Document:

ex10-2.htm

     

     

    
      

    

    Exhibit 10.2

     

    

    FOURTH AMENDED AND RESTATED
REVOLVING LINE OF CREDIT NOTE

    

    

    September
19,
2008                                                                            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 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 Fourth 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:

     

    (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; and

     

    (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, 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 November 19, 2008 shall end on November 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 November 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);
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.

     

    (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:  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

    

    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 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
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, 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.

    Title:        General
Partner

    

    

     By:           

     Name:     Randy
S. Hyne

    
      	
               

            	 	
              Title:

            	
              Vice
      President, General Counsel and
Secretaryex10-1.htm

    EXHIBIT
10.1

     

     

    
      	
              1695 South River
      Road          T 847 827
      9494

              Des
      Plaines, IL 60018 USA    F 847 827 1264

              schawk.com

            	
               

            

    

     

     

    September
18, 2008

     

    Mr.
Timothy J. Cunningham

    [home
address]

    [home
address]

     

    

    Dear
Tim:

     

    On behalf
of Schawk, Inc. (the “Company”), I am
pleased to confirm the terms of your employment arrangement in this letter
agreement (the “Agreement”).

     

    
      	
              1.

            	
              Term of
      Employment.  Your employment with the Company under this
      Agreement shall be for a period commencing on September 18, 2008 (the
      “Effective
      Date”) and ending as provided in Section 7 hereof (the “Employment
      Term”).

            

    

     

    
      	
              2.

            	
              Title and
      Duties.  During the Employment Term, you will serve as
      Executive Vice President and Chief Financial Officer of the Company,
      reporting to the Board of Directors of the Company (the “Board”), with
      such duties and responsibilities as are customarily assigned to such
      position, and such other duties and responsibilities not inconsistent
      therewith as may from time to time be assigned to you by the
      Board.  During the Employment Term, you agree that you will
      devote substantially all of your business time, energy, and skill to the
      business of the Company and shall use your reasonable best efforts to
      promote the Company’s best
interest.

            

    

     

    
      	
              3.

            	
              Compensation.

            

    

     

    
      	
               
      

            	
              (a)

            	
              Base
      Salary.  During the Employment Term, you will receive an
      annual base salary of $375,000, payable in accordance with the Company’s
      regular payroll practices.  Your performance and salary will be
      reviewed annually consistent with other senior executives of the
      Company.  Your base salary, as increased from time to time,
      shall be referred to herein as the “Base
      Salary.”

            

    

     

    
      	
               
      

            	
              (b)

            	
              Annual
      Bonus.

            

    

     

    
      	
               
      

            	
              (i)

            	
              For
      the period beginning on the Effective Date and ending on December 31,
      2008, you will be eligible for a bonus of $125,000, payable in January
      2009 (the “2008
      Bonus”).  Whether or not the 2008 Bonus is earned shall
      be based upon the achievement of certain performance goals and objectives
      as mutually determined by the Chief Executive Officer of the Company and
      you.

            

    

     

    
      
        	
                 
      

              	
                (ii)

              	
                The
      Company will not pay the portion of the Tatum Bonus you would be eligible
      to receive in September 2008 with respect to the services provided by you
      as a partner in the Chicago practice of Tatum,
  LLC.

              

      

    

     

    

    
      
        
           

        

        
          
          

          
            

          

        

        
           

        

    

     

    
      	
               
      

            	
              (iii)

            	
              Starting
      on January 1, 2009, during the Employment Term, you will be eligible to
      participate in the Schawk AIP program, as described in the Company’s 2008
      Proxy per the terms in place from time to time.  The AIP program
      will provide the opportunity for you to earn an annual bonus at the rates
      set forth in the AIP program.  As of the Effective Date, the
      rates for you are currently 40% of Base Salary at Threshold, 60% of Base
      Salary at Target, and 90% of Base Salary at
  Maximum.

            

    

     

    
      	
            	
               

            	
              Except as explicitly set
      forth herein, all bonuses are discretionary and are not earned until
      approved by the Board or the Compensation Committee of the Board. Bonuses
      will be payable only if you are in the Company’s employ on the regular or
      specifically described bonus payment date.  Bonuses, if any,
      will be paid as soon as practicable, but no later than March 15th
      following the end of the calendar year in which the bonus was
      earned.

            

       

    

    
      	
               
      

            	
              (c)

            	
              Annual Incentive
      Compensation.  Starting on January 1, 2009, during the
      Employment Term, you will be eligible to participate in any annual or
      long-term, cash or equity based, incentive plan or other arrangements of
      the Company provided to Executive Vice Presidents and other senior
      executives of the Company, as they exist from time-to-time, including the
      Schawk, Inc. 2006 Long-Term Incentive Plan (together with any additional
      and successor Company compensation plans, the “Schawk 2006
      LTIP”).  Each award granted under the Schawk 2006 LTIP
      shall be evidenced by an award agreement that shall specify the terms and
      conditions of each award granted, which terms and conditions shall be
      those customarily provided for such awards to senior executives of the
      Company, except as otherwise provided
herein.

