Document:

Exhibit 10.4

 

Exhibit 10.4

LIMITED GUARANTY

     This Limited Guaranty (this “Guaranty”) is entered into as of October 15, 2007, by
Banco Santander, S.A. (the “Guarantor”), in favor of Santander Drive Auto Receivables Trust
2007-1 (the “Issuer”), Wells Fargo Bank, National Association, as Indenture Trustee under
the Indenture referred to below (in such capacity, the “Indenture Trustee”), U.S. Bank
Trust National Association, as Owner Trustee under the Trust Agreement (the “Owner
Trustee”) and Financial Guaranty Insurance Company (the “Note Insurer”).

     WHEREAS, Santander Consumer USA Inc., as transferor (the “Transferor”), and Santander Drive
Auto Receivables LLC (the “Depositor”), as purchaser, are parties to that certain Contribution
Agreement dated as of April 4, 2007 (as amended, modified or supplemented from time to time, the
“Contribution Agreement”); and

     WHEREAS, the Issuer, the Transferor, the Depositor and the Indenture Trustee are parties to
that certain Sale and Servicing Agreement dated as of April 4, 2007 (as amended, modified or
supplemented from time to time, the “Sale and Servicing Agreement”); and

     WHEREAS, the Issuer, the Transferor, the Owner Trustee and the Indenture Trustee are parties
to that certain Administration Agreement dated as of April 4, 2007 (as amended, modified or
supplemented from time to time, the “Administration Agreement”); and

     WHEREAS, the Issuer and Indenture Trustee are parties to that certain Indenture dated as of
April 4, 2007 (as amended, modified or supplemented from time to time, the “Indenture”)
pursuant to which the Issuer has issued the Notes; and

     WHEREAS, the Note Insurer, the Transferor, the Depositor, the Issuer, the Owner Trustee and
the Indenture Trustee are parties to that certain Insurance Agreement dated as of April 4, 2007
(the “Insurance Agreement”); and

     WHEREAS, the Note Insurer issued its Financial Guaranty Insurance Policy (the “Note
Insurance Policy”) on April 4, 2007, guaranteeing certain payments due under the Notes as fully
set forth in the Note Insurance Policy; and

     WHEREAS, the Note Insurer, the Transferor, the Depositor, the Issuer, the Owner Trustee and
the Indenture Trustee are parties to that certain First Amendment to Insurance Agreement dated as
of even date herewith (the “First Amendment to Insurance Agreement”); and

     WHEREAS, the Issuer, the Transferor, the Depositor and the Indenture Trustee are parties to
that certain Second Amendment to Sale and Servicing Agreement dated as of even date herewith (the
“Second Amendment to Sale and Servicing Agreement”); and

     WHEREAS, it is a condition precedent to the Note Insurer’s execution of the First Amendment to
Insurance Agreement and consent to the Second Amendment to Sale and Servicing Agreement that the
Guarantor enter into this Guaranty;

Limited Guaranty

 

 

     WHEREAS, the Guarantor will receive substantial direct and indirect benefits from the
consummation of the transactions contemplated by the Contribution Agreement, the Sale and Servicing
Agreement, the Administration Agreement and the Indenture; and

     NOW, THEREFORE, in consideration of the premises and the mutual covenants set forth herein,
and for other good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged by the Guarantor, the parties hereto agree as follows:

     Section 1. Definitions. Unless otherwise defined in this Guaranty, all defined terms used in
this Guaranty shall have the meanings ascribed to such terms in Appendix A to the Sale and
Servicing Agreement.

     Section 2. Guaranty of Obligations.

     (a) The Guarantor hereby absolutely, irrevocably and unconditionally guarantees for the
benefit of the Issuer, the Owner Trustee, the Indenture Trustee, the Noteholders and the Note
Insurer, the due and punctual performance by the Transferor (as servicer, custodian, if applicable,
and/or in its individual capacity) of its covenants, agreements and obligations contained in (i)
the Contribution Agreement; (ii) the Sale and Servicing Agreement, (iii) the Insurance Agreement
and (iv) the Administration Agreement (together, the “Obligations”).

     (b) For the avoidance of doubt, the Guarantor shall have no obligation to guaranty (and does
not guaranty) any obligations of the Obligors under the Receivables or any obligation of the Issuer
under the Indenture.

     Section 3. Unconditionality; Irrevocability. (a) This is an absolute, unconditional and
continuing guaranty of payment and performance of all Obligations, and the Guarantor agrees that
its obligations under this Guaranty shall be irrevocable. The dissolution, insolvency or
adjudication of bankruptcy of the Guarantor shall not revoke this Guaranty.

     (b) No act or thing need occur to establish the liability or obligation of the Guarantor
hereunder, and no act or thing, except full payment, discharge and performance of all Obligations,
shall in any way exonerate the Guarantor hereunder or modify, reduce, limit or release the
liability of Guarantor hereunder. None of Issuer, the Indenture Trustee or the Note Insurer shall
be required first to resort to payment of the Obligations by the Transferor or other Person, or
their properties, before enforcing this Guaranty. Until payment in full of the Obligations, the
Obligations of the Guarantor under this Guaranty shall not be affected, modified or impaired upon
the happening from time to time of any event, including, without limitation, the events described
in Section 4 herein, whether or not with notice to or the consent of the Guarantor.

     (c) The Guarantor further agrees that, if any payment applied hereunder to the Obligations is
thereafter set aside, recovered, rescinded or required to be returned for any reason (including,
without limitation, the bankruptcy, insolvency or reorganization of the Transferor or any other
obligor) or declared to be fraudulent or preferential, the Obligations to which such payment was
applied shall for the purpose of this Guaranty be deemed to have continued in existence,
notwithstanding such payment, and this Guaranty shall be enforceable as to such

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Obligations as fully as if such payment had never been made. The provisions of this
Section 3(c) hereof shall survive any termination of this Guaranty.

     Section 4. Continuation and Validity of Obligations. The liability of the Guarantor shall
not be affected or impaired by any of the following events: (a) the validity, enforceability,
discharge, disaffirmance, settlement or compromise (by any Person, including any trustee in
bankruptcy or other similar official) of the Obligations or of the Transaction Documents, (b) the
absence of any attempt to collect the Obligations from the Transferor or any guarantor or other
Person, (c) the waiver or consent by the Issuer, the Indenture Trustee, the Note Insurer, or any
other Person with respect to any provision of any instrument or agreement evidencing the
Obligations, any delay or lack of diligence in the enforcement of the Obligations, or any failure
to institute proceedings, file a claim, give any required notices or otherwise protect the
Obligations, (d) any change of the time, manner or place of payment or performance, or any other
term of any of the Obligations, (e) any law, regulation or order of any jurisdiction affecting any
term of any of the Obligations or rights of the Issuer, the Indenture Trustee or the Note Insurer
with respect thereto, (f) the failure by the Indenture Trustee to take any steps to perfect and
maintain perfected its interest in the Receivables, Financed Vehicles or other property acquired
from the Issuer or any security or collateral related to the Obligations, (g) the commencement of
any bankruptcy, insolvency or similar proceeding with respect to the Transferor, the Issuer or the
Depositor or any other affiliate of the Transferor, (h) any full or partial release of, compromise
or settlement with, or agreement not to sue, the Transferor or any guarantor or other person liable
in respect of any Obligations, (i) any release, surrender, cancellation or other discharge of any
evidence of the Obligations or the acceptance of any instrument in renewal or substitution thereof,
(j) any collection, sale, lease or disposition of, or any other enforcement of or realization on,
any Receivable or Financed Vehicle, (k) any assignment, pledge or other transfer of the Obligations
or any evidence thereof, (l) any acceptance of collateral security, guarantors, accommodation
parties or sureties for any or all Obligations, (m) any change in the existing relationship between
the Guarantor and the Transferor including, without limitation, any sale or other transfer of the
stock of the Transferor by the Guarantor or (n) any legal or equitable discharge or defense of the
Guarantor. The Guarantor waives any and all defenses and discharges available to a surety,
guarantor or accommodation co-obligor.

