Exhibit 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.
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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.
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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
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