Document:

Exhibit 10.1

 

Wells Fargo Bank Business Credit

119 West 40th Street

New York, NY 10018

 

as of January 24, 2006

Infotech USA. Inc. a New Jersey corporation

Infotech USA. Inc. a Delaware corporation

Information Technology Services, Inc. 

c/o Infotech USA, Inc. 

7 Kingsbridge Road 

Fairfield, New Jersey 07004 

Attn:  Mr. J. Robert Patterson 

	
            RE:
 	
            Third Amendment and Waiver  
 

Gentlemen: 

Reference is made to the Credit and Security Agreement, dated as of June 29, 2004 (as amended from time to time, the “Credit Agreement”), among Infotech USA, Inc., a New Jersey corporation, as borrower (the “Borrower”), Infotech USA, Inc., a Delaware corporation, and Information Technology Services, Inc., a New York corporation, as guarantors (together with the Borrower, the “Obligors”) and Wells Fargo Bank, National Association, as successor by merger to Wells Fargo Business Credit, Inc., acting through its Wells Fargo Business Credit operating division, as lender (the “Lender”). Terms which are capitalized and not otherwise defined herein shall have the meanings ascribed to them in the Credit Agreement. 

The Obligors have informed the Lender that Sebastian Perez has ceased to actively manage each Obligor's day-to-day business activities in his capacity as president of each of the Obligors, which constitutes an Event of Default under Section 7.1(c) of the Credit Agreement (the “Designated Event of Default”). The obligors have requested that the Lender consent to Jonathan McKeage’s employment as a replacement to Sebastian Perez and that the Lender waive the Designated Event of Default, and the Lender hereby agrees to such requests. Accordingly, the Credit Agreement is hereby amended by deleting clause (c) or the definition of “Change of Control” in Section 1.1 of the Credit Agreement and by substituting in lieu thereof the following: “(c) Jonathan McKeage or Robert Patterson shall cease to actively manage each Obligor's day-to-day business
activities, in his capacity as president and chief executive officer or chief financial officer, as the case may be, of each Obligor,” Further, the Lender hereby waives the Designated Event of Default. Except to the extent expressly set forth herein, no waiver of any of the terms, provisions or conditions of the Credit Agreement is intended or implied and nothing heroin shall constitute a waiver of any existing or future Defaults or Events of Default whatsoever, other than the Designated Event of Default. 

The amendment and the waiver set forth herein shall become upon the Lender's receipt of this letter duly signed by each Obligor.  Except as expressly amended herein, the Credit 

 

 

 

Agreement and all of the other Loan Documents are ratified and confirmed in all respects and shall remain in full force and effect in accordance with their respective terms. This letter agreement embodies the entire agreement between the parties hereto with respect to the subject matter hereof and supersedes all prior agreements, commitments, arrangements, negotiations or understandings, whether written or oral, of the parties with respect thereto, This letter agreement shall be governed by and construed in accordance with the internal laws of the State or New York, without regard to conflicts of law principles thereof. 

 

WELLS FARGO BANK, NATIONAL

ASSOCIATION, acting through its Wells Fargo

Business Credit Operating Division. 

By:          /s/ Sal Mutone                                  

	
             
 	
            Name:
 	
            Sal Mutone
 	
             

	
             
 	
            Title:
 	
            Vice President
 

 

Accepted, acknowledged and agreed to: 

INFOTECH USA, INC., a New Jersey corporation

INFORMATION TECHNOLOGY SERVICES, INC. 

By:          /s/ J. Robert Patterson          

	
            Name:
 	
            J. Robert Patterson
 	
             

	
            Title:
 	
            Chief Financial Officer, Vice President and Treasurer
 

 

INFOTECH USA, INC., a Delaware corporation

By:          /s/ J. Robert Patterson          

	
            Name:
 	
            J. Robert Patterson
 	
             

	
            Title:
 	
            Secretary and TreasurerExhibit 10.1

 

AGREEMENT

 

RICHARDSON ELECTRONICS, LTD., whose principal office is located at 40W267 Keslinger Road, PO Box 393, LaFox, Illinois 60147-0393 (together with its subsidiaries, the "Company"), and BRUCE W. JOHNSON of 5838 Teal Lane, Long Grove, Illinois 60047 (the "Employee").