     Section 5. Representations and Warranties. The Guarantor hereby makes the following
representations and warranties as of the date hereof on which the Issuer, the Indenture Trustee and
the Note Insurer will be deemed to have relied in acquiring the Transferred Assets or the pledge of
the Collateral (as defined in the Indenture), as the case may be or, in the case of the Note
Insurer, in issuing the Note Insurance Policy:

     (a) Existence and Power. The Guarantor is a corporation duly incorporated, validly existing
and in good standing under the laws of the Kingdom of Spain and has all power and authority
required to carry on its business as it is presently conducted and to execute, deliver and perform
this Guaranty. The Guarantor has obtained all necessary licenses and approvals, in all
jurisdictions where the failure to do so would materially and adversely affect the financial
condition, business or operations of the Guarantor, taken as a whole.

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     (b) Corporate Authorization and No Contravention. The execution, delivery and performance by
the Guarantor of this Guaranty has been duly authorized by all necessary corporate action and does
not contravene or constitute a default under (i) any applicable law, rule or regulation, (ii) its
organizational documents or (iii) any material agreement, material contract, order or other
material instrument to which it is a party or its property is subject, except where such
contravention or default would not have a material adverse effect on the enforceability or
collectibility of the Receivables or the financial condition, business or operations of the
Guarantor, taken as a whole.

     (c) No Consent Required. No approval or authorization by, or filing with, any (a) Federal,
state, municipal, foreign or other governmental entity, board, bureau, agency or instrumentality,
(b) administrative or regulatory authority (including any central bank or similar authority) or (c)
court or judicial authority is required in connection with the execution, delivery and performance
by the Guarantor of this Guaranty other than (i) approvals and authorizations that have previously
been obtained and filings that have previously been made or approvals, authorizations or filings
which will be made on a timely basis and (ii) approval, authorizations or filings which, if not
obtained or made, would not have a material adverse effect on the financial condition, business or
operations of the Guarantor, taken as a whole.

     (d) Binding Effect. This Guaranty constitutes the legal, valid and binding obligation of the
Guarantor enforceable against the Guarantor in accordance with its terms, except as limited by
bankruptcy, insolvency, or other similar laws of general application relating to or affecting the
enforcement of creditors’ rights generally and subject to general principles of equity.

     (e) No Proceedings. There are no actions, suits or proceedings pending or, to the knowledge
of the Guarantor, threatened against the Guarantor before or by any Governmental Authority that (i)
assert the invalidity or unenforceability of this Guaranty, (ii) seeking to prevent the
consummation of any of the transactions contemplated by this Guaranty, (iii) seeking any
determination or ruling that would materially and adversely affect the performance by the Guarantor
of its obligations under this Guaranty or (iv) seeking any determination or ruling that would
adversely affect the validity or enforceability of this Guaranty.

     (f) Benefits. The Guarantor has a direct and substantial economic interest in the Transferor
and expects to derive substantial benefits therefrom and from the transaction described in the
Transaction Documents, any loans, credit transactions, financial accommodations, discounts,
purchases of property and other transactions and events resulting in the creation of Obligations
and the other obligations guaranteed hereby, and this Guaranty shall be effective and enforceable
by the Issuer, the Indenture Trustee and the Note Insurer without regard to the receipt, nature or
value of any such benefits.

     (g) Solvency. The Guarantor is not insolvent nor will it be rendered insolvent by virtue of
entering into or carrying out this Guaranty.

     Section 6. Independent Obligations. The obligations of the Guarantor hereunder are
undertaken as primary obligor and independently of the obligations of the Transferor, or any other
obligor, guarantor or Person, and action or actions may be brought or prosecuted directly

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against the Guarantor whether or not action is brought first or at all against the Transferor,
the Depositor or any other obligor, guarantor or Person, against any collateral security or any
other circumstance whatsoever, and whether or not the Transferor or any other obligor, guarantor or
Person is joined in any such action or actions, or any claims or demands are made or are not made,
or any action is taken on or against the Transferor, any other obligor, guarantor or Person or any
collateral security or otherwise.

     Section 7. Waivers. The Guarantor waives any and all defenses, claims, setoffs and
discharges of the Transferor, or any other obligor, pertaining to the Obligations. Without
limiting the generality of the foregoing or any other provision hereof, to the fullest extent
permitted by applicable law, the Guarantor hereby waives: (a) any defense arising by reason of any
invalidity or unenforceability of the Transferor’s obligations in respect of the Transaction
Documents, any manner in which the Issuer, the Indenture Trustee or the Note Insurer have exercised
(or not exercised) any rights and remedies under the Transaction Documents or the Notes, or any
cessation from any cause whatsoever of the liability of any obligor, guarantor or Person; (b) all
presentments, demands for performance, notices of nonperformance, protests, notices of protest,
notices of dishonor and notices of acceptance of the Transaction Documents (including this
Guaranty); (c) any release of any of the Collateral (as defined in the Indenture) provided under
the Indenture or other Transaction Documents; (d) notice of any indulgences, extensions, consents
or waivers given to the Transferor or any other obligor, guarantor or Person, notice of any
Servicer Termination Event under the Sale and Servicing Agreement, any Default or Event of Default
under the Indenture or default or event of default under any of the other Transaction Documents or
other notice of any kind whatsoever; (e) any right or claim of right to cause the Indenture Trustee
or the Note Insurer to proceed against the Transferor or any other obligor, guarantor or Person in
any particular order, to proceed against or exhaust any collateral security held by the Issuer, the
Indenture Trustee or the Note Insurer at any time or to pursue any other right or remedy whatsoever
at any time; (f) any requirement of diligence or promptness on the Issuer’s, the Indenture
Trustee’s or the Note Insurer’s part in (X) making any claim or demand on or commencing suit
against the Transferor or any other obligor, guarantor or Person, and (Y) otherwise enforcing the
Issuer’s, the Indenture Trustee’s or the Note Insurer’s rights in respect of the Indenture or the
other Transaction Documents; (g) any defense of waiver, release, discharge in bankruptcy, statute
of limitations, res judicata, statute of frauds, anti-deficiency statute, fraud, usury, illegality
or unenforceability which may be available to any person liable in respect of any Obligations, or
any setoff available against, the Issuer, the Indenture Trustee or the Note Insurer to the
Transferor or any other such person, whether or not on account of a related transaction; and (h)
any duty of the Issuer, the Indenture Trustee or the Note Insurer to advise the Guarantor of any
information known to the Issuer, the Indenture Trustee or the Note Insurer regarding the financial
condition of the Transferor or any other circumstance, it being agreed that the Guarantor assumes
responsibility for being and keeping informed of such condition or any such circumstance.

     Without limiting the generality of the foregoing, to the fullest extent permitted by
applicable law, the Guarantor specifically waives all defenses the Guarantor may have based upon
any election of remedies by the Issuer, the Indenture Trustee or the Note Insurer which destroys
the Guarantor’s rights to proceed against the Transferor or any other obligor, guarantor or Person
for reimbursement, contribution or otherwise, including any loss of rights that it may suffer by
reason of any rights, powers, remedies or defenses of the Transferor in connection with

5

 

any laws limiting, qualifying or discharging indebtedness of or remedies against the
Transferor, and the Guarantor hereby agrees not to exercise or pursue, so long as any of the
Obligations remain unsatisfied, any right to reimbursement, subrogation, or contribution from the
Transferor in respect of payments hereunder.

