Document:

Exhibit 10.1

 

EXECUTIVE EMPLOYMENT AGREEMENT

 

THIS EXECUTIVE
EMPLOYMENT AGREEMENT (this “Agreement”) is
made,  entered into and effective as of October 19,
2004 (the “Effective Date”) by and among
UNITED STATIONERS INC., a Delaware corporation (hereinafter, together with its
successors, referred to as “Holding”),
UNITED STATIONERS SUPPLY CO., an Illinois corporation (hereinafter, together
with its successors, referred to as the “Company”, and,
together with Holding, the “Companies”),
and Patrick T. Collins (hereinafter referred to as the “Executive”).

 

WHEREAS, the Companies
have a need for executive management services; and

 

WHEREAS, the Executive is
qualified and willing to render such services to the Companies;

 

NOW, THEREFORE, in
consideration of the premises and the mutual covenants and agreements contained
herein, the parties agree as follows:

 

Section 1.                                          Definitions.

 

(a)                                  As
used in this Agreement, the following terms have the respective meanings set
forth below:

 

“Accrued Benefits”
means (i) all salary earned or accrued through the date the Executive’s
employment is terminated, (ii) reimbursement for any and all monies advanced in
connection with the Executive’s employment for reasonable and necessary
expenses incurred by the Executive through the date the Executive’s employment
is terminated, (iii) all accrued and unpaid annual incentive compensation
awards for the year immediately prior to the year in which the Executive’s
employment is terminated, and (iv) all other payments and benefits payable on or
after termination of employment to which the Executive is entitled at the date
of termination under the terms of any applicable compensation arrangement or
benefit plan or program of the Company.  “Accrued
Benefits” shall not include any entitlement to severance pay or severance
benefits under any Company severance policy or plan generally applicable to the
Company’s salaried employees.

 

“Affiliate”
shall have the meaning given such term in Rule 12b-2 of the Exchange Act.

 

“Board” shall
mean, so long as Holding owns all of the outstanding Voting Securities (as
hereinafter defined in the definition of Change of Control) of the Company, the
board of directors of Holding.  In all
other cases, Board means the board of directors of the Company.

 

“Cause” shall mean
(i) conviction of, or plea of nolo  contendere to, a felony
(excluding motor vehicle violations); (ii) theft or embezzlement, or attempted
theft or embezzlement, of money or property or assets of the Company 

 

 

or any of its
Affiliates; (iii) illegal use of drugs; (iv) material breach of this Agreement
or any employment-related undertakings provided in a writing signed by the
Executive prior to or concurrently with this Agreement; (v) commission of any
act or acts of moral turpitude; (vi) gross negligence or willful misconduct in
the performance of Executive’s duties; (vii) breach of any fiduciary duty owed
to the Company, including, without limitation, engaging in competitive acts
while employed by the Company; or (viii) the Executive’s willful refusal to
perform the assigned duties for which the Executive is qualified as directed by
the Executive’s Supervising Officer (as hereinafter defined) or the Board;
provided, that in the case of any event constituting Cause within clauses (iv)
through (viii) which is curable by the Executive, the Executive has been given
written notice by the Companies of such event said to constitute Cause,
describing such event in reasonable detail, and has not cured such action
within thirty (30) days of such written notice as reasonably determined by the
Chief Executive Officer.  For purposes of
this definition of Cause, action or inaction by the Executive shall not be
considered “willful” unless done or omitted by the Executive (A) intentionally
or not in good faith and (B) without reasonable belief that the Executive’s
action or inaction was in the best interests of the Companies, and shall not
include failure to act by reason of total or partial incapacity due to physical
or mental illness.

 

“Change of Control”
shall mean (a)  Any “Person”
(having the meaning ascribed to such term in Section 3(a)(9) of the
Exchange Act and used in Sections 13(d) and 14(d) thereof, including a “group”
within the meaning of Section 13(d)(3)) has or acquires “Beneficial
Ownership” (within the meaning of Rule 13d-3 under the Exchange Act) of 30% or
more of the combined voting power of Holding’s then outstanding voting
securities entitled to vote generally in the election of directors (“Voting Securities”); provided, however, that the acquisition
or holding of Voting Securities  by (i)
Holding of any of its subsidiaries, (ii) an employee benefit plan (or a trust
forming a part thereof) maintained by Holding or any of its subsidiaries, or
(iii) any Person in which the Executive has a substantial equity interest shall
not constitute a Change of Control. 
Notwithstanding the foregoing, a Change of Control shall not be deemed
to occur solely because any Person acquired Beneficial Ownership of more than
the permitted amount of Voting Securities as a result of the issuance of Voting
Securities by Holding in exchange for assets (including equity interests) or
funds with a fair value equal to the fair value of the Voting Securities so
issued; provided that if a Change of Control would occur (but for the operation
of this sentence) as a result of the issuance of Voting Securities by Holding,
and after such issuance of Voting Securities by Holding, such Person becomes
the Beneficial Owner of any additional Voting Securities which increases the
percentage of the Voting Securities Beneficially Owned by such Person to more
than 50% of the Voting Securities of Holding, then a Change of Control shall
occur; (b) At any time during a period of two consecutive years, the
individuals who at the beginning of such period constituted the Board (the “Incumbent Board”) cease for any reason to constitute more
than 50% of the Board; provided, however, that if the election, or nomination
for election by Holding’s 

 

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stockholders, of
any new director was approved by a vote of more than 50% of the directors then
comprising the Incumbent Board, such new director shall, for purposes of this
subsection (b), be considered as though such person were a member of the
Incumbent Board; provided, further, however, that no individual shall be
considered a member of the Incumbent Board if such individual initially assumed
office as a result of (i) either an actual “Election Consent” (as described in
Rule 14a-11 promulgated under the Exchange Act) or other actual solicitation of
proxies or consents by or on behalf of a Person other than the Incumbent Board
(a “Proxy Contest”), or (ii) by reason of
an agreement intended to avoid or settle any actual or threatened Election
Contest or Proxy Contest; (c) Consummation of a merger, consolidation or
reorganization or approval by Holding’s stockholders of a liquidation or
dissolution of Holding or the occurrence of a liquidation or dissolution of
Holding (“Business Combination”), unless,
following such Business Combination: (1) the Persons with Beneficial Ownership
of Holding, immediately before such Business Combination, have Beneficial
Ownership of more than 50% of the combined voting power of the then outstanding
voting securities entitled to vote generally in the election of directors of
the corporation (or in the election of a comparable governing body of any other
type of entity) resulting from such Business Combination (including, without
limitation, an entity which as a result of such transaction owns Holding or all
or substantially all of Holding’s assets either directly or through one or more
subsidiaries) (the “Surviving Company”)
in substantially the same proportions as their Beneficial Ownership of the
Voting Securities immediately before such Business Combination, (2) the
individuals who were members of the Incumbent Board immediately prior to the
execution of the initial agreement providing for such Business Combination
constitute more than 50% of the members of the board of directors (or comparable
governing body of a noncorporate entity) of the Surviving Company; and (3) no
Person (other than Holding, any of its subsidiaries or any employee benefit
plan (or any trust forming a part thereof) maintained by Holding, the Surviving
Company or any Person who immediately prior to such Business Combination had
Beneficial Ownership of 30% or more of the then Voting Securities) has
Beneficial Ownership of 30% or more of the then combined voting power of the
Surviving Company’s then outstanding voting securities; provided, that
notwithstanding this clause (3), a Change of Control shall not be deemed to
occur solely because any Person acquired Beneficial Ownership of more than 30%
of Voting Securities as a result of the issuance of Voting Securities by Holding
in exchange for assets (including equity interests) or funds with a fair value
equal to the fair value of the Voting Securities so issued; provided, however
that a Business Combination with a Person in which the Executive has a
substantial equity interest shall not constitute a Change of Control, or (d)
Approval by Holding’s stockholders of an agreement for the assignment, sale,
conveyance, transfer, lease or other disposition of all or substantially all of
the assets of Holding to any Person (other than a Person in which the Executive
has a substantial equity interest and other than a subsidiary of Holding or
other entity, the Persons with Beneficial Ownership of which are the same
Persons with Beneficial Ownership of Holding and such Beneficial 

 

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Ownership is in
substantially the same proportions), or the occurrence of the same.  Notwithstanding the foregoing, a Change of
Control shall not be deemed to occur solely because any Person acquired
Beneficial Ownership of more than the permitted amount of Voting Securities as
a result of the acquisition of Voting Securities by the Company which, by
reducing the number of Voting Securities outstanding, increases the
proportional number of shares Beneficially Owned by such Person; provided that
if a Change of Control would occur (but for the operation of this sentence) as
a result of the acquisition of Voting Securities by the Company, and after such
acquisition of Voting Securities by the Company, such Person becomes the
Beneficial Owner of any additional Voting Securities which increases the
percentage of the Voting Securities Beneficially Owned by such Person, then a
Change of Control shall occur.

 

 “Exchange Act” shall mean
the Securities Exchange Act of 1934, as amended.

 

“Good Reason”
shall mean (i) any material breach by the Companies of this Agreement, (ii) any
material reduction, without the Executive’s written consent, in the Executive’s
title, duties, responsibilities or authority; provided, however, that for
purposes of this clause (ii), neither (A) a change in the Executive’s
Supervising Officer or the number or identity of the Executive’s direct
reports, nor (B) a change in the Executive’s title, duties, responsibilities or
authority as a result of a realignment or restructuring of the Companies’
executive organizational chart nor (C) a change in the Executive’s title,
duties, responsibilities or authority as a result of a realignment or
restructuring of the Companies shall necessarily be deemed by itself to
materially reduce Executive’s title, duties, responsibilities or authority, as
long as, in the case of either (A), (B) or (C), Executive continues to report
to either the Chief Executive Officer or Chief Operating Officer of the
Companies or to the Supervising Officer to whom he reported immediately prior
to the Change of Control or a Supervising Officer of equivalent responsibility
and authority, or (iii) without Executive’s written consent:  (A) a reduction in the Executive’s Base
Salary or a material reduction determined on an aggregate basis in the level of
executive benefits, perquisites and incentive opportunities, (B) the relocation
of the Executive’s principal place of employment more than fifty (50) miles
from its location on the date of a Change in Control, or (C) the relocation of
the Company’s corporate headquarters office outside of the metropolitan area in
which it is located on the date of a Change in Control.  For purposes of this Agreement, a Change of
Control, alone, does not constitute Good Reason.  Furthermore, notwithstanding the above, the
occurrence of any of the events described above will not constitute Good Reason
unless the Executive gives the Companies written notice within thirty (30) days
after the occurrence of any of such events that the Executive believes that
such event constitutes Good Reason, and the Companies thereafter fail to cure
any such event within sixty (60) days after receipt of such notice.

 

“Person” shall
mean any natural person, firm, corporation, limited liability company, trust,
partnership, limited or limited liability partnership, 

 

 

4

 

business
association, joint venture or other entity and, for purposes of the definition
of Change of Control herein, shall comprise any “person”, within the meaning of
Sections 13(d) and 14(d) of the Exchange Act, including a “group” as therein
defined.

 

“Subsidiary”
shall mean, with respect to any Person, any other Person of which such first
Person owns 20% or more of the economic interest in such Person or owns or has
the power to vote, directly or indirectly, securities representing 20%or more
of the votes ordinarily entitled to be cast for the election of directors or
other governing Persons.

 

(b)                                 The
capitalized terms used in Section 5(j) have the respective meanings
assigned to them in such Section and the following additional terms have
the respective meanings assigned to them in the Sections hereof set forth
opposite them:

 

	
  “Annual Bonus”

  	
  Section 4(b)

  
	
  “Base Salary”

  	
  Section 4(b)

  
	
  “Bonus Plan”

  	
  Section 4(b)

  
	
  “Confidential information or proprietary data”

  	
  Section 6(a)(2)

  
	
  “Customer”

  	
  Section 6(d)(2)

  
	
  “Disability”

  	
  Section 5(c)

  
	
  “Employment Period”

  	
  Section 2

  
	
  “Retirement”

  	
  Section 5(f)

  
	
  “Supervising Officer”

  	
  Section 3(a)

  
	
  “Term” and “Termination Date”

  	
  Section 2

  

 

Section 2.                                          Term
and Employment Period.  Subject
to Section 19 hereof, the term of this Agreement (“Term”)
shall commence on the Effective Date of this Agreement and shall continue until
the effective date of termination of the Executive’s employment hereunder
pursuant to Section 5 of this Agreement. 
The period during which the Executive is employed by the Companies
pursuant to this Agreement is referred to herein as the “Employment
Period.”  The date on which
termination of the Executive’s employment hereunder shall become effective is
referred to herein as the “Termination Date.”

 

Section 3.                                          Duties.

 

(a)                                  During
the Employment Period, the Executive (i) shall serve as Senior Vice President,
Sales, of the Companies, (ii) shall report directly to an officer of the
Companies (the “Supervising Officer”) who shall be
selected by the Board or the Chief Executive Officer in its or his or her sole
discretion, (iii) shall, subject to and in accordance with the authority and
direction of the Board and/or the Supervising Officer have such authority and
perform in a diligent and competent manner such duties as may be assigned to
the Executive from time to time by the Board and/or the Supervising Officer and
(iv) shall devote the Executive’s best efforts and such time, attention,
knowledge and skill to the operation of the business and affairs of the
Companies as shall be necessary to perform the Executive’s duties.  During the Employment Period, the Executive’s
place of performance for the Executive’s duties and responsibilities shall be 

 

5

 

at the
Companies’ corporate headquarters office, unless another principal place of
performance is agreed in writing among the parties and except for required
travel by the Executive on the Companies’ business or as may be reasonably
required by the Companies.

 

(b)                                 Notwithstanding
the foregoing, it is understood during the Employment Period, subject to any
conflict of interest policies of the Companies, the Executive may (i) serve in
any capacity with any civic, charitable, educational or professional
organization provided that such service does not materially interfere with the
Executive’s duties and responsibilities hereunder, (ii) make and manage personal
investments of the Executive’s choice, and (iii) with the prior consent of the
Companies’ Chief Executive Officer, which shall not be unreasonably withheld,
serve on the board of directors of one (1) for-profit business enterprise.

