Exhibit 10.1


FOURTH AMENDMENT TO LOAN AGREEMENT


THIS FOURTH AMENDMENT TO
LOAN AGREEMENT (this “Amendment”) is made and entered into and effective
as of December 22, 2006 (the “Amendment Closing Date”), by and among WELLS FARGO BANK, NATIONAL ASSOCIATION, a
national banking association (the “Bank”), FOSSIL PARTNERS, L.P. (the “Borrower”), FOSSIL, INC. (the “Company”), FOSSIL INTERMEDIATE, INC. (“Fossil
Intermediate”), FOSSIL TRUST (“Fossil
Trust”), FOSSIL STORES I, INC.
(“Fossil I”), ARROW MERCHANDISING, INC.
(“Arrow Merchandising”) and FOSSIL
HOLDINGS, LLC (“Fossil Holdings”) (the Company, Fossil
Intermediate, Fossil Trust, Fossil I, Arrow Merchandising and Fossil Holdings
are sometimes referred to herein individually as a “Guarantor” and
collectively as the “Guarantors”).


RECITALS


WHEREAS, the Bank, the
Borrower and the Guarantors are parties to that certain Loan Agreement, dated
as of September 23, 2004 (as amended, modified or supplemented, from time
to time, the “Agreement”); and


WHEREAS, the Bank, the
Borrower and the Guarantors desire to amend the Agreement and the other Loan
Documents as herein set forth.


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


ARTICLE I.


Definitions


Section 1.01.  Capitalized terms
used in this Amendment are defined in the Agreement, as amended hereby, unless
otherwise stated.


ARTICLE II.


Amendments


Section 2.01.  Amendment to
Section 12(a).  Effective as of the
Amendment Closing Date, Section 12(a) of the Agreement is hereby amended
and restated in its entirety to read as follows:


“(a)                            Annual
Financial Statements.  Furnish the
Bank, within one hundred (100) days after the end of each fiscal year of the
Company, (i) either (A) a copy of the Company’s audited consolidated financial
statements, consisting of at least a balance sheet and related statement of
income, retained earnings and changes in financial condition of the Company
prepared in conformity with generally accepted accounting principles, applied
on a basis consistent with that of the preceding year, and certified by an
independent certified public accountant selected by the









 



Company and reasonably
satisfactory to the Bank or (B) upon payment to the Bank of a non-refundable
$10,000 fee in immediately available funds (the “Non-GAAP Annual Financial
Statements Fee”), a copy of its unaudited consolidated financial statements
for such fiscal year, consisting of at least a balance sheet and related
statement of income, retained earnings and changes in financial condition of
the Company applied on a basis consistent with that of the preceding year and
not prepared in conformity with GAAP (“Non-GAAP Annual Financial Statements”)
but certified by an authorized officer of the Company that such Non-GAAP Annual
Financial Statements are true and correct in all material respects and complete
to the best of the Company’s knowledge, provided that for each fiscal
year in which the Company furnishes Non-GAAP Annual Financial Statements, the
Company shall pay the Non-GAAP Annual Financial Statements Fee upon delivery
thereof, and (ii) a copy of the consolidating financial statements of the
Company prepared by the Company.


Section 2.02.  Amendment to
Section 12(b).  Effective as of the
Amendment Closing Date, Section 12(b) of the Agreement is hereby amended
and restated in its entirety to read as follows:


“(b)                           Quarterly
Financial Statements.  Furnish the
Bank, within fifty (50) days after the end of any fiscal quarter of the Company
during the term hereof (other than the fiscal quarter ending on the last day of
the fiscal year of Company), (i) a copy of its unaudited consolidated financial
statements for such fiscal quarter, consisting of at least a balance sheet and
related statement of income, materially prepared in conformity with generally
accepted accounting principles (“GAAP”) and certified by an authorized
officer of the Company, or (ii) upon payment to the Bank of a non-refundable
$10,000 fee in immediately available funds (the “Non-GAAP Quarterly
Financial Statements Fee”), a copy of its unaudited consolidated financial
statements for such fiscal quarter, consisting of at least a balance sheet and
related statement of income, not prepared in conformity with GAAP (“Non-GAAP
Quarterly Financial Statements”) but certified by an authorized officer of
the Company that such Non-GAAP Quarterly Financial Statements are true and
correct in all material respects and complete to the best of the Company’s
knowledge, provided that for each fiscal quarter in which the Company
furnishes Non-GAAP Quarterly Financial Statements, the Company shall pay the
Non-GAAP Quarterly Financial Statements Fee upon delivery thereof.”


