Document:

EX-10.1

 

Exhibit 10.1

CONSULTING AGREEMENT

     THIS AGREEMENT (“Agreement”) made this 10th day of December, 2007, and effective as of January
1, 2008, between VERAMARK TECHNOLOGIES, INC., a Delaware corporation (the “Company”), and DAVID G.
MAZZELLA, JR. (“Mr. Mazzella”).

     WHEREAS, Mr. Mazzella has been employed by the Company as its President and Chief Executive
Officer since June 28, 1997; and

     WHEREAS, Mr. Mazzella has announced his decision to retire as an employee of the Company on
December 31, 2007 and resign his position as President and Chief Executive Officer on his
retirement date and concurrent with the term of his Employment Agreement dated March 28, 2005 (the
“Employment Agreement”); and

     WHEREAS, the Board of Directors of the Company is currently engaged in a search to recruit and
employ Mr. Mazzella’s successor; and

     WHEREAS, the Company is desirous of Mr. Mazzella providing consulting services to the Company
and the new CEO upon his or her employment, which consulting services will extend beyond the term
of his Employment Agreement; and

     WHEREAS, the Company and Mr. Mazzella wish to modify and amend his Employment Agreement with
respect to Section 9. Separation/Transition Bonus and, with respect to that provision only,
as hereinafter provided.

     NOW, THEREFORE, in consideration of the premises and mutual covenants and conditions contained
in this Agreement, the Company and Mr. Mazzella agree as follows:

     1. Consulting Services; Duties. On the terms and subject to the conditions
hereinafter set forth, Mr. Mazzella shall render management consulting services to the Company with
respect to such business matters as the Company may reasonably request, including, without
limitation, in connection with the transition of duties to a new President and CEO, by conferring
by telephone or in person with a representative or representatives of the Company. While it is the
intent of this Agreement that the mutual convenience of the parties be served, it is understood
that Mr. Mazzella shall render management consulting services to the Company in the capacity of an
independent contractor and shall not be subject to the direction, control or supervision of the
Company with respect to the time spent or procedures followed in the performance of his management
consulting services hereunder. In particular, Mr. Mazzella will not be required without his
consent to leave his city of residence at the time for purposes of such consultation. Further, and
without limiting the foregoing, Mr. Mazzella agrees to make himself available a maximum of ten (10)
days per month (each day to be a maximum of eight (8) hours per day) during the term of this
Agreement. If Mr. Mazzella’s services are required for more than ten days in any month, he will be
paid an additional stipend per diem as hereinafter specified, but only to the extent Mr. Mazzella
is willing to provide such additional services.

 

 

     2. Term of Agreement. The term of this Agreement shall commence on January 1, 2008,
and terminate on June 30, 2008.

     3. Compensation; Reimbursement of Expenses. As compensation for his management
consulting services to the Company under this Agreement, the Company shall pay Mr. Mazzella One
Hundred Seventy-Seven Thousand Dollars ($177,000.00), payable as follows: (a) $75,000.00 on or
before January 15, 2008; and (b) $17,000.00 for each month during the term of this Agreement with
the first payment on or before the fifth day of February and each month thereafter, with a final
payment on or before July 5, 2008. If Mr. Mazzella is requested to provide management consulting
services in excess of ten days in any month, with his consent, he will be paid at the rate of
$1,700.00 per diem for each additional day worked payable on or before the fifth day of the
following month in which such additional services were rendered. The Company shall also reimburse
Mr. Mazzella, upon the submission by him to the Company of appropriate receipts and vouchers
therefor, for all expenses incurred by him in connection with the performance of his duties
hereunder but only if the incurring of such an expense is specifically approved in advance by the
Company. Mr. Mazzella shall be entitled to retain the computer equipment, cell phone, and e-mail
address he utilized while working for the Company and the Company shall pay for these services
during the term of this Agreement.

     4. Amendment to Employment Agreement. In consideration for the payments contained in
this Agreement, Section 9. Separation/Transition Bonus of the Employment Agreement and any
obligations thereunder on either party’s side are hereby negated and deemed null and void.

