**Exhibit10.24**

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

Pursuant to that certainManagement Service Agreement, dated September 24, 1997, Service provides abroad range of administrative and business services to Financial.  Financial is in the business of providingfinancial guaranty insurance and specialized surety products.

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

Accordingly, inconsideration of the premises and mutual covenants contained herein and forother good and valuable consideration, the receipt and adequacy of which aremutually acknowledged, the Company and the Executive agree as follows:

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

(a)           “Affiliate” of a Person meansa Person that directly or indirectly through one or more intermediariescontrols, is controlled by or is under common control with, the Personspecified.  Unless the context otherwiserequires, the term “control” (including the terms “controlling,” “controlled by”and “under common control with”) means the possession, direct or indirect, ofthe power to direct or cause the direction of the management and policies of aPerson, whether through the ownership of voting securities, by contract, orotherwise.

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

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

(d)           “Cause” means the Executive:

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

(ii)           performs an action or fails to takean action that constitutes willful dishonesty, larceny, fraud or grossnegligence by the Executive in the performance of the Executive’s duties to theCompany, or makes a knowing or reckless misrepresentation (including byomission of any material adverse information) to shareholders, directors orofficers of the

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

 

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

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

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

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

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

(i)            any Person (other than any Personthat is a stockholder of Holdings as of the Effective Date, or other than a trustee or other fiduciary holding securities under anemployee benefit plan of Holdings, or a corporation owned directly orindirectly by the stockholders of Holdings in substantially the sameproportions as their ownerships of stock of Holdings) becomes the beneficialowner, directly or indirectly, of securities of Holdings representing more thanfifty percent (50%) of the combined voting power of Holdings’ then outstandingvoting 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 anynew director, whose election by Holdings’ stockholders was approved by a voteof at least two-thirds (2/3) of the directors then still in office whoeither were directors at the beginning of the period or whose election ornomination for election was so approved), cease for any reason to constitute amajority thereof; or

(iii)          any Person (other than any Person thatis a stockholder of Holdings as of the Effective Date, or other than a trustee or other fiduciary holding securities under anemployee benefit plan of Holdings, or a corporation owned directly orindirectly by the stockholders of Holdings in substantially the sameproportions as their ownerships of stock of Holdings) is or becomes able toelect a majority of the members of the Board; or

(iv)          a closing or completion, asapplicable, of (i) the sale ordisposition of all or substantially all of Holdings’ assets or (ii) a merger,consolidation, or reorganization of Holdings with or involving any othercorporation, other than a merger,

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consolidation, or reorganization that would resultin the voting securities of Holdings outstanding immediately prior theretocontinuing to represent (either by remaining outstanding or by being convertedinto voting securities of the surviving entity) at least fifty percent (50%) ofthe combined voting power of the voting securities of Holdings (or suchsurviving entity) outstanding immediately after such merger, consolidation, orreorganization.

 

However,in no event shall a “Change of Control” be deemed to have occurred, withrespect to the Executive, if Executive is part of a purchasing group thatconsummates the Change of Control transaction. Executive shall be deemed “part of a purchasing group” for purposes ofthe preceding sentence if the Executive is an equity participant in thepurchasing Person (except for: (i) passive ownership of less than three percent(3%) of the stock of the purchasing company; or (ii) ownership of an equityinterest 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-employeecontinuing directors of Holdings).

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

(g)           “Common Stock” means CommonStock, 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 hisprior written consent, of any of the following events, if the Company shallhave failed to cure such event within thirty (30) days following receipt ofwritten notice from the Executive of a request to cure such event:

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

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

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

(iv)          a material change in the Executive’spositions, titles or responsibilities with the Company (other than as aresult 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 theauthority of Executive, excluding for this purpose, changes to the individuals,groups, positions, or divisions which report to the Executive or, ifapplicable, the Executive’s removal as a member of the Board or as a member ofany board of directors of any Subsidiary of the Company.  For the avoidance of doubt, a change in thePerson to whom the Executive reports shall not be deemed a ConstructiveTermination hereunder;

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

 

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

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

(i)            “Disability” means theExecutive’s inability, due to physical or mental incapacity, to substantiallyperform his duties and responsibilities under this Agreement for a period of 90consecutive days or any 180 days out of 365 consecutive days as determined byan approved medical doctor.  For thispurpose, an “approved medical doctor” means a medical doctor mutually selectedby the Executive and the Company.  If theExecutive and the Company cannot agreeon a medical doctor, each Party shall select a medical doctor and the twodoctors shall select a third who shall be the approved medical doctor for thispurpose.