            

    

     

    
      	
               
      

            	
              (d)

            	
              Sign-On
      Award.  On the Effective Date, you will receive a “Sign-On Award”
      of equity securities having a value equal to a total of $375,000 (the
      “$375,000
      Value”) consisting of the following awards issued under the Schawk
      2006 LTIP:

            

    

     

    
      	
            	
              (i)

            	31,250 stock options priced at the date of this
      Agreement, and

       

      
        	
              	
                (ii)

              	12,500 shares of restricted
stock,

         

      

    

    
      
        
          
            	
                     
      

                  	
                     

                  	
                    
                      subject
      to your execution of the grant agreements.  Each award granted
      under the Sign-On Award will be subject to a three (3) year cliff vesting
      schedule with 100% vesting on the third anniversary of the Effective Date
      and will be evidenced by an award agreement that shall specify the terms
      and conditions of each award granted, which terms and conditions shall be
      those customarily provided for such awards to senior executives of the
      Company, except as otherwise provided
  herein.

                    

                  

          

        

      

       

      
        
          	
                   
      

                	
                  (e)

                	
                  
                    Change in
      Control.  During the Employment Term, upon a Change in
      Control of the Company (as defined below), you shall receive accelerated
      vesting of (and if applicable, have the right to exercise) 100% of any
      then-unvested equity and other awards issued under Schawk 2006 LTIP held
      by you immediately prior
to

                  

                

        

      

    

    
 

    
      
        
           

        

        
          2

          
            

          

        

        
           

        

    

     

    
      
        	
                 
      

              	
                 

              	
                
                  the
      Change in Control.  Any and all stock options issued under the
      Schawk 2006 LTIP that vest pursuant to this subsection (e) shall remain
      exercisable for a minimum of 120 days following the vesting date and, to
      the extent that any award incorporates a performance element that has not
      previously been measured, target performance shall be deemed to have been
      achieved.  For purposes of this Agreement, “Change in
      Control” means the same definition as set forth in the Schawk 2006
      LTIP as of the Effective
Date.

                

              

      

       

    

    
      	
              4.

            	
              Employee
      Benefits.  During the Employment Term, you will be
      eligible to participate in the Company’s medical plan and other employee
      benefit programs at the same level as such benefits are generally provided
      by the Company from time to time to other senior executives of the
      Company.  Your eligibility for all such programs and plans is
      determined under the terms of those programs/plans as applied
      generally.  The Company’s benefit programs, compensation
      programs, and policies are reviewed from time to time and may be modified,
      amended or terminated at any time.  Notwithstanding the
      foregoing, you and your wife and other eligible dependents shall, on the
      Effective Date, be fully and immediately covered under the Company’s
      medical and other health plans without regard to waiting periods or
      exclusions for pre-existing
conditions.

            

    

     

    
      	
              5.

            	
              Expenses and Other
      Benefits.

            

    

     

    
      	
               
      

            	
              (a)

            	
              Expenses.  During
      the Employment Term, the Company will reimburse you for all reasonable
      business expenses incurred by you in the performance of your duties to the
      Company, submitted and processed in accordance with the Company’s expense
      reimbursement policy.

            

    

     

    
      	
               
      

            	
              (b)

            	
              Vacation.  During
      the Employment Term, you will be entitled to four (4) weeks of paid
      vacation each calendar year, which shall be earned in full on the first
      day of the calendar year.  For the period from the Effective
      Date through December 31, 2008, however, you will be entitled to two (2)
      weeks of paid vacation, which will be earned in full on the Effective
      Date.  In the event that you do not use all of your accrued
      vacation days in any period, such unused vacation days will carry over
      into subsequent periods; provided, however, that no more than an aggregate
      of four (4) weeks of unused vacation will be permitted to so carry
      over.

            

    

     

    
      	
               
      

            	
              (c)

            	
              Perquisites.  During
      the Employment Term, you shall be provided with the opportunity to receive
      or participate in perquisites and other benefits on a comparable basis as
      such perquisites are generally provided by the Company from time to time
      to other senior executives of the
Company.

            

    

     

    
      	
               
      

            	
              (d)

            	
              Indemnification. The
      Company shall during the Employment Term and all applicable statute of
      limitation periods: (i) indemnify you to the maximum extent allowed under
      Illinois law and the Company’s governing documents, and (ii) provide
      coverage for you under a directors’ and officers’ liability insurance
      policy in a form at least as comprehensive as, and in an amount that is at
      least equal to, that maintained by the Company at such time for any
      officer or director of the Company.

