FIFTH AMENDMENT TO LOAN AGREEMENT
FIFTH
AMENDMENT TO LOAN AGREEMENT
THIS
FIFTH AMENDMENT TO LOAN AGREEMENT (this “Amendment”) is made and entered
into and effective as of September 19, 2007 (the “Amendment Closing
Date”), by and among XXXXX FARGO BANK, NATIONAL ASSOCIATION,
a national banking association (the “Bank”), FOSSIL
PARTNERS, L.P. (the “Borrower”), FOSSIL, INC.
(the “Company”), FOSSIL INTERMEDIATE, INC. (“Fossil
Intermediate”), FOSSIL TRUST (“Fossil Trust”),
FOSSIL STORES I, INC. (“Fossil I”), ARROW
MERCHANDISING, INC. (“Arrow Merchandising”) and FOSSIL
HOLDINGS, LLC (“Fossil Holdings”) (the Company, Fossil
Intermediate, Fossil Trust, Fossil I, Arrow Merchandising and Fossil Holdings
are sometimes referred to herein individually as a “Guarantor” and
collectively as the “Guarantors”).
RECITALS
WHEREAS,
the Bank, the Borrower and the Guarantors are parties to that certain Loan
Agreement, dated as of September 23, 2004 (as amended, modified or
supplemented, from time to time, the “Agreement”); and
WHEREAS,
the Bank, the Borrower and the Guarantors desire to amend the Agreement and
the
other Loan Documents as herein set forth.
NOW,
THEREFORE, in consideration of the premises herein contained and other good
and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties, intending to be legally bound, agree as
follows:
ARTICLE
I.
Definitions
Section
1.01. Capitalized
terms used in this Amendment are defined in the Agreement, as amended hereby,
unless otherwise stated.
ARTICLE
II.
Amendments
Section
2.01. Amendment
to Section 12(a). Effective as of the Amendment Closing Date,
Section 12(a) of the Agreement is hereby amended and restated in its
entirety to read as follows:
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“(a) Annual
Financial Statements. Furnish the Bank, within one hundred
(100) days after the end of each fiscal year of the Company, (i)
a copy of
the Company’s audited consolidated financial statements, consisting of at
least a balance sheet and related statement of income, retained
earnings
and changes in financial condition of the Company prepared in conformity
with generally accepted accounting principles, applied on a basis
consistent with that of the preceding year, and certified by an
independent certified public accountant selected by the Company
and
reasonably satisfactory to the Bank and (ii) a copy of the consolidating
financial statements of the Company prepared by the
Company.”
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Section
2.02. Amendment
to Section 12(b). Effective as of the Amendment Closing Date,
Section 12(b) of the Agreement is hereby amended and restated in its
entirety to read as follows:
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“(b) Quarterly
Financial Statements. Furnish the Bank, within fifty (50) days
after the end of any fiscal quarter of the Company during the term
hereof
(other than the fiscal quarter ending on the last day of the fiscal
year
of Company), a copy of its unaudited consolidated financial statements
for
such fiscal quarter, consisting of at least a balance sheet and
related
statement of income, materially prepared in conformity with generally
accepted accounting principles (“GAAP”) and certified by an authorized
officer of the Company.”
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Section
2.03. Amendment
to Section 12(c). Effective as of the Amendment Closing Date,
Section 12(c) of the Agreement is hereby amended and restated in its
entirety to read as follows:
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“(c) Compliance
Certificate. Furnish the Bank, concurrently with the delivery
of the financial statements required to be delivered pursuant to
clauses
(a) and (b) above, a Compliance Certificate in a form similar to
the
Compliance Certificate attached hereto as Exhibit C, but including
all representations and warranties to the satisfaction of the Bank,
signed
by an authorized officer of the Borrower and the
Company.”
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Section
2.04. Amendment
to Section 16. Effective as of the Amendment Closing Date, the
reference to “Xxxxx X. Xxxxxx” contained in Section 16 of the Agreement
is deleted in its entirety and replaced with “Xxxxx X. Xxxxxx”.