 

Section 4.                                          Compensation.  During the Employment Period, the Executive
shall be compensated as follows:

 

(a)                                  the
Executive shall receive, at such intervals and in accordance with such Company
payroll policies as may be in effect from time to time, an annual salary (pro
rata for any partial year) equal to $300,000 (“Base Salary”).  The Base Salary shall be reviewed by the
Board from time to time and may, in the Board’s sole discretion, be increased
when deemed appropriate by the Board; if so increased, it shall not thereafter
be reduced (other than an across-the-board reduction applied in the same
percentage at the same time to all of the Companies’ senior executives at the
same grade level);

 

(b)                                 during
the Employment Period, the Executive shall be eligible to earn an annual incentive
compensation award under the Companies’ management incentive or bonus plan, or
a successor plan thereto, as shall be in effect from time to time (the “Bonus Plan”), subject to achievement of performance goals
determined in accordance with the terms of the Bonus Plan (such annual
incentive compensation award, the “Annual Bonus”),
with such Annual Bonus to be payable in a cash lump sum at such time as bonuses
are ordinarily paid to the Companies’ senior executives at the same grade
level;

 

(c)                                  the
Executive shall be reimbursed, at such intervals and in accordance with such
Company policies as may be in effect from time to time, for any and all
reasonable and necessary business expenses incurred by the Executive for the
benefit of the Companies, subject to documentation in accordance with the
Companies’ policies;

 

(d)                                 the
Executive shall be entitled to participate in all incentive, savings and
retirement plans, stock option plans, practices, policies and programs
applicable generally to other senior executives of the Companies at the same
grade level and as determined by the Board from time to time;

 

(e)                                  the
Executive and/or the Executive’s family, as the case may be, shall be eligible
for participation in and shall receive all benefits under welfare benefit
plans, practices, policies and programs provided by the Company to senior
executives of the 

 

6

 

Companies at the same grade level (including, without limitation,
medical, prescription, dental, disability, salary continuance, employee life,
group life, and accidental death and travel accident insurance plans and
programs) to the extent applicable generally to other executives of the
Companies at the same grade level;

 

(f)                                    the
Executive shall be provided with an automobile allowance or a Company-leased
automobile, in either case in accordance with the Companies’ then applicable
Executive Automobile Policy; the Executive shall be entitled to not less than
twenty (20) paid vacation days per calendar year (pro rata for any partial
year);

 

(g)                                 the
Executive shall be entitled to participate in the Company’s other executive
fringe benefits and perquisites generally applicable to the Companies’ senior
executives at the same grade level in accordance with the terms and conditions
of such arrangements as are in effect from time to time; and

 

(h)                                 appended
hereto as Appendix I and made a part of this Agreement is a description
of certain modifications and clarifications to Section 4 of this
Agreement.

 

Section 5.                                          Termination
of Employment.

 

(a)                                  All
Accrued Benefits to which the Executive (or the Executive’s estate or
beneficiary) is entitled shall be payable within thirty (30) days following
termination of the Employment Period, except as otherwise specifically provided
herein or under the terms of any applicable policy, plan or program, in which
case the payment terms of such policy, plan or program shall be determinative.

 

(b)                                 Any
termination by the Companies, or by the Executive, of the Employment Period
shall be communicated by written notice of such termination to the Executive,
if such notice is delivered by the Companies, and to the Companies, if such
notice is delivered by the Executive, each in compliance with the requirements
of Section 13 hereof.  Except in the
event of termination of the Employment Period by reason of Cause or the
Executive’s death, the Termination Date shall be no earlier than thirty (30)
days following the date on which notice of termination is delivered by one
party to the other in compliance with the requirements of Section 13
hereof.

 

(c)                                  If
the Employment Period is terminated by the Companies for any reason other than
Cause or the Executive’s permanent disability, as defined in the Companies’
Board-approved disability plan or policy as in effect from time to time (“Disability”)
and other than within two (2) years following a Change of Control, then, as the
Executive’s exclusive right and remedy in respect of such termination:

 

(i)                                     the
Executive shall be entitled to receive from the Company the Executive’s Accrued
Benefits in accordance with Section 5(a);

 

(ii)                                  the
Executive shall be entitled to an amount equal to one and one-half (1-1/2)
times the Executive’s then existing Base Salary, to be paid in such intervals
and at such times in accordance with the Company’s payroll practices in 

 

7

 

effect from time to time over the eighteen (18) month period following
the Termination Date;

 

(iii)                               the Executive shall be
entitled to a payment in an amount equal to one and one-half (11⁄2) times the
actual incentive compensation award which would otherwise be payable for the
calendar year during which the Termination Date occurs, to be paid at such time
as the incentive award would otherwise be paid in accordance with the Company’s
policies (for purposes of determining such award, any discretionary individual
performance component shall be deemed to be at the same achievement level as in
the year preceding the Termination Date or, if not included in the such year’s incentive
award components, at target);

 

(iv)                              the
Executive shall continue to be covered, upon the same terms and conditions
described in Section 4(e) hereof, by the same or equivalent medical,
dental, hospitalization, life and disability insurance plans, programs and/or
arrangements as in effect for the Executive immediately prior to the
Termination Date until the earlier of: 
(A) the eighteen (18) month anniversary following the date of the
Executive’s Termination Date, and (B) the date the Executive receives
substantially equivalent coverage under the plans, programs and/or arrangements
of a subsequent employer;

 

(v)                                 the
Executive shall be entitled to receive executive level career transition
assistance services provided by a career transition assistance firm selected by
the Executive and paid for by the Companies in an amount not to exceed twenty
percent (20%) of the sum of (i) the Executive’s then existing Base Salary and
(ii) the target incentive compensation award for the calendar year during which
the Termination Date occurs.  The
Executive shall not be eligible to receive cash in lieu of executive level
career transition assistance services.

 

(d)                                 If
during the Employment Period, a Change of Control occurs and the Employment
Period is terminated by the Companies for any reason other than Cause or
Disability or by the Executive for Good Reason within two (2) years from the
date of such Change of Control, then:

 

(i)                                     the
Executive shall be entitled to receive from the Company the Executive’s Accrued
Benefits in accordance with Section 5(a);

 

(ii)                                  the
Executive shall be entitled to a lump-sum payment in an amount equal to two (2)
times the Executive’s then existing Base Salary, to be paid within thirty (30)
days following the Termination Date;

 

(iii)                               the Executive shall be
entitled to a lump-sum payment in an amount equal to two (2) times the
Executive’s target incentive compensation award for the calendar year during
which the Termination Date occurs, to be paid within thirty (30) days following
the Termination Date;

 

(iv)                              the
Executive shall be entitled to a lump-sum payment to be paid within thirty (30)
days following the Termination Date in an amount equal to the 

 

8

 

pro-rata target incentive compensation award for the calendar year
during which the Termination Date occurs. 
Such pro-rata target incentive compensation award shall be determined by
multiplying the target incentive compensation award amount by a fraction, the
numerator of which is the number of days in the calendar year of the
Termination Date elapsed prior to the Termination Date and the denominator of
which is three hundred and sixty-five (365).

 

(v)                                 the
Executive shall continue to be covered, upon the same terms and conditions
described in Section 4(e) hereof, by the same or equivalent medical,
dental, hospitalization, life and disability insurance plans, programs and/or
arrangements as in effect for the Executive immediately prior to the Change of
Control until the earlier of: (A) the second anniversary following the date of
the Executive’s Termination Date, and (B) the date the Executive receives
substantially equivalent coverage under the plans, programs and/or arrangements
of a subsequent employer;

 

(vi)                              the
Executive shall receive two (2) additional years of credit for purposes of age,
benefit service and vesting under the Company’s defined benefit retirement
plan;

 

(vii)                           if the Executive’s
outstanding stock options have not by then fully vested pursuant to the terms
of the Companies’ applicable stock option plan(s) and applicable option
agreement(s), then to the extent permitted in the Companies’ applicable stock
option plan(s) and as provided in the applicable stock option agreement(s), the
Executive shall continue to vest in the Executive’s unvested stock options
following the Termination Date;

 

(viii)                        the Executive shall be entitled
to receive executive level career transition assistance services provided by a
career transition assistance firm selected by the Executive and paid for by the
Companies in an amount not to exceed twenty percent (20%) of the sum of (i) the
Executive’s then existing Base Salary and (ii) the target incentive
compensation award for the calendar year during which the Termination Date
occurs.  The Executive shall not be
eligible to receive cash in lieu of executive level career transition
assistance services; and

 

(ix)                                the
Executive shall be entitled to be reimbursed by the Companies on an as incurred
basis for the Executive’s reasonable attorneys’ fees, costs and expenses
incurred in conjunction with any dispute regarding Section 5(d).

 

(e)                                  Any
amounts payable pursuant to Sections 5(c) and 5(d) above shall be considered
severance payments and, except for the Executive’s vested benefits under the
Companies’ employee benefit plans (other than severance plans), shall be in
full and complete satisfaction of the obligations of the Companies to the
Executive in connection with the termination of the Executive’s
employment.  The Company shall deliver a
Form 1099 to the Executive reflecting such payments.

 

9

 

(f)                                    If
the Employment Period is terminated as a result of the Executive’s death,
Disability or retirement, as defined in the Companies’ Board-approved
retirement plan or policy, as in effect from time to time (“Retirement”), then
the Executive shall be entitled to (i) the Executive’s Accrued Benefits in
accordance with Section 5(a), (ii) any benefits that may be payable to the
Executive under any applicable Board-approved disability, life insurance or
retirement plan or policy in accordance with the terms of such plan or policy,
and (iii) a lump sum payment to be paid within thirty (30) days following the
Termination Date in an amount equal to the pro-rata target incentive compensation
award for the calendar year during which the Termination Date occurs by reason
of the Executive’s death, Disability or Retirement.  Such pro-rata target incentive compensation
award shall be determined by multiplying the target incentive compensation
award amount by a fraction, the numerator of which is the number of days in the
calendar year of the Termination Date elapsed prior to the Termination Date and
the denominator of which is three hundred and sixty-five (365).

 

(g)                                 Notwithstanding
anything else contained herein, if the Executive terminates his employment for
any reason other than Disability or Retirement and, if after a Change of
Control, without Good Reason, or the Companies terminate the Executive’s
employment for Cause, all of the Executive’s rights to payment from the
Companies (including pursuant to any plan or policy of the Companies) shall
terminate immediately, except the right to payment for Accrued Benefits in
respect of periods prior to such termination.

 

(h)                                 Notwithstanding
anything to the contrary contained in this Section 5, the Executive shall
be required to execute the Companies’ then current standard release agreement
as a condition to receiving any of the payments and benefits provided for in
Sections 5(c) and (d), excluding the Accrued Benefits in accordance with Section 5(a).  It is acknowledged and agreed that the then
current standard release agreement shall not diminish or terminate the
Executive’s rights under this Agreement.

 

(i)                                     In
the event of a termination of the Executive’s employment entitling the
Executive to benefits under Section 5(c) above, the Executive shall use
reasonable efforts to obtain employment suitable to his education, training and
experience, and, upon obtaining any such other employment shall promptly notify
the Companies thereof.  The remaining
obligation of the Companies under Section 5(c) shall be offset by any
compensation earned by the Executive from such other employment during the
eighteenth month period commencing on his Termination Date.  Except as set forth in the first sentence of
this Section 5(i) and subject to the Executive’s affirmative obligations
pursuant to Section 6, the Executive shall be under no obligation to seek
other employment or otherwise mitigate the obligations of the Companies under
this Agreement.

 

(j)                                     If
it shall be determined that any payment or distribution of any type to or in
respect of the Executive made directly or indirectly, by the Companies or by
any other party in connection with a Change of Control, whether paid or payable
or distributed or distributable pursuant to the terms of this Agreement or
otherwise (the “Total Payments”), is or will be
subject to the excise tax imposed by Section 4999 of the

 

10

 

Internal Code of 1986, as amended (the “Code”),
or any interest or penalties with respect to such excise tax (such excise tax,
together with any such interest and penalties, are collectively referred to as
the “Excise Tax”), then the Executive shall
be entitled to receive an additional payment (a “Gross-Up
Payment”) in an amount such that after payment by the Executive of
all taxes (including any interest or penalties imposed with respect to such
taxes) imposed upon the Gross-Up Payment, the Executive retains an amount of
the Gross-Up Payment equal to the Excise Tax imposed upon the Total Payments.

 

(i)                                     All
computations and determinations relevant to Section 5(j) and this subsection 5(j)(i)
shall be made by a national accounting firm selected and reimbursed by the Companies
from among the ten (10) largest accounting firms in the United States as
determined by gross revenues (the “Accounting Firm”),
subject to the Executive’s consent (not to be unreasonably withheld), which
firm may be the Companies’ accountants. 
Such determinations shall include whether any of the Total Payments are “parachute
payments” (within the meaning of Section 280G of the Code).  In making the initial determination hereunder
as to whether a Gross-Up Payment is required, the Accounting Firm shall
determine that no Gross-Up Payment is required if the Accounting Firm is able
to conclude that no “Change of Control” has occurred (within the meaning of Section 280G
of the Code).  If the Accounting Firm
determines that a Gross-Up Payment is required, the Accounting Firm shall
provide its determination (the “Determination”),
together with detailed supporting calculations regarding the amount of any
Gross-Up Payment and any other relevant matter both to the Companies and the
Executive by no later than thirty (30) days following the Termination Date, if
applicable, or such earlier time as is requested by the Companies or the
Executive (if the Executive reasonably believes that any of the Total Payments
may be subject to the Excise Tax).  If
the Accounting Firm determines that no Excise Tax is payable by the Executive,
it shall furnish the Executive and the Companies with a written statement that
such Accounting Firm has concluded that no Excise Tax is payable (including the
reasons therefor) and that the Executive has substantial authority not to
report any Excise Tax on Executive’s federal income tax return.

 

(ii)                                  If
a Gross-Up Payment is determined to be payable, it shall be paid to the
Executive within twenty (20) days after the Determination (and all accompanying
calculations and other material supporting the Determination) is delivered to
the Companies by the Accounting Firm. 
Any determination by the Accounting Firm shall be binding upon the
Companies and the Executive, absent manifest error.

 

(iii)                               As a result of
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
Gross-Up Payments not made by the Companies should have been made (“Underpayment”), or that Gross-Up Payments will have been
made by the Companies which should not have been made (“Overpayments”).  In either such event, the Accounting Firm
shall determine the amount of the Underpayment or 

 

11

 

Overpayment that has occurred. 
In the case of an Underpayment, the amount of such Underpayment
(together with an amount which after payment of all taxes thereon is equal to
any interest and penalties payable by the Executive as a result of such
Underpayment) shall be promptly paid by the Companies to or for the benefit of
the Executive.