            

    

     

    

    
      
        
           

        

        
          3

          
            

          

        

        
           

      

    

     

    
      	
              6.

            	
              Compliance with
      Policies.  Subject to the terms of this Agreement, you
      agree that you will comply in all material respects with all policies and
      procedures applicable to similarly situated employees of the Company,
      generally and specifically; provided that any such failure to comply shall
      not be an event constituting “Cause” for termination of employment except
      to the extent specifically provided in Section 7(d)
  hereof.

            

    

     

    
      	
              7.

            	
              Termination of
      Employment.  Notwithstanding any other provision of the
      Agreement, your employment hereunder shall terminate upon the occurrence
      of any of the following events:  (i) the effective date of your
      voluntary resignation with or without Good Reason (as defined below in
      Section 7(e)); (ii) termination of employment by the Company due to your
      Disability (as defined below in Section 7(f)) or death; or (iii)
      termination of employment by the Company, with or without Cause (as
      defined below in Section 7(d)).

            

    

     

    
      	
               
      

            	
              (a)

            	
              Termination with Cause or
      Voluntary Resignation Without Good Reason.  If you are
      terminated by the Company with Cause or you voluntarily resign without
      Good Reason, you shall be entitled to receive as soon as reasonably
      practicable after your date of termination or such earlier time as may be
      required by applicable statute or
regulation:

            

    

     

    
      
        
          	
                   
      

                	
                  (i)

                	
                  
                    your
      earned but unpaid Base Salary through the date of
      termination;

                  

                

        

         

      

    

    
      	
               
      

            	
              (ii)

            	
              payment
      in respect of any vacation days accrued but unused through the date of
      termination; and

            

    

     

    
      	
               
      

            	
              (iii)

            	
              reimbursement
      for all business expenses properly incurred in accordance with Company
      policy prior to the date of termination and not yet reimbursed by the
      Company.  The aggregate benefits payable pursuant to clauses
      (i), (ii), and (iii) hereafter referred to as the “Accrued
      Obligations.”

            

    

     

    
      	
               
      

            	
               

            	Except as provided herein, you shall have no further
      rights to any compensation (including any Base Salary) or any other
      benefits under this Agreement.  All other accrued and vested
      benefits, if any, due to you following your termination of employment
      shall be determined and paid in accordance with the applicable plans,
      policies, and practices of the Company and any award or other agreements
      relating to such benefits.

    

     

    
      	
               
      

            	
              (b)

            	
              Termination without
      Cause or
      Voluntary Resignation With Good Reason.  If you are
      terminated by the Company other than for Cause or as a result of
      your Disability or death, or if you voluntarily resign with Good
      Reason, you shall receive:

            

    

    
       

      
        
          	
                   
      

                	
                  (i)

                	
                  
                    the
      Accrued Obligations; and

                  

                

        

         

        
          
            	
                     
      

                  	
                    (ii)

                  	
                    
                      subject
      to Section 7(g),

                    

                  

          

           

        

      

    

     

    
      
        
           

        

        
          4

          
            

          

        

        
           

        

    

     

    
      	
               
      

            	
              (A)

            	
              severance
      pay of one (1) times Base Salary, payable in accordance with the Company’s
      regular payroll practices;

            

    

     

    
      	
               
      

            	
              (B)

            	
              a
      pro-rata bonus (based on the number of days elapsed in the current bonus
      measurement period), if any, for the year in which termination of
      employment occurred, based on the target bonus for such year, payable no
      later than 2 weeks following the effective date of
      termination;

            

    

     

    
      	
               
      

            	
              (C)

            	
              immediate
      accelerated vesting of (and if applicable, have the right to exercise)
      100% of any then-unvested equity and other awards issued under Schawk 2006
      LTIP; and

            

    

     

    
      	
               
      

            	
              (D)

            	
              contingent
      upon your election of COBRA continuation coverage, the continuation of
      coverage under the same health benefit plans that you and your dependents
      were covered under prior to termination of employment with the Company to
      pay the full cost of the health insurance premiums for such COBRA coverage
      until the first of the following events occurs: (I) the one (1) year
      anniversary following your termination of employment or (II) the date you
      become eligible for coverage under another employer group
      plan.

