Document:

EXHIBIT 10.8
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BANK OF AMERICA

                               SECURITY AGREEMENT
                                 (MULTIPLE USE)

     1. THE SECURITY. The undersigned SWK Technologies (the "Pledgor") hereby
assigns and grants to Bank of America, N.A. (the "Bank") a security interest in
the following described property now owned or hereafter acquired by the Pledgor
("Collateral"):

          (a) All accounts, contract rights, chattel paper, instruments, deposit
     accounts, letter of credit rights, payment intangibles and general
     intangibles, including all amounts due to the Pledgor from a factor; rights
     to payment of money from the Bank under any Swap Contract (as defined in
     Paragraph 2 below); and all returned or repossessed goods which, on sale or
     lease, resulted in an account or chattel paper.

          (b) All inventory, including all materials, work in process and
     finished goods.

          (c) All machinery, furniture, fixtures and other equipment of every
     type now owned or hereafter acquired by the Pledgor, (including, but not
     limited to, the equipment described in the attached Equipment Description,
     if any).

          (d) All negotiable and nonnegotiable documents of title covering any
     Collateral.

          (e) All accessions, attachments and other additions to the Collateral,
     and all tools, parts and equipment used in connection with the Collateral.

          (f) All substitutes or replacements for any Collateral, all cash or
     non-cash proceeds, product, rents and profits of any Collateral, all
     income, benefits and property receivable on account of the Collateral, all
     rights under warranties and insurance contracts, letters of credit,
     guaranties or other supporting obligations covering the Collateral, and any
     causes of action relating to the Collateral.

          (g) All books and records pertaining to any Collateral, including but
     not limited to any computer-readable memory and any computer hardware or
     software necessary to process such memory ("Books and Records").

     2. THE INDEBTEDNESS. The Collateral secures and will secure all
Indebtedness of the Pledgor to the Bank. Each party obligated under any
Indebtedness is referred to in this Agreement as a "Debtor." "Indebtedness"
means all debts, obligations or liabilities now or hereafter existing, absolute
or contingent of the Debtor or any one or more of them to the Bank, whether
voluntary or involuntary, whether due or not due, or whether incurred directly
or indirectly or acquired by the Bank by assignment or otherwise. Indebtedness
shall include, without limitation, all obligations of the Debtor arising under
ANY Swap Contract. "Swap Contract' means any interest rate, credit, commodity or
equity swap, cap, floor, collar, forward foreign exchange transaction, currency
swap, cross currency rate swap, currency option, securities puts, calls,
collars, options or forwards or any combination of, or option with respect to,
these or similar transactions now or hereafter entered into between the Debtor
and the Bank.

     3. PLEDGOR'S COVENANTS. The Pledgor represents, covenants and warrants that
unless compliance is waived by the Bank in writing:

          (a) The Pledgor will properly preserve the Collateral; defend the
     Collateral against any adverse claims and demands; and keep accurate Books
     and Records.

          (b) The Pledgor resides (if the Pledgor is an individual), or the
     Pledgor's chief executive office (if the Pledgor is not an individual) is
     located, in the state specified on the signature page hereof. In addition,
     the Pledgor (if not an individual or other unregistered entity), is
     incorporated in or organized under the laws of the

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<PAGE>

     state specified on such signature page. The Pledgor shall give the Bank at
     least thirty (30) days notice before changing its residence or its chief
     executive office or state of incorporation or organization. The Pledgor
     will notify the Bank in writing prior to any change in the location of any
     Collateral, including the Books and Records.

          (c) The Pledgor will notify the Bank in writing prior to any change in
     the Pledgor's name, identity or business structure.

          (d) Unless otherwise agreed, the Pledgor has not granted and will not
     grant any security interest in any of the Collateral except to the Bank,
     and will keep the Collateral free of all liens, claims, security interests
     and encumbrances of any kind or nature except the security interest of the
     Bank.

          (e) The Pledgor will promptly notify the Bank in writing of any event
     which affects the value of the Collateral, the ability of the Pledgor or
     the Bank to dispose of the Collateral, or the rights and remedies of the
     Bank in relation thereto, including, but not limited to, the levy of any
     legal process against any Collateral and the adoption of any marketing
     order, arrangement or procedure affecting the Collateral, whether
     governmental or otherwise.

          (f) The Pledgor shall pay all costs necessary to preserve, defend,
     enforce and collect the Collateral, including but not limited to taxes,
     assessments, insurance premiums, repairs, rent, storage costs and expenses
     of sales, and any costs to perfect the Bank's security interest
     (collectively, the "Collateral Costs"). Without waiving the Pledgor's
     default for failure to make any such payment, the Bank at its option may
     pay any such Collateral Costs, and discharge encumbrances on the
     Collateral, and such Collateral Costs payments shall be a part of the
     Indebtedness and bear interest at the rate set out in the Indebtedness. The
     Pledgor agrees to reimburse the Bank on demand for any Collateral Costs so
     incurred.

          (g) Until the Bank exercises its rights to make collection, the
     Pledgor will diligently collect all Collateral.

          (h) If any Collateral is or becomes the subject of any registration
     certificate, certificate of deposit or negotiable document of title,
     including any warehouse receipt or bill of fading, the Pledgor shall
     immediately deliver such document to the Bank, together with any necessary
     endorsements.

          (i) The Pledgor will not sell, lease, agree to sell or lease, or
     otherwise dispose of any Collateral except with the prior written consent
     of the Bank; provided, however, that the Pledgor may sell inventory in the
     ordinary course of business.

          (j) The Pledgor will maintain and keep in force insurance covering the
     Collateral against fire and extended coverages, to the extent that any
     Collateral is of a type which can be so insured. Such insurance shall
     require losses to be paid on a replacement cost basis, be issued by
     insurance companies acceptable to the Bank and include a loss payable
     endorsement in favor of the Bank in a form acceptable to the Bank. Upon the
     request of the Bank, the Pledgor will deliver to the bank a copy of each
     insurance policy, or, if permitted by the Bank, a certificate of insurance
     listing all insurance in force.

