Document:

NEITHER THIS WARRANT NOR ANY OF THE SECURITIES
ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OR UNDER THE SECURITIES LAWS OF ANY OTHER
JURISDICTION. BY ACQUIRING THIS WARRANT, HOLDER REPRESENTS THAT HOLDER WILL NOT SELL OR OTHERWISE DISPOSE OF THIS WARRANT OR THE
SECURITIES FOR WHICH IT MAY BE EXERCISED WITHOUT REGISTRATION OR COMPLIANCE WITH AN EXEMPTION FROM REGISTRATION UNDER THE AFORESAID
ACTS AND THE RULES AND REGULATIONS THEREUNDER.

 

WARRANT TO PURCHASE COMMON STOCK

 

Warrant No.:W2016-11-15-1

Number of Shares of Common Stock: 45,547

Date of Issuance: November 16, 2016 (“Issuance
Date”)

 

This
Certifies That, for value received, James L. Davis. (including any permitted and registered assigns, the “Holder”),
is entitled to purchase from Cachet Financial Solutions, Inc., a Delaware corporation (the “Company”), up to
45,547 shares of Common Stock (the “Warrant Shares”) at the Exercise Price then in effect.

 

Capitalized terms used in this Warrant to Purchase
Common Stock (this “Warrant”) shall have the meanings set forth in the body of this Warrant or in Section 13
below. For purposes of this Warrant, the term “Exercise Price” shall mean $4.94 per share, subject to
adjustment as provided herein, and the term “Exercise Period” shall mean the period commencing on the Issuance
Date and ending on 5:00 p.m. New York time on the five-year anniversary thereof.

 

1. EXERCISE OF WARRANT.

 

(a) Mechanics of Exercise. Subject to
the terms and conditions hereof, the rights represented by this Warrant may be exercised in whole or in part at any time or times
during the Exercise Period by delivery of a written notice, in the form attached hereto as Exhibit A (the “Exercise
Notice”), of the Holder’s election to exercise this Warrant. The Holder shall not be required to deliver the original
Warrant in order to effect an exercise hereunder. Execution and delivery of the Exercise Notice with respect to less than all of
the Warrant Shares shall have the same effect as cancellation of the original Warrant and issuance of a new Warrant evidencing
the right to purchase the remaining number of Warrant Shares. On or before the third Trading Day (the “Warrant Share Delivery
Date”) following the date on which the Company shall have received the Exercise Notice, and upon receipt by the Company
of (i) payment to the Company of an amount equal to the applicable Exercise Price multiplied by the number of Warrant Shares as
to which this Warrant is being exercised (the “Aggregate Exercise Price” and together with the Exercise Notice,
the “Exercise Delivery Documents”) in cash or by wire transfer of immediately available funds or (ii) notification
from the Holder that this Warrant is being exercised pursuant to a Cashless Exercise, as defined below, the Company shall (or direct
its transfer agent to) issue and dispatch by overnight courier to the address as specified in the Exercise Notice, a certificate,
registered in the Company’s share register in the name of the Holder or its designee, for the number of shares of Common
Stock to which the Holder is entitled pursuant to such exercise. Upon delivery of the Exercise Delivery Documents, the Holder shall
be deemed for all corporate purposes to have become the holder of record of the Warrant Shares with respect to which this Warrant
has been exercised, irrespective of the date of delivery of the certificates evidencing such Warrant Shares. If this Warrant is
submitted in connection with any exercise pursuant to Section 1(c) and the number of Warrant Shares represented by this Warrant
submitted for exercise is greater than the number of Warrant Shares being acquired upon an exercise, then the Company shall as
soon as practicable and in no event later than three Business Days after any exercise and at its own expense, issue a new Warrant
(in accordance with Section 6) representing the right to purchase the number of Warrant Shares purchasable immediately prior to
such exercise under this Warrant, less the number of Warrant Shares with respect to which this Warrant is exercised.

 

    	 	 	 

    	 

    

 

(b) No Fractional Shares. No fractional
shares shall be issued upon the exercise of this Warrant as a consequence of any adjustment pursuant hereto. All Warrant Shares
(including fractions) issuable upon exercise of this Warrant may be aggregated for purposes of determining whether the exercise
would result in the issuance of any fractional share. If, after aggregation, the exercise would result in the issuance of a fractional
share, the Company shall, in lieu of issuance of any fractional share, pay the Holder otherwise entitled to such fraction a sum
in cash equal to the product resulting from multiplying the then-current fair market value of a Warrant Share by such fraction.

 

(c) Cashless Exercise. The Holder may,
in its sole discretion, at any time prior to the effective date of a registration statement filed by the Company or any Subsidiary
under the Securities Act covering the Warrant Shares, exercise this Warrant in whole or in part and, in lieu of making the cash
payment otherwise contemplated to be made to the Company upon such exercise in payment of the Aggregate Exercise Price, elect instead
to receive upon such exercise the “Net Number” of shares of Common Stock determined according to the following
formula (a “Cashless Exercise”):

 

Net Number = (A x B) – (A x C)

B

 

For purposes of the foregoing formula:

 

	 	A =	the total number of shares with respect to which this Warrant is then being exercised.
	 	 	 
	 	B = 	the Weighted Average Price of the shares of Common Stock for the five consecutive Trading Days ending on the date immediately preceding the date of the Exercise Notice.
	 	 	 
	 	C = 	the Exercise Price then in effect for the applicable Warrant Shares at the time of such exercise.

 

2. ADJUSTMENTS. The Exercise Price and
the number of Warrant Shares shall be adjusted from time to time as follows:

 

    	 	2	 

    	 

    

 

(a) Subdivision or Combination of Common
Stock. If the Company at any time on or after the Issuance Date subdivides (by any stock split, stock dividend, recapitalization
or otherwise) one or more classes of its outstanding shares of Common Stock into a greater number of shares, the Exercise Price
in effect immediately prior to such subdivision will be proportionately reduced and the number of Warrant Shares will be proportionately
increased. If the Company at any time on or after the Issuance Date combines (by combination, reverse stock split or otherwise)
one or more classes of its outstanding shares of Common Stock into a smaller number of shares, the Exercise Price in effect immediately
prior to such combination will be proportionately increased and the number of Warrant Shares will be proportionately decreased.
Any adjustment under this Section shall become effective at the close of business on the date the subdivision or combination becomes
effective.

 

(b) Distribution of Assets. If the Company
shall declare or make any dividend or other distribution of its assets (or rights to acquire its assets) to holders of shares of
Common Stock, by way of return of capital or otherwise (including without limitation any distribution of cash, stock or other securities,
property or options by way of a dividend, spin off, reclassification, corporate rearrangement or other similar transaction) (a
“Distribution”), at any time after the issuance of this Warrant, then, in each such case:

 

(i) any Exercise
Price in effect immediately prior to the close of business on the record date fixed for the determination of holders of shares
of Common Stock entitled to receive the Distribution shall be reduced, effective as of the close of business on such record date,
to a price determined by multiplying such Exercise Price by a fraction (i) the numerator of which shall be the Closing Sale Price
of the shares of Common Stock on the Trading Day immediately preceding such record date minus the value of the Distribution (as
determined in good faith by the Company’s Board of Directors) applicable to one share of Common Stock, and (ii) the denominator
of which shall be the Closing Sale Price of the shares of Common Stock on the Trading Day immediately preceding such record date;
and

 

(ii) the number
of Warrant Shares shall be increased to a number of shares equal to the number of shares of Common Stock obtainable immediately
prior to the close of business on the record date fixed for the determination of holders of shares of Common Stock entitled to
receive the Distribution multiplied by the reciprocal of the fraction set forth in the immediately preceding clause (i); provided,
however, that in the event that the Distribution is of shares of common stock of a company (other than the Company) whose common
stock is traded on a national securities exchange or a national automated quotation system (“Other Shares of Common Stock”),
then the Holder may elect to receive a warrant to purchase Other Shares of Common Stock in lieu of an increase in the number of
Warrant Shares, the terms of which shall be identical to those of this Warrant, except that such warrant shall be exercisable into
the number of shares of Other Shares of Common Stock that would have been payable to the Holder pursuant to the Distribution had
the Holder exercised this Warrant immediately prior to such record date and with an aggregate exercise price equal to the product
of the amount by which the exercise price of this Warrant was decreased with respect to the Distribution pursuant to the terms
of the immediately preceding clause (i) and the number of Warrant Shares calculated in accordance with the first part of this clause
(ii).

