Exhibit 10.24

 

EMPLOYMENT AGREEMENT (this “Agreement”), dated as of September 30, 2004 (the
“Effective Date”), between AMERICAN CAPITAL ACCESS SERVICE CORPORATION, a
Delaware corporation (“Service”), ACA CAPITAL HOLDINGS, INC., a Delaware
corporation (“Holdings”), ACA FINANCIAL GUARANTY CORPORATION, a Maryland
corporation (“Financial,” and, together with Holdings and Service, the
“Company”) and JOSEPH PIMBLEY (the “Executive”).

Pursuant to that certain Management Service Agreement, dated September 24, 1997,
Service provides a broad range of administrative and business services to
Financial.  Financial is in the business of providing financial guaranty
insurance and specialized surety products.

Service desires to employ the Executive and Financial and Holdings desire to
lease from Service the Executive’s services as an officer and employee, and the
Executive desires to accept such employment.

Accordingly, in consideration of the premises and mutual covenants contained
herein and for other good and valuable consideration, the receipt and adequacy
of which are mutually acknowledged, the Company and the Executive agree as
follows:

1.             Definitions.  For purposes of this Agreement, the following terms
shall have the following meanings:

(a)           “Affiliate” of a Person means a Person that directly or indirectly
through one or more intermediaries controls, is controlled by or is under common
control with, the Person specified.  Unless the context otherwise requires, the
term “control” (including the terms “controlling,” “controlled by” and “under
common control with”) means the possession, direct or indirect, of the power to
direct or cause the direction of the management and policies of a Person,
whether through the ownership of voting securities, by contract, or otherwise.

(b)           “Base Salary” means the salary provided for in Section 4 or any
increased salary granted to the Executive pursuant to Section 4.

(c)           “Board” means the Board of Directors of Holdings, as constituted
from time to time.

(d)           “Cause” means the Executive:

(i)            is convicted of, or pleads nolo contendere (or similar plea) to,
a felony or a crime involving moral turpitude;

(ii)           performs an action or fails to take an action that constitutes
willful dishonesty, larceny, fraud or gross negligence by the Executive in the
performance of the Executive’s duties to the Company, or makes a knowing or
reckless misrepresentation (including by omission of any material adverse
information) to shareholders, directors or officers of the

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Company, which in the case of gross negligence only, is material and adverse to
the Company or its business or its reputation;

 

(iii)          engages in independently verified (determined by a qualified
medical or mental health professional), continuing and unremedied for a period
of at least six (6) months, substance abuse involving drugs or alcohol;

(iv)          willfully and repeatedly fails, after thirty (30) business days
notice, to materially follow the material written policies of the Company or
lawful instructions of the Board; or

(v)           materially breaches this Agreement or any written policy, rule or
regulation adopted by the Company or any of its Subsidiaries relating to
compliance with securities laws or other laws, rules or regulations and such
breach is not cured by the Executive or waived in writing by the Company within
thirty (30) days after written notice of such breach to the Executive.

No act, or failure to act, on Executive’s part shall be considered “willful”
unless done, or omitted to be done, without good faith and without reasonable
belief that the action or omission was in the best interest of the Company.

(e)           “Change of Control” means the occurrence of any of the following
events after the Effective Date:

(i)            any Person (other than any Person that is a stockholder of
Holdings as of the Effective Date, or other than a trustee or other fiduciary
holding securities under an employee benefit plan of Holdings, or a corporation
owned directly or indirectly by the stockholders of Holdings in substantially
the same proportions as their ownerships of stock of Holdings) becomes the
beneficial owner, directly or indirectly, of securities of Holdings representing
more than fifty percent (50%) of the combined voting power of Holdings’ then
outstanding voting securities; or

(ii)           during any period of two (2) consecutive years (not including any
period prior to the Effective Date), individuals who at the beginning of such
period constitute the Board (and any new director, whose election by Holdings’
stockholders was approved by a vote of at least two-thirds (2/3) of the
directors then still in office who either were directors at the beginning of the
period or whose election or nomination for election was so approved), cease for
any reason to constitute a majority thereof; or

(iii)          any Person (other than any Person that is a stockholder of
Holdings as of the Effective Date, or other than a trustee or other fiduciary
holding securities under an employee benefit plan of Holdings, or a corporation
owned directly or indirectly by the stockholders of Holdings in substantially
the same proportions as their ownerships of stock of Holdings) is or becomes
able to elect a majority of the members of the Board; or

(iv)          a closing or completion, as applicable, of (i) the sale or
disposition of all or substantially all of Holdings’ assets or (ii) a merger,
consolidation, or reorganization of Holdings with or involving any other
corporation, other than a merger,

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consolidation, or reorganization that would result in the voting securities of
Holdings outstanding immediately prior thereto continuing to represent (either
by remaining outstanding or by being converted into voting securities of the
surviving entity) at least fifty percent (50%) of the combined voting power of
the voting securities of Holdings (or such surviving entity) outstanding
immediately after such merger, consolidation, or reorganization.

 

However, in no event shall a “Change of Control” be deemed to have occurred,
with respect to the Executive, if Executive is part of a purchasing group that
consummates the Change of Control transaction.  Executive shall be deemed “part
of a purchasing group” for purposes of the preceding sentence if the Executive
is an equity participant in the purchasing Person (except for: (i) passive
ownership of less than three percent (3%) of the stock of the purchasing
company; or (ii) ownership of an equity interest in the purchasing company or
group that is otherwise not significant, as determined prior to the Change of
Control by a majority of the non-employee continuing directors of Holdings).

(f)            “Claim” means any claim, demand, request, investigation, dispute,
controversy, threat, discovery request, or request for testimony or information.

(g)           “Common Stock” means Common Stock, par value $0.10 per share, of
Holdings.

(h)           “Constructive Termination” means a termination by the Executive of
his employment with the Company on written notice given to the Company within
thirty (30) days following the date on which he learns of the occurrence,
without his prior written consent, of any of the following events, if the
Company shall have failed to cure such event within thirty (30) days following
receipt of written notice from the Executive of a request to cure such event:

(i)            a reduction in his then current Base Salary or in his current
bonus level pursuant to the Company’s bonus plan;

(ii)           a material breach of the Company’s obligations under this
Agreement;

(iii)          the termination of, or a reduction in, any material employee
benefit or perquisite enjoyed by him (other than as part of an across-the-board
reduction applying to all executive officers of the Company which has been
approved by the Board or the Compensation Committee thereof (the “Compensation
Committee”));

(iv)          a material change in the Executive’s positions, titles or
responsibilities with the Company (other than as a result of a promotion) as set
forth in Section 3 of this Agreement, or any action by the Company which results
in a material diminution in the authority of Executive, excluding for this
purpose, changes to the individuals, groups, positions, or divisions which
report to the Executive or, if applicable, the Executive’s removal as a member
of the Board or as a member of any board of directors of any Subsidiary of the
Company.  For the avoidance of doubt, a change in the Person to whom the
Executive reports shall not be deemed a Constructive Termination hereunder;

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(v)           the relocation of the Executive’s principal office to a location
outside of Manhattan, New York without his consent;

 

(vi)          the failure of the Company to obtain the assumption in writing of
its obligation to fully perform this Agreement by any successor to all or
substantially all of the assets of the Company within 15 days after a merger,
consolidation, sale, or similar transaction; or

(vii)         a material breach by the Company of any or all of the
representations made by the Company in Section 12(a).