     5. Other Activities. Nothing in this Agreement shall prevent Mr. Mazzella from
providing consulting services, to other businesses or entities, so long as any such activities do
not violate his existing non-competition or confidentiality obligations under the Employment
Agreement.

     6. Employment Agreement. Except as modified hereunder, all other terms, conditions,
privileges, and rights of either Mr. Mazzella or the Company contained in the Employment Agreement
continue without modification or alteration, and each party reaffirms its obligations and
commitments thereunder.

     7. Merger, Consolidation, Assignment. In the event that the Company, or any entity
resulting from any merger or consolidation, or any entity referred to in this Section 7 which shall
be a purchaser or transferee (including a transferee by operation of law), shall at any time be
merged or consolidated into or with any other entity, or in the event that substantially all of the
assets of the corporation or any such entity shall be sold or otherwise transferred to another
entity, the provisions of this Agreement shall be binding upon and shall inure to the benefits of
the continuing entity in or the entity resulting from such merger or consolidation or the entity to
which such assets shall be sold or transferred. Neither this Agreement nor the rights to any
payments shall be assignable by Mr. Mazzella.

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     8. Entire Agreement; Waiver. This Agreement contains the entire agreement between the
parties hereto with respect to the specific subject matter of this Agreement and supersedes all
prior and contemporaneous oral and written agreements, representations and understandings between
the parties hereto relating to the specific subject matter of this Agreement, subject at all times
to the provisions of Section 6 of this Agreement. No supplement, modification or amendment of this
Agreement shall be binding unless executed in writing by the parties hereto. No waiver of any
provision of this Agreement shall be deemed or shall constitute, a waiver of any other provisions,
whether or not similar, nor shall any waiver constitute a continuing waiver. No waiver shall be
binding unless executed in writing by the party making the waiver.

     9. Enforcement. In the event that any party hereto has to enforce the provisions of
this Agreement and prevails in doing so, such party’s cost (including reasonable attorneys’ fees)
incurred in so doing shall be reimbursed by the defending party.

     10. Notices. All notices, requests, demands or other communications (collectively,
“Notices”) under this Agreement shall be in writing and shall be deemed to have been duly given (a)
on the date of service if served personally or by telecopy, (b) on the first day after mail if
mailed by overnight courier, and (c) on the fifth day after mailing if mailed by first class mail
(registered or certified, postage prepaid). Notices shall be addressed as follows:

David G. Mazzella, Jr.

The Grosvenor, #402,

6001 Pelican Bay Boulevard,

Naples, Florida, 34108

Veramark Technologies, Inc.

3750 Monroe Avenue

Pittsford, New York 14534

Attention: Charles A. Constantino, Chair

Compensation Committee of the Board of Directors

     Either party hereto may change its address for the purposes of this Section 10 by giving the
other party hereto written notice of the new address in the matter set forth above.

     11. Governing Law. This Agreement shall be construed and enforced in the laws of the
State of New York without giving effect to the choice of law principles thereof.

     Each party irrevocably submits to the exclusive jurisdiction of the Supreme Court of the State
of New York, Monroe County, and to the jurisdiction of the United States District Court for the
Western District of New York, for the purpose of any suit, action or other proceeding arising out
of or relating to this Agreement or any of the transactions contemplated hereby, and hereby waives,
and agrees not to assert, by way of motion, as a defense, or otherwise, in any suit, action or
proceeding, any claim that any of them is not personally subject to the jurisdiction of the

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above-named courts for any reason whatsoever, that such suit or action or proceeding is brought in
an inconvenient forum or that the venue of such suit, action or proceeding is improper or that this
Agreement or, to the full extent permitted by applicable law, any subject matter hereof may not be
enforced in or by such courts.

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

	 	 	 	 	 
	 	VERAMARK TECHNOLOGIES, INC.

 	 
	 	By:  	/s/ Charles A. Constantino
 	 
	 	 	Title: Chairman, Compensation Committee

          of the Board of Directors 	 
	 	 	 	 
	 

	 	 	 	 	 
	 	 	 
	 	  	                          /s/ David G. Mazzella, Jr.
 	 