            

    

     

    
      
        	
                 
      

              	
                 

              	
                Except as provided herein,
      you shall have no further rights to any compensation (including any Base
      Salary) or any other benefits under this Agreement.  All other
      accrued and vested benefits, if any, due to you following your termination
      of employment pursuant to this Section 7(b) shall be determined and paid
      in accordance with the plans, policies and practices of the Company and
      any award or other agreements relating to such
      benefits.  Notwithstanding the foregoing, any and all stock
      options issued under the Schawk 2006 LTIP that vest pursuant to subsection
      (C) above shall remain exercisable for a minimum of 120 days following the
      vesting date and, to the extent that any award described in subsection (C)
      above incorporates a performance element that has not previously been
      measured, target performance shall be deemed to have been
      achieved.  Payments and benefits provided pursuant to this
      Section 7(b) shall be subject to Section 7(h) below, if applicable. The
      payments and benefits provided in this Section 7(b) are in lieu of
      payments and benefits under any other severance arrangement of the
      Company.

              

      

    

     

    
      	
               
      

            	
              (c)

            	
              Termination as a Result of
      Disability or Death.  If you are terminated by the
      Company as a result of your Disability or death, you or your estate,
      personal representative or surviving spouse, as the case may be, shall
      receive:

            

    

    
       

      
        
          
            	
                     
      

                  	
                    (i)

                  	
                    
                      
                        the
      Accrued Obligations;
and

                      

                    

                  

          

           

          
            
              
                	
                         
      

                      	
                        (ii)

                      	
                        
                          
                            subject
      to Section 7(g),

                          

                        

                      

              

               

            

          

        

      

    

     

    
      
        
           

        

        
          5

          
            

          

        

        
           

      

    

     

    
      	
               
      

            	
              (A)

            	
              a
      pro-rata bonus (based on the number of days elapsed in the current bonus
      measurement period), if any, for the year in which termination of
      employment occurred, based on the target bonus for such year, payable no
      later than 2 weeks following the effective date of
      termination;

            

    

     

    
      	
               
      

            	
              (B)

            	
              immediate
      accelerated vesting of (and if applicable, have the right to exercise)
      100% of any then-unvested equity and other awards issued under Schawk 2006
      LTIP; and

            

    

     

    
      	
               
      

            	
              (C)

            	
              contingent
      upon your or your spouse’s election of COBRA continuation coverage, the
      continuation of coverage under the same health benefit plans that you and
      your dependents were covered under prior to termination of employment with
      the Company to pay the full cost of the health insurance premiums for such
      COBRA coverage until the first of the following events occurs: (I) the one
      (1) year anniversary following your termination of employment or (II) the
      date you become eligible for coverage under another employer group
      plan.

            

    

    
       

      
        
          	
                   
      

                	
                   

                	
                  Except as provided herein,
      you shall have no further rights to any compensation (including any Base
      Salary) or any other benefits under this Agreement.  All other
      accrued and vested benefits, if any, due to you following your termination
      of employment pursuant to this Section 7(c) shall be determined and paid
      in accordance with the plans, policies and practices of the Company and
      any award or other agreements relating to such
      benefits.  Notwithstanding the foregoing, any and all stock
      options issued under the Schawk 2006 LTIP that vest pursuant to subsection
      (B) above shall remain exercisable for a minimum of 120 days following the
      vesting date and, to the extent that any award described in subsection (B)
      above incorporates a performance element that has not previously been
      measured, target performance shall be deemed to have been
      achieved.  Payments and benefits provided pursuant to this
      Section 7(c) shall be subject to Section 7(g) below, if applicable. The
      payments and benefits provided in this Section 7(c) are in lieu of
      payments and benefits under any other severance arrangement of the
      Company.

                

        

      

       

    

    
      	
               
      

            	
              (d)

            	
              “Cause” for termination
      by the Company of your employment with the Company means any of the
      following:

            

    

     

    
      	
               
      

            	
              (i)

            	
              your
      conviction of, or plea of guilty or no contest to (A) a misdemeanor
      involving material dishonesty in connection with your job duties, fraud,
      or moral turpitude, or (B) a
felony;

            

    

    
      

      
        	
                 
      

              	
                (ii)

              	
                your
      willful malfeasance, willful misconduct or gross negligence in connection
      with your duties to the
Company;

              

      

    

     

     

    
      
        
           

        

        
          6

          
            

          

        

        
           

        

    

     

    
      	
               
      

            	
              (iii)

            	
              your
      willful and continued failure to substantially perform your duties to the
      Company (other than any such failure resulting from incapacity due to
      Disability), which failure is not remedied earlier than thirty (30) days
      after a written demand for substantial performance is delivered to you by
      the Board which specifically identifies the manner in which the Board
      believes that you have not substantially performed your
      duties;

            

    

     

    
      	
               
      

            	
              (iv)

            	
              your
      willful engaging in illegal conduct or gross misconduct which is
      materially injurious to the business or reputation of the Company;
      or

            

    

     

    
      	
               
      

            	
              (v)

            	
              your
      material willful breach of any of the restrictive covenants set forth in
      this Agreement.

