Document:

CASH COLLATERAL AGREEMENT

 

CASH COLLATERAL AGREEMENT, dated as of March
26, 2014 (this "Agreement"), made by Inventergy, Inc. (the "Pledgor") in favor of Hudson Bay
IP Opportunities Master Fund, LP, in its capacity as collateral agent (in such capacity, the "Collateral Agent")
for the Buyers (as defined below) party to each of the Securities Purchase Agreements (as defined below).

 

WITNESSETH:

 

WHEREAS, the Pledgor and each party listed
as a "Buyer" on the Schedule of Buyers (as such schedule may be amended, restated or otherwise modified from time to
time) attached thereto, each an "Original Buyer", and collectively, the "Original Buyers") are
parties to a Securities Purchase Agreement, dated as of May 10, 2013 (as amended, restated, supplemented or otherwise modified
from time to time, the "Original SPA"), pursuant to which the Pledgor sold to the Original Buyers certain promissory
notes (together with any additional notes issued under the Original SPA from time to time, the "Original Notes");

 

WHEREAS, the Pledgor and each party listed
as a "Buyer" on the Schedule of Buyers (as such schedule may be amended, restated or otherwise modified from time to
time) attached thereto, each a "New Buyer", and collectively, the "New Buyers", and together
with the Original Buyers, each a "Buyer" and collectively, the "Buyers") are parties to a Securities
Purchase Agreement, dated as of March 24, 2014 (as amended, restated, supplemented or otherwise modified from time to time, the
"New SPA", and together with the Original SPA, each a "Securities Purchase Agreement" and collectively,
the "Securities Purchase Agreements"), pursuant to which the Pledgor shall be required to sell, and the New Buyers
shall purchase or have the right to purchase, certain promissory notes (together with any additional notes issued under the New
SPA from time to time, the "New Notes", and together with the Original Notes, each a "Note" and
collectively, the "Notes"); and

 

WHEREAS, pursuant to Securities Purchase Agreements
and the Notes, the Pledgor has agreed to deposit into the Pledgor's account number 80001852293 at First Republic Bank (the "Collateral
Account") certain funds as cash collateral and to execute and deliver to the Collateral Agent a cash collateral agreement,
providing for the pledge to the Collateral Agent, and the grant to the Collateral Agent, of a security interest in the Collateral
Account and all amounts deposited therein, as collateral security for the obligations of the Pledgor in respect of the Notes, the
Securities Purchase Agreements and the other obligations related thereto;

 

NOW, THEREFORE, in consideration of the premises
and the agreements herein, the Pledgor hereby, jointly and severally, agrees with the Collateral Agent as follows:

 

SECTION 1.   Definitions. As used
in this Agreement, the following terms shall have the respective meanings indicated below (such meanings applicable equally to
both the singular and plural forms of such terms):

 

"Cash Collateral" means all
cash, and all other property from time to time deposited in the Controlled Account.

 

    	 

    	 

    

 

"Cash Collateral Event" means
(i) a failure by the Pledgor to pay, upon demand, any Obligation, or (ii) a breach by the Pledgor of any agreement, covenant, representation
or warranty set forth in this Agreement.

 

"Collateral" has the meaning
specified therefor in Section 3 hereof.

 

"Controlled Account" means,
the Collateral Account or any other bank account of the Pledgor at the Controlled Account Bank which is the subject of a Controlled
Account Agreement.

 

"Controlled Account Agreement"
means that certain deposit account control agreement, in form and substance reasonably satisfactory to the Collateral Agent, which
is among the Pledgor, the Collateral Agent and the Controlled Account Bank.

 

"Controlled Account Bank"
means First Republic Bank.

 

"Obligations" has the meaning
specified therefor in Section 4 hereof.

 

"Termination Date" means
the date on which all Obligations and all amounts due to the Collateral Agent and the Buyers under the Notes and the Securities
Purchase Agreements shall have been satisfied and paid in full in cash.

 

SECTION 2.   Controlled Account. The
Controlled Account Bank shall establish and maintain a Controlled Account Agreement with the Collateral Agent and the Pledgor,
in form and substance reasonably acceptable to the Collateral Agent. The Controlled Account Agreement shall provide, among other
things, that (a) the Controlled Account Bank will comply with any instructions originated by the Collateral Agent directing the
disposition of the funds in such Controlled Account without further consent by the Pledgor, (b) the Controlled Account Bank has
no rights of setoff or recoupment or any other claim against the applicable Controlled Account other than for payment of its service
fees and other charges directly related to the administration of such Controlled Account and for returned checks or other items
of payment, and (c) the Controlled Account shall be under the sole dominion and control of the Collateral Agent and the Pledgor
will have no right to give any instructions on the Controlled Account without the prior written consent of the Collateral Agent.

 

SECTION 3.   Security Interest. As
collateral security for the due and punctual payment of all of the Obligations (as defined in Section 4 below), the Pledgor hereby
pledges and assigns to the Collateral Agent, and grants to the Collateral Agent, a continuing security interest in and lien on,
all of the Pledgor's right, title and interest in and to the following (all being collectively referred to herein as the "Collateral"):
(i) the Controlled Account, (ii) the Cash Collateral and all certificates and instruments, if any, from time to time representing
or evidencing the Collateral; (ii) all cash, instruments, and other property from time to time received or otherwise distributed
in respect of or in exchange for any or all of the then existing Collateral; (iii) any deposit account into which the Cash Collateral
has been deposited, including, without limitation, the Controlled Account; and (iv) to the extent not described above, all proceeds
of any and all of the foregoing Collateral.

 

    	-2-

    	 

    

 

SECTION 4.   Obligations. The security
interest created hereby in the Collateral constitutes continuing collateral security for all of the following obligations, whether
now existing or hereafter incurred (the "Obligations"):

 

(a)      the payment by the Pledgor, when
due, of all obligations, interest thereon and all fees, commissions, charges, expense reimbursements, indemnifications and other
amounts payable to the Collateral Agent and the Buyers under or in respect of this Agreement, the Notes and the Securities Purchase
Agreements in accordance with the terms thereof;

 

(b)      the due performance and observance
by the Pledgor in all material respects of all of its other obligations from time to time existing under or in respect of this
Agreement, the Notes and the Securities Purchase Agreements.