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

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

(l)            “Proceeding” means anythreatened or actual action, suit, or proceeding, at law or in equity, whethercivil, criminal, administrative, investigative, appellate, or other.

(m)          “Pro-Rata Annual IncentiveAward” means an amount equal to the product obtained by multiplying (i) theExecutive’s target annual incentive award set forth in Section 5 for theyear during which his employment hereunder terminates (with such award deemed tobe no less than the greater of (x) the target annual incentive award for suchyear pursuant to Section 5 or (y) the actual annual incentive award ofthe 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 wasemployed by the Company during such year and the denominator of which is 365.

(n)           “Subsidiary” means, withrespect to any Person, any corporation, limited liability company, partnership,association or other business entity of which (i) if a corporation, a majorityof the total voting power of shares of stock entitled (without regard to theoccurrence of any contingency) to vote in the election of directors, managersor 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 acombination thereof, or (ii) if a limited liability company, partnership,association or other business entity, a majority of the limited liabilitycompany, partnership or other similar ownership interest thereof is at the timeowned or controlled, directly or indirectly, by any Person or one or moreSubsidiaries of that Person or a combination thereof.

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

 

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

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

2.             Term of Employment.  The Company agrees to employ the Executiveunder this Agreement, and the Executive accepts such employment, for the Termof Employment.  The Term of Employmentshall 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 yearanniversary thereafter, the Term of Employment shall automatically be renewedon the same terms and conditions set forth herein as modified from time to timeby the Parties for additional one-year periods, unless either Party gives the other Party written noticeof the election not to renew the Term of Employment at least 60 days’ prior toany such renewal date, whereupon the Executive’s employment shall terminate onthe anniversary date under the terms of this Agreement.  For the avoidance of doubt, in no event shallsuch non-renewal by the Company of the Term of Employment be deemed atermination by the Company of the Executive’s employment hereunder.  Notwithstanding the foregoing, the Term ofEmployment may be earlier terminated in accordance with the provisions setforth in Section 8.

3.             Positions, Duties, andResponsibilities.

(a)During the Term of Employment, the Executive shall be employed as the ExecutiveVice President — Institutional Risk Managementof each of Holdings, Service, and Financial, and shall perform such normal duties,responsibilities, functions and authority and exercise such powers as areincident to such offices.  The Executive, in carrying out his executiveduties under this Agreement, shall report to the Chief Executive Officer ofsuch companies and shall devote his best efforts and his full businesstime and attention (except for permitted vacation periods and reasonableperiods of illness or other incapacity) to the business and affairs of theCompany.  The Executive shall perform hisduties and responsibilities to the Company hereunder to the best of hisabilities in a diligent, trustworthy, professional and efficient manner andshall comply with the Company’s policies and procedures in all materialrespects.

(b)           Notwithstanding anything herein tothe contrary, nothing shall preclude the Executive from (i) serving on theboards of directors of a reasonable number of other corporations or the boardsof 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 theExecutive’s intention to serve on any such board and, if the Board reasonablyobjects thereto, the Executive agrees not to serve on such board), (ii)engaging in charitable activities and community affairs, including politicalactivities, and (iii) managing his personal investments and affairs, providedthat such activities do not materially interfere with the proper performance ofhis 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, theExecutive shall be paid an annualized Base Salary of $275,000 per annum, or such higher rate as the CompensationCommittee may determine from time to time (as adjusted from time to time, the “BaseSalary”). The Base Salary shall be payable at intervals in accordance with theregular payroll practices of the Company applicable to senior executives but noless frequently than monthly.  The BaseSalary shall be reviewed no less frequently than annually during the Term ofEmployment for increases.  Without theExecutive’s written consent, the Base Salary shall not be decreased at anytime, or for any purpose, during the Term of Employment (including, withoutlimitation, for the purpose of determining benefits due under Section 9).

5.             Annual Incentive Awards.  The Executive shall be eligible for an annualincentive bonus award from the Company in respect of each fiscal year endingduring the Term of Employment.  TheExecutive’s target annual incentive bonus amount for each such year shall be anamount 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 oncriteria determined by the Chief Executive Officer of the Company and approvedby the Compensation Committee in its sole discretion, and communicated to theExecutive no later than 30 days after the beginning of the fiscal year; provided,however, that the Executive’s minimum annual incentive bonus award forfiscal year 2004 shall be no less than $250,000.  The Executive shall receive his annualincentive award payment in respect of any fiscal year no later than the 60th dayfollowing the end of the preceding fiscal year.

