Exhibit 10.1


 


AMENDMENT NO. 3 TO TERM CREDIT AGREEMENT
AND AMENDMENT NO. 1 TO COLLATERAL AGREEMENT


 


THIS AMENDMENT NO.
3 TO TERM CREDIT AGREEMENT AND AMENDMENT NO.1 TO COLLATERAL AGREEMENT, dated as of June 5, 2020 (this “Agreement”),
is entered into by and among FOSSIL GROUP, INC., a Delaware corporation (the “Borrower”), the Lenders party
hereto and JPMORGAN CHASE BANK, N.A., as Administrative Agent, under (i) that certain Term Credit Agreement, dated as of September 26,
2019 (as amended pursuant to that certain Amendment No. 1 to Term Credit Agreement dated as of February 20, 2020 and
that certain Amendment No. 2 to Term Credit Agreement dated as of May 12, 2020 (“Amendment No. 2”),
the “Term Credit Agreement”), among the Borrower, the Lenders party thereto and the Administrative Agent and
(ii) that certain Guarantee and Collateral Agreement, dated as of September 26, 2019 (the “Collateral Agreement”),
among the Borrower, the Guarantors party thereto and the Administrative Agent. All capitalized terms used herein and not otherwise
defined shall have the meanings set forth in the Term Credit Agreement.


 


WHEREAS, Section 9.02
of the Term Credit Agreement, Section 7.02 of the Collateral Agreement and Section 5(b) of Amendment No. 2
permit certain amendments of the Term Credit Agreement, the Collateral Agreement and Amendment No. 2, respectively, with the
consent of the Borrower, the Required Lenders and the Administrative Agent; and


 


WHEREAS, the Borrower,
the Lenders party hereto constituting the Required Lenders and the Administrative Agent desire to amend certain provisions of the
Term Credit Agreement, the Collateral Agreement and Amendment No. 2, as set forth below.


 


NOW, THEREFORE, in
consideration of the premises and covenants contained herein and for other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereto, intending to be legally bound hereby, agree as follows:


 


Section 1. Amendments
to the Term Credit Agreement. Effective as of the Amendment No. 3 Effective Date (as defined in paragraph (a) below),
the Term Credit Agreement shall be amended as follows:


 


(a)            The
following defined terms shall be inserted in Section 1.01 of the Term Credit Agreement in their proper alphabetical order:


 


“Amendment No. 3”
means that certain Amendment No. 3 to Term Credit Agreement and Amendment No. 1 to Collateral Agreement, among the Borrower,
the Administrative Agent and the Lenders party thereto.


 


“Amendment No. 3
Effective Date” means the date on which the conditions set forth in Section 4 of Amendment No. 3 were satisfied,
which date was June [5], 2020.


 


“Prepayment Fee Effective
Date” means September [4], 2020.


 


(b)            The
defined term “Applicable Prepayment Fee” in Section 1.01 of the Term Credit Agreement shall be replaced in its
entirety with the following:


 


“Applicable Prepayment
Fee” means (i) prior to the date that is one year after the Prepayment Fee Effective Date, 2.00% and (ii) from
and after the date that is one year after the Prepayment Fee Effective Date and prior to the date that is two years after the Prepayment
Fee Effective Date, 1.00%.”


 



    


     


    




 


(c)            The
defined term “Applicable Rate” in Section 1.01 of the Term Credit Agreement shall be replaced in its entirety
with the following:


 


“Applicable Rate”
means, for any day on and after the Amendment No. 3 Effective Date, (a) with respect to any Term Loan, (i) 8.50%
in the case of Eurodollar Term Loans and (ii) 7.50% in the case of ABR Term Loans, and (b) with respect to any Extended
Term Loans of any Series, the rate per annum specified in the Extension Agreement establishing the Extended Term Loans of such
Series.


 


(d)            The
defined term “Collateral and Guarantee Requirement” in Section 1.01 of the Term Credit Agreement shall be amended
by replacing clause (b) thereof in its entirety with the following:


 


“(b) subject to Sections
5.19 and 5.20, all Equity Interests owned by or on behalf of any Loan Party shall have been pledged pursuant to, and to the extent
required by, the Collateral Agreement and, in the case of Equity Interests entitled to vote (within the meaning of Treas. Reg.
Section 1.956-2(c)(2)) in any CFC or CFC Holdco, the Loan Parties shall not be required to pledge more than 65% of such Equity
Interests entitled to vote of any such CFC or CFC Holdco (other than with respect to Fossil (East) Limited, Fossil (Gibraltar)
Ltd., Swiss Technology Holding GmbH and Fossil Europe B.V., with respect to which Persons the Loan Parties shall be required to
pledge all Equity Interests owned by or on behalf of any Loan Party), and the Administrative Agent shall, to the extent required
by the Collateral Agreement, have received certificates or other instruments representing all such certificated Equity Interests,
together with undated stock powers or other instruments of transfer with respect thereto endorsed in blank;”


 


(e)            The
defined term “Liquidity” in Section 1.01 of the Term Credit Agreement shall be replaced in its entirety with the
following:


 


“Liquidity”
means, as of any date of determination, the sum of (a) unrestricted cash and Cash Equivalents of the Borrower and its Subsidiaries
on such date plus (b) Availability (as defined in the ABL Credit Agreement) as of such date.


