exhibit10-2.htm


    

      
        
           


        

        
           


          
            

          

        

        
           


        

      


      SIXTH AMENDED AND RESTATED
REVOLVING LINE OF CREDIT NOTE

      


      


      
        	
                November
      18, 2009

              	
                Dallas,
      Texas

              	 	$	200,000,000.00	 


      

      


      


      


      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 TWO
HUNDRED MILLION AND NO/100
DOLLARS ($200,000,000.00), 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 Sixth 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.

       

      “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 last
day of each December, March, June and September prior to November 17, 2010 (the
maturity date of this Note) and 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 November 17, 2010 (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.

       

      “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 17, 2010 shall end on November
17, 2010.

       

      “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 $100,000,000.00; provided, however, that, with
the prior written consent of Payee (which consent may or may not be granted in
Payee's sole and absolute discretion), the Total Commitment may be increased to
an amount not to exceed $200,000,000.00 as provided in the Loan
Agreement.  As of November 18, 2009, the Total Commitment is
$100,000,000.00.

       

      “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 17, 2010.

       

      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 three-quarters
of one percent (0.75%), 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 (including clause (c)
below), 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 in excess thereof), (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 $250,000 (or, if greater than $250,000, in integral multiples of $100,000
in excess thereof), and (c) notwithstanding anything to the contrary
contained herein, Maker shall not have the option to designate portions of the
unpaid principal balance hereof to bear interest at a rate based upon the WFB
Base Rate unless circumstances are such that designating such principal balance
to bear interest at a rate based upon the LIBOR Base Rate is not feasible or
practical for any of the reasons specified in paragraph 8(a), 8(b) or 8(c) hereof; 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.  Subject to the foregoing, the option (or obligation, as
applicable, if so required by clause (c) of this paragraph 7 above) 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.

       

      (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 LIBOR
Base Rate, with a LIBOR Interest Period which is the same as the then relevant
LIBOR Interest Period, to be applicable to such LIBOR Balance or, if but only if
Maker is then permitted to select a rate based upon the WFB Base Rate in
accordance with clause
(c) of this paragraph 7 above, to
have selected a rate based upon the WFB Base Rate to be applicable to such LIBOR
Balance, and, in each case, such LIBOR Balance shall thereafter continue to be a
LIBOR Balance or shall thereafter be a WFB Base Rate Balance (as applicable)
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 (or obligation, as applicable, if so required by clause (c) of this
paragraph 7
above), 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.

       

      (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.  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:   Julia
Harman, Vice President

      Fax:  (214)
953-3982

      


      Maker:                    Fossil
Partners, L.P.

      2323 North Central
Expressway

      Richardson,
Texas  75082

      Attention:  Mike L.
Kovar

      Fax:  (972)
498-9448

      


      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.  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 paragraph 19
hereof.

       

      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) Fifth Amended and Restated Revolving Line of Credit Note dated November 19,
2008, in the stated principal amount of $140,000,000, executed by Maker and
payable to the order of Payee, (b) 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,
(c) 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, (d) 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,
(e)  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 (f) 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.

       

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      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