 

    	 	3	 

    	 

    

 

3. FUNDAMENTAL TRANSACTIONS. If, at
any time while this Warrant is outstanding, (i) the Company effects any merger of the Company with or into another entity and the
Company is not the surviving entity (such surviving entity, the “Successor Entity”), (ii) the Company effects
any sale of all or substantially all of its assets in one or a series of related transactions, (iii) any tender offer or exchange
offer (whether by the Company or by another individual or entity, and approved by the Company) is completed pursuant to which holders
of Common Stock are permitted to tender or exchange their shares of Common Stock for other securities, cash or property and the
holders of at least 50% of the Common Stock accept such offer, or (iv) the Company effects any reclassification of the Common Stock
or any compulsory share exchange pursuant to which the Common Stock is effectively converted into or exchanged for other securities,
cash or property (other than as a result of a subdivision or combination of shares of Common Stock covered by Section 2(a) above)
(in any such case, a “Fundamental Transaction”), then, upon any subsequent exercise of this Warrant, the Holder
shall have the right to receive the number of shares of Common Stock of the Successor Entity or of the Company and any additional
consideration (the “Alternate Consideration”) receivable upon or as a result of such reorganization, reclassification,
merger, consolidation or disposition of assets by a holder of the number of shares of Common Stock for which this Warrant is exercisable
immediately prior to such event (disregarding any limitation on exercise contained herein solely for the purpose of such determination).
For purposes of any such exercise, the determination of the Exercise Price shall be appropriately adjusted to apply to such Alternate
Consideration based on the amount of Alternate Consideration issuable in respect of one share of Common Stock in such Fundamental
Transaction, and the Company shall apportion the Exercise Price among the Alternate Consideration in a reasonable manner reflecting
the relative value of any different components of the Alternate Consideration. If holders of Common Stock are given any choice
as to the securities, cash or property to be received in a Fundamental Transaction, then the Holder shall be given the same choice
as to the Alternate Consideration it receives upon any exercise of this Warrant following such Fundamental Transaction. To the
extent necessary to effectuate the foregoing provisions, any Successor Entity in such Fundamental Transaction shall issue to the
Holder a new warrant consistent with the foregoing provisions and evidencing the Holder’s right to exercise such warrant
into Alternate Consideration.

 

4. NON-CIRCUMVENTION. The Company covenants
and agrees that it will not, by amendment of its certificate of incorporation, bylaws or through any reorganization, transfer of
assets, consolidation, merger, scheme of arrangement, dissolution, issue or sale of securities, or any other voluntary action,
avoid or seek to avoid the observance or performance of any of the terms of this Warrant, and will at all times in good faith carry
out all the provisions of this Warrant and take all action as may be required to protect the rights of the Holder. Without limiting
the generality of the foregoing, the Company (i) shall not increase the par value of any shares of Common Stock receivable upon
the exercise of this Warrant above the Exercise Price then in effect, (ii) shall take all such actions as may be necessary or appropriate
in order that the Company may validly and legally issue fully paid and non-assessable shares of Common Stock upon the exercise
of this Warrant, and (iii) shall, for so long as this Warrant is outstanding, have authorized and reserved, free from preemptive
rights, a sufficient number of shares of Common Stock to provide for the exercise of the rights represented by this Warrant (without
regard to any limitations on exercise).

 

5. WARRANT HOLDER NOT DEEMED A STOCKHOLDER.
Except as otherwise specifically provided herein, this Warrant, in and of itself, shall not entitle the Holder to any voting rights
or other rights as a stockholder of the Company. In addition, nothing contained in this Warrant shall be construed as imposing
any liabilities on the Holder to purchase any securities (upon exercise of this Warrant or otherwise) or as a stockholder of the
Company, whether such liabilities are asserted by the Company or by creditors of the Company.

 

    	 	4	 

    	 

    

 

6. REISSUANCE.

 

(a) Lost, Stolen or Mutilated Warrant.
If this Warrant is lost, stolen, mutilated or destroyed, the Company will, on such terms as to indemnity or otherwise as it may
reasonably impose (which shall, in the case of a mutilated Warrant, include the surrender thereof), issue a new Warrant of like
denomination and tenor as this Warrant so lost, stolen, mutilated or destroyed.

 

(b) Issuance of New Warrants. Whenever
the Company is required to issue a new Warrant pursuant to the terms of this Warrant, such new Warrant shall be of like tenor with
this Warrant, and shall have an issuance date, as indicated on the face of such new Warrant which is the same as the Issuance Date.

 

7. TRANSFER.

 

(a) Notice of Transfer. The Holder agrees
to give written notice to the Company before transferring this Warrant or transferring any Warrant Shares of such Holder’s
intention to do so, describing briefly the manner of any proposed transfer. Promptly upon receiving such written notice, the Company
shall present copies thereof to the Company’s counsel. If the proposed transfer may be effected without registration or qualification
(under any federal or state securities laws), the Company, as promptly as practicable, shall notify the Holder thereof, whereupon
the Holder shall be entitled to transfer this Warrant or to dispose of Warrant Shares received upon the previous exercise of this
Warrant, all in accordance with the terms of the notice delivered by the Holder to the Company; provided, however, that an appropriate
legend may be endorsed on this Warrant or the certificates for such Warrant Shares respecting restrictions upon transfer thereof
necessary or advisable in the opinion of counsel and satisfactory to the Company to prevent further transfers which would be in
violation of Section 5 of the Securities Act and applicable state securities laws; and provided further that the prospective transferee
or purchaser shall execute the Assignment of Warrant attached hereto as Exhibit B and such other documents and make such
representations, warranties, and agreements as may be required solely to comply with the exemptions relied upon by the Company
for the transfer or disposition of the Warrant or Warrant Shares.

 

(b) If the proposed transfer or disposition
of this Warrant or such Warrant Shares described in the written notice given pursuant to this Section 7 may not be effected without
registration or qualification of this Warrant or such Warrant Shares, the Holder will limit its activities in respect to such transfer
or disposition as are permitted by law.

 

8. NOTICES. Any
and all notices or other communications or deliveries required or permitted to be provided hereunder shall be in writing and shall
be deemed given and effective on the earliest of: (a) the date of transmission, if such notice or communication is delivered via
facsimile at or prior to 5:30 p.m. (Minneapolis time) on a Trading Day, (b) the next Trading Day after the date of transmission,
if such notice or communication is delivered via facsimile on a day that is not a Trading Day or later than 5:30 p.m. (Minneapolis
time) on any Trading Day, (c) the third Trading Day following the date of mailing, if sent by U.S. nationally recognized overnight
courier service or (d) upon actual receipt by the party to whom such notice is required to be given. The address for such notices
and communications shall be as set forth in the Exercise Notice. The Company shall provide the Holder with prompt written notice
(i) immediately upon any adjustment of the Exercise Price, setting forth in reasonable detail, the calculation of such adjustment
and (ii) at least 20 days prior to the date on which the Company closes its books or takes a record (A) with respect to any dividend
or distribution upon the shares of Common Stock, (B) with respect to any grants, issuances or sales of any stock or other securities
directly or indirectly convertible into or exercisable or exchangeable for shares of Common Stock or other property, pro rata to
the holders of shares of Common Stock or (C) for determining rights to vote with respect to any Fundamental Transaction, dissolution
or liquidation, provided in each case that such information shall be made known to the public prior to or in conjunction with such
notice being provided to the Holder.

 

    	 	5	 

    	 

    

 

9. AMENDMENT AND WAIVER. The terms of
this Warrant may be amended or waived (either generally or in a particular instance and either retroactively or prospectively)
only with the written consent of the Company and the Holder. In addition, the restrictions set forth in Section 1(d) can be waived,
as to a particular original purchaser of Preferred Stock and its affiliates, pursuant to a writing signed and delivered by the
Company and such original Purchaser prior to the execution and delivery of this Warrant.

 

10. GOVERNING LAW. This Warrant and
all rights, obligations and liabilities hereunder shall be governed by, and construed in accordance with, the internal laws of
the State of Minnesota, without giving effect to the conflicts-of-law principles thereof.

 

11. DISPUTE RESOLUTION. A dispute as
to the determination of the Exercise Price, the Closing Sale Price, or the arithmetic calculation of the Warrant Shares, the Company
or the Holder (as the case may be) shall submit the disputed determinations or arithmetic calculations via facsimile (a) within
two Business Days after receipt of the applicable notice giving rise to such dispute to the Company or the Holder, as the case
may be, or (b) if no notice gave rise to such dispute, at any time after the Holder learned of the circumstances giving rise to
such dispute. If the Holder and the Company are unable to agree upon such determination or calculation of the Exercise Price, Closing
Sale Price or the Warrant Shares within three Business Days of such disputed determination or arithmetic calculation being submitted
to the Company or the Holder, as the case may be, then the Company shall, within two Business Days thereafter submit via facsimile
(x) the disputed determination of the Exercise Price or Closing Sale Price to an independent, reputable investment bank selected
by the Company and approved by the Holder or (y) the disputed arithmetic calculation of the Warrant Shares to the Company’s
independent, outside accountant. The Company shall cause at its expense the investment bank or the accountant, as the case may
be, to perform the determinations or calculations and notify the Company and the Holder of the results no later than ten Business
Days from the time it receives the disputed determinations or calculations. Such investment bank’s or accountant’s
determination or calculation, as the case may be, shall be binding upon all parties absent manifest error.

 

12. ACCEPTANCE. Receipt of this Warrant
by the Holder shall constitute acceptance of and agreement to all of the terms and conditions contained herein.

 

    	 	6	 

    	 

    

 

13. CERTAIN DEFINITIONS. For purposes
of this Warrant, the following terms shall have the following meanings:

 

(a) “Bloomberg” means Bloomberg
Financial Markets.

 

(b) “Business
Day” means any day except any Saturday, any Sunday, any day which is a federal legal holiday in the United States or
any day on which banking institutions in the State of New York are authorized or required by law or other governmental action to
close.