 

(iv)                              In
the case of an Overpayment, the Executive shall, at the direction and expense
of the Companies, take such steps as are reasonably necessary (including the
filing of returns and claims for refund), follow reasonable instructions from,
and procedures established by, the Companies, and otherwise reasonably
cooperate with the Companies to correct such Overpayment, provided, however,
that the Executive shall not in any event be obligated to return to the
Companies an amount greater than the portion of the Overpayment that Executive
has retained after payment of all taxes thereon or has recovered as a refund
from the applicable taxing authorities.

 

(v)                                 The
Executive shall notify the Companies in writing of any claim by the Internal
Revenue Service relating to the possible application of the Excise Tax under Section 4999
of the Code to any of the payments and amounts referred to herein and shall
afford the Companies, at their expense, the opportunity to control the defense
of such claim (for the sake of clarity, if the Internal Revenue Service is
successful in any such claim or the Executive reaches a final settlement with
the Internal Revenue Service with respect to such claim (after having afforded
the Companies, at their expense, the opportunity to control the defense of such
claim), the amount of the Excise Tax resulting from such successful claim or
settlement shall be determinative as to whether or not there has been an Underpayment
or an Overpayment for purposes of subsection 5(j)(iii).

 

(vi)                              Without
limiting the intent of this Section 5(j) to make the Executive whole, on
an after-tax basis, from the application of the Excise Taxes, all
determinations by the Accounting Firm shall be made with a view to minimizing
the application of Sections 280G and 4999 of the Code of any of the Total
Payments, subject, however, to the following: 
the Accounting Firm shall make its determination on the basis of “substantial
authority” (within the meaning of Section 6230 of the Code) and shall
provide opinions to that effect to both the Companies and the Executive upon
the request of either of them.

 

Section 6.                                          Further
Obligations of the Executive.

 

(a)                                  (1)                                  During and following
the Executive’s employment by the Companies, the Executive shall not, directly
or indirectly, disclose, disseminate, make available or use any confidential
information or proprietary data of the Companies or any of their Subsidiaries,
except as reasonably necessary or appropriate for the Executive to perform the
Executive’s duties for the Companies, or as authorized in writing by the Board
or as required by any court or administrative agency (and then only after
prompt notice to the Companies to permit the Companies to seek a protective
order).

 

12

 

(2)                                  For
purposes of this Agreement, “confidential information
or proprietary data” means information and data prepared, compiled,
or acquired by or for the Executive during or in connection with the Executive’s
employment by the Companies (including, without limitation, information
belonging to or provided in confidence by any Customer, Supplier, trading
partner or other Person to which the Executive had access by reason of Executive’s
employment with the Companies) which is not generally known to the public or
which could be harmful  to the Companies
or their Subsidiaries if disclosed to Persons outside of the Companies.  Such confidential information or proprietary
data may exist in any form, tangible or intangible, or media (including any
information technology-related or electronic media) and includes, but is not
limited to, the following information of or relating to the Companies or any of
their Subsidiaries, Customers or Suppliers:

 

(i)                                     Business,
financial and strategic information, such as sales and earnings information and
trends, material, overhead and other costs, profit margins, accounting
information, banking and financing information, pricing policies, capital
expenditure/investment plans and budgets, forecasts, strategies, plans and
prospects.

 

(ii)                                  Organizational
and operational information, such as personnel and salary data, information
concerning the utilization or capabilities of personnel, facilities or
equipment, logistics management techniques, methodologies and systems, methods
of operation data and facilities plans.

 

(iii)                               Advertising, marketing
and sales information, such as marketing and advertising data, plans, programs,
techniques, strategies, results and budgets, pricing and volume strategies,
catalog, licensing or other agreements or arrangements, and market research and
forecasts and marketing and sales training and development courses, aids,
techniques, instruction and materials.

 

(iv)                              Product
and merchandising information, such as information concerning offered or
proposed products or services and the sourcing of the same, product or services
specifications, data, drawings, designs, performance characteristics, features,
capabilities and plans and development and delivery schedules.

 

(v)                                 Information
about existing or prospective Customers or Suppliers, such as Customer and
Supplier lists and contact information, Customer preference data, purchasing
habits, authority levels and business methodologies, sales history, pricing and
rebate levels, credit information and contracts.

 

(vi)                              Technical
information, such as information regarding plant and equipment organization,
performance and design, information technology and logistics systems and
related designs, integration, capabilities, performance and plans, computer
hardware and software, research and development objectives, budgets and
results, intellectual property applications, and other design and performance
data.

 

13

 

(b)                                 All
records, files, documents and materials, in whatever form and media, relating
to the Companies’ or any of their Subsidiaries’ business (including, but not
limited to, those containing or reflecting any confidential information or
proprietary data) which the Executive prepares, uses, or comes into contact
with, including the originals and all copies thereof and extracts and
derivatives therefrom, shall be and remain the sole property of the Companies
or their Subsidiaries.  Upon termination
of the Executive’s Employment Period for any reason, the Executive shall
immediately return all such records, files, documents, materials and other
property of the Companies and their Subsidiaries in the Executive’s possession,
custody or control, in good condition, to the Companies.

 

(c)                                  During
(i) the Executive’s employment by the Companies and (ii) the eighteen (18)
month period following the end of the Executive’s Employment Period, the
Executive shall not within the United States and Canada in any capacity
(whether as an owner, employee, consultant or otherwise) at any time perform,
manage, supervise, or be responsible or accountable for anyone else who is
performing services — which are the same as, substantially similar or related
to the services the Executive is providing, or during the last two years of the
Executive’s employment by the Companies has provided, for the Companies or
their Subsidiaries — for, or on behalf of, any other Person who or which is (1)
a wholesaler of office products, including traditional office products,
computer consumable products, office furniture, janitorial and/or sanitation
products, audio/visual and business machines or such other products whether or
not related to the foregoing provided by the Companies or their Subsidiaries
during the last twelve (12) months of the Executive’s Employment Period, (2) a
provider of services the same as or substantially similar to those provided by
the Companies or their Subsidiaries during the last twelve (12) months of the
Executive’s Employment Period, or (3) engaged in a line of business other than
described in (1) or (2) hereinabove which is the same or substantially similar
to the lines of business engaged in by the Companies or their Subsidiaries, or
to any line of business which to the Executive’s knowledge is under active
consideration or planning by the Companies and their Subsidiaries, during the
last twelve (12) months of the Executive’s Employment Period,.

 

(d)                                 (1)                                  During (i) the
Executive’s employment by the Companies and (ii) the eighteen (18) month period
following the end of the Executive’s Employment Period, the Executive shall not
at any time, directly or indirectly, solicit any Customer for or on behalf of
any Person other than the Companies or any of their Subsidiaries with respect
to the purchase of (A) office products, including traditional office products,
computer consumable products, office furniture, janitorial and/or sanitation
products, audio/visual and business machines, or such other products whether or
not related to the foregoing provided by the Companies or their Subsidiaries to
such Customer during the last twelve (12) months of the Executive’s Employment
Period, (B) services the same as or substantially similar to those provided by
the Companies or their Subsidiaries to such Customer during the last twelve
(12) months of the Executive’s Employment Period or (C) products or services
from a line of business other than as described in (A) or (B) herein which are
the same or substantially similar to the products and services provided to such
Customer from a line of business engaged in by the Companies or their
Subsidiaries during the last twelve (12) months of the Executive’s Employment
Period.

 

14

 

Without limiting the foregoing, (i) during the Executive’s employment
by the Companies and (ii) insofar as the Executive may be employed by, or
acting for or on behalf of, a Supplier at any time within the eighteen (18)
month period following the end of the Executive’s Employment Period, the
Executive shall not at any time, directly or indirectly, solicit any Customer
to switch the purchase of the products or services described hereinabove from
the Companies or their Subsidiaries to Supplier.

 

(2)                                  For purposes of this
Agreement, a “Customer” is any Person who or
which has ordered or purchased by or from the Companies or any of their
Subsidiaries (A) office products, including traditional office products,
computer consumable products, office furniture, janitorial and/or sanitation
products, audio/visual and business machines or such other products whether or
not related to the foregoing, (B) services provided by or from the Companies or
any of their Subsidiaries or (C) products or services from a line of business
other than as described in (A) or (B) herein which are the same or
substantially similar to the products and services from a line of business
engaged in by the Companies or their Subsidiaries during the last twelve (12)
months of the Executive’s Employment Period. 
For purposes of this Agreement, a “Supplier” is
any Person who or which has furnished to the Companies or their Subsidiaries
for resale (A) office products, including traditional office products, computer
consumable products, office furniture, janitorial and/or sanitation products,
audio/visual and business machines or such other products whether or nor
related to the foregoing (B) services provided by or from the Companies or any
of their Subsidiaries or (C) products or services from a line of business other
than as described in (A) or (B) herein which are the same or substantially
similar to the products and services from a line of business engaged in by the
Companies or their Subsidiaries during the last twelve (12) months of the
Executive’s Employment Period.

 

(e)                                  During
the Executive’s employment by the Companies and during the eighteen (18) month
period following the end of the Executive’s Employment Period, the Executive
shall not at any time, directly or indirectly, induce or solicit any employee
of the Companies or any of their Subsidiaries for the purpose of causing such
employee to terminate his or her employment with the Companies or such
Subsidiary.

 

(f)                                    The
Executive shall not, directly or indirectly, make or cause to be made (and
shall prohibit the officers, directors, employees, agents and representatives
of any Person controlled by Executive not to make or cause to be made) any
disparaging, derogatory, misleading or false statement, whether orally or in
writing, to any Person, including members of the investment community, press,
and customers, competitors and advisors to the Companies, about the Companies,
their respective parents, Subsidiaries or Affiliates, their respective officers
or members of their boards of directors, or the business strategy or plans,
policies, practices or operations of the Companies, or of their respective
parents, Subsidiaries or Affiliates.

 

(g)                                 If
any court determines that any portion of this Section 6 is invalid or
unenforceable, the remainder of this Section 6 shall not thereby be
affected and shall be given full effect without regard to the invalid
provision.  If any court construes any of
the provisions of Section 6(c), 6(d), 6(e) or 6(f) above, or any part
thereof, to be unreasonable because of the duration or scope of such provision,
such court shall have 

 

15

 

the power to reduce the duration or scope of such provision and to
enforce such provision as so reduced.

 

(h)                                 During
the Executive’s Employment Period and during the eighteen (18) month period
following the end of Executive’s Employment Period, the Executive agrees that,
prior to accepting employment with a Customer or Supplier of the Companies, the
Executive will give notice to the Chief Executive Officer of the
Companies.  The Companies reserve the
right to make such Customer or Supplier aware of the Executive’s obligations
under Section 6 of this Agreement.

 

(i)                                     During
and following Executive’s Employment Period, the Executive shall furnish a copy
of this Section 6 in its entirety to any prospective employer prior to
accepting employment with such prospective employer.

 

(j)                                     The
Executive hereby acknowledges and agrees that damages will not be an adequate
remedy for the Executive’s breach of any provision of this Section 6, and
further agrees that the Companies shall be entitled to obtain appropriate
injunctive and/or other equitable relief for any such breach, without the
posting of any bond or other security, in addition to all other legal remedies
to which the Companies may be entitled.

 

Section 7.                                          Successors.  The Companies may assign their rights under
this Agreement to any successor to all or substantially all the assets of the
Companies, by merger or otherwise, and may assign or encumber this Agreement and
its rights hereunder as security for indebtedness of the Companies.  Any such assignment by the Companies shall
remain subject to the Executive’s rights under Section 5 hereof.  The rights of the Executive under this
Agreement may not be assigned or encumbered by the Executive, voluntarily or
involuntarily, during the Executive’s lifetime, and any such purported
assignment shall be void ab initio.  Notwithstanding the foregoing, all rights of
the Executive under this Agreement shall inure to the benefit of and be
enforceable by the Executive’s personal or legal representatives, estates,
executors, administrators, heirs and beneficiaries.  All amounts payable to the Executive
hereunder shall be paid, in the event of the Executive’s death, to the
Executive’s estate, heirs or representatives.

 

Section 8.                                          Third
Parties.  Except for the rights
granted to the Companies and their Subsidiaries pursuant hereto (including,
without limitation, pursuant to Section 6 hereof) and except as expressly
set forth or referred to herein, nothing herein expressed or implied is
intended or shall be construed to confer upon or give any person other than the
parties hereto and their successors and permitted assigns any rights or
remedies under or by reason of this Agreement.

 

Section 9.                                          Enforcement.  The provisions of this Agreement shall be
regarded as divisible and, if any of said provisions or any part or application
thereof is declared invalid or unenforceable by a court of competent
jurisdiction, the same shall not affect the other provisions hereof, other
parts or applications thereof or the whole of this Agreement, but such
provision shall be deemed modified to the extent necessary to render such
provision enforceable, and the rights and obligations of the parties shall be construed
and enforced accordingly, preserving to the fullest permissible extent the
intent and agreements of the parties herein set forth.

 

16

 

Section 10.                                   Amendment.  This Agreement may not be amended or modified
at any time except by a written instrument approved by the Board, and executed
by the Companies and the Executive; provided, however, that any
attempted amendment or modification without such approval and execution shall
be null and void ab initio and of no effect.

 

Section 11.                                   Payment
and Withholding.  The Company
shall be responsible as employer for payment of all cash compensation and
severance payments provided herein and Holding shall cause the Company to make
such payments.  The Executive shall not
be entitled to receive any additional compensation from either of the Companies
for any services the Executive provides to Holding or the Companies’
Subsidiaries.  The Company shall be
entitled to withhold from any amounts to be paid to the Executive hereunder any
federal, state, local, or foreign withholding or other taxes or charges which
it is from time to time required to withhold. 
The Company shall be entitled to rely on an opinion of counsel if any
question as to the amount or requirement of any such withholding shall arise.

 

Section 12.                                   Governing
Law.  This Agreement and the
rights and obligations hereunder shall be governed by and construed in
accordance with the laws of the State of Illinois, without regard to principles
of conflicts of law of Illinois or any other jurisdiction.

 

Section 13.                                   Notice.  Notices given pursuant to this Agreement
shall be in writing and shall be deemed given when received and, if mailed,
shall be mailed by United States registered or certified mail, return receipt
requested, addressee only, postage prepaid:

 

If to the Companies:

 

United Stationers Inc.

United Stationers Supply Co.

2200 E. Golf Road

Des Plaines, IL  60016-1267

Attention: 
General Counsel

 

If to the Executive:

 

Patrick T. Collins

17 Rue Cezanne

Coto de Caza, CA  92679

 

or to such other
address as the party to be notified shall have given to the other in accordance
with the notice provisions set forth in this Section 13.

 

Section 14.                                   No
Waiver.  No waiver by either
party at any time of any breach by the other party of, or compliance with, any
condition or provision of this Agreement to be performed by the other party
shall be deemed a waiver of similar or dissimilar provisions or conditions at
any time.