6.             Other Benefits.

(a)           Employee Benefits.  During the Term of Employment, the Executiveshall be entitled to participate in all employee benefit plans, programs andarrangements made available generally to the Company’s senior executives or toits 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 insuranceplans or programs, accidental death and dismemberment protection, travelaccident insurance, and any other employee welfare benefit plans or programsthat may be made available by the Company from time to time, including anyplans or programs that supplement the above-listed types of plans orprograms, whether funded or unfunded; provided, however, thatnothing in this Agreement shall be construed to require the Company toestablish, maintain or retain any such plans, programs, or arrangements, exceptfor family medical, dental, and hospitalization insurance providing coverage,at no cost to the Executive, which shall be required benefit plans for theExecutive.

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(b)           Perquisites. During the Term of Employment, the Executive shall be entitled toparticipate in all fringe benefits and perquisites made generally available tosenior executives of the Company, in each case, at levels, and on terms andconditions, that are commensurate with his positions and responsibilities atthe Company.  The Executive shall alsoreceive such additional fringe benefits and perquisites as the CompensationCommittee may, in its discretion, from time to time provide.

 

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

7.             Reimbursement of Business andOther Expenses.

(a)           The Executive shall be authorized toincur reasonable business expenses in carrying out his duties andresponsibilities under this Agreement which are consistent with the Company’spolicies in effect from time to time with respect to travel, entertainment andother business expenses, and the Company shall promptly reimburse him for allsuch expenses, subject to his satisfaction of Company requirements with respectto reporting and documentation of such expenses.

(b)           All amounts payable to the Executiveas compensation hereunder shall be subject to all required and customary withholdingby the Company.

8.             Termination of Employment.

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

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

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

(iii)          a lump-sum payment promptly after hisdeath in respect of all accrued but unused vacation days at his Base Salaryrate 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 vestedbenefits in accordance with applicable plans and programs of the Company (the “StandardBenefit”); and

(iv)          payment of COBRA premiums for theentire period of eligibility for the Executive’s eligible dependents andcontinued participation for one year for each of the Executive’s dependents inall other employee welfare benefit plans, programs, and arrangements in whichsuch dependent was participating as of the date of the Executive’s death, onterms 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 employmenthereunder is terminated due to Disability, he shall be entitled to thefollowing:

 

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

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

(iii)          the Standard Benefit; and

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

Notermination of the Executive’s employment for Disability shall be effectiveunless the Company first gives 15 days’ written notice of such termination tothe Executive.

(c)           Termination by the Company forCause.

(i)            No termination of the Executive’semployment hereunder by the Company for Cause shall be effective unless theprovisions of this Section 8(c)(i) shall have been fully compliedwith.  Prior to any termination by theCompany for Cause, the Executive shall be given written notice by the Board ofthe intention to terminate him, such notice (A) to state in reasonable detailthe circumstances that constitute the grounds on which the proposed terminationfor Cause is based and (B) to be given no later than 180 days after the Boardfirst learns of such circumstances.  TheExecutive shall have 15 days after receiving such notice in which to cure suchgrounds, to the extent such cure is possible.

(ii)           In the event that the Executive’semployment hereunder is terminated by the Company for Cause in accordance with Section8(c)(i), he shall be entitled to the following:

(A)          payment of the Base Salary through theTermination 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 bythe 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 ofa Constructive Termination, the Executive shall be entitled to:

(i)            payment of the Base Salarythrough the Termination Date;

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(ii)           the Standard Benefit; and

 

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

(1)           a Pro-Rata Annual IncentiveAward for the year in which the Executive was terminated, payable in a lump sumpromptly following the Termination Date;

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

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

(e)           Voluntary Termination.  In the event that the Executive terminateshis employment with the Company on hisown initiative, other than by death, for Disability or by a ConstructiveTermination, he shall have the same entitlements hereunder as provided in Section8(c)(ii) in the case of a termination by the Company for Cause.  A voluntary termination under this Section8(e) shall be effective upon written notice to the Company and shall not bedeemed a breach of this Agreement.