Section 2.03.  Amendment to
Section 12(c).  Effective as of the
Amendment Closing Date, Section 12(c) of the Agreement is hereby amended
and restated in its entirety to read as follows:



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“(c)                            Compliance
Certificate.  Furnish the Bank,
concurrently with the delivery of the financial statements required to be
delivered pursuant to clauses (a) and (b) above, a Compliance Certificate in a
form similar to the Compliance Certificate attached hereto as Exhibit C,
but including all representations and warranties to the satisfaction of the
Bank, signed by an authorized officer of the Borrower and the Company.  For any quarter that the Company furnishes to
the Bank Non-GAAP Quarterly Financial Statements as permitted by Section
12(b)(i)(y) hereof, for purposes of determining compliance with the
financial covenants set forth in Section 14 hereof, such determination
shall be made by the Bank by reference to the Non-GAAP Quarterly Financial
Statements so long as Company paid to the Bank the Non-GAAP Quarterly Financial
Statements Fee for such period.”


Section 2.04.  Amendment to
Section 13.  Effective as of the
Amendment Closing Date, Section 13 of the Agreement is hereby amended by
inserting immediately below Section 13(f) the following text as new Section
13(g):


“(g)                           Equity Purchases.  Make any payment to any equity holder
(whether in cash or in property) with respect to the repurchase of any of their
respective equity interests.”


Section 2.05.  Amendment to
Section 14.  Effective as of the
Amendment Closing Date, Section 14 of the Agreement is hereby amended by
adding Section 14(d) thereto to read as follows:


“(e)                            Minimum Cash
on Hand.  Maintain at all
times unrestricted and unencumbered cash on hand of the Company on a
consolidated basis of at least $50,000,000.”


ARTICLE
III.

Conditions Precedent


Section 3.01.  Conditions to
Effectiveness.  The effectiveness of
this Amendment is subject to the satisfaction of the following conditions
precedent, unless specifically waived in writing by the Bank:


(a)                                  The
Bank shall have received this Amendment, duly executed by the Borrower and each
Guarantor;


(b)                                 There
shall have been no material adverse change in the business or financial
condition of the Borrower, Company and the Guarantors, taken as a whole;


(c)                                  There
shall be no material adverse litigation, either pending or threatened, against
the Borrower or any Guarantor that could reasonably be expected to have a
material adverse effect on the business or financial condition of the Borrower,
Company and the Guarantors, taken as a whole;



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(d)                                 The
representations and warranties contained herein and in the Agreement and the
other Loan Documents, as each is amended hereby, shall be true and correct in
all material respects as of the date hereof, as if made on the date hereof,
except to the extent such representations were made as of a specific date;


(e)                                  No
default or Event of Default under the Agreement, as amended hereby, shall have
occurred and be continuing, unless such default or Event of Default has been
specifically waived in writing by the Bank;


(f)                                    All
requisite corporate, partnership or trust proceedings, as appropriate, shall
have been taken the Borrower and each Guarantor to authorize the execution,
delivery and performance of this Amendment, and such proceedings and other
legal matters incident thereto shall be satisfactory to the Bank and its legal
counsel; and


(g)                                 The
Bank shall have received from the Borrower, in immediately available funds, an
amendment fee in the amount of $10,000 (which fee shall be fully earned and
non-refundable upon execution hereof).


ARTICLE
IV.

No Waiver


Section 4.01.  Nothing contained
herein shall be construed as a waiver by the Bank of any covenant or provision
of the Agreement, the other Loan Documents, this Amendment, or of any other
contract or instrument between the Borrower and/or the Guarantors and the Bank,
and the failure of the Bank at any time or times hereafter to require strict
performance by the Borrower and/or any Guarantor of any provision thereof shall
not waive, affect or diminish any right of the Bank to thereafter demand strict
compliance therewith.  The Bank hereby
reserves all rights granted under the Agreement, the other Loan Documents, this
Amendment and any other contract or instrument between the Borrower and/or the
Guarantors and the Bank.


ARTICLE
V.

Ratifications, Representations and Warranties, Covenants


Section 5.01.  General
Ratifications.  The terms and
provisions set forth in this Amendment shall modify and supersede all
inconsistent terms and provisions set forth in the Agreement and the other Loan
Documents, and, except as expressly modified and superseded by this Amendment,
the terms and provisions of the Agreement and the other Loan Documents are
ratified and confirmed and shall continue in full force and effect.  The parties hereto agree that the Agreement
and the other Loan Documents, as amended hereby, shall continue to be legal,
valid, binding and enforceable in accordance with their respective terms.


Section 5.02.  Ratification of
Guaranties.  Each of the Guarantors
hereby acknowledges and consents to all of the terms and conditions of this
Amendment and hereby ratifies and confirms the Guaranty Agreement to which it
is a party to or for the benefit of the Bank. 
Each of the Guarantors hereby represents and acknowledges that it has no
claims, counterclaims, offsets, credits or defenses to the Loan Documents or
the performance of its obligations thereunder.



