Document:

Exhibit 10.2

 

FIFTH AMENDED AND RESTATED REVOLVING LINE OF
CREDIT NOTE

 

	
  November 19, 2008

  	
   

  	
  Dallas, Texas

  	
   

  	
  $140,000,000.00

  

 

FOR VALUE
RECEIVED, the undersigned (hereinafter called “Maker”) does hereby
unconditionally promise to pay to the order of Wells Fargo
Bank, National Association, a national banking association (“Payee”),
at its office at 1445 Ross Avenue, 3rd Floor, MAC T5303-031, Dallas, Texas
75202, the principal sum of ONE HUNDRED FORTY MILLION
AND NO/100 DOLLARS ($140,000,000.00), or such lesser amount as has
been loaned or advanced by Payee to Maker hereunder or under the Loan Agreement,
in lawful money of the United States of America, together with interest from
the date hereof until maturity at the rates per annum provided below.

 

1.                                       Definitions.  For purposes of this Fifth Amended and
Restated Revolving Line of Credit Note (this “Note”), unless the context
otherwise requires, the following terms shall have the definitions assigned to
such terms as follows and capitalized terms used herein but not defined herein
shall have the meanings therefor specified in the Loan Agreement:

 

“Business
Day” shall mean:

 

(a)                                  for
all purposes (other than as covered by clause (b) below) any day except
Saturday, Sunday or a day which in the United States is a legal holiday or a
day on which banking institutions are authorized or required by law or other
government action to close; and

 

(b)                                 with
respect to all notices and determinations in connection with, and payments of
principal and interest on, a LIBOR Balance, any day which is a Business Day
described in clause (a) above and which is also a day for trading by and
between banks in the interbank eurodollar market.

 

“Consequential
Loss” shall mean, with respect to Maker’s payment, or conversion to a
different Interest Option, of all or any portion of the then-outstanding
principal amount of any LIBOR Balance on a day other than the last day of the
LIBOR Interest Period related thereto, any loss, cost or expense incurred by
Payee in redepositing such principal amount, including the sum of (a) the
interest which, but for such payment, Payee would have earned in respect of
such principal amount so paid for the remainder of LIBOR Interest Period
applicable to such principal amount, reduced, if Payee is able to redeposit such
principal amount so paid for the balance of such LIBOR Interest Period, by the
interest earned by Payee as a result of so redepositing such principal amount,
plus (b) any expense or penalty incurred by Payee on redepositing such
principal amount.

 

“Contract
Rate” shall mean a rate of interest based upon the LIBOR Base Rate or WFB
Base Rate in effect at any time pursuant to an Interest Notice.

 

“Dollars”
and the sign “$” shall mean lawful currency of the United States of
America.

 

1

 

“Eurocurrency
Reserve Percentage” shall mean, with respect to each LIBOR Interest Period,
the maximum reserve percentage (expressed as a decimal) in effect on the first
day of any LIBOR Interest Period, as prescribed by the Board of Governors of
the Federal Reserve System (or any successor), for determining reserve
requirements applicable to “eurocurrency liabilities” pursuant to
Regulation D or any other then applicable regulation of the Board of
Governors (or any successor) which prescribes reserve requirements applicable
to “eurocurrency liabilities,” as presently defined in Regulation D, or any
eurocurrency funding.

 

“Event of
Default” shall mean an Event of Default as such term is defined in the Loan
Agreement.

 

“Excess
Interest Amount” shall mean, on any date, the amount by which (a) the
amount of all interest which would have accrued prior to such date on the
principal of this Note (had the applicable Contract Rate at all times been in
effect without limitation by the Maximum Rate) exceeds (b) the aggregate
amount of interest actually received by Payee on this Note on or prior to such
date.

 

“Federal
Funds Effective Rate” means, for any day, the weighted average of the rates
on overnight Federal funds transactions with members of the Federal Reserve
System arranged by Federal funds brokers, as published on the immediately
following Business Day by the Federal Reserve Bank of New York or, if such rate
is not published for any Business Day, the average of the quotations for the day
of the requested advance received by Payee from three Federal funds brokers of
recognized standing selected by Payee.

 

“Interest
Notice” shall mean the written notice given by Maker to Payee of the
Interest Options selected hereunder. 
Each Interest Notice shall specify the Interest Option selected, the
amount of the unpaid principal balance of this Note to bear interest at the
rate selected and, if the LIBOR Base Rate is specified, the length of the
applicable LIBOR Interest Period.

 

“Interest
Option” shall have the meaning assigned to such term in paragraph 7
hereof.

 

“Interest
Payment Date” shall mean (a) in the case of any WFB Base Rate Balance,
the maturity date of this Note, and (b) in the case of any LIBOR Balance,
the last day of the corresponding LIBOR Interest Period with respect to such
LIBOR Balance and the maturity date of this Note.

 

“LIBOR
Balance” shall mean any principal balance of this Note which, pursuant to
an Interest Notice, bears interest at a rate based upon the LIBOR Base Rate for
the LIBOR Interest Period specified in such Interest Notice.

 

“LIBOR Base
Rate” shall mean, with respect to each LIBOR Interest Period, on any day
thereof the quotient of (a) the LIBOR Rate with respect to such LIBOR
Interest Period, divided by (b) the remainder of 1.0 minus the
Eurocurrency Reserve Percentage in effect on such day.

 

2

 

“LIBOR
Interest Period” shall mean, with respect to any LIBOR Balance, a period
commencing: (a) on any date upon which, pursuant to an Interest Notice,
the principal amount of such LIBOR Balance begins to accrue interest at the
LIBOR Base Rate, or (b) on the last day of the immediately preceding LIBOR
Interest Period in the case of a rollover to a successive LIBOR Interest Period,
and ending one month, two months or three months thereafter as Maker shall
elect in accordance with the provisions hereof; provided, that: (i) any
LIBOR Interest Period which would otherwise end on a day which is not a
Business Day shall be extended to the next succeeding Business Day unless such
Business Day falls in another calendar month, in which case such LIBOR Interest
Period shall end on the next preceding Business Day; and (ii) any LIBOR
Interest Period which begins on the last Business Day of a calendar month (or
on a day for which there is no numerically corresponding day in the calendar
month at the end of such LIBOR Interest Period) shall, subject to clauses (iii) below
and (i) above, end on the last Business Day of a calendar month; and (iii) any
LIBOR Interest Period which would otherwise end after November 18, 2009 shall
end on November 18, 2009.