 

Section 15.                                   Headings.  The headings contained herein are for
reference only and shall not affect the meaning or interpretation of any
provision of this Agreement.

 

17

 

Section 16.                                   Indemnification.  The provisions set forth in the
Indemnification Agreement appended hereto as Attachment A are hereby
incorporated into this Agreement and made a part hereof.  The parties shall execute the Indemnification
Agreement contemporaneously with the execution of this Agreement.

 

Section 17.                                   Execution
in Counterparts.  This Agreement,
including the Indemnification Agreement, may be executed in any number of
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.

 

Section 18.                                   Arbitration.  Any dispute, controversy or question arising
under, out of, or relating to this Agreement (or the breach thereof), or, the
Executive’s employment with the Companies or termination thereof, shall be
referred for arbitration in Chicago, Illinois to a neutral arbitrator selected
by the Executive and the Companies (or if the parties are unable to agree on
selection of such an arbitrator, one selected by the American Arbitration
Association pursuant to its rules referred to below) and this shall be the
exclusive and sole means for resolving such dispute.  Such arbitration shall be conducted in
accordance with the National Rules for Resolution of Employment Disputes of the
American Arbitration Association.  Except
as provided in Section 5(d)(ix) above, the arbitrator shall have the
discretion to award reasonable attorneys’ fees, costs and expenses to the
prevailing party.  Judgment upon the
award rendered by the arbitrator may be entered in any court having
jurisdiction thereof.  Nothing in this Section 18
shall be construed so as to deny the Companies the right and power to seek and
obtain injunctive relief in a court of equity for any breach or threatened
breach by the Executive of any of the Executive’s covenants in Section 6
hereof.  Moreover, this Section 18
and Section 12 hereof shall not be applicable to any dispute, controversy
or question arising under, out of, or relating to the Indemnification
Agreement.

 

Section 19.                                   Survival.  Notwithstanding the stated Term of this
Agreement, the provisions of this Agreement necessary to carry out the
intention of the parties as expressed herein, including without limitation
those in Sections 5, 6, 7, 16 and 18, shall survive the termination or
expiration of this Agreement.

 

Section 20.                                   Construction.  The parties acknowledge that this Agreement
is the result of arm’s-length negotiations between sophisticated parties each
afforded representation by legal counsel. 
Each and every provision of this Agreement shall be construed as though
both parties participated equally in the drafting of same, and any rule of
construction that a document shall be construed against the drafting party
shall not be applicable to this Agreement.

 

Section 21.                                   Free
to Contract.  The Executive
represents and warrants to the Companies that the Executive is able freely to
accept employment by the Companies as described in this Agreement and that
there are no existing agreements, arrangements or understandings, written or
oral, that would prevent the Executive from entering into this Agreement, would
prevent or restrict the Executive in any way from rendering services to the
Companies as provided herein during the Employment Period or would be breached
by the future performance by the Executive of the Executive’s duties and
responsibilities hereunder.

 

Section 22.                                   Entire
Agreement.  This Agreement,
including the Indemnification Agreement and any other written undertakings by
the Executive referred to herein, supersedes all 

 

18

 

other agreements,
arrangements or understandings (whether written or oral) between the Companies
and the Executive with respect to the subject matter of this Agreement and the
Executive’s employment relationship with the Companies and any of their
Subsidiaries, and this Agreement contains the sole and entire agreement among
the parties hereto with respect to the subject matter hereof.

 

*                                         *                                         *

 

IN WITNESS WHEREOF, the
parties have executed this Agreement in one or more counterparts, each of which
shall be deemed one and the same instrument, as of the day and year first
written above.

 

	
  EXECUTED ON:

  	
   

  	
   

  	
   

  	
   

  	
  UNITED STATIONERS INC.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  October 21, 2004

  	
   

  	
   

  	
   

  	
  By:

  	
  /s/ Richard W. Gochnauer

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Name: Richard W. Gochnauer

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Title: President and Chief Executive Officer

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  EXECUTED ON:

  	
   

  	
   

  	
   

  	
   

  	
  UNITED STATIONERS SUPPLY CO.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  October 21, 2004

  	
   

  	
   

  	
   

  	
  By:

  	
  /s/ Richard W. Gochnauer

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Name: Richard W. Gochnauer

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Title: President and Chief Executive Officer

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  EXECUTED ON:

  	
   

  	
   

  	
   

  	
   

  	
  EXECUTIVE:

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  October 21, 2004

  	
   

  	
   

  	
   

  	
  /s/ Patrick T. Collins

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Patrick T. Collins

  

 

19

 

APPENDIX
I

 

Patrick
T. Collins

 

1.               The
Executive will be paid a one-time cash acceptance bonus of $150,000, less
applicable tax withholdings, payable within thirty (30) days after his
employment commencement date, provided that he is an officer and employee of
the Companies in good standing at such time. 
The Executive agrees to repay this acceptance bonus in full on the date
of termination of employment in the event that he voluntarily leaves the employ
of the Companies for any reason other than Disability prior to October 1,
2006.

 

2.               Upon
and subject to approval of and grant by the Human Resources Committee of
Holding’s Board of Directors when such Committee first meets after the
Executive’s employment commencement date (the effective date of such grant
referred to as the “Grant Date”), Holding will grant to the Executive a
non-qualified option to purchase 50,000 shares of Holding’s Common Stock (the “Option”)
on the following terms:  The Option will
become exercisable with respect to 16,666 shares on the first anniversary of
the Grant Date and 16,667 on each of the second and third anniversaries of the
Grant Date, provided in each case that the Executive is still then in the
employ of the Companies. The Option will expire not later than the tenth
anniversary of the Grant Date.  The
Option will be subject to all of the terms, conditions and limitations of the
United Stationers Inc. 2004 Long-Term Incentive Plan and the approved form
of option grant agreement thereunder.

 

3.               The
Executive’s target annual cash bonus for 2004 under the Company’s Management
Incentive Plan (“MIP”) will be 50% of his base salary for the year, prorated in
accordance with the MIP to reflect his proportionate employment period during
2004.  Any amount earned under the MIP in
respect of 2004 will become payable in the first quarter of 2005, provided that
the Executive remains an employee in good standing at the time such payment is
made.

 

20<PAGE>

                                                                  Exhibit 4.12.1

                  THIS CONVERTIBLE PROMISSORY NOTE HAS BEEN, AND ANY SECURITIES
                  ISSUED UPON CONVERSION PURSUANT TO THE TERMS HEREOF WILL BE,
                  ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO, OR FOR SALE IN
                  CONNECTION WITH, ANY DISTRIBUTION THEREOF WITHIN THE MEANING
                  OF THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"). THIS
                  CONVERTIBLE PROMISSORY NOTE AND ANY SECURITIES ISSUED UPON
                  CONVERSION HEREOF HAVE NOT BEEN REGISTERED UNDER THE ACT OR
                  ANY STATE SECURITIES LAW, AND MAY BE OFFERED AND SOLD ONLY IF
                  REGISTERED PURSUANT TO THE PROVISIONS OF THE ACT OR THOSE LAWS
                  OR IF AN EXEMPTION FROM REGISTRATION IS AVAILABLE.

                         EPIXTAR CORP./VOXX CORPORATION

UNSECURED 5% JOINT AND SEVERAL SUBORDINATED CONVERTIBLE PROMISSORY NOTE

Principal Amount: $[PRINCIPAL AMOUNT]                          ___________, 2004

         This Note (this "Note") is one of a duly authorized issue of unsecured
subordinated Notes (collectively, the "Notes") of the joint and several obligors
Epixtar Corp., a Florida corporation ("Epixtar"), and Voxx Corporation, a
Florida corporation ("Voxx") (Epixtar and Voxx may hereafter be collectively
referred to as the "Joint Obligors" or the "Issuer"). The Notes are designated
as the 2004 Unsecured 5% Joint and Several Subordinated Convertible Promissory
Notes, in an aggregate maximum principal face value for all Notes of this series
of Twelve Million Dollars ($12,000,000) (or Thirteen Million Eight Hundred
Thousand Dollars ($13,800,000.00) if the entire over-allotment option is sold),
subject to increase as set forth below. In addition, the aggregate maximum
principal face value for all Notes of this series may be increased by up to an
additional $1,000,000 if the holders of our 8% Convertible Promissory Notes due
2005 elect to exchange their notes for these Notes.

         FOR VALUE RECEIVED, each of Epixtar and Voxx jointly and severally
promises to pay to                                       the registered holder
hereof and its successors and assigns (hereinafter called the "Holder"), at such
address as the Holder may designate in writing to Issuer, the principal sum of
[INSERT PRINCIPAL AMOUNT] DOLLARS [($___________)] plus all accrued interest
then owing hereunder in lawful money of the United States of America on or
before the Maturity Date (as defined below), unless this Note is converted into
securities of Issuer in accordance with Section 7 hereof. For purposes of this
Note, the term "Maturity Date" shall mean the earliest to occur of: (i) May 14,
2007; (ii) the date on which all principal plus accrued and unpaid interest
under this Note is due and payable pursuant to Section 5.2; or (iii) the
occurrence of a Change of Control Event (as defined in Section 6.1).

<PAGE>

         Each of Epixtar and Voxx are jointly and severally liable for the
repayment of this Note which is an unsecured, subordinated obligation of each of
Epixtar and Voxx.

         The following is a statement of the rights of the Holder of this Note
and the terms and conditions to which this Note is subject, and to which the
Holder, by acceptance of this Note, agrees:

         SECTION 1. SUBSCRIPTION AGREEMENT. This Note is subject to the terms
and conditions of that certain Subscription Agreement dated as of the date
hereof by and between Issuer and the initial Holder (the "Subscription
Agreement"), and capitalized terms not expressly defined herein shall have the
meaning ascribed to such terms in the Subscription Agreement.

         SECTION 2. INTEREST. Interest shall accrue on the unpaid principal
amount of this Note at the rate of five percent (5%) per annum (the "Base
Interest Rate"). Interest shall be computed for the actual number of days
elapsed on the basis of a 360-day year composed of 30-day months. Accrued
interest on this Note shall be payable semi-annually in arrears on June 30th and
December 31st of each year, with the first interest payment due on December 31,
2004; provided, however, any accrued but unpaid interest on this Note shall be
due and payable in full on the Maturity Date. The Base Interest Rate shall
increase by an additional five percent (5%) per annum (or the highest rate
permitted by applicable law, whichever is less) if Issuer shall fail to effect
the Voxx Spin-Off (as defined in Section 6.1) or consummate the Voxx IPO (as
defined in Section 6.1) on or prior to the one year anniversary date of the
initial issuance of the Notes (the "One Year Anniversary Date"). In addition to
the rights of the Holder set forth in Section 5 below, upon the occurrence of
any Event of Default (as defined in Section 5.1), interest shall accrue, on the
outstanding principal indebtedness under this Note and all accrued and unpaid
interest, at a default interest rate (the "Default Interest Rate") (computed on
the same basis as set forth above) equal to the Base Interest Rate then in
effect plus ten percent (10%) per annum (or the highest rate permitted by
applicable law, whichever is less) for the period commencing the date upon which
such Event of Default occurred until such time as the Event of Default is cured
or otherwise remedied. The Default Interest Rate shall be payable monthly and
shall be in lieu of the interest otherwise payable hereunder during the period
for which it applies.

         SECTION 3. AFFIRMATIVE COVENANTS. So long as this Note remains
outstanding, each Issuer covenants and agrees that:

         3.1. SEC Filings. Epixtar will furnish to the Holder:

            (a) within 90 days after the end of each fiscal year, beginning with
the fiscal year ending December 31, 2004, a copy of Epixtar's Annual Report on
Form 10-KSB, as filed with the Securities and Exchange Commission ("SEC");

            (b) within 45 days after the end of each fiscal quarter (except for
the fourth quarter), a copy of Epixtar's Quarterly Report on Form 10-QSB, as
filed with the SEC; and

            (c) within five days of filing thereof with the SEC, any amendments
to either of the foregoing reports.

         3.2. Notice of Event of Default. Issuer will provide the Holder with
prompt written notice upon the occurrence of any Event of Default.

                                       2
<PAGE>

         3.3. Notice of Certain Events. Issuer will provide the Holder with not
less than 20 nor more than 30 days' advance written notice before the earlier of
the establishment of any record date in connection with, or any closing or
effective date for, any of the events described in Sections 8.1(a) - (c) hereof
or any Change of Control Event; provided, however, that (i) in the event such
information would be material nonpublic information, Issuer shall first notify
the Holder of such and permit the Holder to waive notification of such event and
(ii) in the event the Holder does not waive such notification, Issuer may
require the Holder to agree to keep such information confidential as a condition
to such notification.

         3.4. Maintenance of Corporate Existence and Rights. Issuer will at all
times do or cause to be done all things necessary to maintain, preserve and
renew the corporate existence of Issuer and each material subsidiary and its
related rights, patents and franchises; provided, however, that nothing
contained in this Section 3.4 shall require Issuer or any subsidiary to
maintain, preserve or renew any right, patent or franchise not necessary or
desirable in the conduct of the business of Issuer or such subsidiary.

         3.5. Insurance. Issuer and its subsidiaries will maintain or cause to
be maintained insurance against loss or damage of the kinds customarily insured
against by corporations similarly situated (including officer's and director's
liability), with reputable insurers, in such amounts, with such deductibles and
by such methods as shall be adequate, and in any event in amounts not less than
amounts generally maintained by other companies engaged in similar businesses.
Issuer shall further promptly provide to the holders of the Notes copies of all
material notices received from or sent to any of its or its subsidiaries'
insurers together with copies of all material correspondence regarding any
potential or actual termination of such insurance.

         3.6. Books and Records. Issuer and its subsidiaries will at all times
keep true books of records and accounts in which full and correct entries will
be made of all its business transactions, and will reflect in its consolidated
financial statements adequate accruals and appropriations to reserves, all in
accordance with generally accepted accounting practices (subject to customary
and reasonable year-end adjustments).

         3.7. Compliance with Law. Issuer and its subsidiaries will comply with
all applicable statutes, rules, regulations, orders and restrictions of the
United States of America, foreign countries, states and municipalities and of
any governmental department, commission, board, regulatory authority, bureau,
agency, and instrumentality of the foregoing, and of any court, arbitrator or
grand jury, in respect of the conduct of their respective businesses and the
ownership of their properties, except such as are being contested in good faith
by appropriate proceedings, unless the penalty for noncompliance would not have
a material adverse effect on the properties, business, condition (financial or
otherwise) or prospects of Issuer and its subsidiaries taken as a whole.