     Section 8. Significance of Waivers. The Guarantor represents, warrants and agrees that each
of the waivers set forth herein are made with the Guarantor’s full knowledge of its significance
and consequences, with the understanding that events giving rise to any defense waived may
diminish, destroy or otherwise adversely affect rights which the Guarantor otherwise may have
against the Transferor or any other obligor, guarantor or Person, or against collateral, and that
under the circumstances the waivers are reasonable.

     Section 9. Reimbursement. The Guarantor shall pay or reimburse all costs and expenses
(including reasonable attorneys’ fees and legal expenses) incurred by the Owner Trustee, the
Indenture Trustee or the Note Insurer in connection with the protection, defense or enforcement of
this Guaranty in any litigation or bankruptcy or insolvency proceedings.

     Section 10. Cumulative Liability. The liability of the Guarantor under this Guaranty is in
addition to and shall be cumulative with all other liabilities of the Guarantor as Guarantor,
surety, endorser, accommodation co-obligor or otherwise of any Obligations or obligation of the
Transferor, without any limitation as to amount.

     Section 11. Nonpetition Covenant. Each party hereto agrees that, prior to the date which is
one year and one day after payment in full of all obligations of each Bankruptcy Remote Party in
respect of all securities issued by any Bankruptcy Remote Party (i) such party shall not authorize
any Bankruptcy Remote Party to commence a voluntary winding up or other voluntary case or other
proceeding seeking liquidation, reorganization or other relief with respect to such Bankruptcy
Remote Party or its debts under any bankruptcy, insolvency or other similar law now or hereafter in
effect in any jurisdiction or seeking the appointment of an administrator, a trustee, receiver,
liquidator, custodian, or other similar official with respect to such Bankruptcy Remote Party or
any substantial part of its property or to consent to any such relief or to the appointment of or
taking possession by any such official in an involuntary case or other proceeding commenced against
such Bankruptcy Remote Party, or to make a general assignment for the benefit of, its creditors
generally, any party hereto or any other creditor of such Bankruptcy Remote Party, and (ii) none of
the parties hereto shall commence or join with any other Person in commencing any proceeding
against such Bankruptcy Remote Party under any bankruptcy, reorganization, liquidation or
insolvency law or statute now or hereafter in effect in any jurisdiction.

     Section 12. Amendments. This Guaranty may not be waived, modified, amended, terminated,
released or otherwise changed except by a writing signed by the Guarantor, the Issuer, the Note
Insurer and the Indenture Trustee. The Guarantor may not assign its obligations hereunder without
the prior written consent of the Note Insurer, the Issuer and the Indenture Trustee.

     Section 13. Governing Law. THIS GUARANTY SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE INTERNAL, SUBSTANTIVE LAWS OF

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THE STATE OF NEW YORK INCLUDING SECTIONS 5-1401 AND 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS
LAW BUT EXCLUDING TO THE MAXIMUM EXTENT PERMITTED BY LAW ALL OTHER RULES THEREOF RELATING TO
CONFLICTS OF LAW AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE
DETERMINED IN ACCORDANCE WITH SUCH LAWS.

     Section 14. Submission to Jurisdiction. Each of the parties hereto hereby irrevocably and
unconditionally:

     (a) submits for itself and its property in any legal action or proceeding relating to this
Guaranty or any documents executed and delivered in connection herewith, or for recognition and
enforcement of any judgment in respect thereof, to the nonexclusive general jurisdiction of the
courts of the State of New York, the courts of the United States of America for the Southern
District of New York and appellate courts from any thereof;

     (b) consents that any such action or proceeding may be brought in such courts and waives any
objection that it may now or hereafter have to the venue of such action or proceeding in any such
court or that such action or proceeding was brought in an inconvenient court and agrees not to
plead or claim the same; and

     (c) agrees that nothing herein shall affect the right to effect service of process in any
manner permitted by law or shall limit the right to sue in any other jurisdiction.

     Section 15. Counterparts. This Guaranty may be executed in any number of counterparts, each
of which so executed shall be deemed to be an original, but all such counterparts shall together
constitute but one and the same instrument.

     Section 16. Severability of Provisions. If any one or more of the covenants, agreements,
provisions or terms of this Guaranty shall be for any reason whatsoever held invalid, then such
covenants, agreements, provisions or terms shall be deemed severable from the remaining covenants,
agreements, provisions or terms of this Guaranty and shall in no way affect the validity or
enforceability of the other provisions of this Guaranty.

     Section 17. Benefits; Third-party Beneficiary. This Guaranty shall be effective as of the
date hereof, without further act, condition or acceptance by the Issuer, the Indenture Trustee or
the Note Insurer, shall be binding upon the Guarantor and the successors and assigns of the
Guarantor and shall inure to the benefit of the Issuer, the Indenture Trustee and the Note Insurer
and their respective participants, successors and assigns.

     Section 18. Termination. This Guaranty shall terminate upon the payment in full of the
principal balance of the Notes plus any accrued interest thereon and payment in full of all amounts
owed to the Note Insurer pursuant to the terms of the Insurance Agreement; provided, however, that
the provisions of Section 3(c) hereof shall survive any termination of this Guaranty.

     Section 19. Limitation of Liability. Notwithstanding anything contained herein to the
contrary, this Guaranty has been acknowledged by U.S. Bank Trust National Association, not in its
individual capacity but solely as Owner Trustee and in no event shall it have any liability for

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the representation, warranties, covenants agreements or other obligations of the Issuer
hereunder or under the Notes or any of the other Transaction Documents or in any of the
certificates, notices or agreements delivered pursuant thereto, as to all of which recourse shall
be had solely to the assets of the Issuer. Under no circumstances shall the Owner Trustee be
personally liable for the payment of any indebtedness or expense of the Issuer or be liable for the
breach or failure of any obligation, representation, warranty or covenant made or undertaken by the
Issuer under the Transaction Documents. For the purposes of this Guaranty, in the performance of
its duties or obligations hereunder, the Owner Trustee shall be subject to, and entitled to the
benefits of, the terms and provisions of Articles VI, VII and VIII of the
Trust Agreement.

[rest of page left intentionally blank]

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     IN WITNESS WHEREOF, this Guaranty has been duly executed by the parties hereto as of the date
and year first above written.

	 	 	 	 	 
	 

	 	BANCO SANTANDER, S.A., as Guarantor
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Jose Antonio Soler
	 

	 	 	 	 
	 

	 	Name: Jose Antonio Soler

Title:   Head of Financial Management

 

 

	 	 	 	 	 
	 

	 	ACKNOWLEDGED:
	 
	 	 	 	 
	 

	 	WELLS FARGO BANK,
NATIONAL ASSOCIATION, not in its

individual capacity, but solely as Indenture Trustee
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Edna Barber
	 

	 	 	 	 
	 

	 	Name: Edna Barber

Title:   Assistant Vice President

 

 

	 	 	 	 	 
	 

	 	SANTANDER DRIVE AUTO RECEIVABLES TRUST 2007-1
	 
	 	 	 	 
	 

	 	By: U.S. BANK TRUST NATIONAL ASSOCIATION, not in its individual capacity, but
solely as Owner Trustee
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Annette E. Morgan
	 

	 	 	 	 
	 

	 	Name: Annette E. Morgan

Title:   Trust Officer

 

 

	 	 	 	 	 
	 

	 	U.S. BANK TRUST NATIONAL ASSOCIATION, not in its
individual capacity, but solely as Owner Trustee
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Annette E. Morgan
	 

	 	 	 	 
	 

	 	Name: Annette E. Morgan

Title:   Trust Officer

 

 

	 	 	 	 	 
	 

	 	FINANCIAL GUARANTY INSURANCE COMPANY
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Katya Sverdlov
	 

	 	 	 	 
	 

	 	Name: Katya Sverdlov

Title:   Vice PresidentEX-10.1

 

Exhibit 10.1

AMENDED AND RESTATED

AGREEMENT

          This Amended and Restated Agreement made as of this 16th day of October, 2007 by and between
Black Box Corporation, a Delaware corporation (the “Corporation”), and R. Terry Blakemore, an
individual residing in the State of Tennessee and the President and Chief Executive Officer of the
Corporation (the “Executive”).

