by action in any court, such Guarantor
waives any necessity, substantive or procedural, that a judgment previously be
rendered against Borrower or any other person or entity or that Borrower or any
other person or entity be joined in such cause or that a separate action be
brought against Borrower or any other person or entity; the obligations of each
Guarantor hereunder are several from those of Borrower or any other person or
entity (including any other surety for Borrower), and are primary obligations
concerning which such Guarantor is the principal obligor.  All waivers herein
contained shall be without prejudice to Bank at its option to proceed against
Borrower or any other person or entity, whether by separate action or by
joinder.  All indebtedness of Borrower to each Guarantor, whether now existing
or hereafter arising (including indebtedness resulting from this Guaranty) is
hereby assigned to Bank to the extent of the amount of this Guaranty as security
for the payment of all obligations of Borrower to Bank. To the extent such
indebtedness of Borrower to any Guarantor (whether now existing or hereafter
arising) exceeds the amount of this Guaranty, such indebtedness is hereby
subordinated to all obligations of Borrower to Bank.  Notwithstanding any
payment or payments made by any Guarantor hereunder or any set-off or
application of funds of any Guarantor by Bank, such Guarantor shall not be
entitled to be subrogated to any of the rights of Bank against Borrower or any
collateral security of rights of offset held by Bank for the payment of the
Guaranteed Obligations.

 

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5.             Bank may, at its option, at any time, without the consent of or
notice to any Guarantor, without incurring responsibility to any Guarantor,
without impairing or releasing the obligations of any Guarantor under this
Guaranty, upon or without any terms or conditions and in whole or in part
(a) change the manner, place or terms of payment or change or extend the time of
payment of or renew, as often and for such periods as Bank may determine, or
increase or otherwise alter any of the Guaranteed Obligations of Borrower hereby
guaranteed, or any liabilities incurred directly or indirectly hereunder, and
the guaranty herein made shall apply to the obligations and liabilities of the
Borrower changed, extended, renewed, increased or altered in any manner,
(b) sell, exchange, release, surrender, realize upon or otherwise deal with in
any manner and in any order any property at any time pledged or mortgaged to
secure or securing the Guaranteed Obligations or any liabilities incurred
directly or indirectly hereunder or any offset against any said liabilities,
(c) exercise or refrain from exercising any rights against Borrower or others,
or otherwise act or refrain from acting, (d) settle or compromise any Guaranteed
Obligations or liabilities hereby incurred, and may subordinate the payment of
all or any part of such obligations or liabilities to the payment of any
obligations or liabilities which may be due to Bank or others, and (e) apply any
sums paid to any liability or liabilities of Borrower to Bank regardless of what
liability or liabilities of Borrower to Bank remain unpaid.  Bank may, at its
option, without the consent of or notice to any Guarantor, apply to the payment
of the liability created by this Guaranty, at any time after such liability
becomes payable, any monies, property, or balance on deposit belonging to any
Guarantor.

 

6.             It is the intention of the parties hereto to comply with
applicable usury laws; accordingly, it is agreed that, notwithstanding any
provision to the contrary in the Guaranteed Obligations or in this Guaranty, in
any note or other instrument, or in any documents securing payment thereof or
hereof, or otherwise relating thereto or hereto, no such provision shall require
the payment or permit the collection of interest in excess of the maximum
permitted by such laws.  If any excess of interest in such respect is provided
for, or shall be adjudged to be so provided for, then in such event (a) the
provisions of this Section shall govern and control, (b) neither any Guarantor
nor any Guarantor’s heirs, successors or assigns or any other party liable for
the payment hereof shall be obligated to pay the amount of such interest to the
extent that it is the excess of the maximum amount permitted by such laws,
(c) any such excess which may have been collected shall be, at Bank’s option,
either applied as a credit against the then unpaid principal amount owing on the
Guaranteed Obligations or refunded, and (d) the effective rate of interest
covered by this Guaranty shall be automatically subject to reduction to the
maximum lawful rate allowed under applicable usury laws.

 

7.             Each Guarantor agrees that suit may be brought against such
Guarantor, jointly and severally, and against one or more of Guarantors, less
than all, without impairing the rights of the Bank, its successors or assigns,
against the other Guarantors; nor shall Bank be required to join Borrower or any
other Guarantor or liable party in a suit against a particular Guarantor; and
the Bank may release one or more Guarantors or settle with such persons as Bank
deems fit without releasing or impairing the rights of Bank to demand and
collect the balance of such indebtedness from the other remaining Guarantors not
so released.  It is agreed among each Guarantor, however, that such settlement
and release shall in nowise impair the rights of the Guarantors as among
themselves.