          (k) The Pledgor will not attach any Collateral to any real property or
     fixture in a manner which might cause such Collateral to become a part
     thereof unless the Pledgor first obtains the written consent of any owner,
     holder of any lien on the real property or fixture, or other person having
     an interest in such property to the removal by the Bank of the Collateral
     from such real property or fixture. Such written consent shall be in form
     and substance acceptable to the Bank and shall provide that the Bank has no
     liability to such owner, holder of any lien, or any other person.

     4. ADDITIONAL OPTIONAL REQUIREMENTS. The Pledgor agrees that the Bank may
at its option at any time, whether or not the Pledgor is in default:

          (a) Require the Pledgor to deliver to the Bank (i) copies of or
     extracts from the Books and Records, and (ii) information on any contracts
     or other matters affecting the Collateral.

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<PAGE>

          (b) Examine the Collateral, including the Books and Records, and make
     copies of or extracts from the Books and Records, and for such purposes
     enter at any reasonable time upon the property where any Collateral or any
     Books and Records are located.

          (c) Require the Pledgor to deliver to the Bank any instruments,
     chattel paper or letters of credit which are part of the Collateral, and to
     assign to the Bank the proceeds of any such letters of credit.

          (d) Notify any account debtors, any buyers of the Collateral, or any
     other persons of the Bank's interest in the Collateral.

     5. DEFAULTS. Any one or more of the following shall be a default hereunder:

          (a) Any Indebtedness is not paid when due, or any default occurs under
     any agreement relating to the Indebtedness, after giving effect to any
     applicable grace or cure periods.

          (b) The Pledgor breaches any term, provision, warranty or
     representation under this Agreement, or under any other obligation of the
     Pledgor to the Bank, and such breach remains uncured after any applicable
     cure period.

          (c) The Bank fails to have an enforceable first lien (except for any
     prior liens to which the Bank has consented in writing) on or security
     interest in the Collateral.

          (d) Any custodian, receiver or trustee is appointed to take
     possession, custody or control of all or a substantial portion of the
     property of the Pledgor or of any guarantor or other party obligated under
     any Indebtedness.

          (e) The Pledgor or any guarantor or other party obligated under any
     Indebtedness becomes insolvent, or is generally not paying or admits in
     writing its inability to pay its debts as they become due, fails in
     business, makes a general assignment for the benefit of creditors, dies, or
     commences any case, proceeding or other action under any bankruptcy or
     other law for the relief of, or relating to, debtors.

          (f) Any case, proceeding or other action is commenced against the
     Pledgor or any guarantor or other party obligated under any Indebtedness
     under any bankruptcy or other law for the relief of, or relating to,
     debtors.

          (g) Any involuntary lien of any kind or character attaches to any
     Collateral, except for liens for taxes not yet due.

          (h) The Pledgor has given the Bank any false or misleading information
     or representations.

     6. BANK'S REMEDIES AFTER DEFAULT. In the event of any default, the Bank may
do any one or more of the following:

          (a) Declare any Indebtedness immediately due and payable, without
     notice or demand.

          (b) Enforce the security interest given hereunder pursuant to the
     Uniform Commercial Code and any other applicable law.

          (c) Enforce the security interest of the Bank in any deposit account
     of the Pledgor maintained with the Bank by applying such account to the
     Indebtedness.

          (d) Require the Pledger to obtain the Bank's prior written consent to
     any sale, lease, agreement to sell or lease, or other disposition of any
     Collateral consisting of inventory.

          (e) Require the Pledgor to segregate all collections and proceeds of
     the Collateral so that they are capable of identification and deliver daily
     such collections and proceeds to the Bank in kind.

          (f) Require the Pledgor to direct all account debtors to forward all
     payments and proceeds of the Collateral to a post office box under the
     Bank's exclusive control.

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<PAGE>

          (g) Require the Pledgor to assemble the Collateral, including the
     Books and Records, and make them available to the Bank at a place
     designated by the Bank.

          (h) Enter upon the property where any Collateral, including any Books
     and Records, are located and take possession of such Collateral and such
     Books and Records, and use such property (including any buildings and
     facilities) and any of the Pledgor's equipment, if the Bank deems such use
     necessary or advisable in order to take possession of, hold, preserve,
     process, assemble, prepare for sale or lease, market for sale or lease,
     sell or lease, or otherwise dispose of, any Collateral.

          (i) Demand and collect any payments on and proceeds of the Collateral.
     In connection therewith the Pledgor irrevocably authorizes the Bank to
     endorse or sign the Pledgor's name on all checks, drafts, collections,
     receipts and other documents, and to take possession of and open the mail
     addressed to the Pledgor and remove therefrom any payments and proceeds of
     the Collateral.

          (j) Grant extensions and compromise or settle claims with respect to
     the Collateral for less than face value, all without prior notice to the
     Pledgor.

          (k) Use or transfer any of the Pledgor's rights and interests in any
     Intellectual Property now owned or hereafter acquired by the Pledgor, if
     the Bank deems such use or transfer necessary or advisable in order to take
     possession of, hold, preserve, process, assemble, prepare for sale or
     lease, market for sale or lease, sell or lease, or otherwise dispose of,
     any Collateral. The Pledgor agrees that any such use or transfer shall be
     without any additional consideration to the Pledgor. As used in this
     paragraph, "Intellectual Property" includes, but is not limited to, all
     trade secrets, computer software, service marks, trademarks, trade names,
     trade styles, copyrights, patents, applications for any of the foregoing,
     customer lists, working drawings, instructional manuals, and rights in
     processes for technical manufacturing, packaging and labeling, in which the
     Pledgor has any right or interest, whether by ownership, license, contract
     or otherwise.

          (l) Have a receiver appointed by any court of competent jurisdiction
     to take possession of the Collateral. The Pledgor hereby consents to the
     appointment of such a receiver and agrees not to oppose any such
     appointment.