 

SECTION 5.   Application of Cash Collateral
Account. All Collateral shall remain in the Controlled Account until the Termination Date; provided, however, that the
Collateral Agent may, as and when any Obligation shall become due or during the continuance of a Cash Collateral Event, direct
the Controlled Account Bank to remit to the Collateral Agent all or part of the Collateral to satisfy payment of all Obligations
then payable.

 

SECTION 6.   Representations and Warranties.
The Pledgor hereby represents and warrants as follows:

 

(a)      Organization, Good Standing, Etc.
The Pledgor (i) is a corporation, duly organized, validly existing and in good standing under the laws of the state or jurisdiction
of its organization, (ii) has all requisite power to carry on its business as now conducted and as presently contemplated, and
(iii) has all requisite power to execute, deliver and perform this Agreement, and to consummate the transactions contemplated hereby.

 

(b)      Authorization, Etc. The execution,
delivery and performance by the Pledgor of this Agreement, (i) has been duly authorized by all necessary action, and (ii) does
not and will not contravene the Pledgor's charter or by-laws or any applicable law or any contractual restriction binding on or
otherwise affecting the Pledgor or any of its properties, and (iii) does not result in the creation of any lien, security interest
or other charge or encumbrance (except as provided in or contemplated by this Agreement) upon or with respect to any of its properties.

 

(c)      Governmental and other Approvals.
No authorization or approval or other action by, and no notice to or filing with, any governmental authority or any other person
or entity is required for (i) the due execution, delivery and performance by the Pledgor of this Agreement, (ii) the grant by the
Pledgor, or the perfection, of the security interest purported to be created hereby in the Collateral, or (iii) the exercise by
the Collateral Agent of any of its rights and remedies hereunder.

 

(d)      Enforceability of Agreement.
This Agreement is a legal, valid and binding obligation of the Pledgor, enforceable against the Pledgor in accordance with its
terms, except as may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws.

 

    	-3-

    	 

    

 

(e)      Security Interest. This Agreement
creates a legal, valid and enforceable security interest in favor of the Collateral Agent in the Collateral, as security for the
Obligations. Such security interest is a perfected, first priority security interest, and all action necessary to perfect and protect
such security interest has been duly taken.

 

(f)      Legal Ownership. The Pledgor
is and will be at all times the legal and beneficial owner of the Collateral and has and will at all times have good and marketable
title thereto, free and clear of any lien, security interest, or other charge or encumbrance, except for the security interest
created by this Agreement.

 

SECTION 7.   Covenants of the Pledgor.

 

(a)      The Pledgor agrees that it will not,
without the prior written consent of the Collateral Agent, (i) sell, assign (by operation of law or otherwise), or otherwise dispose
of any interest in the Collateral, or (ii) create or suffer to exist any lien, claim, security interest, charge or other encumbrance
upon or with respect to any Collateral, except for the security interest purported to be created in the Collateral by this Agreement;
provided, that, subject to any restrictions or requirements in the Notes and the Securities Purchase Agreements, no separate consent
shall be required from the Collateral Agent for the Pledgor to engage in any merger or reorganization transaction that is otherwise
permitted under or consented to pursuant to the terms of the Notes and the Securities Purchase Agreements, to the extent that any
such merger or reorganization will not result or reasonably be expected to result in the impairment in any manner of the Collateral
Agent’s rights or priority in respect of the Collateral.

 

(b)      The Pledgor will not, without the
prior written consent of the Collateral Agent, cancel, terminate, amend, modify or waive any provision of any agreement, document
or other instrument constituting Collateral, or enter into any agreement or permit to exist any restriction with respect to any
Collateral other than pursuant hereto.

 

(c)      The Pledgor will, at the Pledgor's
expense, defend the Collateral Agent's right, title and security interest in and to the Collateral against the claims of any person
or entity.

 

(d)      The Pledgor will not take or fail
to take any action that would in any manner impair the enforceability of the Collateral Agent's security interest in any Collateral.

 

(e)      The Pledgor will, at the Pledgor's
expense, promptly deliver to the Collateral Agent a copy of each notice or other communication received by it in respect of the
Collateral.

 

SECTION 8.   Additional Provisions Concerning
the Collateral.

 

(a)      The Pledgor will at its expense,
at any time and from time to time, promptly execute and deliver all further instruments and documents and take all further action
that may be necessary or desirable or that the Collateral Agent may request in order (i) to perfect and protect, or maintain
the perfection of, the security interest and lien purported to be created hereby; (ii) to enable the Collateral Agent to exercise
and enforce its rights and remedies hereunder in respect of the Collateral; or (ii) otherwise to effect the purposes of this
Agreement. If the Pledgor fails to perform any agreement or obligation contained herein, the Collateral Agent itself may perform
or cause performance of such agreement or obligation, and the expenses of the Collateral Agent incurred in connection therewith
shall be jointly and severally payable to the Collateral Agent by the Pledgor pursuant to Section 11 hereof.

 

    	-4-

    	 

    

 

(b)      The Pledgor hereby (i) authorizes
the Collateral Agent at any time and from time to time to file, without the signature of the Pledgor where permitted by law, one
or more financing or continuation statements, and amendments thereto, relating to the Collateral and (ii) ratifies such authorization
to the extent that the Collateral Agent has filed any such financing statements, continuation statements, or amendments thereto,
prior to the date hereof.

 

(c)      The Pledgor hereby irrevocably appoints
the Collateral Agent as the Pledgor's attorney-in-fact, with full authority in the place and stead of the Pledgor and in the name
of the Pledgor or otherwise, from time to time until the Termination Date in the Collateral Agent's discretion to take any action
and to execute any instrument which the Collateral Agent, in its sole discretion, may deem necessary or advisable to accomplish
the purposes of this Agreement solely with respect to the Collateral, including, without limitation, to receive, indorse and collect
all instruments made payable to the Pledgor representing any dividend, payment of principal, interest, redemption price, purchase
price or other distribution or payment in respect of any Collateral and to give full discharge for the same.

 

SECTION 9.   Intentionally Deleted.