(i)            “Disability” means the Executive’s inability, due to physical or
mental incapacity, to substantially perform his duties and responsibilities
under this Agreement for a period of 90 consecutive days or any 180 days out of
365 consecutive days as determined by an approved medical doctor.  For this
purpose, an “approved medical doctor” means a medical doctor mutually selected
by the Executive and the Company.  If the Executive and the Company cannot agree
on a medical doctor, each Party shall select a medical doctor and the two
doctors shall select a third who shall be the approved medical doctor for this
purpose.

(j)            “Parties” means the Company and the Executive.

(k)           “Person” means any individual, corporation, partnership, limited
liability company, joint venture, trust, estate, board, committee, agency, body,
employee benefit plan, association, joint stock company, unincorporated
organization or governmental entity or any department, agency or political
subdivision thereof or other person or entity.

(l)            “Proceeding” means any threatened or actual action, suit, or
proceeding, at law or in equity, whether civil, criminal, administrative,
investigative, appellate, or other.

(m)          “Pro-Rata Annual Incentive Award” means an amount equal to the
product obtained by multiplying (i) the Executive’s target annual incentive
award set forth in Section 5 for the year during which his employment hereunder
terminates (with such award deemed to be no less than the greater of (x) the
target annual incentive award for such year pursuant to Section 5 or (y) the
actual annual incentive award of the Executive in the prior year of employment
hereunder) times (ii) a fraction, the numerator of which is the number of days
on which the Executive was employed by the Company during such year and the
denominator of which is 365.

(n)           “Subsidiary” means, with respect to any Person, any corporation,
limited liability company, partnership, association or other business entity of
which (i) if a corporation, a majority of the total voting power of shares of
stock entitled (without regard to the occurrence of any contingency) to vote in
the election of directors, managers or trustees thereof is at the time owned or
controlled, directly or indirectly, by that Person or one or more of the other
Subsidiaries of that Person or a combination thereof, or (ii) if a limited
liability company, partnership, association or other business entity, a majority
of the limited liability company, partnership or other similar ownership
interest thereof is at the time owned or controlled, directly or indirectly, by
any Person or one or more Subsidiaries of that Person or a combination thereof.

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For purposes hereof, a Person or Persons shall be deemed to have a majority
ownership interest in a limited liability company, partnership, association or
other business entity if such Person or Persons shall be allocated a majority of
limited liability company, partnership, association or other business entity
gains or losses or shall be or control any managing director or general partner
of such limited liability company, partnership, association or other business
entity.

 

(o)           “Termination Date” means the date on which the Executive’s
employment hereunder terminates for any reason.

(p)           “Voting Stock” means issued and outstanding capital stock or other
securities of any class or classes having general voting power, under ordinary
circumstances in the absence of contingencies, to elect, in the case of a
corporation, the directors of such corporation and, in the case of any other
entity, the corresponding governing Person(s).

2.             Term of Employment.  The Company agrees to employ the Executive
under this Agreement, and the Executive accepts such employment, for the Term of
Employment.  The Term of Employment shall commence on the Effective Date and
shall end on the third anniversary thereof.  On the third anniversary of the
Effective Date, and on every successive one year anniversary thereafter, the
Term of Employment shall automatically be renewed on the same terms and
conditions set forth herein as modified from time to time by the Parties for
additional one-year periods, unless either Party gives the other Party written
notice of the election not to renew the Term of Employment at least 60 days’
prior to any such renewal date, whereupon the Executive’s employment shall
terminate on the anniversary date under the terms of this Agreement.  For the
avoidance of doubt, in no event shall such non-renewal by the Company of the
Term of Employment be deemed a termination by the Company of the Executive’s
employment hereunder.  Notwithstanding the foregoing, the Term of Employment may
be earlier terminated in accordance with the provisions set forth in Section 8.

3.             Positions, Duties, and Responsibilities.

(a) During the Term of Employment, the Executive shall be employed as the
Executive Vice President — Institutional Risk Management of each of Holdings,
Service, and Financial, and shall perform such normal duties, responsibilities,
functions and authority and exercise such powers as are incident to such
offices.  The Executive, in carrying out his executive duties under this
Agreement, shall report to the Chief Executive Officer of such companies and
shall devote his best efforts and his full business time and attention (except
for permitted vacation periods and reasonable periods of illness or other
incapacity) to the business and affairs of the Company.  The Executive shall
perform his duties and responsibilities to the Company hereunder to the best of
his abilities in a diligent, trustworthy, professional and efficient manner and
shall comply with the Company’s policies and procedures in all material
respects.

(b)           Notwithstanding anything herein to the contrary, nothing shall
preclude the Executive from (i) serving on the boards of directors of a
reasonable number of other corporations or the boards of a reasonable number of
trade associations and/or charitable organizations (provided that in each such
case the Executive shall give the Board at least 10

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business days’ advance written notice of the Executive’s intention to serve on
any such board and, if the Board reasonably objects thereto, the Executive
agrees not to serve on such board), (ii) engaging in charitable activities and
community affairs, including political activities, and (iii) managing his
personal investments and affairs, provided that such activities do not
materially interfere with the proper performance of his duties and
responsibilities as the Executive Vice President — Institutional Risk Management
of each of Holdings, Service, and Financial.

 

4.             Base Salary.  Commencing as of the Effective Date, the Executive
shall be paid an annualized Base Salary of $275,000 per annum, or such higher
rate as the Compensation Committee may determine from time to time (as adjusted
from time to time, the “Base Salary”).  The Base Salary shall be payable at
intervals in accordance with the regular payroll practices of the Company
applicable to senior executives but no less frequently than monthly.  The Base
Salary shall be reviewed no less frequently than annually during the Term of
Employment for increases.  Without the Executive’s written consent, the Base
Salary shall not be decreased at any time, or for any purpose, during the Term
of Employment (including, without limitation, for the purpose of determining
benefits due under Section 9).

5.             Annual Incentive Awards.  The Executive shall be eligible for an
annual incentive bonus award from the Company in respect of each fiscal year
ending during the Term of Employment.  The Executive’s target annual incentive
bonus amount for each such year shall be an amount equal to one hundred percent
(100%) of his annualized Base Salary for such year, and his actual bonus amount
for each such year shall be determined based on criteria determined by the Chief
Executive Officer of the Company and approved by the Compensation Committee in
its sole discretion, and communicated to the Executive no later than 30 days
after the beginning of the fiscal year; provided, however, that the Executive’s
minimum annual incentive bonus award for fiscal year 2004 shall be no less than
$250,000.  The Executive shall receive his annual incentive award payment in
respect of any fiscal year no later than the 60th day following the end of the
preceding fiscal year.