ARTICLE
III.
Conditions
Precedent
Section
3.01. Conditions
to Effectiveness. The effectiveness of this Amendment is subject
to the satisfaction of the following conditions precedent, unless specifically
waived in writing by the Bank:
(a) The
Bank
shall have received this Amendment, duly executed by the Borrower and each
Guarantor;
(b) There
shall have been no material adverse change in the business or financial
condition of the Borrower, Company and the Guarantors, taken as a
whole;
(c) There
shall be no material adverse litigation, either pending or threatened, against
the Borrower or any Guarantor that could reasonably be expected to have a
material adverse effect on the business or financial condition of the Borrower,
Company and the Guarantors, taken as a whole;
(d) The
representations and warranties contained herein and in the Agreement and the
other Loan Documents, as each is amended hereby, shall be true and correct
in
all material respects as of the date hereof, as if made on the date hereof,
except to the extent such representations were made as of a specific
date;
(e) No
default or Event of Default under the Agreement, as amended hereby, shall have
occurred and be continuing, unless such default or Event of Default has been
specifically waived in writing by the Bank; and
(f) All
requisite corporate, partnership or trust proceedings, as appropriate, shall
have been taken the Borrower and each Guarantor to authorize the execution,
delivery and performance of this Amendment, and such proceedings and other
legal
matters incident thereto shall be satisfactory to the Bank and its legal
counsel.
ARTICLE
IV.
No
Waiver
Section
4.01. Nothing
contained herein shall be construed as a waiver by the Bank of any covenant
or
provision of the Agreement, the other Loan Documents, this Amendment, or of
any
other contract or instrument between the Borrower and/or the Guarantors and
the
Bank, and the failure of the Bank at any time or times hereafter to require
strict performance by the Borrower and/or any Guarantor of any provision thereof
shall not waive, affect or diminish any right of the Bank to thereafter demand
strict compliance therewith. The Bank hereby reserves all rights
granted under the Agreement, the other Loan Documents, this Amendment and any
other contract or instrument between the Borrower and/or the Guarantors and
the
Bank.
ARTICLE
V.
Ratifications,
Representations and Warranties, Covenants
Section
5.01. General
Ratifications. The terms and provisions set forth in this
Amendment shall modify and supersede all inconsistent terms and provisions
set
forth in the Agreement and the other Loan Documents, and, except as expressly
modified and superseded by this Amendment, the terms and provisions of the
Agreement and the other Loan Documents are ratified and confirmed and shall
continue in full force and effect. The parties hereto agree that the
Agreement and the other Loan Documents, as amended hereby, shall continue to
be
legal, valid, binding and enforceable in accordance with their respective
terms.
Section
5.02. Ratification
of Guaranties. Each of the Guarantors hereby acknowledges and
consents to all of the terms and conditions of this Amendment and hereby
ratifies and confirms the Guaranty Agreement to which it is a party to or for
the benefit of the Bank. Each of the Guarantors hereby represents and
acknowledges that it has no claims, counterclaims, offsets, credits or defenses
to the Loan Documents or the performance of its obligations
thereunder. Furthermore, each Guarantor agrees that nothing contained
in this Amendment shall adversely affect any right or remedy of the Bank under
the Guaranty Agreement to which such Guarantor is a party. Each
Guarantor hereby agrees that with respect to the Guaranty Agreement to which
it
is a party, all references in such Guaranty Agreement to the “Guaranteed
Obligations” shall include, without limitation, the obligations of the Borrower
to the Bank under the Agreement, as amended hereby. Finally, each of
the Guarantors hereby represents and acknowledges that the execution and
delivery of this Amendment and the other Loan Documents executed in connection
herewith shall in no way change or modify its obligations as a guarantor,
debtor, pledgor, assignor, obligor and/or grantor under its respective Guaranty
Agreement (except as specifically provided in this Section 5.02) and
shall not constitute a waiver by the Bank of any of the Bank’s rights against
such Guarantor.