WITNESSETH:

          WHEREAS, the Board of Directors of the Corporation has determined that, in connection with
Executive’s appointment as President and Chief Executive Officer of the Corporation, it is in the
best interests of the Corporation to enter into this Agreement with the Executive to supersede the
current Agreement between the parties; and

          WHEREAS, the Executive desires to obtain certain benefits in the event the Executive’s
employment is terminated;

          NOW, THEREFORE, the parties hereto, each intending to be legally bound hereby, agree as
follows:

	1.	 	Definition of Terms The following terms when used in this Agreement shall have the
meaning hereafter set forth:

	 	(a)	 	“Annual Salary Adjustment Percentage” shall mean the mean average
percentage increase in base salary for all executive officers of the Corporation
during the two full calendar years immediately preceding the time to which such
percentage is being applied; provided, however, that if after a
Change-in-Control, as hereinafter defined, there should be a significant change
in the number of executive officers of the Corporation or in the manner in which
they are compensated, then the foregoing definition shall be changed by
substituting for the phrase “executive officers of the Corporation” the phrase
“persons then performing the functions formerly performed by the executive
officers of the Corporation.”
	 
	 	(b)	 	“Cause for Termination” shall mean:

	 	(i)	 	the deliberate and intentional failure by the
Executive to devote substantially the Executive’s entire business time
and best efforts to the performance of the Executive’s duties (other than
any such 

 

 

	 	 	 	failure resulting from the Executive’s incapacity due to physical or mental
illness or disability); or

	 	(ii)	 	engaging by the Executive in gross misconduct
materially and demonstrably injurious to the Corporation; or
	 
	 	(iii)	 	the conviction of the Executive of, or the entry
of a plea of guilty or Nolo Contendre by the Executive to, a crime
involving an act of fraud or embezzlement against the Corporation or the
conviction of the Executive of, or the entry of a plea of Nolo Contendre
by the Executive to, any felony involving moral turpitude; or
	 
	 	(iv)	 	the Executive’s material breach of Section 4 or
Section 8 hereof which continues for ten (10) days after receiving
written notice thereof from the Corporation or the Executive’s willful
failure to comply with instructions of the Board of Directors of the
Corporation provided that such instructions would not give rise to Good
Reason for Termination.

For purposes of this definition, no act, or failure to act, on the Executive’s
part shall be considered “deliberate and intentional” or to constitute gross
misconduct unless done, or omitted to be done, by the Executive not in good
faith and without reasonable belief that the Executive’s action or omission
was in the best interests of the Corporation.

	 	(c)	 	“Change-in-Control” shall mean a change in control of the
Corporation of such a nature that it would be required to be reported by the
Corporation in response to Item 6(e) of Schedule 14A of Regulation 14A
promulgated under the Securities Exchange Act of 1934, as in effect on the date
hereof (“Exchange Act”); provided, however, that:

	 	(i)	 	without respect to the foregoing, such a change in
control shall be deemed to have occurred if any “person” (as such term is
used in sections 13(d) and 14(d)(2) of the Exchange Act) or any “group”
(as such term is defined in Rule 13d-5(b) promulgated under the Exchange
Act), is or becomes the beneficial owner, directly or indirectly, of
securities of the Corporation representing twenty percent (20%) or more
of the combined voting power of the Corporation’s then outstanding
securities coupled with or followed by the existence of a majority of the
board of directors of the

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	 	 	 	Corporation consisting of individuals other than individuals who either were directors of the Corporation at least one year prior to
or were nominated by those individuals who were directors of the
Corporation at least one year prior to such person or group becoming
a beneficial owner, directly or indirectly, of securities of the
Corporation representing 20% or more of the combined voting power of
the Corporation’s then outstanding securities;

and

	 	(ii)	 	without respect to the foregoing, if the
Corporation shall sell all or substantially all of its assets or shall
merge, consolidate or reorganize with another company, then such a change
in control shall be deemed to have occurred if (x) upon conclusion of the
transaction less than fifty-one percent (51%) of the outstanding
securities entitled to vote generally in the election of directors of the
acquiring company or resulting company are owned by persons who were the
stockholders of the Corporation generally prior to the transaction and
following the transaction a majority of the board of directors of the
acquiring company or resulting company consists of individuals other than
individuals who either were directors of the Corporation at least one
year prior to or were nominated by those individuals who were directors
of the Corporation at least one year prior to such sale, merger,
consolidation or reorganization or (y) following the transaction a person
or group (as described in subclause (i) above) would be a beneficial
owner, directly or indirectly, of securities of the acquiring company or
resulting company representing 20% or more of the combined voting power
of the acquiring company’s or resulting company’s then outstanding
securities as described in subclause (i) above and a majority of the
board of directors of the acquiring company or resulting company consists
of individuals other than individuals who either were directors of the
Corporation at least one year prior to or were nominated by those
individuals who were directors of the Corporation at least one year prior
to such sale, merger, consolidation or reorganization.

	 	(d)	 	“Date of Termination” shall mean:

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	 	(i)	 	if the Executive’s employment is terminated for
Disability, the date that a Notice of Termination is given to the
Executive;

	 	(ii)	 	if the Executive’s employment terminates due to the
Executive’s death or Retirement, the date of death or Retirement,
respectively;
	 
	 	(iii)	 	if the Executive decides to terminate employment
upon Good Reason for Termination, the date specified by the Executive in
a Notice of Termination, which date must be within sixty (60) days after
the expiration of the Notice Period (as defined in Section 3(c) below);
or
	 
	 	(iv)	 	if the Executive’s employment is terminated for any
other reason, the date on which a termination becomes effective pursuant
to a Notice of Termination or, if no Notice of Termination is provided,
the date that the Executive’s employment was terminated.

	 	(e)	 	“Disability” shall mean such incapacity due to physical or mental
illness or injury as causes the Executive to be unable to perform the Executive’s
duties with the Corporation during 90 consecutive days or 120 days during any six
month period.

	 	(f)	 	“Good Reason for Termination” shall mean a material negative change
in the Executive’s service relationship with the Corporation and any Affiliate
(as defined in this Section 1(f) below) of the Corporation, taken as a whole,
without Executive’s consent, on account of one or more of the following
conditions:

	 	(i)	 	A material diminution in Executive’s base
compensation;

	 	(ii)	 	A material diminution in Executive’s authority,
duties or responsibilities; or

	 	(iii)	 	After a Change-in-Control shall have occurred, a
change in the geographic location at which Executive must report to and
perform the majority of Executive’s services of more than fifty (50)
miles.

-4-

 

“Affiliate” shall mean, with respect to any person or legal entity, any
other person or legal entity controlling, controlled by or under common
control with such person or legal entity.