	 	 	David G. Mazzella, Jr. 	 
	 	 	 	 
	 

-4-exv10w1

 

Exhibit 10.1

SIXTH AMENDMENT TO CREDIT AGREEMENT

     This Sixth Amendment to Credit Agreement (this “Sixth Amendment”) is made as of this
5th day of November, 2007 by and among

JO-ANN STORES, INC., an Ohio corporation, having a principal place of business at 5555
Darrow Road, Hudson, Ohio 44236, as Lead Borrower for the Borrowers, being

said JO-ANN STORES, INC., and

FCA of Ohio, Inc., an Ohio corporation, having a principal place of business at 5555
Darrow Road, Hudson, Ohio 44236, and

House of Fabrics, Inc., a Delaware corporation, having a principal place of business
at 5555 Darrow Road, Hudson, Ohio 44236, and

Jo-Ann Stores Supply Chain Management, Inc., an Ohio corporation, having a principal
place of business at 5555 Darrow Road, Hudson, Ohio 44236

each of the Lenders party to the Credit Agreement (defined below) (together with each of
their successors and assigns, referred to individually as a “Lender” and collectively as the
“Lenders”), and

BANK OF AMERICA, N.A. (f/k/a Fleet National Bank), as Issuing Bank, a national banking
association having a place of business at 100 Federal Street, Boston, Massachusetts 02110;
and

BANK OF AMERICA, N.A., as Administrative Agent and Collateral Agent for the Lenders, a
national banking association, having its principal place of business at 100 Federal Street,
Boston, Massachusetts 02110; and

WACHOVIA CAPITAL FINANCE CORPORATION (NEW ENGLAND) (f/k/a Congress Financial Corporation),
as Documentation Agent; and

GMAC COMMERCIAL FINANCE LLC (f/k/a GMAC Commercial Credit LLC), NATIONAL CITY BUSINESS
CREDIT, INC. (f/k/a National City Commercial Finance, Inc.) AND THE CIT GROUP/BUSINESS
CREDIT, INC., as Co-Agents

in consideration of the mutual covenants herein contained and benefits to be derived herefrom.

W I T N E S S E T H

     A. Reference is made to the Credit Agreement (as amended and in effect, the “Credit
Agreement”) dated as of April 24, 2001 by and among the Lead Borrower, the Borrowers, the Lenders,
the Issuing Bank, the Agents, the Documentation Agent and the Co-Agents.

 

 

     B. The parties to the Credit Agreement desire to modify, amend and waive certain provisions of
the Credit Agreement, as provided herein.

     Accordingly, the parties hereto agree as follows:

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

     2. Amendments to Article I of the Credit Agreement. The provisions of Article I of
the Credit Agreement are hereby amended by adding the following new definitions to Article I to the
Credit Agreement in appropriate alphabetical order:

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

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

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

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

3

 

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

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

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

	 	 	 	 	 
	 	JO-ANN STORES, INC.

as Lead Borrower and Borrower

 	 
	 	by  	/s/ James C. Kerr
 	 
	 	Name:  	James C. Kerr 	 	 
	 	Title:  	Executive Vice President and Chief Financial Officer 	 	 
	 
	 	FCA OF OHIO, INC.

as Borrower

 	 
	 	by  	/s/ James C. Kerr
 	 
	 	Name:  	James C. Kerr 	 	 
	 	Title:  	Vice President 	 	 
	 
	 	HOUSE OF FABRICS, INC.

as Borrower

 	 
	 	by  	/s/ James C. Kerr
 	 
	 	Name:  	James C. Kerr 	 	 
	 	Title:  	Vice President 	 	 
	 
	 	JO-ANN STORES SUPPLY CHAIN MANAGEMENT, INC.

as Borrower

 	 
	 	by  	/s/ James C. Kerr
 	 
	 	Name:  	James C. Kerr 	 	 
	 	Title:  	Vice President 	 	 
	 

5

 