 

“LIBOR Rate”
shall mean, with respect to each LIBOR Interest Period, the rate of interest
determined by Payee to be the arithmetic average (rounded upward, if necessary
to the nearest 1/16th of 1%) of the per annum rates of interest at which Dollar
deposits with a maturity equal to the proposed LIBOR Interest Period (and in an
amount approximating the LIBOR Balance) would be offered to Payee by major
banks in the interbank eurodollar market at approximately 8:00 a.m.
(Dallas, Texas time) on the Business Day immediately preceding the first day of
such LIBOR Interest Period.

 

“Loan
Agreement” shall mean that certain Loan Agreement, dated as of September 23,
2004, by and among Maker, Payee and the subsidiaries and/or affiliates of Maker
from time to time a party thereto, as guarantors, as amended, restated,
supplemented and/or modified from time to time.

 

“Maximum
Rate,” as used herein, shall mean, with respect to the holder hereof, the
maximum non-usurious interest rate, if any, that at any time, or from time to
time, may be contracted for, taken, reserved, charged, or received on the
indebtedness evidenced by this Note under the laws which are presently in
effect of the United States and the State of Texas applicable to such holder
and such indebtedness or, to the extent permitted by law, under such applicable
laws of the United States and the State of Texas which may hereafter be in
effect and which allow a higher maximum non-usurious interest rate than
applicable laws now allow.  To the extent
that any of the optional interest rate ceilings provided in Chapter 303 of the
Texas Finance Code, as amended from time to time (as amended, the “Texas
Finance Code”), may be available for application to any loan(s) or
extension(s) of credit under this Note for the purpose of determining the
Maximum Rate hereunder pursuant to the Texas Finance Code, the applicable “monthly
ceiling” (as such term is defined in Chapter 303 of the Texas Finance Code)
from time to time in effect shall be used to the extent that it is so
available, and if such “monthly ceiling” at any time is not so available then
the applicable “weekly ceiling” (as such term is defined in Chapter 303 of the
Texas Finance Code) from time to time in effect shall be used to the extent
that it is so available.

 

“Regulation
D” shall mean Regulation D of the Board of Governors of the Federal Reserve
System from time to time in effect and shall include any successor or other
regulation relating to reserve requirements applicable to member banks of the
Federal Reserve System.

 

“Total
Commitment” shall mean $140,000,000.00.

 

3

 

“WFB”
shall mean Wells Fargo Bank, National Association, a national banking
association, and its successors and assigns.

 

“WFB Base
Rate” shall mean, on any date of determination, a variable rate of interest
per annum equal to the higher of either (a) the WFB Prime Rate, or (b) the
Federal Funds Effective Rate plus one-half of one percent (0.50%).

 

“WFB Base
Rate Balance” shall mean that portion of the principal balance of this Note
bearing interest at a rate based upon the WFB Base Rate.

 

“WFB Prime
Rate” shall mean the rate of interest most recently announced within Payee
at its principal office in San Francisco as its prime rate and is a base rate
for calculating interest on certain loans. 
The rate announced by Payee as its prime rate may or may not be the most
favorable rate charged by Payee to its customers. Each change in the WFB Prime
Rate shall become effective without prior notice to Maker automatically as of
the opening of business on the date such change is announced within Payee.

 

2.                                       Manner
of Borrowing; Advance Requests.  A
request for an advance under this Note shall be made, or shall be deemed to be
made, if Maker gives Payee notice of its intention to borrow, in which notice
Maker shall specify (a) the aggregate principal amount of such advance and
(b) the requested date of such advance, which shall be a Business
Day.  Any such request for an advance
shall be accompanied by an Interest Notice and shall be made (i) no later
than 11:00 a.m. Dallas, Texas time at least three (3) Business Days
prior to the requested advance date if the principal balance of such advance,
pursuant to such Interest Notice, is to bear interest at a rate based upon the
LIBOR Base Rate and (ii) no later than 11:00 a.m. Dallas, Texas time
on the requested advance date if the principal balance of such advance, pursuant
to such Interest Notice, is to bear interest at a rate based upon the WFB Base
Rate.  Notwithstanding anything herein to
the contrary, Payee shall have the right (but not the obligation) to permit or
effectuate advances under this Note as a part of its cash management services
provided to Maker and Payee shall have the right to refuse to accept a request
for an advance under this Note if at the date any such request is made or any
such advance is to be made there exists a default or an Event of Default under
this Note or the Loan Agreement.  As an
accommodation to Maker, Payee may permit telephonic requests for loans and
electronic transmittal of instructions, authorizations, agreements or reports
to Payee by Maker.  Unless Maker
specifically directs Payee in writing not to accept or act upon telephonic or
electronic communications from Maker, Payee shall have no liability to Maker
for any loss or damage suffered by Maker as a result of Payee’s honoring of any
requests, execution of any instructions, authorizations or agreements or
reliance on any reports communicated to Payee telephonically or electronically
and purporting to have been sent to Payee by any individual from time to time
designated by Maker as an authorized officer and Payee shall have no duty to
verify the origin or authenticity of any such communication.

 

3.                                       Payments
of Interest and Principal.  Interest
on the unpaid principal balance of this Note shall be due and payable on each
Interest Payment Date as it accrues.  The
unpaid principal balance of this Note shall be due and payable in full on November 18,
2009.

 

4

 

4.                                       Rates
of Interest.  The unpaid principal of
the WFB Base Rate Balance shall bear interest at a rate per annum which shall from
day to day be equal to the lesser of (a) the higher of either (i) the
WFB Base Rate in effect from day to day, plus  one and one-half of one percent (1.50%) or (ii) three percent (3.0%), or (b) the
Maximum Rate.  The unpaid principal of
each LIBOR Balance shall bear interest at a rate per annum which shall from day
to day be equal to the lesser of (A) the LIBOR Base Rate for the LIBOR
Interest Period in effect with respect to such LIBOR Balance plus  one-half of one percent (0.50%), or (B) the
Maximum Rate.  Each determination by
Payee of the LIBOR Base Rate shall, in the absence of manifest error, be
conclusive and binding.  Interest on this
Note with respect to each WFB Base Rate Balance and each LIBOR Balance shall be
calculated on the basis of the actual days elapsed in a year consisting of 360
days.

 

5.                                       Interest
Recapture.  If on each Interest
Payment Date or any other date on which interest payments are required
hereunder, Payee does not receive interest on this Note computed at the
Contract Rate because such Contract Rate exceeds or has exceeded the Maximum
Rate, then Maker shall, upon the written demand of Payee, pay to Payee in
addition to the interest otherwise required to be paid hereunder, on each
Interest Payment Date thereafter, the Excess Interest Amount (calculated as of
such later Interest Payment Date); provided that in no event shall Maker be
required to pay interest at a rate exceeding the Maximum Rate effective during
such period.

