Document:

TRYX Ventures Corp Exhibit 10-2 Purchase Sale and Assumption

 

PURCHASE,
SALE AND ASSUMPTION AGREEMENT

 

THIS
AGREEMENT entered
into this 7th day of March, 2005.

 

BETWEEN:

ATLAS
ENERGY CORP., 

a Nevada
corporation having offices at 

3273 E.
Warm Springs Road, 

Las
Vegas, Nevada, USA 89120

(the
"Vendor")

OF
THE FIRST PART

AND:

TRYX
VENTURES INC.,

a Nevada
corporation having offices at 

#314 -
837 West Hastings Street

Vancouver,
British Columbia, Canada, V6C 3N6

(the
"Purchaser")

OF
THE SECOND PART

 

WHEREAS:

 

A.  The
Vendor is the owner of certain assets, interests in certain oil and gas leases
and other contracts and agreements under a Purchase and Sale Agreement dated
March 1, 2004, a copy of which is attached hereto and forms part of this
agreement. (the “Purchase and Sale Agreement”).

 

B.  The
Vendor has agreed to sell and assign to the Purchaser and the Purchaser has
agreed to purchase from the Vendor all of the Vendor’s assets and beneficial
interest, rights and obligations in and to the Purchase and Sale Agreement, upon
and subject to the terms and conditions herein set forth, it being the intention
of the parties hereto that the purchase price for the beneficial ownership of
the Assets will be the fair market value thereof. 

 

IN
CONSIDERATION of the
premises, mutual covenants and agreements herein contained and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto hereby agree as follows:

 

1.             
DEFINITIONS
AND INTERPRETATION

 

1.1            In this
Agreement, the following words or expressions shall have the following meanings,
namely:

 

	a)  	
      “Appraised
      Value”
      has the meaning ascribed thereto by
paragraph 3;

 

	b)  	
      “Assets”
      has the meaning ascribed to it in paragraph 1.01 of the Purchase and Sale
      Agreement;

 

 

 

 

	c)  	
      “Assumed
      Obligations”
      has the meaning ascribed to it in paragraph 1.02 of the Purchase and Sale
      Agreement;

 

	d)  	
      “Assignment
      of Leases and Contracts”
      shall have the meaning ascribed to it in paragraph 1.03 of the Purchase
      and Sale Agreement;

 

	e)  	
      “Declaration
      of Trust”
      means the declaration of trust between the Vendor and the Purchaser
      executed concurrently with this Agreement in the form attached hereto as
      Schedule B;

 

	f)  	
      “Effective
      Date”
      means the date on which the Purchase Price is paid in full or the
      180th
      day from the date of execution of this
Agreement;

 

	g)  	
      “Purchase
      and Sale Agreement”
      means the purchase and sale agreement attached hereto as Schedule A and
      forming part of this Agreement by and between Production Specialties
      Company and Atlas Energy Corp. dated March 1, 2004;

 

	h)  	
      “Purchase
      Price”
      has the meaning ascribed thereto by paragraph 3;
  and

 

1.2            
Schedule
A - Purchase and Sale Agreement, attached hereto, shall be incorporated into and
form part of this Agreement; and

 

1.3           
Schedule
B - Declaration of Trust, attached hereto, shall be incorporated into and form a
part of this Agreement:

 

2.            
PURCHASE
AND SALE

 

2.1          
The
Vendor hereby transfers, sells, assigns and sets over to the Purchaser and the
Purchaser hereby purchases, as of the Effective Date its beneficial ownership,
rights and obligations in and to the Assets, the Assumed Obligations and the
Assumption of Leases and Contracts contained in the Purchase and Sale Agreement
on the terms and conditions hereinafter set forth. 

 

2.3          
The
Vendor shall continue to hold the legal title to the Assets transferred, sold
assigned and set over to it under the Purchase and Sale Agreement in trust, as
bare trustee, for and on behalf of the Purchaser from the Effective Date, in
accordance with the terms and conditions of the Declaration of
Trust.

 

2.4           
The
Purchaser hereby assumes all liabilities, encumbrances and charges related to
the Assets, if any.

 

3.             
PURCHASE
PRICE

 

               
The purchase price (the “Purchase Price” or “Appraised Value”) for the transfer,
sale, assignment of the beneficial ownership, rights and obligations in and to
the Assets, the Assumed Obligations and the Assumption of Leases and Contracts
pursuant to the Purchase and Sale Agreement transferred and assigned pursuant to
this Agreement shall be the fair market value thereof as of the date of this
Agreement, which the parties have determined to be Five Hundred and Fifty
Thousand Dollars ($550,000). 

 

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4.               
PAYMENT
OF PURCHASE PRICE

 

4.1             
The
Purchase Price shall be paid or otherwise satisfied by the issuance of Two
Million (2,000,000) common voting shares in the capital stock of the Purchaser
at the price of $0.10 per share (the “Purchase Shares”) and by the payment to
the Vendor of the sum of Three Hundred and Fifty Thousand Dollars ($350,000).
The Purchase Shares shall be issued to the Vendor upon execution of this
Agreement, which shares shall be, upon issuance considered to be fully paid and
non-assessable. The sum of Three Hundred Thousand Dollars ($350,000) shall be
paid to the Vendor within 180 days of execution of this Agreement.

 

5.             
VENDOR’S
REPRESENTATIONS AND WARRANTIES

 

5.1            
The
Vendor hereby represents and warrants to the Purchaser that:

 

	a)  	
      it
      is the legal and beneficial owner of the
Assets;

 

	b)  	
      it
      has the ability to perform its obligations under this Agreement including
      without limitation the transfer of the Assets and the assignment of the
      Purchase and Sale Agreement to the Purchaser, and no third party consents
      or authorizations are required prior to the transfer of the beneficial
      ownership of the Assets to the Purchaser, other than from Atlas Energy
      Corp., which consent has been obtained; and

 

	c)  	
      it
      has the ability and capacity to perform its obligations under the
      Declaration of Trust.

 

5.2            
The
Purchaser hereby represents and warrants to the Vendor that:

 

	a)  	
      it
      has the ability to perform its obligations under this Agreement and under
      the Purchase and Sale Agreement and without limiting the foregoing has the
      capacity to enter into and perform its obligations under the Declaration
      of Trust;

 

	b)  	
      it
      is purchasing the Assets for use in the course of its commercial
      activities;

 

5.3           
The
representations and warranties set out in this paragraph 5 shall survive the
completion of the transactions contemplated by this Agreement.

 

6.             
FURTHER
ASSURANCES

 

The
Vendor and the Purchaser shall do or cause to be done all such further acts and
things and shall execute or cause to be executed all such further deeds,
documents, elections and instruments as may be reasonably necessary for the
purpose of completing the transactions contemplated by this
Agreement.

 

8.             
ENUREMENT

 

                
This Agreement shall enure to the benefit of and be binding upon the parties
hereto and their respective successors and assigns.

 

 

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9.            
NOTICES

 

              
All notices, directions, or other instruments required or permitted to be given
to the parties hereto shall be in writing and shall be delivered to the address
of the party to whom it is directed as set forth on the first page of this
Agreement.

 

10.           
MODIFICATION

 

               
This Agreement may not be modified or amended except by an instrument in writing
signed by the parties hereto or their respective successors or
assigns.

 

11.          GOVERNING
LAW

 

              
This Agreement shall be governed by and be construed in accordance with the laws
of the State of Nevada.

 

12.         
HEADINGS

 

               
The headings of the clauses of this Agreement are inserted for convenience of
reference only and shall not constitute a part hereof.

 

13.         
TIME
OF ESSENCE

 

               
Time shall be of the essence of this Agreement.

 

14.          
COUNTERPARTS
AND FACSIMILE

 

               
This Agreement may be signed and delivered in counterparts and/or by electronic
facsimile by the parties in counterparts, each of which so signed shall be
deemed to be an original, and such counterparts together shall constitute one
and the same instrument.

 

IN
WITNESS WHEREOF the
parties have caused these presents to be executed as of the date first written
above.

 

 

                                                                                            
VENDOR:    ATLAS ENERGY CORP.

 

Per:/s/
Stuart
McPherson                                      

     Authorized
Signatory

 

 

PURCHASER:  
TRYX VENTURES, INC.

 

Per:/s/
Alessandra
Bordon                                     

       Authorized
Signatory

 

 

 

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SCHEDULE
“A”

 

PURCHASE
AND SALE AGREEMENT

By and
Between

PRODUCTION
SPECIALTIES COMPANY (“SELLER”)

and

ATLAS
ENERGY CORP. (“PURCHASER”)

 

THIS
PURCHASE AND SALE AGREEMENT is made
and entered into as of March 1, 2004, by and between PRODUCTION SPECIALTIES
COMPANY, A CALIFORNIA CORPORATION (“Seller”), and ATLAS ENERGY CORP., A NEVADA
CORPORATION (“Purchaser”).

WHEREAS,
the
respective Boards of Directors of both Seller and Purchaser have approved the
terms of this Agreement and the transaction contemplated hereby;
and

WHEREAS,
this
Agreement provides for the sale of certain of Seller’s rights and interests in
and to certain oil and gas leases and other contracts and agreements to
Purchaser; and

WHEREAS,
Seller
and Purchaser desire to set forth the terms of their agreement and transaction
as provided for herein; 

NOW,
THEREFORE, in
consideration of the promises and agreements herein contained, the parties
hereto agree as follows:

ARTICLE
1 - ASSETS PURCHASED AND LIABILITIES ASSUMED

1.01 Purchase
and Sale of Assets. Subject
to the terms and conditions of this Agreement, at Closing (as hereinafter
defined), Seller shall convey, assign, transfer and deliver, and Purchaser shall
purchase and receive an undivided seventy five percent (75%) of all of Seller’s
rights, title and interests in and to all of the (i) Oil and Gas Leases, (ii)
Declarations of Pooling, (iii) Oil and/or Gas Wells, (iv) Joint Operating
Agreements, (v) Farm-out Agreements, and (vi) other Contracts and Agreements of
any kind described or referred to in Exhibit “A” attached hereto. Seller’s
undivided rights, title and interests in and to the Oil and Gas Leases,
Declarations of Pooling, Oil and/or Gas Wells, Joint Operating Agreements,
Farmout Agreements, and other Contracts and Agreements described in Exhibit “A”
attached hereto are hereinafter collectively referred to as the
“Assets.”

