Document:

Exhibit 10.68

 Exhibit 10.68 
 AMENDED AND RESTATED PROMISSORY NOTE 
 (TERM LOAN) 
  

			
	 $11,608,484.00
	  	December 10, 2008

 Comstock Homebuilding Companies, Inc. (hereinafter referred to as “Borrower”) 
 11465 Sunset Hills Road 
 5th Floor 
 Reston, VA 20190 
 Attn: Christopher D. Clemente 
 Attn: Jubal R. Thompson 
 Wachovia Bank, National Association (hereinafter
referred to as “Bank”) 
 123 South Broad Street 
 Philadelphia, PA 19109 
 Borrower promises to pay to the order of Bank, in lawful money of the United States of America by mailing to the address
specified hereinafter or wherever else Bank may specify, the sum of Eleven Million, Six Hundred and Eight Thousand, Four Hundred and Eighty-Four and No/100 Dollars ($11,608,484.00), with interest on the unpaid principal balance at the rate and on
the terms provided in this Promissory Note (including all renewals, extensions or modifications hereof, this “Note”). 
 RENEWAL/MODIFICATION. This Note, an Amended and Restated Promissory Note (Revolving Line of Credit) of even date herewith, and an Amended and Restated Promissory Note (Tribble Road Loan) of even date herewith renew, extend and/or
modify that certain Promissory Note dated May 26, 2006 in the original principal amount of $40,000,000.00 (as previously modified and amended, if applicable, the “Original Note”). This Note is not a novation. 
 USE OF PROCEEDS. Borrower shall use the proceeds of the loan(s) evidenced by this Note for the commercial purposes of Borrower, as follows: debt renewal and
extension pursuant to the terms of that certain Loan Modification and Forbearance Agreement of even date herewith entered into by Borrower, Bank, and other parties (the “Forbearance Agreement”). 
 SECURITY. Borrower has granted or will grant Bank a security interest in the collateral described in the Loan Documents and such other security instruments as are
executed from time to time, including, but not limited to, real and personal property collateral described in (i) that certain Deed of Trust, Security Agreement and Financing Statement dated May 26, 2006 from Comstock Massey Preserve,
L.L.C. (formerly Comstock Wesel, L.L.C.) to TRSTE, Inc., a Virginia corporation (“TRSTE”) and recorded in the Wake County Register of Deeds in Book 11976, Page 1996; (ii) that certain Deed of Trust, Security Agreement and Financing
Statement dated May 26, 2006 from Comstock Homes of Raleigh, L.L.C. (“Comstock Raleigh”) (formerly Capitol Homes, Inc.) to TRSTE and recorded in the Durham County Register of Deeds in Book 5222, Page 995; (iii) that certain Deed
of Trust, Security Agreement and Financing Statement dated May 26, 2006 from Comstock Raleigh to TRSTE and recorded in the Johnston County Register of Deeds in Book 3128, Page 783; (iv) that certain Deed of Trust, Security Agreement and
Financing Statement dated May 26, 2006 from Comstock Raleigh to TRSTE and recorded in the Wake County Register of Deeds in Book 11976, Page 1982; (v) that certain Supplemental Deed of Trust, Security Agreement and Financing Statement dated
June 26, 2006 from Comstock Raleigh to TRSTE and recorded in the Wake County Register of Deeds in Book 12031, Page 441; (vi) that certain Supplemental Deed of Trust, Security Agreement and Financing Statement dated July 21, 2006 from
Comstock Raleigh to TRSTE and recorded in the Johnston County Register of Deeds in Book 3165, Page 476; (vii) that certain Supplemental Deed of Trust, Security Agreement and Financing Statement dated July 25, 2006 from Comstock Raleigh to
TRSTE and recorded in the Wake County Register of Deeds in Book 12079, Page 404; (viii) that certain Deed of Trust, Security Agreement and Financing Statement dated July 21, 2006 from Comstock Landing, LLC to TRSTE and recorded in the Wake
County Register of Deeds in Book 12080, Page 830; (ix) that certain Supplemental Deed of Trust, 