 

SECTION 10.   Remedies Upon Default.
If any Cash Collateral Event shall have occurred and be continuing:

 

(a)      The Collateral Agent may exercise
in respect of the Collateral, in addition to other rights and remedies provided for herein or otherwise available to it, all of
the rights and remedies of a secured party on default under the Uniform Commercial Code then in effect in the State of New York.

 

(b)      Any Collateral may be applied (after
payment of any amounts payable to the Collateral Agent hereunder, under Section 11 hereof or otherwise) by the Collateral Agent
to pay or to provide for the future payment of all or any part of the Obligations in such order as the Collateral Agent may elect.

 

SECTION 11.   Indemnity and Expenses.

 

(a)      The Pledgor agrees to defend, protect,
indemnify and hold harmless the Collateral Agent from and against any and all claims, losses, damages, liabilities, obligations,
penalties, fees, reasonable costs and expenses (including, without limitation, reasonable attorneys' fees, costs, expenses and
disbursements) incurred by the Collateral Agent to the extent that they arise out of or otherwise result from or relate to or are
in connection with this Agreement (including, without limitation, enforcement of this Agreement), except claims, losses or liabilities
resulting solely and directly from the Collateral Agent's gross negligence or willful misconduct, as determined by a final judgment
of a court of competent jurisdiction.

 

    	-5-

    	 

    

 

(b)      The Pledgor agrees to pay to the
Collateral Agent upon demand (and authorizes the Collateral Agent in its sole discretion to apply the Collateral against) the amount
of any and all costs and expenses, including the reasonable fees, costs, expenses and disbursements of counsel for the Collateral
Agent and of any experts and agents (including, without limitation, any collateral trustee which may act as agent of the Collateral
Agent), which the Collateral Agent may incur in connection with (i) the administration, amendment, waiver or other modification
or termination of this Agreement, (ii) the custody, preservation, use or operation of, or the sale of, collection from, or
other realization upon, any Collateral, (iii) the exercise or enforcement of any of the rights or remedies of the Collateral
Agent hereunder, or (iv) the failure by the Pledgor to perform or observe any of the provisions hereof.

 

SECTION 12.   Notices, Etc. All notices
and other communications provided for hereunder shall be in writing and shall be mailed, telecopied or delivered, if to the Pledgor,
to it at the address listed below its signature hereto, and if to the Collateral Agent, to it at its address specified under its
signature hereto. All such notices and other communications shall be effective (i) if mailed, when received or three Business Days
after mailing, whichever occurs first, (ii) if telecopied, when transmitted and confirmation is received or (iii) if delivered,
upon delivery.

 

SECTION 13.   Continuing Security Interest;
Termination.

 

(a)      This Agreement shall create a continuing
security interest in the Collateral and shall (i) remain in full force and effect until the Termination Date irrespective of (w)
any lack of validity or enforceability of the Notes or the Securities Purchase Agreements, (x) any change in the time, manner or
place of payment of, or in any other term in respect of, all or any of the Obligations, or any other amendment or waiver of or
any consent to departure from the Notes or the Securities Purchase Agreements, (y) any exchange or release of, or non-perfection
of any lien on or security interest in, any collateral for any of the Obligations or (z) any other circumstance which might otherwise
constitute a defense available to, or a discharge of, the Pledgor or any other person or entity in respect of the Obligations,
and (ii) be binding on the Pledgor and its successors and assigns and inure, together with all rights and remedies of the Collateral
Agent hereunder and its successors, transferees and assigns. None of the rights or obligations of the Pledgor hereunder may be
assigned or otherwise transferred except as consented to in writing by the Collateral Agent.

 

(b)      Upon the Termination Date, (i) this
Agreement and the security interest created hereby shall terminate and all rights to the Collateral shall revert to the Pledgor,
and (ii) the Collateral Agent will, upon the Pledgor's request and at the Pledgor's expense, without any representation, warranty
or recourse whatsoever, (A) return to the Pledgor (or whomsoever shall be lawfully entitled to receive the same or as a court of
competent jurisdiction shall direct) such of the Collateral as shall not have been applied pursuant to the terms hereof and (B)
execute and deliver to the Pledgor such documents as the Pledgor shall reasonably request in writing to evidence such termination.

 

    	-6-

    	 

    

 

SECTION 14.   Miscellaneous.

 

(a)      No amendment of any provision of
this Agreement shall be effective unless it is in writing and signed by the Pledgor and the Collateral Agent, and no waiver of
any provision of this Agreement, and no consent to any departure by the Pledgor therefrom, shall in any event be effective unless
the same shall be in writing and signed by the Collateral Agent, and then such waiver or consent shall be effective only in the
specific instance and for the specific purpose for which given.

 

(b)      No failure on the part of the Collateral
Agent to exercise, and no delay in exercising, any right hereunder shall operate as a waiver thereof; nor shall any single or partial
exercise of any such right preclude any other or further exercise thereof or the exercise of any other right. The rights and remedies
of the Collateral Agent provided herein are cumulative and are in addition to, and not exclusive of, any rights or remedies provided
by law. The rights of the Collateral Agent under this Agreement are not conditional or contingent on any attempt by the Collateral
Agent to exercise any of its rights against such party or against any other person.

 

(c)      Any provision of this Agreement which
is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition
or unenforceability without invalidating the remaining portions hereof or affecting the validity or enforceability of such provision
in any other jurisdiction.

 

(d)      This Agreement shall be governed
by and construed in accordance with the law of the State of New York.

 

(e)      THE PLEDGOR AND THE COLLATERAL AGENT
HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT
OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE ACTIONS OF THE COLLATERAL AGENT IN THE NEGOTIATION, ADMINISTRATION,
PERFORMANCE OR ENFORCEMENT THEREOF.