 

(c) “Closing Sale Price”
means, for any security as of any date, (i) the last closing trade price for such security on the Principal Market, as reported
by Bloomberg, or, if the Principal Market begins to operate on an extended hours basis and does not designate the closing trade
price, then the last trade price of such security prior to 4:00 p.m., New York time, as reported by Bloomberg, or (ii) if the foregoing
does not apply, the last trade price of such security in the over-the-counter market for such security as reported by Bloomberg,
or (iii) if no last trade price is reported for such security by Bloomberg, the average of the bid and ask prices of any market
makers for such security as reported by the OTC Markets. If the Closing Sale Price cannot be calculated for a security on a particular
date on any of the foregoing bases, the Closing Sale Price of such security on such date shall be the fair market value as mutually
determined by the Company and the Holder. All such determinations to be appropriately adjusted for any stock dividend, stock split,
stock combination or other similar transaction during the applicable calculation period.

 

(d) “Commission”
means the United States Securities and Exchange Commission.

 

(e) “Common Stock” means
the Company common stock, par value $0.0001 per share, and any other class of securities into which such securities may hereafter
be reclassified or changed.

 

(f) “Common Stock Equivalents”
means any securities of the Company that would entitle the holder thereof to acquire at any time Common Stock, including without
limitation any debt, preferred stock, rights, options, warrants or other instrument that is at any time convertible into or exercisable
or exchangeable for, or otherwise entitles the holder thereof to receive, Common Stock.

 

(g) “Exchange
Act” means the Securities Exchange Act of 1934, and the rules and regulations thereunder.

 

(h) “Exempt Issuance” means the
issuance of (i) shares of Common Stock or options to employees, officers, directors or consultants of the Company pursuant to any
stock or option plan duly adopted by a majority of the non-employee members of the Board of Directors of the Company or a majority
of the members of a committee of non-employee directors established for such purpose (for the avoidance of doubt, including the
Company’s 2014 Associate Stock Purchase Plan intended to qualify under Section 422 of the Internal Revenue Code of 1986),
(ii) any Common Stock upon the exercise or conversion of securities that are issued and outstanding as of the date hereof, (iii)
securities issued pursuant to acquisitions or strategic transactions approved by a majority of the disinterested directors of the
Company, (iv) shares of Common Stock issued in connection with regularly scheduled dividend payments on the Series C Preferred
Stock, and (v) shares of Common Stock issued pursuant to any loan or leasing arrangement, real property leasing arrangement, or
debt financing from a bank approved by the Board of Directors of the Company.

 

    	 	7	 

    	 

    

 

(i) “Principal Market” means
the primary national securities exchange on which the Common Stock is then traded.

 

(j) “Securities
Act” means the Securities Act of 1933, and the rules and regulations thereunder.

 

(k) “Trading Day”
means (i) any day on which the Common Stock is listed or quoted and traded on its Principal Market, (ii) if the Common Stock is
not then listed or quoted and traded on any national securities exchange, then a day on which trading occurs on any over-the-counter
markets, or (iii) if trading does not occur on the over-the-counter markets, any Business Day.

 

* * * * * * *

 

    	 	8	 

    	 

    

 

In Witness
Whereof, the Company has caused this Warrant to be duly executed as of the Issuance Date.

 

	 	CACHET FINANCIAL SOLUTIONS, INC.
	 	 
	 	/s/ Bryan Meier
	 	Bryan Meier
	 	Executive Vice President & Chief Financial Officer

 

    	 	 	 

    	 

    

 

EXHIBIT A

 

EXERCISE NOTICE

 

(To be executed by the registered holder to
exercise this Warrant to Purchase Common Stock)

 

The
Undersigned holder hereby exercises the right to purchase _________________ of the shares of Common Stock (“Warrant
Shares”) of Cachet Financial Solutions, Inc., a Delaware corporation (the “Company”), evidenced by the attached
copy of the Warrant to Purchase Common Stock (the “Warrant”). Capitalized terms used herein and not otherwise defined
shall have the respective meanings set forth in the Warrant.

 

1. Form
of Exercise Price. The Holder intends that payment of the Exercise Price shall be made as (check one):

 

	 	[  ]	a cash exercise with respect to _________________ Warrant Shares; and/or 
	 	 	 
	 	[  ]	a “Cashless Exercise” with respect to _______________ Warrant Shares. 

 

2. Payment
of Exercise Price. In the event that the holder has elected a cash exercise with respect to some or all of the Warrant Shares
to be issued pursuant hereto, the holder shall pay the Aggregate Exercise Price in the sum of $___________________ to the Company
in accordance with the terms of the Warrant.

 

3. Delivery
of Warrant Shares. The Company shall deliver to the holder __________________ Warrant Shares in accordance with the terms of
the Warrant.

 

	Date:		 	 
	 	 	 	 
	 	 	(Print Name of Registered Holder) 
	 	 	 	 
	 	 	By:	 
	 	 	Name:	 
	 	 	Title:	 
	 	 	Address:	 
	 	 	 

 

    	 	 	 

    	 

    

 

EXHIBIT B

 

ASSIGNMENT OF WARRANT

 

(To be signed only upon authorized transfer
of the Warrant)

 

For
Value Received, the undersigned hereby sells, assigns, and transfers unto ____________________ the right to purchase _______________
shares of common stock of Cachet Financial Solutions, Inc., to which the within Warrant to Purchase Common Stock relates and appoints
____________________, as attorney-in-fact, to transfer said right on the books of Cachet Financial Solutions, Inc. with full power
of substitution and re-substitution in the premises. By accepting such transfer, the transferee has agreed to be bound in all respects
by the terms and conditions of the within Warrant.

 

	Dated: __________________	 
	 	 
	 	(Signature) *
	 	 
	 	(Name) 
	 	 
	 	(Address)
	 	
	 	(Social Security or Tax Identification No.)

 

* The signature on this Assignment of Warrant
must correspond to the name as written upon the face of the Warrant to Purchase Common Stock in every particular without alteration
or enlargement or any change whatsoever. When signing on behalf of a corporation, partnership, trust or other entity, please indicate
your position(s) and title(s) with such entity.jcg-ex101_226.htm

Exhibit 10.1

Execution Version

FIFTH AMENDMENT TO CREDIT AGREEMENT AND 
CONSENT TO RELEASE OF MORTGAGES

 

FIFTH AMENDMENT TO CREDIT AGREEMENT AND CONSENT TO RELEASE OF MORTGAGES, dated as of November 17, 2016 (this “Amendment”), by and among J. CREW GROUP, INC., a Delaware corporation (the “Borrower”), CHINOS INTERMEDIATE HOLDINGS B, INC., a Delaware corporation (“Holdings”), BANK OF AMERICA, N.A., as administrative agent (in such capacity, including any successor thereto, the “Administrative Agent”) and as collateral agent (in such capacity, including any successor thereto, the “Collateral Agent”) under the Loan Documents, and each lender party hereto (collectively, the “Lenders” and individually, each a “Lender”).

WHEREAS:

	
A.
	
The Borrower, Holdings, the Administrative Agent, the Collateral Agent and the Lenders are parties to that certain Credit Agreement, dated as of March 7, 2011 (as amended by that certain First Amendment to Credit Agreement, dated as of October 11, 2012, that certain Second Amendment to Credit Agreement, dated as of March 5, 2014, that certain Third Amendment to Credit Agreement, dated as of December 10, 2014, that certain Fourth Amendment to Credit Agreement (Incremental Amendment), dated as of December 17, 2015, as amended hereby, and as may be further amended, restated, supplemented or otherwise modified, renewed or replaced from time to time, the “Credit Agreement”), pursuant to which the Lenders agreed, subject to the terms and conditions thereof, to extend credit and make certain other financial accommodations available to the Borrower; and

B.The Borrower and Holdings have requested that the Lenders agree to amend the Credit Agreement as set forth herein, and the Lenders have agreed to such amendments, subject to the terms and conditions set forth herein.

NOW, THEREFORE, in consideration of the foregoing and the mutual covenants herein contained, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties signatory hereto agree as follows:

1.Definitions.  Capitalized terms used herein and not otherwise defined herein shall have the respective meanings given such terms in the Credit Agreement.

2.Release of Mortgages.  The Lenders hereby consent to the Collateral Agent’s release of its Lien on all Mortgaged Properties (as defined in the Credit Agreement before giving effect to this Amendment) and any other property subject to a Mortgage as of the Fifth Amendment Effective Date, including without limitation those properties set forth on Schedule 1.1D attached to the Credit Agreement (as in effect immediately prior to this Amendment), and the release and discharge of the related Mortgages.  The Collateral Agent does hereby discharge and release such Mortgages and agrees to deliver, promptly following the Fifth Amendment Effective Date, instruments in recordable form and otherwise in form and substance reasonably satisfactory to the Collateral Agent memorializing the foregoing discharge and release.  The provisions of this Section 2 shall not, and shall not be construed to, (i) release or discharge the Obligations secured by such Mortgages or (ii) release or discharge any other Collateral Document or the Liens of the Collateral Agent pursuant to such other Collateral Documents, all of which are reaffirmed and remain in full force and effect in accordance with Section 7 below.

3.Amendments to Credit Agreement.  Subject to the satisfaction of the conditions precedent specified in Section 6 below:

 

 

(a)Additional Definitions.  Section 1.1 of the Credit Agreement is hereby amended to include, in addition and not in limitation, the following definitions in proper alphabetical order:

(i)“Bail-In Action” means the exercise of any Write-Down and Conversion Powers by the applicable EEA Resolution Authority in respect of any liability of an EEA Financial Institution.