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Furthermore,
each Guarantor agrees that nothing contained in this Amendment shall adversely
affect any right or remedy of the Bank under the Guaranty Agreement to which
such Guarantor is a party.  Each
Guarantor hereby agrees that with respect to the Guaranty Agreement to which it
is a party, all references in such Guaranty Agreement to the “Guaranteed
Obligations” shall include, without limitation, the obligations of the Borrower
to the Bank under the Agreement, as amended hereby.  Finally, each of the Guarantors hereby
represents and acknowledges that the execution and delivery of this Amendment
and the other Loan Documents executed in connection herewith shall in no way
change or modify its obligations as a guarantor, debtor, pledgor, assignor,
obligor and/or grantor under its respective Guaranty Agreement (except as
specifically provided in this Section 5.02) and shall not constitute a
waiver by the Bank of any of the Bank’s rights against such Guarantor.


Section 5.03.  Ratification of
Security Interests.  The Company
hereby agrees that the Stock Pledge Agreement is hereby expressly amended such
that the definition of “Secured Obligations” contained therein includes,
without limitation, all indebtedness and other obligations of the Borrower now
or hereafter existing hereunder the Agreement, as amended hereby.  Furthermore, the Company hereby ratifies and
reaffirms its obligations under the Stock Pledge Agreement, as the same is
amended hereby, and represents and acknowledges that the Stock Pledge Agreement
is not subject to any claims, counterclaims, defenses or offsets.  Finally, the Company hereby represents and
acknowledges that the execution and delivery of this Amendment and the other
Loan Documents executed in connection herewith shall in no way change or modify
its obligations as a debtor, pledgor, assignor, obligor and/or grantor under
the Stock Pledge Agreement (except as specifically provided in this Section
5.03) and shall not constitute a waiver by the Bank of any of the Bank’s
rights against the Company.


Section 5.04.  Representations
and Warranties.  The Borrower and
each of the Guarantors hereby jointly and severally represent and warrant to
the Bank that (a) the execution, delivery and performance of this Amendment and
any and all other Loan Documents executed and/or delivered in connection
herewith have been duly authorized by all requisite corporate, partnership or
trust proceedings, as appropriate, and will not contravene, or constitute a
default under, any provision of applicable law or regulation or of the
Agreement of Limited Partnership, Articles of Incorporation, By-Laws or Trust
Agreement, as applicable, of the Borrower or any Guarantor, or of any mortgage,
indenture, material contract, material agreement or other material instrument,
or any judgment, order or decree, binding upon the Borrower or any Guarantor;
(b) the officer(s) of the Borrower and each Guarantor executing and delivering
this Amendment and any and all other Loan Documents executed and/or delivered
in connection herewith are duly elected and are authorized, by resolution of
the board of directors, board of managers or trustees (or other applicable
governing body) of the Borrower and each such Guarantor, to execute on behalf
of each such entity this Amendment and any and all other Loan Documents
executed and/or delivered in connection herewith; (c) the representations and
warranties contained in the Agreement and the other Loan Documents, as amended
hereby, are true and correct in all material respects on and as of the date
hereof and on and as of the date of execution hereof as though made on and as
of each such date, except to the extent such representations were made as of a
specific date; (d) no default or Event of Default under the Agreement, as
amended hereby, has occurred and is continuing, unless such default or Event of
Default has been specifically waived in writing by the Bank; and (e) the
Borrower and the Guarantors are in full compliance



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with all
covenants and agreements contained in the Agreement and the other Loan
Documents, as amended hereby.


ARTICLE
VI.

Miscellaneous Provisions


Section 6.01.  Survival of
Representations and Warranties.  All
representations and warranties made in the Agreement or any other Loan
Documents, including, without limitation, any document furnished in connection
with this Amendment, shall survive the execution and delivery of this Amendment
and the other Loan Documents to be executed in connection herewith, and no
investigation by the Bank or any closing shall affect the representations and
warranties or the right of the Bank to rely upon them.


Section 6.02.  Reference to
Agreement.  Each of the Agreement and
the other Loan Documents, and any and all other agreements, documents or
instruments now or hereafter executed and delivered pursuant to the terms
hereof or pursuant to the terms of the Agreement, as amended hereby, are hereby
amended so that any reference in the Agreement and such other Loan Documents to
the Agreement, shall mean a reference to the Agreement, as amended hereby.


