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Exhibit 10.31    
    

 
 

PFI HOLDINGS CORP.
  FORM OF DIRECTOR INDEMNIFICATION AGREEMENT    
    

        THIS AGREEMENT (this "Agreement") is made as of November 3, 2003, by and between
PFI Holdings Corp., a Delaware corporation (the "Company", which term shall include, where appropriate, any Entity (as hereinafter
defined) controlled directly or indirectly by the Company) and                        (the "Indemnitee"). 

        WHEREAS,
it is essential to the Company that it be able to retain and attract as directors the most capable persons available; 

        WHEREAS,
increased corporate litigation has subjected directors to litigation risks and expenses, and the limitations on the availability of directors and officers liability insurance
have made it increasingly difficult for companies to attract and retain such persons; 

        WHEREAS,
the Company desires to provide Indemnitee with specific contractual assurance of Indemnitee's rights to full indemnification against litigation risks and expenses (regardless,
among other things, of any amendment to the Company's certificate of incorporation or revocation of any provision of the Company's by-laws or any change in the ownership of the Company or
the composition of its Board of Directors); and 

        WHEREAS,
Indemnitee is relying upon the rights afforded under this Agreement in accepting Indemnitee's position as a director of the Company. 

        NOW,
THEREFORE, in consideration of the promises and the covenants contained herein, the Company and Indemnitee do hereby covenant and agree as follows: 

        1.    Definitions.    

        (a)   "Closing" means the closing of the transactions contemplated by the Stock Purchase Agreement by and among Pierre Fabre
Dermo-Cosmetique, S.A., Pierre Fabre, S.A., Pierre Fabre, Inc., the Company and PFI Acquisition Corp., dated as of the date hereof. 

        (b)   "Corporate Status" describes the status of a person who is serving or has served (i) as a director of the Company,
including as a member of any committee thereof, (ii) in any capacity with respect to any employee benefit plan of the Company, or (iii) as a director, partner, trustee, officer,
employee, or agent of any other Entity at the request of the Company. For purposes of subsection (iii) of this Section 1(a), an officer or director of the Company who is serving or has
served as a director, partner, trustee, officer, employee or agent of a Subsidiary (as defined below) shall be deemed to be serving at the request of the Company. 

        (c)   "Entity" shall mean any corporation, partnership, limited liability company, joint venture, trust, foundation,
association, organization or other legal entity. 

        (d)   "Expenses" shall mean all fees, costs and expenses incurred in connection with any Proceeding (as defined below),
including, without limitation, reasonable attorneys' fees, disbursements and retainers (including, without limitation, any such fees, disbursements and retainers incurred by Indemnitee pursuant to
Sections 8 and 10(c) of this Agreement), fees and disbursements of expert witnesses, private investigators and professional advisors (including, without limitation, accountants and investment
bankers), court costs, transcript costs, fees of experts, travel expenses, duplicating, printing and binding costs, telephone and fax transmission charges, postage, delivery services, secretarial
services and other disbursements and expenses. 

        (e)   "Indemnifiable Expenses," "Indemnifiable Liabilities" and "Indemnifiable Amounts" shall have the meanings ascribed to
those terms in Section 3(a) below. 

        (f)    "Liabilities" shall mean judgments, damages, liabilities, losses, penalties, excise taxes, fines and amounts paid in
settlement. 

 

        (g)   "Proceeding" shall mean any threatened, pending or completed claim, action, suit, arbitration, alternate dispute
resolution process, investigation, administrative hearing, appeal, or any other proceeding, whether civil, criminal, administrative, arbitrative or investigative, whether formal or informal, including
a proceeding initiated by Indemnitee pursuant to Section 10 of this Agreement to enforce Indemnitee's rights hereunder. 

        (h)   "Subsidiary" shall mean any corporation, partnership, limited liability company, joint venture, trust or other Entity of
which the Company owns (either directly or through or together with another Subsidiary of the Company) either (i) a general partner, managing member or other similar interest or
(ii) (A) 50% or more of the voting power of the voting capital equity interests of such corporation, partnership, limited liability company, joint venture or other Entity, or
(B) 50% or more of the outstanding voting capital stock or other voting equity interests of such corporation, partnership, limited liability company, joint venture or other Entity. 