 

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8.             This Guaranty is for the benefit of the Bank, and for such other
persons as may from time to time become or be the holders of any Guaranteed
Obligations; and this Guaranty shall be transferable and negotiable, with the
same force and effect and to the same extent as the Guaranteed Obligations may
be transferable, it being understood that upon the assignment or transfer by
Bank of any Guaranteed Obligations, the legal holder of such Guaranteed
Obligations shall have all of the rights granted to Bank under this Guaranty.

 

9.             Guarantor agrees that the Bank, its successors and assigns shall
not be liable for failure to use diligence in the collection of any Guaranteed
Obligations or any security therefor, in creating or preserving the liability of
any person liable on the Guaranteed Obligations, or in creating, perfecting or
preserving any security, if any, for the Guaranteed Obligations, and Guarantor
hereby waives presentment and demand for payment, notice of dishonor or
nonpayment, notice of intention to accelerate, notice of acceleration, protest,
and notice thereof, collection, and diligence in or the bringing of suit against
any person liable for any Guaranteed Obligations or against any security
therefor.  Payment of all amounts hereunder shall be made at the offices of
Bank.

 

10.           As security for payment of the Guaranteed Obligations and other
amounts now or hereafter owing hereunder, each Guarantor hereby grants to Bank a
security interest in, and a contractual pledge and assignment of, any and all
money, property, accounts, securities, documents, chattel paper, claims,
demands, instruments, items or deposits of Guarantors, and each of them, or to
which any of them is a party, now held or hereafter coming within Bank’s custody
or control, including by way of example and not of limitation all certificates
of deposit and other depository accounts, whether such have matured or the
exercise of Bank’s rights results in loss of interest or other penalty on such
deposits, but excluding deposits subject to tax penalties if assigned.  Without
prior notice to or demand upon any Guarantor, Bank may exercise its rights
granted above, as well as other rights and remedies at law and equity (all of
which are cumulative), at any time when a default has occurred or Bank deems
itself insecure.  In addition, Bank shall have the right to file this Guaranty
as a Uniform Commercial Code financing statement naming Guarantors, or each of
them, as debtor and the Bank as secured party, and indicating therein the types,
or describing the items, of security herein specified.  Bank shall have all the
rights and remedies of a secured party under the Uniform Commercial Code and
shall have the right after ten (10) days notice, which the parties agree is
reasonable, to sell, at a private or public sale, any of the collateral or other
property held by Bank pursuant hereto or otherwise to enforce the obligations of
any Guarantor hereunder.  Bank’s rights and remedies hereunder shall be in
addition to and cumulative of any other rights and remedies at law and equity,
including, without limitation, any rights of set-off to which Bank may be
entitled.

 

11.           If, at any time, there be Other Indebtedness, (a) Bank, without in
any manner impairing its rights hereunder, may, at its option, exercise rights
of offset by applying, first, to the Other Indebtedness, any deposit balances to
the credit of Borrower and (b) except as stated in the immediately following
sentence of this Section, Bank may apply, first, to the Other Indebtedness all
amounts realized by Bank from collateral or security held by Bank of the payment
of Borrower’s indebtedness.  If a particular security instrument expressly
requires an application different from that permitted under the preceding
sentence, proceeds realized by Bank from such security instrument shall be
applied as provided in such instrument.

 

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The term “Other Indebtedness” as used herein means all indebtedness, if any, of
Borrower to Bank which Bank may have separately agreed from time to time is not
a part of the Guaranteed Obligations.

 

12.           All notices required or permitted hereunder shall be in writing
and shall be deemed to have been given or made as follows:  (a) if sent by hand
delivery, upon delivery; (b) if sent by registered or certified mail, return
receipt requested, upon receipt (as indicated on the return receipt); and (c) if
sent by facsimile, upon receipt (which shall be confirmed by a confirmation
report from the sender’s facsimile machine), addressed to the parties at their
respective addresses designated herein or such other address as such party may
from time to time designate by written notice to the other.