(ii)“Bail-In Legislation” means, with respect to any EEA Member Country implementing Article 55 of Directive 2014/59/EU of the European Parliament and of the Council of the European Union, the implementing law for such EEA Member Country from time to time which is described in the EU Bail-In Legislation Schedule.

(iii)“Designated Jurisdiction” means any country or territory to the extent that such country or territory is the subject of any Sanction (as of the Fifth Amendment Effective Date, without limitation of any country or territory that becomes the subject of any Sanction on or after the Fifth Amendment Effective Date, Crimea, Cuba, Iran, North Korea, Sudan and Syria).

(iv)“EEA Financial Institution” means (a) any credit institution or investment firm established in any EEA Member Country which is subject to the supervision of an EEA Resolution Authority, (b) any entity established in an EEA Member Country which is a parent of an institution described in clause (a) of this definition, or (c) any financial institution established in an EEA Member Country which is a subsidiary of an institution described in clauses (a) or (b) of this definition and is subject to consolidated supervision with its parent.

(v)“EEA Member Country” means any of the member states of the European Union, Iceland, Liechtenstein, and Norway.

(vi)“EEA Resolution Authority” means any public administrative authority or any person entrusted with public administrative authority of any EEA Member Country (including any delegee) having responsibility for the resolution of any EEA Financial Institution.

(vii)“EU Bail-In Legislation Schedule” means the EU Bail-In Legislation Schedule published by the Loan Market Association (or any successor person), as in effect from time to time.

(viii)“Fifth Amendment” means the Fifth Amendment to Credit Agreement and Consent to Release of Mortgages, dated and effective as of the Fifth Amendment Effective Date, by and among the Borrower, Holdings, the Administrative Agent, the Collateral Agent and the Lenders party thereto.

(ix)“Fifth Amendment Effective Date” means November 17, 2016.

(x)“Sanction(s)” means any sanction administered or enforced by any Governmental Authority of the United States or Canada (including, without limitation, OFAC, the United States Department of State, Foreign Affairs and International Trade Canada or the Department of Public Safety Canada), the European Union or Her Majesty’s Treasury (“HMT”).

 

2

 

 

 

(xi)“Write-Down and Conversion Powers” means, with respect to any EEA Resolution Authority, the write-down and conversion powers of such EEA Resolution Authority from time to time under the Bail-In Legislation for the applicable EEA Member Country, which write-down and conversion powers are described in the EU Bail-In Legislation Schedule.

(b)Deleted Definitions.  Section 1.1 of the Credit Agreement is hereby further amended by deleting the following definitions:  “Material Real Property”, “Mortgage Policies” and “Mortgaged Properties”.

(c)Amended Definitions.  Section 1.1 of the Credit Agreement is hereby further amended as follows:

(i)The definition of “Availability Reserve” is hereby deleted in its entirety and the following is substituted in its stead: 

“Availability Reserves” means, without duplication of any other reserves or items that are otherwise addressed or excluded through eligibility criteria, such reserves as the Administrative Agent from time to time determines in its Permitted Discretion as being appropriate (a) to reflect the impediments to the Agents’ ability to realize upon the Collateral, (b) to reflect claims and liabilities that the Administrative Agent determines will need to be satisfied in connection with the realization upon the Collateral or (c) to reflect criteria, events, conditions, contingencies or risks which adversely affect any component of the Borrowing Base, the Collateral or the validity or enforceability of this Agreement or the other Loan Documents or any material remedies of the Secured Parties hereunder or thereunder; provided that circumstances, conditions, events or contingencies existing or arising prior to the Effective Date and, in each case, disclosed in writing in any field examination or appraisal delivered to the Administrative Agent in connection herewith prior to the Effective Date shall not be the basis for any establishment of any reserves after the Effective Date, unless such circumstances, conditions, events or contingencies shall have changed in a material respect since the Effective Date. Without limiting the generality of the foregoing, Availability Reserves may include reserves based on: (i) rent; provided that such Availability Reserves shall be limited to an amount not to exceed the sum of (x) past due rent for all of the Borrower and the Subsidiary Guarantors’ leased locations plus (y) one (1) month’s rent for all of the Borrower and the Subsidiary Guarantors’ leased locations (A) located in the states of Washington, Virginia, Pennsylvania and all other Landlord Lien States or (B) that are distribution centers or warehouses, other than, in each case, such locations, distribution centers or warehouses with respect to which the Administrative Agent has received a Collateral Access Agreement in form and substance reasonably satisfactory to the Administrative Agent; (ii) customs duties, and other costs to release Inventory which is being imported into the United States; (iii) outstanding Taxes and other governmental charges, including, ad valorem, real estate, personal property, sales, and other Taxes which have priority over the interests of the Collateral Agent in the Current Asset Collateral; (iv) salaries, wages and benefits due to employees of the Borrower which have priority over the interests of the Collateral Agent in the Current Asset Collateral, (v) Customer Credit Liabilities; (vi) warehousemen’s or bailee’s charges and 

 

3

 

 

 

other Liens permitted under Section 9.1 which might have priority over the interests of the Collateral Agent in the Current Asset Collateral; (vii) reserves in respect of Cash Management Obligations, provided that reserves of the type described in this clause (vii) in respect of such Cash Management Obligations shall require the consent of the Borrower; (viii) reserves in respect of Obligations in respect of Secured Hedge Agreements, provided that, if such Obligations in respect of Secured Hedge Agreements shall constitute Specified Secured Hedge Obligations, then reserves of the type described in this clause (viii) shall require the consent of the Borrower; (ix) at any time on or after December 4, 2020, the amount by which the aggregate outstanding principal amount of the loans under the Term Facility or any Permitted Refinancing thereof with a maturity date that is earlier than the date that is 91 days after the Latest Maturity Date exceeds $50,000,000 (the amount of which reserve under this clause (ix) shall for avoidance of doubt be reduced on a dollar for dollar basis by any reduction on or after December 4, 2020, in the outstanding principal amount of such loans) and (x) additional reserves in the Administrative Agent’s Permitted Discretion.

 

(ii)The definition of “Cash Dominion Period” is hereby deleted in its entirety and the following is substituted in its stead:

“Cash Dominion Period” means (a) each period beginning on the date that Excess Availability shall have been less than the greater of (x) 12.5% of the Maximum Credit and (y) $35,000,000, in either case, for five (5) consecutive Business Days, and ending on the date Excess Availability shall have been equal to or greater than the greater of (x) 12.5% of the Maximum Credit and (y) $35,000,000, in each case, for thirty (30) consecutive calendar days or (b) upon the occurrence of a Specified Event of Default, the period that such Specified Event of Default shall be continuing; provided that a Cash Dominion Period may not deemed to have ended under this definition on more than three (3) occasions in any period of 365 consecutive days.

 

(iii)The definition of “Collateral” is hereby deleted in its entirety and the following is substituted in its stead:

“Collateral” means all the “Collateral” (or equivalent term) as defined in any Collateral Document.

 

(iv)(A) Clause (e) of the definition of “Collateral and Guarantee Requirement” is hereby deleted in its entirety, (B) the semicolon at the end of clause (d) of such definition is hereby replaced with a period, and (C) the word “and” is hereby added to the end of clause (c) of such definition.

(v)The definition of “Covenant Trigger Event” is hereby deleted in its entirety and the following is substituted in its stead:

“Covenant Trigger Event” means that Excess Availability on any day is less than the greater of (i) $27,500,000 and (ii) 10% of the Maximum Credit.  For purposes hereof, the occurrence of a Covenant Trigger Event shall be deemed to be continuing until Excess Availability is equal to or greater than the greater of (i) $27,500,000 and (ii) 10% of the Maximum Credit, in each case, for thirty (30) 

 

4

 

 

 

consecutive days, in which case a Covenant Trigger Event shall no longer be deemed to be continuing for purposes of this Agreement.

 

(vi)Clause (d) of the definition of “Defaulting Lender” is hereby deleted in its entirety and the following is substituted in its stead:

“(d)has, or has a direct or indirect parent company that has, (i) become the subject of a proceeding under any Debtor Relief Law, (ii) had a receiver, conservator, trustee, administrator, assignee for the benefit of creditors or similar Person charged with reorganization or liquidation of its business or a custodian appointed for it, (iii) taken any action in furtherance of, or indicated its consent to, approval of or acquiescence in any such proceeding or appointment, or (iv) become the subject of a Bail-In Action; provided that a Lender shall not be a Defaulting Lender solely by virtue of the ownership or acquisition of any equity interest in that Lender or any direct or indirect parent company thereof by a Governmental Authority so long as such ownership interest does not result in or provide such Lender with immunity from the jurisdiction of courts within the United States or from the enforcement of judgments or writs of attachment on its assets or permit such Lender (or such Governmental Authority) to reject, repudiate, disavow or disaffirm any contracts or agreements made with such Lender.”

 

(vii)The definition of “Eurocurrency Rate” is hereby amended by (A) deleting the word “and” at the end of clause (a) thereof, (B) replacing the period at the end of clause (b) thereof with the phrase “; and”, and (C) adding the following clause (c) thereto:

“(c) in any event (notwithstanding the foregoing clauses (a) and (b)), a rate per annum not less than zero.”

 

(viii)The definition of “Fixed Charges” is hereby deleted in its entirety and the following is substituted in its stead: 

“Fixed Charges” means, with respect to any Person for any Test Period, the sum, determined on a Consolidated basis, of (a) the Consolidated Net Cash Interest Expense of such Person and its Restricted Subsidiaries for such period plus (b) scheduled payments of principal on Indebtedness for borrowed money of such Person and its Restricted Subsidiaries due and payable during such period.