 


(f)            Section 2.08(a)(i) 
of the Term Credit Agreement shall be replaced in its entirety with the following:


 


(a)(i) The Borrower shall
repay the principal amount of the Term Borrowings on the dates set forth below in an aggregate amount based on the schedule set
forth in the table below (as such amounts may be adjusted pursuant to paragraph (c) of this Section).


 






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	Date	 	Amount	 
	June 30, 2020	 	$	5,000,000	 
	September 30, 2020	 	$	8,000,000	 
	December 31, 2020	 	$	10,000,000	 
	March 31, 2021	 	$	10,000,000	 
	June 30, 2021	 	$	10,000,000	 
	September 30, 2021	 	$	10,000,000	 
	December 31, 2021	 	$	10,000,000	 
	March 31, 2022	 	$	10,000,000	 
	June 30, 2022	 	$	10,000,000	 
	September 30, 2022	 	$	10,000,000	 
	December 31, 2022	 	$	10,000,000	 
	March 31, 2023	 	$	10,000,000	 
	June 30, 2023	 	$	10,000,000	 
	September 30, 2023	 	$	10,000,000	 
	December 31, 2023	 	$	10,000,000	 
	March 31, 2024	 	$	10,000,000	 
	June 30, 2024	 	$	10,000,000	 






 


(g)            Section 2.10(e) of
the Term Credit Agreement shall be replaced in its entirety as follows:


 


“In the event that during
the period commencing as of the Amendment No. 3 Effective Date and ending on the two year anniversary of the Prepayment Fee
Effective Date (x) the Borrower prepays any Term Loan with the proceeds of any other financing, including any issuance of
Equity Interests, or effects any conversion of any Term Loan into any new or replacement tranche of term loans, (y) any Lender
is required to assign its Loan pursuant to Section 2.17(b)(iii) or (z) the Borrower makes any payment in respect
of any Term Loan following acceleration of any Term Loans or after the Term Loans have otherwise become due prior to their Maturity
Date, in each case of this clause (z) in respect of and during the existence of an Event of Default, then, in each case the
Borrower shall pay such Lender a fee equal to the Applicable Prepayment Fee with respect to the principal amount of such Lender’s
Loan so prepaid or required to be assigned; provided that no Applicable Prepayment Fee shall be due or payable in connection
with any event described in clause (x) above if such event occurs prior to the Prepayment Fee Effective Date unless such event
occurs in connection with a transaction or series of transactions that would, if consummated, result in a Change in Control. Without
limiting the generality of the foregoing clause (z), it is understood and agreed that if the Term Loans are accelerated or otherwise
become due prior to their Maturity Date, in each case, in respect of and during the existence of an Event of Default (including
upon the occurrence of a bankruptcy or insolvency event (including the acceleration of claims by operation of law)), the Applicable
Prepayment Fee with respect to a voluntary prepayment of the Term Loans will also be due and payable on the date of such acceleration
or such other prior due date as though the Term Loans were voluntarily prepaid as of such date and shall constitute part of the
Secured Obligations, in view of the impracticability and extreme difficulty of ascertaining actual damages and by mutual agreement
of the parties as to a reasonable calculation of each Lender’s loss as a result thereof. Any premium payable above shall
be presumed to be the liquidated damages sustained by each Lender and the Borrower agrees that it is reasonable under the circumstances
currently existing. THE BORROWER EXPRESSLY WAIVES (TO THE FULLEST EXTENT IT MAY LAWFULLY DO SO) THE PROVISIONS OF ANY PRESENT
OR FUTURE STATUTE OR LAW THAT PROHIBITS OR MAY PROHIBIT THE COLLECTION OF THE PREPAYMENT FEE IN CONNECTION WITH ANY SUCH ACCELERATION.
The Borrower expressly agrees (to the fullest extent it may lawfully do so) that: (A) the Applicable Prepayment Fee is reasonable
and is the product of an arm’s length transaction between sophisticated business people, ably represented by counsel; (B) the
Applicable Prepayment Fee shall be payable notwithstanding the then prevailing market rates at the time payment is made; (C) there
has been a course of conduct between the Lenders and the Borrower giving specific consideration in this transaction for such agreement
to pay the Applicable Prepayment Fee; and (D) the Borrower shall be estopped hereafter from claiming differently than as agreed
to in this paragraph.”