(f)            Benefit Plans.  In the event that the Executive, or any ofhis dependents, is precluded from continuing full participation in any employeebenefit 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-taxeconomic equivalent of any benefit or coverage foregone.  For this purpose, the economic equivalent ofany benefit or coverage foregone shall be deemed to be the total cost to theExecutive or any of his dependents of obtaining such benefit or coverage byhimself on an individual basis.  Paymentof such after-tax economic equivalent shall be made quarterly in advance,without discount.

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

9.             Change of Control.  In the event that a Change of Controloccurs during the Term of Employment, then (i) all Company stock options issuedto 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 outstandingvested stock option, including, without limitation, any portion of theExecutive’s stock options vesting prior to or upon such Change of Control, tothe extent permitted by the applicable plan or, if more favorable to theExecutive, grant document.  In the eventthat holders of Common Stock receive cash, securities, or other property inrespect of their Common Stock in connection with a Change of Controltransaction, the Company shall enable the Executive (if he so elects) toexercise any stock option at a time and in afashion that will entitle him to receive in exchange for any shares thusacquired, the same consideration as is received in such Change of Controltransaction by other holders of Common Stock.

 

10.           Indemnification.

(a)           The Company agrees that (i) if theExecutive is made a party, or is threatened to be made a party, to anyProceeding by reason of the fact that he is or was a director, officer,employee, agent, manager, consultant, or representative of the Company or is orwas serving at the request of the Company or any of its Affiliates as adirector, officer, member, employee, agent, manager, consultant, orrepresentative of another Person or (ii) if any Claim is made, or threatened tobe made, that arises out of or relates to the Executive’s service in any of theforegoing capacities, then the Executive shall promptly be indemnified and heldharmless by the Company to the fullest extent legally permitted or authorizedby Holdings’ Certificate of Incorporation, Bylaws or Board resolutions, againstany and all costs, expenses, liabilities, and losses (including, withoutlimitation, attorney’s fees, judgments, interest, expenses of investigation,penalties, fines, ERISA excise taxes or penalties, and amounts paid or to bepaid in settlement) incurred or suffered by the Executive in connectiontherewith, and such indemnification shall continue as to the Executive even ifhe has ceased to be a director, member, employee, agent, manager, consultant orrepresentative of the Company or other Person and shall inure to the benefit ofthe Executive’s heirs, executors, and administrators.  The Company shall advance to the Executiveall costs and expenses incurred by him in connection with any such Proceedingor Claim within 15 days after receiving written notice requesting such anadvance.  Such notice shall include anundertaking by the Executive to repay the amount advanced if he is ultimatelydetermined not to be entitled to indemnification against such costs and expenses.  For the avoidance of doubt, notwithstandinganything to the contrary contained herein, the Executive shall not be entitledto indemnification hereunder if any Proceeding or Claim is initiated by theExecutive without the prior written consent of the Company, or if the Executivefails timely to notify the Company of his being made (or being threatened to bemade) a party to any such Proceeding contemplated by this Section 10(a)and the Company is materially prejudiced by the Executive’s failure to sonotify it.

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

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(c)           During the Term of Employment and for a period of sixyears thereafter, the Company shall keep in place a directors and officers’liability insurance policy (or policies) providing comprehensive coverage tothe 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 formersenior executive or director of the Company.

 

(d)           The Company shall be entitledto deduct or withhold from any amounts owing from the Company to the Executiveany federal, state, local or foreign withholding taxes, excise tax, oremployment taxes (“Taxes”) imposed with respect to the Executive’scompensation or other payments from the Company or the Executive’s ownershipinterest in the Company (including, without limitation, wages, bonuses,dividends, the receipt or exercise of equity options and/or the receipt orvesting of restricted equity).  In theevent the Company elects, at the Executive’s request, to not make suchdeductions or withholdings, the Executive shall indemnify the Company for anyamounts 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 uponand 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 theCompany under this Agreement may be assigned or transferred by the Companyexcept that such rights or obligations may be assigned or transferred pursuantto 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 andbusiness of the Company; provided, that the assignee or transferee isthe successor to all or substantially all of the assets and business of theCompany and such assignee or transferee assumes the liabilities, obligations,and duties of the Company, as contained in this Agreement, either contractuallyor as a matter of law.  In the event ofany sale of assets and business or liquidation as described in the precedingsentence, the Company shall use its commercially reasonable efforts to causesuch assignee or transferee to expressly assume the liabilities, obligationsand duties of the Company hereunder.