            

    

     

    
      
        
          	
                   
      

                	
                   

                	
                  For purposes of this
      definition, no act or failure to act on your part shall be considered
      “willful” unless it is done, or omitted to be done, by you in bad faith or
      without reasonable belief that your action or omission was in the best
      interests of the Company.  The Company shall give written notice
      to you of the termination for Cause, which shall state the particular act
      or acts or the failure or failures to act that constitute the grounds on
      which the Cause termination is based. You shall have thirty (30) days upon
      receipt of the notice in which to cure such conduct, to the extent such
      cure is possible.

                

        

      

       

    

    
      	
               
      

            	
              (e)

            	
              “Good Reason” for
      termination by you of your employment means the occurrence (without your
      express written consent) of any one of the following acts by the Company
      or failures by the Company to act:

            

    

     

    
      	
               
      

            	
              (i)

            	
              a
      reduction in Base Salary or a reduction in the bonus rates set forth in
      the Schawk AIP, or any replacement bonus plan, below those described in
      Section 3(b)(iii) above except, solely with respect to bonuses, in cases
      where due to poor economic performance or uncertainty the Board of
      Directors of the Company suspends the bonus plan for executive
      management;

            

    

     

    
      	
               
      

            	
              (ii)

            	
              the
      Company’s failure to require any successor (whether direct or indirect, by
      purchase, merger, consolidation or otherwise) to all or substantially all
      of the business and/or assets of the Company expressly in writing to
      assume and agree to perform this Agreement in the same manner and to the
      same extent that the Company would have been required to perform it if no
      such succession had taken place;

            

    

     

    
      	
               
      

            	
              (iii)

            	
              the
      Company’s requiring you to be based at, or perform your principal
      functions at, any office or location other than a location within thirty
      (30) miles of the Company’s Des Plaines, Illinois headquarters
      office;

            

    

     

    
      
        	
                 
      

              	
                (iv)

              	
                the
      assignment to you of any duties inconsistent in any material respect with
      your position or any material diminution in your authority, duties or
      responsibilities; or

              

      

    

     

    

    
      
        
           

        

        
          7

          
            

          

        

        
           

      

    

     

    
      
        	
                 
      

              	
                (v)

              	 a material breach by the Company of this
      Agreement.

      

       

      
        
          	
                   
      

                	
                   

                	
                  Prior to your right to
      terminate this Agreement for Good Reason, you shall give written notice to
      the Company of your intention to terminate your employment on account of a
      Good Reason.  Such notice shall state the particular act or acts
      or the failure or failures to act that constitute the grounds on which
      your Good Reason termination is based.  The Company shall have
      thirty (30) days (five (5) days in the case of a breach by the Company of
      this Agreement relating to the payment of compensation) upon receipt of
      the notice in which to cure such conduct, to the extent such cure is
      possible.

                

        

         

      

    

    
      	
               
      

            	
              (f)

            	
              “Disability” means your
      inability to perform your normal duties as a result of any physical or
      mental injury or ailment for (i) any consecutive ninety (90)-day
      period or (ii) any one hundred eighty (180) calendar days (whether or
      not consecutive) during any three hundred sixty-five (365) calendar day
      period.

            

    

     

    
      	
               
      

            	
              (g)

            	
              Release.  Notwithstanding
      any other provision of this Agreement to the contrary, you acknowledge and
      agree that any and all payments to which you are entitled under this
      Section 7 which are described as being subject to this
      Section 7(g) are conditioned upon and subject to your (or in the case
      of your death, your personal representative’s) execution of, and not
      having revoked within any applicable revocation period, a general release
      and waiver, in such reasonable and customary form as shall be prepared by
      the Company, of all claims you or your estate may have against the Company
      and its directors, officers, subsidiaries and affiliates, except as to
      (i) matters covered by provisions of this Agreement that expressly
      survive the termination of this Agreement and (ii) rights to which
      you are entitled by virtue of your participation in the employee benefit
      plans, policies and arrangements of the
Company.

            

    

     

    
      	
               
      

            	
              (h)

            	
              Code Section 409A
      Compliance.  Notwithstanding the above, if necessary to
      avoid incurring penalties under Section 409A of the Internal Revenue
      Code of 1986, as amended (the “Code”),
      payments and benefits due under this Section 7 shall not be provided
      to you during the six (6) month period immediately following your
      termination; provided, however, that on the first business day following
      the date six (6) months after your termination, a lump-sum catch-up
      payment shall be made to you for amounts not paid during the six (6) month
      delay.