 

    	-7-

    	 

    

 

SECTION 15.   Waiver. To the extent
permitted by applicable law or otherwise explicitly provided in the Transaction Documents (as defined in the New SPA), the Pledgor
hereby waives (a) promptness and diligence, (b) notice of acceptance and notice of the incurrence of any Obligation by the Pledgor,
(c) notice of any actions taken by the Collateral Agent or any other person under the Notes, the Securities Purchase Agreements
or any other agreement, document or instrument relating thereto, (d) all other notices, demands and protests, and all other formalities
of every kind in connection with the enforcement of the Obligations, the omission of or delay in which, but for the provisions
of this Section 15, might constitute grounds for relieving the Pledgor of any of its obligations hereunder and (e) any requirement
that the Collateral Agent protect, secure, perfect or insure any security interest or other lien on any property subject thereto
or exhaust any right or take any action against the Pledgor or any other person or any collateral; provided, however,
that the Collateral Agent will endeavor to provide prompt notice to the Pledgor after any action is taken by the Collateral Agent
under the Notes, the Securities Purchase Agreements or any other agreement, document or instrument relating thereto.

 

[remainder of page intentionally left blank]

 

    	-8-

    	 

    

 

Signature Page, Cash Collateral
Agreement

 

IN WITNESS WHEREOF, the Pledgor has caused
this Agreement to be duly executed and delivered, as of the date first above written.

 

	 	INVENTERGY, INC.
	 	 
	 	By:	   /s/ Joseph Beyers
	 	 	Name: Joseph Beyers
	 	 	Title: Chairman and Chief Executive Officer
	 	 	 
	 	 	Address for notices:
	 	 	19995 Stevens Creek Blvd., Suite 100
	 	 	Cupertino, CA 95014

 

	ACCEPTED AND AGREED:	 
	 	 
	HUDSON BAY IP OPPORTUNITIES MASTER FUND, LP,	 
	 	 
	By:	/s/ Yoav Roth	 
	 	Name: Yoav Roth	 
	 	Title: Authorized Signatory	 
	 	 
	Address for notices:	 
	777 Third Avenue, 30th Floor	 
	New York, NY 10017exhibit1012014

Exhibit 10.1

Five Below, Inc.
1818 Market Street, Suite 1900
Philadelphia, PA 19103

June 8, 2014

Personal and Confidential
 
Joel D. Anderson
6909 St. Patrick’s Lane
Edina, MN 55439

Re: Employment Terms

Dear Joel:

On behalf of Five Below, Inc. (the “Company”), I am proud to extend you an offer to join our firm as our President and Chief Operating Officer.  In that position you will be an integral part of our senior management team.  This letter agreement (“Agreement”) memorializes the terms and conditions agreed to and shall become effective upon your start date with the Company which is to be as soon as possible after the date hereof but in no event later than August 4, 2014 (the “Effective Date”).  The terms and conditions of your employment with the Company following the Effective Date shall be as follows:

		
	POSITION:
	President and Chief Operating Officer.

		
	REPORTING:
	Chief Executive Officer of the Company (the “CEO”).

		
	DUTIES:
	You agree to perform all duties required as President of the Company, as determined and assigned by the CEO from time to time, including, without limitation, supervision and control over, and responsibility for, the general management and overall policy of the Company. Your employment will be on a full‐time and exclusive basis, and you agree that you will not accept other employment or engage in any activity that would impair or interfere with the performance of your duties to the Company, whether or not for compensation, without the express written consent of the Company’s Board of Directors (the “Board”).

		
	BASE SALARY:
	Commencing with the Effective Date, you will be paid an annual base salary of $700,000 (“Base Salary”), payable in accordance with the Company’s regular payroll practices in effect from time to time.  Commencing with the Company’s 2016 fiscal year, your Base Salary will be subject to annual review for increase by the Board or the Compensation Committee of the Board (the “Compensation Committee”).  

ANNUAL INCENTIVE 
		
	BONUS:
	Each year during your employment, you will be eligible for an annual cash performance bonus opportunity at a target of 100% of Base Salary and a maximum of 120% of Base Salary, subject to satisfaction of pre‐established Company performance goals applicable to the Company’s senior executive officers (the “Performance Bonus”). For the Company’s 2014 fiscal year, you will be eligible for a full-year Performance Bonus in recognition of your forfeiture of a full‐year bonus opportunity at your prior employer.

		
	LTIP:
	You will be eligible, commencing with the Company’s 2014 fiscal year, for an annual equity grant pursuant to the Company’s long‐term incentive program, with a targeted annual grant value equal to $1,200,000.  The annual equity grant with respect to the Company’s 2014 fiscal year will be delivered $600,000 in performance share units (“PSUs”) and $600,000 in an option grant (collectively, with the PSUs, the “2014 Annual Grant”), determined as follows:

		
	•
	The actual number of PSUs in the 2014 Annual Grant shall be determined by dividing $600,000 by the closing price of the Company’s common stock on the Effective Date. 

		
	•
	The actual number of shares underlying the option in the 2014 Annual Grant shall be determined by dividing $600,000 by the Company’s most recent, as of the Effective Date, Black-Scholes value attributable to Company options.   

The 2014 Annual Grant will be made on or as soon as administratively feasible following the Effective Date.  Subject to your continued employment on the applicable vesting date: the options in the 2014 Annual Grant will vest 50% on the second anniversary of the date of grant and 25% on each of the third and fourth anniversaries of the date of grant; and the PSUs will vest 100% at the end of a cumulative three year performance period, subject to satisfaction of the applicable performance goal(s) established for the 2014 grants to other senior executive officers of the Company.  

Commencing with the Company’s 2015 fiscal year, your annual equity grants shall be delivered and vested, subject to the same terms and conditions as equity grants made to the Company’s other senior executive officers.

RELOCATION 
		
	BONUS:
	Subject to your continued employment on such date, as part of the first payroll following relocation of your permanent residence to the greater Philadelphia, PA metropolitan area, you will receive a cash bonus of $250,000.

TEMPORARY
		
	LIVING EXPENSES:
	The Company shall reimburse or pay you up to $7,500 per month, for a period of up to twelve (12) months, beginning on the first payroll date following the Effective Date to provide assistance for travel and temporary housing (the “Travel/Housing Subsidy”).  The Travel/Housing Subsidy shall be subject to applicable tax withholding.  In addition, for the first ten (10) business days following the Effective Date, you shall be entitled to reimbursement for reasonable hotel expenses, and such reimbursements shall be in addition to the Travel/Housing Subsidy.

REPLACEMENT
		
	GRANT:
	On or as soon as administratively feasible following the Effective Date, you will receive an equity grant (the “Replacement Grant”) of restricted stock units (“RSUs”) that will have a value of $2,300,000. 