1.02 Assumption
of Obligations.
Purchaser shall take its interest in the Assets “AS IS” subject to all
obligations and liabilities that are associated with such interest, including
drilling costs, clean up costs, well closing, plugging and abandonment costs and
expenses, and all surface remediation and environmental (surface and subsurface)
costs, expenses and liabilities, all of which obligations and liabilities
Purchaser agrees to assume (the “Assumed
Obligations”) and to
defend and hold Seller harmless from and against any and all claims,
liabilities, costs and expenses (including all attorney’s fees) with respect
thereto.

1.03 Assumption
of Leases and Contracts.
Purchaser assumes and shall perform, as to its undivided interest, all duties
and obligations under all of the Oil and Gas Leases, Declarations of Pooling,
Joint Operating Agreements, Farm-out Agreements and other Contracts, Agreements,
permits and other matters that are a part of the Assets or are otherwise being
conveyed and assigned to Purchaser pursuant to this Agreement and the Assignment
and Bill of Sale provided for in Article 7 (Closing) below. Purchaser shall
defend and hold Seller harmless from and against any and all claims,
liabilities, costs and expenses (including all attorneys’ fees) arising out of
or in any way related to any failure or refusal on Purchaser’s part to fully
perform any duty or obligation hereby assumed by Purchaser under any Lease,
Contract, Agreement, permit or other matter.

ARTICLE
2 - THE CLOSING; PURCHASE PRICE

2.01 Closing. The
closing of the transaction contemplated in this Agreement (the “Closing”) shall
be on March 1, 2004 (“Closing
Date”), time
being of the essence. In the event closing does not occur on or before the
Closing Date, or such other date as the parties shall mutually agree in writing,
this Agreement shall become null and void and of no further force or
effect.

2.02 Purchase
Price. At
Closing, Purchaser shall pay to Seller the sum of Three Hundred Thousand Dollars
($300,000.00) as the Purchase Price for the undivided interest in the Assets
being purchased by Purchaser. Such Purchase Price shall be paid in cash at
Closing.

ARTICLE
3 - REPRESENTATIONS AND 

WARRANTIES
OF SELLER

Seller
hereby represents and warrants to Purchaser as follows:

3.01 Special
Warranty of Title. Seller
represents and warrants that Seller has not sold, assigned, conveyed, encumbered
and/or otherwise hypothecated any of the Assets.

3.02 Tax
Matters. To the
best knowledge of Seller, Seller has duly and timely filed all tax returns and
reports required to be filed by Seller prior to Closing, except to the extent
that any failure or alleged failure to file any tax return or report would not
have a material adverse effect on Seller or the purchased Assets. To the best
knowledge of Seller, all of Seller’s tax returns and reports are true and
complete in all materials respects.

3.03 Litigation. Seller
represents, to the best of its knowledge, that there is no prosecution, suit,
action, arbitration proceeding or governmental

 

 

 

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proceeding
pending or threatened against or affecting Seller, any of the Assets, or the
transaction contemplated herein. To the best knowledge of Seller, there is not
outstanding against Seller any decision, judgment, decree, injunction, rule or
order of any court, arbitrator or governmental entity affecting any of the
Assets or this transaction.

3.04 Brokers.
Purchaser shall not have any obligation or liability to pay any fee, commission
or other compensation to any person or entity engaged by Seller in connection
with this Agreement or the transaction contemplated herein.

3.05 True
Copies. All
copies of documents delivered or made available to Purchaser in connection with
this Agreement are true and correct copies of the originals
thereof.

3.06 Compliance
with Law and Regulations. To the
best of Seller’s knowledge, Seller is in material compliance with all federal,
state and local laws, regulations and ordinances applicable to its business and
operations.

ARTICLE
4 - REPRESENTATIONS AND

WARRANTIES
OF PURCHASER

Purchaser
hereby represents and warrants to Seller as follows:

4.01 Organization
and Good Standing.
Purchaser is a corporation duly organized, validly existing and in good standing
under the laws of the State of Nevada, and is duly qualified and in good
standing as a foreign corporation in each jurisdiction in which any of the
Assets are located.

4.02 Capitalization
and Financial Resources.
Purchaser has the necessary capitalization and financial resources to fulfill
its commitments set forth in this Agreement, including, but not limited to, the
payment of the Purchase Price and the assumption of obligations and liabilities
as provided for herein.

4.03 Authority
Relative to this Agreement.
Purchaser has the requisite and corporate power and authority to enter into this
Agreement and all ancillary documents, and to carry out its obligations
hereunder and thereunder. The execution and delivery of this Agreement and each
ancillary document, and the consummation of the transactions contemplated herein
and therein, have been duly authorized by the Board of Directors of Purchaser,
or by an authorized committee thereof, and do not violate any provision of the
Articles or Certificate of Incorporation or Bylaws of Purchaser. No other
corporate proceeding on the part of Purchaser is necessary to authorize this
Agreement, the ancillary documents and/or the transaction contemplated herein
and therein. The execution and delivery of this Agreement and each ancillary
document, and the

 

 

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consummation
of the transaction provided for herein and therein will not conflict with or
effect a breach, violation or default, or cause an event of default, under any
mortgage, lease, or other material agreement or instrument, or any statute,
regulation, order, judgment or decree to which Purchase is a party or by which
Purchaser is bound, or any law or governmental regulation applicable to
Purchaser, or require the consent of any person (other than the parties to this
Agreement). This Agreement and the ancillary documents constitute legal, valid
and binding obligations of Purchaser, enforceable in accordance with their
terms, except as enforcement thereof may be limited by any applicable
bankruptcy, reorganization, insolvency, moratorium, or similar laws affecting
rights of creditors generally, whether applied at law or in equity.

4.04 No
Broker. Seller
shall not have any obligation or liability to pay any fee or other compensation
to any person or entity engaged by Purchaser in connection with this Agreement
or the transaction contemplated herein.

4.05 No
Reliance.
Purchaser is purchasing and accepting its interest in the Assets “AS IS” without
any express or implied warranty of any kind, except for the special warranty of
title provided for in Section 3.01 above. Purchaser is entering into this
transaction solely on the basis of Purchaser’s own expertise, inspection,
evaluation, familiarity with and knowledge of the Assets. Purchaser is not
relying on any representation, estimate, claim, warranty, statement, data, or
information of any kind made or provided to Purchaser or any of its employees,
agents, consultants, etc., by Seller or any employee, agent, or other
representative of Seller. No patent or latent condition affecting the Assets (or
any Asset) in any way, whether now known or discovered or hereafter discovered,
shall in any way affect any of Purchaser’s obligations contained in this
Agreement, or give rise to any right of or to damages, rescission, or any other
legal or equitable right or remedy on behalf of Purchaser against
Seller.

4.06 SELLER’S
DISCLAIMER. EXCEPT
FOR THE SPECIAL WARRANTY OF TITLE CONTAINED IN SECTION 3.01 ABOVE, SELLER MAKES
NO REPRESENTATION OR WARRANTY, AND SELLER HEREBY EXPRESSLY DISCLAIMS ALL
LIABILITY AND RESPONSIBILITY FOR ANY REPRESENTATION, WARRANTY, STATEMENT OR
INFORMATION, ORALLY OR IN WRITING, MADE OR COMMUNICATED TO PURCHASER INCLUDING,
BUT NOT LIMITED TO, ANY OPINION, INFORMATION OR ADVISE WHICH MAY HAVE BEEN
PROVIDED TO PURCHASER BY ANY OFFICER, DIRECTOR, EMPLOYEE, AGENT, CONSULTANT OR
REPRESENTATIVE OF SELLER, ANY ENGINEER OR ENGINEERING FIRM, OR ANY OTHER AGENT,
CONSULTANT OR REPRESENTATIVE OF SELLER. IN ADDITION, PURCHASER ACKNOWLEDGES THAT
SELLER HAS NOT MADE, AND SELLER HEREBY EXPRESSLY DISCLAIMS AND NEGATES, ANY
IMPLIED OR EXPRESS WARRANTY OF MERCHANTABILITY, FITNESS FOR ANY PARTICULAR
PURPOSE, OR CONFORMITY TO MODELS OR SAMPLES OR MATERIALS, AS WELL AS ANY OTHER
REPRESENTATION OR WARRANTY, EXPRESS, STATUTORY OR IMPLIED, RELATING TO THE
ASSETS OR 

 

 

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THEIR
CONDITION. EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT, PURCHASER IS
ACQUIRING INTEREST IN THE ASSETS IN AN “AS-IS, WHERE-IS” CONDITION WITH ALL
FAULTS.

ARTICLE
5 - SURVIVAL OF REPRESENTATIONS;

AND
WARRANTIES; INDEMNIFICATION

5.01 Survival
of Representations and Warranties. All
representations and warranties made by the parties, as contained in this
Agreement or in any ancillary document, as well as any indemnification made by
any party, shall survive the Closing.