6.             Other Benefits.

(a)           Employee Benefits.  During the Term of Employment, the Executive
shall be entitled to participate in all employee benefit plans, programs and
arrangements made available generally to the Company’s senior executives or to
its employees, including, without limitation or guarantee, profit-sharing,
savings (qualified and non-qualified) and other defined contribution retirement
plans or programs, medical, dental, hospitalization, vision, short-term and
long-term disability and life insurance plans or programs, accidental death and
dismemberment protection, travel accident insurance, and any other employee
welfare benefit plans or programs that may be made available by the Company from
time to time, including any plans or programs that supplement the above-listed
types of plans or programs, whether funded or unfunded; provided, however, that
nothing in this Agreement shall be construed to require the Company to
establish, maintain or retain any such plans, programs, or arrangements, except
for family medical, dental, and hospitalization insurance providing coverage, at
no cost to the Executive, which shall be required benefit plans for the
Executive.

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(b)           Perquisites.  During the Term of Employment, the Executive shall
be entitled to participate in all fringe benefits and perquisites made generally
available to senior executives of the Company, in each case, at levels, and on
terms and conditions, that are commensurate with his positions and
responsibilities at the Company.  The Executive shall also receive such
additional fringe benefits and perquisites as the Compensation Committee may, in
its discretion, from time to time provide.

 

(c)           Vacation.  During the Term of Employment, the Executive shall be
entitled to vacation in accordance with the Company’s vacation policies in
effect from time to time.

7.             Reimbursement of Business and Other Expenses.

(a)           The Executive shall be authorized to incur reasonable business
expenses in carrying out his duties and responsibilities under this Agreement
which are consistent with the Company’s policies in effect from time to time
with respect to travel, entertainment and other business expenses, and the
Company shall promptly reimburse him for all such expenses, subject to his
satisfaction of Company requirements with respect to reporting and documentation
of such expenses.

(b)           All amounts payable to the Executive as compensation hereunder
shall be subject to all required and customary withholding by the Company.

8.             Termination of Employment.

(a)           Termination Due to Death.  In the event that the Executive’s
employment hereunder is terminated due to his death, his estate or his
beneficiaries (as the case may be) shall be entitled to the following:

(i)            payment of the Base Salary through the date of his death and for
an additional 90 days thereafter;

(ii)           a Pro-Rata Annual Incentive Award for the year in which his death
occurs, payable in a lump sum promptly after the date of his death in due course
with such payments made to other executives of the Company following the end of
the Company’s fiscal year;

(iii)          a lump-sum payment promptly after his death in respect of all
accrued but unused vacation days at his Base Salary rate in effect on the
Termination Date, payment of any other amounts earned, accrued and owing to the
Executive but not yet paid and receipt of other vested benefits in accordance
with applicable plans and programs of the Company (the “Standard Benefit”); and

(iv)          payment of COBRA premiums for the entire period of eligibility for
the Executive’s eligible dependents and continued participation for one year for
each of the Executive’s dependents in all other employee welfare benefit plans,
programs, and arrangements in which such dependent was participating as of the
date of the Executive’s death, on terms and conditions no less favorable than
those applying on such date.

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(b)           Termination Due to Disability.  In the event that the Executive’s
employment hereunder is terminated due to Disability, he shall be entitled to
the following:

 

(i)            continuation of Base Salary until commencement of long-term
disability payments;

(ii)           a Pro-Rata Annual Incentive Award for the year in which his
employment terminates, payable in a lump sum in due course with such payments
made to other executives of the Company following the end of the Company’s
fiscal year;

(iii)          the Standard Benefit; and

(iv)          payment of COBRA premiums for the entire period of eligibility for
the Executive and eligible dependents and participation for one year for the
Executive and each of his dependents in all Company life insurance coverage and
in all other Company employee welfare benefit plans, programs, and arrangements.

No termination of the Executive’s employment for Disability shall be effective
unless the Company first gives 15 days’ written notice of such termination to
the Executive.

(c)           Termination by the Company for Cause.

(i)            No termination of the Executive’s employment hereunder by the
Company for Cause shall be effective unless the provisions of this Section
8(c)(i) shall have been fully complied with.  Prior to any termination by the
Company for Cause, the Executive shall be given written notice by the Board of
the intention to terminate him, such notice (A) to state in reasonable detail
the circumstances that constitute the grounds on which the proposed termination
for Cause is based and (B) to be given no later than 180 days after the Board
first learns of such circumstances.  The Executive shall have 15 days after
receiving such notice in which to cure such grounds, to the extent such cure is
possible.

(ii)           In the event that the Executive’s employment hereunder is
terminated by the Company for Cause in accordance with Section 8(c)(i), he shall
be entitled to the following:

(A)          payment of the Base Salary through the Termination Date; and

(B)           the Standard Benefit.

(d)           Termination Without Cause; Constructive Termination of the
Executive.  In the event that the Executive’s employment hereunder is terminated
by the Company, other than due to Disability in accordance with Section 8(b) or
for Cause in accordance with Section 8(c)(i), or in the event of the Executive’s
termination of his employment as a result of a Constructive Termination, the
Executive shall be entitled to:

(i)            payment of the Base Salary through the Termination Date;

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(ii)           the Standard Benefit; and

 

(iii)          upon execution and delivery of the General Release substantially
in the form and substance as set forth in Exhibit A attached hereto (the
“General Release”) and such General Release having become effective:

(1)           a Pro-Rata Annual Incentive Award for the year in which the
Executive was terminated, payable in a lump sum promptly following the
Termination Date;

(2)           payment of severance in an amount equal to one year of the
Executive’s annual Base Salary as of the Termination Date, which severance
payment shall be payable on a “salary continuation basis” in regular
installments in accordance with the general payroll practices of the Company (in
effect from time to time) or, at the Company’s option, in one lump sum payment;
and

(3)           payment of COBRA premiums for the entire period of eligibility for
the Executive and eligible dependents and continued participation for the
Executive and each of his dependents in all Company life insurance coverage and
all other Company welfare benefit plans, programs, and arrangements until the
earlier of (x) one year from the Termination Date or (y) the date the Executive
receives equivalent coverage and benefits from a subsequent employer.

(e)           Voluntary Termination.  In the event that the Executive terminates
his employment with the Company on his own initiative, other than by death, for
Disability or by a Constructive Termination, he shall have the same entitlements
hereunder as provided in Section 8(c)(ii) in the case of a termination by the
Company for Cause.  A voluntary termination under this Section 8(e) shall be
effective upon written notice to the Company and shall not be deemed a breach of
this Agreement.

(f)            Benefit Plans.  In the event that the Executive, or any of his
dependents, is precluded from continuing full participation in any employee
benefit plan, program, or arrangement as provided in Sections 8(a)(iv),
8(b)(iv), or 8(d)(iii)(3), the Executive shall be provided with the after-tax
economic equivalent of any benefit or coverage foregone.  For this purpose, the
economic equivalent of any benefit or coverage foregone shall be deemed to be
the total cost to the Executive or any of his dependents of obtaining such
benefit or coverage by himself on an individual basis.  Payment of such
after-tax economic equivalent shall be made quarterly in advance, without
discount.