Section
5.03. Ratification
of Security Interests. The Company hereby agrees that the Stock
Pledge Agreement is hereby expressly amended such that the definition of
“Secured Obligations” contained therein includes, without limitation, all
indebtedness and other obligations of the Borrower now or hereafter existing
hereunder the Agreement, as amended hereby. Furthermore, the Company
hereby ratifies and reaffirms its obligations under the Stock Pledge Agreement,
as the same is amended hereby, and represents and acknowledges that the Stock
Pledge Agreement is not subject to any claims, counterclaims, defenses or
offsets. Finally, the Company hereby represents and acknowledges that
the execution and delivery of this Amendment and the other Loan Documents
executed in connection herewith shall in no way change or modify its obligations
as a debtor, pledgor, assignor, obligor and/or grantor under the Stock Pledge
Agreement (except as specifically provided in this Section 5.03) and
shall not constitute a waiver by the Bank of any of the Bank’s rights against
the Company.
Section
5.04. Representations
and Warranties. The Borrower and each of the Guarantors hereby
jointly and severally represent and warrant to the Bank that (a) the execution,
delivery and performance of this Amendment and any and all other Loan Documents
executed and/or delivered in connection herewith have been duly authorized
by
all requisite corporate, partnership or trust proceedings, as appropriate,
and
will not contravene, or constitute a default under, any provision of applicable
law or regulation or of the Agreement of Limited Partnership, Articles of
Incorporation, By-Laws or Trust Agreement, as applicable, of the Borrower or
any
Guarantor, or of any mortgage, indenture, material contract, material agreement
or other material instrument, or any judgment, order or decree, binding upon
the
Borrower or any Guarantor; (b) the officer(s) of the Borrower and each Guarantor
executing and delivering this Amendment and any and all other Loan Documents
executed and/or delivered in connection herewith are duly elected and are
authorized, by resolution of the board of directors, board of managers or
trustees (or other applicable governing body) of the Borrower and each such
Guarantor, to execute on behalf of each such entity this Amendment and any
and
all other Loan Documents executed and/or delivered in connection herewith;
(c)
the representations and warranties contained in the Agreement and the other
Loan
Documents, as amended hereby, are true and correct in all material respects
on
and as of the date hereof and on and as of the date of execution hereof as
though made on and as of each such date, except to the extent such
representations were made as of a specific date; (d) no default or Event of
Default under the Agreement, as amended hereby, has occurred and is continuing,
unless such default or Event of Default has been specifically waived in writing
by the Bank; and (e) the Borrower and the Guarantors are in full compliance
with
all covenants and agreements contained in the Agreement and the other Loan
Documents, as amended hereby.
ARTICLE
VI.
Miscellaneous
Provisions
Section
6.01. Survival
of Representations and Warranties. All representations and
warranties made in the Agreement or any other Loan Documents, including, without
limitation, any document furnished in connection with this Amendment, shall
survive the execution and delivery of this Amendment and the other Loan
Documents to be executed in connection herewith, and no investigation by the
Bank or any closing shall affect the representations and warranties or the
right
of the Bank to rely upon them.
Section
6.02. Reference
to Agreement. Each of the Agreement and the other Loan Documents,
and any and all other agreements, documents or instruments now or hereafter
executed and delivered pursuant to the terms hereof or pursuant to the terms
of
the Agreement, as amended hereby, are hereby amended so that any reference
in
the Agreement and such other Loan Documents to the Agreement, shall mean a
reference to the Agreement, as amended hereby.
Section
6.03. Expenses
of the Bank. As provided in the Agreement, the Borrower agrees to
pay on demand all reasonable costs and expenses incurred by the Bank in
connection with the preparation, negotiation, and execution of this Amendment
and the other Loan Documents executed pursuant hereto and any and all
amendments, modifications, and supplements hereto or thereto, including, without
limitation, the costs and fees of the Bank’s legal counsel, and all costs and
expenses incurred by the Bank in connection with the enforcement or preservation
of any rights under the Agreement or any other Loan Document, in each case
as
amended hereby, including, without, limitation, the costs and fees of the Bank’s
legal counsel.