 



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(h)            Section 5.20
of the Term Credit Agreement shall be replaced in its entirety with the following:


 


“Section 5.20.    Amendment
No. 3 Post-Closing Requirement. The Borrower shall deliver, within 60 days after the Amendment No. 3 Effective Date,
the additional pledges of Equity Interests arising out of the amendment to clause (b) of the definition of the term “Collateral
and Guarantee Requirement” implemented by Amendment No. 3.”


 


(i)            Section 6.08(a)(vi) shall
be replaced in its entirety with the following:


 


“(vi) [reserved]”


 


(j)            Section 6.13
of the Term Credit Agreement shall be replaced in its entirety with the following:


 


“Section 6.13.     Total
Leverage Ratio. Commencing with the Fiscal Quarter ending January 1, 2022, the Borrower will not permit the Total Leverage
Ratio as of the last day of each Fiscal Quarter to be greater than 1.50 to 1.00. For the avoidance of doubt, this Section 6.13
shall not apply with respect to any Fiscal Quarter ending in Fiscal Year 2020 or Fiscal Year 2021, other than the Fiscal Quarter
ending January 1, 2022.”


 


(k)            Section 6.14
of the Term Credit Agreement shall be replaced in its entirety with the following:


 


Section 6.14.       Minimum
Liquidity. From and after the Amendment No. 3 Effective Date, the Borrower will not permit Liquidity as of the last day
of each Fiscal Month (commencing with the Fiscal Month ending June 30, 2020) to be less than the amount set forth in the table
below for such Fiscal Month.


 


	Last Day of Fiscal Month	 	Minimum Liquidity	 
	July 4, 2020	 	$	125,000,0000	 
	August 1, 2020	 	$	125,000,0000	 
	August 29, 2020	 	$	125,000,0000	 
	October 3, 2020	 	$	125,000,0000	 
	October 31, 2020	 	$	125,000,0000	 
	November 28, 2020	 	$	125,000,0000	 
	January 2, 2021	 	$	150,000,000	 
	thereafter	 	$	150,000,000	 



 



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(l)            A
new Section 6.15 of the Term Credit Agreement shall be inserted as follows:


 


Section 6.15.      Minimum
Consolidated EBITDA. The Borrower will not permit Consolidated EBITDA for any period set forth in the table below to be more
negative than the amount set forth for such period in the table below. For the avoidance of doubt, this Section 6.15 shall
not apply during any period not specifically set forth in the table below.


 


	Period	 	Minimum Consolidated EBITDA	 
	Fiscal Quarter ending April 3, 2021	 	 	-$	 	 	 	75,000,000	 
	Two Fiscal Quarter period ending July 3, 2021	 	 	-$	 	 	 	65,000,000	 
	Three Fiscal Quarter period ending October 2, 2021	 	 	-$	 	 	 	30,000,000	 



 


 


(m)           A
new Section 6.16 of the Term Credit Agreement shall be inserted as follows:


 


Section 6.16.      Maximum
Consolidated Capital Expenditures. The Borrower will not, and will not permit any of its Subsidiaries to, make or incur Consolidated
Capital Expenditures in any Fiscal Year in an aggregate amount for the Borrower and its Subsidiaries in excess of the amount set
forth in the table below for such Fiscal Year:


 


	Last Day of Fiscal Year	 	Maximum Consolidated Capital Expenditures	 
	January 2, 2021	 	$	10,000,000	 
	January 1, 2022	 	$	20,000,000	 
	December 31, 2022	 	$	25,000,000	 
	thereafter	 	$	25,000,000	 



 


(n)            Article VII(d) shall
be replaced in its entirety with the following:


 


“the Borrower shall fail to observe or perform
any covenant, condition or agreement contained in Section 5.02(a), 5.05 (with respect to the existence of the Borrower), 5.11,
5.20 or in Article VI;”


 


Section 2. Amendments
to the Collateral Agreement. Effective as of the Amendment No. 3 Effective Date, the Collateral Agreement shall be
amended as follows:


 


(a)            Section 3.01
of the Collateral Agreement shall be amended by replacing clause (a) thereof in its entirety with:


 