(g)           No Mitigation; Offset.  In the event of any termination of the
Executive’s employment with the Company, the Executive shall be under no
obligation to seek other employment or otherwise mitigate the obligations of the
Company under this Agreement.  The Company may offset against amounts due the
Executive under this Agreement on account of (A) any claim that the Company or
any of its shareholders or Affiliates may have against him or (B) any
remuneration or other benefit earned or received by the Executive after such
termination except as specifically provided in Section 8(d)(iii)(3).

9.             Change of Control.  In the event that a Change of Control occurs
during the Term of Employment, then (i) all Company stock options issued to the
Executive prior to the date

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hereof shall thereupon become fully vested and nonforfeitable; and (ii) the
Executive shall have the continued right to exercise each outstanding vested
stock option, including, without limitation, any portion of the Executive’s
stock options vesting prior to or upon such Change of Control, to the extent
permitted by the applicable plan or, if more favorable to the Executive, grant
document.  In the event that holders of Common Stock receive cash, securities,
or other property in respect of their Common Stock in connection with a Change
of Control transaction, the Company shall enable the Executive (if he so elects)
to exercise any stock option at a time and in a fashion that will entitle him to
receive in exchange for any shares thus acquired, the same consideration as is
received in such Change of Control transaction by other holders of Common Stock.

 

10.           Indemnification.

(a)           The Company agrees that (i) if the Executive is made a party, or
is threatened to be made a party, to any Proceeding by reason of the fact that
he is or was a director, officer, employee, agent, manager, consultant, or
representative of the Company or is or was serving at the request of the Company
or any of its Affiliates as a director, officer, member, employee, agent,
manager, consultant, or representative of another Person or (ii) if any Claim is
made, or threatened to be made, that arises out of or relates to the Executive’s
service in any of the foregoing capacities, then the Executive shall promptly be
indemnified and held harmless by the Company to the fullest extent legally
permitted or authorized by Holdings’ Certificate of Incorporation, Bylaws or
Board resolutions, against any and all costs, expenses, liabilities, and losses
(including, without limitation, attorney’s fees, judgments, interest, expenses
of investigation, penalties, fines, ERISA excise taxes or penalties, and amounts
paid or to be paid in settlement) incurred or suffered by the Executive in
connection therewith, and such indemnification shall continue as to the
Executive even if he has ceased to be a director, member, employee, agent,
manager, consultant or representative of the Company or other Person and shall
inure to the benefit of the Executive’s heirs, executors, and administrators. 
The Company shall advance to the Executive all costs and expenses incurred by
him in connection with any such Proceeding or Claim within 15 days after
receiving written notice requesting such an advance.  Such notice shall include
an undertaking by the Executive to repay the amount advanced if he is ultimately
determined not to be entitled to indemnification against such costs and
expenses.  For the avoidance of doubt, notwithstanding anything to the contrary
contained herein, the Executive shall not be entitled to indemnification
hereunder if any Proceeding or Claim is initiated by the Executive without the
prior written consent of the Company, or if the Executive fails timely to notify
the Company of his being made (or being threatened to be made) a party to any
such Proceeding contemplated by this Section 10(a) and the Company is materially
prejudiced by the Executive’s failure to so notify it.

(b)           Neither the failure of the Company (including the Board,
independent legal counsel, or stockholders) to have made a determination in
connection with any request for indemnification or advancement under Section
10(a) that the Executive has satisfied any applicable standard of conduct nor a
determination by the Company (including the Board, independent legal counsel, or
stockholders) that the Executive has not met any applicable standard of conduct,
shall create a presumption that the Executive has not met an applicable standard
of conduct.

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(c)           During the Term of Employment and for a period of six years
thereafter, the Company shall keep in place a directors and officers’ liability
insurance policy (or policies) providing comprehensive coverage to the Executive
equal to at least the greater of (i) $5,000,000 per year and (ii) the coverage
that the Company provides for any other present or former senior executive or
director of the Company.

 

(d)           The Company shall be entitled to deduct or withhold from any
amounts owing from the Company to the Executive any federal, state, local or
foreign withholding taxes, excise tax, or employment taxes (“Taxes”) imposed
with respect to the Executive’s compensation or other payments from the Company
or the Executive’s ownership interest in the Company (including, without
limitation, wages, bonuses, dividends, the receipt or exercise of equity options
and/or the receipt or vesting of restricted equity).  In the event the Company
elects, at the Executive’s request, to not make such deductions or withholdings,
the Executive shall indemnify the Company for any amounts paid with respect to
any such Taxes, together with any interest, penalties and related expenses
thereto.

11.           Assignability; Binding Nature.

(a)           This Agreement shall be binding upon and inure to the benefit of
the Parties and their respective successors, heirs (in the case of the
Executive), and assigns.

(b)           No rights or obligations of the Company under this Agreement may
be assigned or transferred by the Company except that such rights or obligations
may be assigned or transferred pursuant to a merger or consolidation in which
the Company is not the continuing entity, or a sale or liquidation of all or
substantially all of the assets and business of the Company; provided, that the
assignee or transferee is the successor to all or substantially all of the
assets and business of the Company and such assignee or transferee assumes the
liabilities, obligations, and duties of the Company, as contained in this
Agreement, either contractually or as a matter of law.  In the event of any sale
of assets and business or liquidation as described in the preceding sentence,
the Company shall use its commercially reasonable efforts to cause such assignee
or transferee to expressly assume the liabilities, obligations and duties of the
Company hereunder.

(c)           No rights or obligations of the Executive under this Agreement may
be assigned or transferred by the Executive other than his rights to
compensation and benefits, which may be transferred only by will or operation of
applicable law, except as provided in Section 18(f).

12.           Representations.

(a)           Holdings, Service and Financial, jointly and severally, represent
and warrant that:

(i)            Holdings, Service and Financial are duly authorized to enter into
this Agreement and to perform their respective obligations hereunder and, upon
the execution and delivery of this Agreement by the Parties, this Agreement
shall be the valid and binding obligation of Holdings, Service and Financial,
enforceable against Holdings, Service and Financial in accordance with its
terms;

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(ii)           Holdings, Service and Financial are corporations, each duly
organized, validly existing and in good standing under the laws of the States of
Delaware and Maryland, as applicable, and each having full corporate power and
authority to conduct its business as such businesses are presently conducted;
and

 

(iii)          The execution and delivery by each of Holdings, Service, and
Financial of this Agreement and the consummation of the transactions
contemplated hereby will not result in the violation of any law, statute, rule,
regulation, order, writ, injunction, judgment, or decree of any court or
governmental authority to or by which Holdings, Service, or Financial is bound,
or of any provision of the Certificate of Incorporation or Bylaws of Holdings,
Service or Financial, and will not conflict with, or result in a breach or
violation of, any of the terms or provisions of, or constitute (with due notice
or lapse of time or both) a default under, any agreement, instrument, or
document to which Holdings, Service or Financial is a party or by which it is
bound or to which any of its properties or assets is subject, nor result in the
creation or imposition of any lien upon any of the properties or assets of
Holdings, Service or Financial.