5.02 Indemnification
by Purchaser.
Purchaser agrees to indemnify and to hold Seller harmless from and against any
and all damages, losses, liabilities, deficiencies, costs and/or expenses,
including all attorneys’ fees, expenses and other out-of-pocket costs of
litigation and/or arbitration (collectively “Damages”),
resulting from, arising out of or in any way in connection with or related to
Seller’s ownership and/or operation of the Assets (insofar as the interest being
sold to Purchaser) at any time before or after Closing, whether or not any such
Damages are in connection with any action, suit, proceeding, demand or judgment
of a third party (including governmental entities) or involve any other matter
or proceeding. The foregoing indemnification shall include all damages arising
out of or in connection with environmental matters.

ARTICLE
6 - CONDITIONS TO CLOSING

7.01 Conditions
to Obligation of Purchaser to Close. The
obligation of Purchaser to close the transaction contemplated hereby is subject
to the satisfaction of the following conditions:

	 	
      A.
      
	
      Purchaser
      shall have the right to conduct such inspections and investigations of the
      Assets as Purchaser deems necessary. In the event that Purchaser, in its
      sole discretion, determines that the purchase contemplated herein is not
      in its best interest, Purchaser shall have the right to cancel this
      Agreement and this Agreement shall be null and void and of no further
      force or effect.

	 	
      B.
	
      It
      is agreed that Seller shall deliver marketable title to the Assets.
      Closing shall constitute Purchaser’s full approval and acceptance of
      title. It is agreed that Seller will provide to Purchaser all log reports,
      geological reports, production runs and other data and information in
      Seller’s possession.

 

 

 

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ARTICLE
7 - CLOSING

At the
Closing, Seller shall deliver to Purchaser an Assignment and Bill of Sale of and
to the interest in the Assets being purchased by Purchaser. The Assignment and
Bill of Sale shall be executed and delivered by Seller to Purchaser at the
Closing in the form attached hereto as Exhibit “B.” At the Closing, Purchaser
shall pay the Purchase Price, in cash, to Seller.

ARTICLE
8 - ADDITIONAL AGREEMENTS

8.01 Agreements
as to Tax Matters. The
parties will cooperate fully with each other in connection with the preparation,
signing and filing of tax returns and in any other matters involving taxes
relating to the Assets.

8.02 Post-Closing
Documents. The
parties will cooperate with one another after Closing and, without any further
consideration, will execute and deliver such other documents as shall be
reasonably required after the Closing to transfer title to the interest in the
Assets being purchased by Purchaser. The Parties will take any other action
necessary to carry out the intent and purposes of this Agreement.

8.03 Notice. Each
party shall notify the other of any claim, demand, action, suit or proceeding
relating to, or arising in connection with, the Assets as soon as practicable
after learning of such claim, demand, action, suit, or proceeding.

 

ARTICLE
9 - GENERAL PROVISIONS

9.01 Expenses. Each
party shall pay its own expenses (including legal and accounting costs and
expenses) in connection with the negotiation, preparation and consummation of
this Agreement.

9.02 Governing
Law; Waiver of Jury Trial. All
questions concerning the construction, interpretation, validity and enforcement
of this Agreement shall be governed by the laws of the State of California
without giving effect to any choice or conflict of law provisions or rules
(whether in the State of California or any other jurisdiction) that would cause
the application of the laws of any jurisdiction other than the State of
California.

9.03 Submission
to Jurisdiction. Any
legal action or proceeding with respect to this Agreement or any of the rights
or interests of the parties hereunder shall be brought in the courts of the
State of California located in the County of Tehama and, by execution and
delivery of this Agreement, the Purchaser hereby accepts for itself and in
respect of its property, generally and

 

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unconditionally,
the jurisdiction and venue of the aforesaid court(s). Each party hereby
irrevocably waives, in connection with any action or proceeding, any objection,
including, without limitation, any objection to venue based on grounds of forum
non conveniens, which it may now or hereafter have to the bringing of any action
or proceeding in the aforesaid jurisdiction and venue. Each party hereby
irrevocably consents to the service of process of the aforementioned court(s) in
any such action or proceeding by the mailing of copies thereof by registered or
certified mail, postage prepaid, to it at its address as set forth herein.

 

9.04  Headings. Article
and Section headings used in this Agreement are for convenience only and shall
not affect the meaning or construction of this Agreement.

9.05
  Notices. All
notices and other communications hereunder shall be in writing and shall be
deemed given if delivered personally or mailed by certified mail (return receipt
requested) to a party at the following address (or at such other address as a
party shall specify by like notice), or if sent by facsimile to a party at the
following facsimile number;

	 	
      To
      Purchaser:

	 	 
	 	
      Atlas
      Energy Corp.

	 	
      3273
      East Warm Springs Road

	 	
      Las
      Vegas, Nevada 89120

	 	
      Facsimile
      Number: ____________________

	 	 
	 	
      To
      Seller:

	 	 
	 	
      Production
      Specialties Company

	 	
      P.
      O. Box 880

	 	
      Woodland,
      California 95776-0880

	 	
      Facsimile
      Number: (530) 668-5329

9.06 Parties
in Interest. All of
the terms and provisions of this Agreement shall be binding upon, and shall
inure to the benefit of and be enforceable by the successors and assigns of
Seller and Purchaser.

9.07 Final
Agreement; Entire Agreement. This
Agreement is the final agreement between the parties and constitutes the entire
agreement between them. This Agreement supersedes all prior agreements and
understandings, written or oral, whether signed or unsigned, with respect to the
subject matter hereof.

 

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9.08 Counterparts. This
Agreement may be executed in two or more counterparts, each of which shall be
considered an original, and all of which shall constitute one and the same
instrument.

9.09 Amendment. This
Agreement may be amended only by an instrument in writing signed by or on behalf
of each of the parties hereto.

IN
WITNESS WHEREOF, the
parties have duly executed this Agreement as of the date first written
above.

                                                                                                                 
SELLER

 

                                                                                                                
PRODUCTION
SPECIALTIES COMPANY

 

 

                                                                                                                 By:/s/
Dero
Parker                                                     

                                                                                                                       President                                     
(Name)

                                                                                                                                                                             
(Title)

                                                                                                                 
BUYER

 

                                                                                                                
ATLAS ENERGY CORP.

 

 

                                                                                                                 By:/s/
Stuart
McPherson                                       

                                                                                                                                                 
                           
(Name)
                                                                                                                                                                             
(Title)

 

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EXHIBIT
“A”

Attached
to and made a

 

part of
that certain

 

Purchase
and Sale Agreement,

 

dated
March 1, 2004,

 

by and
between 

 

Production
Specialties Company, as Seller,

 

and Atlas
Energy Corp., as Purchaser

(Triangle
“T” Area)

Lessor:
TRIANGLE T RANCH INC. 

Lessee:
PHILLIPS PETROLEUM

Dated:
OCTOBER 26, 1989 

Recorded:
Book 90, Page 9278 

County of
Tehama

Lessor:
TRIANGLE T RANCH INC. 

Lessee:
PHILLIPS PETROLEUM 

Dated:
SEPTEMBER 15, 1988 

Recorded:
Book 2093, Page 36 

County of
Tehama

Lessor: B
B LIMITED 

Lessee:
UNION OIL COMPANY 

Dated:
JULY 21, 1989 

Recorded:
Book 2147, Page 365 

County of
Tehama

Lessor:
TRIANGLE T RANCH, INC. 

Lessee:
UNION OIL COMPANY 

Dated:
AUGUST 3, 1989 

Recorded:
Book 2147, Page 369 

County of
Tehama

Lessor:
TRIANGLE T RANCH INC 

Lessee:
NNG, A CALIF CORP 

Dated:
NOVEMBER 1, 1997 

Recorded:
Book 9802, Page 668 

County of
Tehama

Lessor:
MAYS, CHARLES D. ET. UX 

Lessee:
PHILLIPS PETROLEUM 

Dated:
AUGUST 14, 1987 

Recorded:
Book 2018, Page 601 

County of
Tehama

Lessor: B
B LIMITED 

Lessee:
PHILLIPS PETROLEUM

Dated:
AUGUST 1, 1987 

Recorded:
Book 2018, Page 588 

County of
Tehama

Lessor:
NEEDHAM, JAMES C. 

Lessee:
FULLER OIL CO. 

Dated:
AUGUST 31, 1992 

Recorded:
Book 92, Page 3411 5 

County of
Tehama

Lessor:
PROVO, ADRIENNE MOFFAT 

Lessee:
FULLER OIL COMPANY 

Dated:
AUGUST 25, 1992 

Recorded:
Book 92, Page 34114 

County of
Tehama

Lessor:
MOFFAT, WILLIAM H. JR. 

Lessee:
FULLER OIL CO. 

Dated:
AUGUST 28, 1992 

Recorded:
Book 92, Page 34112 

County of
Tehama

Lessor:
POPE, PATRICIA MOFFAT 

Lessee:
FULLER OIL CO. 

Dated:
AUGUST 26, 1992 

Recorded:
Book 92, Page 34113 

County of
Tehama

- 2
-

Lessor:
HAUSER, LYN NEEDIIA

Lessee:
FULLER OIL CO. 

Dated:
SEPTEMBER 23, 1992 

Recorded:
Book 92, Page 34110 

County of
Tehama

Lessor:
NEEDHAM, HENRY II. JR. 

Lessee:
FULLER OIL CO. 