         SECTION 4. Negative Covenants of Issuer. Issuer hereby agrees that, so
long as at least fifty percent (50%) of the principal amount of the originally
issued Notes are outstanding, it will not nor will it permit any of its
subsidiaries to:

                                       3
<PAGE>

         4.1. Indebtedness for Borrowed Money. Incur, or permit to exist, any
(i) additional secured or unsecured indebtedness for borrowed money of Voxx or
(ii) any additional indebtedness for borrowed money of Epixtar which is senior
to the Notes, except, in the case of clauses (i) and (ii) above, for Permitted
Indebtedness. The term "Permitted Indebtedness" means the incurrence of
indebtedness for borrowed money of Epixtar or Voxx (other than clause (e) below
which shall only apply to Epixtar) (a) in connection with the factoring of its
receivables; (b) represented by working capital lines of credit consistent with
its ordinary course business operations; (c) in connection with its lease or
acquisition of equipment to be used in its ordinary course business operations;
(d) in connection with its execution and delivery of real property leases in
accordance with its ordinary course business operations; (e) that is due and
owing to the holders of Senior Debt (as defined in Section 9(a) below); (f) in
connection with future loans made to Epixtar or Voxx from Laurus Master Fund,
Ltd. ("Laurus"); and (g) in connection with acquisitions approved by a majority
of the independent members of its Board of Directors.

         4.2. Contingent Liabilities. Assume, endorse, be or become liable for
or guarantee the indebtedness or obligations of any Person, contingently or
otherwise, excluding however, (i) the endorsement of negotiable instruments for
deposit or collection in the ordinary course of business and (ii) any guarantee
of the Senior Debt (including any future loans made to Epixtar or Voxx by
Laurus);

         4.3. New Securities. Create or issue any new class or series of any
debt or equity security of Epixtar or Voxx (or any security which is convertible
into any such securities, including any class of preferred stock) which has a
preference senior to the Notes with respect to voting, interest, dividends,
liquidation preference or redemption (other than the creation and issuance of
any new debt security to the holders of Senior Debt);

         4.4. Sale or Encumbrance of Assets. Effect any sale, lease, assignment,
encumbrance, transfer or other conveyance of all or substantially all of the
assets of Epixtar or Voxx; provided, however, Epixtar and Voxx may grant
security interests in their assets, and pledge any stock owned by them, to
secure the indebtedness owed to the holders of the Senior Debt (which, for the
avoidance of doubt, shall include any future loans made to Epixtar or Voxx by
Laurus);

         4.5. Mergers. Effect any merger, share transfer, reorganization or
consolidation involving Epixtar or Voxx or enter into any transaction or series
of related transactions, in any such case, in which more than fifty percent
(50%) of the voting power of Epixtar or Voxx is disposed of;

         4.6. Dividends and Distributions. Pay dividends or make any other
distribution on shares of the capital stock of either Epixtar or Voxx, except
for dividends or distributions contemplated by the Notes, the Senior Debt or
other indebtedness or securities outstanding on the date of initial issuance of
the Notes; or

         4.7. No Impairment. Make or enter into any agreement or become
obligated to do any of the actions prohibited by Sections 4.1 through 4.6 above.

                                       4
<PAGE>

Notwithstanding anything contained in this Section 4, each Issuer shall be
permitted, and the consent of the holders of Notes shall not be required, to
effect the Voxx IPO or the Voxx Spin-Off.

         SECTION 5. EVENTS OF DEFAULT

         5.1. Definition of Event of Default. The occurrence of any of the
following shall constitute an "Event of Default" under this Note (whatever the
reason for such Event of Default and whether it shall be voluntary or
involuntary or be effected by operation of law or pursuant to any judgment,
decree or order of any court or any order, rule or regulation of any
administrative or governmental body):

            (a) subject to the provisions of Section 9, a default in the payment
of all or any part of the principal or interest due under this Note as and when
the same shall become due and payable, at maturity, by declaration as permitted
hereunder, upon acceleration or otherwise; provided, that Issuer shall have an
additional five (5) days to cure any failure to make an interest payment when
due;

            (b) any representation, warranty, certificate, or other statement
(financial or otherwise) made or furnished by or on behalf of Issuer to the
Holder in writing in connection with this Note or the Subscription Agreement
shall be false, incorrect, incomplete or misleading in any material respect when
made or furnished;

            (c) the failure to observe any covenant set forth herein (other than
a covenant covered by clause (a) above) (which failure is not cured within 20
days after receipt by Issuer of notice of such failure);

            (d) an acceleration of the stated maturity of any indebtedness of
Issuer in an amount greater than Two Million Dollars ($2,000,000) in aggregate
principal amount (which acceleration is not rescinded, annulled or otherwise
cured within 20 days of receipt by Issuer of notice of such acceleration);

            (e) a judgment or order (not covered by insurance) for the payment
of money shall be rendered against Issuer in excess of Two Million Five Hundred
Thousand Dollars ($2,500,000) in the aggregate for all such judgments or orders
(treating any deductibles, self insurance or retention as not so covered) and
such judgment or order shall continue unsatisfied and unstayed for a period of
20 days; or

            (f) Issuer shall have applied for or consented to the appointment of
a custodian, receiver, trustee or liquidator, or other court-appointed fiduciary
of all or a substantial part of its properties; or a custodian, receiver,
trustee or liquidator or other court appointed fiduciary shall have been
appointed with the consent of Issuer; or Issuer is generally not paying its
debts as they become due by means of available assets or is insolvent, or has
made a general assignment for the benefits of its creditors; or Issuer files a
voluntary petition in bankruptcy, or a petition or an answer seeking
reorganization or an arrangement with its creditors or seeking to take advantage
of any insolvency law, or an answer admitting the material allegations of a
petition in any bankruptcy, reorganization or insolvency proceeding or has taken
action for the purpose of effecting any of the foregoing; or if, within 60 days
after the commencement of any proceeding against Issuer seeking any
reorganization, rehabilitation, arrangement, composition, readjustment,
liquidation, dissolution or similar relief under the Federal bankruptcy code or
similar order under future similar legislation, the appointment of any trustee,
receiver, custodian, liquidator, or other court-appointed fiduciary of Issuer or
of all or any substantial part of its properties, such order or appointment
shall not have been vacated or stayed on appeal or if, within 60 days after the
expiration of any such stay, such order or appointment shall not have been
vacated (all such events, collectively "Insolvency Events").

                                       5
<PAGE>

         5.2. Rights of Holder Upon an Event of Default. Upon the occurrence or
existence of an Event of Default, holders representing a majority-in-interest of
the then outstanding Notes, by notice in writing to Issuer (the "Acceleration
Notice"), may declare the principal amount of this Note and the other Notes and
all accrued and unpaid interest due and owing thereon to be due and payable
immediately, without presentment, demand, protest or any notice of any kind, all
of which are hereby expressly waived; provided that if an Insolvency Event
occurs, the principal amount of this Note and the other Notes and all accrued
and unpaid interest shall become and be immediately due and payable without any
declaration or other act on the part of the Holder and without the need for any
consent thereto. Upon the occurrence of any Event of Default, the Holder may, in
addition to declaring all amounts due hereunder to be immediately due and
payable as provided in the preceding sentence, pursue any available remedy,
whether at law or in equity. If an Event of Default occurs, Issuer shall pay to
the Holder the reasonable attorneys' fees and disbursements and all other
out-of-pocket costs incurred by the Holder in order to collect amounts due and
owing under this Note or otherwise to enforce the Holder's rights and remedies
hereunder. This Section 5.2 shall be subject to the provisions of Section 9 of
this Note.

         SECTION 6. CHANGE OF CONTROL.

         6.1. Definition of Change of Control. The occurrence of any of the
following shall constitute a "Change of Control Event" under this Note (whatever
the reason for such Change of Control Event and whether it shall be voluntary or
involuntary or be effected by operation of law or pursuant to any judgment,
decree or order of any court or any order, rule or regulation of any
administrative or governmental body):

            (a) any person or group becomes, directly or indirectly, in one or a
series of transactions, the beneficial owner of shares of voting stock of
Epixtar or Voxx (i) representing more than 50% or more of the total voting power
of all outstanding classes of voting stock of Epixtar or Voxx, or (ii) having
the power, directly or indirectly, to elect a majority of the Board of Directors
of Epixtar or Voxx;

            (b) the merger or consolidation of Epixtar or Voxx with or into any
other entity which results in the stockholders of Epixtar or Voxx owning less
than 50.1% of the outstanding common stock of the surviving entity following the
consummation of such transaction;

            (c) the sale by Epixtar or Voxx of all or substantially all of its
assets; or

            (d) the liquidation or dissolution of Epixtar or Voxx.

                                       6
<PAGE>

         Notwithstanding the foregoing, a Change of Control Event shall not
include: (i) any reorganization or reincorporation of Epixtar and its
subsidiaries so long as such reorganization or reincorporation does not involve
an unaffiliated third party or does not result in the stockholders of Epixtar
owning less than 50.1% of the outstanding common stock of the surviving entity
following the consummation of such transaction, (ii) the pro rata distribution
to Epixtar's stockholders of a percentage (such percentage to be agreed upon by
Epixtar and the Placement Agent) of the shares of common stock, par value $.001
per share (the "Voxx Common Stock"), of Voxx (the "Voxx Spin-Off"), (iii) the
consummation of an initial public offering of Voxx Common Stock (the "Voxx
IPO"), or (iv) any event described above which holders of at least a
majority-in-interest of the then outstanding Notes notify the Issuer in writing
that they desire not to be deemed a Change of Control Event.

         6.2. Rights of Holder Upon Change of Control Event. Subject to the
provisions of Section 9, upon the occurrence of a Change of Control Event, all
outstanding principal and accrued but unpaid interest under this Note shall
automatically become due and payable immediately, without presentment, demand,
protest or any notice of any kind, all of which are hereby expressly waived.

         SECTION 7. CONVERSION.

         7.1. Optional Conversion Prior to the One Year Anniversary Date. (a) At
any time from and after the date of issuance of this Note and prior to the One
Year Anniversary Date, the Holder may convert all, but not less than all, of the
principal and accrued interest outstanding under this Note into fully paid and
non-assessable shares of Epixtar's common stock, $0.001 par value per share (the
"Epixtar Common Stock"), at a conversion price equal to the volume
weighted-average price of the Epixtar Common Stock for the thirty (30) trading
day period immediately preceding the date of conversion of this Note; provided,
that, the volume weighted-average price for such thirty (30) day period equals
or exceeds Two Dollars and Twenty Five Cents ($2.25)(as subject to adjustment
for stock splits, stock combinations and stock dividends with respect to the
Epixtar Common Stock) (the "Epixtar Conversion Price I"). Such conversion shall
be effected by the Holder sending Epixtar a written notice of conversion (which
notice shall specify the outstanding principal and accrued and unpaid interest
which is being converted and the number of shares to be received upon such
conversion) and this Note for cancellation. Within three (3) business days after
receipt of a proper conversion notice from the Holder, Epixtar shall issue a
certificate to the Holder representing the number of shares of Epixtar Common
Stock (or such other securities issuable upon conversion of this Note) issuable
upon conversion of this Note in accordance with the Holder's conversion notice.
Upon conversion of this Note, only whole shares of Epixtar Common Stock (or any
other securities issuable upon conversion of this Note) shall be issued. Any
remainder due hereunder which is insufficient to purchase a whole share of
Epixtar Common Stock (or any other securities issuable upon conversion of this
Note) shall be paid by Issuer in cash. In the event the Holder has not converted
this Note into Epixtar Common Stock prior to the One Year Anniversary Date in
accordance with this Section 7.1(a), then the right to convert this Note
pursuant to this Section 7.1(a) shall automatically terminate. For the avoidance
of doubt, in the event that the Holder converts this Note into Epixtar Common
Stock in accordance with this Section 7.1(a), then the right of the Holder to
receive the Voxx Warrants (as defined in Section 7.3(b) below) shall
automatically terminate.

                                       7
<PAGE>

         (b) In the event the Holder elects to convert all, but not less than
all, of the principal and accrued interest outstanding under this Note into
Epixtar Common Stock prior to the One Year Anniversary Date in accordance with
Section 7.1(a), then the Holder shall be entitled to receive, in addition to the
shares of Common Stock issuable upon conversion of this Note in accordance with
Section 7.1(a), a warrant (the "Epixtar Conversion I Warrant") to purchase the
number of shares of Epixtar Common Stock equal to fifty percent (50%) of the
then outstanding principal amount of this Note divided by the Epixtar Conversion
Price I. The Epixtar Conversion I Warrant shall have a five year term and shall
be exercisable at an exercise price equal to the Epixtar Conversion Price I at
the time of conversion of this Note in accordance with Section 7.1(a). The
Epixtar Conversion I Warrant shall contain certain weighted-average and other
customary anti-dilution provisions but shall not provide for the cashless
exercise of the Epixtar Conversion I Warrant.

         7.2. Optional Conversion Following the One Year Anniversary Date. (a)
If Issuer shall fail to consummate the Voxx IPO or Voxx Spin-Off on or prior to
the One Year Anniversary Date, then the Holder shall have the right, at any time
following the One Year Anniversary Date and prior to the consummation of the
Voxx IPO or Voxx Spin-Off, to convert all, but not less than all, of the
principal and accrued interest outstanding under this Note into fully paid and
non-assessable shares of Epixtar Common Stock at a conversion price equal to the
greater of (i) a twenty-five percent (25%) discount to the volume
weighted-average price of the Epixtar Common Stock for the thirty (30) trading
day period immediately preceding the One Year Anniversary Date, and (ii) One
Dollar ($1.00) (the "Epixtar Conversion Price II" and together with the Epixtar
Conversion Price I, the "Epixtar Conversion Price"). Such conversion shall be
effected by the Holder sending Epixtar a written notice of conversion (which
notice shall specify the outstanding principal and accrued and unpaid interest
which is being converted and the number of shares to be received upon such
conversion) and this Note for cancellation. Within three (3) business days after
receipt of a proper conversion notice from the Holder, Epixtar shall issue a
certificate to the Holder representing the number of shares of Epixtar Common
Stock (or such other securities issuable upon conversion of this Note) issuable
upon conversion of this Note in accordance with the Holder's conversion notice.
Upon conversion of this Note, only whole shares of Epixtar Common Stock (or any
other securities issuable upon conversion of this Note) shall be issued. Any
remainder due hereunder which is insufficient to purchase a whole share of
Epixtar Common Stock (or any other securities issuable upon conversion of this
Note) shall be paid by Issuer in cash. For the avoidance of doubt, in the event
that the Holder elects to convert this Note into Epixtar Common Stock in
accordance with this Section 7.2(a), then the right of the Holder to receive the
Voxx Warrants shall automatically terminate.