Section
6.04. Severability. Any
provision of this Amendment held by a court of competent jurisdiction to be
invalid or unenforceable shall not impair or invalidate the remainder of this
Amendment and the effect thereof shall be confined to the provision so held
to
be invalid or unenforceable.
Section
6.05. Successors
and Assigns. This Amendment is binding upon and shall inure to
the benefit of the Borrower, the Guarantors and the Bank and their respective
successors and assigns.
Section
6.06. Counterparts. This
Amendment may be executed in one or more counterparts, each of which when so
executed shall be deemed to be an original, but all of which when taken together
shall constitute one and the same instrument.
Section
6.07. Effect
of Waiver. No consent or waiver, express or implied, by the Bank
to or for any breach of or deviation from any covenant or condition by the
Borrower or any Guarantor shall be deemed a consent to or waiver of any other
breach of the same or any other covenant, condition or duty.
Section
6.08. Headings. The
headings, captions and arrangements used in this Amendment are for convenience
only and shall not affect the interpretation of this Amendment.
Section
6.09. Applicable
Law. THIS AMENDMENT AND ALL OTHER AGREEMENTS EXECUTED PURSUANT
HERETO SHALL BE DEEMED TO HAVE BEEN MADE AND TO BE PERFORMABLE IN AND SHALL
BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
TEXAS.
Section
6.10. Final
Agreement. THE AGREEMENT AND THE OTHER LOAN DOCUMENTS, EACH AS
AMENDED HEREBY, REPRESENT THE ENTIRE EXPRESSION OF THE PARTIES WITH RESPECT
TO
THE SUBJECT MATTER HEREOF ON THE DATE THIS AMENDMENT IS EXECUTED. THE
AGREEMENT AND THE OTHER LOAN DOCUMENTS, AS AMENDED HEREBY, MAY NOT BE
CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS
OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE
PARTIES. NO MODIFICATION, RESCISSION, WAIVER, RELEASE OR AMENDMENT OF
ANY PROVISION OF THIS AMENDMENT SHALL BE MADE, EXCEPT BY A WRITTEN AGREEMENT
SIGNED BY THE BORROWER, THE GUARANTORS AND THE BANK.
Section
6.11. 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 herein by reference 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.
[Remainder
of page intentionally left blank.]
IN
WITNESS WHEREOF, this Amendment has been executed and is effective as of the
date first above-written.
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“BANK”
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XXXXX
FARGO BANK,
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NATIONAL
ASSSOCIATION
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By: /s/
Xxxxx X. Xxxxxx
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Xxxxx
X. Xxxxxx,
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Vice
President
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“BORROWER”
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FOSSIL
PARTNERS, L.P.
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By:
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Fossil,
Inc., its general partner
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By: /s/
Xxxxxxx Xxxxxx
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Xxxxxxx
Xxxxxx,
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President
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“GUARANTORS”
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FOSSIL,
INC.
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By: /s/
Xxxxxxx Xxxxxx
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Xxxxxxx
Xxxxxx,
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President
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FOSSIL
INTERMEDIATE, INC.
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By: /s/
Xxxx X. Xxxxx
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Xxxx
X. Xxxxx, Treasurer
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FOSSIL
TRUST
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By: /s/
Xxxx X. Xxxxx
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Xxxx
X. Xxxxx, Treasurer
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FOSSIL
STORES I, INC.
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By: /s/
Xxxx X. Xxxxx
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Xxxx
X. Xxxxx, Treasurer
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ARROW
MERCHANDISING, INC.
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By: /s/
Xxxx X. Xxxxx
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Xxxx
X. Xxxxx, Treasurer
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FOSSIL
HOLDINGS, LLC
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By: /s/
Xxxx X. Xxxxx
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Xxxx
X. Xxxxx, Treasurer
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