          (m) Take such measures as the Bank may deem necessary or advisable to
     take possession of, hold, preserve, process, assemble, insure, prepare for
     sale or lease, market for sale or lease, sell or lease, or otherwise
     dispose of, any Collateral, and the Pledgor hereby irrevocably constitutes
     and appoints the Bank as the Pledgor's attorney-in-fact to perform all acts
     and execute all documents in connection therewith.

          (n) Without notice or demand to the Pledgor, set off and apply against
     any and all of the Indebtedness any and all deposits (general or special,
     time or demand, provisional or final) and any other indebtedness, at any
     time held or owing by the Bank or any of the Bank's agents or affiliates to
     or for the credit of the account of the Pledgor or any guarantor or
     endorser of the Pledgor's Indebtedness.

          (o) Exercise any other remedies available to the Bank at law or in
     equity.

     7. PLEDGOR NOT A DEBTOR. If any Pledgor is not a Debtor under some or all
of the Indebtedness:

          (a) The Pledgor authorizes the Bank, from time to time, without
     affecting the Pledgor's obligations under this Agreement, to enter into an
     agreement with the Debtor to change the interest rate on or renew the
     Indebtedness; accelerate, extend, compromise, or otherwise change the
     repayment terms or any other terms of the Indebtedness; receive and hold,
     exchange, enforce, waive, fail to perfect, substitute, or release
     Collateral, including collateral not originally covered by this Agreement;
     sell or apply any Collateral in any order; or release or substitute any
     borrower, guarantor or endorser of the Indebtedness, or other person.

          (b) The Pledgor waives any defense by reason of any Debtor's or any
     other person's defense, disability, or release from liability. The Bank can
     exercise its rights against the Collateral even if any Debtor or any other
     person no longer is liable on the Indebtedness because of a statute of
     limitations or for other reasons.

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<PAGE>

          (c) The Pledgor agrees that it is solely responsible for keeping
     itself informed as to the financial condition of the Debtors and of all
     circumstances which bear upon the risk of nonpayment The Pledgor waives any
     right it may have to require the Bank to disclose to the Pledgor any
     information which the Bank may now or hereafter acquire concerning the
     financial condition of the Debtors.

          (d) The Pledgor waives all rights to notices of default or
     nonperformance by the Debtors. The Pledgor further waives all rights to
     notices of the existence or the creation of new indebtedness by any Debtor
     and all rights to any other notices to any party liable on any of the
     Indebtedness.

          (e) The Pledger represents and warrants to the Bank that it will
     derive benefit, directly and indirectly, from the collective administration
     and availability of credit under the Indebtedness. The Pledgor agrees that
     the Bank will not be required to inquire as to the disposition by any
     Debtor of funds disbursed by the Bank.

          (f) Until all obligations to the Bank under the Indebtedness have been
     paid in full and any commitments of the Bank or facilities provided by the
     Bank with respect to the Indebtedness have been terminated, the Pledgor
     waives any right of subrogation, reimbursement, indemnification and
     contribution (contractual, statutory or otherwise), including without
     limitation, any claim or right of subrogation under the Bankruptcy Code
     (Title 11, United States Code) or any successor statute, which the Pledgor
     may now or hereafter have against any Debtor with respect to the
     Indebtedness. The Pledger waives any right to enforce any remedy which the
     Bank now has or may hereafter have against any Debtor, and waives any
     benefit of, and any right to participate in, any security now or hereafter
     held by the Bank.

          (g) The Pledger waives any right to require the Bank to proceed
     against any Debtor or any other person; proceed against or exhaust any
     security; or pursue any other remedy. Further, the Pledgor consents to the
     taking of, or failure to take, any action which might in any manner or to
     any extent vary the risks of the Pledger under this Agreement or which, but
     for this provision, might operate as a discharge of the Pledgor.

          (h) In the event any amount paid to the Bank on any Indebtedness or
     any interest in property transferred to the Bank as payment on any
     Indebtedness is subsequently recovered from the Bank in or as a result of
     any bankruptcy, insolvency or fraudulent conveyance proceeding, the Pledger
     shall be liable to the Bank for the amounts so recovered up to the fair
     market value of the Collateral whether or not the Collateral has been
     released or the security interest terminated. In the event the Collateral
     has been released or the security interest terminated, the fair market
     value of the Collateral shall be determined, at the Bank's option, as of
     the date the Collateral was released, the security interest terminated, or
     said amounts were recovered.

     8. ARBITRATION AND WAIVER OF JURY TRIAL

          (a) This paragraph concerns the resolution of any controversies or
     claims between the parties, whether arising in contract, tort or by
     statute, including but not limited to controversies or claims that arise
     out of or relate to: (i) this agreement (including any renewals, extensions
     or modifications); or (ii) any document related to this agreement
     (collectively a "Claim"). For the purposes of this arbitration provision
     only, the term "parties" shall include any parent corporation, subsidiary
     or affiliate of the Bank involved in the servicing, management or
     administration of any obligation described or evidenced by this agreement.

          (b) At the request of any party to this agreement, any Claim shall be
     resolved by binding arbitration in accordance with the Federal Arbitration
     Act (Title 9, U. S. Code) (the "Act"). The Act will apply even though this
     agreement provides that it is governed by the law of a specified state.

          (c) Arbitration proceedings will be determined in accordance with the
     Act, the applicable rules and procedures for the arbitration of disputes of
     JAMS or any successor thereof ("JAMS"), and the terms of this paragraph. In
     the event of any inconsistency, the terms of this paragraph shall control.

          (d) The arbitration shall be administered by JAMS and conducted,
     unless otherwise required by law, in any U. S. state where real or tangible
     personal property collateral for this credit is located or if there is no
     such collateral, in the state specified in the governing law section of
     this agreement. All Claims shall be determined by one arbitrator; however,
     if Claims exceed $5,000,000, upon the request of any party, the Claims
     shall be decided by three arbitrators. All arbitration hearings shall
     commence within 90 days of the demand for arbitration and close within 90
     days of commencement and the award of the arbitrator(s) shall be issued
     within 30 days of the close of the hearing. However, the arbitrator(s),
     upon a showing of good cause, may extend the

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<PAGE>

     commencement of the hearing for up to an additional 60 days. The
     arbitrator(s) shall provide a concise written statement of reasons for the
     award. The arbitration award may be submitted to any court having
     jurisdiction to be confirmed, judgment entered and enforced.