	 	(g)	 	“LTIP Plan” shall mean an incentive compensation plan of the
Corporation which would pay bonuses to the Executive based upon the achievement
of specified goals during or at the end of an award period of more than one year
(such as a three year incentive compensation plan).
	 
	 	(h)	 	“Notice of Termination” shall mean a written statement which sets
forth the specific reason for termination and, if such is claimed to be Cause for
Termination or Good Reason for Termination, in reasonable detail the facts and
circumstances thereof.
	 
	 	(i)	 	“Options” shall mean any stock options issued pursuant to any
present or future stock option plan of the Corporation.
	 
	 	(j)	 	“Retirement” shall mean a termination of the Executive’s employment
after age 65 or in accordance with any mandatory retirement arrangement with
respect to an earlier age agreed to by the Executive.
	 
	 	(k)	 	“Stock Awards” shall mean any stock-based awards, other than
Options, including any stock appreciation rights, restricted stock awards, or
performance stock awards, issued pursuant to any present or future stock plan of
the Corporation.

	2.	 	Termination by the Corporation Due to Cause for Termination. Should the Board of
Directors of the Corporation determine that Cause for Termination exists, the Board of
Directors of the Corporation by resolution duly adopted may at that time or during a period of
two months thereafter terminate the Executive’s employment due to Cause for Termination by
delivering a Notice of Termination. If the Board of Directors of the Corporation fails to
duly adopt within such two month period a resolution terminating the Executive’s employment,
then the Corporation shall be deemed to have waived its right to terminate the Executive due
to those circumstances which constituted the Cause for Termination previously found to exist
by the Board.
	 
	3.	 	Payments Following Termination of Employment.

-5-

 

	 	(a)	 	If during the term of this Agreement the Executive’s employment
with the Corporation shall be terminated:

(i)     due to the Executive’s death or Disability,

(ii)     by the Executive other than the Executive’s having
terminated for Good Reason for Termination or

(iii)     by the Corporation in accordance with Section 2 hereof or in accordance
with Retirement,

then the Corporation shall have no obligations hereunder to the Executive from
and after the Date of Termination and the only obligations of the Corporation
to the Executive shall be in accordance with any other employment agreement
applicable to the Executive and the then various policies, practices and
benefit plans of the Corporation.

	 	(b)	 	If during the term of this Agreement a Change-in-Control shall have
occurred and the Executive’s employment shall have been involuntarily terminated
on or before the second anniversary of the date of the Change-in-Control other
than under the circumstances above described in subsection 3(a) (for example, a
termination by the Executive for Good Reason for Termination within the foregoing
period following a Change-in-Control shall entitle the Executive to the payments
set forth in this subsection), then the Corporation shall pay the Executive on or
before the sixtieth (60th) day following the Date of Termination the following
sums:

	 	(i)	 	in cash any unpaid portion of the Executive’s full
base salary for the period from the last period for which the Executive
was paid to the Date of Termination; and

	 	(ii)	 	an amount in cash as liquidated damages for lost
future remuneration equal to the sum of

	 	(A)	 	the product obtained by multiplying:

	 	(1)	 	the lesser of

	 	(i)	 	three (3.0), or

-6-

 

	 
	 	(ii)	 	a number equal to the number of calendar
months remaining from the Date of Termination to
the date on which the Executive is 65 years of age
(or, if earlier, the age agreed to by the Executive
pursuant to any prior arrangement) divided by
twelve,

	 	times	 	 

	 	(2)	 	the sum of

	 	(i)	 	the greatest of

(x) the Executive’s annual base salary for the
year in effect on the Date of Termination,

(y) in the case of termination by the
Executive for Good Reason for Termination, the
Executive’s annual base salary in effect on
the date immediately preceding the date of the
earliest event which gave rise to the
termination by the Executive for Good Reason
for Termination,

or

(z) the Executive’s annual base salary for the
year in effect on the date of the
Change-in-Control,

plus

	 	(ii)	 	the greatest of

(x) one third (1/3) of the aggregate cash
bonuses or awards (including any payments
under an LTIP Plan) received by the Executive
as incentive compensation or bonus during the
three calendar years immediately preceding the
Date of Termination

-7-

 

(y) in the case of termination by the
Executive for Good Reason for Termination, one
third (1/3) of the aggregate cash bonuses or
awards (including any payments under an LTIP Plan)
received by the Executive as incentive
compensation or bonus during the three calendar years immediately preceding the date
of the earliest event which gave rise to the
termination by the Executive for Good Reason
for Termination,

or

(z) one third (1/3) of the aggregate cash
bonuses or awards (including any payments
under an LTIP Plan) received by the Executive
as incentive compensation or bonus for the
three calendar years immediately preceding the
date of the Change-in-Control,

plus

(B) if the Executive immediately preceding the date of the
Change-in-Control is a participant in an LTIP Plan and the award
period has not been completed prior to the date of the
Change-in-Control, an amount equal to

(1) the total cash
award or bonus which would have been received by the
Executive under such LTIP Plan assuming that, in
addition to any goals met on or before the date of the
Change-in-Control, all goals that were to be measured
after the date of the Change-in-Control were achieved
and the Executive remained in the employ of the
Corporation at all relevant times under the LTIP Plan,

less

-8-

 

(2) any portion of
the cash award or bonus for that award period
previously paid to the Executive pursuant to such LTIP
Plan.

	 	(c)	 	If during the term of this Agreement and prior to a
Change-in-Control occurring, the Executive’s employment with the Corporation
shall have been involuntarily terminated (x) by the Corporation other than under the
circumstances above described in subsection 3(a)(i) or 3(a)(iii) or (y) by the
Executive for Good Reason for Termination other than at a time when the
Corporation could have terminated the Executive due to Cause for Termination, then the Corporation shall make a payment to the Executive equal to his base
salary at the rate in effect on the Date of Termination for the period equal
to the greater of (A) 36 months from the date of this Agreement or (B) twelve
(12) months from the Date of Termination. The payment will be made in the
form of a lump sum, subject to all applicable withholdings. The payment shall
be made within sixty (60) days following the Termination Date. Except as
specifically set forth in this Section 3(c), the Corporation shall have no
further obligation hereunder to the Executive from and after the Date of
Termination other than obligations of the Corporation to the Executive in
accordance with the then various policies, practices and benefit plans of the
Corporation or any of its Affiliates applicable to Executive.

	 	(d)	 	In order for the Executive to terminate for Good Reason for
Termination under this Agreement, (i) the Executive must deliver a Notice of
Termination to the Corporation at 1000 Park Drive, Lawrence, PA 15055, Attn:
General Counsel, and within ninety (90) days of the event constituting Good
Reason for Termination, (ii) the event must remain uncorrected during the Notice
Period and (iii) the Date of Termination must occur within sixty (60) days after
the expiration of the Notice Period. “Notice Period” means the thirty (30) days
following the date that Executive notifies the Corporation in writing of
Executive’s intent to terminate employment for Good Reason for Termination.

	4.	 	Nondisclosure of Information.

	 	(a)	 	Executive acknowledges that the Corporation has invested and will
continue to invest considerable resources in the research, development and
advancement of the Corporation’s business, which investment has or may result in
the generation of proprietary, confidential and/or trade secret data,
information, techniques and materials, tangible and intangible, which 

-9-

 

\

	 	 	 	properly belong to the Corporation or in which the Corporation has an interest. Executive
acknowledges and agrees that it would be unlawful for Executive to appropriate,
to attempt to appropriate, or to disclose to anyone or use for a third party’s
benefit such data, information, techniques or materials, subject to the
following:

	 	(i)	 	Executive acknowledges that the following
constitute protectable confidential, trade secret or otherwise
proprietary information of the Corporation or of a third party: all
computer software and firmware and computer aided mechanisms related to
the foregoing, files, programs, data or information received by the
Corporation from a customer or prospective customer of the Corporation if
such is confidential or proprietary to the customer, data base management
systems or other instrumentations, any proposals for development, any
reports on findings of tests, investigative studies, consultations or the
like, pricing policies, budgets, customer lists, strategic plans (whether
or not communicated in writing), marketing and sales information, all
written documents not generally in the public domain, any and all copies
or imitations of the foregoing, and all other confidential, trade secret
or proprietary information, whether or not copyrighted or patented and
whether created solely by Executive, jointly with others, or solely by
others.