 
Security Agreement and Financing Statement dated July 27, 2006 from Comstock Wakefield, LLC and Comstock Wakefield II, LLC to TRSTE and recorded in the
Wake County Register of Deeds in Book 12094, Page 1730; (x) that certain Deed to Secure Debt, Security Agreement and Financing Statement dated August 29, 2006 from Comstock Homes of Atlanta, LLC (“Comstock Atlanta”) to Lender and
recorded with Cherokee County Clerk of Superior Court in Book 9018, Page 173; (xi) that certain Deed to Secure Debt, Security Agreement and Financing Statement dated August 29, 2006 from Comstock Atlanta to Lender and recorded with Forsyth
County Clerk of Superior Court in Book 4428, Page 387; (xii) that certain Deed to Secure Debt, Security Agreement and Financing Statement dated August 29, 2006 from Comstock Atlanta to Lender and recorded with Jackson County Clerk of
Superior Court in Book 45I, Page 458; (xiii) that certain Deed to Secure Debt, Security Agreement and Financing Statement dated September 14, 2006 from Comstock James Road, LLC to Lender and recorded with Forsyth County Clerk of Superior
Court in Book 4450, Page 620; (xiv) that certain Deed to Secure Debt, Security Agreement and Financing Statement dated September 27, 2006 from Tribble Road Development, LLC to Lender and recorded with Forsyth County Clerk of Superior Court
on in Book 4469, Page 410; (xv) that certain Supplemental Deed of Trust, Security Agreement and Financing Statement dated October 18, 2006 from Comstock Raleigh to TRSTE and recorded in the Wake County Register of Deeds in Book 12223, Page
2235; (xvi) that certain Supplemental Deed of Trust, Security Agreement and Financing Statement dated November 9, 2006 from Comstock Raleigh to TRSTE and recorded in the Wake County Register of Deeds in Book 12261, Page 489;
(xvii) that certain Deed of Trust, Security Agreement and Financing Statement dated November 13, 2006 from Comstock Summerland, L.C. to TRSTE and recorded in the Prince William County Register of Deeds as instrument number 200611170162991;
and (xviii) that certain Supplemental Deed of Trust, Security Agreement and Financing Statement dated December 13, 2006 from Comstock Raleigh to TRSTE and recorded in the Wake County Register of Deeds in Book 12308, Page 2241. 

INTEREST RATE. Interest shall accrue on the unpaid principal balance of this Note from the date hereof at the LIBOR Market Index Rate plus 4.0%, as that rate
may change from day to day in accordance with changes in the LIBOR Market Index Rate (“Interest Rate”). “LIBOR Market Index Rate”, for any day, means the rate for 1 month U.S. dollar deposits as reported on Telerate Successor
Page 3750 as of 11:00 a.m., London time, on such day, or if such day is not a London business day, then the immediately preceding London business day (or if not so reported, then as determined by Bank from another recognized source or interbank
quotation). 
 DEFAULT RATE. In addition to all other rights contained in this Note, if a Default (as defined herein) occurs and as long as a Default
continues, all outstanding Obligations, other than Obligations under any swap agreements (as defined in 11 U.S.C. § 101, as in effect from time to time) between Borrower and Bank or its affiliates, shall bear interest at the Interest Rate plus
3% (“Default Rate”). The Default Rate shall also apply from acceleration until the Obligations or any judgment thereon is paid in full. 
 INTEREST AND FEE(S) COMPUTATION (ACTUAL/360). Interest and fees, if any, shall be computed on the basis of a 360-day year for the actual number of days in the applicable period (“Actual/360 Computation”). The Actual/360
Computation determines the annual effective interest yield by taking the stated (nominal) rate for a year’s period and then dividing said rate by 360 to determine the daily periodic rate to be applied for each day in the applicable period.
Application of the Actual/360 Computation produces an annualized effective rate exceeding the nominal rate. 
 REPAYMENT TERMS. This Note shall be due
and payable as follows: 
 1) by periodic payments of principal and accrued interest (“Installments”) due upon the sale of each
“Lot” (as defined in the Forbearance Agreement), with each such Installment being an amount equal to the sum of (a) the amount advanced by Bank for all of the Lots in the particular development where the Lot being sold is located,
allocated to each Lot on a pro rata basis, plus all accrued and unpaid interest on the Original Note as of the date hereof allocated to each Lot in the same manner (as detailed in Schedule 1 attached hereto) plus (b) all accrued
but unpaid interest due for each Lot from the date hereof to the closing of the sale of that respective Lot; and 
  

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 2) a final payment of all principal and accrued interest shall be due and payable on January 15,
2010. 
 Borrower may prepay this Note in whole or in part at any time without penalty or premium. 
 APPLICATION OF PAYMENTS. Monies received by Bank from the sale of Lots shall be applied as set forth in the Forbearance Agreement. Monies received by Bank from
any other source for application toward payment of the Obligations shall be applied to accrued interest and then to principal. If a Default occurs, monies may be applied to the Obligations in any manner or order deemed appropriate by Bank.