            

    

     

    
      	
               
      

            	
              (i)

            	
              No Mitigation or
      Offset.  You shall not be required to mitigate the amount
      of any payments provided for under this Agreement by seeking other
      employment. No amounts paid to or earned by you following termination of
      your employment shall reduce or be set off against any amounts payable to
      you under this Agreement, nor will any payments otherwise due to you
      hereunder be subject to offset in respect of any claims that the Company
      may assert against you.

            

    

    
       

      
        	
                8.

              	
                Return of
      Materials.  Upon the
      termination of your employment, you shall return to the Company all
      Company property, including all materials furnished to you during your
      

              

      

       

    

    

    
      
        
           

        

        
          8

          
            

          

        

        
           

      

    

     

    
      	
               

            	
              employment
      (including but not limited to keys, electronic communication devices,
      files and identification cards) and all Company-related materials created
      by you during your employment with the Company.  In addition,
      upon the termination of your employment, you will provide the Company with
      all passwords and similar information which will be necessary for the
      Company to access materials on which you worked or to otherwise continue
      in its business.

            

    

     

    
      	
              9.

            	
              Confidentiality.  In
      the course of your employment with the Company, you will be given access
      to and otherwise obtain knowledge of certain trade secrets and
      confidential and proprietary information pertaining to the business of the
      Company and its affiliates.  Other than in the course of
      properly performing your duties for the Company, during the Employment
      Term and thereafter, you will not, directly or indirectly, without the
      prior written consent of the Company, disclose or use for the benefit of
      any person, corporation or other entity, including yourself, any trade
      secrets or other confidential or proprietary information concerning the
      Company or its affiliates, including, but not limited to, information
      pertaining to clients, services, products, earnings, finances, operations,
      marketing, methods or other activities; provided, however, that the
      foregoing shall not apply to information which is of public record or is
      generally known, disclosed or available to the general public or the
      industry generally (other than as a result of your breach of this covenant
      or the breach by another employee of his or her confidentiality
      obligations).  Notwithstanding the foregoing, you may disclose
      such information as is required by law during any legal proceeding or to
      your personal representatives and professional advisers as is required for
      purposes of rendering tax or legal advice, and, with respect to such
      personal representatives and professional advisers, you shall inform them
      of your obligations hereunder and take all reasonable steps to ensure that
      such professional advisers do not disclose the existence or substance
      thereof.  Further, other than in the course of performing your
      duties in good faith for the Company, you shall not, directly or
      indirectly, remove from the Company’s premises any documents, records,
      computer disks or files, computer printouts, business plans or any copies
      or reproductions thereof, or any information or instruments derived
      therefrom, arising out of or relating to the business of the Company and
      its affiliates or obtained as a result of your employment with the
      Company.

            

    

     

    
      	
              10.

            	
              Non-Solicitation/Non-Competition.

            

    

     

    
      	
               
      

            	
              (a)

            	
              Without
      the prior written consent of the Company, during the Employment Term and
      for a period of twelve (12) months after the termination of your
      employment with the Company for any reason, you shall
  not:

            

    

     

    
      	
               
      

            	
              (i)

            	
              become
      engaged in or otherwise become interested in, directly or indirectly
      (whether as an owner, officer, employee, consultant, director,
      stockholder, or otherwise), any company, enterprise or entity that, in any
      market served by the Company, provides, or has made substantial
      preparation to provide, services or products that compete with any portion
      of the Company’s business, other than as a holder of not more than two
      percent (2%) of the equity securities of any such company, enterprise or
      

            

    

     

    

    
      
        
           

        

        
          9

          
            

          

        

        
           

        

    

     

    
      
        	
                 
      

              	
                 

              	entity the equity securities of which are listed on a
      national securities exchange;

      

    

     

    
      	
               
      

            	
              (ii)

            	
              for
      the purpose of providing services or products similar to those provided by
      the Company in the conduct of the business, directly or indirectly
      solicit, or assist any other person in soliciting, any customer of the
      Company (x) with whom you had contact during your employment with the
      Company, (y) about which you learned non-public information during
      your employment with the Company, or (z) whose account you oversaw
      during your employment with the Company;
or

            

    

     

    
      	
               
      

            	
              (iii)

            	
              for
      purposes of employment with an entity other than the Company, directly or
      indirectly solicit, or assist any other person in soliciting, any person
      who was an employee of the Company or its affiliates as of your
      termination of employment with the Company, or any person who, as of such
      date, was in the process of being recruited by the Company or its
      affiliates to become an employee of the Company or its affiliates (each
      such person, a “Protected
      Employee”), or induce any Protected Employee to terminate his or
      her employment with the Company or its
  affiliates.