 

WHEREAS, the Employee has been an executive officer of the Company for several years and employed pursuant to a certain Employment and Bonus Agreement dated as of November 7, 1996 (the “Original Employment Contract”); and

 

WHEREAS, the parties agree that Employee is retiring from employment with the Company as an executive officer, and his employment with the Company as an executive officer, particularly as President and Chief Operating Officer, is to be terminated and the Employee will be continue to be employed as a non-officer employee of the Company for the period of time herein specified and that the payments provided herein shall be in lieu of any payments under the Original Employment Contract and any Company policy relating to termination of Employee’s employment as an executive officer and eventually as an employee at the expiration of employment term provided in paragraph 3 below and shall be to resolve and settle all possible claims the Employee may have against or with respect to the Company;

 

NOW, THEREFORE, IT IS AGREED AS FOLLOWS:

 

1.            The Company and the Employee agree that the Employee's employment with the Company as an executive officer will cease on the close of business January 19, 2006 and any other officer position with the Company, including with its subsidiaries, direct or indirect, will cease and terminate on the close of business on June 2, 2006 (the "Officer Termination Date") and Employee hereby resigns as President and Chief Operating Officer effective at the close of business January 19, 2006, and from all director and officer positions with any subsidiary, direct or indirect, of the Company, in each case effective as of the Officer Termination Date.  In addition, Employee shall have the title of “President, Emeritus” until the Officer Termination Date; provided that, by such title Em

ployee shall not
be considered an executive officer of the Company or an officer for purposes of Section 16 of the Securities Exchange Act of 1934. Further Employee shall remain as a Director of the Company for the term for which elected by the shareholders of the Company.

 

2.            Employee shall be entitled to payment of his compensation and benefits, including bonus, as presently being paid through the Officer Termination Date; provided that, except to the extent precluded by Section 8, Employee shall receive no less than $26,875 in bonus per fiscal quarter. 

 

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3.            The parties agree that after the Officer Termination Date, Employee will continue to be employed with the Company as a non-officer to work on such matters as may be directly requested by, and under the direct supervision of, Edward J. Richardson through the period from the Officer Termination Date until June 2, 2007 (the “Final Termination Date”.)  All employment of Employee shall cease on the Final Termination Date. Such requested work shall take into consideration the Employee's health, residence, and personal circumstances, including, without limitation, other employment in which he may be engaged.  Employee shall not be required to report to any office to perform his work unless specifically requested by Edward J. Richardson and, except by
mutual agreement, shall not be required to perform such work at a location other than (a) the Company’s LaFox, Illinois location, or (b) another location so long as that location is not beyond 5 miles of any of his then residences.  Employee’s unavailability for work as provided in this paragraph 3 due to health or other reasons shall not terminate the Company’s obligation to make the payments provided for in paragraph 4 below.

 

4.            In consideration of Employee’s service with the Company as an executive officer and his other promises and agreements made in this Agreement and in full settlement of any and all claims that the Employee may have against the Company, its successors, assigns, affiliates, or any of its officers, directors, shareholders, employees, agents or representatives, for compensation or otherwise in connection with his past employment or termination of his employment, the Company agrees to provide the Employee with the following in addition to the compensation referred to in paragraph 2. above:

 

	
             
 	
            (a)
 	
            $16,538.47 every other Friday for 12 months beginning June 4, 2006 through June 1, 2007, payable in arrears every other Friday with the first payment being on June 16, 2006 and continuing through June 15, 2007, the first and last payments being for one half of the above stated amount, provided, however, that the Employee’s right to receive and the Company’s obligation to make such payment shall cease in the event of Employee’s breach of paragraphs 8, 11, 12 or 13 below
 

 

	
             
 	
            (b)
 	
            For each fiscal quarter of the Company after the Officer Termination Date to the Final Termination Date, an amount equal to the greater of $26,875 or the amount of bonus that Employee would have received for such period calculated in the manner previously calculated for fiscal year 2006, to be paid within 60 days after the end of each fiscal quarter; provided, however, that the Employee’s right to receive and the Company’s obligation to make such payment shall cease in the event of Employee’s breach of paragraphs 8, 11, 12 or 13 below;
 

 

5.            The parties agree that until the Final Termination Date, Employee shall be entitled to participate in and receive other employee benefits of medical, dental, life, accidental death and dismemberment and disability insurance, profit sharing on the same terms as other employees, but shall not be entitled to participate in or receive car allowance, vacation or bonus benefits for the period following the Officer Termination Date, and Employee hereby waives all rights to such benefits. Should Employee at anytime be deemed entitled to any such benefits by law, rule or regulation Employee shall pay to or reimburse the Company for the entire cost and expense of or related to such 

 

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benefits.  Notwithstanding the foregoing Options previously granted to Employee under the Company’s various stock option or incentive compensation plans shall continue to be exercisable or become exercisable in accordance with the terms thereof through the Final Termination Date, on which date all unvested Options shall vest and on September 1, 2007 Employee’s right to exercise any vested options not previously exercised shall terminate and be cancelled.

