Exhibit 10.1

 

FOURTH AMENDMENT TO FIFTH AMENDED

AND RESTATED LOAN AGREEMENT

 

                This Fourth Amendment to Fifth Amended and Restated Loan
Agreement, dated as of September 30, 2004, by and among The J. Jill Group, Inc.,
a Delaware corporation (“BORROWER”) on the one hand, and Citizens Bank of
Massachusetts, HSBC Bank USA, National Association, successor by merger to HSBC
Bank USA, and Banknorth, N.A. (collectively, “LENDERS”) and Citizens Bank of
Massachusetts as agent (“AGENT”) for the LENDERS, on the other hand.

 

WITNESSETH:

 

                WHEREAS, BORROWER, LENDERS and AGENT are parties to that certain
Fifth Amended and Restated Loan Agreement dated as of June 29, 2001, as amended
by First Amendment thereto dated as of August 28, 2001; by Second Amendment
thereto dated as of July 25, 2002; and by Third Amendment thereto dated as of
June 26, 2003 (collectively, the “LOAN AGREEMENT”); and

 

                WHEREAS, BORROWER, LENDERS and AGENT wish to amend the LOAN
AGREEMENT as more particularly hereafter set forth.  Capitalized terms used
herein without definition shall have the meanings ascribed to them in the LOAN
AGREEMENT.

 

                NOW, THEREFORE, in consideration of the covenants and agreements
herein contained, the parties hereby agree that the LOAN AGREEMENT is hereby
amended as follows:

 

1.                                       Section 1.01 of the LOAN AGREEMENT is
hereby amended by deleting the respective definitions of “J. JILL DIRECT” and
“SPECIAL SUBSIDIARIES” appearing therein and substituting therefor the
following:

 

“J. JILL DIRECT” means that certain former Massachusetts corporation known as J.
JILL DIRECT, INC. which corporation was merged into and with BIRCH POND, the
latter entity being the survivor of such merger.

 

“SPECIAL SUBSIDIARIES” shall mean individually and collectively each of QT
SERVICES and BIRCH POND, the latter entity being the surviving entity of a
merger between it and J. JILL DIRECT.

 

2.                                       Section 1.01 of the LOAN AGREEMENT is
hereby amended by deleting the definition of “TERMINATION DATE” appearing
therein and substituting therefor the following:

 

                                                “TERMINATION DATE” shall mean
June 1, 2006.

 

3.                                       Section 1.01 of the LOAN AGREEMENT is
hereby amended by deleting the definition of QUALIFIED INVESTMENTS appearing
therein and substituting therefor the following:

 

--------------------------------------------------------------------------------

 

                                                “QUALIFIED INVESTMENTS” shall
mean investments in (i) commercial paper rated P1 by Moody’s Investors Service,
Inc. or A-1 by Standard & Poor’s Corporation on the date of acquisition, (ii)
corporate bonds with a minimum rating of A-1 by Moody’s Investors Service, Inc.
or A+ by Standard & Poor’s Corporation; (iii) tax-exempt securities with a
minimum rating of A by Moody’s Investors Service, Inc. or Standard & Poor’s
Corporation or tax-exempt securities that are insured to meet such minimum
rating; (iv) certificates of deposit or other evidences of deposit at financial
institutions (having a combined capital and surplus in excess of One Billion
DOLLARS ($1,000,000,000)), or in any of the LENDERS; (v) obligations of the
United States Government or any agency thereof; (vi) obligations guaranteed by
the United States Government, (vii) repurchase agreements in United States
DOLLARS from financial institutions (having a combined capital and surplus in
excess of One Billion DOLLARS ($1,000,000,000)), or from any of the LENDERS;
(viii) so-called “money market accounts” in United States financial institutions
(having a combined capital and surplus in excess of One Billion DOLLARS
($1,000,000,000)) or in any of the LENDERS; (ix) money market mutual funds and
diversified mutual funds in financial institutions (having a combined capital
and surplus in excess of One Billion DOLLARS ($1,000,000,000)) provided that (a)
each obligation referred to above matures within three years from the date of
purchase and is payable in United States DOLLARS; (b) the duration of the entire
portfolio does not exceed two years; and (c) the interests of BORROWER or any
SUBSIDIARY, as the case may be, in the securities underlying repurchase
agreements referred to in subclause (vii) (except with respect to repurchase
agreements with AGENT) is fully perfected at all times.