(c)           Norights or obligations of the Executive under this Agreement may be assigned ortransferred by the Executive other than his rights to compensation andbenefits, 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 areduly authorized to enter into thisAgreement and to perform their respective obligations hereunder and, upon theexecution and delivery of this Agreement by the Parties, this Agreement shallbe the valid and binding obligation ofHoldings, Service and Financial, enforceable against Holdings, Service andFinancial in accordance with its terms;

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(ii)           Holdings, Service and Financial are corporations, eachduly organized, validly existing and in good standing under the laws of theStates of Delaware and Maryland, as applicable, and each having full corporatepower and authority to conduct its business as such businesses are presentlyconducted; and

 

(iii)          The execution and delivery by eachof Holdings, Service, and Financial of this Agreement and the consummation ofthe transactions contemplated hereby will not result in the violation of anylaw, statute, rule, regulation, order, writ, injunction, judgment, or decree ofany court or governmental authority to or by which Holdings, Service, orFinancial is bound, or of any provision of the Certificate of Incorporation orBylaws of Holdings, Service or Financial, and will not conflict with, or resultin a breach or violation of, any of the terms or provisions of, or constitute (withdue notice or lapse of time or both) a default under, any agreement,instrument, or document to which Holdings, Service or Financial is a party orby 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 propertiesor assets of Holdings, Service or Financial.

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

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

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

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

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

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

(a)           Covenant Not to Compete.

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

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the Executive agrees that during theTerm of Employment and for a period of twelve (12) months thereafter (the “Noncompete Period”), theExecutive 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 (asdefined below) that directly or indirectly competes with the Company or any ofits Subsidiaries in the United States or other jurisdictions in which theCompany or any of its Subsidiaries conducts or is developing business or hasdemonstrable plans to conduct business; provided, however, thatthis clause (A) shall not apply following the expiration of the Term ofEmployment as a result of a notice from the Company or the Executive pursuantto Section 2; provided, further, that nothing herein shallprohibit 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 publiclytraded, so long as the Executive has no active participation in the business ofsuch corporation; or

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

(ii)           Forthe purposes of this Section 13, a “Restricted Business” shallmean a financial guaranty insurance, specialized surety, creditderivative and/or structured finance business, whether existing or to be formedand without regard to its claims-paying ability, or any other business whichthe Company or any of its Subsidiaries conducts or is developing or consideringfor development during the Term of Employment or on the Termination Date.

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

(iv)          The covenants set forth above in this Section13 shall be construed as a series of separate covenants, one for eachcounty in each of the states of the United States or country outside the UnitedStates to which such restriction applies, subject, however, to the applicablelaws of such jurisdictions.

(v)           If, at the time of enforcement ofthis Section 13, any arbitrator or court of competent jurisdiction shallhold that the duration, scope or area restrictions stated herein areunreasonable under circumstances then existing, the Parties agree that themaximum duration, scope or area reasonable under such circumstances shall besubstituted for the stated duration, scope or area and that such arbitrator orcourt shall be authorized to revise the restrictions contained herein to coverthe maximum period, scope and area permitted by

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applicable law.  The Executiveacknowledges that the restrictions contained in this Section 13 arereasonable and necessary to the protection of legitimate Company interests.

 

(vi)          In the event of the breach or athreatened breach by the Executive of any of the provisions of this Section13, the Executive acknowledges and agrees that the Company would sufferirreparable harm, and thus, in addition and supplementary to other rights andremedies existing in its favor, the Company shall be entitled to seek andobtain specific performance and/or injunctive or other equitable relief inorder to enforce or prevent any violations of the provisions hereof (withoutposting a bond or other security).  Inaddition, in the event of a breach or violation by Executive of this Section13, the Noncompete Period shall be automatically extended by the amount oftime between the initial occurrence of the breach or violation and when suchbreach or violation has been duly cured.

(b)           Confidentiality.

(i)            The Executive acknowledgesthat he will develop and be exposed to non-public information that is or willbe proprietary to the Company and its Subsidiaries, including, but not limitedto, 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 Companyconcerning the business or affairs of the Company and its Subsidiaries (“ConfidentialInformation”) are the property of the Company and/or one or more of itsSubsidiaries.  The Executive agrees to use such information only inconnection with the performances of his duties hereunder, to forever maintainsuch information in confidence and not to disclose to any Person or usefor his own purposes any Confidential Information or any confidential orproprietary information of other Persons in the possession of the Company (“ThirdParty Information”) without the prior written consent of the Board, unlessand to the extent that the Confidential Information or Third Party Informationbecomes generally known to and available for use by the public or in theCompany’s industry other than, in each case, as a result of the Executive’sacts or omissions; provided, however, that the Executive may disclosesuch information when required to by law or subpoena from a court, governmentagency or legislative body; providedfurther, however,that the Executive shall immediately notify the Company of his receipt of anyrequest or demand (whether through legal process or otherwise) that he providesuch disclosure, and thereafter the Executive shall cooperate fully with anyCompany efforts to resist, restrict or modify any such request or demand.  The Executive shall deliver to theCompany 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 Subsidiarieswhich he may then possess or have under his control.