Subject to your continued employment on each vesting date, vesting of Replacement Grant will be as follows: 

		
	•
	1/3 of the Replacement Grant will vest on January 1, 2015;

		
	•
	1/3 of the Replacement Grant will vest on the earlier of (A) the later of (i) October 1, 2015 or (ii) 30 days after you relocate your permanent residence to the greater Philadelphia, PA metropolitan area, and (B) January 1, 2016; and

		
	•
	1/3 of the Replacement Grant will vest on January 1, 2016. 

The actual number of RSUs in your Replacement Grant shall be determined by dividing $2,300,000 by the closing price of the Company’s common stock on the Effective Date.

		
	RETENTION GRANT:
	On the Effective Date, you will receive an equity grant with a fair value equal to $2,000,000, the value of which will be equally delivered in RSUs and PSUs (the “Retention Grant”). 

Subject to your continued employment on each vesting date: the time‐based RSUs in the Retention Grant will vest in equal parts on December 1, 2017 and December 1, 2018; and the PSUs in the Retention Grant will be eligible to vest in equal parts on February 3, 2018 and February 2, 2019, based on the level of the Company’s performance achieved in fiscal years 2017 and 2018 against earnings growth measures established by the Compensation Committee not later than the first anniversary of the grant date.    

The actual number of RSUs and PSUs granted as your Retention Grant shall be determined by dividing $2,000,000 by the closing price of the Company’s common stock on the grant date.

REIMBURSEMENT OF
		
	MOVING EXPENSES:
	During employment, you will be reimbursed by the Company for all reasonable moving expenses incurred in connection with the relocation of your permanent residence to the Philadelphia metropolitan area in accordance with the Company’s reimbursement policies in effect from time to time.  The Company will reimburse you for the reasonable hotel expenses, coach airfare from Minneapolis, Minnesota, meals and transportation incurred by your wife and children for purposes of making three (3) house-hunting trips to the Philadelphia, PA area.

		
	BENEFITS:
	During employment, you will be eligible to participate in all medical and health plans or other employee welfare benefit plans and any holiday, vacation, perquisite or retirement plans that the Company provides to other senior executive officers, subject to the terms of those plans.

D & O  
		
	INDEMNIFICATION:
	During and following termination of your employment for any reason, the Company shall provide directors’ and officers’ liability insurance for you and shall indemnify and hold you harmless from any and all loss and liability for any and all authorized acts or omissions by you in the course and scope of his employment to the fullest extent permitted by law, and in no event on terms less favorable than those extended at such time to any other senior officer or director of the Company.  

		
	LEGAL FEES:
	On or as soon as administratively feasible following the later of (a) the Effective Date or (b) your submission of a reimbursement request in accordance with the Company’s reimbursement policies in effect from time to time, the Company will reimburse you for reasonable legal fees incurred in connection with the negotiation and execution of this Agreement.

		
	TERMINATION:
	You will be an “at-will” employee who can resign or terminate your employment with the Company at any time.  Likewise, the Company may terminate your employment at any time and for any reason whatsoever, with or without “Cause” or advance notice.  In the event you fail to relocate your permanent residence to the greater Philadelphia, PA metropolitan area by August 31, 2015, the Company shall have until September 30, 2015 to terminate you for that reason and, if the Company does so terminate you during that period for that reason, you will be entitled to the Accrued Benefits (as defined below) and you will not be entitled to any severance benefits, including those set forth below. 

Upon a termination of your employment with the Company (i) by you without Good Reason, or (ii) by the Company with Cause, you will be entitled to your accrued but unpaid Base Salary, all unused vacation days in the year of such termination that were accrued as of such termination, any vested benefits provided upon termination of employment under any of the Company’s benefit plans (other than any severance plan), reimbursement of all business expenses properly incurred prior to termination of your employment, and any Performance Bonus earned for a fiscal year prior to the fiscal year in which such termination occurs, but not yet paid as of the date of termination (collectively, the “Accrued Benefits”).

		
	SEVERANCE:
	Notwithstanding your at-will employment, in addition to the Accrued Benefits: 

		
	*
	Upon a termination of your employment (i) by the Company without Cause or by you for Good Reason, in each case, within 18 months after the Effective Date or (ii) by you with or without Good Reason between January 10, 2015 and February 10, 2015, inclusive, in either such case, you will also be entitled to:

		
	*
	24 months of Base Salary continuation following such termination, payable in accordance with the Company’s normal payroll practices in effect from time to time and such payments will commence on the first payroll date of the Company following the thirtieth (30th) day after the termination of your employment (the “First Payroll Date”), subject to any delay required under Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”). Notwithstanding the foregoing, if your termination occurs due to your voluntary resignation between January 10, 2015 and February 10, 2015 inclusive, your severance payments will be reduced (on a prospective basis only) dollar for dollar by any employment, consulting or independent contractor compensation actually received by you during the two year period after such resignation.  The portion of the severance pay that would have been paid to you during the period between the termination of your employment and the First Payroll Date had no thirty-day delay been required will be paid to you in a lump sum on the First Payroll Date and thereafter the remaining portion of the severance pay will be paid without delay as provided in this paragraph; and

		
	*
	monthly payments equal to the applicable monthly premium for COBRA continuation coverage for so long as you are receiving such continuation coverage up to 24 months after such termination, commencing on the First Payroll Date; provided that the portion of the COBRA premiums paid by you during the period between the termination of your employment and the First Payroll Date, if any, had no thirty-day delay been required will be paid to you in a lump sum on the First Payroll Date.

		
	*
	Additionally, upon a termination of your employment (i) by the Company without Cause, or (ii) by you for Good Reason, in each case within 18 months after the Effective Date only, you will also be entitled to:

		
	* 
	continued vesting of the Replacement Grant, according to the original vesting schedule, as set forth above; provided however, that vesting of the Replacement Grant under these circumstances shall not be subject to the condition of your continued employment on each vesting date. 

