Exhibit 10.1
SIXTH AMENDMENT TO CREDIT AGREEMENT
     This Sixth Amendment to Credit Agreement (this “Sixth Amendment”) is made
as of this 5th day of November, 2007 by and among
JO-ANN STORES, INC., an Ohio corporation, having a principal place of business
at 5555 Darrow Road, Hudson, Ohio 44236, as Lead Borrower for the Borrowers,
being
said JO-ANN STORES, INC., and
FCA of Ohio, Inc., an Ohio corporation, having a principal place of business at
5555 Darrow Road, Hudson, Ohio 44236, and
House of Fabrics, Inc., a Delaware corporation, having a principal place of
business at 5555 Darrow Road, Hudson, Ohio 44236, and
Jo-Ann Stores Supply Chain Management, Inc., an Ohio corporation, having a
principal place of business at 5555 Darrow Road, Hudson, Ohio 44236
each of the Lenders party to the Credit Agreement (defined below) (together with
each of their successors and assigns, referred to individually as a “Lender” and
collectively as the “Lenders”), and
BANK OF AMERICA, N.A. (f/k/a Fleet National Bank), as Issuing Bank, a national
banking association having a place of business at 100 Federal Street, Boston,
Massachusetts 02110; and
BANK OF AMERICA, N.A., as Administrative Agent and Collateral Agent for the
Lenders, a national banking association, having its principal place of business
at 100 Federal Street, Boston, Massachusetts 02110; and
WACHOVIA CAPITAL FINANCE CORPORATION (NEW ENGLAND) (f/k/a Congress Financial
Corporation), as Documentation Agent; and
GMAC COMMERCIAL FINANCE LLC (f/k/a GMAC Commercial Credit LLC), NATIONAL CITY
BUSINESS CREDIT, INC. (f/k/a National City Commercial Finance, Inc.) AND THE CIT
GROUP/BUSINESS CREDIT, INC., as Co-Agents
in consideration of the mutual covenants herein contained and benefits to be
derived herefrom.
W I T N E S S E T H
     A. Reference is made to the Credit Agreement (as amended and in effect, the
“Credit Agreement”) dated as of April 24, 2001 by and among the Lead Borrower,
the Borrowers, the Lenders, the Issuing Bank, the Agents, the Documentation
Agent and the Co-Agents.

 

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     B. The parties to the Credit Agreement desire to modify, amend and waive
certain provisions of the Credit Agreement, as provided herein.
     Accordingly, the parties hereto agree as follows:
     1. Definitions. Capitalized terms used herein and not otherwise defined
herein shall have the meanings assigned to such terms in the Credit Agreement.
     2. Amendments to Article I of the Credit Agreement. The provisions of
Article I of the Credit Agreement are hereby amended by adding the following new
definitions to Article I to the Credit Agreement in appropriate alphabetical
order:

  a.   “IdeaForest” means IdeaForest.com, Inc., a Delaware corporation.     b.  
“IdeaForest Merger Agreement” means the Agreement and Plan of Merger dated as of
November 5, 2007 by and among Jo-Ann Stores, Inc., IDFT Acquisition Corporation
and IdeaForest.     c.   “IdeaForest Note” means the Promissory Note dated as of
November 5, 2007 made by Jo-Ann Stores, Inc. in favor of Renee LaBran, as the
designated representative of certain Persons named therein.     d.   Amendments
to Article VI. The provisions of Article VI of the Credit Agreement are hereby
amended as follows:

  (i)   The provisions of Section 6.01 are hereby amended by deleting the word
“and” at the end of clause (x), renumbering clause (xi) as clause (xii) and
inserting the following new clause (xi):         (xi) Indebtedness on account of
the IdeaForest Note; and     (ii)   The provisions of Section 6.04 are hereby
amended by inserting the following new clause (i):         (i) the acquisition
of the equity interests in IdeaForest pursuant to the IdeaForest Merger
Agreement; and     (iii)   The provisions of Section 6.06(b) are hereby amended
by deleting the word “and” at the end of clause (ii), renumbering clause
(iii) as clause (iv) and inserting the following new clause (iii):        
(iii) prepayments of the IdeaForest Note as long as (A) no Default or Event of
Default then exists or would arise therefrom, (B) prior to making such
prepayment, Excess Availability is at least $20,000,000, and (C) after giving
effect to such prepayment, Excess Availability is at least $20,000,000; and

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     3. Conditions Precedent to Effectiveness. This Sixth Amendment shall not be
effective until each of the following conditions precedent have been fulfilled
to the satisfaction of the Administrative Agent:

  a.   This Sixth Amendment shall have been duly executed and delivered by the
Borrowers and the Required Lenders, shall be in full force and effect, and shall
be in form and substance satisfactory to the Administrative Agent and the
Required Lenders.     b.   All action on the part of the Borrowers necessary for
the valid execution, delivery and performance by the Borrowers of this Sixth
Amendment shall have been duly and effectively taken and evidence thereof
satisfactory to the Administrative Agent shall have been provided to the
Administrative Agent.     c.   The Borrowers shall have paid to the
Administrative Agent all other amounts due under the Loan Documents as of the
effective date of this Sixth Amendment.     d.   The Borrowers shall have
provided such additional instruments and documents to the Administrative Agent
as the Administrative Agent and Administrative Agent’s counsel may have
reasonably requested.     4.   Miscellaneous.     a.   The parties acknowledge
that Fleet Retail Group, LLC has been succeeded as Administrative Agent,
Collateral Agent and Lender by its Affiliate Bank of America, N.A.     b.  
Except as otherwise expressly provided herein, all provisions of the Credit
Agreement and the other Loan Documents remain in full force and effect. Without
limiting the foregoing, promptly upon completion of the acquisition of the
equity interests in IdeaForest pursuant to the IdeaForest Merger Agreement, the
Lead Borrower shall cause IdeaForest to promptly execute and deliver to the
Agents the instruments, documents and agreements required pursuant to
Section 5.12 of the Credit Agreement.     c.   This Sixth Amendment may be
executed in several counterparts and by each party on a separate counterpart,
each of which when so executed and delivered shall be an original, and all of
which together shall constitute one instrument.     d.   This Sixth Amendment
expresses the entire understanding of the parties with respect to the
transactions contemplated hereby. No prior negotiations or discussions shall
limit, modify, or otherwise affect the provisions hereof.     e.   Any
determination that any provision of this Sixth Amendment or any application
hereof is invalid, illegal or unenforceable in any respect and in any instance
shall not effect the validity, legality, or enforceability of such provision in
any other

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      instance, or the validity, legality or enforceability of any other
provisions of this Sixth Amendment.

  f.   The Borrowers shall pay on demand all costs and expenses of the Agents,
including, without limitation, reasonable attorneys’ fees in connection with the
preparation, negotiation, execution and delivery of this Sixth Amendment.     g.
  The Borrowers warrant and represent that the Borrowers have consulted with
independent legal counsel of the Borrowers’ selection in connection with this
Sixth Amendment and are not relying on any representations or warranties of the
Agents, the Lenders or their counsel in entering into this Sixth Amendment.

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

            JO-ANN STORES, INC.
as Lead Borrower and Borrower
      by   /s/ James C. Kerr       Name:   James C. Kerr        Title:  
Executive Vice President and Chief Financial Officer          FCA OF OHIO, INC.
as Borrower
      by   /s/ James C. Kerr       Name:   James C. Kerr        Title:   Vice
President          HOUSE OF FABRICS, INC.
as Borrower
      by   /s/ James C. Kerr       Name:   James C. Kerr        Title:   Vice
President          JO-ANN STORES SUPPLY CHAIN MANAGEMENT, INC.
as Borrower
      by   /s/ James C. Kerr       Name:   James C. Kerr        Title:   Vice
President       

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            BANK OF AMERICA, N.A.,
as Administrative Agent, as Collateral Agent, as Swingline Lender, as Issuing
Bank and as Lender
      By:   /s/ James Ward         James Ward        Managing Director       
WACHOVIA CAPITAL FINANCE CORPORATION (NEW ENGLAND), as Documentation Agent and
Lender
      By:   /s/ John Husson       Name:   John Husson        Title:   Managing
Director          GMAC COMMERCIAL FINANCE LLC
as Co-Agent and Lender
      By:   /s/ Steven J. Brown       Name:   Steven J. Brown        Title:  
Director          NATIONAL CITY BUSINESS CREDIT, INC.
as Co-Agent and Lender
      By:   /s/ Kathryn C. Ellero       Name:   Kathryn C. Ellero       
Title:   Vice President          THE CIT GROUP/BUSINESS CREDIT, INC.
as Co-Agent and Lender
      By:   /s/ Manuel Borges       Name:   Manuel Borges        Title:   Vice
President       

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            WELLS FARGO FOOTHILL, LLC
as Lender
      By:   /s/ Jennifer Fong       Name:   Jennifer Fong        Title:  
Assistant Vice President       

                      COMERICA BANK         as Lender    
 
               
 
  By:                                   Name:        
 
                    Title:        
 
         
 
   

            GENERAL ELECTRIC CAPITAL CORPORATION
as Lender
      By:   /s/ Rebecca A. Ford       Name:   Rebecca A. Ford        Title:  
Duly Authorized Signatory          RZB FINANCE, LLC
as Lender
      By:   /s/ Christoph Hoedl       Name:   Christoph Hoedl        Title:  
Group Vice President          RZB FINANCE, LLC
as Lender
      By:   /s/ John A. Valiska       Name:   John A. Valiska        Title:  
First Vice President       

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            US BANK N.A.
as Lender
      By:   /s/ Matthew Kasper       Name:   Matthew Kasper        Title:  
Assistant Vice President          KEY BANK NATIONAL ASSOCIATION
as Lender
      By:   /s/ Nadine M. Eames       Name:   Nadine M. Eames        Title:  
Vice President       

                  WEBSTER BUSINESS CREDIT CORPORATION       as Lender    
 
             
 
By:                               Name:        
 
                Title:        
 
       
 
   
 
                LASALLE BUSINESS CREDIT, LLC       as Lender    
 
             
 
By:                               Name:        
 
                Title:        
 
       
 
   

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