          (e) The arbitrator(s) will have the authority to decide whether any
     Claim is barred by the statute of limitations and, if so, to dismiss the
     arbitration on that basis. For purposes of the application of the statute
     of limitations, the service on JAMS under applicable JAMS rules of a notice
     of Claim is the equivalent of the filing of a lawsuit. Any dispute
     concerning this arbitration provision or whether a Claim is arbitrable
     shall be determined by the arbitrator(s). The arbitrator(s) shall have the
     power to award legal fees pursuant to the terms of this agreement.

          (f) This paragraph does not limit the right of any party to: (i)
     exercise self-help remedies, such as but not limited to, setoff; (ii)
     initiate judicial or non judicial foreclosure against any real or personal
     property collateral; (iii) exercise any judicial or power of sale rights,
     or (iv) act in a court of law to obtain an interim remedy, such as but not
     limited to, injunctive relief, writ of possession or appointment of a
     receiver, or additional or supplementary remedies.

          (g) The filing of a court action is not intended to constitute a
     waiver of the right of any party, including the suing party, thereafter to
     require submittal of the Claim to arbitration.

          (h) BY AGREEING TO BINDING ARBITRATION, THE PARTIES IRREVOCABLY AND
     VOLUNTARILY WAIVE ANY RIGHT THEY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF
     ANY CLAIM. FURTHERMORE, WITHOUT INTENDING IN ANY WAY TO LIMIT THIS
     AGREEMENT TO ARBITRATE, TO THE EXTENT ANY CLAIM IS NOT ARBITRATED, THE
     PARTIES IRREVOCABLY AND VOLUNTARILY WAIVE ANY RIGHT THEY MAY HAVE TO A
     TRIAL BY JURY IN RESPECT OF SUCH CLAIM. THIS PROVISION IS A MATERIAL
     INDUCEMENT FOR THE PARTIES ENTERING INTO THIS AGREEMENT.

     9. MISCELLANEOUS.

          (a) Any waiver, express or implied, of any provision hereunder and any
     delay or failure by the Bank to enforce any provision shall not preclude
     the Bank from enforcing any such provision thereafter.

          (b) The Pledgor shall, at the request of the Bank, execute such other
     agreements, documents, instruments, or financing statements in connection
     with this Agreement as the Bank may reasonably deem necessary.

          (c) All notes, security agreements, subordination agreements and other
     documents executed by the Pledgor or furnished to the Bank in connection
     with this Agreement must be in form and substance satisfactory to the Bank.

          (d) This Agreement shall be governed by and construed according to the
     laws of the State of New Jersey, to the jurisdiction of which the parties
     hereto submit.

          (e) All rights and remedies herein provided are cumulative and not
     exclusive of any rights or remedies otherwise provided by law. Any single
     or partial exercise of any right or remedy shall not preclude the further
     exercise thereof or the exercise of any other right or remedy.

          (f) All terms not defined herein are used as set forth in the Uniform
     Commercial Code.

          (g) In the event of any action by the Bank to enforce this Agreement
     or to protect the security interest of the Bank in the Collateral, or to
     take possession of, hold, preserve, process, assemble, insure, prepare for
     sale or lease, market for sale or lease, sell or lease, or otherwise
     dispose of, any Collateral, the Pledgor agrees to pay immediately the costs
     and expenses thereof, together with reasonable attorney's fees and
     allocated costs for in-house legal services to the extent permitted by law.

          (h) In the event the Bank seeks to take possession of any or all of
     the Collateral by judicial process, the Pledgor hereby irrevocably waives
     any bonds and any surety or security relating thereto that may be required
     by applicable law as an incident to such possession, and waives any demand
     for possession prior to the commencement of any such suit or action.

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<PAGE>

          (i) This Agreement shall constitute a continuing agreement, applying
     to all future as well as existing transactions, whether or not of the
     character contemplated at the date of this Agreement, and if all
     transactions between the Bank and the Pledgor shall be closed at any time,
     shall be equally applicable to any new transactions thereafter.

          (j) The Bank's rights hereunder shall inure to the benefit of its
     successors and assigns. In the event of any assignment or transfer by the
     Bank of any of the Indebtedness or the Collateral, the Bank thereafter
     shall be fully discharged from any responsibility with respect to the
     Collateral so assigned or transferred, but the Bank shall retain all rights
     and powers hereby given with respect to any of the Indebtedness or the
     Collateral not so assigned or transferred. All representations, warranties
     and agreements of the Pledgor if more than one are joint and several and
     all shall be binding upon the personal representatives, heirs, successors
     and assigns of the Pledgor.

     10. FINAL AGREEMENT. BY SIGNING THIS DOCUMENT EACH PARTY REPRESENTS AND
AGREES THAT: (A) THIS DOCUMENT REPRESENTS THE FINAL AGREEMENT BETWEEN THE
PARTIES WITH RESPECT TO THE SUBJECT MATTER HEREOF, (B) THIS DOCUMENT SUPERSEDES
ANY COMMITMENT LETTER, TERM SHEET, OR OTHER WRITTEN OUTLINE OF TERMS AND
CONDITIONS RELATING TO THE SUBJECT MATTER HEREOF, UNLESS SUCH COMMITMENT LETTER,
TERM SHEET, OR OTHER WRITTEN OUTLINE OF TERMS AND CONDITIONS EXPRESSLY PROVIDES
TO THE CONTRARY, (C) THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES,
AND (D) THIS DOCUMENT MAY NOT BE CONTRADICTED BY EVIDENCE OF ANY PRIOR,
CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OR UNDERSTANDINGS OF THE PARTIES.