 

(ix)The definition of “Letter of Credit Sublimit” is hereby deleted in its entirety and the following is substituted in its stead:

“Letter of Credit Sublimit” means an amount equal to $200,000,000, as such amount may be increased or reduced in accordance with the provisions of this Agreement; provided, however, that HSBC Bank USA, N.A. (in its capacity as an Issuer) shall not be required to Issue Letters of Credit having a maximum aggregate face amount exceeding $50,000,000 at any time outstanding.  The Letter of Credit Sublimit is part of, and not in addition to, the Revolving Credit Commitments.  A permanent reduction of the Aggregate Commitments shall not require a corresponding pro rata reduction in the Letter of Credit Sublimit; 

 

5

 

 

 

provided, however, that if the Aggregate Commitments are reduced to an amount less than the Letter of Credit Sublimit, then the Letter of Credit Sublimit shall be reduced to an amount equal to (or, at the Borrower’s option, less than) the Aggregate Commitments.

 

(x)The definition of “Loan Documents” is hereby deleted in its entirety and the following is substituted in its stead:

“Loan Documents” means, collectively, (a) this Agreement, (b) the Revolving Credit Notes, (c) any Incremental Amendment and any Extension Amendment, (d) the Guaranty, (e) the Fee Letter and any other fee letter entered into between the Borrower and the Administrative Agent in connection with this Agreement, (f) each Letter of Credit Reimbursement Agreement, (g) the Collateral Documents, (h) the Issuer Documents, (i) the First Amendment, (j) the Second Amendment, (k) the Third Amendment, (l) the Fourth Amendment, and (m) the Fifth Amendment.

 

(xi)The definition of “Mortgages” is hereby deleted in its entirety and the following is substituted in its stead:

“Mortgages” means, collectively, any deeds of trust, trust deeds, hypothecs and mortgages made after the Fifth Amendment Effective Date by the Loan Parties in favor or for the benefit of the Collateral Agent on behalf of the Lenders in form and substance reasonably satisfactory to the Collateral Agent.

 

(xii)The definition of “OFAC” is hereby deleted in its entirety and the following is substituted in its stead:

“OFAC” means the Office of Foreign Assets Control of the United States Department of the Treasury.

 

(xiii)The definition of “Payment Conditions” is hereby deleted in its entirety and the following is substituted in its stead:

“Payment Conditions” means, at any time of determination, that (a) no Event of Default exists or would arise as a result of the making of the subject Specified Payment, (b) after giving Pro Forma Effect to such Specified Payment and projected for the succeeding six (6) months following such Specified Payment, Excess Availability shall be greater than or equal to the greater of (i) 15% of the Maximum Credit and (ii) $40,000,000 and (c) either (i) after giving Pro Forma Effect to such Specified Payment and projected for the succeeding six (6) months following such Specified Payment, Excess Availability shall be greater than 25% of the Maximum Credit or (ii) the Fixed Charge Coverage Ratio as of the end of the most recently ended Test Period for which financial statements have been or are required to have been delivered pursuant to Section 7.1(a) or (b) shall be greater than or equal to 1.0 to 1.0 after giving Pro Forma Effect to such Specified Payment as if such Specified Payment (if applicable to such calculation) had been made as of the first day of such period, and, in each case, the Borrower shall have delivered, in accordance with Section 7.2(f) hereof, to the Administrative Agent evidence reasonably satisfactory to the 

 

6

 

 

 

Administrative Agent that the conditions contained in the foregoing clauses (a), (b) and (c) have been satisfied.

 

(xiv)The last sentence of the definition of “Revolving Credit Commitment” is hereby deleted in its entirety and the following is substituted in its stead:

“As of the Fifth Amendment Effective Date, the aggregate amount of the Revolving Credit Commitments is $350,000,000.”

 

(xv)The definition of “Revolving Credit Termination Date” is hereby deleted in its entirety and the following is substituted in its stead:

“Revolving Credit Termination Date” means the earliest of (a) the Scheduled Termination Date, (b) the date of termination of all of the Revolving Credit Commitments pursuant to Section 2.5, (c) the date on which the Obligations become due and payable pursuant to Section 10.2, and (d) December 4, 2020, unless (in the case of this clause (d)), by such date, the maturity date of the loans under the Term Facility or any Permitted Refinancing thereof (other than a portion of such loans in an aggregate outstanding principal amount not to exceed $100,000,000, provided that an Availability Reserve in the maximum amount contemplated under clause (ix) of the definition thereof has been implemented and is thereafter maintained (subject to reduction in accordance with the terms thereof)) has been extended to a date that is at least ninety-one (91) days after the Latest Maturity Date.

 

(xvi)The definition of “RP Conditions” is hereby deleted in its entirety and the following is substituted in its stead:

“RP Conditions” means, at any time of determination, that (a) no Event of Default exists or would arise as a result of the subject Specified Payment, (b) after giving Pro Forma Effect to such Specified Payment and projected for the succeeding six (6) months following such Specified Payment, Excess Availability shall be greater than or equal to the greater of (i) 15% of the Maximum Credit and (ii) $40,000,000 and (c) either (i) after giving Pro Forma Effect to such Specified Payment and projected for the succeeding six (6) months following such Specified Payment, Excess Availability shall be greater than 25% of the Maximum Credit or (ii) the Fixed Charge Coverage Ratio as of the end of the most recently ended Test Period for which financial statements have been or are required to have been delivered pursuant to Section 7.1(a) or (b) shall be greater than or equal to 1.1 to 1.0 after giving Pro Forma Effect to such Specified Payment as if such Specified Payment (if applicable to such calculation) had been made as of the first day of such period, and, in each case, the Borrower shall have delivered, in accordance with Section 7.2(f) hereof, to the Administrative Agent evidence reasonably satisfactory to the Administrative Agent that the conditions contained in the foregoing clauses (a), (b) and (c) have been satisfied.

 

(xvii)The definition of “Scheduled Termination Date” is hereby deleted in its entirety and the following is substituted in its stead:

 

7

 

 

 

“Scheduled Termination Date” means the date that is five (5) years after the Fifth Amendment Effective Date, as may be extended pursuant to Section 12.1 or Section 2.17; provided, however, that if such date is not a Business Day, the Scheduled Termination Date shall be the Business Day immediately preceding such date.

 

(xviii)The definition of “Weekly Monitoring Event” is hereby deleted in its entirety and the following is substituted in its stead:

“Weekly Monitoring Event” means (a) a Specified Event of Default has occurred and is continuing or (b) the Borrower has failed to maintain, for five (5) consecutive Business Days, Excess Availability of the greater of (i) $35,000,000 and (ii) 12.5% of the Maximum Credit; provided that a Weekly Monitoring Event shall be deemed continuing until the date on which, as applicable, in the case of the foregoing clause (a), such Specified Event of Default is cured or waived in accordance with Section 12.1, or, in the case of the foregoing clause (b), Excess Availability has been greater than or equal to the greater of (i) $35,000,000 and (ii) 12.5% of the Maximum Credit, in each case under clauses (i) and (ii), for at least thirty (30) consecutive days.

 

(d)Amendment to Section 1.3.  Section 1.3 of the Credit Agreement is hereby deleted in its entirety and the following is substituted in its stead: 

“All accounting terms not specifically or completely defined herein shall be construed in conformity with, and all financial data (including financial ratios and other financial calculations) required to be submitted pursuant to this Agreement shall be prepared in conformity with, GAAP, except as otherwise specifically prescribed herein. Notwithstanding the foregoing or anything to the contrary contained herein (including in the definitions of “Capitalized Lease” and/or “Capitalized Lease Obligation”), in the event of an accounting change requiring all leases to be capitalized, only those leases (assuming for purposes hereof that such leases were in existence on the date hereof) that would constitute Capitalized Leases in conformity with GAAP on the Fifth Amendment Effective Date shall be considered Capitalized Leases, and all calculations and determinations under this Agreement or any other Loan Document shall be made or delivered, as applicable, in accordance therewith.”

 

(e)Amendment to Section 2.15 (Revolving Commitment Increase).  The third sentence of Section 2.15(a) of the Credit Agreement is hereby deleted in its entirety and the following is substituted in its stead:

“Notwithstanding anything to the contrary herein, the aggregate amount of the Revolving Commitment Increases on and after the Fifth Amendment Effective Date shall not exceed $100,000,000 (the “Incremental Availability”).”

(f)Amendment to Section 5.18 (USA PATRIOT Act).  Section 5.18 of the Credit Agreement is hereby deleted in its entirety and the following is substituted in its stead:

	
 
	
“Section 5.18
	
Sanctions Concerns; Anti-Corruption Laws; Anti-Money Laundering Laws.

 

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(a)
	
Sanction Concerns.  No Loan Party, nor any Subsidiary, nor, to the knowledge of the Loan Parties and their Subsidiaries, any director, officer, employee, agent, affiliate or representative thereof, is an individual or entity that is, or is owned or controlled by any individual or entity that is (i) currently the subject or target of any Sanctions, (ii) included on OFAC’s List of Specially Designated Nationals, HMT’s Consolidated List of Financial Sanctions Targets and the Investment Ban List or any similar list enforced by any Sanctions authority, or (iii) located, organized or resident in a Designated Jurisdiction, in each case unless otherwise authorized or approved by the relevant Sanctions authority.