(b)           The Executive hereby acknowledges, represents and warrants to the
Company that:

(i)            the execution, delivery and performance of this Agreement by the
Executive do not and shall not conflict with, breach, violate or cause a default
under any contract, agreement, instrument, order, judgment or decree to which
the Executive is a party or by which he is bound;

(ii)           the Executive is not a party to or bound by any undisclosed
employment agreement, non-compete agreement or confidentiality agreement with
any other Person;

(iii)          upon the execution and delivery of this Agreement by the Company,
this Agreement shall be the valid and binding obligation of the Executive,
enforceable in accordance with its terms; and

(iv)          the Executive has had ample opportunity to consult with
independent legal counsel regarding his rights and obligations under this
Agreement, has so consulted to the extent desired by the Executive in his sole
discretion, and fully understands the terms and conditions contained herein.

13.           Covenant Not to Compete; Confidentiality; Intellectual Property,
Inventions and Patents.

(a)           Covenant Not to Compete.

(i)            In further consideration of the compensation to be paid to the
Executive hereunder, the Executive acknowledges that during the course of his
employment with the Company he shall become familiar with the Company’s and its
Subsidiaries’ trade secrets and with other Confidential Information concerning
the Company and its Subsidiaries and that his services shall be of special,
unique and extraordinary value to the Company, and therefore,

12

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the Executive agrees that during the Term of Employment and for a period of
twelve (12) months thereafter (the “Noncompete Period”), the Executive shall not
directly or indirectly (whether as an employee, consultant, investor,
independent contractor, or director):

 

(A)          engage, enter into or attempt to enter into, or manage, control,
participate in, consult with, render services for, or be employed by, a
Restricted Business (as defined below) that directly or indirectly competes with
the Company or any of its Subsidiaries in the United States or other
jurisdictions in which the Company or any of its Subsidiaries conducts or is
developing business or has demonstrable plans to conduct business; provided,
however, that this clause (A) shall not apply following the expiration of the
Term of Employment as a result of a notice from the Company or the Executive
pursuant to Section 2; provided, further, that nothing herein shall prohibit the
Executive from being a passive owner of not more than five percent (5%) of the
outstanding stock of any class of a corporation that is publicly traded, so long
as the Executive has no active participation in the business of such
corporation; or

(B)           (i) induce or attempt to persuade any former or then-current
employee, agent, manager, consultant, director, customer, counterparty or other
business relationship of the Company or any of its Subsidiaries to terminate
such employment or other relationship (including, without limitation, by making
any negative or disparaging statements or communications regarding the Company
or any of its Subsidiaries) or (ii) hire any Person who was an employee of the
Company or any of its Subsidiaries within the 12 month period prior to the
Termination Date.

(ii)           For the purposes of this Section 13, a “Restricted Business”
shall mean a financial guaranty insurance, specialized surety, credit derivative
and/or structured finance business, whether existing or to be formed and without
regard to its claims-paying ability, or any other business which the Company or
any of its Subsidiaries conducts or is developing or considering for development
during the Term of Employment or on the Termination Date.

(iii)          The covenants of the Executive set forth in this Section 13 shall
be null and void and without any force or effect upon the effective date of any
liquidation or dissolution of the Company, it being understood that a merger or
consolidation of the Company shall not be deemed to constitute a liquidation or
dissolution of the Company.

(iv)          The covenants set forth above in this Section 13 shall be
construed as a series of separate covenants, one for each county in each of the
states of the United States or country outside the United States to which such
restriction applies, subject, however, to the applicable laws of such
jurisdictions.

(v)           If, at the time of enforcement of this Section 13, any arbitrator
or court of competent jurisdiction shall hold that the duration, scope or area
restrictions stated herein are unreasonable under circumstances then existing,
the Parties agree that the maximum duration, scope or area reasonable under such
circumstances shall be substituted for the stated duration, scope or area and
that such arbitrator or court shall be authorized to revise the restrictions
contained herein to cover the maximum period, scope and area permitted by

13

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applicable law.  The Executive acknowledges that the restrictions contained in
this Section 13 are reasonable and necessary to the protection of legitimate
Company interests.

 

(vi)          In the event of the breach or a threatened breach by the Executive
of any of the provisions of this Section 13, the Executive acknowledges and
agrees that the Company would suffer irreparable harm, and thus, in addition and
supplementary to other rights and remedies existing in its favor, the Company
shall be entitled to seek and obtain specific performance and/or injunctive or
other equitable relief in order to enforce or prevent any violations of the
provisions hereof (without posting a bond or other security).  In addition, in
the event of a breach or violation by Executive of this Section 13, the
Noncompete Period shall be automatically extended by the amount of time between
the initial occurrence of the breach or violation and when such breach or
violation has been duly cured.

(b)           Confidentiality.

(i)            The Executive acknowledges that he will develop and be exposed to
non-public information that is or will be proprietary to the Company and its
Subsidiaries, including, but not limited to, customer lists, marketing plans,
pricing data, product development plans, and other intangible information, and
that the non-public information and data (including trade secrets) obtained by
him while employed by the Company concerning the business or affairs of the
Company and its Subsidiaries (“Confidential Information”) are the property of
the Company and/or one or more of its Subsidiaries.  The Executive agrees to use
such information only in connection with the performances of his duties
hereunder, to forever maintain such information in confidence and not to
disclose to any Person or use for his own purposes any Confidential Information
or any confidential or proprietary information of other Persons in the
possession of the Company (“Third Party Information”) without the prior written
consent of the Board, unless and to the extent that the Confidential Information
or Third Party Information becomes generally known to and available for use by
the public or in the Company’s industry other than, in each case, as a result of
the Executive’s acts or omissions; provided, however, that the Executive may
disclose such information when required to by law or subpoena from a court,
government agency or legislative body; provided further, however, that the
Executive shall immediately notify the Company of his receipt of any request or
demand (whether through legal process or otherwise) that he provide such
disclosure, and thereafter the Executive shall cooperate fully with any Company
efforts to resist, restrict or modify any such request or demand.  The Executive
shall deliver to the Company at the Termination Date, or at any other time the
Company may request, all memoranda, notes, plans, records, reports, computer
files, disks and tapes, printouts and software and other documents and data (and
all copies thereof) embodying or relating to Third Party Information,
Confidential Information, Work Product (as defined below) or the business of the
Company or any of its Subsidiaries which he may then possess or have under his
control.

(ii)           The Executive shall be prohibited in the course performing his
duties for the Company from using or disclosing any confidential information or
trade secrets that the Executive may have learned through any prior employment.