         (b) If Issuer shall fail to consummate the Voxx IPO or Voxx Spin-Off on
or prior to the One Year Anniversary Date and the Holder shall not have elected
to convert this Note into Epixtar Common Stock in accordance with Section 7.1(a)
prior to the One Year Anniversary Date, then the Holder shall automatically
receive on the One Year Anniversary Date, a warrant (the "Epixtar Conversion II
Warrant" and together with the Epixtar Conversion I Warrant, the "Epixtar
Warrants") to purchase the number of shares of Epixtar Common Stock equal to
fifty percent (50%) of the then outstanding principal amount of this Note
divided by the Epixtar Conversion Price II. The Epixtar Conversion II Warrant
shall have a five year term and shall be exercisable at an exercise price equal
to the greater of (i) the volume weighted-average price of the Epixtar Common
Stock for the thirty (30) trading day period immediately preceding the One Year
Anniversary Date, and (ii) One Dollar ($1.00). The Epixtar Conversion II Warrant
shall contain certain weighted-average and other customary anti-dilution
provisions but shall not provide for the cashless exercise of the Epixtar
Conversion II Warrant. If this Note is outstanding at the time of consummation
of the Voxx IPO or the Voxx Spin-Off, then the Epixtar Conversion II Warrant
shall terminate automatically upon the consummation of the Voxx IPO or the Voxx
Spin-Off. For purposes of this Note, the Voxx Spin-Off shall be deemed to have
been consummated on such date as (i) a registration statement covering the
underlying shares of Voxx Common Stock related to the Voxx Spin-Off is declared
effective by the SEC and (ii) the Voxx Common Stock commences trading on an
Approved Market. "Approved Market" shall mean any public market on which the
Voxx Common Stock is trading (it being understood that the Pink Sheets Quotation
Services shall not qualify as an Approved Market).

                                       8
<PAGE>

         7.3. Automatic Conversion. (a) If Issuer consummates the Voxx IPO, the
principal amount of this Note, together with all accrued but unpaid interest,
shall automatically, upon consummation of the Voxx IPO, without any further
action on the part of the Holder, convert into shares of Voxx Common Stock at a
twenty percent (20%) discount to the initial public offering price per share of
Voxx Common Stock (the "Discounted Voxx IPO Conversion Price"). In the event
this Note is automatically converted into Voxx Common Stock in accordance with
this Section 7.3(a), then the Holder shall be entitled to receive, in addition
to the shares of Voxx Common Stock issuable upon the automatic conversion of
this Note in accordance with this Section 7.3(a), a warrant (the "Voxx
Conversion I Warrant") to purchase the number of shares of Voxx Common Stock
equal to fifty percent (50%) of the then outstanding principal amount of this
Note divided by the Discounted Voxx IPO Conversion Price. The Voxx Conversion I
Warrant shall have a five year term and shall be exercisable at an exercise
price equal to the initial public offering price per share of Voxx Common Stock.
The Voxx Conversion I Warrant shall contain certain weighted-average and other
customary anti-dilution provisions but shall not provide for the cashless
exercise of the Voxx Conversion I Warrant. In the event the Holder (or any
transferee of the Epixtar Conversion II Warrant) exercises the Epixtar
Conversion II Warrant prior to the issuance to the Holder of the Voxx Conversion
I Warrant, then the number of shares of Voxx Common Stock issuable upon exercise
of the Voxx Conversion I Warrant shall be proportionately reduced by the number
of shares of Epixtar Common Stock previously issued to the Holder (or such
transferee of the Epixtar Conversion II Warrant) upon exercise of the Epixtar
Conversion II Warrant.

         (b) If Issuer effects the Voxx Spin-Off, the principal amount of this
Note, together with all accrued but unpaid interest, shall automatically, upon
consummation of the Voxx Spin-Off as described in Section 7.2(b), without any
further action on the part of the Holder, convert into shares of Voxx Common
Stock at a twenty percent (20%) discount to the value of the Voxx Common Stock
based upon the valuation of Voxx at the time of the Voxx Spin-Off (the
"Discounted Voxx Spin-Off Conversion Price"), which valuation shall be
determined in good faith by the Board of Directors of Voxx with the consent of
the Placement Agent. In the event this Note is automatically converted into Voxx
Common Stock in accordance with this Section 7.3(b), then the Holder shall be
entitled to receive, in addition to the shares of Voxx Common Stock issuable
upon the automatic conversion of this Note in accordance with this Section
7.3(b), a warrant (the "Voxx Conversion II Warrant" and together with the Voxx
Conversion I Warrant, the "Voxx Warrants") to purchase the number of shares of
Voxx Common Stock equal to fifty percent (50%) of the then outstanding principal
amount of this Note divided by the Discounted Voxx Spin-Off Conversion Price.
The Voxx Conversion II Warrant shall have a five year term and shall be
exercisable at an exercise price equal to the value of Voxx Common Stock based
upon the valuation of Voxx at the time of the Voxx Spin-Off, which valuation
shall be determined in good faith by the Board of Directors of Voxx with the
consent of the Placement Agent. In the event the Holder (or any transferee of
the Epixtar Conversion II Warrant) exercises the Epixtar Conversion II Warrant
prior to the issuance to the Holder of the Voxx Conversion II Warrant, then the
number of shares of Voxx Common Stock issuable upon exercise of the Voxx
Conversion II Warrant shall be proportionately reduced by the number of shares
of Epixtar Common Stock previously issued to the Holder (or such transferee of
the Epixtar Conversion II Warrant) upon exercise of the Epixtar Conversion II
Warrant.

                                       9
<PAGE>

         7.4. Conversion Price Adjustments. (a) The Epixtar Conversion Price and
the amount and kind of securities issuable upon conversion of this Note shall be
subject to adjustment from time to time in accordance with the provisions of
Section 7.4(b) and Section 8 hereof.

         (b) Immediately following the final Closing of the offering of the
Notes, Issuer shall register with the SEC for resale all of the shares of
Epixtar Common Stock issuable upon conversion of this Note and the other Notes
in accordance with Sections 7.1(a) and 7.2 (based upon a conversion price of
$1.00). In the event that a registration statement covering these shares of
Epixtar Common Stock is not filed with the SEC within sixty (60) days following
the final Closing of the offering of the Notes (the sixtieth (60th) day
following the final Closing of the offering of the Notes is referred to as the
"Filing Deadline I"), then the Epixtar Conversion Price shall be immediately
reduced by five percent (5%) of the then effective Epixtar Conversion Price. The
Epixtar Conversion Price shall be reduced by an additional five percent (5%) of
the then effective Epixtar Conversion Price for each additional thirty (30) day
period (or partial period, as the case may be) following the Filing Deadline I
that such registration statement is not filed with SEC. In addition, immediately
following the One Year Anniversary Date, Issuer shall register for resale all of
the shares of Epixtar Common Stock then issuable upon conversion of the Notes
(to the extent not previously covered by the registration statement referred to
above) and the exercise of the Epixtar Warrants. In the event that a
registration statement covering these shares of Epixtar Common Stock is not
filed with the SEC within sixty (60) days following the One Year Anniversary
Date (the sixtieth (60th) day following the One Year Anniversary Date is
referred to as the "Filing Deadline II"), then the Epixtar Conversion Price II
shall be immediately reduced by five percent (5%) of the then effective Epixtar
Conversion Price II. The Epixtar Conversion Price II shall be reduced by an
additional five percent (5%) of the then effective Epixtar Conversion Price II
for each additional thirty (30) day period (or partial period, as the case may
be) following the Filing Deadline II that such registration statement is not
filed with SEC.

         7.5. Due Issuance of Shares Upon Conversion. Issuer covenants and
agrees that all shares of Epixtar Common Stock, Voxx Common Stock or any such
other securities which may be issued upon any whole or partial conversion of
this Note will, upon issuance, be validly issued, fully paid and non-assessable
and free from all taxes, liens and charges with respect to the issue thereof.

                                       10
<PAGE>

         7.6. Stock to be Reserved. Issuer will at all times reserve and keep
available out of its authorized Epixtar Common Stock and Voxx Common Stock, as
the case may be, solely for the purpose of issuance upon conversion of the Notes
and exercise of the Epixtar Warrants and Voxx Warrants, such number of shares of
Epixtar Common Stock, Voxx Common Stock or such other securities as shall then
be issuable upon conversion hereof or exercise thereof. Issuer covenants that,
to the extent permitted by law, it will from time to time take all such action
as may be required to assure that the par value per share of the Epixtar Common
Stock or Voxx Common Stock, as the case may be, is at all times equal to or less
than the effective conversion or exercise price. Issuer will not take any action
which results in any adjustment to the conversion price of the Notes if the
total number of shares of Epixtar Common Stock or Voxx Common Stock, as the case
may be, issued and issuable after such action upon conversion of this Note
would, when added to the number of shares of Epixtar Common Stock or Voxx Common
Stock, as the case may be, then reserved for issuance, exceeds the total number
of shares of Epixtar Common Stock or Voxx Common Stock, as the case may be, then
authorized by the applicable Certificate of Incorporation of Issuer.

         7.7. Issue Tax. The issuance of certificates for shares of Epixtar
Common Stock, Voxx Common Stock or other securities upon conversion of this Note
shall be made without charge to the Holder for any issuance tax in respect
thereof, provided that Issuer shall not be required to pay any tax which may be
payable in respect of any transfer involved in the issuance and delivery of any
certificate in a name other than that of the Holder.

         7.8. Closing of Books. Issuer will at no time close its transfer books
against the transfer of any shares of Epixtar Common Stock, Voxx Common Stock or
other securities issued or issuable upon the conversion of this Note in any
manner which interferes with the timely conversion of this Note, except as may
otherwise be required to comply with applicable securities laws.

         SECTION 8. ADJUSTMENTS TO EPIXTAR CONVERSION PRICE AND NUMBER OF
CONVERSION SHARES.

         8.1. Adjustments Upon Stock Events and Stock Issuances. Subject and
pursuant to the provisions of this Section 8.1, from and after the One Year
Anniversary Date, the Epixtar Conversion Price II and the number of shares of
Epixtar Common Stock or other securities issuable upon conversion of this Note
in accordance with Section 7.2 hereof (the "Conversion Shares") shall be subject
to adjustment from time to time as set forth hereinafter.

            (a) If Epixtar shall, at any time or from time to time while this
Note is outstanding, pay a dividend or make a distribution on the Epixtar Common
Stock in shares of Epixtar Common Stock, subdivide its outstanding shares of
Epixtar Common Stock into a greater number of shares or combine its outstanding
shares of Epixtar Common Stock into a smaller number of shares or issue by
reclassification of its outstanding shares of Epixtar Common Stock any shares of
its capital stock (including any such reclassification in connection with a
consolidation or merger in which Epixtar is the continuing corporation), then
the number of Conversion Shares and the Epixtar Conversion Price II in effect
immediately prior to the date upon which such change shall become effective,
shall be adjusted by Epixtar so that the Holder thereafter exercising this Note
shall be entitled to receive the number of shares of Epixtar Common Stock or
other capital stock which the Holder would have received if this Note had been
fully exercised immediately prior to such event upon payment of an Epixtar
Conversion Price II that has been adjusted to reflect a fair allocation of the
economics of such event to the Holder. Such adjustments shall be made
successively whenever any event listed above shall occur.

                                       11
<PAGE>

            (b) If any capital reorganization, reclassification of the capital
stock of Epixtar, consolidation or merger of Epixtar with another corporation in
which Epixtar is not the survivor, or sale, transfer or other disposition of all
or substantially all of Epixtar's or any of its subsidiaries' assets to another
corporation, person or entity shall be effected (in each case, other than any
Change of Control Event or the Voxx Spin-Off), then Epixtar shall use its best
efforts to ensure that lawful and adequate provision shall be made whereby the
Holder shall thereafter have the right to purchase and receive upon the basis
and upon the terms and conditions herein specified and in lieu of the Conversion
Shares immediately theretofore issuable upon exercise of this Note, such shares
of stock, securities or assets as would have been issuable or payable with
respect to or in exchange for a number of Conversion Shares equal to the number
of Conversion Shares immediately theretofore issuable upon exercise of this
Note, had such reorganization, reclassification, consolidation, merger, sale,
transfer or other disposition not taken place, and in any such case appropriate
provision shall be made with respect to the rights and interests of the Holder
to the end that the provisions hereof (including, without limitation, provision
for adjustment of the Epixtar Conversion Price II) shall thereafter be
applicable, as nearly equivalent as may be practicable in relation to any shares
of stock, securities or assets thereafter deliverable upon the exercise thereof.
Epixtar shall not effect any such consolidation, merger, sale, transfer or other
disposition unless prior to or simultaneously with the consummation thereof the
successor corporation, person or entity (if other than Epixtar) resulting from
such consolidation or merger, or the corporation purchasing or otherwise
acquiring such assets or other appropriate corporation or entity shall assume
the obligation to deliver to the Holder, at the last address of such holder
appearing on the books of Epixtar, such shares of stock, securities or assets
as, in accordance with the foregoing provisions, such Holder may be entitled to
purchase, and the other obligations under this Note. The provisions of this
paragraph (b) shall similarly apply to successive reorganizations,
reclassifications, consolidations, mergers, sales, transfers or other
dispositions.