        2.    Services of Indemnitee.    In consideration of the Company's covenants and commitments hereunder, Indemnitee
agrees to serve or continue to serve as a director of the Company. However, this Agreement shall not impose any obligation on Indemnitee or the Company to continue Indemnitee's service to the Company
beyond any period otherwise required by law or by other agreements or commitments of the parties, if any. 

        3.    Agreement to Indemnify.    The Company agrees to indemnify Indemnitee as follows: 

        (a)   Subject
to the exceptions contained in Section 4(a) below, if Indemnitee was or is a party or is threatened to be made a party to any Proceeding (other than an
action by or in the right of the Company) by reason of Indemnitee's Corporate Status, Indemnitee shall be indemnified by the Company against all Expenses and Liabilities incurred or paid by Indemnitee
in connection with such Proceeding (referred to herein as "Indemnifiable Expenses" and "Indemnifiable
Liabilities," respectively, and collectively as "Indemnifiable Amounts"). 

        (b)   Subject
to the exceptions contained in Section 4(b) below, if Indemnitee was or is a party or is threatened to be made a party to any Proceeding by or in the
right of the Company to procure a judgment in its favor by reason of Indemnitee's Corporate Status, Indemnitee shall be indemnified by the Company against all Indemnifiable Expenses. 

        (c)   If
any of Summit Ventures V, L.P., Summit Ventures V Companion Fund, L.P., Summit Ventures VI-A, L.P., Summit Ventures
VI-B, L.P. or any of their affiliates (each, a "Summit Fund") is or is threatened to be made a party to or a participant in any
Proceeding, and the Summit Fund's involvement in the Proceeding arises in whole or in part from the Indemnitee's service to the Company as an officer or director of the Company, then the Summit Fund
shall be entitled to
all of the indemnification rights and remedies, and shall to the extent indemnified hereunder, undertake the obligations of the Indemnitee, under this Agreement to the same extent as Indemnitee. 

        (d)   If
Pierre Fabre Dermo-Cosmetique, S.A. ("PFDC SA") or any of its affiliates is or is threatened to be made a party to or a participant in any Proceeding, and PFDC SA's
involvement in the proceeding arises in whole or in part from the Indemnitee's service to the Company as an officer or director of the Company at any time after Closing, then PFDC SA shall be entitled
to all of the indemnification rights and remedies, and shall to the extent indemnified hereunder, undertake the obligations of the Indemnitee, under this Agreement to the same extent as Indemnitee. 

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        4.    Exceptions to Indemnification.    Indemnitee shall be entitled to indemnification under Sections 3(a) and
3(b) above in all circumstances other than the following: 

        (a)   If
indemnification is requested under Section 3(a) and it has been adjudicated finally by a court of competent jurisdiction that, in connection with the subject
of the Proceeding out of which the claim for indemnification has arisen, Indemnitee failed to act (i) in good faith and (ii) in a manner Indemnitee reasonably believed to be in or not
opposed to the best interests of the Company and, with respect to any criminal action or proceeding, Indemnitee had reasonable cause to believe that Indemnitee's conduct was unlawful, Indemnitee shall
not be entitled to payment of Indemnifiable Amounts hereunder. 

        (b)   If
indemnification is requested under Section 3(b) and 

          (i)  it
has been adjudicated finally by a court of competent jurisdiction that, in connection with the subject of the Proceeding out of which the claim for indemnification
has arisen, Indemnitee failed to act (A) in good faith and (B) in a manner Indemnitee reasonably believed to be in or not opposed to the best interests of the Company, Indemnitee shall
not be entitled to payment of Indemnifiable Expenses hereunder; or 

         (ii)  it
has been adjudicated finally by a court of competent jurisdiction that Indemnitee is liable to the Company with respect to any claim, issue or matter involved in the
Proceeding out of which the claim for indemnification has arisen, including, without limitation, a claim that Indemnitee received an improper personal benefit, no Indemnifiable Expenses shall be paid
with respect to such claim, issue or matter unless the court of law or another court in which such Proceeding was brought shall determine upon application that, despite the adjudication of liability,
but in view of all the circumstances of the case, Indemnitee is fairly and reasonably entitled to indemnity for such Indemnifiable Expenses which such court shall deem proper. 