Date: August 1, 2005

                                      BANK OF AMERICA, N.A.

                                      By:
                                          ---------------------------------
                                          William H Baker, Officer

                                      Address for Notices:
                                      West Seneca-Credit Services
                                      Atin: Credit Services
                                      NY7-505-01-24
                                      2970 Transit Road
                                      West Seneca, NY 14224

                                      SWK Technologies

                                      By: SWK TECHNOLOGIES

                                      By: /s/ Jeffrey D. Roth
                                          ---------------------------------
                                          Jeffrey D. Roth, CEO

                                       -7-
<PAGE>

                                      By: /s/ Lynn K. Bermarn, President
                                          ---------------------------------
                                          Lynn K. Bermarn, Vice President

                                      By: /s/ Gary Bermarn, Vice President
                                          ---------------------------------
                                          Gary Bermarn, Vice President

Pledgor's Location (principal residence,
if the Pledgor is an individual;
chief executive office, if
the Pledgor is not an individual):

5 Regent Street
Livingston, New Jersey 07039

Pledgor's state of incorporation
or organization (if Pledgor is a corporation, partnership,
limited liability company or other registered entity): New Jersey

Mailing Address (if different
from above):

---------------------------------
Street Address

---------------------------------
City        State       Zip

                                       -8-WWW.EXFILE.COM, INC. -- 14576 -- AMERICAN POWER CONVERSION CORP. -- EXHIBIT 10.1 TO FORM 8-K

    EXHIBIT
      10.1

    

    EMPLOYMENT
      AGREEMENT

    

    The
      parties to this Employment Agreement (this “Agreement”), dated as of August 15,
      2006, are American Power Conversion Corporation, a Massachusetts corporation
      (the “Company”), and Robert Johnson (the “Executive”). Accordingly, the parties,
      intending to be legally bound, agree as follows:

     

    1. Employment.

     

    1.1 General.
      The
      Company hereby employs the Executive in the positions and capacities of
      President and Chief Executive Officer, and the Executive hereby accepts such
      employment, subject to the terms and conditions herein contained. In such
      capacities, the Executive agrees faithfully to perform (i) such duties and
      responsibilities as are customary for an executive with similar titles and
      positions at similar publicly-traded companies and (ii) such additional duties
      (consistent with his positions as President and Chief Executive Officer) as
      may
      reasonably be assigned to the Executive from time to time. The Executive
      acknowledges that his duties will include such matters as certification of
      the
      Company’s quarterly and annual filings with the Securities and Exchange
      Commission. The Executive further acknowledges that he is serving under this
      Agreement solely on an interim basis while and until the Company completes
      its
      search for a new President and Chief Executive Officer, and subject to the
      provisions hereof, the Executive may be removed from such positions, with or
      without cause, at anytime by the Board of Directors of the Company.

     

    1.2 Full-Time
      Position.
      The
      Executive hereby agrees that, during the Employment Term he shall devote all
      of
      his business time, attention and skills to the business and affairs of the
      Company and its subsidiaries, except during vacation time as provided by Section
      3.3 hereof and any periods of illness. The Executive agrees that, during the
      Employment Term, he will not seek employment with another entity. Subject to
      the
      foregoing, nothing in this Agreement shall restrict the Executive from (i)
      managing his personal investments, personal business affairs and other personal
      matters, (ii) serving on civic or charitable boards or committees or (iii)
      delivering lectures, fulfilling speaking engagements or teaching at educational
      institutions; provided
      that
      none of such activities, either singly or in the aggregate, interfere with
      the
      performance of his duties under this Agreement. The Executive must receive
      approval of the Board of Directors of the Company (“Board”) prior to assuming
      any directorships in accordance with any applicable policies of the Company.
      

     

    2. Compensation.

     

    2.1 Salary.
      Subject
      to the terms and conditions herein contained, during the Employment Term, the
      Company shall pay to the Executive, and the Executive shall accept, for all
      services to be rendered by him pursuant to this Agreement (including, but not
      limited to, any services that may be 

     

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

     

    rendered
      by him to any subsidiary of the Company and any services that may be rendered
      by
      him as a member of the Board or of the board of any such subsidiary or any
      committee(s) thereof) a base salary at a rate of $500,000.00 per annum, and
      subject to increases, if any, as may be approved from time to time by the Board
      or the Compensation and Stock Option Committee of the Board (the “Compensation
      Committee”) in its discretion (such amount, together with any applicable
      increases, shall be referred to herein as the “Base Salary”). The Executive’s
      Base Salary shall be payable in such installments as are in effect from time
      to
      time in accordance with the regular payroll practices of the
      Company.

     

    2.2 Executive
      Bonus.
      In
      addition to his Base Salary, the Executive shall be eligible to participate
      in
      the executive bonus program of the Company in respect of each calendar year
      during the Employment Term (a “Bonus”), as such Bonus may be awarded pursuant
      to, and in accordance with, the terms of the Company’s the executive bonus
      program, as then in effect. The Company’s current executive bonus program
      provides for the payment of a formulaic percentage of base salary actually
      paid
      to the executive for services in a calendar year.

     

    3. Additional
      Benefits.

     

    3.1 Expenses.
      The
      Company shall reimburse the Executive (upon the submission by him of reasonably
      itemized accounts therefore), or advance to the Executive, where appropriate,
      an
      amount for such costs and expenses as the Executive shall reasonably incur
      (including, among other things, business travel and business entertainment
      expenses) in connection with the performance by him of his duties hereunder
      in
      accordance with the Company’s policy with respect thereto as in effect from time
      to time during the Employment Term and reimbursement of amounts paid by him
      for
      the annual planning and preparation of his tax returns in an amount reasonable
      and customary for executives of similar status. 

     

    3.2 General
      Fringe Benefits.
      The
      Executive shall be entitled to, and the Company shall provide, such fringe
      benefits of the Company, with
      eligibility to commence on the Effective Date, including,
      but not limited to, participation in employee health and benefit plans and
      the
      Company’s purchase of health and/or disability insurance, which the Company may
      from time to time generally offer its officers during the Employment Term and
      for which the Executive is eligible.