	 	 	 	 	 
	 	BANK OF AMERICA, N.A.,

as Administrative Agent, as Collateral Agent, as Swingline Lender, as Issuing Bank and as Lender

 	 
	 	By:  	/s/ James Ward
 	 
	 	 	James Ward 	 
	 	 	Managing Director 	 
	 
	 	WACHOVIA CAPITAL FINANCE CORPORATION (NEW ENGLAND), as Documentation Agent and Lender

 	 
	 	By:  	/s/ John Husson
 	 
	 	Name:  	John Husson 	 	 
	 	Title:  	Managing Director 	 	 
	 
	 	GMAC COMMERCIAL FINANCE LLC

as Co-Agent and Lender

 	 
	 	By:  	/s/ Steven J. Brown
 	 
	 	Name:  	Steven J. Brown 	 	 
	 	Title:  	Director 	 	 
	 
	 	NATIONAL CITY BUSINESS CREDIT, INC.

as Co-Agent and Lender

 	 
	 	By:  	/s/ Kathryn C. Ellero
 	 
	 	Name:  	Kathryn C. Ellero 	 	 
	 	Title:  	Vice President 	 	 
	 
	 	THE CIT GROUP/BUSINESS CREDIT, INC.

as Co-Agent and Lender

 	 
	 	By:  	/s/ Manuel Borges
 	 
	 	Name:  	Manuel Borges 	 	 
	 	Title:  	Vice President 	 	 
	 

6

 

	 	 	 	 	 
	 	WELLS FARGO FOOTHILL, LLC

as Lender

 	 
	 	By:  	/s/ Jennifer Fong
 	 
	 	Name:  	Jennifer Fong 	 	 
	 	Title:  	Assistant Vice President 	 	 
	 

	 	 	 	 	 	 	 	 	 
	 	 	COMERICA BANK	 	 
	 	 	as Lender	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 

	 	 

	 	 	 	 	 
	 	GENERAL ELECTRIC CAPITAL CORPORATION

as Lender

 	 
	 	By:  	/s/ Rebecca A. Ford
 	 
	 	Name:  	Rebecca A. Ford 	 	 
	 	Title:  	Duly Authorized Signatory 	 	 
	 
	 	RZB FINANCE, LLC

as Lender

 	 
	 	By:  	/s/ Christoph Hoedl
 	 
	 	Name:  	Christoph Hoedl 	 	 
	 	Title:  	Group Vice President 	 	 
	 
	 	RZB FINANCE, LLC

as Lender

 	 
	 	By:  	/s/ John A. Valiska
 	 
	 	Name:  	John A. Valiska 	 	 
	 	Title:  	First Vice President 	 	 
	 

7

 

	 	 	 	 	 
	 	US BANK N.A.

as Lender

 	 
	 	By:  	/s/ Matthew Kasper
 	 
	 	Name:  	Matthew Kasper 	 	 
	 	Title:  	Assistant Vice President 	 	 
	 
	 	KEY BANK NATIONAL ASSOCIATION

as Lender

 	 
	 	By:  	/s/ Nadine M. Eames
 	 
	 	Name:  	Nadine M. Eames 	 	 
	 	Title:  	Vice President 	 	 
	 

	 	 	 	 	 	 	 	 
	 	WEBSTER BUSINESS CREDIT CORPORATION	 	 
	 	as Lender	 	 
	 
	 	 	 	 	 	 	 
	 

	By:	 	 	 	 	 	 
	 	 	 	 	 	 	 	 
	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 	 
	 	Title:	 	 	 	 
	 

	 	 	 	 	 

	 	 
	 
	 	 	 	 	 	 	 
	 	LASALLE BUSINESS CREDIT, LLC	 	 
	 	as Lender	 	 
	 
	 	 	 	 	 	 	 
	 

	By:	 	 	 	 	 	 
	 	 	 	 	 	 	 	 
	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 	 
	 	Title:	 	 	 	 
	 

	 	 	 	 	 

	 	 

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