Exhibit 10.1


 


SEVENTH AMENDMENT TO LOAN
AGREEMENT


 


THIS SEVENTH AMENDMENT
TO LOAN AGREEMENT (this “Amendment”) is made and entered into and
effective as of November 19, 2008 (the “Amendment Closing Date”),
by and among WELLS 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”), FOSSIL HOLDINGS, LLC
(“Fossil Holdings”) and FOSSIL INTERNATIONAL
HOLDINGS, INC. (“Fossil International”) (the Company, Fossil
Intermediate, Fossil Trust, Fossil I, Arrow Merchandising, Fossil Holdings and
Fossil International are sometimes referred to herein individually as a “Guarantor”
and collectively as the “Guarantors”).


 


RECITALS


 


WHEREAS, the
Bank, the Borrower and certain of 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 to, among other things, (a) increase
the Total Commitment from $100,000,000 to $140,000,000 and (b) extend the
maturity date of the Revolving Note to November 18, 2009.


 


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 Definition of “Guarantors”.  The
parenthetical phrase “(the Company, Fossil Intermediate, Fossil Trust, Fossil
I, Intermediate Leasing, Arrow Merchandising, Fossil Holdings and FMW are
sometimes referred to herein individually as a ‘Guarantor’ and collectively as ‘Guarantors’)”
contained in the preamble to the Agreement is hereby amended and restated to
read in its entirety as follows:


 


“(the Company, Fossil Intermediate, Fossil Trust, Fossil I, Arrow
Merchandising, Fossil Holdings, Fossil International Holdings, Inc. and
any other person or entity which is, at any time, a party to the Guaranty
Agreement or any other agreement which guarantees payment or collection of any
loans or other obligations from time to time outstanding under this Agreement, the
Revolving Note or any other Loan Document are sometimes referred to herein
individually as a ‘Guarantor’ and collectively as the ‘Guarantors’)”.


 


1

















 


Section 2.02.                             Amendment
to Section 1.  Effective as of
the Amendment Closing Date, Section 1 of the Agreement is hereby
amended and restated to read in its entirety as follows:


 


“1.                                 The Line of Credit.  Subject to and upon the terms, conditions,
covenants and agreements contained herein and in the Revolving Note (as
hereinafter defined), the Bank agrees to loan to the Borrower, at any time and
from time to time prior to the maturity of the Revolving Note, such amounts as
the Borrower may request up to but not exceeding at any time the aggregate
principal amount of $140,000,000 (the “Total Commitment”); within such
limits and during such period, the Borrower may borrow, repay and re-borrow
hereunder (the “Line of Credit”). 
All loans under the Line of Credit shall be evidenced by a Revolving
Line of Credit Note (as amended, modified or supplemented, increased, renewed,
extended or replaced from time to time, the “Revolving Note”) in form
and substance satisfactory to the Bank, executed by the Borrower and payable to
the order of the Bank, and bearing interest upon the terms provided therein
(but in no event to exceed the maximum non-usurious interest rate permitted by
law).  The principal of, and interest on,
the Revolving Note shall be due and payable as provided in the Revolving
Note.  Notation by the Bank on its
records shall constitute prima facie evidence of the amount and date of any
payment or borrowing thereunder.


 


(a)                                  Renewals
and Extensions.  All renewals,
extensions, modifications and rearrangements of the Revolving Note, if any,
shall be deemed to be made pursuant to this Agreement, and, accordingly, shall
be subject to the terms and provisions hereof, and the Borrower and the
Guarantors shall be deemed to have ratified, as of such renewal, extension,
modification or rearrangement date, all of the representations, covenants and
agreements herein set forth.


 


(b)                                 Letters
of Credit.  Advances under the Line
of Credit may be utilized by the Borrower to fund drawings under any
Documentary or Stand-by Letters of Credit (as hereinafter defined) that are
issued by the Bank for the account of the Borrower.  In the event the Borrower fails to reimburse
the Bank for any such drawings, the Bank may, in its own discretion, advance
funds under the Line of Credit to fund such drawings and all such advances
shall be added to the principal amount of the Revolving Note.”


 


Section 2.03.                             Amendment
to Section 2.  Effective as of
the Amendment Closing Date, the reference to “$100,000,000” contained in Section 2
of the Agreement is hereby deleted and “$140,000,000” is substituted in lieu
thereof.


 


Section 2.04.                             Amendment
to Section 5(a).  Effective as
of the Amendment Closing Date, Section 5(a) of the Agreement is
hereby amended and restated to read in its entirety as follows:


 


2

















 


“5.                                 Availability.