		
	*
	Upon a termination of your employment (i) by the Company without Cause, or (ii) by you for Good Reason, in each case more than 18 months after the Effective Date, you will be entitled to:

		
	* 
	12 months of Base Salary continuation following such termination, payable in accordance with the Company’s normal payroll practices in effect from time to time and such payments will commence on the First Payroll Date. The portion of the severance pay that would have been paid to you during the period between the termination of your employment and the First Payroll Date had no thirty-day delay been required will be paid to you in a lump sum on the First Payroll Date and thereafter the remaining portion of the severance pay will be paid without delay as provided in this paragraph; and

		
	*
	monthly payments equal to the applicable monthly premium for COBRA continuation coverage for so long as you are receiving such continuation coverage up to 12 months after such termination, commencing on the First Payroll Date; provided that the portion of the COBRA premiums paid by you during the period between the termination of your employment and the First Payroll Date, if any, had no thirty-day delay been required will be paid to you in a lump sum on the First Payroll Date.

For this purpose:

“Cause” means  (i) alcohol abuse or use of controlled drugs (other than in accordance with a physician’s prescription); (ii) refusal, failure or inability to perform any material obligation or fulfill any duty (other than any duty or obligation of the type described in clause (iv) below) to the Company (other than due to a Disability as defined in the Company Equity Incentive Plan), which failure, refusal or inability is not cured within 10 days after delivery of notice thereof; (iii) gross negligence or willful misconduct in the course of employment; (iv) any material breach of any obligation or duty to the Company or any of its affiliates (whether arising by statute, common law, contract or otherwise) relating to confidentiality, noncompetition, nonsolicitation or proprietary rights; (v) other conduct, material in nature, involving any type of disloyalty to the Company or any of its affiliates, including, without limitation, fraud, embezzlement, theft or proven dishonesty; (vi) conviction of (or the entry of a plea of guilty or nolo contendere to) a misdemeanor involving moral turpitude or a felony; 

“Good Reason” means (i) a material diminution in your Base Salary or Performance Bonus target; (ii) a material, adverse change in your authority, duties, title or responsibilities from those in effect on the Effective Date; (iii) a requirement that you report to anyone other than the CEO or the Board; (iv) any willful action or inaction that constitutes a material breach by the Company of any of its covenants or obligations under this Agreement; or (v) the relocation of the geographic location of your principal place of employment by more than 50 miles from the Company’s principal executive office on the Effective Date; provided, that, no event described above shall constitute “Good Reason” unless (x) you provide written notice of the event within the 60-day period following the occurrence of such Good Reason event, and (y) the Company has not cured such event within 30 days of receipt of such notice. For the avoidance of doubt, Good Reason shall not exist hereunder unless and until the thirty-day cure period following receipt by the Company of your written notice expires and the Company shall not have cured such circumstances, and in such case your employment shall terminate for Good Reason if you provide notice to the Company within 15 days following the expiration of such thirty-day cure period that you wish to resign on account of “Good Reason,” and your termination date shall become effective on the first business day following the end of your 15 day notice period.

Notwithstanding the foregoing, all severance benefits will be contingent upon your execution of a fully effective and non-revocable general release of claims against the Company and its affiliates, in substantially the form attached hereto as Exhibit A (the “Release”), within 30 days following the termination of your employment, which release will be provided to you within five days of the termination of your employment.  

		
	NONDISCLOSURE:
	You acknowledge that you will be bound by the terms of the Non-Disclosure Agreement, which you executed on even date in connection with your execution of this Agreement; including without limitation the non-competition, non-solicitation, non-disparagement, intellectual property and work-for-hire provisions contained therein.  

SECTION 409A
		
	COMPLIANCE:
	Notwithstanding any provision to the contrary herein, no severance shall be paid pursuant to this Agreement unless the termination of your employment constitutes a “separation from service” (as such term is defined in Treas. Reg. Section 1.409A-1(h), including the default presumptions).

To the maximum extent permitted under Section 409A of the Code (“Section 409A”), the severance payments and benefits payable under this Agreement are intended to be exempt from Section 409A in reliance on the “separation pay exception” under Treas. Reg. Section 1.409A-1(b)(9)(iii). If any payment, compensation or other benefit provided to you in connection with the termination of your employment is determined by the Company, in whole or in part, not to be so exempt and to constitute “nonqualified deferred compensation” within the meaning of Section 409A and you are a specified employee as defined in Section 409A(a)(2)(B)(i), then such “nonqualified deferred compensation” will not be paid before (i) the first regularly scheduled payroll date following the sixth (6th) month after the termination of your employment or (ii) the first regularly scheduled payroll date following your death (the “New Payment Date”). The aggregate of any payments that otherwise would have been paid to you during the period between the date of termination and the New Payment Date will be paid to you in a lump sum on such New Payment Date.  Thereafter, any payments that remain outstanding as of the day immediately following the New Payment Date will be paid without delay over the time period originally scheduled, in accordance with the terms of this Agreement.

Notwithstanding the other provisions hereof, this Agreement is intended to comply with or be exempt from the requirements of Section 409A, to the extent applicable, and this Agreement shall be interpreted to avoid any penalty sanctions under Section 409A.  Accordingly, all provisions herein, or incorporated by reference, shall be construed and interpreted to comply with or be exempt from Section 409A, if necessary, any such provision shall be deemed amended to comply with Section 409A and regulations thereunder.  If any payment or benefit cannot be provided or made at the time specified herein without incurring sanctions under Section 409A, then such benefit or payment shall be provided in full at the earliest time thereafter when such sanctions will not be imposed.  In no event may you designate the calendar year of payment of any severance benefits payable to you under this Agreement.
    
Notwithstanding anything to the contrary contained in this Agreement, all reimbursements and in-kind benefits provided hereunder shall be made or provided in accordance with the requirements of section 409A of the Code, including, where applicable, the requirement that (i) any reimbursement shall be for expenses incurred during your lifetime, (ii) the amount of expenses eligible for reimbursement, or in-kind benefits provided, during a taxable year may not affect the expenses eligible for reimbursement, or in- kind benefits to be provided, in any other taxable year, (iii) the reimbursement of an eligible expense will be made on or before the last day of the taxable year following the year in which the expense is incurred, and (iv) the right to reimbursement or in-kind benefits is not subject to liquidation or exchange for another benefit.