Dated:
OCTOBER 7, 1992 

Recorded:
Book 92, Page 34111 

County of
Tehama

Lessor:
HOWARD, CHARLES S.
III

Lessee:
SAMEDAN OIL CORP 

Dated:
APRIL 10, 1994 

Recorded:
Book 92, Page 21095 

County of
Tehama

Lessor:
HOWARD, ROBERT STEWART JR 

Lessee:
SAMEDAN OIL CORP 

Dated:
APRIL 10, 1994 

Recorded:
Book 94, Page 21091 

County of
Tehama

Lessor:
HOWARD, FRANK ROBERT 

Lessee:
SAMEDAN OIL CORP 

Dated:
APRIL 10, 1994 

Recorded:
Book 94, Page 21096 

County of
Tehama

Lessor:
LEASK, SCOTT STEWART 

Lessee:
SAMEDAN OIL CORP 

Dated:
APRIL 10, 1994 

Recorded:
Book 94, Page 21088 

County of
Tehama

Lessor:
ONGE, CYNTHIA LEASK SAINT 

Lessee:
SAMEDAN OIL CORP 

Dated:
APRIL 10, 1994 

Recorded:
Book 94, Page 21089 

County of
Tehama

- 3
-

Lessor:
SANWA BANK, TRUSTEE 

Lessee:
SAMEDAN OIL CORP 

Dated:
APRIL 10, 1994 

Recorded:
Book 94, Page 23173

County of
Tehama

 

Lessor:
LAMONTE, BRIGITTE LYN . 

Lessee:
SAMEDAN OIL CORP 

Dated:
APRIL 10, 1994 

Recorded:
Book 94, Page 21087 

County of
Tehama

Lessor:
JAKOBSON, MICHAEL 

Lessee:
SAMEDAN OIL CORP 

Dated:
APRIL 10, 1994 

Recorded:
Book 94, Page 21090 

County of
Tehama

Lessor:
COLLINS FAMILY TRUST 

Lessee:
SAMEDAN OIL CORP

Dated:
APRIL 10, 1994 

Recorded:
Book 94, Page 21093 

County of
Tehama

Lessor:
DIVEN, MARITA C. TRUST 

Lessee:
SAMEDAN OIL CORP 

Dated:
APRIL 10, 1994 

Recorded:
Book 94, Page 21094 

County of
Tehama

Lessor:
HOWARD, LISA L 

Lessee:
SAMEDAN OIL CORP 

Dated:
APRIL 10, 1994 

Recorded:
Book 95, Page 00950 

County of
Tehama

Lessor:
HOWARD, MALINDA L. 

Lessee:
SAMEDAN OIL CORP 

Dated:
APRIL 10, 1994 

Recorded:
Book 94, Page 2 1092 

County of
Tehama

- 4
-

Lessor:
HOWARD, MICHAEL C. 

Lessee:
SAMEDAN OIL CORP 

Dated:
APRIL 10, 1994 

Recorded:
Book 94, Page 21830 

County of
Tehama

Lessor:
TEMPLE LIVING TRUST 

Lessee:
SAMEDAN OIL CORP 

Dated:
JUNE 1, 2001 

Recorded:
Book 2001 Page 025562 

County of
Tehama

Lessor:
TEMPLE, DOUG 

Lessee:
SAMEDAN OIL CORP 

Dated:
JUNE 1, 2001 

Recorded:
Book 2001, Page 025563 

County of
Tehama

Lessor:
TEMPLE-BOGEN,JANET 

Lessee:
SAMEDAN OIL CORP 

Dated:
JUNE 1, 2001 

Recorded:
Book 2001, Page 025564 

County of
Tehama

Lessor:
TEMPLE-MARTINIE LINDA 

Lessee:
SAMEDAN OIL CORP 

Dated:
JUNE 1, 2001 

Recorded:
Book 2001, Page 025565 

County of
Tehama

Lessor:
TEMPLE, ROGER 

Lessee:
SAMEDAN OIL CORP

Dated:
JUNE 1, 2001 

Recorded:
Book 2001, Page 025566 

County of
Tehama

Lessor:
TEMPLE-WOLFE, CHRISTINE 

Lessee:
SAMEDAN OIL CORP 

Dated:
JUNE 1, 2001 

Recorded:
Book 2001, Page 025567 

County of
Tehama

- 5
-

Lessor:
TRIANGLE T RANCH, INC. 

Lessee:
SAMEDAN OIL CORP.

Dated:
OCTOBER 16, 1993 

Recorded:
Book 93, Page 31496 

County of
Tehama

Lessor:
HIDDEN, MERRILL JEAN ET. AL 

Lessee:
SAMEDAN OIL CORP 

Dated:
JULY 19, 1996 

Recorded:
Book 9621 Page 275 

County of
Tehama

 

WELLS

Triangle
#1-28, #1-29, #1-3

Undivided
right, title and interest in and to the property known as the Triangle T
(Arroyo) Pipeline located in and running through: Sections 29, 32-36, T11S,
R14E, and Sections 1, 12 and 13 in T12S, R14E, and into Section 18, T12S, R15E,
in Madera and Fresno Counties, CA

AGREEMENTS

Joint
Operating Agreement dated 7/15/92, by and between Samedan Oil Corporation,
Operator, and Tri-Valley Corporation, Non-Operator (Triangle T 1-28, Triangle T
1-29, Triangle T 1-33, Triangle T 2-33)

Farm-out
Agreement dated effective 3/17/99 between Geo Petro Resources Company and NNG,
Farmor, and Samedan Oil Corporation, Farmee

Participation
Agreement dated 7/15/92 between Tri-Valley Oil and Gas Company and Samedan Oil
Corp.

Farmout
Agreement dated 6/12/92 between Phillips Petroleum Company, Farmor, and
Tri-Valley Oil and Gas Company, Farmee (Triangle T #1-33, #2-33)

Farm-out
Agreement dated 9/25/92 between Union Oil Company of California, Farmor, and
Tri-Valley Oil and Gas Company, Farmee (Triangle T #1-29)

Declaration
of Pooling establishing the Triangle T #1-29 unit, dated effective 1/11/93,
recorded at 93-05901, records of Madera County, CA

Declaration
of Pooling establishing the Triangle T #1-33 unit, dated effective 8/5/94,
recorded at 94-23713 and 94-34917

- 6
-

EXHIBIT
“B”

Attached
to and made a

 

part of
that certain

 

Purchase
and Sale Agreement,

 

dated
March 1, 2004,

 

by and
between 

 

Production
Specialties Company, as Seller,

 

and Atlas
Energy Corp., as Purchaser

(Assignment
and Bill of Sale)

 

 

 

RECORDING
REQUESTED BY AND

WHEN
RECORDED RETURN TO:

 

______________________________

______________________________

______________________________

______________________________

 

ASSIGNMENT
AND BILL OF SALE

PRODUCTION
SPECIALTIES COPMANY, A CALIFORNIA CORPORATION, hereinafter referred to as
“Assignor,” for good and valuable consideration (the receipt and sufficiency of
which are hereby acknowledged), does hereby GRANT, BARGAIN, SELL, CONVEY,
ASSIGN, TRANSFER, SET OVER, and DELIVER unto ATLAS ENERGY CORP., A NEVADA
CORPORATION, hereinafter referred to as Assignee, an undivided seventy five
percent (75%) of all of Assignor’s rights, title and interests in and to the
following (collectively called the “Assets”):

(A) The Oil
and Gas Leases described in Exhibit “A” (the “Leases”) attached hereto; (ii) the
Declarations of Pooling described in said Exhibit “A”; (iii) the Oil and Gas
Wells described in said Exhibit “A”; (iv) the easements, rights-of-way, and
other rights, privileges, benefits and powers with respect to the use and
occupation of the surface of, and the subsurface depths under, the land covered
by the Leases; (v) all rights in respect of any pooled or unitized acreage
located in whole or in part within each Lease, including all production from the
pool or unit allocated to any such Lease, and all interest in any well(s) within
the unit or pool associated with such Lease, regardless of whether such unit or
pool production comes from a well or wells located within or outside of such
Lease;

(B) All
pipelines, personal property, equipment, fixtures and improvements located on or
appurtenant to the Leases and used in or related to the production,
transportation, treatment, sale and/or disposal of gas and/or hydrocarbons or
water produced therefrom or attributable thereto;

(C) All
licenses, servitudes, gas purchase and sale contracts, farm-in agreements,
farm-out agreements, bottom hole agreements, acreage contribution agreements,
operating agreements, unit agreements, processing agreements, options, leases of
equipment or facilities, joint venture agreements, pooling agreements,
transportation agreements, rights-of-way, and other contracts, agreements and
rights of any kind which are owned by Assignor, in

whole or
in part, and which are: (i) appurtenant to the Leases, or (ii) used or held for
use in connection with the ownership or operation of the Leases, or the
production, sale, distribution, transportation or disposal of gas and/or
hydrocarbons or water from the Leases;

(D) All
governmental permits, licenses and authorizations, including environmental
permits, licenses and other authorizations, as well as any applications for the
same, related to the Leases or the operation thereof;

(E) All of
the documents, files, records and other data relating to the Assets described in
Paragraphs (A), (B), (C) and (D) above, including, without limitation, title
records, surveys, maps, drawings, contracts, correspondence, microfiche lists,
geological, geophysical, and seismic records, data, and information, production
records, electric logs, core data, pressure data, decline curves, graphical
production curves, and all related matters in Assignor’s possession;
and

(F) Any and
all other assets of Assignor appurtenant to, related to, or used or useful in
connection with the Leases.

TO HAVE
AND TO HOLD the undivided seventy five percent (75%) unto Assignee, its
successors and assigns, forever.

This
Assignment and Bill of Sale is made and accepted subject to the following terms
and conditions:

	 	
      1.
	