 

4.                                       Section 1.01 of the LOAN AGREEMENT is
hereby amended by deleting the definition of “UNFINANCED CAPITAL EXPENDITURES”
appearing therein and substituting therefor the following:

 

                                                “UNFINANCED CAPITAL
EXPENDITURES” shall mean the lesser of (A) consolidated capital expenditures net
of related tenant allowances minus new consolidated long term indebtedness
issued during the applicable period plus the aggregate amount of all long term
indebtedness prepaid during such period or (B) the “CASH CALCULATION” as
hereafter described.  “CASH CALCULATION” shall equal zero ($0) if BORROWER’S
cash, cash equivalents, and QUALIFIED INVESTMENTS pursuant to BORROWER’S
consolidated balance sheet at the end of the applicable period equals or exceeds
Twenty-Eight Million Seven Hundred Six Thousand Dollars ($28,706,000).  If
BOROWER’S cash, cash equivalents, and QUALIFIED INVESTMENTS pursuant to
BOROWER’S consolidated balance sheet at the end of the applicable period are
less than Twenty-Eight Million Seven Hundred Six Thousand Dollars ($28,706,000)
(the “LESSER SUM”), then “CASH CALCULATION” shall equal the difference between
Twenty-Eight Million Seven Hundred Six Thousand Dollars ($28,706,000) and the
LESSER SUM.  The term “long term indebtedness” as

 

 

2

--------------------------------------------------------------------------------

 

                                                used in this definition shall
include, but not be limited to, those items shown on Schedule 1.01C.

 

5.                                       Section 9.12 of the LOAN AGREEMENT is
hereby amended by deleting said section in its entirety and substituting
therefor the following:

 

                                                “9.12  The BORROWER and its
SUBSIDIARIES on a consolidated basis will not at any time permit its ratio of
“hard current assets” (defined as the aggregate of (i) cash less cash held in
escrow, (ii) QUALIFIED INVESTMENTS, (iii) ACCOUNTS and (iv) INVENTORY) to
current liabilities including ADVANCES to be less than 1.50 to 1.”

 

6.                                       Section 9.16 of the LOAN AGREEMENT is
hereby amended by deleting said section in its entirety.

 

7.                                       Section 9.17 of the LOAN AGREEMENT is
hereby amended by deleting said section in its entirety.

 

8.                                       Simultaneously herewith, BORROWER shall
pay to AGENT for the benefit of the LENDERS on a pro rata basis a facility fee
of Seventy-Five Thousand Dollars ($75,000) in connection with this Fourth
Amendment to Fifth Amended and Restated Loan Agreement.

 

9.                                       Simultaneously herewith, BORROWER shall
execute and deliver respectively to each of the LENDERS a First Amendment to
each amended and restated REVOLVING NOTE, each in form and substance
satisfactory to AGENT.

 

10.                                 LENDERS and AGENT acknowledge that J. JILL
DIRECT has been merged into and with BIRCH POND, and that any documents,
instruments or agreements formerly executed by J. JILL DIRECT are now the
obligations of the surviving entity, BIRCH POND.

 

11.                                 On account of a merger between HSBC BANK USA
and HSBC BANK USA, National Association, the latter entity being the survivor of
such merger, Subsection 12.02(b) of the LOAN AGREEMENT is hereby amended by
deleting the reference therein to “HSBC Bank USA” and substituting “HSBC Bank
USA, National Association.”  The parties agree that such substitution shall be
deemed to be made in all of the FINANCING AGREEMENTS.

 

Except as hereby amended, the LOAN AGREEMENT is hereby ratified, confirmed and
republished.

 

3

--------------------------------------------------------------------------------

 

                IN WITNESS WHEREOF, the parties hereto have set their hands and
seals as of the date first above written.

 

CITIZENS BANK OF MASSACHUSETTS

 

THE J. JILL GROUP, INC.

 

 

 

 

By:

/s/ Lori B. Leeth

 

 

By:

/s/ Olga L. Conley

 

Lori B. Leeth, Senior Vice President

 

 

Name:

Olga L. Conley

 

 

 

 

Title:

EVP/CFO

 

 

 

 

 

 

 

 

 

 

HSBC BANK USA, NATIONAL ASSOCIATION

 

BANKNORTH, N.A.

 

 

 

 

 

 

By:

/s/ George Ahlmeyer

 

 

By:

/s/ Jon R. Sundstrom

 

George Ahlmeyer, Senior Vice President

 

 

 

Jon R. Sundstrom

 

 

 

 

 

Senior Vice President

 

 

4

--------------------------------------------------------------------------------