            

    

     

    
      	
               
      

            	
              (b)

            	
              You
      acknowledge that the protections of the Company set forth in this
      Section 10 are fair and reasonable.  You agree that
      remedies at law for a breach or threatened breach of the provisions of
      this Section 10 would be inadequate and, therefore, the Company shall
      be entitled, in addition to any other available remedies, without posting
      a bond, to equitable relief in the form of specific performance, temporary
      restraining order, temporary or permanent injunction, or any other
      equitable remedy that may be then
available.

            

    

     

    
      	
              11.

            	
              Cooperation.  You
      agree that during the Employment Term or following a termination of
      employment for any reason, you shall, upon reasonable advance notice,
      reasonably assist and cooperate with the Company with regard to any
      investigation or litigation related to a matter or project in which you
      were involved during your employment.  The Company shall
      reimburse you for all reasonable and necessary out-of-pocket expenses
      related to your services under this Section 11 within thirty (30) days of
      you submitting to the Company appropriate receipts and expense
      statements.

            

    

     

    
      	
              12.

            	
              Tax
      Issues.

            

    

     

    
      	
               
      

            	
              (a)

            	
              Withholding.  All
      payments to be made to you by the Company shall be subject to withholding
      as reasonably determined by the Company pursuant to applicable law and
      regulation.

            

    

    
      

      
        	
                 
      

              	
                (b)

              	
                Code
      Section 409A.  It is intended that any amounts
      payable under this Agreement and the Company’s and your exercise of
      authority or discretion hereunder shall comply with Code Section 409A
      (including the Treasury regulations and other published guidance relating
      thereto) so as not to subject you to the payment of any interest or
      additional tax imposed under Code

              

      

       

    

    

    
      
        
           

        

        
          10

          
            

          

        

        
           

        

    

    

    
      	
               
      

            	
               

            	
              Section 409A.  To
      the extent any amount payable to you from the Company, per this Agreement
      or otherwise, would trigger the additional tax imposed by Code
      Section 409A, the payment arrangements shall be modified to avoid
      such additional tax.  This provision includes, but is not
      limited to, Treasury Regulation Section 1.409A-3(g)(2), relating to a
      six-month delay in payment of deferred compensation to a “specified
      employee” (as defined in the Treasury Regulations under Section 409A)
      upon a separation from service, to the extent
  applicable.

            

    

     

    
      	
              13.

            	
              Other Legal
      Matters.

            

    

     

    
      	
               
      

            	
              (a)

            	
              No Other
      Agreements/Obligations.  You have advised the Company
      that your execution and performance of the terms of this Agreement do not
      and will not violate any other agreement binding on you or the rights of
      any third parties and you understand that in the event this advice is not
      accurate the Company will not have any obligation to you under this
      Agreement.   The Company acknowledges that its employment
      of you will obligate it to make certain payments to Tatum, LLC in
      accordance with the Company’s agreements with Tatum,
  LLC.

            

    

     

    
      	
               
      

            	
              (b)

            	
              Governing
      Law.  This Agreement will be governed by, and interpreted
      in accordance with, the laws of the State of Illinois, without regard to
      the conflict of laws provisions of any jurisdiction which would cause the
      application of any law other than that of the State of
      Illinois.

            

    

     

    
      	
               
      

            	
              (c)

            	
              Arbitration.  Any
      controversy or claim arising out of or relating to this Agreement or for
      the breach thereof, or your employment, including without limitation any
      statutory claims (for example, claims for discrimination including but not
      limited to discrimination based on race, sex, sexual orientation,
      religion, national origin, age, marital status, handicap or disability;
      and claims relating to leaves of absence mandated by state or federal
      law), breach of any contract or covenant (express or implied), tort
      claims, violation of public policy or any other alleged violation of
      statutory, contractual or common law rights (and including claims against
      the Company’s officers, directors, employees or agents) if not otherwise
      settled between the parties, shall be conclusively settled by arbitration
      to be held in Chicago, Illinois, in accordance with the American
      Arbitration Association’s Employment Arbitration Rules and Mediation
      Procedures (the “Rules”).  Arbitration
      shall be the parties’ exclusive remedy for any such controversies, claims
      or breaches.  The parties also consent to personal jurisdiction
      in Chicago, Illinois with respect to such arbitration.  The
      award resulting from such arbitration shall be final and binding upon both
      parties.  This Agreement shall be governed by the laws of the
      United States of America and the State of Illinois without regard to any
      conflict of law provisions of any jurisdiction.  You and the
      Company hereby waive the right to pursue any claims, including but not
      limited to employment related claims, through civil litigation outside the
      arbitration procedures of this provision, unless otherwise required by
      law.  You and the Company each have the right to be represented
      by counsel with respect to arbitration of any dispute pursuant to this
      paragraph.  The arbitrator shall be

            