(c)           Intellectual Property, Inventions and Patents.  The Executive
acknowledges that all discoveries, concepts, ideas, inventions, innovations,
improvements,

14

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developments, methods, designs, analyses, drawings, reports, patent
applications, copyrightable work and mask work (whether or not including any
confidential information) and all registrations or applications related thereto,
all other proprietary information and all similar or related information
(whether or not patentable) which relate to the Company’s or any of its
Subsidiaries’ actual or anticipated business, research and development or
existing or future products or services and which are conceived, developed or
made by the Executive (whether alone or jointly with others) while employed by
the Company, whether before or after the date of this Agreement (“Work
Product”), belong to the Company and/or one or more of its Subsidiaries.  The
Executive shall promptly disclose such Work Product to the Board and, at the
Company’s expense, perform all actions reasonably requested by the Board
(whether during or after the Term of Employment) to establish and confirm such
ownership (including, without limitation, assignments, consents, powers of
attorney and other instruments).  The Executive acknowledges that all Work
Product shall be deemed to constitute “works made for hire” under the U.S.
Copyright Act of 1976, as amended.

 

14.           Executive’s Cooperation.  During the Term of Employment and
thereafter, the Executive shall cooperate with the Company in any internal
investigation, any administrative, regulatory or judicial proceeding or any
dispute with a third party as reasonably requested by the Company (including,
without limitation, the Executive being available to the Company upon reasonable
notice for interviews and factual investigations, appearing at the Company’s
request to give testimony without requiring service of a subpoena or other legal
process, volunteering to the Company all pertinent information and turning over
to the Company all relevant documents which are or may come into the Executive’s
possession, all at times and on schedules that are reasonably consistent with
Executive’s other permitted activities and commitments).  In the event the
Company requires the Executive’s cooperation in accordance with this Section 14,
the Company shall reimburse the Executive solely for reasonable travel expenses
(including lodging and meals) upon submission of receipts.  Notwithstanding
anything to the contrary contained herein, upon termination of the Term of
Employment hereunder, the Executive shall, if applicable, automatically be
deemed to have resigned as a director of the Board and of any board of directors
(or similar governing body) of any Subsidiary of the Company.

15.           Resolution of Disputes.  Except as specifically contemplated in
this Agreement, any Claim arising out of or relating to this Agreement, the
Executive’s employment with the Company, or the termination of such employment
shall be resolved by binding confidential arbitration, to be held in New York,
New York, in accordance with the Commercial Arbitration Rules of the American
Arbitration Association.  Judgment upon the award rendered by the arbitrator may
be entered by any Party in any court having jurisdiction thereof.  During the
resolution of any dispute under this Section 15, each Party shall bear the cost
of its own attorneys’ fees and expenses.  If the Executive prevails in the
arbitration, then the Company shall promptly pay all reasonable costs and
expenses, including, without limitation, reasonable attorneys’ fees, incurred by
the Executive or his beneficiaries in resolving any such Claim.  If the Company
prevails in the arbitration, then the arbitrator shall determine the allocation
of the costs and expenses of the arbitration, including the arbitrator’s fee and
both Parties’ attorneys’ fees and expenses, based upon the extent to which each
Party prevailed in the arbitration.  In the event that any relief which is
awarded is non-monetary, then such costs and expenses shall be allocated in any
manner as may be determined by the arbitrator.

15

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16.           Notices.  Any notice, consent, demand, request, or other
communication given to a Person in connection with this Agreement shall be in
writing and shall be deemed to have been given to such Person (a) when delivered
personally to such Person, or (b) provided that a written acknowledgment of
receipt is obtained, two days after being sent by prepaid certified or
registered mail, or by a nationally recognized overnight courier, to the address
specified below for such Person (or to such other address as such Person shall
have specified by 10 days’ advance notice given in accordance with this Section
16), or (c) in the case of the Company only, on the first business day after it
is sent by facsimile to the facsimile number set forth for the Company (or to
such other facsimile number as the Company shall have specified by 10 days’
advance notice given in accordance with this Section 16), with a confirmatory
copy sent by certified or registered mail or by overnight courier to the Company
in accordance with this Section 16.

 

If to the Company, to:

American Capital Access Service Corporation
140 Broadway
New York, NY 10005
Attention: General Counsel
Telephone: (212) 375-2000
Facsimile: (212) 375-2100

If to the Executive, to:

The Executive’s principal residence as shown in the records of the Company,

with a copy to:

the Executive at the Company’s address.

If to a beneficiary of the Executive, to:

The address most recently specified by the Executive or beneficiary through
notice given in accordance with this Section 16.

17.           Guarantee of Obligations.  Financial and Holdings are each a
beneficiary of the services provided by Executive and hereby irrevocably and
unconditionally guarantee the performance of all obligations of Service
hereunder.

18.           Insurance.  The Company may, at its discretion, apply for and
procure in its own name and for its own benefit life and/or disability insurance
on the Executive in any amount or amounts considered advisable.  The Executive
agrees to cooperate in any medical or other examination, supply any information
and execute and deliver any applications or other instruments in writing as may
be reasonably necessary to obtain and constitute such insurance.

16

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19.           Miscellaneous.

 

(a)           Entire Agreement.  This Agreement, including Exhibit A hereto,
represents the entire understanding and agreement between the Parties concerning
the subject matter hereof and, as of the Effective Date, supersedes and
terminates all prior agreements, understandings, discussions, negotiations, and
undertakings, whether written or oral, between the Parties with respect thereto.

(b)           Severability.  In the event that any provision or portion of this
Agreement shall be determined to be invalid or unenforceable for any reason, in
whole or in part, the remaining provisions of this Agreement shall be unaffected
thereby and shall remain in full force and effect to the fullest extent
permitted by law so as to achieve the purposes of this Agreement.

(c)           Amendment or Waiver.  No provision in this Agreement may be
amended unless such amendment is set forth in a writing signed by the Parties. 
No waiver by either Party of any breach of any condition or provision contained
in this Agreement shall be deemed a waiver of any similar or dissimilar
condition or provision at the same or any prior or subsequent time.  To be
effective, any waiver must be set forth in a writing signed by the waiving
Party.

(d)           Headings.  The headings of the Sections contained in this
Agreement are for convenience only and shall not be deemed to control or affect
the meaning or construction of any provision of this Agreement.

(e)           Beneficiaries/ References.  The Executive shall be entitled, to
the extent permitted under any applicable law, to select and change a
beneficiary or beneficiaries to receive any compensation or benefit hereunder
following the Executive’s death by giving the Company written notice thereof. 
In the event of the Executive’s death or a judicial determination of his
incompetence, reference in this Agreement to the Executive shall be deemed,
where appropriate, to refer to his beneficiary, estate, or other legal
representative.

(f)            Survivorship.  Except as otherwise set forth in this Agreement,
the respective rights and obligations of the Parties hereunder shall survive the
Termination Date.

(g)           Governing Law/ Jurisdiction.  This Agreement shall be governed,
construed, performed, and enforced in accordance with the laws of the State of
New York, without giving effect to any choice of law or conflict of law rules or
provisions (whether of the State of New York or any other jurisdiction) that
would cause the application of the laws of any jurisdiction other than the State
of New York.  In furtherance of the foregoing, the internal law of the State of
New York shall control the interpretation and construction of this Agreement
(and all exhibits hereto), even though under that jurisdiction’s choice of law
or conflict of law analysis, the substantive law of some other jurisdiction
would ordinarily apply.

(h)           Counterparts.  This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which, when
taken together, shall constitute one and the same instrument.