        5.    Procedure for Payment of Indemnifiable Amounts.    Indemnitee shall submit to the Company a written request
specifying the Indemnifiable Amounts for which Indemnitee seeks payment under Section 3 of this Agreement and the basis for the claim. The Company shall pay such Indemnifiable Amounts to
Indemnitee within ten (10) calendar days following receipt of the request. 

        6.    Indemnification for Expenses of a Party Who is Wholly or Partly Successful.    Notwithstanding any other
provision of this Agreement, and without limiting any such provision, to the extent that Indemnitee is, by reason of Indemnitee's Corporate Status, a party to and is successful, on the merits or
otherwise, in any Proceeding, Indemnitee shall be indemnified against all Expenses reasonably incurred by Indemnitee or on Indemnitee's behalf in connection therewith. If Indemnitee is not wholly
successful in such Proceeding but is successful, on the merits or otherwise, as to one or more but less than all claims, issues or matters in such Proceeding, the Company shall indemnify Indemnitee
against all Expenses reasonably incurred by Indemnitee or on Indemnitee's behalf in connection with each successfully resolved claim, issue or matter. For purposes of this Agreement, the termination
of any claim, issue or matter in such a Proceeding by dismissal, with or without prejudice, shall be deemed to be a successful result as to such claim, issue or matter. 

        7.    Effect of Certain Resolutions.    Neither the settlement nor termination of any Proceeding nor the failure of
the Company to award indemnification or to determine that indemnification is payable shall create an adverse presumption that Indemnitee is not entitled to indemnification hereunder. In addition, the
termination of any proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent shall not create a presumption that Indemnitee did not act in good faith
and in a manner which Indemnitee reasonably believed to be in or not opposed to the best interests of the Company or, with respect to any criminal action or proceeding, had reasonable cause to believe
that Indemnitee's action was unlawful. 

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        8.    Agreement to Advance Expenses; Conditions.    The Company shall pay to Indemnitee all Indemnifiable Expenses
incurred by Indemnitee in connection with any Proceeding, including a Proceeding by or in the right of the Company, in advance of the final disposition of such Proceeding, as the same are incurred. To
the extent required by Delaware corporate law, Indemnitee hereby undertakes to repay the amount of Indemnifiable Expenses paid to Indemnitee if it is finally determined by a court of competent
jurisdiction that Indemnitee is not entitled under this Agreement to indemnification with respect to such Expenses. This undertaking is an unlimited and unsecured general obligation of Indemnitee and
no interest shall be charged thereon. 

        9.    Procedure for Advance Payment of Expenses.    Indemnitee shall submit to the Company a written request
specifying the Indemnifiable Expenses for which Indemnitee seeks an advancement under Section 8 of this Agreement, together with documentation evidencing that Indemnitee has incurred such
Indemnifiable Expenses. Payment of Indemnifiable Expenses under Section 8 shall be made no later than ten (10) calendar days after the Company's receipt of such request. 

        10.    Remedies of Indemnitee.    

        (a)    Right to Petition Court.    In the event that Indemnitee makes a request for payment of Indemnifiable Amounts
under Sections 3 and 5 above or a request for an advancement of Indemnifiable Expenses under Sections 8 and 9 above and the Company fails to make such payment or advancement in a timely manner
pursuant to the terms of this Agreement, Indemnitee may petition a court of law to enforce the Company's obligations under this Agreement. 

        (b)    Burden of Proof.    In any judicial proceeding brought under Section 10(a) above, the Company shall have
the burden of proving that Indemnitee is not entitled to payment of Indemnifiable Amounts hereunder. 