    

     

    

    
      
        
           

        

        
          11

          
            

          

        

        
           

        

    

     

    
      
        	
                 
      

              	
                 

              	
                selected by agreement
      between the parties, but if they do not agree on the selection of an
      arbitrator within thirty (30) days after the date of the request for
      arbitration, the arbitrator shall be selected pursuant to the
      Rules.  With respect to any claim brought to arbitration
      hereunder, both you and the Company shall be entitled to recover whatever
      damages would otherwise be available to you/it in any legal proceeding
      based upon the federal and/or state law applicable to the claim, except
      that parties agree they shall not seek any award for punitive damages for
      any claims they may have under this Agreement.  The decision of
      the arbitrator may be entered and enforced in any court of competent
      jurisdiction by either you or the Company.  Each party shall pay
      the fees of their respective attorneys (except as otherwise awarded by the
      arbitrator), the expenses of their witnesses and any other expenses
      connected with presenting their cases, other costs, including the fees of
      the mediator, the arbitrator, the cost of any record or transcript of the
      arbitration, and administrative fees, shall be borne equally by the
      parties, one-half by you, and one-half by the Company.  Should
      you pursue any dispute or matter covered by this paragraph by any method
      other than said arbitration, the Company shall be entitled to recover from
      you all damages, costs, expenses, and attorneys’ fees incurred as a result
      of such action. Should the Company pursue any dispute or matter covered by
      this paragraph by any method other than said arbitration, you shall be
      entitled to recover from the Company all damages, costs, expenses, and
      attorneys’ fees incurred as a result of such action.  The
      provisions contained in this paragraph shall survive termination of your
      employment with the Company and the termination and/or expiration of this
      Agreement.

              

      

       

    

    
      	
               
      

            	
              (d)

            	
              Notice.  All
      notices and other communications under this Agreement shall be in writing
      to you at such address as most currently appears in the records of the
      Company and, if to the Company:

            

    

     

    Schawk,
Inc.

    HR
Service Center

    1695
River Road

    Des
Plaines, IL 60018

    Attn:
Jennifer Erfurth.

    

    
      	
               
      

            	
              (e)

            	
              Full and Complete
      Agreement.  This Agreement contains the entire
      understanding of the parties and may be amended only in a writing signed
      by the parties.  This Agreement supersedes any and all prior
      agreements, whether written or oral, between you and the Company, that are
      not specifically incorporated by reference herein.  You
      specifically acknowledge that no promises or commitments have been made to
      you that are not set forth in this
letter.

            

    

     

    
      	
               
      

            	
              (f)

            	
              Survival of
      Provisions.  The provisions of Sections 9 through 11
      of this Agreement shall survive the termination of your employment with
      the Company and the expiration or termination of this
      Agreement.

            

       

    
      
        
           

        

        
          12

          
            

          

        

        
           

        

    

    

    
      	
               
      

            	
              (g)

            	
              Severability.  If
      any provision of this Agreement or the application thereof is held
      invalid, such invalidity shall not affect other provisions or applications
      of this Agreement that can be given effect without the invalid provision
      or application and, to such end, the provisions of this Agreement are
      declared to be severable.

            

    

     

    
      	
               
      

            	
              (h)

            	
              No
      Waiver.  The failure of a party to insist upon strict
      adherence to any term of this Agreement on any occasion shall not be
      considered a waiver of such party’s rights or deprive such party of the
      right thereafter to insist upon strict adherence to that term or any other
      term of this Agreement.

            

    

     

    
      	
               
      

            	
              (i)

            	
              Counterparts and
      Signatures.  This Agreement may be signed in
      counterparts, each of which shall be an original, with the same effect as
      if the signatures were upon the same instrument.  Signatures
      delivered by facsimile or PDF file shall constitute original
      signatures.

            

    

     

    If these
terms are agreeable to you, please sign and date the enclosed copy of this
letter in the appropriate space at the bottom and return it to me to indicate
your agreement to these terms.

     

    Yours sincerely,

     

     

    
      
        	 	 	 	 	 
	
                /s/David
      A. Schawk

              	 	 	
                 

              	 
	
                David
      A. Schawk

              	 	 	
                 

              	 
	
                President
      and Chief Executive Officer

              	 	 	
                 

              	 

      

    

     

     

    I hereby accept the terms and
conditions of employment as outlined above:

     

    
      	 	 	 	 	 
	
              /s/Timothy
      J. Cunningham

            	 	 	
              September 18,
      2008

            	 
	
              Timothy
      J. Cunningham

            	 	 	
              Date

            	 
	
               

            	 	 	
               

            	 

    

    
 

    
      
        
        

      

      
        13

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00147-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00147-of-00352.parquet"}]]