 

13.           This Guaranty shall not be wholly or partially satisfied or
extinguished by any Guarantor’s payment of any amount hereunder, including
payment of all amounts due as of any specified date, but shall continue in full
force and effect as against each Guarantor for the full amount, except as
otherwise specified herein, as to all Guaranteed Obligations created, incurred
or arising prior to the time when notice of termination is given by the
respective Guarantor to the Bank as specified herein, and until payment in full
thereof.  Any and all extensions of credit and financial accommodations
concurrently herewith or hereafter made by Bank to Borrower shall be
conclusively presumed to have been made in acceptance hereof.

 

14.           Anything contained in this Guaranty to the contrary
notwithstanding, the obligations of each Guarantor hereunder shall be limited to
a maximum aggregate amount equal to the greatest amount that would not cause
such Guarantor’s obligations hereunder to be avoided as a fraudulent transfer or
conveyance under Section 548 of Title 11 of the United States Code or any
provisions of applicable state law or similar laws of other jurisdictions (the
“Fraudulent Transfer Law”), after giving effect to all other liabilities of such
Guarantor, contingent or otherwise, that are relevant under the Fraudulent
Transfer Law and after giving effect as assets to the value (as determined under
the applicable provisions of the Fraudulent Transfer Law) of any rights to
subrogation, contribution, reimbursement, indemnity or similar rights of such
Guarantor pursuant to (i) applicable law or (ii) Section 15 hereof or any other
agreement providing for an equitable allocation among such Guarantor and other
affiliates of Borrower of obligations arising under guaranties by such parties.

 

15.           Each Guarantor (a “Contributing Guarantor”) agrees, subject to the
other provisions in this Section, that, in the event a payment shall be made by
any other Guarantor hereunder or assets of any other Guarantor shall be sold
pursuant to any security agreement, mortgage, deed of trust or other security
document to satisfy a claim of Bank hereunder and such other Guarantor (a
“Claiming Guarantor”) shall not have been fully indemnified by Borrower, the
Contributing Guarantor shall indemnify the Claiming Guarantor in an amount equal
to the amount of such payment or the greater of the book value or the fair
market value of such assets, as the case may be, in each case multiplied by a
fraction of which the numerator shall be the net worth of the Contributing
Guarantor on the date hereof and the denominator shall be the net worth of all
the Guarantors on the date hereof.  Notwithstanding the foregoing, all rights of
the Guarantors under this Section and all other rights of indemnity,
contribution and subrogation under applicable law or otherwise shall be fully
subordinated to the indefeasible payment in full in cash of the Guaranteed
Obligations.

 

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No failure on the part of any Guarantor to make the payments required by this
Section (or any other payments required under applicable law or otherwise) shall
in any respect limit the obligations and liabilities of any other Guarantor with
respect to its obligations hereunder, and each Guarantor shall remain liable for
the full amount of the obligations of such Guarantor hereunder.

 

16.           This Guaranty shall be binding upon each Guarantor and its
respective successors and assigns and shall inure to the benefit of, and be
enforceable by, Bank and its successors and assigns and each and every other
person who shall from time to time be or become the owner or holder of any of
the Guaranteed Obligations, and each and every reference herein to “Bank” shall
also include each and every successor or holder.  Each Guarantor agrees that it
shall not assign any of its obligations hereunder without the prior written
consent of Bank.

 

17.           The release by Bank of any one or more Guarantors under this
Guaranty shall not affect the remaining Guarantors hereunder, who shall remain
fully liable in accordance with the terms of this Guaranty.

 

18.           Subject to Section 29 below, this Guaranty shall be in addition to
and cumulative of, and not in substitution, novation or discharge of, any and
all prior or contemporaneous guaranty agreements by Guarantors, or any of them,
in favor of Bank or assigned to Bank by others.

 

19.           If this Guaranty is given by a corporation or other entity, then
the undersigned guaranteeing corporation or entity does hereby acknowledge that
it has investigated fully the benefits and advantages which will be derived by
the undersigned from execution of this Guaranty, and the board of directors or
other governing body of the undersigned corporation or entity has reasonably
determined that, and the undersigned corporation or entity does hereby
acknowledge, warrant and represent that, a direct or an indirect benefit will
accrue to the undersigned by reason of execution of this Guaranty.

 

20.           This Guaranty is being executed and delivered, and is intended to
be performed in, the State of Texas.  Except to the extent that the laws of the
United States may apply to the terms hereof, the substantive laws of the State
of Texas shall govern the validity, construction, enforcement and interpretation
of this Guaranty.  In the event of a dispute involving this Guaranty or any
other instruments executed in connection herewith, the undersigned irrevocably
agrees that venue for such dispute shall lie in any court of competent
jurisdiction in Dallas County, Texas to the extent such dispute is not resolved
by binding arbitration pursuant to the Bank’s current Arbitration Program
described in Section 28 below.