Section 6.03.  Expenses of the
Bank.  As provided in the Agreement,
the Borrower agrees to pay on demand all reasonable costs and expenses incurred
by the Bank in connection with the preparation, negotiation, and execution of
this Amendment and the other Loan Documents executed pursuant hereto and any
and all amendments, modifications, and supplements hereto or thereto, including,
without limitation, the costs and fees of the Bank’s legal counsel, and all
costs and expenses incurred by the Bank in connection with the enforcement or
preservation of any rights under the Agreement or any other Loan Document, in
each case as amended hereby, including, without, limitation, the costs and fees
of the Bank’s legal counsel.


Section 6.04.  Severability.  Any provision of this Amendment held by a
court of competent jurisdiction to be invalid or unenforceable shall not impair
or invalidate the remainder of this Amendment and the effect thereof shall be
confined to the provision so held to be invalid or unenforceable.


Section 6.05.  Successors and
Assigns.  This Amendment is binding
upon and shall inure to the benefit of the Borrower, the Guarantors and the
Bank and their respective successors and assigns.


Section 6.06.  Counterparts.  This Amendment may be executed in one or more
counterparts, each of which when so executed shall be deemed to be an original,
but all of which when taken together shall constitute one and the same
instrument.


Section 6.07.  Effect of
Waiver.  No consent or waiver,
express or implied, by the Bank to or for any breach of or deviation from any
covenant or condition by the Borrower or any Guarantor shall be deemed a
consent to or waiver of any other breach of the same or any other covenant,
condition or duty.



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Section 6.08.  Headings.  The headings, captions and arrangements used
in this Amendment are for convenience only and shall not affect the
interpretation of this Amendment.


Section 6.09.  Applicable Law.  THIS AMENDMENT AND ALL OTHER AGREEMENTS
EXECUTED PURSUANT HERETO SHALL BE DEEMED TO HAVE BEEN MADE AND TO BE
PERFORMABLE IN AND SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF TEXAS.


Section 6.10.  Final Agreement.  THE AGREEMENT AND THE OTHER LOAN DOCUMENTS,
EACH AS AMENDED HEREBY, REPRESENT THE ENTIRE EXPRESSION OF THE PARTIES WITH
RESPECT TO THE SUBJECT MATTER HEREOF ON THE DATE THIS AMENDMENT IS EXECUTED.  THE AGREEMENT AND THE OTHER LOAN DOCUMENTS,
AS AMENDED HEREBY, MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.  THERE ARE NO UNWRITTEN ORAL AGREEMENTS
BETWEEN THE PARTIES.  NO MODIFICATION,
RESCISSION, WAIVER, RELEASE OR AMENDMENT OF ANY PROVISION OF THIS AMENDMENT
SHALL BE MADE, EXCEPT BY A WRITTEN AGREEMENT SIGNED BY THE BORROWER, THE
GUARANTORS AND THE BANK.


Section 6.11.  Agreement for
Binding Arbitration.  The parties agree to be
bound by the terms and provisions of the Bank’s current Arbitration Program
which is incorporated herein by reference 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.


[Remainder of page
intentionally left blank.]



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IN WITNESS WHEREOF, this
Amendment has been executed and is effective as of the date first above-written.


	
  

  	
  “BANK”

  
	
   

  	
   

  
	
   

  	
  WELLS FARGO BANK,

  
	
   

  	
  NATIONAL ASSSOCIATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Susan K. Nugent

  
	
   

  	
   

  	
  Susan K. Nugent,

  
	
   

  	
   

  	
  Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
  “BORROWER”

  
	
   

  	
   

  
	
   

  	
  FOSSIL PARTNERS, L.P.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Fossil, Inc., its general partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Randy S. Kercho

  
	
   

  	
   

  	
  Randy S. Kercho,

  
	
   

  	
   

  	
  Executive Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  “GUARANTORS”

  
	
   

  	
   

  
	
   

  	
  FOSSIL, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ Randy S. Kercho

  
	
   

  	
   

  	
  Randy S. Kercho,

  
	
   

  	
   

  	
  Executive Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  FOSSIL INTERMEDIATE, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Mike L. Kovar

  
	
   

  	
   

  	
  Mike L. Kovar, Treasurer

  



 









 



 


	
  

  	
  FOSSIL TRUST

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Mike L. Kovar

  
	
   

  	
   

  	
  Mike L. Kovar, Treasurer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  FOSSIL STORES I, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Mike L. Kovar

  
	
   

  	
   

  	
  Mike L. Kovar, Treasurer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  ARROW MERCHANDISING, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Mike L. Kovar

  
	
   

  	
   

  	
  Mike L. Kovar, Treasurer

  
	
   

  	
   

  	
   

  
	
   

  	
  FOSSIL HOLDINGS, LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ Mike L. Kovar

  
	
   

  	
   

  	
  Mike L. Kovar, Treasurer

  
						



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