	
 
	
(b)
	
Anti-Corruption Laws; Anti-Money Laundering Laws.  The Loan Parties and their Subsidiaries have (i) conducted their business in compliance in all material respects with the United States Foreign Corrupt Practices Act of 1977, the UK Bribery Act 2010, the USA PATRIOT Act and the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (Canada), and (ii) instituted and maintained policies and procedures designed to promote and achieve compliance in all material respects with the United States Foreign Corrupt Practices Act of 1977, the UK Bribery Act 2010 and the USA PATRIOT Act, to the extent such laws apply to the Loan Parties and their Subsidiaries.”

(g)Amendment to Section 7.4 (Inventory Appraisals and Field Examinations).  Sections 7.4(c) and (d) of the Credit Agreement are hereby deleted in their entirety and the following is substituted in their stead:

	
 
	
“(c)
	
The Borrower shall also cooperate with (and cause its Subsidiaries to cooperate with) the Administrative Agent, in connection with updates to the Initial Inventory Appraisal that shall be in form and detail and from third-party appraisers reasonably acceptable to the Administrative Agent (the “Updated Inventory Appraisal”) for the purpose of determining the amount of the Borrowing Base attributable to Inventory and the Administrative Agent may carry out, at the Borrower’s expense, one (1) Updated Inventory Appraisal in any period of 12 consecutive months; provided, however, that notwithstanding the foregoing limitations (x)(i) at any time on or after the date on which Excess Availability has been less than the greater of (A) $50,000,000 and (B) 25% of the Maximum Credit, in each case, for five (5) consecutive Business Days, the Administrative Agent may carry out, at the Borrower’s expense, two (2) Updated Inventory Appraisals in any period of 12 consecutive months, and (ii) at any time during the continuation of a Specified Event of Default, the Administrative Agent may carry out, at the Borrower’s expense, Updated Inventory Appraisals as frequently as determined by the Administrative Agent in its reasonable discretion and (y) in addition to the foregoing clause (x), the Administrative Agent may carry out, at the Lenders’ expense, one (1) additional Updated Inventory Appraisal in any period of 12 consecutive months.  The Borrower shall furnish to the Administrative Agent any information that the Administrative Agent may reasonably request regarding the determination and calculation of the Borrowing Base including correct and complete copies of any invoices, underlying agreements, instruments or other documents and the identity of all Account Debtors in respect of Accounts referred to therein.

 

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(d)
	
The Administrative Agent may carry out investigations and reviews of each Loan Party’s property at the reasonable expense of the Borrower (including field audits conducted by the Administrative Agent) (“Field Examination”) and the Administrative Agent may carry out, at the Borrower’s expense, one (1) Field Examination in any period of 12 consecutive months; provided, however, that notwithstanding the foregoing limitations, (x)(i) at any time on or after the date on which Excess Availability has been less than the greater of (A) $50,000,000 and (B) 25% of the Maximum Credit, in each case, for five (5) consecutive Business Days, the Administrative Agent may carry out, at the Borrower’s expense, two (2) Field Examinations in any period of 12 consecutive months, and (ii) at any time during the continuation of a Specified Event of Default, the Administrative Agent may carry out, at the Borrower’s expense, Field Examinations as frequently as determined by the Administrative Agent in its reasonable discretion and (y) in addition to the foregoing clause (x), the Administrative Agent may carry out, at the Lenders’ expense, one (1) additional Field Examination in any period of 12 consecutive months.  The Borrower shall furnish to the Administrative Agent any information that the Administrative Agent may reasonably request regarding the determination and calculation of the Borrowing Base including correct and complete copies of any invoices, underlying agreements, instruments or other documents and the identity of all Account Debtors in respect of Accounts referred to therein.”

(h)Amendment to Section 8.11 (Covenant to Guarantee Obligations and Give Security).  Section 8.11 of the Credit Agreement is hereby deleted in its entirety and the following is substituted in its stead:

	
 
	
“Section 8.11
	
Covenant to Guarantee Obligations and Give Security.

At the Borrower’s expense, subject to the provisions of the Collateral and Guarantee Requirement and any applicable limitation in any Collateral Document, take all action necessary or reasonably requested by the Administrative Agent or the Collateral Agent to ensure that the Collateral and Guarantee Requirement continues to be satisfied, including:

	
 
	
(a)
	
(x) upon the formation or acquisition of any new direct or indirect Wholly‐Owned Subsidiary that is a Material Domestic Subsidiary (in each case, other than an Unrestricted Subsidiary or an Excluded Subsidiary) by any Loan Party, the designation in accordance with Section 8.3 of any existing direct or indirect Wholly-Owned Subsidiary that is a Material Domestic Subsidiary as a Restricted Subsidiary or any Subsidiary becoming a Wholly‐Owned Subsidiary that is a Material Domestic Subsidiary, (y) upon the acquisition of any material assets by the Borrower or any other Loan Party or (z) with respect to any Subsidiary at the time it becomes a Loan Party, for any material assets held by such Subsidiary (in each case, other than assets constituting Collateral under a Collateral Document that becomes subject to the Lien created by such Collateral Document upon acquisition thereof (without limitation of the obligations to perfect such Lien)):

 

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(i)
	
within forty-five (45) days after such formation, acquisition or designation or, in each case, such longer period as the Administrative Agent may agree in its reasonable discretion:

	
 
	
(A)
	
[reserved]

	
 
	
(B)
	
cause each such Material Domestic Subsidiary that is required to become a Guarantor pursuant to the Collateral and Guarantee Requirement to duly execute and deliver to the Collateral Agent Security Agreement Supplements, Intellectual Property Security Agreements and other security agreements and documents, as reasonably requested by and in form and substance reasonably satisfactory to the Collateral Agent (consistent with the Security Agreement, Intellectual Property Security Agreements and other Collateral Documents in effect on the Effective Date), in each case granting Liens required by the Collateral and Guarantee Requirement;

	
 
	
(C)
	
cause each such Material Domestic Subsidiary that is required to become a Guarantor pursuant to the Collateral and Guarantee Requirement to deliver any and all certificates representing Equity Interests (to the extent certificated) that are required to be pledged pursuant to the Collateral and Guarantee Requirement, accompanied by undated stock powers or other appropriate instruments of transfer executed in blank (or any other documents customary under local law) and instruments evidencing the intercompany Indebtedness held by such Material Domestic Subsidiary and required to be pledged pursuant to the Collateral Documents, indorsed in blank to the Collateral Agent;

	
 
	
(D)
	
(1) take and cause the applicable Material Domestic Subsidiary and each direct or indirect parent of the applicable Material Domestic Subsidiary that is required to become a Guarantor pursuant to the Collateral and Guarantee Requirement to take whatever action (including the filing of UCC financing statements and delivery of stock and membership interest certificates to the extent certificated) may be necessary in the reasonable opinion of the Administrative Agent to vest in the Collateral Agent (or in any representative of the Collateral Agent designated by it) valid Liens required by the Collateral and Guarantee Requirement, enforceable against all third parties in accordance with their terms, except as such enforceability may be limited by Debtor Relief Laws and by general principles of equity (regardless of whether enforcement is sought in equity or at law) and (2) comply with the requirements of Section 8.12 with respect to all Deposit Accounts; and

	
 
	
(ii)
	
within forty-five (45) days after the request therefor by the Administrative Agent (or such longer period as the Administrative Agent may agree in its reasonable discretion), deliver to the 

 

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Administrative Agent a signed copy of an opinion, addressed to the Administrative Agent and the other Secured Parties, of counsel for the Loan Parties reasonably acceptable to the Administrative Agent as to such matters set forth in this Section 8.11(a) as the Administrative Agent may reasonably request; and

	
 
	
(iii)
	
[reserved]

	
 
	
(b)
	
(i) the Borrower shall obtain the security interests and Guarantees set forth on Schedule 1.1A on or prior to the dates corresponding to such security interests and Guarantees set forth on Schedule 1.1A; and (ii) [reserved].”

(i)Amendment to Section 8.13 (Further Assurances and Post-Closing Covenants).  Section 8.13(b) of the Credit Agreement is hereby deleted in its entirety and the phrase “[reserved]” is substituted in its stead.

(j)Amendment to Section 9.1 (Liens).  Clause (g) of Section 9.1 of the Credit Agreement is hereby deleted in its entirety and the following is substituted in its stead:

	
 
	
“(g)
	
easements, rights-of-way, restrictions (including zoning restrictions), encroachments, protrusions and other similar encumbrances and title defects affecting real property that, in the aggregate, do not in any case materially interfere with the ordinary conduct of the business of the Borrower and its Subsidiaries taken as a whole, or the use of the property for its intended purpose;”

(k)Amendment to Section 9.4 (Fundamental Changes).  Clause (d)(ii)(E) of Section 9.4 of the Credit Agreement is hereby deleted in its entirety and the following is substituted in its stead:

	
 
	
“(E)
	
[Reserved], and”

(l)Amendment to Section 9.5 (Dispositions).  

(i)Section 9.5(j) of the Credit Agreement is amended by (A) deleting clause (iv) thereof (including the proviso thereto), (B) replacing “; and” immediately following clause (iii) thereof with a period and (C) inserting the word “and”  at the end of clause (ii) thereof.