 


(a)                                  Revolving
Note.  The aggregate principal amount
at any time outstanding under the Revolving Note, plus one hundred
percent (100%) of the face amount of the JDB Letter of Credit (calculated by
reference to the amount of United States of America dollars into which the Bank
determines it could, in accordance with its practice from time to time in the
interbank foreign exchange market, convert such amount of Yen at its spot rate
of exchange in effect at approximately 8:00 a.m. (Dallas, Texas time) on
the date of determination), plus one hundred percent (100%) of the face
amount of all outstanding Documentary and Stand-by Letters of Credit (other
than the JDB Letter of Credit) issued for the account of the Borrower, plus
one hundred percent (100%) of the Bank’s participation interest in all letters
of credit issued for the account of the Borrower, the Company or any of their
respective subsidiaries pursuant to that certain The Hongkong and Shanghai
Banking Corporation Limited uncommitted letter of credit facility dated as of March 2,
2006 or any similar letter of credit facility to which the Borrower, the
Company or any of their respective subsidiaries is a party from time to time,
as the same may be amended, modified, extended, renewed or replaced from time
to time (said sum being herein referred to as the “Outstanding Revolving
Credit”), shall not at any time exceed the Total Commitment.”


 


Section 2.05.                             Amendment
to Section 12(m).  Effective as
of the Amendment Closing Date, Section 12(m) of the Agreement is
hereby amended and restated to read in its entirety the following:


 


“(m)                         Domestic/Foreign Subsidiary
Guarantees/Stock Pledges.  (i) cause
each majority-owned subsidiary of the Company or the Borrower which is
incorporated, organized or formed in the United States of America and which
owns or holds tangible assets having an aggregate book value of $30,000,000 or
more (each, a “Significant Domestic Subsidiary”) to execute a Guaranty
Agreement in the form of Exhibit A attached hereto, and (ii) pledge
to the Bank, as collateral security for the Borrower’s obligations to the Bank
hereunder, a security interest in sixty-five percent (65%) of the stock and
other equity interests of each majority owned subsidiary of the Company which
is incorporated, organized or formed outside of the United States and which
owns or holds tangible assets having an aggregate book value of $30,000,000 or
more (each a “Significant Foreign Subsidiary”)  by executing a Stock Pledge Agreement in the
form of Exhibit B attached hereto.”


 


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:


 


3

















 


(a)                                  The
Bank shall have received (i) this Amendment, duly executed by the Borrower
and each Guarantor, (ii) an amended and restated Revolving Note in form
and substance satisfactory to the Bank which (A) increases the maximum
principal amount thereof from $100,000,000 to $140,000,000 and (B) extends
the maturity date of the Revolving Note to November 18, 2009, duly
executed by the Borrower, (iii) an amended and restated Guaranty
Agreement, duly executed by each Guarantor, and (iv) an amended and
restated Stock Pledge Agreement executed by the Company which pledges
sixty-five percent (65%) of the stock and other equity interests of each
Significant Foreign Subsidiary;


 


(b)                                 The
Bank shall have received (i) certified copies of the organizational
documents of the Borrower, each Guarantor and each Significant Foreign
Subsidiary, (ii) certificates dated as of a recent date issued by the
applicable governmental authorities which evidence the existence and good
standing of the Borrower and each Guarantor, and (iii) certified copies of
resolutions of the board of directors or other applicable governing body of the
Borrower and each Guarantor which authorize the execution and delivery of this
Amendment and the other Loan Documents executed in connection herewith, in each
case in form and substance satisfactory to the Bank;


 


(c)                                  The
Bank shall have received a legal opinion from counsel to the Borrower and each
Guarantor relating to this Amendment and the other Loan Documents executed in
connection herewith, in form and substance satisfactory to the Bank;


 


(d)                                 There
shall have been no material adverse change in the business or financial
condition of the Borrower, the Company and the Guarantors, taken as a whole;


 


(e)                                  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,
the Company and the Guarantors, taken as a whole;


 


(f)                                    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;


 


(g)                                 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


 


(h)                                 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.

Ratifications, Representations and Warranties, Covenants


 


Section 4.01.                             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.