 

21.           Each Guarantor shall furnish to Bank all such financial statements
and other information relating to the financial condition, properties and
affairs of Guarantor as Bank may from time to time request.

 

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22.           Each Guarantor will not change its address, name or identity
without notifying Bank of such change in writing at least thirty (30) days prior
to the effective date of such change.

 

23.           No delay on the part of Bank in exercising any right hereunder or
failure to exercise the same shall operate as a waiver of such right, nor shall
any single or partial exercise of any right, power or privilege bar any further
or subsequent exercise of the same or any other right, power or privilege.

 

24.           This Guaranty shall not be changed orally, but shall be changed
only by agreement in writing signed by the person against whom enforcement of
such change is sought.

 

25.           The masculine and neuter genders used herein shall each include
the masculine, feminine and neuter genders and the singular number used herein
shall include the plural number. The words “person” and “entity” shall include
individuals, corporations, partnerships, joint ventures, limited liability
companies, associations, joint stock companies, trusts, unincorporated
organizations, and governments and any agency or political subdivision thereof.

 

26.           This Guaranty may be executed in multiple counterparts, and each
counterpart executed by any party shall be deemed an original and shall be
binding upon the person or entity executing the same, irrespective of whether
any other Guarantor has executed that or any other counterpart of this
Guaranty.  Production of any counterpart other than the one to be enforced shall
not be required.

 

27.           This Guaranty is executed in connection with the Loan Agreement
and the Note, and the holder hereof is entitled to all the benefits provided
therein and in the other agreements, documents, instruments and certificates
entered into in connection with the Loan Agreement and the Note.

 

28.           AGREEMENT FOR BINDING ARBITRATION.  The parties agree to be bound
by the terms and provisions of the Bank’s current Arbitration Program which is
incorporated by reference herein and is acknowledged as received by the parties
pursuant to which any and all disputes shall be resolved by mandatory binding
arbitration upon the request of any party.

 

29.           Amendment and Restatement.  This Guaranty constitutes an amendment
and restatement of, but does not extinguish, release or limit in any way any
obligation of any Guarantor under, that certain Guaranty Agreement dated as of
September 23, 2004, executed by certain of the Guarantors (and certain other
entities which are no longer in existence) to and in favor of Bank (the “Prior
Guaranty Agreement”), all of which obligations under the Prior Guaranty
Agreement are hereby ratified and confirmed by each Guarantor and acknowledged
and agreed by each Guarantor as being and continuing in full force and effect
and valid, binding and enforceable in accordance with their terms.

 

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EXECUTED as of November 19, 2008.

 

 

GUARANTORS:

 

 

 

FOSSIL, INC.

 

 

 

 

 

By:

/s/ Mike L. Kovar

 

Name:

Mike L. Kovar

 

Title:

Executive Vice President, Chief Financial

 

 

Officer and Treasurer

 

 

 

FOSSIL INTERMEDIATE, INC.

 

 

 

 

 

By:

/s/ Mike L. Kovar

 

Name:

Mike L. Kovar

 

Title:

Treasurer

 

 

 

FOSSIL TRUST

 

 

 

 

 

By:

/s/ Michael W. Barnes

 

Name:

Michael W. Barnes

 

Title:

Trustee

 

 

 

 

 

By:

/s/ Tom Kartsotis

 

Name:

Tom Kartsotis

 

Title:

Trustee

 

 

 

 

 

By:

/s/ Mike L. Kovar

 

Name:

Mike L. Kovar

 

Title:

Treasurer

 

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FOSSIL STORES I, INC.

 

 

 

 

 

By:

/s/ Mike L. Kovar

 

Name:

Mike L. Kovar

 

Title:

Treasurer

 

 

 

 

 

ARROW MERCHANDISING, INC.

 

 

 

 

 

By:

/s/ Mike L. Kovar

 

Name:

Mike L. Kovar

 

Title:

Treasurer

 

 

 

 

 

FOSSIL HOLDINGS, LLC

 

 

 

 

 

By:

/s/ Mike L. Kovar

 

Name:

Mike L. Kovar

 

Title:

Manager

 

 

 

 

 

FOSSIL INTERNATIONAL HOLDINGS, INC.

 

 

 

 

 

By:

/s/ Michael W. Barnes

 

Name:

Michael W. Barnes

 

Title:

President

 

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