“(a)(i) the shares of
capital stock and other Equity Interests now owned or at any time hereafter acquired by such Grantor, including those set forth
opposite the name of such Grantor on Schedule 8(a) or (b) to the Perfection Certificate, and (ii) all certificates
and any other instruments representing all such Equity Interests (collectively, the “Pledged Equity Interests”),
provided that the Pledged Equity Interests shall not include (A) Equity Interests in any Person other than wholly-owned
Subsidiaries to the extent not permitted by the terms of such Person’s organizational or joint venture documents (for so
long as such Person remains a non-wholly owned Subsidiary) and (B) any Equity Interests in a Foreign Subsidiary or CFC Holdco
other than those required to be pledged pursuant to clause (b) of the definition of the term “Collateral and Guarantee
Requirement” as defined in the Credit Agreement (the interests so excluded under clauses (A) and (B) above being
collectively referred to herein as the “Excluded Equity Interests”)”


 






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(b)            The
table of Pledged Equity Interests attached as Schedule II to the Collateral Agreement is hereby replaced in its entirety with the
table attached as Annex A to this Agreement.


 


Section 3. Amendment
to Amendment No. 2. Effective as of the Amendment No. 3 Effective Date, (i) Section 4(a) of Amendment
No. 2 shall be deleted and replaced with the words “[Intentionally Deleted]” and (ii) the Borrower shall
not be subject to the requirements set forth in such Section 4(a). For the avoidance of doubt, the deletion of Section 4(a) of
Amendment No. 2 shall not release the Borrower of its obligation to deliver with the delivery of the financial statements
for the fiscal quarter ended April 4, 2020, a Compliance Certificate in accordance with the terms and conditions set forth
in Section 5.01(c) of the Term Credit Agreement.


 


Section 4. Representations
and Warranties. Each Loan Party represents and warrants to the Administrative Agent and the Lenders that, after giving
effect to this Agreement and the amendments set forth herein:


 


(a)            the
representations and warranties set forth in Article III of the Term Credit Agreement, and in each of the other Loan Documents,
are true and complete in all material respects on the date hereof as if made on and as of the date hereof (or, if any such representation
or warranty is expressly stated to have been made as of a specific date, such representation or warranty shall be true and correct
in all material respects as of such specific date), and as if each reference in such Article III to “this Agreement”
included reference to this Agreement (it being agreed that it shall be deemed to be an Event of Default under the Credit Agreement
if any of the foregoing representations and warranties shall prove to have been materially incorrect when made); and


 


(b)            no
Default or Event of Default has occurred and is continuing as of the date hereof.


 


Section 5. Effectiveness
of Amendments. The amendments set forth in Sections 2, 3 and 4 of this Agreement shall become effective upon satisfaction
of the following conditions:


 


(a)            The
Borrower, the Administrative Agent and Lenders collectively constituting the Required Lenders shall have executed and delivered
a counterpart of this Agreement (by electronic transmission or otherwise) to the Administrative Agent;


 


(b)            The
Borrower shall have paid all fees and expenses (including expenses of counsel) due and payable on or before the Amendment No. 3
Effective Date; and


 


(c)            The
Borrower shall have made a prepayment of the Term Loans in an aggregate principal amount equal to $15,000,000 to be paid to the
Term Loan Lenders on a pro rata basis.


 


Section 6. Counterparts;
Entire Agreement; Amendment, Modification and Waiver.


 


(a)            This
Agreement may be executed in counterparts (and by different parties hereto on different counterparts), each of which shall constitute
an original, but all of which when taken together shall constitute a single contract. Delivery of an executed counterpart of a
signature page of this Agreement by electronic transmission shall be effective as delivery of a manually executed counterpart
of this Agreement.


 






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(b)            After
the Amendment No. 3 Effective Date, this Agreement may not be amended, modified or waived except in accordance with Section 9.02
of the Term Credit Agreement, Section 7.02 of the Collateral Agreement or Section 5(b) of Amendment No. 2,
as applicable.


 


Section 7. Applicable
Law; Waiver of Jury Trial, Etc. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK BUT GIVING EFFECT TO FEDERAL LAWS APPLICABLE
TO NATIONAL BANKS. THE PROVISIONS OF SECTIONS 9.09(c) THROUGH (e) AND 9.10 OF THE TERM CREDIT AGREEMENT SHALL APPLY
TO THIS AGREEMENT MUTATIS MUTANDIS.


 


Section 8. Headings.
The headings of this Agreement are for purposes of reference only and shall not limit or otherwise affect the meaning hereof.