 

6.                                       Default
Rate of Interest.  From and after the
occurrence and during the continuance of an Event of Default, this Note shall
bear interest at any rate equal to or less than the Maximum Rate, as chosen by
Payee, at its discretion.  All past due
principal and, to the extent permitted by applicable law, interest upon this
Note shall bear interest at any rate equal to or less than the Maximum Rate, as
chosen by Payee, at its discretion.

 

7.                                       Interest
Option.  Subject to the provisions
hereof, Maker shall have the option (an “Interest Option”) to designate
portions of the unpaid principal balance hereof to bear interest at a rate
based upon the LIBOR Base Rate or WFB Base Rate as provided in paragraph 4
hereof; provided, however, that (a) except in the case of
any advance under this Note made by Payee to repay any negative cash balance of
Maker relating to cash management services provided by Payee, in the case of
selection of the WFB Base Rate, such advance shall not be less than $100,000 (or, if greater than $100,000 in integral multiples of $100,000)
or (b) in the case of the selection of the LIBOR Base Rate, the LIBOR
Balance for a particular LIBOR Interest Period shall not be less than $500,000 (or, if greater than $500,000, in integral multiples of $100,000); provided  further, however,
that no more than five (5) LIBOR Balances shall be outstanding at any one
time under this Note; provided  further, however, that the
sum of the aggregate amount of all LIBOR Balances and WFB Base Rate Balances
outstanding under this Note shall at no time exceed the Total Commitment.  The option of Maker to designate portions of
the principal of this Note to bear interest at a rate based upon the LIBOR Base
Rate or WFB Base Rate shall be exercised in the manner provided below:

 

(i)                                     At
Time of Borrowing.  Maker shall
request advances under this Note in accordance with, and in the manner
prescribed by, paragraph 2 hereof. 
In connection with any such advance request, Maker shall give Payee an
Interest Notice indicating the Interest Option selected with respect to the
principal amount of the proposed borrowing.

 

5

 

(ii)                                  At
Expiration of LIBOR Interest.  At
least three (3) Business Days prior to the termination of any LIBOR
Interest Period, Maker shall give Payee an Interest Notice indicating the
Interest Option to be applicable to the corresponding LIBOR Balance, as
appropriate, upon the expiration of such LIBOR Interest Period.  If the required Interest Notice shall not
have been timely received by Payee prior to the expiration of the then relevant
LIBOR Interest Period, Maker shall be deemed (A) to have selected a rate
based upon the WFB Base Rate to be applicable to such LIBOR Balance, and such
LIBOR Balance shall thereafter be a WFB Base Rate Balance upon the expiration
of such LIBOR Interest Period, and (B) to have given Payee notice of such
selections.

 

(iii)                               Conversion
From WFB Base Rate.  During any
period in which any portion of the principal hereof bears interest at a rate
based upon the WFB Base Rate, Maker shall have the right, on any Business Day
(the “Conversion Date”), to convert all or a portion of such principal
amount from the WFB Base Rate Balance to a LIBOR Balance by giving Payee an
Interest Notice of such selection at least three (3) Business Days prior
to such Conversion Date for any LIBOR Balance.

 

8.                                       Special
Provisions For LIBOR Pricing.

 

(a)                                  Inadequacy
of LIBOR Pricing.  If Payee
reasonably determines that, by reason of circumstances affecting the interbank
market generally, deposits in Dollars (in the applicable amounts) are not being
offered to Payee in the interbank market for any LIBOR Interest Period, or that
the rate at which such Dollar deposits are being offered will not adequately
and fairly reflect the cost to Payee of making or maintaining a LIBOR Balance
for such LIBOR Interest Period, Payee shall forthwith give notice thereof to
Maker, whereupon until Payee notifies Maker that the circumstances giving rise
to such suspension no longer exist, (i) the right of Maker to select an
Interest Option based upon the LIBOR Base Rate shall be suspended, and (ii) Maker
shall convert each LIBOR Balance into the WFB Base Rate Balance in accordance
with the provisions hereof on the last day of the then-current LIBOR Interest
Period applicable to such LIBOR Balance.

 

(b)                                 Illegality.  If, after the date hereof, the adoption of
any applicable law, rule or regulation, or any change therein, or any
change in the interpretation or administration thereof by any governmental
authority, central bank or comparable agency charged with the interpretation or
administration thereof, or compliance by Payee with any request or directive
(whether or not having the force of law) of any such authority, central bank or
comparable agency shall make it unlawful or impossible for Payee to make or maintain
a LIBOR Balance, Payee shall so notify Maker. 
Upon receipt of such notice, Maker shall convert such LIBOR Balance into
the WFB Base Rate Balance, on either (i) the last day of the then-current
LIBOR Interest Period applicable to such LIBOR Balance if Payee may lawfully
continue to maintain and fund such LIBOR Balance to such day, or (ii) immediately,
if Payee may not lawfully continue to maintain such LIBOR Balance to such day.

 

6

 

(c)                                  Increased
Costs for LIBOR Balances.

 

(i)                                     If,
after the date hereof, the adoption of any applicable law, rule or
regulation, or any change therein, or any change in the interpretation or
administration thereof by any governmental authority, central bank or
comparable agency charged with the interpretation or administration thereof, or
compliance by Payee with any request or directive (whether or not having the
force of law) of any such authority, central bank or comparable agency shall
subject Payee to any tax (including without limitation any United States
interest equalization or similar tax, however named), duty or other charge with
respect to the LIBOR Balances, this Note or Payee’s obligation to compute
interest on the principal balance of this Note at a rate based upon the LIBOR
Base Rate, or shall change the basis of taxation of payments to Payee of the
principal of or interest on the LIBOR Balances or any other amounts due under
this Note in respect of the LIBOR Balances or Payee’s obligation to compute the
interest on the balance of this Note at a rate based upon the LIBOR Base Rate
(except for changes in the rate on the tax on the overall net income of Payee
imposed by the jurisdiction in which Payee’s principal executive office is
located); or

 