	 	(ii)	 	For purposes of this Section 4, all confidential,
proprietary or trade secret information enumerated or mentioned in
Section 4(a)(i) is hereinafter referred to as “Information”. Any
restrictions on disclosure and use of the Information will apply to all
copies of the Information, whether in whole or in part.
	 
	 	(iii)	 	During the term of this Agreement and at all times
after termination of this Agreement, unless authorized in writing by the
Corporation, the Executive will not:

	 	(1)	 	use for the Executive’s benefit
or advantage the Information or
	 
	 	(2)	 	use the Information for the
benefit or advantage of any third party or

-10-

 

	 
	 	(3)	 	disclose or cause to be disclosed
the Information or authorize or permit such disclosure of the
Information to any unauthorized third party or
	 
	 	(4)	 	use the Information in any manner
which is intended to injure or cause loss, whether directly or
indirectly, to the Corporation.

	 	(iv)	 	The Executive will not be liable for the disclosure
of Information which:

	 	(1)	 	is in the public domain generally
and as such becomes known to Executive through no wrongful act
or breach of this Agreement; or
	 
	 	(2)	 	is received rightfully by
Executive from a third party having a lawful right to possess
and to release the Information, provided the Executive agrees to
promptly notify the Corporation if the Executive suspects that
the information possessed by the third party is within the
meaning of Information under this Agreement.

	 	(v)	 	In any judicial proceeding, it will be presumed
that the Information constitutes protectable trade secrets, and the
Executive will bear the burden of proving that any Information is
publicly or rightfully known by the Executive.
	 
	 	(vi)	 	The Executive will surrender to the Corporation at
any time upon request, and upon termination of the Executive’s employment
with the Corporation for any reason, all written or otherwise tangible
documentation representing or embodying the Information, in whatever
form, whether or not copyrighted, patented, or protected as a mask work,
and any copies or imitations of the Information, whether or not made by
the Executive.
	 
	 	(vii)	 	The Executive agrees to be available upon request
for consultation after termination of employment to provide information
and details with respect to any work or activity performed or materials
created by the Executive alone or with others during the Executive’s

-11-

 

	 	 	 	employment by the Corporation. The Executive will be reimbursed for
these services.

	 	(b)	 	Any and all creations, developments, discoveries, inventions, works
of authorship, enhancements, modifications and improvements, including without
limitation computer programs, data bases, data files and the like, (hereinafter
collectively referred to as “Development” or “Developments”), whether or not the
Developments are copyrightable, patentable, protectable as mask works or
otherwise protectable (such as by contract or implied duty), and whether
published or unpublished, conceived, invented, developed, created or produced
by the Executive alone or with others during the term of the Executive’s
employment, whether or not during working hours and whether on the Corporation’s premises or elsewhere, will be the sole and exclusive property
of the Corporation if the Development is:

	 	(i)	 	connected with the Corporation in any way or
	 
	 	(ii)	 	within the scope of the Executive’s duties assigned
or implied in accordance with the Executive’s position or
	 
	 	(iii)	 	a product, service or other item which would be in
competition with the products or services offered by the Corporation or
which is related to the Corporation’s products or services, whether
presently existing, under development or under active consideration or
	 
	 	(iv)	 	in whole or in part, the result of the Executive’s
use of the Corporation’s resources, including without limitation
personnel, computers, data bases, communications facilities, word
processing systems, programs, office facilities or otherwise.

During the term of the Executive’s employment with the Corporation and, if the
Corporation should then so request, after termination of such employment, the
Executive agrees to assign and does hereby assign to the Corporation all
rights in the Developments created by the Executive alone or with others
during the term of the Executive’s employment, and all rights in any
trademarks, copyrights, patents, trade secrets and analogous intellectual
property rights and any applications for registration for same, of the United
States and such foreign countries as the Corporation may designate which are
related to the Developments, including without limitation all accompanying
goodwill and the right to sue for infringement or misappropriation and to

-12-

 

receive all proceeds related to any judgment or settlement of same. The
Executive agrees to execute and deliver to the Corporation any instruments the
Corporation deems necessary to vest in the Corporation sole title to and all
exclusive rights in the Developments created by the Executive alone or with
others during the term of the Executive’s employment, and in all related
trademarks, copyrights, mask work protection rights, and/or patent rights so
created during the term of employment. The Executive agrees to execute and
deliver to the Corporation all proper papers for use in applying for,
obtaining, maintaining, amending and enforcing all such trademarks, copyrights, patents
or such other legal protections as the Corporation may desire. The Executive
further agrees to assist fully the Corporation or its nominees in the
preparation and prosecution of any trademark, copyright, mask work protection,
patent or trade secret arbitration or litigation. The Executive shall
be reimbursed on a reasonable hourly basis consistent with the compensation
provided for herein for the Executive’s services rendered following
termination of employment.

	 	(c)	 	The Executive’s obligations and covenants in this Section 4 will be
binding upon the Executive’s heirs, legal representatives, successors and
assigns.
	 
	 	(d)	 	The Corporation and the Executive agree that the rights conveyed by
this Agreement are of a unique and special nature. The Executive and the
Corporation agree that any violation of this Section 4 will result in immediate
and irreparable harm to the Corporation and that in the event of any actual or
threatened breach or violation of any of the provisions of this Section 4, the
Corporation will be entitled as a matter of right to an injunction or a decree of
specific performance without bond from any equity court of competent
jurisdiction. The Executive waives the right to assert the defense that such
breach or violation can be compensated adequately in damages in an action at law.
Nothing in this Agreement will be construed as prohibiting the Corporation from
pursuing any other remedies at law or in equity available to it for such breach
or violation or threatened violation.

	5.	 	Medical Insurance or Similar Benefit Plans. If the Executive’s employment should
terminate under such circumstance as entitles the Executive to receive payments pursuant to
Section 3(b) hereof, then, to the extent permitted by applicable law and the medical insurance
and benefits policies to which Executive is entitled to participate, Employer shall maintain
Executive’s paid coverage for health insurance (through the payment of Executive’s COBRA
premiums) for the earlier to occur of: (a) Executive attaining the age of 65, (b) the date
Executive is provided by another

-13-

 

	 	 	employer benefits substantially comparable to the benefits
provided by the above-referenced medical plan (which Executive must provide prompt notice with
respect thereto to the Employer) or (c) the expiration of the COBRA Continuation Period (as
defined below). During the applicable period of coverage described in the foregoing sentence,
Executive shall be entitled to benefits, on substantially the same basis as would have
otherwise been provided had Executive not been terminated and Employer will have no obligation
to pay any benefits to, or premiums on behalf of, Executive after such period ends. To the
extent that such benefits are available under the above-referenced medical plan and Executive
had such coverage immediately
prior to termination of employment, such continuation of benefits for Executive shall
also cover Executive’s dependents for so long as Executive is receiving benefits under
this section. The COBRA Continuation Period for medical insurance under this section
shall be deemed to run concurrently with the continuation period federally mandated by
COBRA (generally 18 months), or any other legally mandated and applicable federal,
state, or local coverage period for benefits provided to terminated employees under
the medical plan. For purposes of this Agreement, (a) “COBRA” means the Consolidated
Omnibus Budget Reconciliation Act of 1985, as amended, and (b) “COBRA Continuation
Period” shall mean the continuation period for medical insurance to be provided under
the terms of this Agreement which shall commence on the first day of the calendar
month following the month in which the date of termination falls and generally shall
continue for an 18 month period.

