Document:

exhibit_10-2.htm

     

     
      
        

      

    

    
 

    THIRD
      AMENDED AND RESTATED REVOLVING LINE OF CREDIT NOTE

     

     

    September
      20,
      2007                                                                                                                     
Dallas,
      Texas                                                                                                          
                  
$100,000,000.00

     

    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 MILLION AND
      NO/100 DOLLARS ($100,000,000.00), or such lesser amount as has been
      loaned or advanced by Payee to Maker hereunder, 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 Third 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:

     

    “Business
      Day” shall mean:

     

    (i)  for
      all
      purposes (other than as covered by clause (ii) 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;

     

    (ii)  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 (i) 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 (i) 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 (ii) 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 (i) 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 (ii) 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 (i) in the case of any WFB Base Rate Balance, the
      fifteenth (15th) day of the last month of each calendar quarter during the
      term
      hereof, commencing December 15, 2007, and at the maturity of this Note, and
      (ii) in the case of any LIBOR Balance, the last day of the corresponding LIBOR
      Interest Period with respect to such LIBOR Balance and at the maturity 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 (i) the LIBOR Rate with respect to such LIBOR
      Interest Period, divided by (ii) 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: (i) 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 (ii) 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: (A) 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 (B) 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 (C) below and (A) above, end on
      the
      last Business Day of a calendar month; and (C) any LIBOR Interest Period which
      would otherwise end after September 19, 2008 shall end on
      September 19, 2008.

     

    “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.

     

    “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 (i)
      the
      aggregate principal amount of such advance and (ii) 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 or 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 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 September 19, 2008.

     

    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 (i) the higher of  either (a) the WFB Base Rate in
      effect from day to day, minus one percent (1.00%) or
      (b) three percent (3.0%), or (ii) 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 (i) 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 (ii) 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 (i) 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 (ii) 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);
providedfurther,however,
      that no more than five (5) LIBOR
      Balances shall be outstanding at any one time under this Note;
providedfurther, 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.

     

    (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.

     

    (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:  Susan
      N. Jenull,
      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 non-payment, 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 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 ask for, demand or receive 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 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, (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
      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, that certain 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 that
      certain 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]

     

     

     

     

    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., its general partner

     

    By: /s/
      Michael
      Barnes                                                    
   

         
Michael
      Barnes, Presidentexv4w2

 

Exhibit 4.2

AGREEMENT AND PLAN OF REORGANIZATION

     This AGREEMENT AND PLAN OF REORGANIZATION (this “Agreement”) is effective as of
the 29th day of June, 2007, by and among National Welders Supply Company, Inc., a North
Carolina corporation (the “National Welders”), the undersigned Series A Preferred
Shareholders of National Welders (the “Shareholders”) and Airgas, Inc. a Delaware
corporation (“Airgas”). Capitalized terms used herein but not otherwise defined herein
shall have the meanings ascribed to such terms in those certain Amended and Restated Articles of
Incorporation of National Welders (the “Articles”).

     WHEREAS, the Shareholders own a majority of the outstanding shares of Series A Preferred Stock
of National Welders (the “Series A Stock”);

     WHEREAS, Airgas owns all of the outstanding shares of Common Stock of National Welders; and

     WHEREAS, the undersigned parties desire to enter into this Agreement to reflect their
agreement in respect of matters relating to a merger (the “Merger”) of Airgas NWS, Co., a
Delaware corporation that is a wholly-owned subsidiary of Airgas (“Newco”), into National
Welders; and

     WHEREAS, as a result of the Merger, National Welders will become a wholly owned subsidiary of
Airgas and all holders of Series A Stock and all holders of Series B Preferred Stock of National
Welders (the “Series B Stock;” the Series A Stock and the Series B Stock are referred to
herein as the “Preferred Stock”) will receive Airgas Common Stock in exchange for their
shares of Preferred Stock;

     NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged by the parties, the undersigned parties hereby agree, intending to be legally
bound, as follows:

     1. Reorganization. The parties desire to effect a merger of Newco into National
Welders consistent with this Agreement. The parties intend for the Merger to be treated as a tax
free reorganization as defined in Section 386(a)(1)(B) of the Internal Revenue Code of 1986, as
amended (the “Code”), in accordance with Revenue Ruling 67-448 of the Internal Revenue
Service. In furtherance of the foregoing, Airgas represents and agrees that (i) Newco is a newly
formed, wholly-owned subsidiary of Airgas, which was or will be capitalized by Airgas solely with
shares of voting common stock of Airgas sufficient to effectuate the Merger, (ii) immediately prior
to the Merger, the only class of stock of Newco will be voting common stock, (iii) Airgas does not
presently intend to liquidate or merge National Welders following the Merger, (iv) Airgas and
National Welders shall each continue their respective business subsequent to the Merger to the
extent consistent with the parties intention that the Merger be treated as a tax free
reorganization; and (v) upon the effectiveness of the Merger, Airgas will

 