(ii)                                  if,
after the date hereof, any governmental authority, central bank or other
comparable authority shall at any time impose, modify or deem applicable any
reserve (including, without limitation, any imposed by the Board of Governors
of the Federal Reserve System but excluding any reserve requirement included in
the Eurocurrency Reserve Percentage of Payee), special deposit or similar
requirement against assets of, deposits with or for the account of, or credit
extended by, Payee, or shall impose on Payee (or its eurocurrency lending
office) or the interbank market any other condition affecting a LIBOR Balance,
this Note or Payee’s obligation to compute the interest on the balance of this
Note at a rate based upon the LIBOR Base Rate; and the result of any of the
foregoing is to increase the cost to Payee of maintaining a LIBOR Balance, or
to reduce the amount of any sum received or receivable by Payee under this Note
by an amount deemed by Payee to be material, then, upon demand by Payee, Maker
shall pay to Payee such additional amount or amounts as will compensate Payee
for such increased cost or reduction, the amount of which, when aggregated with
interest to be paid under the LIBOR Balance, does not exceed the interest which
would have been payable had the balance been calculated using the WFB Base
Rate. Payee will promptly notify Maker of any event of which it has knowledge,
occurring after the date hereof, which will entitle Payee to compensation
pursuant to this paragraph.  A certificate
of Payee claiming compensation under this paragraph and setting forth in
reasonable detail the additional amount or amounts to be paid to Payee
hereunder shall be conclusive in the absence of manifest error.

 

(d)                                 Effect
on Balances.  If notice has been
given requiring a LIBOR Balance to be repaid or converted to the WFB Base Rate
Balance, then unless and until Payee notifies Maker that the circumstances
giving rise to such repayment no longer apply, the Interest Option shall be a
rate based upon the WFB Base Rate.  If
Payee notifies Maker that the circumstances giving rise to such repayment or
conversion no longer apply, Maker may thereafter select a rate based upon the
LIBOR Base Rate in accordance with the terms of this Note.

 

9.                                       Extension,
Place and Application of Payments. 
Subject to the terms of the definitions of LIBOR Interest Period, should
the principal of, or any interest on, this Note become due and payable on any
day other than a Business Day, the maturity thereof shall be extended to the
next succeeding Business Day, and interest shall be payable with respect to
such extension.

 

7

 

All payments of principal of,
and interest on, this Note shall be made by Maker to Payee at Payee’s principal
banking office in Dallas, Texas in federal or other immediately available
funds.  Payments made to Payee by Maker
hereunder shall be applied first to accrued interest and then to principal.

 

10.                                 Repayments
of WFB Base Rate Balances; Prepayments of LIBOR Balances; Consequential Loss.  Maker may repay any WFB Base Rate Balance at
any time without premium or penalty and without prior notice. Maker may prepay
any LIBOR Balance prior to the expiration of the applicable LIBOR Interest
Period upon three (3) Business Days prior written notice subject to Maker’s
payment of the Consequential Loss incurred by Payee as a result of the timing
of such prepayment; provided, however, that Maker shall not have the option to
designate any portion of the unpaid principal balance hereof to bear interest
at a rate based upon the LIBOR Base Rate for a period of ninety (90) days
following any such prepayment of any LIBOR Balance.  Any repayment or permitted prepayment of
principal made hereunder shall not be less than $100,000 (or, if greater than
$100,000, in integral multiples of $100,000) or such lesser amount as is then
outstanding under this Note.  Any
repayment or permitted prepayment of principal made hereunder shall be made
together with interest accrued through the date of such repayment or prepayment,
as applicable.

 

11.                                 Advance
Notice.  Payee will use its best
efforts to supply the Maker advance notice of the interest and/or principal
amounts that the Payee has calculated are due at the scheduled payment dates at
least one day in advance, assuming the unpaid principal balance and interest
rate remain the same until such scheduled payment date.  Notwithstanding the foregoing, no failure by
the Payee to give such notice will reduce the obligation of the Maker to pay
such amounts on the date they become due.

 

12.                                 Notices.  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 Maker or
Payee at the following respective addresses or such other address as such party
may from time to time designate by written notice to the other:

 

	
   

  	
  Payee:

  	
  Wells Fargo
  Bank, National Association

  
	
   

  	
   

  	
  1445 Ross
  Avenue, 3rd Floor

  
	
   

  	
   

  	
  MAC
  T5303-031

  
	
   

  	
   

  	
  Dallas,
  Texas 75202

  
	
   

  	
   

  	
  Attention:
  Marguerite C. Burtzlaff

  
	
   

  	
   

  	
  Fax: (214)
  953-3982

  
	
   

  	
   

  	
   

  
	
   

  	
  Maker:

  	
  Fossil
  Partners, L.P.

  
	
   

  	
   

  	
  2323 North
  Central Expressway

  
	
   

  	
   

  	
  Richardson,
  Texas 75082

  
	
   

  	
   

  	
  Attention:
  Mike L. Kovar

  
	
   

  	
   

  	
  Fax: (972)
  498-9448

  

 

8

 

13.                                 Legal
Fees.  If this Note is placed in the
hands of any attorney for collection, or if it is collected through any legal
proceeding at law or in equity or in bankruptcy, receivership or other court
proceedings, Maker agrees to pay all costs of collection including, but not
limited to, court costs and reasonable attorneys’ fees.

 

14.                                 Waivers.  Maker and each surety, endorser, guarantor
and other party ever liable for payment of any sums of money payable on this
Note, jointly and severally waive presentment and demand for payment, protest,
notice of protest, intention to accelerate, acceleration and nonpayment, or
other notice of default, and agree that their liability under this Note shall
not be affected by any renewal or extension in the time of payment hereof, or
in any indulgences, or by any release or change in any security for the payment
of this Note, and hereby consent to any and all renewals, extensions,
indulgences, releases or changes, regardless of the number of such renewals,
extensions, indulgences, releases or changes.

 

No waiver by
Payee of any of its rights or remedies hereunder or under any other document
evidencing or securing this Note or otherwise shall be considered a waiver of
any other subsequent right or remedy of Payee; no delay or omission in the
exercise or enforcement by Payee of any rights or remedies shall ever be
construed as a waiver of any right or remedy of Payee; and no exercise or
enforcement of any such rights or remedies shall ever be held to exhaust any
right or remedy of Payee.

 

15.                                 Acceleration.  If Maker fails or refuses to pay any part of
the principal of or interest upon this Note as the same become due, or upon the
occurrence and during the continuance of any Event of Default, then in any such
event the holder hereof may, at its option, declare the entire unpaid balance
of principal and accrued interest on this Note to be immediately due and
payable, and foreclose all liens and security interests securing payment hereof
or any part hereof.