                                       12
<PAGE>

            (c) In case Issuer shall fix a payment date for the making of a
distribution to all holders of Epixtar Common Stock (including without
limitation any distribution of shares of capital stock of any subsidiary of
Epixtar (other than in connection with the Voxx Spin-Off) and any distribution
made in connection with a consolidation or merger in which Epixtar is the
continuing corporation) of evidences of indebtedness or assets (other than cash
dividends or cash distributions payable out of consolidated earnings or earned
surplus or dividends or distributions referred to in Section 8.1(a)), or
subscription rights or warrants, the Epixtar Conversion Price II to be in effect
after such payment date shall be determined by multiplying the Epixtar
Conversion Price II in effect immediately prior to such payment date by a
fraction, the numerator of which shall be the total number of shares of Epixtar
Common Stock outstanding multiplied by the Market Value (as defined below) per
share of Epixtar Common Stock immediately prior to such payment date, less the
fair market value (as determined by the Board of Directors of Epixtar in good
faith) of said assets or evidences of indebtedness so distributed, or of such
subscription rights or warrants, and the denominator of which shall be the total
number of shares of Epixtar Common Stock outstanding multiplied by such Market
Value per share of Epixtar Common Stock immediately prior to such payment date.
"Market Value" as of a particular date (the "Valuation Date") shall mean the
following: (v) if the Epixtar Common Stock is then listed on a national stock
exchange, the Market Value shall be the Market Price of one share of Epixtar
Common Stock on such exchange on the last trading day prior to the Valuation
Date, provided that if such stock has not traded in the prior ten (10) trading
sessions, the Market Value shall be the average Market Price of one share of
Epixtar Common Stock in the most recent ten (10) trading sessions during which
the Epixtar Common Stock has traded; (w) if the Epixtar Common Stock is then
included in The Nasdaq Stock Market, Inc. ("Nasdaq"), the Market Value shall be
the Market Price of one share of Epixtar Common Stock on Nasdaq on the last
trading day prior to the Valuation Date or, if no such Market Price is
available, the average of the high bid and the low ask price quoted on Nasdaq as
of the end of the last trading day prior to the Valuation Date, provided that if
such stock has not traded in the prior ten (10) trading sessions, the Market
Value shall be the average Market Price of one share of Epixtar Common Stock in
the most recent ten (10) trading sessions during which the Epixtar Common Stock
has traded; (x) if the Epixtar Common Stock is then included in the
Over-the-Counter Bulletin Board, the Market Value shall be the Market Price of
one share of Epixtar Common Stock on the Over-the-Counter Bulletin Board on the
last trading day prior to the Valuation Date or, if no such Market Price is
available, the average of the high bid and the low ask price quoted on the
Over-the-Counter Bulletin Board as of the end of the last trading day prior to
the Valuation Date, provided that if such stock has not traded in the prior ten
(10) trading sessions, the Market Value shall be the average Market Price of one
share of Epixtar Common Stock in the most recent ten (10) trading sessions
during which the Epixtar Common Stock has traded; (y) if the Epixtar Common
Stock is then included in the "pink sheets, " the Market Value shall be the
Market Price of one share of Epixtar Common Stock on the "pink sheets" on the
last trading day prior to the Valuation Date or, if no such Market Price is
available, the average of the high bid and the low ask price quoted on the "pink
sheets" as of the end of the last trading day prior to the Valuation Date,
provided that if such stock has not traded in the prior ten (10) trading
sessions, the Market Value shall be the average Market Price of one share of
Epixtar Common Stock in the most recent ten (10) trading sessions during which
the Epixtar Common Stock has traded; or (z) if the Epixtar Common Stock is not
then listed on a national stock exchange or quoted on Nasdaq or the
Over-the-Counter Bulletin Board or the "pink sheets ", the fair market value of
one share of Epixtar Common Stock on the Valuation Date shall be determined in
good faith by the Board of Directors of Epixtar. "Market Price" shall mean the
closing sale price of one share of Epixtar Common Stock as listed or quoted on
the primary exchange or quotation system on which the Epixtar Common Stock is
then listed or quoted, or if not so listed or quoted, then the closing sale
price quoted on the Over-the-Counter Bulletin Board or on the "pink sheets", as
applicable. The Board of Directors of Epixtar shall respond promptly, in
writing, to an inquiry by the Holder prior to the exercise hereunder as to the
Market Value of a share of Epixtar Common Stock.

            (d) For the term of this Note, in addition to the provisions
contained above, the Epixtar Conversion Price II and the number of Conversion
Shares issuable hereunder shall be subject to adjustment as provided below. An
adjustment to the Epixtar Conversion Price II shall become effective immediately
after the payment date in the case of each dividend or distribution and
immediately after the effective date of each other event which requires an
adjustment.

                                       13
<PAGE>

            (e) Except as provided in Section 8.1(f) hereof, if and whenever
Epixtar shall issue or sell, or is, in accordance with any of Sections 8.1(e)(l)
through (e)(5) hereof, deemed to have issued or sold, any shares of Epixtar
Common Stock for a consideration per share less than the Epixtar Conversion
Price II in effect immediately prior to the time of such issue or sale, then and
in each such case (a "Trigger Issuance"), effective as of the close of business
on the effective date of the Trigger Issuance, the then-existing Epixtar
Conversion Price II shall be reduced, as of the close of business on the
effective date of the Trigger Issuance, to an Epixtar Conversion Price II
determined as follows:

                Adjusted Conversion Price = (A x B) + D
                                            -----------
                                                A+C

                where

                A = the number of shares of Epixtar Common Stock outstanding
(including any Additional Shares of Common Stock (as defined below) immediately
preceding such Trigger Issuance);

                B = the Epixtar Conversion Price II in effect immediately
preceding such Trigger Issuance;

                C = the number of Additional Shares of Common Stock (as adjusted
for stock splits, stock combinations, recapitalizations, and dividends and the
like) outstanding or deemed outstanding hereunder as a result of such Trigger
Issuance; and

                D = the aggregate consideration, if any, received or deemed to
be received by Epixtar upon such Trigger Issuance.

            For purposes of this subsection (e), "Additional Shares of Common
Stock" shall mean all shares of Epixtar Common Stock issued by Epixtar or deemed
to be issued pursuant to this Section 8.1(e), other than those excluded
issuances set forth in Section 8.1(f) hereof.

            For purposes of this Section 8.1(e), the following subsections
(e)(l) to (e)(5) shall also be applicable (subject, in each such case, to the
provisions of Section 8.1(f) hereof and to each other subsection contained in
this Section 8.1(e)):

                                       14
<PAGE>

                        (e)(1) Issuance of Convertible Securities; Issuance of
            Rights or Options. In case at any time after the date hereof Epixtar
            shall in any manner grant, issue or sell any stock or security
            convertible into or exchangeable for Common Stock ("Convertible
            Securities") or any warrants or other rights to subscribe for or to
            purchase, or any options for the purchase of, Common Stock or any
            Convertible Securities (such warrants, rights or options being
            called "Options"), whether or not the right to convert, exchange or
            exercise any such Convertible Securities or such Options are
            immediately exercisable, and the price per share for which Common
            Stock is issuable upon the conversion or exchange of such
            Convertible Securities or upon the exercise of such Options
            (determined by dividing (i) the sum of (x) the total amount, if any,
            received or receivable by Epixtar as consideration for the issue or
            sale of such Convertible Securities or the granting of such Options,
            plus (y) the aggregate amount of additional consideration, if any,
            payable to Epixtar upon the conversion or exchange of all such
            Convertible Securities or the exercise of all such Options, plus
            (z), in the case of such Options to purchase Convertible Securities,
            the aggregate amount of additional consideration, if any, payable
            upon the conversion or exchange of such Convertible Securities, by
            (ii) the maximum number of shares of Common Stock issuable upon the
            conversion or exchange of all such Convertible Securities, or upon
            the exercise of such Options, or upon the conversion or exchange of
            all such Convertible Securities issuable upon the exercise of such
            Options) shall be less than the Epixtar Conversion Price II in
            effect immediately prior to the time of the issue or sale of such
            Convertible Securities or the granting of such Options, then the
            total number of shares of Common Stock issuable upon the conversion
            or exchange of such Convertible Securities, or the exercise of such
            Options, or upon the conversion or exchange of the maximum amount of
            such Convertible Securities issuable upon the exercise of such
            Options shall be deemed to have been issued for such price per share
            as of the date of the issuance or sale of such Convertible
            Securities or the granting of such Options (including Options to
            purchase Convertible Securities) and thereafter shall be deemed to
            be outstanding for purposes of adjusting the Epixtar Conversion
            Price II. Except as otherwise provided in Section 8.1(e)(2), no
            additional adjustment of the Epixtar Conversion Price II shall be
            made upon the actual issuance of such Epixtar Common Stock upon
            conversion or exchange of such Convertible Securities or upon the
            exercise of such Options.

                        (e)(2) Change in Option Price or Conversion Rate. Upon
            the happening of any of the following events, namely, if the
            purchase price provided for in any Option referred to in Section
            8.1(e)(l) hereof, the additional consideration, if any, payable upon
            the conversion or exchange of any Convertible Securities referred to
            in Section 8.1(e)(l), or the rate at which Convertible Securities
            referred to in Section 8.1(e)(l) are convertible into or
            exchangeable for Epixtar Common Stock shall change at any time
            (including, but not limited to, changes under or by reason of
            provisions designed to protect against dilution), the Epixtar
            Conversion Price II in effect at the time of such event shall
            forthwith be readjusted to the Epixtar Conversion Price II which
            would have been in effect at such time had such Options or
            Convertible Securities still outstanding provided for such changed
            purchase price, additional consideration or conversion rate, as the
            case may be, at the time initially granted, issued or sold, but only
            if as a result of such adjustment the Epixtar Conversion Price II
            then in effect hereunder is thereby reduced. On the termination of
            any Option for which an adjustment was made pursuant to this Section
            8.1(e) or any right to convert or exchange Convertible Securities
            for which an adjustment was made pursuant to this Section 8.1(e),
            the Epixtar Conversion Price II then in effect hereunder shall
            forthwith be changed to the Epixtar Conversion Price II which would
            have been in effect at the time of such termination had such Option
            or Convertible Securities, to the extent outstanding immediately
            prior to such termination, never been issued.

                                       15
<PAGE>

                        (e)(3) Consideration for Stock. In case any shares of
            Epixtar Common Stock, Options or Convertible Securities shall be
            issued or sold for cash, the consideration received therefor shall
            be deemed to be the gross amount received by Epixtar therefor,
            before deduction therefrom of any expenses incurred or any
            underwriting commissions or concessions paid or allowed by Epixtar
            in connection therewith. In case any shares of Epixtar Common Stock,
            Options or Convertible Securities shall be issued or sold for a
            consideration other than cash, the amount of the consideration other
            than cash received by Epixtar shall be deemed to be the fair value
            of such consideration as determined in good faith by the Board of
            Directors of Epixtar, before deduction of any expenses incurred or
            any underwriting commissions or concessions paid or allowed by
            Epixtar in connection therewith. In case any Options shall be issued
            in connection with the issue and sale of other securities of
            Epixtar, together comprising one integral transaction in which no
            specific consideration is allocated to such Options by the parties
            thereto, such Options shall be deemed to have been issued for such
            consideration as determined in good faith by the Board of Directors
            of Epixtar.

                        (e)(4) Record Date. In case Epixtar shall take a record
            of the holders of Epixtar Common Stock for the purpose of entitling
            them (i) to receive a dividend or other distribution payable in
            Epixtar Common Stock, Options or Convertible Securities or (ii) to
            subscribe for or purchase Epixtar Common Stock, Options or
            Convertible Securities, then such record date shall be deemed to be
            the date of the issue or sale of the shares of Epixtar Common Stock
            deemed to have been issued or sold upon the declaration of such
            dividend or the making of such other distribution or the date of the
            granting of such right of subscription or purchase, as the case may
            be. Notwithstanding the foregoing, no anti-dilution adjustment shall
            be effected with respect to any transaction for which a record date
            is set by Epixtar if the transaction is abandoned by Epixtar prior
            to the time such transaction becomes effective.

                        (e)(5) Treasury Shares. The number of shares of Epixtar
            Common Stock outstanding at any given time shall not include shares
            owned or held by or for the account of Epixtar or any of its
            wholly-owned subsidiaries, and the disposition of any such shares
            (other than the cancellation or retirement thereof) shall be
            considered an issue or sale of Epixtar Common Stock for the purpose
            of this subsection (e).

                                       16
<PAGE>

            (f) Anything herein to the contrary notwithstanding, Epixtar shall
not be required to make any adjustment of the Epixtar Conversion Price II in the
case of the following issuances from and after the date of issuance of this
Note: (i) Options for up to 250,000 shares (subject to adjustment in the event
of a stock split, stock combination or similar event) of Epixtar Common Stock
granted after the date hereof to directors, officers, employees or consultants
of Epixtar in connection with their service as directors of Epixtar, their
employment by Epixtar or their retention as consultants by Epixtar pursuant to
any employee benefit plans or programs approved by the Board of Directors of
Epixtar or any committee thereof, (ii) shares of Epixtar Common Stock upon the
conversion or exercise of Options or Convertible Securities outstanding on the
date of issuance of this Note (including the Notes), (iii) shares of Epixtar
Common Stock issued or issuable by reason of a dividend, stock split or other
distribution payable pro rata to all holders of Epixtar Common Stock (but only
to the extent that such a dividend, split or distribution results in an
adjustment in the Epixtar Conversion Price II pursuant to the other provisions
of this Note), (iv) shares of Voxx Common Stock issued or issuable in connection
with the Voxx Spin-Off or IPO, (v) shares of Epixtar Common Stock issuable upon
exercise of the Epixtar Warrants or the Placement Agent Warrants, (vi) up to
300,000 shares of Epixtar Common Stock in connection with the acquisition of the
capital stock or assets of Innovative Marketing Strategies, Inc. and (vii)
shares of Epixtar Common Stock upon the exercise of Options granted pursuant to
subsection (i) above (collectively, the "Permitted Issuances").

            (g) In the event that, as a result of an adjustment made pursuant to
this Section 8.1, the Holder shall become entitled to receive any shares of
capital stock of Epixtar other than shares of Epixtar Common Stock, the number
of such other shares so receivable upon exercise of this Note shall be subject
thereafter to adjustment from time to time in a manner and on terms as nearly
equivalent as practicable to the provisions with respect to the Conversion
Shares contained in this Note.

         8.2. Notice of Adjustment. Upon any adjustment of the Epixtar
Conversion Price II, then and in each such case Epixtar shall give written
notice thereof, by delivery in person, certified or registered mail, return
receipt requested, telecopier or telex, addressed to the Holder at the address
of the Holder, as provided to Epixtar, which notice shall state the Epixtar
Conversion Price II resulting from such adjustment and setting forth in
reasonable detail the method upon which such calculation is based.

         8.3. Termination of Section 8.1(e). Notwithstanding anything contained
in Section 8.1(e) of this Note or any other provision of this Note, in the event
that the exchange or market on which shares of Epixtar Common Stock are then
listed prohibit "weighted average" anti-dilution provisions, such as the one
contained in Section 8.1(e) of this Note, then Section 8.1(e) of this Note shall
immediately terminate and shall no longer be effective.