17

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(i)            No Strict Construction.  The language used in this Agreement
shall be deemed to be the language chosen by the Parties to express their mutual
intent, and no rule of strict construction shall be applied against any Party.

 

(k)           Consent to Jurisdiction.  EACH OF THE PARTIES IRREVOCABLY SUBMITS
TO THE NON-EXCLUSIVE JURISDICTION OF ANY UNITED STATES DISTRICT COURT LOCATED IN
NEW YORK CITY, NEW YORK, FOR THE PURPOSES OF ANY SUIT, ACTION OR OTHER
PROCEEDING ARISING OUT OF THIS AGREEMENT, ANY RELATED AGREEMENT OR ANY
TRANSACTION CONTEMPLATED HEREBY OR THEREBY.  EACH OF THE PARTIES FURTHER AGREES
THAT SERVICE OF ANY PROCESS, SUMMONS, NOTICE OR DOCUMENT BY U.S. REGISTERED MAIL
TO SUCH PARTY’S RESPECTIVE ADDRESS SET FORTH ABOVE SHALL BE EFFECTIVE SERVICE OF
PROCESS FOR ANY ACTION, SUIT OR PROCEEDING IN THE STATE OF NEW YORK WITH RESPECT
TO ANY MATTERS TO WHICH IT HAS SUBMITTED TO JURISDICTION IN THIS PARAGRAPH
18(L).  EACH OF THE PARTIES IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY OBJECTION
TO THE LAYING OF VENUE OF ANY ACTION, SUIT OR PROCEEDING ARISING OUT OF THIS
AGREEMENT, ANY RELATED DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY AND
THEREBY IN ANY UNITED STATES DISTRICT COURT LOCATED IN NEW YORK CITY, NEW YORK,
AND HEREBY AND THEREBY FURTHER IRREVOCABLY AND UNCONDITIONALLY WAIVES AND AGREES
NOT TO PLEAD OR CLAIM IN ANY SUCH COURT THAT ANY SUCH ACTION, SUIT OR PROCEEDING
BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.

(l)            Waiver of Jury Trial.  AS A SPECIFICALLY BARGAINED FOR INDUCEMENT
FOR EACH OF THE PARTIES TO ENTER INTO THIS AGREEMENT, EACH PARTY EXPRESSLY
WAIVES THE RIGHT TO TRIAL BY JURY IN ANY LAWSUIT OR PROCEEDING RELATING TO OR
ARISING IN ANY WAY FROM THIS AGREEMENT OR THE MATTERS CONTEMPLATED HEREBY.

18

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SIGNATURE PAGE TO
EMPLOYMENT AGREEMENT

 

IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the date
first set forth above.

 

 

 

 

AMERICAN CAPITAL ACCESS SERVICE CORPORATION

 

 

 

 

 

 

 

 

 

 

 

 

 

 

By:

/s/ ALAN S. ROSEMAN

 

 

 

Name:

 

 

 

Title:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ACA CAPITAL HOLDINGS, INC.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

By:

/s/ ALAN S. ROSEMAN

 

 

 

Name:

 

 

 

Title:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ACA FINANCIAL GUARANTY CORPORATION

 

 

 

 

 

 

 

 

 

 

 

 

 

 

By:

/s/ ALAN S. ROSEMAN

 

 

 

Name:

 

 

 

Title:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

/s/ Joseph Pimbley

 

 

JOSEPH PIMBLEY

 

--------------------------------------------------------------------------------

Exhibit A

GENERAL RELEASE

I, JOSEPH PIMBLEY, in consideration of and subject to the performance by
AMERICAN CAPITAL ACCESS SERVICE CORPORATION, a Delaware corporation (“Service”),
ACA CAPITAL HOLDINGS, INC., a Delaware corporation (“Holdings”), ACA FINANCIAL
GUARANTY CORPORATION, a Maryland corporation (“Financial,” and, together with
Holdings, Service and each of their respective subsidiaries, the “Company”), of
their respective obligations under the Employment Agreement, dated as of
September 30, 2004 (the “Agreement”), do hereby release and forever discharge as
of the date hereof the Company and its affiliates and all present and former
directors, officers, employees, agents, representatives, attorneys, successors
and assigns of the Company and its affiliates and the Company’s direct or
indirect owners (collectively, the “Released Parties”) to the extent provided
below.

1.                                       I understand that any payments or
benefits paid or granted to me under Section 8(d)(iii) of the Agreement
represent, in part, consideration for signing this General Release and are not
salary, wages or benefits to which I was already entitled.  I understand and
agree that I will not receive the payments and benefits specified in Section
8(d)(iii) of the Agreement unless I execute and effectuate this General
Release.  Such payments and benefits will not be considered compensation for
purposes of any employee benefit plan, program, policy or arrangement maintained
or hereafter established by the Company or its affiliates.  I also acknowledge
and represent that I have received all payments and benefits that I am entitled
to receive (as of the date hereof) by virtue of any employment by the Company.

2.                                       Except with respect to obligations to
me under my Employment Agreement that expressly survive the termination of my
employment with the Company, I knowingly and voluntarily (for myself, my heirs,
executors, administrators and assigns) release and forever discharge the Company
and the other Released Parties from any and all claims, suits, controversies,
actions, causes of action, cross-claims, counter-claims, demands, debts,
compensatory damages, liquidated damages, punitive or exemplary damages, other
damages, claims for costs and attorneys’ fees, or liabilities of any nature
whatsoever, in law and in equity, both past and present (through the date this
General Release becomes effective and enforceable) and whether known or unknown,
suspected, or claimed, against the Company or any of the Released Parties which
I, my spouse, or any of my heirs, executors, administrators or assigns, may
have, which arise out of or are connected with my employment with, or my
separation or termination from, the Company (including, but not limited to, any
allegation, claim or violation arising under: Title VII of the Civil Rights Act
of 1964, as amended; the Civil Rights Act of 1991; the Age Discrimination in
Employment Act of 1967, as amended (including the Older Workers Benefit
Protection Act); the Equal Pay Act of 1963, as amended; the Americans with
Disabilities Act of 1990; the Family and Medical Leave Act of 1993; the Worker
Adjustment Retraining and Notification Act; the Employee Retirement Income
Security Act of 1974; any applicable Executive Order Programs; the Fair Labor
Standards Act; or their state or local counterparts; or under any other federal,
state or local civil or human

  

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rights law, or under any other local, state, or federal law, regulation or
ordinance; or under any public policy, contract or tort, or under common law; or
arising under any policies, practices or procedures of the Company; or any claim
for wrongful discharge, breach of contract, infliction of emotional distress,
defamation; or any claim for costs, fees, or other expenses, including
attorneys’ fees incurred in these matters) (collectively, the “Claims”).

 

3.                                       I represent that I have made no
assignment or transfer of any right, claim, demand, cause of action, or other
matter covered by Section 2 above.