        (c)    Expenses.    The Company agrees to reimburse Indemnitee in full for any Expenses incurred by Indemnitee in
connection with investigating, preparing for, litigating, defending or settling any action brought by Indemnitee under Section 10(a) above, or in connection with any claim or counterclaim
brought by the Company in connection therewith. 

        (d)    Validity of Agreement.    The Company shall be precluded from asserting in any Proceeding, including, without
limitation, an action under Section 10(a) above, that the provisions of this Agreement are not valid, binding and enforceable or that there is insufficient consideration for this Agreement and
shall stipulate in court that the Company is bound by all the provisions of this Agreement. 

        (e)    Failure to Act Not a Defense.    The failure of the Company (including its Board of Directors or any committee
thereof, independent legal counsel or stockholders) to make a determination concerning the permissibility of the payment of Indemnifiable Amounts or the advancement of Indemnifiable Expenses under
this Agreement shall not be a defense in any action brought under Section 10(a) above, and shall not create a presumption that such payment or advancement is not permissible. 

        11.    Representations and Warranties of the Company.    The Company hereby represents and warrants to Indemnitee as
follows: 

        (a)    Authority.    The Company has all necessary power and authority to enter into, and be bound by the terms of,
this Agreement, and the execution, delivery and performance of the undertakings contemplated by this Agreement have been duly authorized by the Company. 

        (b)    Enforceability.    This Agreement, when executed and delivered by the Company in accordance with the provisions
hereof, shall be a legal, valid and binding obligation of the Company, enforceable against the Company in accordance with its terms, except as such 

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enforceability
may be limited by applicable bankruptcy, insolvency, moratorium, reorganization or similar laws affecting the enforcement of creditors' rights generally. 

        12.    Insurance.    The Company shall, as promptly as practicable following the date hereof, use reasonable efforts
to obtain and maintain directors and officers' liability insurance coverage on terms reasonably satisfactory to the Company's Board of Directors. In all policies of director and officer liability
insurance, Indemnitee shall be named as an insured in such a manner as to provide Indemnitee the same rights and benefits as are accorded to the most favorably insured of the Company's officers and
directors. 

        13.    Fees and Expenses.    During the term of the Indemnitee's service as a director, the Company shall promptly
reimburse the Indemnitee for all expenses incurred by him in connection with his service as a director or member of any board committee or otherwise in connection with the Company's business and shall
pay or provide the Indemnitee with fees and other compensation, including stock options or awards, in amounts and value which are at least equal to those provided to any of the Company's other
non-employee directors from time to time. 

        14.    Contract Rights Not Exclusive.    The rights to payment of Indemnifiable Amounts and advancement of
Indemnifiable Expenses provided by this Agreement shall be in addition to, but not exclusive of, any other rights which Indemnitee may have at any time under applicable law, the Company's
by-laws or certificate of incorporation, or any other agreement, vote of stockholders or directors (or a committee of directors), or otherwise, both as to action in Indemnitee's official
capacity and as to action in any other capacity as a result of Indemnitee's serving as a director of the Company. 

        15.    Successors.    This Agreement shall be (a) binding upon all successors and assigns of the Company
(including any transferee of all or a substantial portion of the business, stock and/or assets of the Company and any direct or indirect successor by merger or consolidation or otherwise by operation
of law) and (b) binding on and shall inure to the benefit of the heirs, personal representatives, executors and administrators of Indemnitee. This Agreement shall continue for the benefit of
Indemnitee and such heirs, personal representatives, executors and administrators after Indemnitee has ceased to have Corporate Status. 

        16.    Subrogation.    In the event of any payment of Indemnifiable Amounts under this Agreement, the Company shall be
subrogated to the extent of such payment to all of the rights of contribution or recovery of Indemnitee against other persons, and Indemnitee shall take, at the request and expense of
the Company, all reasonable action necessary to secure such subrogation rights, including the execution of such documents as are necessary to enable the Company to bring suit to enforce such rights. 