      THIS
      ASSIGNMENT IS MADE WITHOUT WARRANTY OF ANY KIND, EXPRESS, IMPLIED OR
      STATUTORY, EXCEPT THAT ASSIGNOR WARRANTS AND WILL DEFEND THE ASSETS UNTO
      ASSIGNEE FROM AND AGAINST ALL PERSONS CLAIMING THE ASSETS OR ANY PART
      THEREOF BY, THROUGH, OR UNDER ASSIGNOR, BUT NOT
  OTHERWISE.

	 	
      2.
	
      ASSIGNOR
      EXPRESSLY DISCLAIMS AND NEGATES ANY WARRANTY AS TO THE CONDITION OF ANY
      PERSONAL PROPERTY, EQUIPMENT, FIXTURES, AND ITEMS OF MOVEABLE PROPERTY
      COMPRISING ANY PART OF THE ASSETS, IT BEING EXPRESSLY UNDERSTOOD THAT SAID
      PERSONAL PROPERTY, FIXTURES, EQUIPMENT AND OTHER ITEMS ARE BEING CONVEYED
      TO ASSIGNEE “AS IS AND WHERE IS” WITHOUT ANY WARRANTY OF MERCHANTABILITY,
      CONDITION OR FITNESS FOR A PARTICULAR PURPOSE, OR ANY OTHER WARRANTY,
      EXPRESS OR IMPLIED.

	 	
      3.
	
      To
      the extent permitted by law, Assignee shall be subrogated to Assignor’s
      rights in and to any prior representations, warranties
  or

 

 

- 2
-

covenants
given with respect to the Assets. Assignor hereby grants and transfers to
Assignee, its successors and assigns, to the extent that they may exist and be
so transferable as permitted by law, the benefit of and the right to enforce any
such prior representations, warranties, or covenants that may
exist.

	 	
      4.
	
      Assignor
      agrees to execute and deliver to Assignee, from time to time, such other
      and additional instruments, notices, division orders, transfer orders, and
      other documents, and to do all such other and further acts and things as
      may be reasonably necessary to fully and effectively carry out the intent
      and purposes of this Assignment and Bill of
Sale.

 

	 	
      5.
	
      Unless
      expressly provided otherwise, all recording references in the Exhibits
      attached hereto are to the Official Records of the County in which the
      Assets are located.

	 	
      6.
	
      This
      Assignment shall be binding upon and inure to the benefit of Assignor and
      Assignee, and to their respective successors and
  assigns.

	 	
      7.
	
      This
      Assignment may be executed in one or more counterparts, each of which
      shall be deemed an original, and said counterparts shall constitute but
      one and the same instrument which may be sufficiently evidenced by one
      counterpart. The fact that this Assignment may have been executed at
      different times by different parties shall not affect its
      validity.

This
Assignment and Bill of Sale is effective as of 7:00 A.M., Pacific Time, on March
1, 2004 (“Effective Date”).

IN
WITNESS WHEREOF, Assignor and Assignee have executed this Assignment and Bill of
Sale on the date set forth in their respective acknowledgments below, but
effective as of the Effective Date.

ASSIGNOR                                                                       
ASSIGNEE

PRODUCTION
SPECIALTIES                                        
ATLAS
ENERGY CORP.

COMPANY

By:/s/
Dero
Parker                                                              By:/s/
Stuart
McPherson                                

  President                                    
(Name)                                                                               
(Name)

                                                      
(Title)                                                                                 
(Title)

 

 

 

- 3
-

 

SCHEDULE
“B”

 

DECLARATION
OF TRUST

THIS
INDENTURE made effective as of the 7th day of March, 2005.

 

BETWEEN:

ATLAS
ENERGY CORP., 

a Nevada
corporation having offices at 

3273 E.
Warm Springs Road, 

Las
Vegas, Nevada, USA 89120

(the
"Trustee")

OF
THE FIRST PART

AND:

TRYX
VENTURES INC.,

a Nevada
corporation having offices at 

#314 -
837 West Hastings Street

Vancouver,
British Columbia, Canada, V6C 3N6

 

(the
"Beneficiary")

OF
THE SECOND PART

WHEREAS:

A.  The
Trustee is the sole registered owner of certain assets more particularly
described and defined in paragraph 1.01 of a Purchase and Sale Agreement dated
March 1, 2004 (the “Purchase and Sale Agreement”) by and between Production
Specialties Company and Atlas Energy Corp., a copy of which is attached hereto
and forms part of this Agreement, (hereinafter the “Trust
Property”);

 

B.  Pursuant
to a Purchase, Sale and Assumption Agreement entered into on March 7, 2005 by
and between the Trustee and the Beneficiary (the Purchase, Sale and Assumption
Agreement”), the Beneficiary, among other things, purchased the Trust Property
from the Trustee; and

 

C.  The
Trustee has agreed to hold all of their right title and interest in the Trust
Property in trust for the Beneficiary on the terms and conditions hereinafter
set forth:

 

                 
NOW THEREFORE THIS AGREEMENT WITNESSES THAT, in
consideration of the sum of Two ($2.00) Dollars now paid by each of the parties
hereto to 

 

the
other, the receipt and sufficiency of which is hereby acknowledged, and of the
premises and of the mutual covenants and agreements herein contained, it is
hereby mutually covenanted, agreed and acknowledged between the parties hereto
as follows:

1.  The
Trustee does and shall stand seized of the Trust Property in trust for the
Beneficiary, the Beneficiary’s, successors and assigns, forever, and shall
transfer, lease, encumber or dispose of the Trust Property only in such manner
as the Beneficiary, the Beneficiary’s, successors and assigns lawfully
direct.

2.  All
dividends, profits, and advantages accruing to or arising out of the Trust
Property shall be held by the Trustee for the exclusive use, benefit and
advantage of the Beneficiary and the Trustee shall, upon written demand from the
Beneficiary, account to the Beneficiary for all such profits and advantages and
pay over the same to the Beneficiary.

3.  Upon
receipt of a written demand from the Beneficiary the Trustees shall transfer the
legal and registered title to the Trust Property to the Beneficiary or the
Beneficiary’s nominee and account to and pay over to them all dividends and
profits that shall have been received by the Trustees thereon.

4.  The
Beneficiary shall pay and or fulfil any and all obligations, costs and expenses
incurred with respect to the Trust Property of every nature and
kind.

5.  The
Beneficiary shall comply with all obligations in respect of the Trust Property
as is required of it pursuant to the Purchase, Sale and Assumption
Agreement.

6.  The
Beneficiary will indemnify and save harmless the Trustee from any and all
claims, demands, payments of money, causes of actions, suits, judgments,
howsoever arising out of or in connection with the Trust Property.

 

 

 

- 2
-

 

 

7.  The
Trustee does hereby acknowledge and declare further and that the Trustee will
not permit the Trust Property to become in any way charged, encumbered or
affected by any act or omission of the Trustee.

8.  The
parties shall execute such further assurances and other documents and
instruments and do such further and other things as may be necessary to
implement and carry out the intent of this Agreement.

9.  All
notices, writings or demands to be given to any Party pursuant to this Agreement
must be in writing and must be delivered to such Party at his/its address set
out above (or to such other address, notice of which has been given to all
Parties hereto) and will be deemed to have been given on the day so
served.

10.  No waiver
of any term or provision of this Agreement will be enforceable unless it is in
writing signed by the Party against whom such waiver is sought to be enforced
and makes specific reference to this Agreement, and this Agreement may only be
amended in writing signed by the Parties hereto.

11.  In the
event that any one of the provisions of this Agreement is invalid, illegal or
unenforceable in any respect, the validity, legality and enforceability of the
remaining provisions contained herein will not in any way be affected or
impaired thereby.

12.  Wherever
the singular, or masculine or neuter is used herein, the same is to be construed
as meaning the plural or the feminine or body corporate or vice-versa where the
context or the hereto so require and, if any Party is more than one person, the
covenants and agreements by such Party are to be joint as well as
several.

13.  This
Agreement will be governed by and construed and enforced in accordance with, and
the right of the Parties shall be governed by, the laws of the State of
Nevada.

 

 

 

- 3
-

 

 

14.  This
Agreement will be binding upon and inure to the benefit of the Parties hereto
and their respective heirs, executors, administrators, successors and permitted
assigns.

15.  Time is
of the essence of this Agreement.

16.  The
recitals to this Agreement shall be deemed to be, representations or statements
of fact by the Parties.

IN
WITNESS WHEREOF the
parties hereto have hereunto set their hands and seals as of the date first
hereinbefore mentioned.

 

                                                                                               
BENEFICIARY:

 

                                                                                              
TRYX VENTURES INC.

 

                                                                                              
Per:/s/
Alessandra
Bordon                                                   

                                                                                                    Authorized
Signatory 

 

                                                                                               TRUSTEE:

 

                                                                                              
ATLAS
ENERGY CORP.

 

                                                                                              
Per:/s/
Stuart
McPherson                                                    

                                                                             Authorized
Signatory

 

This is
page four of a four page Declaration of Trust, between ATLAS ENERGY
CORP. as
Trustee and TRYX VENTURES INC. as Beneficiary.

 

- 4
-EX-10.1

Exhibit 10.1

AGREEMENT

THIS AGREEMENT (“Agreement”) is made as of the 4th day of March, 2005, between JO-ANN STORES,
INC., an Ohio corporation (the “Company”), and DAVID HOLMBERG (“Executive”).

The Company is entering into this Agreement in recognition of the importance of Executive’s
services to the continuity of management of the Company and based upon its determination that it
will be in the best interests of the Company to encourage Executive’s continued attention and
dedication to Executive’s duties as a general matter and in the potentially disruptive
circumstances of a possible Change of Control of the Company. (As used in this Agreement, the term
“Change of Control” and certain other capitalized terms have the meanings ascribed to them in
Section 17 at the end of this Agreement.)