 

6.            If title to the automobile purchased for Employee by the Company has not been previously transferred to Employee, it shall be transferred to him on June 2, 2006.

 

7.            Any compensation Employee receives under any disability benefit plan provided by Employer during any period of disability, injury or illness shall be in lieu of the compensation which Employee would otherwise receive under paragraph 2 during such period of disability, injury or sickness, but shall not reduce the amounts to be paid under paragraph 4.

 

8.            The payments provided for in paragraphs 2 and 4 above shall be payable if and when but not unless, the Employee shall without additional compensation, fee, or other payment by the Company;

 

(a)  Refrain (independently of and without reference to paragraph 13 hereof), after the expiration of a period of thirty (30) days from the mailing to him of written notice by the Secretary of the Company of a direction to do so, from engaging in the operation or management of a business, whether as owner, shareholder, partner, officer, employee or otherwise, which then shall be one in which the Employee could not engage without being in violation of his obligations not to compete as provided in paragraph 13 hereof;

 

(b)  Refrain (independently of and without reference to paragraph 12 hereof) from disclosing to unauthorized persons information relative to the business, properties, products, technology or other assets of the Company or any of its subsidiaries which he shall have reason to believe is confidential; and

 

(c)  Refrain (independently of and without reference to paragraph 11 hereof) from otherwise acting or conducting himself in a manner which he shall have reason to believe is inimical or contrary to the best interests of the Company.

 

In the event that the Employee shall fail to comply with any provision of this paragraph 8, the Company's obligation to make any further payment provided for in paragraph 2 or 4 above shall forthwith terminate and cease.

 

9.            The consideration from the Company set forth above constitutes full settlement of 

 

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any and all claims that the Employee may have against the Company, its successors, assigns, affiliates, or any of its officers, directors, shareholders, employees, agents or representatives, under the Original Employment Contract or for compensation or otherwise in connection with termination of his employment, except for any and all claims arising out of the performance by the Company of this Agreement, including, but not limited to, rights under the Company’s profit sharing and employee stock ownership plans.

 

10.          In further consideration for the promises made by the Company herein, the Employee, on behalf of himself, his agents, assignees, attorneys, heirs, executors, and administrators, fully releases the Company, and its successors, assigns, parents, subsidiaries, divisions, affiliates, officers, directors, shareholders, employees, agents and representatives, from any and all liability, claims, demands, actions, causes of action, suits, grievances, debts, sums of money, controversies, agreements, promises, damages, back and front pay, costs, expenses, attorneys' fees, and remedies of any type, by reason of any matter, act or omission arising out of or in connection with the Employee's employment with or termination by the Company, including but not limited to claims,
demands or actions under the Original Employment Contract, Title VII of the Civil Rights Act of 1964, the Age Discrimination in Employment Act, the Americans With Disabilities Act, the Civil Rights Act of 1986, the Illinois Human Rights Act, any other federal, state or local statute or regulation regarding employment, discrimination in employment, or the termination of employment, and the common law of any state relating to employment contracts, public policy torts, wrongful discharge, or any other matter, including, without limitation, claims, demands or actions under the False Claims Act or any qui tam rights, except, however, any and all claims arising out of the performance by the Company of this Agreement (the "Released Claims").

 

11.         Employee agrees that he will at no time engage in conduct which injures, harms, destroys, corrupts, demeans, defames, libels, slanders, destroys or diminishes in any way the reputation or goodwill of the Company, its subsidiaries, or their respective shareholders, directors, officers, employees, or agents or the products sold by the Company, or its other properties or assets.  Nor will Employee cause any computer bugs to the Company’s computer system, database or software. Employee agrees to cooperate with and assist the Company, including, without limit executing requested documents, with respect to any matters or things that relate to the matters on which he worked or for which he was responsible, including, without limit, the financial statements and records of
the Company for the period of his employment with the Company. 

 

12.         The Employee shall not (except in the proper course of his duties to the Company) either during the period of his employment with the Company or thereafter make use of, disseminate or divulge to any person, firm, company, association or other entity, and shall use his best endeavors to prevent the use, dissemination, publication or disclosure of, any information, knowledge or data disclosed to Employee or known by Employee as a consequence of or through his employment or relationship with the Company or any of its predecessors or subsidiaries (including information, knowledge or data conceived, originated, discovered or developed by Employee) not generally known in the business of manufacturing or distributing electron tubes, 

 

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closed circuit television products, semiconductors, or display products, whether patentable or not, about the Company's or its predecessors' or subsidiaries' businesses, products, processes and services, including without limitation information relating to financial matters, manufacturing, purchasing, sales, research, development, methods, policies, procedures, technology, techniques, processes, know-how, designs, drawings, specifications, systems, practices, merchandising, suppliers or customers, including, without limitation, customer lists, information or data.  It is not intended to limit or restrict Employee's right to utilize information, ideas, concepts or structures of a general nature so long as they are not used in a business competitive with that of the Company.  The failure to mark any of the information confidential or proprietary shall not affect its status as such under
this Agreement.