 

16.                                 Interest
Laws; Spreading.  Any provision
herein, or in any document securing this Note, or any other document executed
or delivered in connection herewith, or in any other agreement or commitment,
whether written or oral, expressed or implied, to the contrary notwithstanding,
neither Payee nor any holder hereof shall in any event be entitled to contract
for, charge, receive or collect, nor shall or may amounts received hereunder be
credited, so that Payee or any holder hereof shall be paid, as interest, a sum
greater than the maximum amount permitted by applicable law to be charged to
the person, partnership, firm or corporation primarily obligated to pay this
Note at the time in question.  If any
construction of this Note or any document securing this Note, or any and all
other papers, agreements or commitments, indicate a different right given to
Payee or any holder hereof to contract for, charge, receive or collect any
larger sum as interest, such is a mistake in calculation or wording which this
clause shall override and control, it being the intention of the parties that
this Note, and all other instruments securing the payment of this Note or
executed or delivered in connection herewith, shall in all things comply with
applicable law and proper adjustments shall automatically be made
accordingly.  In the event that Payee or
any holder hereof ever contracts for, charges, receives, collects or applies, as
interest, any sum in excess of the Maximum Rate, if any, such excess amount
shall be applied to the reduction of the unpaid principal balance of this Note,
and, if this Note is paid in full, any remaining excess shall be paid to Maker.

 

9

 

In determining whether or not
the interest paid or payable, under any specific contingency, exceeds the
Maximum Rate, if any, Maker and Payee or any holder hereof shall, to the
maximum extent permitted under applicable law: 
(a) characterize any non-principal payment as an expense or fee
rather than as interest, (b) exclude voluntary prepayments and the effects
thereof, and (c) “spread” the total amount of interest throughout the
entire term of this Note; provided that if this Note is paid and performed in
full prior to the end of the full contemplated term hereof, and if the interest
received for the actual period of existence thereof exceeds the Maximum Rate,
if any, Payee or any holder hereof shall refund to Maker the amount of such
excess, or credit the amount of such excess against the aggregate unpaid
principal balance of all advances made by the Payee or any holder hereof under
this Note at the time in question.

 

17.                                 Choice
of Law.  This Note 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 Note.  In the
event of a dispute involving this Note 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 Payee’s current Arbitration Program described in Section 19
below.

 

18.                                 Loan
Agreement.  This Note is executed in
connection with the Loan Agreement 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.

 

19.                                 AGREEMENT FOR BINDING ARBITRATION.  The parties agree to be bound by the terms
and provisions of the Payee’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.

 

20.                                 Amendment
and Restatement.  This Note
increases, amends, modifies and restates, but does not extinguish the
indebtedness evidenced by, that certain (a) Fourth Amended and Restated
Revolving Line of Credit Note dated September 19, 2008, in the stated
principal amount of $100,000,000, executed by Maker and payable to the order of
Payee, (b) Third Amended and Restated Revolving Line of Credit Note dated September 20,
2007, in the stated principal amount of $100,000,000, executed by Maker and
payable to the order of Payee, (c) Second Amended and Restated Revolving
Line of Credit Note dated September 21, 2006, in the stated principal
amount of $100,000,000, executed by Maker and payable to the order of Payee, (d) 
Amended and Restated Revolving Line of Credit Note dated September 22,
2005, in the stated principal amount of $100,000,000, executed by Maker and
payable to the order of Payee, and (e) Revolving Line of Credit Note dated
September 23, 2004, in the stated principal amount of $50,000,000,
executed by Maker and payable to the order of Payee.

 

[THE REMAINDER OF PAGE INTENTIONALLY LEFT
BLANK]

 

10

 

IN WITNESS
WHEREOF, Maker has caused this Note to be duly executed and delivered in
Dallas, Texas, as of the date first above written.

 

	
   

  	
  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

  

 

11Exhibit
10.3

 

AMENDED AND RESTATED STOCK PLEDGE AGREEMENT

 

THIS AMENDED AND RESTATED STOCK
PLEDGE AGREEMENT (this “Agreement”) is entered into as
of November 19, 2008, between FOSSIL,
INC., a Delaware corporation (“Pledgor”), and WELLS FARGO BANK, NATIONAL ASSOCIATION, a
national banking association (“Pledgee”).

 

1.                                       In
consideration of any extension of credit heretofore or hereafter made by
Pledgee to Fossil Partners, L.P., a Texas limited partnership (“Borrower”),
and as collateral security for and to secure the prompt payment and performance
in full of all Secured Obligations (hereinafter defined), Pledgor undertakes to
assign and grant to Pledgee, and hereby assigns to Pledgee and grants to
Pledgee, a continuing security interest in sixty-five percent (65%) of all
issued and outstanding shares of capital stock and other equity interests (including,
without limitation, all shares of capital stock or other equity interests represented
by the certificates identified on Schedule I attached hereto) of
each of Fossil Europe B.V., Fossil Holdings (Gibraltar) Ltd. and Swiss
Technology Holding GmbH (each individually, a “Pledged Subsidiary” and
collectively, the “Pledged Subsidiaries”), whether now or hereafter
issued by any Pledged Subsidiary, together with all proceeds, products and
increases thereof and substitutions and replacements therefor (collectively,
the “Collateral”).  As used
herein, the term “Secured Obligations” shall mean and include any and
all indebtedness, obligations and liabilities of every kind and character of
Borrower and/or Pledgor to Pledgee, 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.  In addition to and without limiting the
generality of the foregoing, Pledgor and Pledgee hereby expressly acknowledge
and agree that the Secured Obligations shall include, without limitation, (a) all
loans and other indebtedness at any time and from time to time owed or owing by
Borrower to Pledgee under or in connection with (i) that certain Loan
Agreement dated as of September 23, 2004, by and among Borrower, certain
other entities affiliated with Borrower, as guarantors, and Pledgee, 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 (ii) 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 Pledgee, 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 Pledgee at any time and from time to time, and (b) all
obligations and other indebtedness at any time and from time to time owed or
owing by Pledgor to Pledgee under or in connection with (i) that certain
Amended and Restated Guaranty Agreement dated November 19, 2008, executed
by Pledgor and certain other guarantors to and in favor of Pledgee, as such
Amended and Restated Guaranty Agreement may be amended, increased, modified, supplemented,
renewed, extended, restated or replaced from time to time (the “Amended and
Restated Guaranty Agreement”) and (ii) this Agreement as it may be
amended, increased, modified, supplemented, renewed, extended, restated or
replaced from time to time.