The Company and Executive agree, effective as of the 29th day of December, 2004 (the
“Effective Date”), as follows:

1. Severance Benefits upon Certain Terminations Occurring Before a Change of Control. If, before
the occurrence of a Change of Control, Executive’s employment with the Company is terminated (a) by
the Company without Cause, or (b) by Executive for Good Reason, Executive shall be entitled to the
following as Severance Benefits:

(a) The Company shall pay Executive an amount equal to one and one half (1-1/2) times
Executive’s Base Salary payable in consecutive bi-weekly installments over the eighteen (18) months
following the Termination Date at the same times and in the same amounts as if Executive had
remained in the employ of the Company and had continued to earn Executive’s Base Salary over that
eighteen (18) month period.

(b) The Company shall continue to provide Executive with the welfare benefits of medical
insurance, dental insurance, and group term life insurance through the end of the eighteenth
(18th) full calendar month following the Termination Date, except that

	 	(i)	 	the Company may stop providing medical insurance and dental
insurance coverage earlier if and when Executive accepts full time employment
with a subsequent employer that generally makes medical insurance available to
its executives and Executive is eligible for that coverage with the subsequent
employer, and

	 	(ii)	 	the Company may stop providing group term life insurance
earlier if and when Executive accepts full time employment with a subsequent
employer and that employer provides Executive with group term life insurance
coverage.

The benefits to be provided by the Company pursuant to this paragraph shall be provided to
Executive at the same cost to Executive, and at the same coverage level, as is applicable to
continuing executives in comparable positions from time to time during the period the benefits are
continued.

2. Change of Control Severance Benefits upon Certain Terminations Occurring After a Change of
Control. If, after the occurrence of a Change of Control, Executive’s employment with the Company
is terminated (a) by the Company without Cause, or (b) by Executive for Good Reason, Executive
shall be entitled to the following as Change of Control Severance Benefits:

(a) The Company shall make a lump sum cash payment to Executive, not later than ten (10)
business days after the Termination Date, in an amount equal to two (2) times the sum of (i)
Executive’s Base Salary plus (ii) the greater of (A) Executive’s average annual bonus earned over
the three (3) full fiscal years of the Company ended before the Termination Date, or (B)
Executive’s target annual bonus established for the bonus plan year in which the Termination Date
occurs. If Executive has been employed by the Company for fewer than three (3) but at least one
(1) full fiscal year of the Company ended before the Termination Date, the average of the bonuses
earned in the two (2) full fiscal years of the Company ended before the Termination Date, or the
amount of the bonus earned in the one full fiscal year of the Company ended before the Termination
Date, as the case may be, shall be substituted for the average referred to in (A) above.

(b) If the Termination Date occurs after the end of a bonus year under any Company sponsored
bonus plan and before the bonus with respect to that bonus year has been paid, the Company shall
pay to Executive, not later than ten (10) business days after the Termination Date, an amount equal
to the bonus for that bonus year to which Executive would have been entitled had the bonus plan for
that bonus year remained in effect without any change and had Executive remained in the employ of
the Company through the date on which bonuses for that bonus year were paid.

(c) The Company shall make a lump sum cash payment to Executive, not later than ten (10)
business days after the Termination Date, in an amount equal to the greater of (i) Executive’s
unpaid targeted annual bonus, established for the bonus year in which the Termination Date occurs,
multiplied by a fraction, the numerator of which is the number of days Executive was employed by
the Company in the bonus year through the Termination Date, and the denominator of which is 365, or
(ii) the bonus amount specifically guaranteed to Executive for that bonus year under any other
agreement between the Company and Executive.

(d) The Company shall continue to provide Executive with the welfare benefits of medical
insurance, dental insurance, group term life insurance, and split-dollar life insurance through the
second (2nd) anniversary of the Termination Date, except that

	 	(i)	 	the Company may stop providing medical insurance and dental
insurance coverage earlier if Executive accepts full time employment with a
subsequent employer that generally makes medical insurance available to its
executives and Executive is eligible for that coverage with the subsequent
employer, and

	 	(ii)	 	the Company may stop providing group term life insurance
earlier if Executive accepts full time employment with a subsequent employer
and that employer provides Executive with group term life insurance coverage.

The benefits to be provided by the Company pursuant to this paragraph shall be provided to
Executive at the same cost to Executive, and at the same coverage level, as in effect as of the
Termination Date.

(e) In lieu of any retirement benefits provided under Articles II or III of the Fabri-Centers
of America, Inc. Supplemental Retirement Benefit Agreement (the “SERP”), the Company shall pay to
Executive, not later than ten (10) business days after the Termination Date, a lump sum benefit
equal to (A) times (B), where (A) is equal to the Maximum Supplemental Retirement Benefit defined
in Section 1.8 of the SERP, and (B) is a fraction (not to exceed 1.0), the numerator of which is
the number of completed months of service Executive had with the Company as of the Termination Date
and the denominator of which is the number of months of service Executive would have had with the
Company had Executive continued to work for the Company through Executive’s 65th birthday.

3. Earned but Unpaid Base Salary and Accrued Paid Time Off Pay Payable Upon Any Termination of
Employment; Treatment of Long-Term Incentive Awards. Upon any termination of Executive’s
employment for any reason and at any time, the Company shall pay to Executive (or, where
appropriate, to Executive’s Beneficiary), not later than ten (10) days after the Termination Date,
(a) all earned but unpaid Base Salary through the Termination Date, and (b) an amount equal to the
aggregate dollar value of all paid time off earned but not taken by Executive (“Accrued Paid Time
Off Pay”) before the Termination Date. In addition, upon any termination of Executive’s
employment, all outstanding long-term incentive awards shall be subject to the treatment provided
under the applicable long-term incentive plan of the Company.

4. Termination Due to Retirement, Disability, or Death. If Executive’s employment is terminated
due to Retirement, Disability, or death while this Agreement remains in effect (whether before or
after the occurrence of a Change of Control), neither Executive nor Executive’s Beneficiaries will
be entitled to Severance Benefits or Change of Control Severance Benefits under either of Sections
1 or 2 but Executive or Executive’s Beneficiaries, as appropriate, will be entitled to the payments
provided for in Section 3 and to such benefits as may be provided under the terms of the Company’s
disability, retirement, survivor’s benefits, insurance, and other applicable plans and programs of
the Company then in effect.

5. Termination for Cause or by Executive other than for Good Reason. If Executive’s employment is
terminated either by the Company for Cause or by Executive other than for Good Reason while this
Agreement remains in effect (whether before or after the occurrence of a Change of Control) and
Section 6 does not apply, neither Executive nor Executive’s Beneficiaries will be entitled to
Severance Benefits or Change of Control Severance Benefits under either of Sections 1 or 2 but
Executive or Executive’s Beneficiaries, as appropriate, will be entitled to the payments provided
for in Section 3 and the Company shall pay to Executive such other amounts to which Executive is
entitled under any compensation plans of the Company, at the time such payments are due. Except as
provided in this Section 5, the Company shall have no further obligations to Executive under this
Agreement.

6. Special Provision Applicable only if Executive is Terminated both in Advance of and in
Contemplation of a Change of Control. If Executive is terminated by the Company (a) in
contemplation of and not more than six (6) full calendar months before the occurrence of a Change
of Control, and (b) under circumstances such that if the termination had occurred immediately after
that Change of Control Executive would have been entitled to Change of Control Severance Benefits
under Section 2 above, then the Company shall pay and provide to Executive all of the amounts and
benefits specified in Section 2, reduced by such amounts and such benefits, if any, that the
Company has otherwise paid and provided to Executive pursuant to Section 1 above. The Company
shall make any cash payment required pursuant to this Section 6 within ten (10) days of the
occurrence of the Change of Control.

7. Change of Control Ignored if Employment Continues for More than Two Years Thereafter. If
Executive’s employment continues for more than two (2) years following the occurrence of any Change
of Control, that particular Change of Control will deemed never to have occurred for purposes of
this Agreement.

8. Term of Agreement, Right to Severance Benefits upon Determination by Company Not to Renew.

8.1. Term. This Agreement shall be effective as of the Effective Date and shall thereafter apply
to any termination of Executive’s employment occurring on or before July 31, 2005. Unless this
Agreement is earlier terminated pursuant to its terms, on July 31, 2005 and on July 31st of each
succeeding year thereafter (a “Renewal Date”), the term of this Agreement shall be automatically
extended for an additional year unless either party has given notice to the other, at least one (1)
year in advance of that Renewal Date, that the Agreement shall not apply to any termination of
Executive’s employment occurring after that Renewal Date.

8.2. Right to Severance Benefits. If the Company gives Executive notice that this Agreement shall
not apply to any termination of Executive’s employment occurring after a particular Renewal Date,
Executive shall have the right to terminate Executive’s employment at any time during the first
three (3) months of the final year during which this Agreement is thereafter scheduled to be
effective (e.g., if the Company gives notice that the Agreement is not to apply to any termination
after July 31, 2006, at any time during the months of August, September and October 2005) and
Executive shall thereupon be entitled to receive Severance Benefits to the same extent as if all of
the conditions to Executive’s right to receive Severance Benefits under Section 2 had been
satisfied.