 


4

















 


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 4.02.                             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 not revoked, terminated, limited or otherwise modified
its obligations under the Guaranty Agreement executed by it in any way and that
it has no claims, counterclaims, offsets, credits or defenses to the Guaranty
Agreement executed by it or to the other Loan Documents to which it is a party or
the performance of its obligations thereunder, all of which obligations are
legal, valid and binding in accordance with their terms.  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, and all indebtedness evidenced by the Revolving
Note dated as of November 19, 2008, in the maximum original principal
amount of $140,000,000 made by the Borrower payable to the order of the Bank.  Finally, each of the Guarantors hereby
represents and acknowledges that the execution and delivery of this Amendment,
the Revolving Note 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 4.02)
and shall not constitute a waiver by the Bank of any of the Bank’s rights or
remedies against such Guarantor.


 


Section 4.03.                             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, and all
indebtedness evidenced by the Revolving Note dated as of November 19,
2008, in the maximum original principal amount of $140,000,000 made by the
Borrower payable to the order of the Bank. 
Furthermore, the Company hereby ratifies and reaffirms its grant of a
security interest in all “Collateral”, as such term is defined in the Stock
Pledge Agreement, as security for the payment and performance of all “Secured
Obligations”, as such term is defined in the Stock Pledge Agreement, and all
other 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 and that all of its
obligations thereunder are legal, valid and binding in accordance with their
terms.  Finally, the Company hereby
represents and acknowledges that the execution and delivery of this Amendment,
the Revolving Note 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 4.03) and shall not
constitute a waiver by the Bank of any of the Bank’s rights or remedies against
the Company.


 


5

















 


Section 4.04.                             Representations
and Warranties, etc.  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, Trust
Agreement or other organizational document, 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) or
other representatives, as applicable, 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, or any other Loan Document
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.


 


Section 4.05.                             Subsidiaries,
etc.  The Borrower and each of the
Guarantors hereby jointly and severally represents and warrants to the Bank
that (a) attached hereto as Seventh Amendment Schedule 1 is a list
of all majority-owned subsidiaries of the Company or the Borrower as of the
Amendment Closing Date, (b) attached hereto as Seventh Amendment
Schedule 2 is a list of all Significant Domestic Subsidiaries as of the Amendment
Closing Date and after giving effect to this Amendment, (c) attached
hereto as Seventh Amendment Schedule 3 is a list of all Significant
Foreign Subsidiaries as of the Amendment Closing Date and after giving effect
to this Amendment, and (d) each of the Borrower and the Guarantors is in
compliance with the requirements of Section 12(m) of the Agreement
as of the Amendment Closing Date and after giving effect to this Amendment.


 


ARTICLE V.

Miscellaneous Provisions


 


Section 5.01.                             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.


 


6

















 


Section 5.02.                             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 thereof 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 5.03.                             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 or remedies 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 5.04.                             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 5.05.                             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; provided, however,
that neither the Borrower nor any Guarantor may assign any of its obligations
hereunder or under any Loan Document without the prior written consent of the
Bank.


 


Section 5.06.                             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.  A facsimile signature or a
signature transmitted electronically shall be effective as an original
signature.


 


Section 5.07.                             Effect
of Waiver.  No consent or waiver,
express or implied, by the Bank to or for any breach of or deviation from any
covenant, condition or duty 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 5.08.                             Headings.  The headings, captions and arrangements used
in this Amendment are for convenience only and shall not affect the
interpretation of this Amendment.


 


Section 5.09.                             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 5.10.                             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 AND THEREOF ON THE DATE
THIS AMENDMENT IS EXECUTED.


 


7

















 


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 OR AMONG 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 5.11.                             Agreement
for Binding Arbitration.  The parties
agree to be bound by the terms and provisions of the Bank’s current Arbitration
Program, a true and correct copy of which is attached hereto as Exhibit A
and 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.]


 


8

















 


IN WITNESS
WHEREOF, this Amendment has been executed and is effective as of the date first
above-written.


 


	
   

  	
  “BANK”

  
	
   

  	
   

  
	
   

  	
  WELLS FARGO BANK,

  
	
   

  	
  NATIONAL ASSOCIATION

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Marguerite C. Burtzlaff

  
	
   

  	
  Name:

  	
  Marguerite C. Burtzlaff

  
	
   

  	
  Title:

  	
  Vice President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  “BORROWER”

  
	
   

  	
   

  
	
   

  	
  FOSSIL PARTNERS, L.P.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  Fossil, Inc.