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

(c)           Intellectual Property, Inventionsand Patents.  The Executiveacknowledges that all discoveries, concepts, ideas, inventions, innovations,improvements,

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developments, methods, designs, analyses, drawings, reports, patentapplications, copyrightable work and mask work (whether or not including anyconfidential information) and all registrations or applications relatedthereto, all other proprietary information and all similar or relatedinformation (whether or not patentable) which relate to the Company’s or any ofits Subsidiaries’ actual or anticipated business, research and development orexisting or future products or services and which are conceived, developed ormade by the Executive (whether alone or jointly with others) while employed bythe Company, whether before or after the date of this Agreement (“WorkProduct”), belong to the Company and/or one or more of itsSubsidiaries.  The Executive shallpromptly disclose such Work Product to the Board and, at the Company’s expense,perform all actions reasonably requested by the Board (whether during or afterthe Term of Employment) to establish and confirm such ownership (including,without limitation, assignments, consents, powers of attorney and otherinstruments).  The Executive acknowledgesthat all Work Product shall be deemed to constitute “works made for hire” underthe 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 athird party as reasonably requested by the Company (including, withoutlimitation, the Executive being available to the Company upon reasonable noticefor interviews and factual investigations, appearing at the Company’s requestto give testimony without requiring service of a subpoena or other legalprocess, volunteering to the Company all pertinent information and turning overto the Company all relevant documents which are or may come into the Executive’spossession, all at times and on schedules that are reasonably consistent withExecutive’s other permitted activities and commitments).  In the event the Company requires the Executive’scooperation in accordance with this Section 14, the Company shallreimburse the Executive solely for reasonable travel expenses (includinglodging and meals) upon submission of receipts. Notwithstanding anything to the contrary contained herein, upontermination of the Term of Employment hereunder, the Executive shall, ifapplicable, automatically be deemed to have resigned as a director of the Boardand of any board of directors (or similar governing body) of any Subsidiary ofthe Company.

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

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16.           Notices.  Anynotice, consent, demand, request, or other communication given to a Person inconnection with this Agreement shall be in writing and shall be deemed to havebeen given to such Person (a) when delivered personally to such Person,or (b) provided that a written acknowledgment of receipt is obtained, two daysafter being sent by prepaid certified or registered mail, or by a nationallyrecognized 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 thecase of the Company only, on the firstbusiness day after it is sent by facsimile to the facsimile number set forthfor the Company (or to such other facsimile number as the Company shall havespecified by 10 days’ advance notice given in accordance with this Section16), with a confirmatory copy sent by certified or registered mail or byovernight courier to the Company in accordance with this Section 16.

 

If tothe Company, to:

American Capital Access Service Corporation140 BroadwayNew 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 therecords 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 theExecutive or beneficiary through notice given in accordance with this Section16.

17.           Guarantee of Obligations.  Financial and Holdings are each a beneficiaryof the services provided by Executive and hereby irrevocably andunconditionally guarantee the performance of all obligations of Servicehereunder.

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

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19.           Miscellaneous.

 

(a)           EntireAgreement.  This Agreement, includingExhibit A hereto, represents the entire understanding and agreementbetween the Parties concerning the subject matter hereof and, as of theEffective Date, supersedes and terminates all prior agreements, understandings,discussions, negotiations, and undertakings, whether written or oral, betweenthe Parties with respect thereto.

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

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

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

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

(f)            Survivorship.  Except as otherwise set forth in thisAgreement, the respective rights and obligations of the Parties hereunder shallsurvive 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 givingeffect to any choice of law or conflict of law rules or provisions (whether ofthe State of New York or any other jurisdiction) that would cause theapplication of the laws of any jurisdiction other than the State of New York.  In furtherance of the foregoing, the internallaw of the State of New York shall control the interpretation and constructionof this Agreement (and all exhibits hereto), even though under thatjurisdiction’s choice of law or conflict of law analysis, the substantive lawof some other jurisdiction would ordinarily apply.