9. Excise Tax.

9.1. Excise Tax. Notwithstanding any other provision of this Agreement (but subject to the
following sentence), if any portion of the severance benefits or any other payment under this
Agreement, or under any other agreement with or plan of the Company (in the aggregate “Total
Payments”) would constitute an “excess parachute payment,” then the payments to be made to
Executive under this Agreement shall be reduced, but not below zero, to such amount that the value
of the aggregate Total Payments that Executive is entitled to receive shall be One Dollar ($1.00)
less than the maximum amount which Executive may receive without becoming subject to the tax
imposed by Code Section 4999 and without the Company suffering a loss of deduction under Code
Section 280G(a). However, the payments shall be reduced as described above only if the reduction
results in Executive receiving greater total severance benefits (on an after-tax basis, including
excise taxes) than if such severance benefits were not reduced. For purposes of this Agreement,
the terms “excess parachute payment” and “parachute payments” shall have the meanings assigned to
them in Section 280G of the Code, and such “parachute payments” shall be valued as provided
therein.

9.2. Procedure for Establishing Limitation on Termination Payment.

(a) Within sixty (60) days following delivery of notice by the Company to Executive of its
belief that there is a payment or benefit due to Executive which will result in an “excess
parachute payment”, Executive and the Company, at the Company’s expense, shall obtain the opinion
of such legal counsel, which need not be unqualified, as Executive may choose, which sets forth:
(i) the amount of Executive’s “annualized includible compensation for the base period” (as defined
in Code Section 280G(d)(1)); (ii) the present value of the Total Payments; and (iii) the amount and
present value of any “excess parachute payment.” The opinion of such legal counsel shall be
supported by the opinion of a certified public accounting firm and shall be binding upon the
Company and Executive.

(b) If the opinion of legal counsel indicates that there would be an “excess parachute
payment,” the severance benefits hereunder shall be reduced or eliminated as specified by Executive
in writing delivered to the Company within thirty (30) days of Executive’s receipt of such opinion,
or, if Executive fails to so notify the Company, then as the Company shall reasonably determine, so
that under the basis of calculations set forth in such opinion, there will be no “excess parachute
payment.”

(c) The calculations, notices, and opinion provided for herein shall be based upon the
conclusive presumption that: (i) the compensation and benefits provided for herein; and (ii) any
other compensation earned prior to the effective date of termination by Executive pursuant to the
Company’s compensation programs (if such payments would have been made in the future in any event,
even though the timing of such payment is triggered by the Change of Control), are reasonable.

9.3. Subsequent Imposition of Excise Tax. If, notwithstanding compliance with the provisions
herein, it is ultimately determined by a court or pursuant to a final determination by the Internal
Revenue Service that any portion of the Total Payments is considered to be a “parachute payment,”
subject to excise tax under Section 4999 of the Code, which was not contemplated to be a “parachute
payment” at the time of payment (so as to accurately determine whether a limitation should have
been applied to the Total Payments to maximize the net benefit to Executive), Executive shall be
entitled to receive a lump sum cash payment sufficient to place Executive in the same net after-tax
position, computed by using the “Special Tax Rate” as such term is defined below, that Executive
would have been in had such payment not been subject to such excise tax, and had Executive not
incurred any interest charges or penalties with respect to the imposition of such excise tax. For
purposes of this Agreement, the “Special Tax Rate” shall be the highest effective Federal and state
marginal tax rates applicable to Executive in the year in which the payment contemplated under this
Agreement is made.

10. Outplacement Assistance. Following a termination of employment in which Severance Benefits or
Change of Control Severance Benefits are payable hereunder the Company shall provide Executive with
outplacement services obtained by the Company at its cost and commensurate with the outplacement
services typically provided by the Company to Executives who left the employ of the Company before
the Effective Date of this Agreement until Executive obtains subsequent employment or self
employment.

11. The Company’s Payment Obligation.

11.1. Payment Obligations Absolute. The Company’s obligation to make the payments and provide the
benefits provided for herein shall be absolute and unconditional, and shall not be affected by any
circumstances, including, without limitation, any offset, counterclaim, recoupment, defense, or
other right which the Company may have against Executive or anyone else. All amounts payable by
the Company hereunder shall be paid without notice or demand. Each and every payment made
hereunder by the Company shall be final, and the Company shall not seek to recover all or any part
of such payment from Executive or from whomsoever may be entitled thereto, for any reasons
whatsoever.

11.2. No Mitigation. Executive shall not be obligated to seek other employment in mitigation of
the amounts payable or benefits to be provided under any provision of this Agreement, and the
obtaining of any such other employment shall in no event effect any reduction of the Company’s
obligations to make the payments or provide any benefits as required under this Agreement, except
to the limited extent provided above in cases where a subsequent employer provides medical
insurance and/or group term life insurance coverage.

11.3. Source of Payments and Benefits. All payments under this Agreement shall be made solely from
the general assets of the Company (or from a grantor trust, if any, established by the Company for
purposes of making payments under this Agreement and other similar agreements), and Executive shall
have the rights of an unsecured general creditor of the Company with respect thereto.

12. Legal Remedies

12.1. Payment of Legal Fees. Unless prohibited by law, the Company shall pay all legal fees, costs
of arbitration and/or litigation, prejudgment interest, and other expenses incurred in good faith
by Executive as a result of the Company’s refusal to provide the Severance Benefits or Change of
Control Severance Benefits to which Executive deems Executive to be entitled under this Agreement,
as a result of the Company’s contesting the validity, enforceability, or interpretation of this
Agreement, or as a result of any conflict between the parties pertaining to this Agreement,
provided, however, that the Company shall be reimbursed by Executive for all such fees and expenses
if, but only if, it is ultimately determined by a court of competent jurisdiction or by the
arbitrators, as the case may be, that Executive had no reasonable grounds for the position
propounded by Executive in the arbitration and/or litigation (which determination need not be made
simply because Executive fails to succeed in the arbitration and/or litigation).

12.2. Arbitration. Subject to the following sentences, any dispute or controversy arising under or
in connection with this Agreement shall be settled by mandatory arbitration (in lieu of
litigation), conducted before a panel of three (3) arbitrators sitting in a location selected by
Executive within fifty (50) miles from Hudson, Ohio, in accordance with the rules of the American
Arbitration Association then in effect. Any dispute which arises with respect to Executive’s
alleged violation of the prohibition on competition or any other restriction contained in Section
14 of this Agreement shall be settled by judicial proceedings (in any court of competent
jurisdiction with respect to such dispute or claim). Except as provided above for claims or
disputes under Section 14, judgment may be entered on the award of the arbitrator in any court
having proper jurisdiction.

13. Withholding. The Company shall be entitled to withhold from any amounts payable under this
Agreement all taxes as legally shall be required (including, without limitation, any United States
federal taxes, and any other state, city, or local taxes).

14. Noncompetition.

14.1. Prohibition on Competition. Without the prior written consent of the Company, during the
term of this Agreement, and, if Severance Benefits are paid hereunder, thereafter during the
eighteen (18) month period beginning on the Termination Date or if Change of Control Severance
Benefits are paid hereunder, thereafter through the second (2nd) anniversary of the
Termination Date, Executive shall not, as an employee, an officer, or as a director, engage
directly or indirectly in any business or enterprise that engages to any significant extent within
the United Sates of America in the sale at retail or direct marketing to consumers of fabric and
craft components. Notwithstanding the foregoing, Executive may purchase and hold for investment
less than two percent (2%) of the shares of any corporation whose shares are regularly traded on a
national securities exchange or in the over-the-counter market.

14.2. Disclosure of Information. Executive acknowledges that Executive has and has had access to
and knowledge of certain confidential and proprietary information of the Company, which is
essential to the performance of Executive’ s duties as an employee of the Company. Executive will
not, during or after the term of Executive’s employment by the Company, in whole or in part,
disclose such information to any person, firm, corporation, association, or other entity for any
reason or purpose whatsoever, nor shall Executive make use of any such information for their own
purposes.

14.3. Covenants Regarding Other Employees. During the term of this Agreement and thereafter during
any period during which Executive is subject to the restriction set forth in Section 14.1,
Executive shall not to attempt to induce any employee of the Company to terminate his or her
employment with the Company or accept employment with any competitor of the Company and Executive
shall not interfere in any similar manner with the business of the Company.

15. Successors and Assignment.

15.1. Successors to the Company. The Company will require any successor (whether direct or
indirect, by purchase, merger, consolidation, or otherwise) of all or substantially all of the
business and/or assets of the Company to expressly assume and agree to perform the Company’s
obligations under this Agreement in the same manner and to the same extent that the Company would
be required to perform them if no such succession had taken place. Failure of the Company to
obtain such assumption and agreement prior to the effective date of any such succession shall be a
breach of this Agreement and shall entitle Executive to notify the Company that, unless the failure
is remedied within thirty (30) days after delivery of the notice from Executive, Executive’s
employment will terminate as of the thirty-first (31st) day after the delivery of the
notice. If any such notice is given and the failure is not so remedied, Executive will be entitled
to receive the same payments and benefits from the Company, and on the same schedule, as if the
Company had undergone a Change of Control on the date of the succession and Executive had thereupon
terminated his employment for Good Reason.

15.2. Assignment by Executive. This Agreement shall inure to the benefit of and be enforceable by
Executive and each of Executive’s personal or legal representatives, executors, administrators,
successors, heirs, distributes, devisees, and legatees. If Executive dies while any amount would
still be payable to Executive hereunder had Executive continued to live, all such amounts, unless
otherwise provided herein, shall be paid in accordance with the terms of this Agreement, to
Executive’s Beneficiary. If Executive has not named a Beneficiary, then such amounts shall be paid
to Executive’s devisee, legatee, or other designee, or if there is no such designee, to Executive’s
estate.

16. Miscellaneous.

16.1. Employment Status. Except as may be provided under any other agreement between Executive and
the Company, the employment of Executive by the Company is “at will,” and, prior to the effective
date of a Change of Control, may be terminated by either Executive or the Company at any time,
subject to applicable law.