(ii)The last paragraph of Section 9.5 of the Credit Agreement is hereby deleted in its entirety and the following is substituted in its stead:

 “provided that (x) any Disposition of any property pursuant to this Section 9.5 (except pursuant to Sections 9.5(a), (e), (i), (k), (m), (n), (o) and (q) and except for Dispositions from the Borrower or a Restricted Subsidiary that is a Loan Party to the Borrower or a Restricted Subsidiary that is a Loan Party), shall be for no less than the fair market value of such property at the time of such Disposition as determined by the Borrower in good faith, and (y) in the event of any Disposition (including, without limitation, by way of Investment) of Intellectual Property used or useful in connection with the Current Asset 

 

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Collateral, the purchaser, assignee or other transferee thereof agrees in writing to be bound by a non-exclusive royalty-free worldwide license of such Intellectual Property in favor of the Collateral Agent for use in connection with the exercise of the rights and remedies of the Secured Parties, which license shall be in form and substance identical to the license described in the first paragraph of Section 4.01 of the Security Agreement, mutatis mutandis, or, at the election of the Borrower, otherwise reasonably satisfactory to the Collateral Agent, provided further that in the case of a Disposition of Intellectual Property licensed by the Borrower or one of its Restricted Subsidiaries from a third party, the transferee thereof shall be required to provide such a license only to the extent to which the applicable license gives it a right to do so.  To the extent any Collateral is Disposed of as expressly permitted by this Section 9.5 to any Person other than a Loan Party, such Collateral shall be sold free and clear of the Liens created by the Loan Documents, and, if requested by the Administrative Agent, upon the certification by the Borrower that such Disposition is permitted by this Agreement, the Administrative Agent shall be authorized to take any actions deemed appropriate in order to effect the foregoing.”

(m)New Section 9.16 (Use of Proceeds).  The following new provision is hereby added to the Credit Agreement as Section 9.16:

	
 
	
“Section 9.16
	
Use of Proceeds.  Directly or, to its knowledge, indirectly use any Credit Extension or the proceeds of any Credit Extension for any purpose which would breach the United States Foreign Corrupt Practices Act of 1977, the UK Bribery Act 2010, the USA PATRIOT Act or the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (Canada).”

(n)New Section 9.17 (Sanctions).  The following new provision is hereby added to the Credit Agreement as Section 9.17:

	
 
	
“Section 9.17
	
Sanctions.  Directly or, to its knowledge, indirectly use the proceeds of any Credit Extension, or lend, contribute or otherwise make available such proceeds to any subsidiary, joint venture partner or other individual or entity, to fund any activities of or business with any individual or entity, or in any Designated Jurisdiction, that, at the time of such funding, is the subject of Sanctions, in each case except to the extent licensed or otherwise approved by the relevant Sanctions authority.”

(o)New Section 12.28 (Bail-In Provisions).  The following new provision is hereby added to the Credit Agreement as Section 12.28:

	
 
	
“Section 12.28
	
Acknowledgement and Consent to Bail-In of EEA Financial Institutions.

Notwithstanding anything to the contrary in any Loan Document or in any other agreement, arrangement or understanding among any such parties, each party hereto acknowledges that any liability of any Lender that is an EEA Financial Institution arising under any Loan Document, to the extent such liability is unsecured, may be subject to the write-down and conversion powers 

 

13

 

 

 

of an EEA Resolution Authority and agrees and consents to, and acknowledges and agrees to be bound by:

	
 
	
(a)
	
the application of any Write-Down and Conversion Powers by an EEA Resolution Authority to any such liabilities arising hereunder which may be payable to it by any Lender that is an EEA Financial Institution; and

	
 
	
(b)
	
the effects of any Bail-in Action on any such liability, including, if applicable:

	
 
	
(i)
	
a reduction in full or in part or cancellation of any such liability;

	
 
	
(ii)
	
conversion of all, or a portion of, such liability into shares or other instruments of ownership in such EEA Financial Institution, its parent entity, or a bridge institution that may be issued to it or otherwise conferred on it, and that such shares or other instruments of ownership will be accepted by it in lieu of any rights with respect to any such liability under this Agreement or any other Loan Document; or

	
 
	
(iii)
	
the variation of the terms of such liability in connection with the exercise of the write-down and conversion powers of any EEA Resolution Authority.”

(p)Deleted Schedules.  Schedule 1.1D to the Credit Agreement (Mortgaged Properties) is hereby deleted.

4.Revolving Credit Commitments; Reallocation of Revolving Loans and Participations in Letter of Credit Obligations.  Schedule I to the Credit Agreement (Revolving Credit Commitments) shall be amended by deleting such schedule and replacing it with the corresponding schedule set forth on Annex I attached hereto.  All outstanding Revolving Loans and all participations in Letter of Credit Obligations shall, immediately upon the effectiveness of this Amendment, to the extent necessary to ensure the Revolving Credit Lenders hold such Revolving Loans and participations ratably, be reallocated among the Revolving Credit Lenders in accordance with their respective Applicable Percentages.  Each applicable Revolving Credit Lender to whom Revolving Loans are so reallocated on the Fifth Amendment Effective Date shall make full cash settlement on the Fifth Amendment Effective Date, through the Administrative Agent, as the Administrative Agent may direct with respect to such reallocation, in the aggregate amount of the Revolving Loans so reallocated to such Revolving Credit Lender.  Each applicable Lender hereby waives any breakage fees in respect of such reallocation of Eurocurrency Rate Loans on the Fifth Amendment Effective Date.

5.Representations and Warranties.  Each of Holdings and the Borrower represents and warrants to the Administrative Agent, the Collateral Agent and the Lenders that:

(a)the representations and warranties set forth in the Credit Agreement and in each of the other Loan Documents are true and correct in all material respects on the Fifth Amendment Effective Date, as if made on and as of the Fifth Amendment Effective Date and as if each reference therein to “this Agreement” or the “Credit Agreement” or the like includes reference to this Amendment and the Credit Agreement as amended hereby (except to the extent that such representations and warranties expressly relate to an earlier date, in which case they are true and correct in all material 

 

14

 

 

 

respects as of such earlier date); provided, that any representation and warranty that is qualified as to “materiality”, “Material Adverse Effect” or similar language shall be true and correct (after giving effect to any qualification therein) in all respects on such respective dates; and 

(b)after giving effect to this Amendment, no Default or Event of Default exists as of the Fifth Amendment Effective Date.

6.Conditions Precedent.  The amendments set forth in this Amendment shall not be effective until each of the following conditions precedent are satisfied:

(a)receipt by the Administrative Agent of copies of (i) this Amendment, duly authorized and executed by the Borrower, Holdings and the Lenders, (ii) the Guarantor Consent and Reaffirmation, in substantially the form of Annex II attached hereto, duly authorized and executed by Holdings and each Subsidiary Guarantor (the “Guarantor Consent and Reaffirmation”), and (iii) that certain Fifth Amendment Fee Letter, duly executed by the Borrower;

(b)receipt by the Administrative Agent of an amended and restated Revolving Credit Note executed by the Borrower in favor of each Lender whose Revolving Credit Commitment is changing on the Fifth Amendment Effective Date and that has requested a Note at least two (2) Business Days in advance of the Fifth Amendment Effective Date;

(c)receipt by the Administrative Agent of reimbursement or payment of all reasonable out-of-pocket expenses (including, without limitation, reasonable fees and expenses of Choate, Hall & Stewart LLP, counsel to the Administrative Agent and the Collateral Agent) required to be reimbursed or paid by the Loan Parties pursuant to the terms of Section 12.3 of the Credit Agreement, to the extent invoiced at least one (1) Business Day prior to the Fifth Amendment Effective Date; 

(d)receipt by the Administrative Agent of a Secretary’s Certificate from each of the Loan Parties certifying (i) the recent passage and continued effectiveness of resolutions, in the case of the Borrower, approving the transactions contemplated by this Amendment and, in the case of the Guarantors, approving the Guarantor Consent and Reaffirmation, and (ii) the incumbency of the officers executing this Amendment and the documents delivered in connection therewith to which such Loan Party is a party, in each case in form and substance reasonably satisfactory to the Administrative Agent; and

(e)receipt by the Administrative Agent of a certificate of a Responsible Officer of the Borrower stating that after giving effect to this Amendment, no Default or Event of Default shall have occurred and be continuing, nor shall any Default or Event of Default result from the consummation of the transactions contemplated herein.

7.Effect on Loan Documents.  As amended hereby, the Credit Agreement and the other Loan Documents (other than the Mortgages) shall be and remain in full force and effect in accordance with their terms and hereby are ratified and confirmed by the Borrower in all respects.  The execution, delivery, and performance of this Amendment shall not operate as a waiver of any right, power, or remedy of the Administrative Agent, the Collateral Agent or the Lenders under the Credit Agreement or the other Loan Documents.  The Borrower hereby acknowledges and agrees that, after giving effect to the Amendment, all of its respective obligations and liabilities under the Loan Documents to which it is a party, as such obligations and liabilities have been amended by the Amendment, are reaffirmed and remain in full force and effect.  After giving effect to the Amendment and the release and discharge of the Mortgages pursuant to Section 2 hereof, the Borrower reaffirms each Lien granted by it to the Collateral 

 

15

 

 

 

Agent for the benefit of the Secured Parties under each of the Loan Documents to which it is a party, which Liens shall continue in full force and effect during the term of the Credit Agreement, and shall continue to secure the Obligations (after giving effect to the Amendment), in each case, on and subject to the terms and conditions set forth in the Credit Agreement and the other Loan Documents.