         SECTION 9. SUBORDINATION. (a) This Note and the other Notes and the
indebtedness evidenced hereby and thereby (the "Subordinated Debt") is
subordinated in right of payment to all obligations of Issuer to the holders of
Senior Debt. The term "Senior Debt" means all indebtedness and obligations,
whether now existing or hereafter arising (including, without limitation, with
respect to future debt financings from Laurus), due and owing to (i) Laurus and
the holders of Epixtar's secured convertible promissory notes, dated May 14,
2004, in the aggregate principal amount of Five Million Dollars ($5,000,000),
and (ii) the holders of Epixtar's 8% Convertible Promissory Notes dated April
and May 2004 in the aggregate principal amount of One Million Dollars
($1,000,000), in the case of clauses (i) and (ii), including all fees,
penalties, expenses, costs (including costs of collecting such obligations and
reasonable attorneys' fees associated therewith), default interest, acceleration
and default amounts and other amounts incurred thereunder, including, without
limitation, all interest accruing after the commencement by or against Issuer of
any bankruptcy, reorganization or similar proceeding.

                                       17
<PAGE>

            (b) Except as set forth in this Section 9(b), no payment or
distribution (other than a payment or distribution in the form of Permitted
Junior Securities) of any assets or securities of Issuer of any kind may be made
by or on behalf of Issuer, including, without limitation, by way of payment,
pre-payment, set-off or otherwise, for or on account of this Note or any of the
other notes, and neither the Holder of this Note nor the holders of the other
Notes shall take or receive from Issuer any payment of cash or other property in
respect of all or any portion of this Note unless and until all Senior Debt is
indefeasibly paid in full in cash or such other form of consideration as the
holders of Senior Debt, in their sole discretion, may elect to accept; provided,
however, so long as no event of default or similar term has occurred and is
continuing with respect to the Senior Debt, as defined in the documents
governing the Senior Debt, Issuer shall be permitted to pay the interest due and
owing under this Note and the other Notes in accordance with the terms of such
Notes. At such time as the prohibition set forth in the preceding sentence shall
no longer be in effect, Issuer shall resume making any and all required payments
in respect of this Note and the other Notes. Nothing in this Section 9(b) shall
be deemed or construed to prohibit (i) the Holder of this Note or the holders of
the other Notes from converting all or any part of the Subordinated Debt into
shares of Epixtar Common Stock in accordance with Sections 7.1 and 7.2 of the
Notes, or (ii) the conversion of the Subordinated Debt into Voxx Common Stock in
accordance with Section 7.3 of the Notes. As used herein, "Permitted Junior
Securities" means equity securities of Issuer issued in conjunction with,
without limitation, the conversion of the Notes in accordance with Sections 7.1,
7.2 or 7.3 of the Notes or pursuant to a reorganization or readjustment of the
securities of Issuer or any other company, trust, corporation or partnership
provided for by a plan of reorganization or readjustment, that, in the case of
any such equity securities, are junior, or the payment of which is otherwise
subordinate, at least to the extent provided in this Section 9(b) with respect
to the Notes, to the payment in full of all Senior Debt outstanding, or to all
securities issued in exchange therefore, to the holder(s) of Senior Debt.

            (c) Upon the occurrence of an Event of Default, holders representing
a majority-in-interest of the then outstanding Notes shall provide written
notice of such Event of Default to Laurus, on behalf of the holders of Senior
Debt (or such other holder of Senior Debt designated by the holders of Senior
Debt), and for a period commencing upon the date Laurus receives such notice and
ending 180 days from such date (the "Standstill Period"), the Holder and the
holders of the other Notes shall not demand or receive from Issuer (and Issuer
will not pay to the Holder or the holders of the other Notes) all or any part of
the Subordinated Debt, by way of payment, prepayment, setoff, lawsuit or
otherwise, other than by converting all or any part of the Subordinated Debt
into debt or equity securities of Issuer as set forth in Section 9(b) above; nor
will the Holder or the other holders of the Notes (apart from declaring an Event
of Default by written notice to Issuer), exercise any right or remedy during the
Standstill Period with respect to the Subordinated Debt (other than by
converting all or any part of the Subordinated Debt into equity securities of
Issuer as set forth in Section 9(b) above); nor will the Holder or the other
holders of the Notes during the Standstill Period commence, prosecute or
participate in any administrative, legal or equitable action against Issuer,
including, without limitation, initiation of an Insolvency Event.
Notwithstanding the foregoing, (A) in the event that Issuer is the subject of a
petition under Title 11 of the United States Code, the Holder and the other
holders of the Notes shall be entitled to file a proof of claim or take other
action to preserve their claims against Issuer provided that (i) the holders of
the Senior Debt shall be entitled to any and all proceeds or distributions that
the Holder and the other holders of the Notes may receive as the result of such
proceedings until the Senior Debt is indefeasibly paid in full in cash or such
other form of consideration as the holders of Senior Debt, in their sole
discretion, may elect to accept, and (ii) in the event that the Holder shall
fail to file a proof of claim with respect to the Subordinated Debt held by the
Holder by the date ten (10) days preceding the last day for filing proofs of
claim in such proceeding, the holders of Senior Debt shall be authorized and
permitted to file such proof of claim on behalf of the Holder; (B) in the event
that any holder of the Senior Debt accelerates the principal obligation owed
with respect to such Senior Debt, then the Holder and the other holders of the
Notes shall be entitled to accelerate the principal obligation due under the
Notes (provided that neither the Holder nor the other holders of the Notes shall
be permitted to exercise any other rights or remedies with respect to the
Subordinated Debt, except as expressly permitted under this Section 9); and (C)
in the event that any holder of the Senior Debt commences any action or
proceeding against Issuer, holders representing a majority-in-interest of the
then outstanding Notes may, in their sole discretion, 30 days after the
commencement of any such action or proceeding by a holder of the Senior Debt,
institute an action to collect the Subordinated Debt (provided that any and all
proceeds that the Holder and the other holders of the Notes may receive as a
result of such action or proceeding shall be delivered to the holders of the
Senior Debt as and to the extent required by this Section 9).

                                       18
<PAGE>

            (d) In the event that the Holder or any other holder of the Notes
receives any payment or distribution (other than a payment or distribution in
the form of Permitted Junior Securities) of assets of any kind or character
(including, without limitation, cash, property or securities) on or with respect
to the Notes at a time that such payment is prohibited by Section 9(b) or (c) of
the Notes, such payment shall be held by the Holder or the holders of the other
Notes, as the case may be, in trust for the benefit of, and shall be paid
forthwith over and delivered, upon written request, to, the holders of Senior
Debt for application to the payment of all Senior Debt remaining unpaid to the
extent necessary to pay such obligations in full in accordance with their terms,
after giving effect to any concurrent payment or distribution to the holders of
Senior Debt.

            (e) In the event of any Insolvency Event, the provisions of this
Section 9 shall remain in full force and effect, and all claims against Issuer
and the estate of Issuer in respect of Senior Debt shall be paid in full before
any payment is made to the Holder and the other holders of the Notes (other than
payment in the form of Permitted Junior Securities).

            (f) The Holder and the other holders of the Notes shall not take any
action in any proceeding related to an Insolvency Event inconsistent with the
terms and conditions of this Section 9, including the payment subordination
provisions contained herein.

            (g) This Section 9 shall remain effective for so long as Issuer owes
any amounts with respect to the Senior Debt. If, at any time after payment in
full of the Senior Debt, any payments of the Senior Debt must be disgorged by
the recipients for any reason (including, without limitation, the bankruptcy of
the Company), this Section 9 and the relative rights and priorities set forth
herein shall be reinstated as to all such disgorged payments as though such
payments had not been made and the Holder and the other holders of the Notes
shall immediately pay over to the holders of Senior Debt all payments received
with respect to the Subordinated Debt to the extent that such payments would
have been prohibited hereunder. At any time and from time to time, without
notice to the Holder and the other holders of the Notes, the holders of Senior
Debt may take such actions with respect to the Senior Debt as such holders, in
their sole discretion, may deem appropriate, including, without limitation,
increasing the amount of Senior Debt, extending the time of payment, shortening
the time of payment (if permitted under the documents governing the Senior
Debt), increasing applicable interest rates, renewing, compromising or otherwise
amending the terms of any documents affecting the Senior Debt and any collateral
securing the Senior Debt, and enforcing or failing to enforce any rights against
Issuer or any other person. No such action or inaction shall impair or otherwise
affect the provisions of this Section 9 and the rights of the holders of Senior
Debt hereunder.

                                       19
<PAGE>

            (h) After all Senior Debt is indefeasibly paid in full and until
this Note is paid in full, the Holder and the holders of the other Notes shall
be subrogated to the rights of the holders of Senior Debt to receive
distributions applicable to such Senior Debt, to the extent that distributions
otherwise payable to the Holder and the holders of the other Notes have been
applied to the payment of Senior Debt. A distribution made under this Section 9
to holders of Senior Debt that otherwise would have been made to the Holder or
the holders of the other Notes is not, as between the Company and the Holder and
the holders of the other Notes, a payment by Issuer on this Note and the other
Notes.

            (i) The provisions of this Section 9 shall bind any successors or
assignees of the Holder and shall benefit the holders of Senior Debt and any of
their successors or assigns, and, if Issuer refinances or replaces a portion of
the Senior Debt with a new lender, such new lender shall be deemed a successor
of Laurus for the purposes of this Section 9. Each holder of Senior Debt is
hereby irrevocably made a third-party beneficiary of the rights granted to such
holders under this Section 9.

            (j) The provisions of this Section 9 may be amended only by a
written instrument signed by holders of a majority-in-interest of the then
outstanding principal amount of the Notes and the holders of a majority of the
outstanding principal amount of the Senior Debt.

            (k) This Section 9 defines the relative rights of the Holder and the
other holders of the Notes and the holders of the Senior Debt. Nothing in this
Agreement shall:

                (i) impair, as between Issuer and the Holder or the other
holders of the Notes, the obligation of Issuer, which is absolute and
unconditional, to pay principal of and interest on the Notes in accordance with
their terms;

                (ii) affect the relative rights of the Holder and the other
holders of the Notes and creditors of Issuer, other than their rights in
relation to the Senior Debt and the holders thereof; and

                (iii) prevent the Holder or any other holder of the Notes from
exercising their respective available remedies upon an Event of Default in a
manner permitted by Section 9 hereof.

            (l) To the extent the provisions of this Section 9 conflict with any
of the other provisions of this Note, the provisions of this Section 9 shall
control.

                                       20
<PAGE>

         SECTION 10. MISCELLANEOUS.

         10.1. Failure or Delay Not Waiver. No failure or delay on the part of
the Holder hereof in the exercise of any power, right, or privilege hereunder
shall operate as a waiver thereof, nor shall any single or partial exercise of
any such power, right or privilege preclude other or further exercise thereof or
of any other right, power or privilege. All rights and remedies existing
hereunder are cumulative to, and not exclusive of, any rights or remedies
otherwise available. Issuer hereby waives presentment, demand for payment,
diligence, notice of dishonor and all other notices or demands in connection
with the delivery, acceptance, performance, default or indorsement of this Note.

         10.2. Notices. Unless otherwise specifically provided herein, all
communications under this Note shall be in writing and shall be deemed to have
been duly given (a) on the date personally delivered to the party to whom notice
is to be given, (b) on the day of transmission if sent by facsimile transmission
to a number provided to a party specifically for such purposes and the sending
party receives confirmation of the completion of such transmission, (c) on the
business day after delivery to Federal Express or similar overnight courier
which utilizes a written form of receipt, or (d) on the fifth day after mailing,
if mailed to the party to whom notice is to be given, by first class mail,
registered or certified, postage prepaid, and properly addressed, return receipt
requested. All notices shall be addressed as follows: if to the Holder, at its
address as set forth in Issuer's books and records and, if to Issuer, at the
address as follows, or at such other address as the Holder or Issuer may
designate by five days' advance written notice to the other:

                           If to Issuer:

                           Epixtar Corp.
                           11900 Biscayne Boulevard
                           Miami, Florida 33181
                           Attention: Office of Secretary
                           Facsimile:  (315) 503-8610

                           With a copy to:

                           Michael DiGiovanna, Esq.
                           212 Carnegie Center
                           Princeton, New Jersey 08540
                           Facsimile:  (609) 452-9473

         10.3. Amendments. Any provision of this Note may be amended, waived or
modified upon the written consent of Issuer and holders of a
majority-in-interest of the then outstanding principal amount of the Notes.

         10.4. Binding Effect; Assignability. This Note shall be binding upon
Issuer, its successors and its assigns, and shall inure to the benefit of
Holder, its successors and its assigns. This Note is transferable or assignable
by the Holder; provided that such transfer or assignment is made in compliance
with the Act and any applicable state and foreign securities laws.

                                       21
<PAGE>

         10.5. Governing Law; Jurisdiction; Venue. This Note has been executed
in and shall be governed by the laws of the State of New York. Issuer
irrevocably submits to the exclusive jurisdiction of the courts of the State of
New York and the United States District Court for the Southern District of New
York for the purpose of any suit, action, proceeding or judgment relating to or
arising out of this Note. Service of process in connection with any such suit,
action or proceeding may be served on Issuer anywhere in the world by any method
authorized by law. Issuer irrevocably consents to the jurisdiction of any such
court in any such suit, action or proceeding and to the laying of venue in such
court. Issuer irrevocably waives any objection to the laying of venue of any
such suit, action or proceeding brought in such courts and irrevocably waives
any claim that any such suit, action or proceeding brought in any such court has
been brought in an inconvenient forum.

         10.6. Identity of Transfer Agent. The Transfer Agent for the Epixtar
Common Stock is Interwest Transfer Company Inc. Upon the appointment of any
subsequent transfer agent for the Epixtar Common Stock or other shares of the
Issuer's capital stock issuable upon the exercise of the rights of conversion
represented by this Note, Issuer will mail to the Holder a statement setting
forth the name and address of such transfer agent.

         10.7. Registration Rights. The initial holder of this Note is entitled
to the benefit of certain registration rights with respect to the shares of
Epixtar Common Stock and Voxx Common Stock underlying this Note, the Epixtar
Warrants and the Voxx Warrants, as provided in the Subscription Agreement, and
any subsequent holder hereof shall be entitled to such rights to the extent
provided in the Subscription Agreement.

         10.8. No Rights as Shareholder. Prior to the conversion of this Note,
the Holder shall not have or exercise any rights as a stockholder of Issuer by
virtue of its ownership of this Note unless specifically set forth herein.

         10.9. Section Headings. The section headings in this Note are for the
convenience of the Issuer and the Holder and in no way alter, modify, amend,
limit or restrict the provisions hereof.

                                       22
<PAGE>

         IN WITNESS WHEREOF, Issuer has caused this Note to be signed in its
name by its duly authorized officer and its corporate seal to be affixed hereto.

                                            EPIXTAR CORP.

                                            By:  _______________________________
                                                  Name:
                                                  Title:

                                            VOXX CORPORATION

                                            By:  _______________________________
                                                  Name:
                                                  Title:

                                       23

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