		
	MISCELLANEOUS:
	The Company will be entitled to withhold from any amounts to be paid or benefits provided to you hereunder any federal, state, local or foreign withholding, FICA contributions, or other taxes, charges or deductions which it is from time to time required to withhold.  The Company will be entitled to rely on the advice of counsel if any question as to the amount or requirement of any such withholding shall arise.

As a Company employee, you will be expected to abide by all Company rules and regulations.

Neither this Agreement nor any of your rights, duties or obligations shall be assignable by you, nor shall any of the payments required or permitted to be made to you by this Agreement be encumbered, transferred or in any way anticipated, except as required by applicable laws.

Any notice, request, instruction or other document given under this Agreement shall be in writing and shall be addressed and delivered, in the case of the Company, to the CEO at the principal office of the Company and, in your case, to your address as shown in the records of the Company or to such other address as may be designated in writing by either party.

This Agreement shall be exclusively governed by and construed in accordance with the laws of the Commonwealth of Pennsylvania, without regard to conflicts of law doctrine. 

The provisions of this Agreement are severable and the invalidity of any one or more provisions shall not affect the validity of any other provision.  

A waiver by either party of any breach of any provision of this Agreement by the other party shall not operate or be construed as a waiver of any other or subsequent breach by the other party.

This Agreement forms the complete statement of your employment terms with the Company, and supersedes any other agreements made to you by anyone, whether oral or written, including without limitation, any previously received candidate term sheet.  This Agreement may not be amended or revised except by a writing signed by the parties.

This Agreement may be executed simultaneously in two or more counterparts, each of which shall be deemed an original, but which together shall constitute one and the same instrument.

[Signature Page Follows]

If you are in agreement with the foregoing, please execute this Agreement at the signature line below and return an executed copy to my attention.

Very truly yours,

                                                   /s/ Thomas G. Vellios     
Thomas G. Vellios
          Chief Executive Officer

Accepted and agreed to by:

/s/ Joel D. Anderson             
Joel D. Anderson

Date:       June 8, 2014         

EXHIBIT A

GENERAL RELEASE OF CLAIMS

A general release is required as a condition for receiving the severance payments described in the employment agreement between Five Below, Inc. (the “Company”) and Joel D. Anderson (“you”) dated June 8, 2014, (the “Employment Agreement”); thus, by executing this general release (“General Release”), you, on your own behalf and on behalf of your heirs, estate and beneficiaries, generally release and forever discharge the Company, its predecessors, successors or assigns, affiliates, shareholders or members, and their respective managers, members, partners, officers, directors, agents and employees and each of their heirs, executors, successors and assigns (individually a “Released Party” and collectively the “Released Parties”) from any and all claims and causes of action of every kind, nature and description whatsoever, whether known, unknown or suspected to exist, which you ever had or may now have, against any of the Released Parties, arising out of or relating to your employment relationship with the Company, and/or your separation from that employment relationship, including but not limited to: 
a.    All claims arising out of or relating to the statements, actions, or omissions of the Released Parties.
b.    All claims for any alleged unlawful discrimination, harassment, retaliation or reprisal, or other alleged unlawful practices arising under any federal, state, or local statute, ordinance, or regulation, including without limitation, claims under Title VII of the Civil Rights Act of 1964, as amended; the Civil Rights Act of 1866, the Age Discrimination in Employment Act of 1967, as amended (including the Older Workers Benefit Protection Act); the Americans with Disabilities Act of 1990, as amended; the Civil Rights Act of 1991; the Family and Medical Leave Act of 1993; the Equal Pay Act of 1963; the Worker Adjustment and Retraining Notification Act; the Employee Retirement Income Security Act of 1974; the Fair Credit Reporting Act; and any other federal, state or local anti-discrimination acts, state wage payment statutes and non-interference or non-retaliation statutes under any applicable state or local laws or ordinances or any other legal restrictions on the Released Parties’ rights.
c.    All claims for alleged wrongful discharge; breach of contract; breach of implied contract; failure to keep any promise; breach of a covenant of good faith and fair dealing; breach of fiduciary duty; promissory estoppel; your activities, if any, as a “whistleblower”; defamation; infliction of emotional distress; fraud; misrepresentation; negligence; harassment; retaliation or reprisal; constructive discharge; assault; battery; false imprisonment; invasion of privacy; interference with contractual or business relationships; any other wrongful employment practices; and violation of any other principle of common law.
d.    All claims for compensation of any kind, including without limitation, commission payments, bonus payments, vacation pay, expense reimbursements, reimbursement for health and welfare benefits, and perquisites including payments, benefits, and reimbursements; except as otherwise provided in the Employment Agreement.
e.    All claims for back pay, front pay, reinstatement, other equitable relief, compensatory damages, damages for alleged personal injury, liquidated damages, and punitive damages.
f.    All claims for attorneys’ fees, costs, and interest.
The foregoing release shall not extend to the following: (i) your rights to receive severance under the terms of the Employment Agreement; (ii) any rights you may have to receive vested amounts under any of the Company's employee benefit plans and/or pension plans or programs; (iii) your rights to medical benefit continuation coverage, on a self-pay basis, pursuant to federal law (COBRA);  (iv) any rights or claims that the law does not allow to be released and/or waived by private agreement; (v) any rights or claims that are based on events occurring after the date on which you sign this General Release; (vi) any rights or claims that you have relating to your outstanding equity rights to receive shares of common stock of the Company, as well as any shares of common stock of the Company that you own and (vii) any claims to indemnification or insurance coverage, including but not limited to “D&O coverage”, that you may have with respect to any claims made or threatened against you in your capacity as a director, officer or employee of the Company.  You acknowledge and agree that even though claims and facts in addition to those now known or believed by you to exist may subsequently be discovered, it is your intention to fully settle and release all claims you may have against the Released Parties, whether known, unknown or suspected.
It is further understood and agreed that you are waiving any right to initiate an action in state or federal court by you or on your behalf alleging discrimination on the basis of race, sex, religion, national origin, age, disability, marital status, or any other protected status or involving any contract or tort claims based on your termination from the Company.  It is also acknowledged that your termination is not in any way related to any work-related injury.  
This General Release shall be construed and enforced in accordance with, and governed by, the laws of the Commonwealth of Pennsylvania, without regard to principles of conflict of laws.  If any clause of this General Release should ever be determined to be unenforceable, it is agreed that this will not affect the enforceability of any other clause or the remainder of this General Release.
You understand and agree that the compensation and benefits described in the Employment Agreement offer you consideration greater than that to which you would otherwise be entitled. You acknowledge that before entering into this agreement, you have had the opportunity to consult with any attorney or other advisor of your choice, and you have been advised to do so, and to the extent you deem appropriate, you have fully availed yourself of this right.  You acknowledge that you have executed this General Release knowingly and voluntarily with full understanding of its terms and after having been advised and having had the opportunity to seek and receive advice and counsel from your attorney.  You acknowledge that you have been given a period of at least 21 days within which to consider this General Release or have knowingly and voluntarily waived your right to do so.  You understand that you may revoke this General Release during the seven days following the execution of this General Release by delivering notice to the Company.  If no such revocation occurs, this General Release shall become effective on the eighth day following the execution of this General Release.
[Signature Page Follows]