(h)           Counterparts.  This Agreementmay be executed in two or more counterparts, each of which shall be deemed anoriginal, but all of which, when taken together, shall constitute one and thesame instrument.

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(i)            NoStrict Construction.  The languageused in this Agreement shall be deemed to be the language chosen by the Partiesto express their mutual intent, and no rule of strict construction shall beapplied against any Party.

 

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

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

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** **

**SIGNATUREPAGE TOEMPLOYMENT AGREEMENT**

 

IN WITNESS WHEREOF, theundersigned 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                              |

 

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**Exhibit A**

GENERAL RELEASE

I, JOSEPH PIMBLEY, inconsideration of and subject to the performance by AMERICAN CAPITAL ACCESSSERVICE CORPORATION, a Delaware corporation (“Service”), ACA CAPITALHOLDINGS, INC., a Delaware corporation (“Holdings”), ACA FINANCIALGUARANTY CORPORATION, a Maryland corporation (“Financial,” and, togetherwith Holdings, Service and each of their respective subsidiaries, the “Company”),of their respective obligations under the Employment Agreement, dated as ofSeptember 30, 2004 (the “Agreement”), do hereby release and foreverdischarge as of the date hereof the Company and its affiliates and all presentand former directors, officers, employees, agents, representatives, attorneys,successors and assigns of the Company and its affiliates and the Company’sdirect or indirect owners (collectively, the “Released Parties”) to theextent provided below.

1.                                       Iunderstand that any payments or benefits paid or granted to me under Section8(d)(iii) of the Agreement represent, in part, consideration for signing thisGeneral Release and are not salary, wages or benefits to which I was alreadyentitled.  I understand and agree that Iwill not receive the payments and benefits specified in Section 8(d)(iii) ofthe Agreement unless I execute and effectuate this General Release.  Such payments and benefits will not beconsidered compensation for purposes of any employee benefit plan, program,policy or arrangement maintained or hereafter established by the Company or itsaffiliates.  I also acknowledge andrepresent that I have received all payments and benefits that I am entitled toreceive (as of the date hereof) by virtue of any employment by the Company.

2.                                       Exceptwith respect to obligations to me under my Employment Agreement that expresslysurvive the termination of my employment with the Company, I knowingly andvoluntarily (for myself, my heirs, executors, administrators and assigns)release and forever discharge the Company and the other Released Parties fromany 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 pastand present (through the date this General Release becomes effective andenforceable) and whether known or unknown, suspected, or claimed, against theCompany 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 areconnected with my employment with, or my separation or termination from, theCompany (including, but not limited to, any allegation, claim or violationarising under: Title VII of the Civil Rights Act of 1964, as amended; the CivilRights Act of 1991; the Age Discrimination in Employment Act of 1967, asamended (including the Older Workers Benefit Protection Act); the Equal Pay Actof 1963, as amended; the Americans with Disabilities Act of 1990; the Familyand Medical Leave Act of 1993; the Worker Adjustment Retraining andNotification Act; the Employee Retirement Income Security Act of 1974; anyapplicable Executive Order Programs; the Fair Labor Standards Act; or theirstate or local counterparts; or under any other federal, state or local civilor human

  

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

 

3.                                       Irepresent 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.                                       Insigning this General Release, I acknowledge and intend that it shall beeffective as a bar to each and every one of the Claims hereinabove mentioned orimplied.  I expressly consent that thisGeneral Release shall be given full force and effect according to each and allof its express terms and provisions, including those relating to unknown andunsuspected Claims (notwithstanding any state statute that expressly limits theeffectiveness of a general release of unknown, unsuspected and unanticipatedClaims), if any, as well as those relating to any other Claims hereinabovementioned or implied.  I acknowledge andagree that this waiver is an essential and material term of this GeneralRelease and that without such waiver the Company would not have agreed to theterms of the Agreement.  I further agreethat 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 Claimbrought by a governmental agency on my behalf, this General Release shall serveas a complete defense to such Claims as to my rights and entitlements.  I further agree that I am not aware of anypending charge or complaint of the type described in Section 2 as of theexecution of this General Release.

5.                                       Iagree that neither this General Release, nor the furnishing of theconsideration for this General Release, shall be deemed or construed at anytime to be an admission by the Company, any Released Party or myself of anyimproper or unlawful conduct.