8.No Novation; Entire Agreement.  This Amendment is not a novation or discharge of the terms and provisions of the obligations of the Borrower under the Credit Agreement and the other Loan Documents.  There are no other understandings, express or implied, among the Borrower, the Administrative Agent, the Collateral Agent and the Lenders regarding the subject matter hereof or thereof.

9.Governing Law.  THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

10.Counterparts; Electronic Execution.  This Amendment may be executed in any number of counterparts and by different parties and separate counterparts, each of which when so executed and delivered shall be deemed an original, and all of which, when taken together, shall constitute one and the same instrument.  Delivery of an executed counterpart of a signature page to this Amendment by facsimile or other electronic transmission shall be as effective as delivery of a manually executed counterpart of this Amendment.  Any party delivering an executed counterpart of this Amendment by facsimile or other electronic transmission also shall deliver a manually executed counterpart of this Amendment but the failure to deliver a manually executed counterpart shall not affect the validity, enforceability, and binding effect of this Amendment.

11.Construction.  This Amendment and the Credit Agreement shall be construed collectively and in the event that any term, provision or condition of any of such documents is inconsistent with or contradictory to any term, provision or condition of any other such document, the terms, provisions and conditions of this Amendment shall supersede and control the terms, provisions and conditions of the Credit Agreement.  Upon and after the effectiveness of this Amendment, each reference in the Credit Agreement to “this Agreement”, “hereunder”, “herein”, “hereof” or words of like import referring to the Credit Agreement, and each reference in the other Loan Documents to “the Credit Agreement”, “thereunder”, “therein”, “thereof” or words of like import referring to the Credit Agreement, shall mean and be a reference to the Credit Agreement as modified hereby.

[Remainder of page intentionally left blank; signature pages follow.]

 

 

16

 

 

 

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed as of the date first above written.

	
 
	
J. CREW GROUP, INC., as the Borrower

	
 
	
 
	
 

	
 
	
By:
	
/s/ VINCENT ZANNA

	
 
	
Name:
	
Vincent Zanna

	
 
	
Title:
	
Vice President and Treasurer

 

 

	
 
	
CHINOS INTERMEDIATE HOLDINGS B, INC., as

	
 
	
Holdings

	
 
	
 
	
 

	
 
	
By:
	
/s/ VINCENT ZANNA

	
 
	
Name:
	
Vincent Zanna

	
 
	
Title:
	
Vice President and Treasurer

 

 

 

 

 

[Signature Page to Fifth Amendment to Credit Agreement and Consent to Release of Mortgages]

 

 

	
 
	
BANK OF AMERICA, N.A.,

	
 
	
as Administrative Agent and Collateral Agent

	
 
	
 
	
 

	
 
	
By: 
	
/s/ MATTHEW POTTER

	
 
	
 
	
Name: Matthew Potter

	
 
	
 
	
Title:   Vice President

 

 

	
 
	
BANK OF AMERICA, N.A.,

	
 
	
as Swing Loan Lender, Issuer and a Lender

	
 
	
 
	
 

	
 
	
By: 
	
/s/ MATTHEW POTTER

	
 
	
 
	
Name: Matthew Potter

	
 
	
 
	
Title:   Vice President

[Signature Page to Fifth Amendment to Credit Agreement and Consent to Release of Mortgages]

 

 

	
 
	
WELLS FARGO BANK, NATIONAL ASSOCIATION,

	
 
	
as a Lender

	
 
	
 
	
 

	
 
	
By: 
	
/s/ Y. SONIA ANANDRAJ

	
 
	
 
	
Name: Y. Sonia Anandraj

	
 
	
 
	
Title:   Authorized Signer

 

[Signature Page to Fifth Amendment to Credit Agreement and Consent to Release of Mortgages]

 

 

	
 
	
HSBC BANK USA, NATIONAL ASSOCIATION,

	
 
	
as a Lender

	
 
	
 
	
 

	
 
	
By: 
	
/s/ BRIAN GINGUE

	
 
	
 
	
Name: Brian Gingue

	
 
	
 
	
Title:   Senior Vice President

 

 

[Signature Page to Fifth Amendment to Credit Agreement and Consent to Release of Mortgages]

 

 

	
 
	
TD BANK, N.A.,

	
 
	
as a Lender

	
 
	
 
	
 

	
 
	
By: 
	
/s/ JENNIFER VISCONTI

	
 
	
 
	
Name: Jennifer Visconti

	
 
	
 
	
Title:   Vice President

 

[Signature Page to Fifth Amendment to Credit Agreement and Consent to Release of Mortgages]

 

 

	
 
	
U.S. BANK NATIONAL ASSOCIATION,

	
 
	
as a Lender

	
 
	
 
	
 

	
 
	
By: 
	
/s/ CAROL ANDERSON

	
 
	
 
	
Name: Carol Anderson

	
 
	
 
	
Title:   Vice President

 

 

 

[Signature Page to Fifth Amendment to Credit Agreement and Consent to Release of Mortgages]

 

 

	
 
	
GOLDMAN SACHS BANK USA,

	
 
	
as a Lender

	
 
	
 
	
 

	
 
	
By: 
	
/s/ ANNIE CARR

	
 
	
 
	
Name: Annie Carr

	
 
	
 
	
Title: Authorized Signatory

 

[Signature Page to Fifth Amendment to Credit Agreement and Consent to Release of Mortgages]

 

 

Annex I

SCHEDULE I TO 

CREDIT AGREEMENT

 

Revolving Credit Commitments

 

			
	
Lender
	
Revolving Credit Commitment
	
Applicable Percentage

	
Bank of America, N.A.
	
$110,000,000.00
	
31.428571429%

	
Wells Fargo Bank, National Association
	
$92,500,000.00
	
26.428571429%

	
HSBC Bank USA, National Association
	
$52,500,000.00
	
15.000000000%

	
TD Bank, N.A.
	
$35,000,000.00
	
10.000000000%

	
Goldman Sachs Bank USA
	
$30,000,000.00
	
8.571428571%

	
U.S. Bank National Association
	
$30,000,000.00
	
8.571428571%

	
Total
	
$350,000,000.00
	
100%

 

 

 

 

Annex II

 

GUARANTOR CONSENT AND REAFFIRMATION

 

November 17, 2016

 

Reference is made to (i) the Fifth Amendment to Credit Agreement and Consent to Release of Mortgages, dated as of November 17, 2016, attached as Exhibit A hereto (the “Amendment”), among J. Crew Group, Inc., a Delaware corporation (the “Borrower”), Chinos Intermediate Holdings B, Inc., a Delaware corporation (“Holdings”), Bank of America, N.A., as administrative agent (in such capacity, including any successor thereto, the “Administrative Agent”) and as collateral agent (in such capacity, including any successor thereto, the “Collateral Agent”) under the Loan Documents, and each Lender party thereto, and (ii) the Credit Agreement dated as of March 7, 2011 (as amended, amended and restated, supplemented or otherwise modified through the date hereof, including pursuant to the Amendment, the “Credit Agreement”), among the Borrower, Holdings, the Administrative Agent, the Collateral Agent and each Lender from time to time party thereto.  Capitalized terms used but not otherwise defined in this Guarantor Consent and Reaffirmation (this “Consent”) are used with the meanings attributed thereto in the Credit Agreement. 

Each Guarantor hereby consents to the execution, delivery and performance of the Amendment and agrees that each reference to the Credit Agreement in the Loan Documents shall, on and after the Fifth Amendment Effective Date, be deemed to be a reference to the Credit Agreement in accordance with the terms of the Amendment.

 

Each Guarantor hereby acknowledges and agrees that, after giving effect to the Amendment, all of its respective obligations and liabilities under the Loan Documents to which it is a party, as such obligations and liabilities have been amended by the Amendment, are reaffirmed and remain in full force and effect.

 

After giving effect to the Amendment, each Guarantor reaffirms each Lien granted by it to the Collateral Agent for the benefit of the Secured Parties under each of the Loan Documents to which it is a party, which Liens shall continue in full force and effect during the term of the Credit Agreement, and shall continue to secure the Obligations (after giving effect to the Amendment), in each case, on and subject to the terms and conditions set forth in the Credit Agreement and the other Loan Documents.

 

Nothing in this Consent shall create or otherwise give rise to any right to consent on the part of the Guarantors to the extent not required by the express terms of the Loan Documents.

This Consent is a Loan Document and shall be governed by, and construed in accordance with, the law of the State of New York.

 

[The remainder of this page is intentionally left blank]

 

 

 

IN WITNESS WHEREOF, the undersigned have caused this Consent to be executed as of the date first above written.

 

CHINOS INTERMEDIATE HOLDINGS B, INC.

J. CREW OPERATING CORP.

J. CREW INC.

J. CREW INTERNATIONAL, INC.

GRACE HOLMES, INC.

H. F. D. NO. 55, INC.

MADEWELL INC.

J. CREW VIRGINIA, INC.

 

 

 

By: _____________________________

Name: 

Title:   

 

 

[Guarantor Consent and Reaffirmation Signature Page]

 

 

Exhibit A

 

Fifth Amendment to Credit Agreement and
Consent to Release of Mortgages

 

See Attached.

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