 

1

 

2.                                       Pledgor
represents and warrants that (a) Pledgor holds absolute ownership of the
Collateral, free and clear of all liens, security interests and encumbrances; (b) there
are no restrictions upon the transfer of any of the Collateral, other than as
may appear and may be referenced on the face of the certificates or other than
arising under applicable state or federal securities laws or laws of the
jurisdiction in which the applicable Pledged Subsidiary is organized; (c) Pledgor
owns directly 100%  of the issued
and outstanding capital stock of each of the Pledged Subsidiaries; (d) there
are no existing obligations to issue capital stock or securities convertible
into capital stock of any Pledged Subsidiary and in no event will Pledgor permit
any such stock or securities to be issued prior to payment in full of the
Secured Obligations; and (e) there are no existing securities or
obligations of any Pledged Subsidiary the amount of which obligation is based,
in whole or in part, on the value of any Pledged Subsidiary’s capital stock or
any increase thereof, nor will Pledgor permit any such securities or
obligations to exist prior to payment in full of the Secured Obligations.

 

3.                                       In
furtherance of Pledgee’s security interest in the Collateral, Pledgor agrees to
deliver to Pledgee, on the date hereof (to the extent not previously delivered
to Pledgee), the stock certificates identified on Schedule I
attached hereto, together with stock powers duly executed in blank by Pledgor.  Pledgee acknowledges that, notwithstanding
Pledgor’s delivery to Pledgee of stock certificates which may represent in
excess of sixty-five percent (65%) of the issued and outstanding shares of
capital stock of any Pledged Subsidiary, Pledgee’s security interest hereunder
shall be limited to sixty-five percent (65%) of the issued and outstanding
shares of capital stock of each Pledged Subsidiary.

 

4.                                       With
respect to the Collateral and all proceeds, products and increases thereof and
substitutions therefor, Pledgor hereby appoints Pledgee, as Pledgor’s attorney-in-fact,
to arrange for the transfer of the Collateral on the books of each Pledged
Subsidiary to the name of Pledgee subsequent to the occurrence and during the
continuance of any Event of Default (as hereinafter defined) hereunder.  However, Pledgee shall be under no obligation
to do so.

 

5.                                       During
the term of this Agreement, provided no Event of Default has occurred and then
exists hereunder, Pledgor shall have the right, where applicable, to vote the
Collateral on all corporate questions, and Pledgee shall, if necessary, execute
due and timely proxies in favor of Pledgor for this purpose; provided, however,
that Pledgor will not be entitled to exercise any such right if the result
thereof could reasonably be expected to materially and adversely affect the
rights inuring to Pledgee hereunder or the rights and remedies of Pledgee under
this Agreement or the ability of Pledgee to exercise the same.

 

6.                                       Upon
the occurrence of any Event of Default and during the continuance thereof,
Pledgee may exercise all of the rights and privileges in connection with the
Collateral (including, without limitation, voting rights) to which a transferee
may be entitled as the record holder thereof, together with the rights and
privileges otherwise granted hereunder. 
Pledgee shall be under no obligation to exercise any of such rights or
privileges.

 

2

 

7.                                       If,
with the consent of Pledgee, Pledgor shall substitute or exchange other
securities in place of those herein mentioned, all of the rights and privileges
of Pledgee and all of the obligations of Pledgor with respect to the securities
originally pledged or held as Collateral hereunder shall be forthwith
applicable to such substituted or exchanged securities.

 

8.                                       Upon
the occurrence of any Event of Default and during the continuance thereof,
Pledgee shall be authorized to collect all dividends, interest payments and
other amounts (including amounts received or receivable upon redemption or repurchase)
that may be, or become, due on any of the Collateral.  If Pledgor receives any such dividends,
payments or amounts after the occurrence and during the continuance of an Event
of Default, it shall immediately endorse and deliver the same to Pledgee in the
form received.  All such amounts which
Pledgee receives and retains in accordance with the terms of this
paragraph 8 shall be applied to reduce the principal amount outstanding on
the Secured Obligations in inverse order of maturity thereof.  Pledgee is, furthermore, authorized to give
receipts in the name of Pledgor for any amounts so received.  Pledgee shall be under no obligation to
collect any such amounts.

 

9.                                       In
the event that, during the term of this Agreement, subscription warrants or any
other rights or options shall be issued in connection with the Collateral, such
warrants, rights or options shall be immediately assigned, if necessary or
requested by Pledgee, by Pledgor to Pledgee. 
If any such warrants, rights or options are exercised by Pledgor, all
new securities so acquired by Pledgor shall be immediately assigned to Pledgee,
shall become part of the Collateral and shall be endorsed to, delivered to and
held by Pledgee under the terms of this Agreement in the same manner as the
securities originally pledged.

 

10.                                 In
the event that, during the term of this Agreement, any share, dividend,
reclassification, readjustment or other change is declared or made in the
capital structure of any Pledged Subsidiary, all new, substituted and
additional shares, or other securities and related stock certificates, issued
by reason of any such change shall become part of the Collateral and shall be
endorsed to, delivered to and held by Pledgee under the terms of this Agreement
in the same manner as the securities originally pledged hereunder (except to
the extent that any such pledge by Pledgor to Pledgee would cause more than
sixty-five percent (65%) of the issued and outstanding shares of capital stock
of any Pledged Subsidiary to become subject to Pledgee’s security interest
hereunder).

 

11.                                 Pledgor
authorizes Pledgee, without notice or demand, and without affecting the
liability of Pledgor hereunder, from time to time to:

 

(a)                                  hold
security in addition to and other than the Collateral for the payment of the
Secured Obligations or any part thereof, and exchange, enforce, waive and
release any Collateral or any part thereof, or any other such security, or part
thereof;

 

(b)                                 release
any of the endorsers or guarantors of the Secured Obligations secured hereunder
or any part thereof, or any other person or entity whomsoever liable for or on
account of such Secured Obligations;

 

3

 

(c)                                  upon
the transfer of all or any part of the Secured Obligations secured hereunder,
Pledgee may assign all or any part of Pledgee’s security interest in the
Collateral and shall be fully discharged thereafter from all liability and responsibility
with respect to the Collateral so transferred, provided that in no event shall
Pledgee be liable for any act or omission or negligent act or negligent
omission with respect to the Collateral, other than acts or omissions
constituting gross negligence, willful misconduct or tortious breach of
contract.  The transferee of the
Collateral shall be vested with the rights, powers and remedies of Pledgee
hereunder, and, with respect to any Collateral not so transferred, Pledgee
shall retain all rights, powers and remedies hereby given; and

 

(d)                                 Pledgor
hereby waives any right to require Pledgee to proceed against Pledgor, Borrower
or any other person or entity whomsoever, to proceed against or exhaust any
collateral or any other security held by Pledgee, or to pursue any other remedy
available to Pledgee.  Pledgor further
waives any defense arising by reason of any liability or other defense of
Pledgor or of any other person or entity. 
Pledgor shall have no right to require Pledgee to marshal collateral.

