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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