     

    3.3 Employee
      Time Off.
      The
      Executive shall be entitled to twenty-two (22) days of time off annually during
      the Employment Term in accordance with the Company’s policies and practices. The
      Executive shall provide the Board with reasonable prior notice of his planned
      vacation(s). 

     

    3.4 Other
      Benefits.
      Nothing
      in this Agreement shall prevent the Company from, or obligate the Company to,
      increase compensation (including without limitation any Base Salary or Bonus),
      any other payments or any other benefits to the Executive, or from deciding
      to
      provide the Executive with any benefits in addition to those provided for
      herein. 

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    4. Term
      of Employment.
      The
      Executive’s employment hereunder shall commence on August 15, 2006 (the
“Effective Date”) and shall continue until the Board of Directors elects a new
      President and/or Chief Executive Officer unless earlier terminated pursuant
      to
      Section 5 below. The period of such employment is herein referred to as the
“Employment Term.” 

     

    5. Termination.

     

    5.1 Death.
      The
      Employment Term shall terminate automatically in the event of the Executive’s
      death during the Employment Term and upon such termination, the obligations,
      duties and liabilities of the Company to the Executive shall solely be as set
      forth in Section 5.5.1 hereof.

     

    5.2 Disability.
      In the
      event of the Executive’s failure to perform his duties by reason of his becoming
      Disabled (as defined herein) during the Employment Term, the Company shall
      have
      the option to terminate the Employment Term, by giving written notice of such
      termination to the Executive, which notice shall specify the effective date
      of
      termination. Upon such termination, the Executive shall have no further duties
      hereunder (except as set forth in Section 7 hereof) and the obligations, duties
      and liabilities of the Company to the Executive shall solely be as set forth
      in
      Section 5.5.1 hereof. For purposes of this Agreement, the term “Disabled” shall
      mean the inability of the Executive, for medical reason(s) certified by a
      physician selected by the Company and reasonably satisfactory to the Executive,
      to substantially perform his duties hereunder for an aggregate of at least
      180
      days during any period of 365 consecutive days. 

     

    5.3 By
      the
      Company for Cause.
      The
      Company may, at its option, terminate the Employment Term, for any of the
      following reasons (each a “Cause”), upon not less than five (5) business days’
prior written notice to the Executive that a meeting of the Board will be held
      to consider such action, at which meeting the Executive shall be afforded an
      opportunity to be heard (a “Hearing”). If
      the
      Board decides to terminate the Executive at the Hearing,
      the
      Executive shall have no further duties hereunder (except as set forth in Section
      7 hereof) and the obligations, duties and liabilities of the Company to the
      Executive shall solely be as set forth in Section 5.5.2 hereof:

     

    5.3.1 Violation
      of Law.
      If the
      Executive is convicted of or pleads nolo contendere to (i) any misdemeanor
      relating to the affairs of the Company or any of its affiliates, (ii) a felony
      under Federal or state law, or (iii) a willful violation of any federal or
      state
      securities law.

     

    5.3.2 Failure
      to Perform.
      If,
      without the prior express written consent of the Board, the Executive (i) fails
      to perform (other than as a result of being Disabled, as to which Section 5.2
      hereof could apply), in any material respect, any of his duties or obligations
      to the Company or those duties or actions reasonably requested by the Board
      or
      the Chief Executive Officer of the Company, fails to observe Company policies,
      practices or procedures, or breaches any contract or agreement with the Company,
      and if such failure or breach continues for more than thirty (30) days after
      written
      notice by the 

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    Company
      to the Executive specifying the nature of his failure or breach, provided,
      however,
      that if
      such failure or breach is incapable of being cured, in the good faith
      determination of the Board, the Employment Term shall terminate immediately
      after the date of the Hearing,
      (ii)
      takes actions or omits to take actions in connection with his duties and/or
      responsibilities hereunder that constitute willful misconduct or gross
      negligence,
      or
(iii)
      commits any act of insubordination or disloyalty to the Company, its Board
      or
      management.

     

    The
      parties hereto acknowledge and agree that matters of the business judgment
      of
      the Executive or the economic performance of the Company or any segment thereof
      shall not be factors in determining Cause, except to the extent that they
      involve gross negligence or willful misconduct as referenced in the foregoing
      paragraph. 

     

    5.4 By
      the
      Company Without Cause.
      In
      addition (and without prejudice) to its right to terminate the Employment Term
      under the provisions of Section 5.3 hereof, the Company may, at its option,
      terminate the Employment Term for any reason whatsoever by giving written notice
      of termination to the Executive, specifying the date of termination.

     

    5.5 Payments
      Upon Termination.
      In the
      event that the Employment Term is terminated hereunder, the Company shall pay
      to
      the Executive the following amounts, and the Company shall thereupon have no
      liability or other obligation of any kind or character under or in connection
      with this Agreement (the effective date of any such termination is hereinafter
      referred to as the “Termination Date”):

     

    5.5.1 Death
      or Disability.
      In the
      event that the Employment Term is terminated pursuant to Section 5.1 or Section
      5.2 hereof, the Company shall pay to the Executive or to the Executive’s
      executor, administrator, beneficiary or personal representative (the
“Representative”), as the case may be, the Base Salary due and owing through the
      Termination Date, payable in accordance with the Company’s regular payroll
      practices. 

     

    5.5.2 By
      the
      Company for Cause.
      In the
      event that the Employment Term is terminated pursuant to Section 5.3 hereof,
      the
      Company shall pay to the Executive his Base Salary due and owing to him through
      the Termination Date payable in accordance with the Company’s regular payroll
      practices.