6.                                       Iagree that I will (i) forfeit all amounts payable by the Company pursuant tothe 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 GeneralRelease by suing the Company or the other Released Parties, I will pay allcosts and expenses of defending against the suit incurred by the ReleasedParties, including reasonable attorneys’ fees, and return all payments receivedby me pursuant to the Agreement.

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

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

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facts and circumstancesby the Securities and Exchange Commission (SEC), the National Association ofSecurities Dealers, Inc. (NASD), any other self-regulatory organizationor governmental entity.

 

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

10.                                 Iagree not to disparage the Company, its past and present investors, officers,directors or employees or its affiliates and to keep all confidential andproprietary information about the past or present business affairs of theCompany and its affiliates confidential unless a prior written release from theCompany is obtained.  I further representthat as of the date hereof, I have returned to the Company any and allproperty, tangible or intangible, relating to its business, which I possessedor had control over at any time (including, but not limited to, company-providedcredit cards, building or office access cards, keys, computer equipment,manuals, files, documents, records, software, customer data base and otherdata) 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.                                 Notwithstandinganything in this General Release to the contrary, this General Release shallnot relinquish, diminish, or in any way affect any rights or claims arising outof any breach by the Company or by any Released Party of the Agreement afterthe date hereof.

12.                                 Wheneverpossible, each provision of this General Release shall be interpreted in, suchmanner as to be effective and valid under applicable law, but if any provisionof this General Release is held to be invalid, illegal or unenforceable in anyrespect under any applicable law or rule in any jurisdiction, such invalidity,illegality or unenforceability shall not affect any other provision or anyother jurisdiction, but this General Release shall be reformed, construed andenforced in such jurisdiction as if such invalid, illegal or unenforceableprovision had never been contained herein.

BYSIGNING THIS GENERAL RELEASE, I REPRESENT AND AGREE THAT:

1.                                       IHAVE READ IT CAREFULLY;

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

 

3.                                       IVOLUNTARILY CONSENT TO EVERYTHING IN IT;

4.                                       IHAVE BEEN ADVISED TO CONSULT WITH AN ATTORNEY BEFORE EXECUTING IT, I HAVE HADTHE OPPORTUNITY TO SO CONSULT, AND HAVE AVAILED MYSELF OF SUCH ADVICE TO THEEXTENT I HAVE DEEMED NECESSARY TO MAKE A VOLUNTARY AND INFORMED CHOICE TO EXECUTETHIS AGREEMENT;

5.                                       IHAVE HAD AT LEAST [21][/][45] DAYS FROM THE DATE OF MY RECEIPT OF THIS RELEASESUBSTANTIALLY IN ITS FINAL FORM ON **_____________**, 20**___** TO CONSIDERIT AND THE CHANGES MADE SINCE THE **_____________**, 20**___** VERSION OFTHIS RELEASE ARE NOT MATERIAL AND WILL NOT RESTART ANY REQUIRED CONSIDERATIONPERIOD;  **[This section is only required if the Executive is over the age of40.  The 45 day period is required if atleast one other person is being terminated at the same time for the same reason,i.e., a reduction in force.]**

6.                                       IUNDERSTAND THAT I HAVE SEVEN DAYS AFTER THE EXECUTION OF THIS RELEASE TO REVOKEIT, SUCH REVOCATION TO BE RECEIVED IN WRITING BY THE COMPANY BY THE END OF THESEVENTH DAY AFTER THE DATE HEREOF, AND THAT THIS RELEASE SHALL NOT BECOMEEFFECTIVE OR ENFORCEABLE UNTIL THE REVOCATION PERIOD HAS EXPIRED;  **[Thissection is only required if the Executive is over the age of 40.]**

7.                                       IHAVE SIGNED THIS GENERAL RELEASE KNOWINGLY AND VOLUNTARILY AND WITH THE ADVICEOF ANY COUNSEL RETAINED TO ADVISE ME WITH RESPECT TO IT; AND

8.                                       IAGREE THAT THE PROVISIONS OF THIS GENERAL RELEASE MAY NOT BE AMENDED, WAIVED,CHANGED OR MODIFIED EXCEPT BY AN INSTRUMENT IN WRITING SIGNED BY AN AUTHORIZEDREPRESENTATIVE OF THE COMPANY AND BY ME.
|  NAME: |   |   |   |   |
|-------------|--------|--------|--------|--------|
|        |   |   |
|        |   |   |
|  DATE: |   |   |   |   |

 

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