I hereby state that I have carefully read this General Release and that I am signing this General Release knowingly and voluntarily with the full intent of releasing the Released Parties from any and all claims, except as set forth herein.  Further, if signed prior to the completion of the 21 day review period, this is to acknowledge that I knowingly and voluntarily signed this General Release on an earlier date.

                                                                         ___________________________
Date                        Joel D. Anderson

FIVE BELOW, INC.
1818 MARKET STREET
SUITE 2000 
PHILADELPHIA, PENNSYLVANIA 19103

June 8, 2014
Dear Joel:
In connection with your potential employment with Five Below, Inc. (the “Company”), from time to time, the Company may provide you with, or you may otherwise obtain, confidential information regarding the Company and its business (the “Business”).
1.All information about the Company and the Business furnished by the Company or on the Company’s behalf to you, or otherwise obtained by you in connection with your employment with the Company, is referred to in this letter agreement as “Proprietary Information.” For purposes of this letter agreement, Proprietary Information: (a) shall include all documents which are prepared by you, including all correspondence, memoranda, notes, summaries, analyses, studies, models, extracts of and documents and records reflecting, based on or derived from Proprietary Information as well as all copies and other reproductions thereof, whether in writing or stored or maintained in or by electronic, magnetic or other means, media or devices (all such documents and writings which are prepared by you are sometimes referred to herein as “Evaluation Documents”); and (b) shall not include information which is or becomes generally available to the public other than as a result of a disclosure by you.
2.Unless otherwise agreed to in writing by the Company, you agree that you will keep all Proprietary information confidential and not disclose or reveal any Proprietary Information to any person.
3.You agree that you will, upon the Company’s request, promptly deliver to the Company all Proprietary Information in your possession or control.
4.In consideration of your employment with the Company and the Company’s providing you with, or your otherwise obtaining, the Proprietary Information, you agree that: (A) if your employment with the Company is terminated without “Cause” or if you resign your employment with “Good Reason” (as such terms are defined in the Letter Agreement between you and the Company with even date hereof), for the period, if any, to which you may be entitled to receive severance benefits or (B) if your employment with the Company terminates or is terminated for any other reason, for a period of two (2) years from the date of the termination, you will not, either directly or indirectly, on your own behalf or in the service of or on behalf of others, together with or on behalf of any other person: (a) engage or participate, or provide any service to any person that is engaged or plans to engage, (i) in a business that is directly competitive with the Business, (ii) in a business that sells at retail more than a majority of its product at fixed price points of $ 10 (or integral multiples thereof) or less or any combination of one or more price points of $10, (or integral multiples thereof) or less, such as by way of example, the retailer B Tween $1 and Five, or (iii) in a business that devotes a majority of its sales area to the retail sale of party goods, or is known as a party store, such as (by way of example and not limitation): Party City or Factory Card Outlet; or (b) solicit, recruit, hire or attempt to solicit, recruit or hire, any employee of the Company. 
5.If any court determines that any provision of this letter agreement is unenforceable because of its duration or geographic scope or otherwise, then that court will have the power to modify such provision and, in its amended form, such provision will then be enforceable.
6.In the event that any provision in this letter agreement is prohibited or unenforceable in any jurisdiction, such provision shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions, hereof or affecting the validity or enforceability of such provision in any other jurisdiction.
7.Without prejudice to the rights and remedies otherwise available to the Company, you agree that the Company shall be entitled to equitable relief by way of injunction if you breach or threaten to breach any of the provisions of this letter agreement.  In the event that the Company should seek an injunction or other equitable relief hereunder, you hereby waive any requirement that the Company post a bond or any other security.  It is understood that any failure or delay by the Company in exercising any right, power or privilege hereunder shall not operate as a waiver thereof, nor shall any single or partial exercise of any right, power or privilege hereunder preclude any other or further exercise thereof.  In the event that the Company is the prevailing party in any action or proceeding under this letter agreement, then you shall pay all costs and expenses incurred by the Company in connection therewith (including, without limitation, reasonable attorney’s fees).
8.This letter agreement constitutes the entire and exclusive agreement between the parties respecting the subject matter hereof, superseding all prior discussions, agreements or arrangements, whether oral or written, with respect to the subject matter thereof. This letter agreement may not be amended unless in writing and signed by both parties.
9.By executing this agreement, you are acknowledging that you have been provided with ample time to carefully review each of the provisions of this letter agreement and to consult with counsel of your choice, and that you fully understand each of the provisions of this agreement.
10.This letter agreement may be executed and delivered by facsimile signature in two or more counterparts, each of which shall constitute an original instrument and all of which, together, shall constitute the same letter agreement.
11.This letter agreement, its interpretation and enforcement, shall be governed by the laws of the Commonwealth of Pennsylvania applicable to agreements made and to be performed wholly therein.
Please confirm your agreement with the foregoing by signing and returning to the undersigned the duplicate copy of this letter agreement enclosed herewith.
Yours truly,

FIVE BELOW, INC.

By:    /s/Thomas G. Vellios                                          
Thomas G. Vellios
President & Chief Executive Officer

Accepted and Agreed:
/s/ Joel D. Anderson                           
Joel D. Anderson

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