4.                                       In signing this General Release, I
acknowledge and intend that it shall be effective as a bar to each and every one
of the Claims hereinabove mentioned or implied.  I expressly consent that this
General Release shall be given full force and effect according to each and all
of its express terms and provisions, including those relating to unknown and
unsuspected Claims (notwithstanding any state statute that expressly limits the
effectiveness of a general release of unknown, unsuspected and unanticipated
Claims), if any, as well as those relating to any other Claims hereinabove
mentioned or implied.  I acknowledge and agree that this waiver is an essential
and material term of this General Release and that without such waiver the
Company would not have agreed to the terms of the Agreement.  I further agree
that in the event I should bring a Claim seeking damages against the Company, or
in the event I should seek to recover against the Company in any Claim brought
by a governmental agency on my behalf, this General Release shall serve as a
complete defense to such Claims as to my rights and entitlements.  I further
agree that I am not aware of any pending charge or complaint of the type
described in Section 2 as of the execution of this General Release.

5.                                       I agree that neither this General
Release, nor the furnishing of the consideration for this General Release, shall
be deemed or construed at any time to be an admission by the Company, any
Released Party or myself of any improper or unlawful conduct.

6.                                       I agree that I will (i) forfeit all
amounts payable by the Company pursuant to the Agreement and (ii) to the maximum
extent permitted by applicable law, immediately return to the Company all
amounts paid by the Company pursuant to Section 8(d)(iii), in each case, if I
challenge the validity of this General Release.  I also agree that if I violate
this General Release by suing the Company or the other Released Parties, I will
pay all costs and expenses of defending against the suit incurred by the
Released Parties, including reasonable attorneys’ fees, and return all payments
received by me pursuant to the Agreement.

7.                                       I agree that this General Release is
confidential and agree not to disclose any information regarding the terms of
this General Release, except to my immediate family and any tax, legal or other
counsel I have consulted regarding the meaning or effect hereof or as required
by law, and I will instruct each of the foregoing not to disclose the same to
anyone.

8.                                       Any non-disclosure provision in this
General Release does not prohibit or restrict me (or my attorney) from
responding to any inquiry about this General Release or its underlying

21

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facts and circumstances by the Securities and Exchange Commission (SEC), the
National Association of Securities Dealers, Inc. (NASD), any other
self-regulatory organization or governmental entity.

 

9.                                       I agree to reasonably cooperate with
the Company in any internal investigation, any administrative, regulatory, or
judicial proceeding or any dispute with a third party. I understand and agree
that my cooperation may include, but not be limited to, making myself available
to the Company upon reasonable notice for interviews and factual investigations;
appearing at the Company’s request to give testimony without requiring service
of a subpoena or other legal process; volunteering to the Company pertinent
information; and turning over to the Company all relevant documents which are or
may come into my possession all at times and on schedules that are reasonably
consistent with my other permitted activities and commitments.  I understand
that in the event the Company asks for my cooperation in accordance with this
provision, the Company will reimburse me solely for reasonable travel expenses,
(including lodging and meals), upon my submission of receipts.

10.                                 I agree not to disparage the Company, its
past and present investors, officers, directors or employees or its affiliates
and to keep all confidential and proprietary information about the past or
present business affairs of the Company and its affiliates confidential unless a
prior written release from the Company is obtained.  I further represent that as
of the date hereof, I have returned to the Company any and all property,
tangible or intangible, relating to its business, which I possessed or had
control over at any time (including, but not limited to, company-provided credit
cards, building or office access cards, keys, computer equipment, manuals,
files, documents, records, software, customer data base and other data) and that
I have not retained any copies, compilations, extracts, excerpts, summaries or
other notes of any such manuals, files, documents, records, software, customer
data base or other data.

11.                                 Notwithstanding anything in this General
Release to the contrary, this General Release shall not relinquish, diminish, or
in any way affect any rights or claims arising out of any breach by the Company
or by any Released Party of the Agreement after the date hereof.

12.                                 Whenever possible, each provision of this
General Release shall be interpreted in, such manner as to be effective and
valid under applicable law, but if any provision of this General Release is held
to be invalid, illegal or unenforceable in any respect under any applicable law
or rule in any jurisdiction, such invalidity, illegality or unenforceability
shall not affect any other provision or any other jurisdiction, but this General
Release shall be reformed, construed and enforced in such jurisdiction as if
such invalid, illegal or unenforceable provision had never been contained
herein.

BY SIGNING THIS GENERAL RELEASE, I REPRESENT AND AGREE THAT:

1.                                       I HAVE READ IT CAREFULLY;

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2.                                       I UNDERSTAND ALL OF ITS TERMS AND KNOW
THAT I AM GIVING UP IMPORTANT RIGHTS, INCLUDING BUT NOT LIMITED TO, RIGHTS UNDER
THE AGE DISCRIMINATION IN EMPLOYMENT ACT OF 1967, AS AMENDED;

 

3.                                       I VOLUNTARILY CONSENT TO EVERYTHING IN
IT;

4.                                       I HAVE BEEN ADVISED TO CONSULT WITH AN
ATTORNEY BEFORE EXECUTING IT, I HAVE HAD THE OPPORTUNITY TO SO CONSULT, AND HAVE
AVAILED MYSELF OF SUCH ADVICE TO THE EXTENT I HAVE DEEMED NECESSARY TO MAKE A
VOLUNTARY AND INFORMED CHOICE TO EXECUTE THIS AGREEMENT;

5.                                       I HAVE HAD AT LEAST [21][/][45] DAYS
FROM THE DATE OF MY RECEIPT OF THIS RELEASE SUBSTANTIALLY IN ITS FINAL FORM ON
__________ ___, 20___ TO CONSIDER IT AND THE CHANGES MADE SINCE THE __________
___, 20___ VERSION OF THIS RELEASE ARE NOT MATERIAL AND WILL NOT RESTART ANY
REQUIRED CONSIDERATION PERIOD;  [This section is only required if the Executive
is over the age of 40.  The 45 day period is required if at least one other
person is being terminated at the same time for the same reason, i.e., a
reduction in force.]

6.                                       I UNDERSTAND THAT I HAVE SEVEN DAYS
AFTER THE EXECUTION OF THIS RELEASE TO REVOKE IT, SUCH REVOCATION TO BE RECEIVED
IN WRITING BY THE COMPANY BY THE END OF THE SEVENTH DAY AFTER THE DATE HEREOF,
AND THAT THIS RELEASE SHALL NOT BECOME EFFECTIVE OR ENFORCEABLE UNTIL THE
REVOCATION PERIOD HAS EXPIRED;  [This section is only required if the Executive
is over the age of 40.]

7.                                       I HAVE SIGNED THIS GENERAL RELEASE
KNOWINGLY AND VOLUNTARILY AND WITH THE ADVICE OF ANY COUNSEL RETAINED TO ADVISE
ME WITH RESPECT TO IT; AND

8.                                       I AGREE THAT THE PROVISIONS OF THIS
GENERAL RELEASE MAY NOT BE AMENDED, WAIVED, CHANGED OR MODIFIED EXCEPT BY AN
INSTRUMENT IN WRITING SIGNED BY AN AUTHORIZED REPRESENTATIVE OF THE COMPANY AND
BY ME.

 NAME:

 

 

 

 

 

 

 

 

 

 

 DATE:

 

 

 

 

 

23

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