 

12.                                 It
shall not be necessary for Pledgee to inquire into the powers of Pledgor or the
officers, directors or agents acting or purporting to act on behalf of Pledgor,
and any obligations made or created in reliance on the professed exercise of
such powers shall be secured hereunder.

 

13.                                 To
the extent permitted by applicable law and in the Loan Agreement, Pledgee shall
be under no duty or obligation whatsoever to make or give any presentments,
demands for performance, notices of non-performance, protests, notices of
protest, or notices of dishonor in connection with the Secured Obligations.

 

14.                                 The
occurrence of an event of default under and as defined in the Loan Agreement
shall, at the option of Pledgee, constitute an “Event of Default” under
this Agreement.

 

15.                                 Upon
the occurrence and during the continuance of any Event of Default, the Secured
Obligations shall, at the option of Pledgee, become immediately due and
payable, and Pledgee shall have all rights and remedies as a secured party
under any UCC (as hereinafter defined), and such additional rights and remedies
to which a secured party is entitled under the laws in effect in all relevant
jurisdictions, and, in this connection, subject to applicable regulatory and
legal requirements, Pledgee may sell the Collateral, or any part thereof, at
public or private sale or at any broker’s board or on any securities exchange
or electronic trading facility, for cash, upon credit or for future delivery as
Pledgee shall deem appropriate.  Pledgee
shall be authorized at any such sale (if it deems it advisable to do so) to restrict
the prospective bidders or purchasers to persons or entities who will represent
and agree that they are purchasing the Collateral for their own account for
investment and not with a view to the distribution or sale thereof, and, upon
consummation of any such sale, Pledgee shall have the right to assign, transfer
and deliver to the purchaser or purchasers thereof the Collateral so sold.  Each such purchaser at any such sale shall
hold the property sold absolutely free from any claim or right on the part of
Pledgor, and, to the extent permitted by applicable law, Pledgor hereby waives
all rights of redemption, stay, valuation and appraisal Pledgor now has or may
at any time in the future have under any rule of law or statute now
existing or hereafter enacted.  Pledgee
shall give each person or entity entitled to notice of such sale under Section 9-611(c) of
the UCC ten (10) days prior written notice (which Pledgor agrees is
reasonable notice within the meaning of Section 9-612 of the UCC) of
Pledgee’s intention to make any sale of Collateral.  

 

4

 

Such notice shall conform to the requirements of Section 9-613
of the UCC.  Any such public sale shall
be held at such time or times within ordinary business hours and at such place
or places as Pledgee may fix and state in the notice of such sale.  At any such sale, the Collateral, or portion
thereof, to be sold may be sold in one lot as an entirety or in separate
parcels, as Pledgee may (in its sole and absolute discretion) determine.  Pledgee shall not be obligated to make any
sale of any Collateral if it shall determine not to do so, regardless of the
fact that notice of sale of such Collateral shall have been given.  Pledgee may, without notice or publication,
adjourn any public or private sale or cause the same to be adjourned from time
to time by announcement at the time and place fixed for sale, and such sale
may, without further notice, be made at the time and place to which the same
was so adjourned.  In case any sale of
all or any part of the Collateral is made on credit or for future delivery, the
Collateral so sold may be retained by Pledgee until the sale price is paid in
full by the purchaser or purchasers thereof, but Pledgee shall not incur any
liability in case any such purchaser or purchasers shall fail to take up and
pay for the Collateral so sold and, in case of any such failure, such
Collateral may be sold again upon like notice. 
At any public (or, to the extent permitted by applicable law, private)
sale made pursuant to this Section, Pledgee may bid for or purchase, free from
any right of redemption, stay or appraisal on the part of Pledgor (all said
rights being also hereby waived and released), the Collateral or any part
thereof offered for sale and may make payment on account thereof by using any
claim then due and payable to it from Pledgor as a credit against the purchase
price, and it may, upon compliance with the terms of sale, hold, retain and
dispose of such property without further accountability to Pledgor therefor.  For purposes hereof, (a) a written
agreement to purchase the Collateral or any portion thereof shall be treated as
a sale thereof, (b) Pledgee shall be free to carry out such sale pursuant
to such agreement, and (c) Pledgor shall not be entitled to the return of the
Collateral or any portion thereof subject thereto, notwithstanding the fact
that, after Pledgee shall have entered into such an agreement, all Events of
Default shall have been remedied and the Secured Obligations paid in full.  As an alternative to exercising the power of
sale herein conferred upon it, Pledgee may proceed by a suit or suits at law or
in equity to foreclose upon the Collateral and to sell the Collateral or any
portion thereof pursuant to a judgment or decree of a court or courts having competent
jurisdiction or pursuant to a proceeding by a court-appointed receiver.  Any sale pursuant to the provisions of this Section shall
be deemed to be a commercially reasonable disposition as provided in Section 9-610
of the UCC.  Pledgee shall receive the
proceeds of any such sale or sales, and, after deducting therefrom any and all
reasonable costs and expenses incurred in connection with the sale thereof,
apply the net proceeds toward the payment of the Secured Obligations secured
hereunder, including interest, reasonable attorneys’ fees and all other
reasonable costs and expenses incurred by Pledgee hereunder and under any other
agreement between Pledgor and Pledgee. 
If such proceeds be more than sufficient to pay the same, then, in case
of a surplus, such surplus shall be accounted for and paid over to Pledgor,
provided Pledgor be not then indebted to Pledgee otherwise under this
Agreement, any other Loan Document or any other agreement or for any cause
whatsoever.  As used herein, the term “UCC”
shall mean (i) the Uniform Commercial Code as in effect from time to time
in the State of Texas and (ii) in any case where mandatory choice or law rules in
the Texas Uniform Commercial Code require the application of the Uniform
Commercial Code of another jurisdiction, the Uniform Commercial Code of such
other jurisdiction as in effect from time to time.