  
	
   

  	
  Title:

  	
  General Partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Mike L. Kovar

  
	
   

  	
   

  	
  Name:

  	
  Mike L. Kovar

  
	
   

  	
   

  	
  Title:

  	
  Executive Vice President, Chief

  
	
   

  	
   

  	
   

  	
  Financial Officer and Treasurer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  “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

  



 


9

















 


	
   

  	
  FOSSIL TRUST

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Mike L. Kovar

  
	
   

  	
  Name:

  	
  Mike L. Kovar

  
	
   

  	
  Title:

  	
  Treasurer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  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

  



 


10

















 


SEVENTH AMENDMENT SCHEDULE 1


 


ALL SUBSIDIARIES


 


Fossil Intermediate, Inc.


Fossil Stores I, Inc.


Arrow Merchandising, Inc.


Fossil Holdings, LLC


Fossil Trust


Fossil International Holdings, Inc.


Fossil Europe B.V.


Fossil Holdings (Gibraltar) Ltd.


Swiss Technology Holding GmbH


Fossil Austria GmbH


Fossil Japan, K.K.


Fossil (Gibraltar) Ltd.


Fossil Canada, Inc.


Fossil Mexico, S.A. de C. V.


Servicios Fossil Mexico, S.A. de
C.V.


Fossil (East) Limited


Fossil Holding LLC Luxembourg, SCS


Fossil Luxembourg, Sarl


Pulse Time Center Company, Ltd.


Fossil (Asia) Ltd


Fossil Singapore Ptd Ltd.


FDT, Ltd.


Fossil (Australia) Pty Ltd.


Fossil (New Zealand) Ltd.


Fossil Time Malaysia Sdn. Bhd.


Fossil Industries Ltd.


Fossil Trading (Shanghai) Company Ltd.


Fossil (Asia) Holding Ltd.


Fossil Europe GmbH


Fossil Italia, S.r.l.


Gum, S.A.


Fossil, S.L.


Fossil U.K. Holdings Ltd.


FESCO, GmbH


Fossil Swiss No Time GmbH


Fossil Swiss X Time GmbH


In Time - Portugal


Fossil U.K. Ltd.


Fossil Stores U.K. Ltd.


Montres Antima SA


Fossil Group Europe, GmbH


Fossil France SA


 

















 


Logisav SARL


Trotime Espana SL


Fossil Retail Stores (Australia)
Pty. Ltd


Fossil Management Services Pty.
Ltd.


Fossil Scandinavia AB


Fossil Norway AS


Fossil Denmark AS


Fossil Stores France SAS


Fossil Stores S.r.l.


Fossil (Korea) Ltd.


Fossil (Macau) Limited


Fossil India Private Ltd.


Fossil Stores Spain, S.L.


Fossil Stores Belgium BVBA


Fossil Belgium BVBA


Fossil Stores Sweden AB


Fossil Stores Denmark A/S


MW (Asia), Ltd.


Trylink International, Ltd.


Fossil Newtime Ltd.


 
















 


SEVENTH AMENDMENT SCHEDULE 2


 


SIGNIFICANT DOMESTIC SUBSIDIARIES


 


Fossil Intermediate, Inc.


Fossil Trust


Fossil Stores I, Inc.


 

















 


SEVENTH AMENDMENT SCHEDULE 3


 


SIGNIFICANT FOREIGN SUBSIDIARIES


 


Fossil Europe B.V.


Fossil Holdings (Gibraltar) Ltd.


Swiss Technology Holding GmbH


 

















 


EXHIBIT A


 


ARBITRATION PROGRAM


 

















 


ARBITRATION


 


(a)           Arbitration.  The parties hereto agree, upon demand by any
party, to submit to binding arbitration all claims, disputes and controversies
between or among them (and their respective employees, officers, directors,
attorneys, and other agents), whether in tort, contract or otherwise in any way
arising out of or relating to (i) any credit subject hereto, or any of the
Loan Documents, and their negotiation, execution, collateralization,
administration, repayment, modification, extension, substitution, formation,
inducement, enforcement, default or termination; or (ii) requests for
additional credit.


 


(b)           Governing Rules.  Any arbitration proceeding will (i) proceed
in a location in Texas selected by the American Arbitration Association (“AAA”);
(ii) be governed by the Federal Arbitration Act (Title 9 of the United
States Code), notwithstanding any conflicting choice of law provision in any of
the documents between the parties; and (iii) be conducted by the AAA, or
such other administrator as the parties shall mutually agree upon, in
accordance with the AAA’s commercial dispute resolution procedures, unless the
claim or counterclaim is at least $1,000,000.00 exclusive of claimed interest,
arbitration fees and costs in which case the arbitration shall be conducted in
accordance with the AAA’s optional procedures for large, complex commercial
disputes (the commercial dispute resolution procedures or the optional
procedures for large, complex commercial disputes to be referred to herein, as
applicable, as the “Rules”).  If there is
any inconsistency between the terms hereof and the Rules, the terms and
procedures set forth herein shall control. 
Any party who fails or refuses to submit to arbitration following a
demand by any other party shall bear all costs and expenses incurred by such
other party in compelling arbitration of any dispute.  Nothing contained herein shall be deemed to
be a waiver by any party that is a bank of the protections afforded to it under
12 U.S.C. §91 or any similar applicable state law.