16.2. Entire Agreement. This Agreement sets forth the entire agreement between the parties with
respect to severance benefits to be provided upon any termination of Executive’s employment and
supersedes any and all prior employment, retention, and/or change of control agreements between
Executive and the Company.

16.3. Beneficiaries. Executive may designate one or more persons or entities as the primary and/or
contingent Beneficiaries of any Severance Benefits or Change of Control Severance Benefits owing to
Executive under this Agreement. Such designation must be in the form of a signed writing
acceptable to the Committee. Executive may make or change such designation at any time.

16.4. Severability. In the event any provision of this Agreement shall be held illegal or invalid
for any reason, the illegality or invalidity shall not affect the remaining parts of the Agreement,
and the Agreement shall be construed and enforced as if the illegal or invalid provision had not
been included.

16.5. Modification. No provision of this Agreement may be modified, waived, or discharged unless
such modification, waiver, or discharge is agreed to in writing and signed by Executive and by an
authorized representative of the Company, or by the respective parties’ legal representatives and
successors.

16.6. Applicable Law. To the extent not preempted by the laws of the United States, the laws of
the state of Ohio, applicable to contracts made and to be performed wholly within that state, shall
be the controlling law in all matters relating to this Agreement.

17. Definitions. Whenever used in this Agreement, the following capitalized terms shall have the
meanings set forth below:

17.1. “Base Salary” means an amount equal to Executive’s base annual salary at the highest rate
payable at any time before the date of a termination. For this purpose, Base Salary shall not
include bonuses, long-term incentive compensation, or any remuneration other than base annual
salary.

17.2. “Beneficial Owner” shall have the meaning ascribed to such term in Rule 13d-3 of the General
Rules and Regulations under the Exchange Act.

17.3. “Beneficiary” means the persons or entities designated or deemed designated by Executive
pursuant to Section 15.2 herein.

17.4. “Board” means the Board of Directors of the Company.

17.5. “Cause” shall mean the occurrence of any one or more of the following:

(a) The willful and continued failure by Executive to substantially perform his or her normal
duties (other than any such failure resulting from Executive’s Disability), after a written demand
for substantial performance is delivered to Executive that specifically identifies the manner in
which the Committee believes that Executive has not substantially performed his or her duties, and
Executive has failed to remedy the situation within thirty (30) business days of receiving such
notice;

(b) Executive’s conviction for committing an act of fraud, embezzlement, theft, or other
criminal act constituting a felony; or

(c) The willful engaging by Executive in gross negligence materially and demonstrably
injurious to the Company. However, no act, or failure to act on Executive’s part, shall be
considered “willful” unless done, or omitted to be done, by Executive not in good faith and without
reasonable belief that his or her action or omission was in or not opposed to the best interest of
the Company.

17.6. Change of Control. A “Change of Control” shall be deemed to have occurred if at any time or
from time to time while this Agreement is in effect:

(a) Any person (other than the Company, any of its Subsidiaries, any member of either of the
Founding Families, any employee benefit plan or employee stock ownership plan of the Company, or
any person organized, appointed, or established by the Company for or pursuant to the terms of any
such plan), alone or together with any of its affiliates, becomes the beneficial owner of fifteen
percent (15%) or more (but less than fifty percent (50%)) of the Voting Shares then outstanding;

(b) Any person (other than the Company, any of its Subsidiaries, any employee benefit plan or
employee stock ownership plan of the Company, or any person organized, appointed, or established by
the Company for or pursuant to the terms of any such plan), alone or together with any of its
affiliates, becomes the beneficial owner of fifty percent (50%) or more of the Voting Shares then
outstanding;

(c) Any person commences or publicly announces an intention to commence a tender offer or
exchange offer the consummation of which would result in the person becoming the beneficial owner
of fifteen percent (15%) or more of the Voting Shares then outstanding;

(d) At any time during any period of twenty-four (24) consecutive months, individuals who were
directors at the beginning of the 24-month period no longer constitute a majority of the members of
the Board of the Company, unless the election, or the nomination for election by the Company’s
shareholders, of each director who was not a director at the beginning of the period is approved by
at least a majority of the directors who (i) are in office at the time of the election or
nomination, and (ii) were directors at the beginning of the period;

(e) A record date is established for determining shareholders entitled to vote upon (i) a
merger or consolidation of the Company with another corporation in which those persons who are
shareholders of the Company immediately before the merger or consolidation are to receive or retain
less than sixty percent (60%) of the stock of the surviving or continuing corporation, (ii) a sale
or other disposition of all or substantially all of the assets of the Company, or (iii) the
dissolution of the Company;

(f) (i) the Company is merged or consolidated with another corporation and those persons who
were shareholders of the Company immediately before the merger or consolidation receive or retain
less than sixty percent (60%) of the stock of the surviving or continuing corporation, (ii) there
occurs a sale or other disposition of all or substantially all of the assets of the Company, or
(iii) the Company is dissolved; or

(g) Any person who proposes to make a “control share acquisition” of the Company, within the
meaning of Section 1701.01(Z) of the Ohio General Corporation Law, submits or is required to submit
an acquiring person statement to the Company.

Notwithstanding anything herein to the contrary, if an event described in clause (b), clause (d),
or clause (f) above occurs, the occurrence of that event will constitute an irrevocable Change of
Control. Furthermore, notwithstanding anything herein to the contrary, if an event described in
clause (c) occurs, and the Board either approves such offer or takes no action with respect to such
offer, then the occurrence of that event will constitute an irrevocable Change of Control. On the
other hand, notwithstanding anything herein to the contrary, if an event described in clause (a),
clause (e), or clause (g) above occurs, or if an event described in clause (c) occurs and the Board
does not either approve such offer or take no action with respect to such offer as described in the
preceding sentence, and a majority of those members of the Board who were Directors prior to such
event determine, within the 90-day period beginning on the date such event occurs, that the event
should not be treated as a Change of Control, then, from and after the date that determination is
made, that event will be treated as not having occurred. If no such determination is made, a
Change of Control resulting from any of the events described in the immediately preceding sentence
will constitute an irrevocable Change of Control on the 91st day after the occurrence of the event.

17.7. “Change of Control Severance Benefits” means those payments and benefits that may become
payable pursuant to Section 2 above.

17.8. “Code” means the United States Internal Revenue Code of 1986, as amended.

17.9. “Committee” means the Compensation Committee of the Board, or any other committee appointed
by the Board to perform the functions of the Compensation Committee.

17.10. “Company” means Jo-Ann Stores, Inc., an Ohio corporation, and its successors.

17.11. “Disability” means permanent and total disability, within the meaning of Code Section
22(e)(3), as determined by the Committee in the exercise of good faith and reasonable judgment,
upon receipt of and in reliance on sufficient competent medical advice from one (1) or more
individuals, selected by the Committee, who are qualified to give professional medical advice,
provided, however, that Executive must be entitled to disability benefits under the Company
sponsored disability plans or programs.

17.12. “Exchange Act” means the United States Securities Exchange Act of 1934, as amended.

17.13. “Founding Families” means the families consisting of Betty and Martin Rosskamm and Alma and
Justin Zimmerman and their respective issue.

17.14. “Good Reason” (after a Change of Control) means, without Executive’s express written
consent, the occurrence, after the occurrence of a Change of Control, of any one or more of the
following:

(a) Any reduction in Executive’s Base Salary below the amount in effect immediately before the
Change of Control or, if higher, the amount in effect before any reduction in Executive’s Base
Salary made in contemplation of the Change of Control.

(b) Any significant reduction in Executive’s duties, responsibilities, or position with
respect to the Company from the duties, responsibilities, or position as in effect immediately
before the Change of Control or as in effect immediately before any reduction in any such item made
in contemplation of the Change of Control.

(c) Any significant reduction in Executive’s benefits package from the benefit package in
effect immediately before the Change of Control or as in effect immediately before any reduction of
the benefit package made in contemplation of the Change of Control.

(d) Any reduction in Executive’s long-term incentive opportunity with the Company.

(e) Any shift of Executive’s principal place of employment with the Company to a location that
is more than fifty (50) miles (by straight line measurement) from the site of the Company’s
headquarters in Hudson, Ohio at the Effective Time.

(f) Any dissolution or liquidation of the Company.

Executive’s continued employment shall not constitute consent to, or a waiver of rights with
respect to, any circumstance constituting Good Reason under this Section 17.14 unless the Company
has given Executive written notice of the change and Executive has voluntarily agreed in a writing
that specifically refers to this section of this Agreement to accept the change and to waive any
possible reliance on that change as constituting Good Reason.

17.15. “Good Reason”(before a Change of Control) means, without Executive’s express written
consent, any reduction in Executive’s Base Salary other than a reduction that is in the same
proportion as the reduction of the base salaries of every other executive officer of the Company in
connection with an across-the-board reduction of executive base salaries.

17.16. “Person” shall have the meaning ascribed to such term in Section 3(a)(9) of the Exchange Act
and used in Sections 13(d) and 14(d) thereof, including a “group” as defined in Section 13(d).

17.17. “Retirement” means a voluntary termination of Executive’s employment other than for Good
Reason after Executive has either (a) attained age fifty-five (55) and has completed at least ten
(10) full years of continuous service with the Company, or (b) has attained age sixty-five (65)
(without regard to length of service).

17.18. “Severance Benefits” means those payments and benefits that may become payable before the
occurrence of a Change of Control pursuant to Section 1 above.

17.19. “Termination Date” means the date on which any termination of Executive’s employment becomes
effective.

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written
above.

JO-ANN STORES, INC.

By

/s/ Alan Rosskamm

	 	 	 	Alan Rosskamm

President and Chief Executive Officer

“EXECUTIVE”

/s/ David Holmberg

	 	 	 	David Holmberg

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