 

13.         Employee agrees that he will not, during the term of employment with Employer and for a period until the later of one (1) year after the termination of such employment or one (1) year after the Final Termination Date, directly or indirectly (whether or not for compensation or profit):

 

(a)          Engage in any business or enterprise the nature of any part of which is competitive with any part of that of the Employer (a "Prohibited Business"); or

 

(b)          Participate as an officer, director, creditor, promoter, proprietor, associate, agent, employee, partner, consultant, sales representative or otherwise, or promote or assist, financially or otherwise, or directly or indirectly own any interest in any person or entity involved in any Prohibited Business; or

 

(c)          Canvas, call upon, solicit, entice, persuade, induce, respond to, or otherwise deal with, directly or indirectly, any individual or entity which, during Employee's term of employment with the Employer, was or is a customer or supplier, or proposed customer or supplier, of the Employer, for any of the following purposes:

 

(a)          to purchase (with respect to customers) or to sell (with respect to suppliers) products of the types or kinds sold by the Employer or which could be substituted for (including, but not limited to, rebuilt products), or which serve the same purpose or function as, products sold by the Employer (all of which products are herein sometimes referred to, jointly and severally, as "Prohibited Products"), or

 

(b)          to request or advise any such customer or supplier to withdraw, curtail or cancel its business with the Employer; or

 

(d)          For himself or for or through any other individual or entity call upon, solicit, entice, persuade, induce or offer any individual who, during Employee’s term of employment with the Employer, was an employee or sales representative or distributor of the Employer, employment by, or representation as sales agent or distributor for, any one other than the 

 

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Employer, or request or advise any such employee or sales agent or distributor to cease employment with or representation of the Employer, and Employee shall not approach, respond to, or otherwise deal with any such employee or sales representative or distributor of Employer for any such purpose, or authorize or knowingly cooperate with the taking of any such actions by any other individual or entity.

 

Each obligation of each subparagraph and provision of this paragraph 13 shall be independent of any obligation under any other subparagraph or provision hereof or thereof.

 

Nothing in this paragraph 13, however, shall prohibit Employee from owning (directly or indirectly through a parent, spouse, child or other relative or person living in the same household with Employee or any of the foregoing), as a passive investment, up to 1% of the issued and outstanding shares of any class of stock of any publicly traded company.

 

14.          All notes, data, reference materials, memoranda, files and records, including without limitation computer reports, products lists and information, process manuals and notes, drawings, and technology manuals and notes, customer or supplier lists, data or information, in any way relating to any of the Company's or its predecessors' or subsidiaries' businesses, operations or products shall belong exclusively to Company, and Employee agrees to turn over to Company all copies of such materials and all keys, equipment and other Company property in his possession or control at the request of Company or, in the absence of such a request, upon the termination of Employee's employment with Company.  Upon the execution hereof, Employee shall immediately refrain from seeking
access to or utilization of Company's (a) telephonic voice mail, E-mail or message system, (b) computerized order entry system, and (c) computer data bases and software, except to use the modem/network e-mail connection to those outside the Company as specifically authorized by the Chairman of the Board of the Company.

 

15.          In the event of a breach or threatened breach by the Employee of the provisions of paragraphs 11, 12, or 13, the Company shall be entitled to an injunction restraining the Employee from such breach.  Nothing herein shall be construed as prohibiting the Company from pursuing any other remedies available to the Company for such breach or threatened breach.  The parties hereto desire that paragraphs 11, 12, and 13 shall be fully enforceable in accordance with the terms thereof but if any portion is held unenforceable or void or against public policy by any court of competent jurisdiction, the remainder shall continue to be fully enforceable in accordance with its terms or as it may be modified by such court.  The period of restriction specified in paragraphs 11, 12, or
13 shall abate during the time of any violation thereof and the remaining portion at the commencement of the violation shall not begin to run until the violation is cured.