	6.	 	Other Employment. In the event of a termination of employment under the
circumstances above described in Section 3(b) hereof, the Executive shall have no duty to seek
any other employment after termination of the Executive’s employment with the Corporation and
the Corporation hereby waives and agrees not to raise or use any defense based on the position
that the Executive had a duty to mitigate or reduce the amounts due the Executive hereunder by
seeking other employment whether suitable or unsuitable and should the Executive obtain other
employment, then the only effect of such on the obligations of the Corporation hereunder shall
be that the Corporation shall be entitled to credit against any payments which would otherwise
be made pursuant to Sections 5(a) or 5(b) hereof, any comparable payments to which the
Executive is entitled under the employee benefit plans maintained by the Executive’s other
employer or employers in connection with services to such employer or employers after
termination of the Executive’s employment with the Corporation.
	 
	7.	 	Stock Awards and Options. If the Executive’s employment should terminate under the
circumstances described in Section 3(a) hereof, the Executive’s rights, if any, with respect
to any outstanding Stock Awards and/or Options shall be governed by the 

-14-

 

	 	 	plans and any related
agreements pursuant to which such Stock Awards and/or Options were granted. If the
Executive’s employment should terminate under such circumstances as entitle the Executive to
receive payments pursuant to Section 3(b) hereof, then, with respect to each outstanding
Option or Stock Award which did not immediately vest and/or become exercisable upon the
occurrence of a Change-in-Control, such Stock Award or Option shall remain outstanding in
accordance with its terms provided that in any event it shall automatically vest upon
termination of employment and/or become and remain exercisable at any time after termination
of employment until the stated expiration date contained in the grant for such Stock
Award or Option, but not to exceed ten years from the date of grant.
	 
	8.	 	Noncompetition. During the period of employment of Executive by the Corporation and
for five (5) years thereafter, the Executive will not, in any geographic area in which the Corporation is offering its services and products, without the prior written consent of the
Corporation:

	 	(a)	 	directly or indirectly engage in,
	 
	 	(b)	 	assist or have an active interest in (whether as proprietor,
partner, investor, shareholder, officer, director or any type of principal
whatsoever), or
	 
	 	(c)	 	enter the employ of, or act as agent for, or advisor or consultant
to, any person, firm, partnership, association, corporation or business
organization, entity or enterprise which is or is about to become directly or
indirectly engaged in,

	 
	 	 	any business which is competitive with any business of the Corporation or any
subsidiary or affiliate thereof in which Executive is or was engaged; provided,
however, that the foregoing provisions of this paragraph 8 are not intended to
prohibit and shall not prohibit Executive from purchasing, for investment, not in
excess of 1% of any class of stock or other corporate security of any company which is
registered pursuant to Section 12 of the Securities Exchange Act of 1934.
	 
	 	 	Executive acknowledges that the breach by the Executive of the provisions of
this Section 8 would cause irreparable injury to the Corporation, acknowledges and
agrees that remedies at law for any such breach will be inadequate and consents and
agrees that the Corporation shall be entitled, without the necessity of proof of
actual damage, to injunctive relief in any proceedings which may be brought to enforce
the provisions of this Section 8. Executive acknowledges and warrants that the
Executive will be fully able to earn an adequate livelihood for the Executive and the
Executive’s 

-15-

 

	 	 	dependents if this Section 8 should be specifically enforced against the
Executive and that such enforcement will not impair the Executive’s ability to obtain
employment commensurate with the Executive’s abilities and fully acceptable to the
Executive.
	 
	 	 	If the scope of any restriction contained in this Section 8 is too broad to permit
enforcement of such restriction to its full extent, then such restriction shall be
enforced to the maximum extent permitted by law and Executive and the Corporation
hereby consent and agree that such scope may be judicially modified in any proceeding brought
to enforce such restriction.

	9.	 	Terms. This Agreement shall be for an initial term of five years commencing on the
date hereof. This Agreement shall automatically renew for an additional term of one year commencing on the fifth anniversary of the date hereof and for succeeding additional terms
each of one year on each succeeding anniversary thereof until and unless either party sends
written notice of non-renewal to the other party at least six months prior to a renewal date;
provided, however, that if a Change-in-Control shall occur during the initial or renewed term
of this Agreement, then this Agreement shall remain in effect until the second anniversary of
the date of the Change-in-Control.

	10.	 	Miscellaneous.

	 	(a)	 	This Agreement shall be construed under the laws of the
Commonwealth of Pennsylvania.
	 
	 	(b)	 	This Agreement constitutes the entire understanding of the parties
hereto with respect to the subject matter hereof and may only be amended or
modified by written agreement signed by the parties hereto. The parties
acknowledge and agree that this Agreement supersedes, amends and restates in its
entirety, renders null and void and terminates that Agreement by and between the
parties dated May 15, 2007.
	 
	 	(c)	 	The Corporation will require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Corporation, by agreement
in form and substance satisfactory to the Executive, to expressly assume and
agree to perform this Agreement in the same manner required of the Corporation
and to perform it as if no such succession had taken place. Failure of the
Corporation to obtain such agreement prior to the effectiveness of any such

-16-

 

	 	 	 	succession shall be a breach of this Agreement and shall entitle the Executive to
terminate employment due to Good Reason for Termination. As used in this
Agreement, “Corporation” shall mean the Corporation as hereinbefore defined and
any successor to its business and/or assets as aforesaid which executes and
delivers the agreement provided for in this subsection (c) or which otherwise
becomes bound by all the terms and provisions of this Agreement by operation of
law.
	 
	 	(d)	 	This Agreement shall inure to the benefit of and be enforceable by
the Executive and the Corporation and their respective legal representatives,
executors, administrators, successors, heirs, distributees, devisees and
legatees. If the Executive should die while any amounts would still be payable
to the Executive hereunder if the Executive had continued to live, all such
amounts, unless otherwise provided herein, shall be paid in accordance with the terms of this Agreement to the Executive’s devisee, legatee or other designee or,
if there be no such designee, to the Executive’s estate.

	 	(e)	 	Any notice or other communication provided for in this Agreement
shall be in writing and, unless otherwise expressly stated herein, shall be
deemed to have been duly given if mailed by United States registered mail, return
receipt requested, postage prepaid, addressed in the case of the Executive to the
Executive’s office at the Corporation with a copy to the Executive’s residence
and in the case of the Corporation to its principal executive offices, attention
of the Chief Executive Officer.
	 
	 	(f)	 	No provisions of this Agreement may be modified, waived or
discharged unless such waiver, modification or discharge is agreed to in writing
signed by the Executive and approved by resolution of the Board of Directors of
the Corporation. No waiver by either party hereto at any time of any breach by
the other party hereto of, or compliance with, any condition or provision of this
Agreement to be performed by such other party shall be deemed a waiver of similar
or dissimilar provisions or conditions at the same or at any prior or subsequent
time. No agreements or representations, oral or otherwise, express or implied,
with respect to the subject matter hereof have been made by either party which
are not set forth expressly in this Agreement. Nothing contained herein shall
impair the right of the Corporation to terminate the Executive’s employment,
subject to making any payments required to be made hereunder.