 


(c)           No Waiver of
Provisional Remedies, Self-Help and Foreclosure.  The arbitration requirement does not limit
the right of any party to (i) foreclose against real or personal property collateral;
(ii) exercise self-help remedies relating to collateral or proceeds of
collateral such as setoff or repossession; or (iii) obtain provisional or
ancillary remedies such as replevin, injunctive relief, attachment or the
appointment of a receiver, before during or after the pendency of any
arbitration proceeding.  This exclusion
does not constitute a waiver of the right or obligation of any party to submit
any dispute to arbitration or reference hereunder, including those arising from
the exercise of the actions detailed in sections (i), (ii) and (iii) of
this paragraph.


 


(d)           Arbitrator
Qualifications and Powers.  Any
arbitration proceeding in which the amount in controversy is $5,000,000.00 or
less will be decided by a single arbitrator selected according to the Rules,
and who shall not render an award of greater than $5,000,000.00.  Any dispute in which the amount in
controversy exceeds $5,000,000.00 shall be decided by majority vote of a panel
of three arbitrators; provided however, that all three arbitrators must
actively participate in all hearings and deliberations.  The arbitrator will be a neutral attorney
licensed in the State of Texas with a minimum of ten years experience in the
substantive law applicable to the subject matter of the dispute to be
arbitrated.  The arbitrator will
determine whether or not an issue is arbitratable and will give effect to the
statutes of limitation in determining any claim.  In any arbitration proceeding the arbitrator
will decide (by documents only or with a hearing at the arbitrator’s
discretion) any pre-hearing motions which are similar to motions to dismiss for
failure to state a claim or motions for summary adjudication.  The arbitrator shall resolve all disputes in
accordance with the substantive law of Texas and may grant any remedy or relief
that a court of such state could order or grant within the scope hereof and
such ancillary relief as is necessary to make effective any award.


 

















 


The
arbitrator shall also have the power to award recovery of all costs and fees, to
impose sanctions and to take such other action as the arbitrator deems
necessary to the same extent a judge could pursuant to the Federal Rules of
Civil Procedure, the Texas Rules of Civil Procedure or other applicable
law.  Judgment upon the award rendered by
the arbitrator may be entered in any court having jurisdiction.  The institution and maintenance of an action
for judicial relief or pursuit of a provisional or ancillary remedy shall not
constitute a waiver of the right of any party, including the plaintiff, to
submit the controversy or claim to arbitration if any other party contests such
action for judicial relief.


 


(e)           Discovery.  In any arbitration proceeding, discovery will
be permitted in accordance with the Rules. 
All discovery shall be expressly limited to matters directly relevant to
the dispute being arbitrated and must be completed no later than 20 days before
the hearing date.  Any requests for an
extension of the discovery periods, or any discovery disputes, will be subject
to final determination by the arbitrator upon a showing that the request for
discovery is essential for the party’s presentation and that no alternative
means for obtaining information is available.


 


(f)            Class Proceedings
and Consolidations.  No party hereto
shall be entitled to join or consolidate disputes by or against others in any
arbitration, except parties who have executed any Loan Document, or to include
in any arbitration any dispute as a representative or member of a class, or to
act in any arbitration in the interest of the general public or in a private
attorney general capacity.


 


(g)           Payment Of
Arbitration Costs And Fees.  The arbitrator shall award all costs and
expenses of the arbitration proceeding.


 


(h)           Miscellaneous.  To the maximum extent practicable, the AAA,
the arbitrators and the parties shall take all action required to conclude any
arbitration proceeding within 180 days of the filing of the dispute with the
AAA.  No arbitrator or other party to an
arbitration proceeding may disclose the existence, content or results thereof,
except for disclosures of information by a party required in the ordinary
course of its business or by applicable law or regulation.  If more than one agreement for arbitration by
or between the parties potentially applies to a dispute, the arbitration
provision most directly related to the Loan Documents or the subject matter of
the dispute shall control.  This
arbitration provision shall survive termination, amendment or expiration of any
of the Loan Documents or any relationship between the parties.