 

16.         Employee’s death shall not terminate the Company’s obligation to pay the amounts it would otherwise be obligated to pay Employee under paragraphs 2 or 4.  In the event of Employee’s death prior to payment of all amounts due under paragraphs 2 and 4, such amounts thereafter shall be paid to Employee’s estate or, if Employee has provided Company with written direction prior to his death of an alternative beneficiary, to the beneficiary so designated by Employee in such written 

 

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direction.  Such payments shall be made on the dates and to the extent paragraphs 2 or 4, as the case may be, would require them to be made to Employee if he were still alive.  In the event the Company, at its expense, purchases reducing term life insurance for the Employee that would cover the amount of its obligation to continue payments in the event of Employee’s death as provided above in this paragraph, then the Company shall not be obligated to continue payments in the event of Employee’s death and all payments hereunder would cease upon Employee’s death.

 

17.         The Employee understands and agrees that the existence and terms of this Agreement are confidential and shall not be disclosed to any third party (other than his spouse, attorney or tax preparer or financial consultant, each of whom shall agree to maintain its confidentiality) without the prior written consent of the Company, except as may be required by law and in response to a lawful subpoena in which event Employee shall provide prompt notice to the Company.

 

18.         The existence and execution of this Agreement shall not be considered, and shall not be admissible in any proceeding, as an admission by the Employee or the Company, or any of its agents or employees, of any liability, error, violation or omission.

 

	
             
 	
            19.
 	
            It is agreed that:
 

 

	
             
 	
            (a)
 	
            This Agreement shall be binding upon the parties hereto, their heirs, legal representatives, successors and assigns and shall inure to their respective benefits.
 

 

	
             
 	
            (b)
 	
            This Agreement shall not be subject to change, modification, or discharge, in whole or in part, except by written instrument signed by the parties; provided, however, that if any of the terms, provisions or restrictions of paragraph 11, 12, or 13 are held to be in any respect unreasonable restrictions upon Employee, then the court so holding shall reduce the territory to which it pertains and/or the period of time in which it operates or effect any other change to the extent necessary to render any of said terms, provisions or restrictions enforceable.
 

 

	
             
 	
            (c)
 	
            The failure by the Company to insist upon strict compliance by the Employee with respect to any of the terms or conditions hereof shall not be deemed a waiver or relinquishment of any other terms or conditions nor shall any failure to exercise any right or power hereunder at one or more times be deemed a waiver or relinquishment of such right or power at any other time or times.
 

 

	
             
 	
            (d)
 	
            This Agreement shall be governed and construed in accordance with the laws of the State of Illinois.
 

 

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            (e)
 	
            All notices required to be given hereunder to the Company shall be addressed to its principal executive office at 40W267 Keslinger Road, PO Box 393, LaFox, Illinois 60147; attention: Legal Department, by certified or registered mail.  All notices required or to be given hereunder to the Employee shall be addressed to the Employee at his residence as last reflected on the records of the Company, by certified or registered mail or courier delivery, with signature required for delivery. Notice shall be deemed given if delivered in person to Edward J. Richardson on behalf of the Company or to the Employee, or if mailed, when deposited in the United States Mail addressed as aforesaid.
 

 

20.         The Employee acknowledges that Employee had an adequate opportunity to review this Agreement and to review it with counsel of his choice, that Employee fully understands its terms, that Employee was not coerced into signing it, and that Employee has signed it knowingly and voluntarily.

 

21.         The Company may terminate its obligations under paragraphs 2 and 4 of this Agreement if Employee, at any time during his employment with the Company, including prior to the date of this Agreement, (a) engaged in an act or acts (i) of personal dishonesty taken by the Employee and intended to result in personal enrichment of the Employee, (ii) that were fraudulent, malpractice or material violations by the Employee of the Employee's obligations or duties to the Company, or (iii) a material violation of law, regulations, rules or standard accounting practices, or (b) failed to take action that would avoid (i) fraud, malpractice or material violations of Employee’s obligations or duties to the Company, or (ii) ) a material violation of law, regulations, rules or standard
accounting practices.

 

IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement the day and year written below their respective signatures.

 

	
            EMPLOYEE
 	
            RICHARDSON ELECTRONICS, LTD.
 

 

 

	
                    /s/ Bruce W. Johnson            
 	
            By:        /s/ Edward J. Richardson          
 
	
            Bruce W. Johnson
 	
            Edward J. Richardson,
 	
             

	
             
 	
            Chairman of the Board
 	
             

					

 

	
            Dated:  
 	
                 1/20/06       
 	
            Dated:   
 	
                 1/20/06       
 

Subscribed and sworn to

before me this      20    day

of January, 2006

        /s/ David J. Gilmartin      

Notary Public

 

[NOTARY SEAL]

 

 

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