-17-

 

	 
	 	(g)	 	The invalidity or unenforceability of any provisions of this
Agreement shall not affect the validity or enforceability of any other provision
of this Agreement, which shall remain in full force and effect.
	 
	 	(h)	 	This Agreement may be executed in one or more counterparts, each of
which shall be deemed to be an original but all of which together will constitute
one and the same instrument.
	 
	 	(i)	 	If litigation should be brought to enforce, interpret or challenge
any provision contained herein, the prevailing party in such litigation, if any,
shall be entitled to its reasonable attorney’s fees and disbursements and other
costs incurred in such litigation and to interest on any money judgment obtained
calculated at the prime rate of interest in effect from time to time at Citizen’s
Bank, N.A. (or its successor), from the date that the payment should have been
made under this Agreement.

	 	(j)	 	Excise Taxes.

(i) For purposes of this subsection 10(j), (1) a Payment shall mean any
payment or distribution in the nature of compensation to or for the benefit of
the Executive, whether paid or payable pursuant to this Agreement or
otherwise; (2) Agreement Payment shall mean a Payment paid or payable pursuant
to this Agreement (disregarding this subsection 10(j)); (2) Net After Tax
Receipts shall mean the Present Value of a Payment net of all taxes imposed on
the Executive with respect thereto under Sections 1 and 4999 of the Internal
Revenue Code of 1986, as amended (the “Code”), determined by applying the
highest marginal rate under Section 1 of the Code applicable to the
Executive’s taxable income for such year; (4) “Present Value” shall mean such
value determined in accordance with Section 280G(d) (4) of the Code; and (5)
“Reduced Amount” shall mean the greatest aggregate amount of Payments, if any,
which (x) is less than the sum of all Payments and (y) results in aggregate
Net After Tax Receipts which are greater than the Net After Tax Receipts which
would result if the aggregate Payments were made.

(ii) Anything in this Agreement to the contrary notwithstanding, in the event
PriceWaterhouseCoopers L.L.P. (or if PriceWaterhouseCoopers L.L.P. is the
audit firm for the Corporation at the time, another accounting firm of
nationally recognized standing selected by Executive) (the “Accounting Firm”)
shall determine that receipt of all Payments would subject the Executive to
tax under Section 4999 of the Code, it shall determine whether

-18-

 

some amount of
Payments would meet the definition of a “Reduced Amount.” If the Accounting
Firm determines that there is a Reduced Amount, the aggregate Agreement
Payments shall be reduced to such Reduced Amount; provided, however, that if
the Reduced Amount exceeds the aggregate Agreement Payments, the aggregate
Payments shall, after the reduction of all Agreement Payments, be reduced (but
not below zero) in the amount of such excess. All determinations made by the
Accounting Firm under this Section shall be binding upon the Corporation and
the Executive and shall be made within 60
days of the occurrence of an event which requires the Corporation to make
payments to the Executive under this Agreement. No later than two business
days following the making of this determination by the Accounting Firm, the
Corporation shall pay to or distribute for the benefit of the Executive such
Payments as are then due to the Executive under this Agreement and shall
promptly pay to or distribute for the benefit of the Executive in the future
such Payments as become due to the Executive under this Agreement. The
Corporation or its successor shall pay for the work done by the Accounting
Firm. In the event that the Accounting Firm is unable or unwilling to make
the determinations to be made under this subsection 10(j) or for any reason
such determinations are not made within 60 days of the occurrence of the event
which requires the Corporation to make payments to the Executive under this
Agreement, the Corporation shall make all Payments as are then due to the
Executive without reduction no later than two business days following the 60th
day after the occurrence of the event which required the Corporation to make
payments to the Executive under this Agreement.

(iii) While it is the intention of the Corporation and the Executive to reduce
the amounts payable or distributable to the Executive hereunder only if the
aggregate Net After Tax Receipts to the Executive would thereby be increased,
as a result of the uncertainty in the application of Section 4999 of the Code
at the time of the initial determination by the Accounting Firm hereunder, it
is possible that amounts will have been paid or distributed by the Corporation
to or for the benefit of the Executive pursuant to this Agreement which should
not have been so paid or distributed (“Overpayments”) or that additional
amounts which will not have been paid or distributed by the Corporation to or
for the benefit of the Executive pursuant to this Agreement could have been so
paid or distributed (“Underpayment”), in each case, consistent with the
calculation of the Reduced Amount hereunder. In the event that the Accounting
Firm, based either upon the assertion of a deficiency by the Internal Revenue
Service against the Corporation or the Executive which the Accounting Firm
believes 

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has a high probability of success or controlling precedent or other
substantial authority, determines that an Overpayment has been made, any such
Overpayment paid or distributed by the Corporation to or for the benefit of
the Executive shall be treated for all purposes as a loan ab initio to the
Executive which the Executive shall repay to the Corporation together with
interest at the applicable federal rate provided for in Section 7872(f) (2) of
the Code; provided, however, that no such loan shall be deemed to have been
made and no amount shall be payable by the Executive to the Corporation if and
to the extent such deemed loan and
payment would not either reduce the amount on which the Executive is subject
to tax under Section 1 and Section 4999 of the Code or generate a refund of
such taxes. In the event that the Accounting Firm, based upon controlling
precedent or other substantial authority, determines that an Underpayment has
occurred, any such Underpayment shall be promptly paid by the Corporation to
or for the benefit of the Executive together with interest at the applicable
federal rate provided for in Section 7872(f) (2) of the Code.

	 	(k)	 	The payments to be made under this Agreement are intended to be
excepted from coverage under Section 409A of the Code (“Section 409A”) and the
regulations promulgated thereunder and shall be construed accordingly. If the
Corporation determines in good faith that any amounts to be paid to Executive
under this Agreement are subject to Section 409A, the Corporation shall adjust or
cause its Affiliate to adjust the form and/or the timing of such payments as
determined to be necessary or advisable to be in compliance with Section 409A.
If any payment must be delayed to comply with Section 409A, such payment will be
paid at the earliest practicable date permitted by Section 409A. Notwithstanding
any provision to the contrary, to the extent that any amounts payable hereunder
are subject to the requirements of section 409A and are payable on account of
termination of employment, the payment of said amounts will be delayed for a
period of six (6) months after the termination date (or, if earlier, the death of
the Participant) for any Participant that is a “specified employee” (as defined
in Section 409A). Any payment that would otherwise have been due or owing during
such six-month period will be paid immediately following the end of the six-month
period. Notwithstanding any provision of this Agreement to the contrary,
Executive acknowledges and agrees that the Corporation and any Affiliate of the
Corporation shall not be liable for, and nothing provided or contained in this
Agreement will be construed to obligate or cause the Corporation or any Affiliate
of the Corporation to be liable for, any tax, interest or

-20-

 

	 	 	 	penalties imposed on
Executive related to or arising with respect to any violation of Section 409A.

     IN WITNESS WHEREOF, this Agreement has been executed on the date first above written.

	 	 	 	 	 	 	 	 	 
	WITNESS:	 	 	 	BLACK BOX CORPORATION	 	 
	 
	 	 	 	 	 	 	 	 
	/s/ Norman H. Brown, Jr.
 

Print Name: Norman H. Brown, Jr.

	 	 
	 	By:
	 	/s/ Thomas G. Greig
 

Thomas G. Greig

Chairman of the Board of Directors
	 	 
	 
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	WITNESS:
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	/s/ Kimberly Tollett
 

Print Name: Kimberly Tollett

	 	 
	 	/s/ R. Terry Blakemore
 

R. Terry Blakemore
	 	 

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