 

control National Welders within the meaning of Section 368(c) of the Code. As part of the
Merger, each share of common stock of Newco which is issued and outstanding on the effective date
of the Merger (the “Effective Date”) shall automatically and without further action be cancelled
and each share of common stock of National Welders which is issued and outstanding on the Effective
Date shall automatically and without further action remain outstanding. In addition, as part of
the Merger, each share of Preferred Stock shall automatically and without further action be
converted into a right to receive Airgas Common Stock at the rate of .7724 shares of Airgas Common
Stock for each share of Preferred Stock. The parties agree that the Merger shall be consummated on
July 2, 2007 or July 3, 2007 as selected by Airgas, if all requisite National Welders corporate
approvals for the Merger have been obtained in time to permit the Merger to be consummated on the
date so selected. If National Welders has not received all necessary consents from the holders of
the Preferred Stock in time to permit the Merger to be consummated on or before July 3, 2007, then
on either July 3, 2007 or July 5, 2007, as selected by Airgas, National Welders shall send out
notices of a meeting of shareholders to be held on July 16, 2007 at 10:00 a.m. in accordance with
the applicable provisions of North Carolina law and the Merger shall be consummated on July 16,
2007 unless an earlier date is agreed to by Judith Carpenter and Airgas in which case the Merger
shall be consummated on such earlier date provided all requisite approvals have been obtained. At
the meeting described above, the Shareholders agree to vote their shares of Series A Stock in favor
of the Merger.

     2. Registration of Airgas Stock. Airgas agrees to make its commercially reasonable
best efforts to have the Airgas Common Stock received by the holders of Preferred Stock as a result
of the Merger effectively registered as soon as reasonably practicable. Prior to such
registration, the Airgas Common Stock shall be represented by a single certificate in the name of
Judith Carpenter, individually and as agent.

     3. National Welders Name Usage. The parties acknowledge and agree that the National
Welders trade name (the “Trade Name”) has significant value in the Restricted Territory (as
defined in the Joint Venture Agreement dated June 28, 1996 by and among Airgas, National Welders
and certain shareholders of National Welders). Airgas covenants and agrees to continue, or to
cause National Welders to continue, to utilize the Trade Name in the Restricted Territory in the
operation of the industrial gas business (i) for so long as Airgas believes that such utilization
has value to the business, (ii) as long as such utilization does not unreasonably interfere with
any corporate restructuring by Airgas, and (iii) notwithstanding the foregoing, for a period ending
no sooner than the first anniversary of the date of this Agreement. Such utilization shall
include, without limitation, signage on the stores and the vehicles used in the business that
reflects the Trade Name as well as the name Airgas.

     4. Entire Agreement. This Agreement reflects the entire understanding of the parties
hereto with respect to its subject matter. This Agreement may be amended or modified only by a
written instrument duly executed by the parties hereto. The Section headings contained in this
Agreement are for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.

     5. Assignment; Successors. This Agreement may not be assigned by any party hereto
without the prior written consent of the all other parties. This Agreement will be binding upon,
inure to the benefit of, and be enforceable by, the respective successors and permitted

2

 

assigns of the parties hereto. Any attempted assignment in violation of this Section 5 shall
be null and void.

     6. Governing Law. This Agreement shall be governed by and construed in accordance
with the laws of the State of North Carolina, without giving effect to its rules governing conflict
of laws.

     7. Miscellaneous. Each party hereto shall be responsible for the payment of its own
fees, costs and expenses incurred in connection with the negotiation and consummation of the
transactions contemplated hereby and shall not be liable to the other party or parties for the
payment of any such fees, costs and expenses. This Agreement may be executed in any number of
counterparts, and each such counterpart hereof shall be deemed to be an original instrument, and
all such counterparts together shall constitute but one agreement. Signature pages to this
Agreement may be delivered by facsimile, and such signature pages shall be effective as if they
were original signature pages. Any party to this Agreement may, by written notice to the other
parties hereto, waive any provision of this Agreement from which such party is entitled to receive
a benefit. The waiver by any party hereto of a breach by another party of any provision of this
Agreement shall not operate or be construed as a waiver of any subsequent breach by such other
party of such provision or any other provision of this Agreement.

[Remainder of Page Left Intentionally Blank]

3

 

     IN WITNESS WHEREOF, the undersigned parties have executed this Agreement on the date set forth
above.

	 	 	 	 	 	 	 	 	 
	 	 	AIRGAS:	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	Airgas, Inc.	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	/s/ Thomas M. Smyth	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name:	 	Thomas M. Smyth	 	 
	 

	 	 	 	Title:
	 	Vice President
	 	 
	 

	 	 	 	 	 	 

	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	NATIONAL WELDERS:	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	National Welders Supply Company, Inc.	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Andrew R. Cichocki	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name:
	 	Andrew R. Cichocki	 	 
	 

	 	 	 	Title:
	 	President/CEO
	 	  
	 

	 	 	 	 	 	 

	 	 

	 	 	 	 	 
	 	SHAREHOLDERS:

 	 
	 	/s/
Judith Carpenter	 
	 	Judith Carpenter 	 
	 	 	 	 
	 	James A. Turner, Jr. Revocable Trust Under

Agreement Dated November 20, 1998

 	 
	 	 	 
	 	By:  	/s/
Mark R. Bernstein	 
	 	 	Mark R. Bernstein, Trustee 	 
	 	 	 	 
	 	James A. Turner, Jr. Insurance Trust

Dated June 27, 1986

 	 
	 	 	 
	 	By:  	/s/
Mark R. Bernstein	 
	 	 	Mark R. Bernstein, Trustee 	 
	 	 	 	 
	 	 	 

4

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