        17.    Change in Law.    To the extent that a change in Delaware law (whether by statute or judicial decision) shall
permit broader indemnification or advancement of expenses than is provided under the terms of the certificate of incorporation and/or by-laws of the Company and this Agreement, Indemnitee
shall be entitled to such broader indemnification and advancements, and this Agreement shall be deemed to be automatically amended to such extent. 

        18.    Severability.    Whenever possible, each provision of this Agreement shall be interpreted in such a manner as
to be effective and valid under applicable law, but if any provision of this Agreement, or any clause thereof, shall be determined by a court of competent jurisdiction to be illegal, invalid or
unenforceable, in whole or in part, such provision or clause shall be limited or modified in its application to the minimum extent necessary to make such provision or clause valid, legal and
enforceable, and the remaining provisions and clauses of this Agreement shall remain fully enforceable and binding on the parties. 

        19.    Indemnitee as Plaintiff.    Except as provided in Section 10(c) of this Agreement and in the next
sentence, Indemnitee shall not be entitled to payment of Indemnifiable Amounts or advancement of Indemnifiable Expenses with respect to any Proceeding brought by Indemnitee against the Company, 

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any
Entity which it controls, any director or officer thereof, or any third party, unless such Company has consented to the initiation of such Proceeding. This Section shall not apply to counterclaims
or affirmative defenses asserted by Indemnitee in an action brought against Indemnitee. 

        20.    Modifications and Waiver.    Except as provided in Section 17 above with respect to changes in Delaware
law which broaden the right of Indemnitee to be indemnified by the Company, no supplement, modification or amendment of this Agreement shall be binding unless executed in writing by each of the
parties hereto. No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other provisions of this Agreement (whether or not similar), nor shall such
waiver constitute a continuing waiver. 

        21.    General Notices.    All notices, demands and other communications to be given or delivered under or by reason
of the provisions of this Agreement shall be in writing and shall be deemed to have been given (i) when personally delivered, sent by telecopy (with hard copy to follow) upon receipt of
mechanical confirmation of delivery, (ii) for deliveries within the continental United States, one day following the day when deposited with a reputable and established overnight express
courier (charges prepaid), (iii) for overseas deliveries, five days following the day when deposited with a reputable and established
overnight express courier (charges prepaid), or (iv) for deliveries within the continental United States, five days following mailing by certified or registered mail, postage prepaid and return
receipt requested: 

	(i)
	If to Indemnitee, to:

Telecopy: 

	(ii)
	If to the Company, to:

PFI
Holdings Corp.

1055 West 8th Street

Azusa, CA 91702

Attn: Chief Executive Officer

Telephone:

Telecopy: 

or
to such other address as may have been furnished in the same manner by any party to the others. 

        22.    Governing Law.    This Agreement shall be governed by and construed and enforced under the laws of the State of
Delaware without giving effect to the provisions thereof relating to conflicts of law. 

*    *    *    *    * 

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        IN
WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year first above written. 

	 	 	PFI HOLDINGS CORP.
	

 	
 	

By:	

 Name:

Title:
	

 	
 	

INDEMNITEE
	

 	
 	

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QuickLinks

Exhibit 10.31

PFI HOLDINGS CORP. FORM OF DIRECTOR INDEMNIFICATION AGREEMENTExhibit 10.8.1

 

AMENDED
AND RESTATED EMPLOYMENT AGREEMENT (this “Agreement”),
dated as of                         ,
2006, between ACA CAPITAL HOLDINGS, INC., a Delaware corporation (“Holdings”),
ACA FINANCIAL GUARANTY CORPORATION, a Maryland corporation (“Financial,”
and, together with Holdings the “Company”) and EDWARD U. GILPIN (the “Executive”).

 

The Company
and the Executive are parties to that certain Amended and Restated Employment
Agreement, dated as of September 30, 2004 (the “Effective Date”), as amended
by amendment number one thereto dated January 2, 2005 (the “Former
Employment Agreement”).

 

Financial
desires to continue to employ the Executive and the Executive desires to
continue such employment, but under modified terms as described herein.

