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

  



 


11