     

    5.5.3 By
      the
      Company without Cause.
      In the
      event that the Employment Term is terminated pursuant to Section 5.4 hereof,
      the
      Executive shall remain an employee of the Company in the position of Vice
      President, Solutions Delivery Group at a base salary, bonus eligibility and
      fringe benefits to be mutually agreed but which shall in no event be less than
      the salary, bonus eligibility and fringe benefits in effect with respect to
      the
      Executive immediately prior to the effective date of this Agreement subject
      to
      changes in the bonus plan and fringe benefits available to officers generally
      and which shall take into account the increased responsibilities of the position
      of Vice President, Solutions Delivery Group as 

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    compared
      with the Executive’s position immediately prior to the effectiveness of this
      Agreement. Notwithstanding the foregoing, in the event the Company does not
      offer the new (or comparable) position to the Executive upon the Termination
      Date and the Executive ceases to be an employee of the Company other than as
      provided in 5.1, 5.2 or 5.3, the Company shall pay to the Executive (i) his
      Base
      Salary due and owing to him through the Termination Date, payable in accordance
      with the Company’s regular payroll practices, and (ii) an amount equal to the
      Executive’s annual base salary as in effect immediately prior to the
      effectiveness of this Agreement. 

     

    6. Arbitration.

     

    6.1 General.
      Any dispute under this Agreement, including
      those arising out of or relating to Section 5 hereof,
      shall be
      settled by arbitration in accordance with this Section 6.

     

    6.2 Commencement.
      Either
      party may serve upon the other party written notice that the dispute, specifying
      the nature thereof, shall be submitted to arbitration. Within ten (10) days
      after the service of such notice, each of the parties shall designate a person
      as an arbitrator and serve written notice of such appointment upon the other
      party. If either party fails within the specified time to appoint such
      arbitrator, the other party (if such party shall timely designate an arbitrator)
      shall be entitled to appoint both arbitrators. The two arbitrators so appointed
      shall appoint a third arbitrator. If the two arbitrators appointed shall fail
      to
      agree upon a third arbitrator within ten (l0) days after their appointment,
      then
      an application may be made by either party hereto, upon written notice to the
      other party, to the American Arbitration Association, or any successor thereto,
      or if the American Arbitration Association or its successor shall fail to
      appoint a third arbitrator within ten (10) days after such request, then either
      party may apply, with written notice to the other, to any court of competent
      jurisdiction for the appointment of a third arbitrator, and any such appointment
      so made shall be binding upon both parties hereto.

     

    6.3 Applicable
      Rules and Procedures.
      The
      arbitration shall be conducted, to the extent consistent with this Section
      6, in
      accordance with the then prevailing rules and procedures of the American
      Arbitration Association or its successor. The arbitrators shall have the right
      to retain and consult experts and competent authorities skilled in the matters
      under arbitration, but all consultations shall be made in the presence of both
      parties, who shall have full right to cross-examine the experts and authorities.
      Unless otherwise agreed by the parties, any such arbitration shall take place
      in
      Rhode Island and shall be conducted in accordance with the Commercial
      Arbitration Rules of the American Arbitration Association. 

     

    6.4 Decision.
      The
      arbitrators shall render their award, upon the concurrence of at least two
      of
      their number, not later than thirty (30) days after the appointment of the
      third
      arbitrator. Their decision and award shall be in writing, and counterpart copies
      shall be delivered to each of the parties. Such decision of the arbitrators
      shall be final and binding upon the parties hereto. In rendering their award,
      the 

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    arbitrators
      shall have no power to modify any of the provisions of this Agreement, and
      the
      jurisdiction and power of the arbitrators are expressly limited accordingly.
      Judgment may be entered on the award of the arbitrators and may, be enforced
      in
      any court having jurisdiction. 

     

    Each
      of
      the parties hereto shall bear all of its/his own fees, costs and expenses,
      including attorneys’ fees, incurred by it in connection with any arbitration
      proceeding pursuant to this Section 6. Notwithstanding the foregoing, in the
      event any party fails to comply with the decision of the arbitrators and the
      other party undertakes any action(s) or proceeding(s) to enforce such
      compliance, all costs and expenses (including reasonable legal fees) incurred
      by
      the party seeking to enforce such compliance shall be borne by the party failing
      to so comply.

     

    7. Non-disclosure;
      Non-compete; Availability.

     

    7.1 Agreement.
      The
      Executive has been an employee of the Company prior to the date hereof, and
      the
      Executive acknowledges and agrees, as a condition precedent to the effectiveness
      of this Agreement, that in his employment under this Agreement he remains bound
      by and subject to the non-disclosure, non-competition, non-solicitation and
      developments agreements (the “NDA”) currently in effect with the Executive.

     

    7.2 Availability.
      Reasonably subject to his employment commitments elsewhere, the Executive hereby
      agrees to make himself available to the Company after the termination of the
      Employment Term, at such reasonable time or times as may be required by the
      Company in connection with any pending or threatened litigation or governmental
      investigation involving the Company, not to exceed five (5) days in any calendar
      quarter unless otherwise mutually agreed. The Company shall advance or reimburse
      the Executive for any out-of-pocket expenses reasonably incurred by him in
      fulfilling his obligations under this Section 7.2 upon the submission by him
      of
      reasonably itemized accounts therefore,
      and
      shall pay the Executive a mutually agreed upon per diem fee for any days in
      excess of two (2) hereunder, including reasonable preparation time.

     

    8. Miscellaneous
      Provisions.

     

    8.1 Withholding.
      All
      payments required to be made to the Executive by the Company hereunder shall
      be
      subject to any applicable withholding under applicable Federal, state and local
      income tax laws. Any such withholding shall be based upon the most recent Form
      W-4 filed by the Executive with the Company, and the Executive may from time
      to
      time revise such filing.

     

    8.2 Severability.
      If in
      any jurisdiction any term or provision hereof is adjudicated to be invalid
      or
      unenforceable, (i) the remaining terms and provisions hereof shall be
      unimpaired, (ii) any such invalidity or unenforceability in any jurisdiction
      shall not invalidate, limit or render unenforceable such provision in any other
      jurisdiction and (iii) the invalid or unenforceable term or provision shall,
      for

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

     

    purposes
      of such jurisdiction, be deemed replaced by a term or provision that is valid
      and enforceable and that comes closest to expressing the intention of the
      invalid or unenforceable term or provision. 