 


Section 9. Effect
of Agreement. Except as expressly set forth herein, this Agreement (a) shall not by implication or otherwise limit,
impair, constitute a waiver of or otherwise affect the rights and remedies of any party under the Term Credit Agreement or any
other Loan Document, and (b) shall not alter, modify, amend or in any way affect any of the terms, conditions, obligations,
covenants or agreements contained in the Term Credit Agreement or any other provision of either such agreement or any other Loan
Document or be construed as a novation thereof, or serve to effect a novation of the obligations outstanding under the Term Credit
Agreement or instruments guaranteeing or securing the same, which shall remain and continue in full force and effect. Each and
every term, condition, obligation, covenant and agreement contained in the Term Credit Agreement as amended hereby, or any other
Loan Document as amended hereby, is hereby ratified and re-affirmed in all respects and shall continue in full force and effect.
This Agreement shall constitute a Loan Document for purposes of the Term Credit Agreement and, from and after the Amendment No. 3
Effective Date, (i) all references to the Term Credit Agreement in any Loan Document and all references in the Term Credit
Agreement to “this Agreement”, “hereunder”, “hereof” or words of like import referring to the
Term Credit Agreement, shall, unless expressly provided otherwise, refer to the Term Credit Agreement as amended and supplemented
by this Agreement, (ii) all references to the Collateral Agreement in any Loan Document and all references in the Collateral
Agreement to “this Agreement”, “hereunder”, “hereof” or words of like import referring to the
Collateral Agreement, shall, unless expressly provided otherwise, refer to the Collateral Agreement as amended and supplemented
by this Agreement and (iii) all references to Amendment No. 2 in any Loan Document and all references in Amendment No. 2
to “this Agreement”, “hereunder”, “hereof” or words of like import referring to Amendment No. 2,
shall, unless expressly provided otherwise, refer to Amendment No. 2 as amended and supplemented by this Agreement.


 


[Remainder of Page Left Intentionally
Blank]


 









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IN WITNESS WHEREOF,
the parties hereto have duly executed this Agreement as of the day and year first above written.


 


	 	FOSSIL GROUP, INC.,
	 	as the Borrower
	 	 	 
	 	By:	/s/ Jeffrey N. Boyer
	 	 	Name: 	Jeffrey N. Boyer
	 	 	Title: 	Chief Operating Officer, Chief Financial
	 	 	 	Officer and Treasurer


 






    


     


    




 


	 	JPMORGAN CHASE BANK, N.A.,
	 	as Administrative Agent
	 	 
	 	By:	 /s/ Ajay Gupta
	 	Name: Ajay Gupta
	 	Title: Vice President




 




    


     


    

 


	 	HG VORA SPECIAL OPPORTUNITIES MASTER FUND, LTD, as Lender
	 	 
	 	By:	HG VORA CAPITAL MANAGEMENT, LLC, as investment advisor
	 	 
	 	By:	/s/ Gary Moross
	 	Name: Gary Moross
	 	Title: Partner




 




    


     


    

 


	 	AT INVESTMENTS LLC, as a Lender
	 	 
	 	By:	 HG VORA OPPORTUNISTIC CAPITAL MASTER FUND LP, its Managing Member
	 	 
	 	By:	HG VORA CAPITAL MANAGEMENT, LLC, its Investment Manager
	 	 
	 	 
	 	By:	/s/ Gary Moross
	 	Name: Gary Moross
	 	Title: Partner




 




    


     


    

 


	 	BRYANT PARK FUNDING ULC, as a Lender
	 	 
	 	By:	 /s/ Mobasharul Islam
	 	Name: Mobasharul Islam
	 	Title: Authorized Signatory




 




    


     


    

 


	 	GEM 1 LOAN FUNDING LLC, as a Lender
	 	 
	 	By:	/s/ Morgan Land
	 	Name: Morgan Land
	 	Title: Attorney-in-Fact




 




    


     


    

 


	 	BEACHHEAD CREDIT OPPORTUNITIES LLC, as a Lender
	 	 
	 	By:	/s/ Christine Woodhouse
	 	Name: Christine Woodhouse
	 	Title: General Counsel




 




    


     


    

 


	 	CHILTERN
    HOLDINGS LIMITED, as a Lender
	 	 
	 	By: 	HG VORA CAPITAL MANAGEMENT, LLC, investment adviser
	 	 
	 	By: 	/s/ Philip M. Garthe
	 	Name:
    Philip M. Garthe
	 	Title:
    Chief Operating Officer




 








    


     


    




 


Annex A


 


Pledged Equity Interests


 


	Loan Party	 	Issuer	 	Type of
 Organization	 	Number of

 Shares 

Owned	 	Total Shares

 Outstanding	 	Percentage of

 Interest 

Pledged	 	Certificate
 No. (if
 uncertificated,
 please indicate
 so)