 

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, in the reasonable judgment of a majority of the members of the
Board, 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 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, 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 

 

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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;

 

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

 

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(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. 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 

 

4

 

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 Chief Financial Officer and Executive Vice
President of each of Holdings 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
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 

 

5

 

interfere with
the proper performance of his duties and responsibilities as the Chief
Financial Officer and Executive Vice President of each of Holdings and
Financial.

 

4.             Base Salary. The Executive
shall be paid an annual Base Salary of $400,000
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. 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.

 

(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; provided
that the Company shall provide the Executive with an expense account in an
amount not to exceed $10,000 per annum which shall be used by the Executive for
certain executive benefits and the promotion the business of the Company and
its Subsidiaries. The Executive shall also receive such additional fringe
benefits and perquisites as the Compensation Committee may, in its discretion,
from time to time provide.

 

6

 

(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.

 

(d)           Existing Indebtedness. Beginning
on February 28, 2005 (the “Waiver Date”) and on each of the following
two anniversaries of the Waiver Date thereafter during the initial Term of Employment hereunder,
and only for so long as the Executive shall continue to be employed by the
Company hereunder on such Waiver Date, the Company shall release, cancel,
forgive and forever discharge an amount equal to one third (1/3) of the
outstanding principal amount (and any accrued but unpaid interest thereon)
under that certain Promissory Note, dated September 20, 2001, made by the
Executive in favor of the Company in the original principal amount of $500,000.
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 Company shall release, cancel, forgive and forever discharge
the entire outstanding principal amount of such Promissory Note as of the date
of such termination.

 

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 

 

7

 

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.

 

(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.

 

8

 

(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;

 

(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, which shall be calculated based
on the last full year Annual Incentive Award paid by the Company to the
Executive, payable in a lump sum promptly following the Termination Date;

 

(2)           a prompt lump-sum severance payment
equal to two times the Executive’s annual Base Salary as of the Termination
Date; 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 

 

9

 

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 and shares of restricted stock issued to the
Executive 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.

 

10

 

(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.

 

(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).

 

11

 

12.          Representations.

 

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

 

(i)            Holdings 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 and Financial, enforceable against Holdings and Financial in
accordance with its terms;

 

(ii)           Holdings 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 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 or Financial is bound,
or of any provision of the Certificate of Incorporation or Bylaws of Holdings
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 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 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 terns and
conditions contained herein.

 

12

 

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 has and 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, the Executive agrees that during the Term of Employment
and for a period of (1) in the case of a termination by the Company without
Cause or by Executive as a result of a Constructive Termination, 12 months or
(2) in the case of a termination of employment for any other reason, 18 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 

 

13

 

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 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
has and 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, 

 

14

 

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 of 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, 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 

 

15

 

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.

 

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:

 

ACA Financial
Guaranty 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. Holdings
is a beneficiary of the services provided by Executive and hereby irrevocably
and unconditionally guarantee the performance of all obligations of Financial hereunder.

 

16

 

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.

 

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, including,
but not limited to, the Former Employment Agreement and all predecessor
agreements.

 

(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.

 

17

 

(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.

 

(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.

 

(j)            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 l8(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.

 

(k)           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

 

SIGNATURE PAGE TO

AMENDED AND RESTATED EMPLOYMENT AGREEMENT

 

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

 

	
   

  	
  ACA CAPITAL
  HOLDINGS, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
  ACA
  FINANCIAL GUARANTY CORPORATION

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  EDWARD U.
  GILPIN

  

 

19

 

Exhibit A

 

GENERAL RELEASE

 

I, EDWARD U.
GILPIN, in consideration of and subject to the performance by ACA CAPITAL
HOLDINGS, INC., a Delaware corporation (“Holdings”), ACA FINANCIAL
GUARANTY CORPORATION, a Maryland corporation (“Financial,” and, together
with Holdings and each of their respective subsidiaries, the “Company”),
of their respective obligations under the Amended and Restated 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 rights law, or under any other local, state, or federal law,
regulation or ordinance; or 

 

20

 

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 facts and circumstances by the Securities and Exchange
Commission (SEC), the National 

 

21

 

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;

 

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;

 

22

 

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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