 

5

 

16.                                 In
view of the position of Pledgor in relation to the Collateral, or because of
other current or future circumstances, a question may arise under the
Securities Act of 1933, as now or hereafter in effect, or any similar statute
in any other jurisdiction or hereafter enacted analogous in purpose or effect
(such Act and any such similar statute as from time to time in effect being
called the “Securities Laws”) with respect to any disposition of the
Collateral permitted hereunder.  Pledgor
understands that compliance with the Securities Laws might very strictly limit
the course of conduct of Pledgee if Pledgee were to attempt to dispose of all
or any part of the Collateral, and might also limit the extent to which or the
manner in which any subsequent transferee of any Collateral could dispose of
the same.  Similarly, there may be other
legal restrictions or limitations affecting Pledgee in any attempt to dispose
of all or part of the Collateral under applicable blue sky or other state
securities laws or similar laws analogous in purpose or effect.  Pledgor recognizes that, in light of such
restrictions and limitations, Pledgee may, with respect to any sale of the
Collateral, limit the purchasers to those who will agree, among other things,
to acquire such Collateral for their own account, for investment and not with a
view to the distribution or resale thereof. 
Pledgor acknowledges and agrees that, in light of such restrictions and
limitations, Pledgee, in its sole and absolute discretion, (a) may proceed
to make such a sale whether or not a registration statement for the purpose of
registering such Collateral or part thereof shall have been filed under the
Securities Laws and (b) may approach and negotiate with a single potential
purchaser or a limited number of potential purchasers to effect such sale.  Pledgor acknowledges and agrees that any such
sale might result in prices and other terms less favorable to the seller than
if such sale were a public sale without such restrictions.  In the event of any such sales, Pledgee shall
incur no responsibility or liability for selling all or any part of the
Collateral at a price that Pledgee, in its sole and absolute discretion, may in
good faith deem reasonable under the circumstances, notwithstanding the
possibility that a substantially higher price might have been realized if the
sale were deferred until after registration under the Securities Laws or if
more than a single purchaser or a limited number of purchasers were
approached.  The provisions of this Section will
apply notwithstanding the existence of a public or private market upon which
the quotations or sales prices may exceed substantially the price at which
Pledgee sells.

 

17.                                 Pledgor
agrees to execute and deliver to Pledgee such financing statements,
continuation statements or amendments of financing statements, each in form
reasonably acceptable to Pledgee, as Pledgee may from time to time reasonably
request, or as are necessary or desirable in the opinion of Pledgee to
establish and maintain a valid, enforceable, first priority perfected security
interest in the Collateral as provided herein, and the other rights and
security contemplated hereby, all in accordance with the UCC as enacted in any
and all relevant jurisdictions, or any other relevant law.  Pledgor hereby authorizes Pledgee to file any
such financing statements without the signature of Pledgor where permitted by
law.  Pledgee is hereby authorized to
make filings with such recording offices and such other governmental
authorities as Pledgee may consider necessary or appropriate for the purpose of
perfecting, confirming, continuing, enforcing and/or protecting the security
interests and liens granted to Pledgor by Pledgee.  Pledgor will pay any applicable filing fees,
recordation taxes and related expenses relating to the Collateral.

 

6

 

18.                                 Pledgor
hereby constitutes and appoints Pledgee its true and lawful attorney,
irrevocably, with full power after the occurrence of and during the continuance
of an Event of Default (in the name of Pledgor or otherwise) (a) to act,
require, demand, receive, compound and give acquittance for any and all moneys
and claims for moneys due or to become due to Pledgor under or arising out of
the Collateral, (b) to endorse any checks or other instruments or orders
in connection therewith, (c) to file any claims or take any action or
institute any proceedings which Pledgee may deem to be necessary or advisable to
protect its interests and (d) to execute, deliver, record or file any
other document or instrument and take such other actions as it considers
appropriate in connection with the perfection, protection or enforcement of its
security interest in the Collateral, the possession, maintenance, preparation
for sale, foreclosure, sale, lease, exchange or other disposition or release of
any Collateral or the exercise of any rights or remedies provided in this
Agreement, which appointment as attorney is coupled with an interest.

 

19.                                 Upon
indefeasible repayment in full in cash of the Secured Obligations, Pledgee will
promptly, at Pledgor’s expense, deliver all of the Collateral to Pledgor along
with all instruments of assignment executed in connection therewith, and
execute and deliver to Pledgor such documents as Pledgor shall reasonably
request to evidence Assignor’s release of Pledgee’s security interest
hereunder.

 

20.                                 Choice
of Law.  This Agreement 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 Agreement.  In the
event of a dispute involving this Agreement 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 Pledgee’s current Arbitration Program described in Section 22
below.

 

21.                                 Loan
Agreement.  This Agreement is
executed in connection with the Loan Agreement and Pledgee 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.

 

22.                                 AGREEMENT FOR BINDING ARBITRATION.  The parties agree to be bound by the terms
and provisions of Pledgee’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.

 

7

 

IN WITNESS WHEREOF, Pledgor and Pledgee have executed
this Agreement as of the date first above written.

 

	
   

  	
  PLEDGOR:

  
	
   

  	
   

  
	
   

  	
  FOSSIL, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Mike L. Kovar

  
	
   

  	
  Name:

  	
  Mike L. Kovar

  
	
   

  	
  Title:

  	
  Executive Vice President, Chief Financial

  Officer and Treasurer

  
	
   

  	
   

  
	
   

  	
  PLEDGEE:

  
	
   

  	
   

  
	
   

  	
  WELLS FARGO BANK, NATIONAL

  ASSOCIATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Marguerite C. Burtzlaff

  
	
   

  	
  Name:

  	
  Marguerite C. Burtzlaff

  
	
   

  	
  Title:

  	
  Vice President

  

 

8

 

SCHEDULE I

 

(to Amended and Restated Stock Pledge
Agreement)

 

	
  Issuer of Pledged Capital Stock

  	
   

  	
  Jurisdiction of Organization of Issuer

  
	
   

  	
   

  	
   

  
	
  Fossil Europe B.V.

  	
   

  	
  Netherlands

  
	
  Fossil Holdings (Gibraltar) Ltd.

  	
   

  	
  Gibraltar

  
	
  Swiss Technology Holding GmbH

  	
   

  	
  Switzerland

  

 

	
  Class or Other Description of

  Pledged Capital Stock

  	
   

  	
  Number of Shares or

  Units of Capital Stock

  Issued and Outstanding

  	
   

  	
  Number of Shares or

  Units of Capital Stock

  Pledged

  	
   

  	
  Stock Certificate No. evidencing

  Capital Stock Pledged

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

9

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