     

    8.3 Indemnification.
      The
      Company shall indemnify the Executive to the fullest extent permitted by
      applicable law and
      the
      By-Laws of the Company for
      all
      amounts (including without limitation, judgments, fines, settlement payments,
      costs, expenses and attorneys’ fees and expenses) reasonably incurred or paid by
      the Executive in connection with any claim, action, suit, investigation or
      proceeding arising out of or relating to performance by the Executive of
      services for, or actions of the Executive as (or the Executive’s serving in the
      position of) a director, officer or employee of, the Company, any subsidiary
      or
      affiliate of the Company or any enterprise at the Company’s request, and shall
      advance to the Executive (subject to the Executive’s undertaking to repay any
      advances if it is determined that he is not entitled to them) the reasonable
      costs, including attorneys fees, of defending any such claim. The provisions
      of
      this Section 8.3 shall survive the termination of this Agreement.

     

    8.4 Execution
      in Counterparts.
      This
      Agreement may be executed in one or more counterparts, and by each of the
      parties hereto in separate counterparts, each of which shall be deemed to be
      an
      original but all of which taken together shall constitute one and the same
      agreement, and this Agreement shall become effective when one or more
      counterparts has been signed by each of the parties hereto and delivered to
      the
      other party hereto.

     

    8.5 Notices.
      All
      notices, requests, demands and other communications hereunder shall be in
      writing and shall be deemed duly given when delivered by hand, or when delivered
      if mailed by registered or certified mail or private courier service, postage
      prepaid, to the respective addresses as follows:

     

    If
      to the
      Company, to:

     

    American
      Power Conversion Corporation

    132
      Fairgrounds Road

    West
      Kingston, RI 02892

    Attn:
      Vice President & General Counsel

     

    If
      to the
      Executive, to:

     

    Robert
      Johnson

    c/o
      801
      Corporate Centre Drive

    O’Fallon,
      MO 63368

     

    or
      to
      such other address(es) as either party hereto shall have designated by like
      notice to the other Party hereto.

     

    8.6 Amendment.
      No
      provision of this Agreement may be modified, amended or discharged in any
      manner, except by a written instrument executed by each of the parties
      hereto.

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

     

    8.7 Entire
      Agreement.
      This
      Agreement constitutes the entire agreement of the parties hereto with respect
      to
      the subject matter hereof, and supersedes all prior agreements and
      understandings of the parties hereto, oral and written, including all prior
      or
      existing employment agreements. Each party hereto hereby acknowledges and agrees
      that, other than as contained herein, no other representations or warranties,
      oral or written, have been made, expressly or impliedly, by the other party
      hereto.

     

    8.8 Applicable
      Law.
      This
      Agreement shall be governed by the laws of the Commonwealth of Massachusetts,
      without regard to its choice of law provisions. 

     

    8.9 Headings.
      The
      headings contained herein are for the sole purpose of convenience of reference,
      and shall not in any way limit or affect the meaning or interpretation of any
      of
      the terms or provisions of this Agreement.

     

    8.10 Non-assignability.

     

    8.10.1 By
      the
      Executive.
      Neither
      this Agreement nor any right, duty, obligation or interest hereunder shall
      be
      assignable or delegable by the Executive without the Company’s prior written
      consent; however, that the Executive may designate any of his beneficiaries
      to
      receive (and such beneficiaries shall receive) any compensation, payments or
      other benefits payable hereunder upon or after his death, or the foregoing
      may
      be transferred by the laws of descent or distribution.

     

    8.10.2 By
      the
      Company.
      This
      Agreement and all of the Company’s rights and obligations hereunder may be
      assigned or transferred by it through a merger, consolidation or other business
      combination. Upon the occurrence of such a transaction, any such successor
      company resulting therefrom shall be deemed to be substituted for all purposes
      as the Company hereunder.

     

    8.11 Binding
      Effect; Benefits.
      This
      Agreement shall inure to the benefit of, and be binding upon, the parties hereto
      and their respective heirs, legal representatives, successors and permitted
      assigns.

     

    8.12 Waiver.
      The
      failure of either of the parties hereto at any time to enforce any provision
      of
      this Agreement shall not be deemed or construed to be a waiver of any such
      or
      any other provision, nor to in any way affect the validity of this Agreement
      or
      any provision hereof or the right of either of the parties hereto to thereafter
      enforce each and every provision of this Agreement. No waiver of any breach
      of
      any of the provisions of this Agreement shall be effective unless set forth
      in a
      written instrument executed by the party against whom or which enforcement
      of
      such waiver is sought, and no waiver of any such breach shall be construed
      or
      deemed to be a waiver of any other or subsequent breach.

     

    8.13 Capacity,
      etc.
      The
      Executive hereby represents and warrants to the Company and the Company hereby
      represents and warrants to the Executive that: (i) he (or it) has full power,
      authority and capacity to execute and deliver this Agreement, and to perform
      his
      (or its) obligations hereunder, (ii) said execution, delivery and performance
      will not (and with the giving of notice or lapse of time, or both, would not)
      result in the breach of any agreement or other obligation to which he (or it)
      is
      a party or is 

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

     

    otherwise
      bound and (iii) this Agreement is his (or its) valid and binding obligation
      enforceable in accordance with its terms.

     

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

     

    
      	 	 	 
	 	AMERICAN
              POWER
              CONVERSION CORPORATION
	 
 	 
 	 
 
	 	By:  	/s/
              Andrew Cole 
	 	
              

              Title:
                Vice President for HR & Organizational Development

            
	 	 

    

     

     

     

    
      	 	 	 
	 	
              /s/
                Robert J. Johnson

            
	 	
              

              Robert
                Johnson  

            
	 
 	 
 	 
 
	 	       
               	 
	 	
            
	 	 

    

     

    
      
 

    

    

     

    

    

    

     

    

    

    
      
        
        

      

      
        9

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