 If any payment received by Bank under this Note or other Loan Documents is rescinded, avoided or for any reason returned by Bank because of any adverse
claim or threatened action, the returned payment shall remain payable as an obligation of all persons liable under this Note or other Loan Documents as though such payment had not been made. 
 DEFINITIONS. Loan Documents. The term “Loan Documents”, as used in this Note and the other Loan Documents, refers to all documents executed in
connection with or related to the loan evidenced by this Note and any prior notes which evidence all or any portion of the loan evidenced by this Note, and any letters of credit issued pursuant to any loan agreement to which this Note is subject,
any applications for such letters of credit and any other documents executed in connection therewith or related thereto, and may include, without limitation, a commitment letter that survives closing, a loan agreement, this Note, forbearance
agreements, guaranty agreements, security agreements, security instruments, financing statements, mortgage instruments, any renewals or modifications, whenever any of the foregoing are executed, but does not include swap agreements (as defined in 11
U.S.C. § 101, as in effect from time to time). Obligations. The term “Obligations”, as used in this Note and the other Loan Documents, refers to any and all indebtedness and other obligations under this Note, all other
obligations under any other Loan Document(s), and all obligations under any swap agreements (as defined in 11 U.S.C. § 101, as in effect from time to time) between Borrower and Bank, or its affiliates, whenever executed. Certain Other
Terms. All terms that are used but not otherwise defined in any of the Loan Documents shall have the definitions provided in the Uniform Commercial Code. 
 LATE CHARGE. If any payments are not timely made, Borrower shall also pay to Bank a late charge equal to 5% of each payment past due for 10 or more days. This late charge shall not apply to payments due at maturity or by acceleration
hereof. 
 Acceptance by Bank of any late payment without an accompanying late charge shall not be deemed a waiver of Bank’s right to collect such late
charge or to collect a late charge for any subsequent late payment received. 
 If this Note is secured by owner-occupied residential real property located
outside the state in which the office of Bank first shown above is located, the late charge laws of the state where the real property is located shall apply to this Note and the late charge shall be the highest amount allowable under such laws. If
no amount is stated thereunder, the late charge shall be 5% of each payment past due for 10 or more days. 
 ATTORNEYS’ FEES AND OTHER COLLECTION
COSTS. Borrower shall pay all of Bank’s reasonable expenses actually incurred to enforce or collect any of the Obligations including, without limitation, reasonable arbitration, paralegals’, attorneys’ and experts’ fees and
expenses, whether incurred without the commencement of a suit, in any trial, arbitration, or administrative proceeding, or in any appellate or bankruptcy proceeding. 
 USURY. If at any time the effective interest rate under this Note would, but for this paragraph, exceed the maximum lawful rate, the effective interest rate under this Note shall be the maximum lawful rate, and
any amount received by Bank in excess of such rate shall be applied to principal and then to fees and expenses, or, if no such amounts are owing, returned to Borrower. 
  

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 DEFAULT. If any of the following occurs, a default (“Default”) under this Note shall exist:
Nonpayment; Nonperformance. The failure of timely payment or performance of the Obligations or Default under this Note or any other Loan Documents. False Warranty. A warranty or representation made or deemed made in the Loan Documents
or furnished Bank in connection with the loan evidenced by this Note proves materially false, or if of a continuing nature, becomes materially false. Cross Default. At Bank’s option, any default in payment or performance of any
obligation under any other loans, contracts or agreements of Borrower, any Subsidiary or Affiliate of Borrower, any general partner of or the holder(s) of the majority ownership interests of Borrower with Bank or its affiliates
(“Affiliate” shall have the meaning as defined in 11 U.S.C. § 101, as in effect from time to time, except that the term “Borrower” shall be substituted for the term “Debtor” therein; “Subsidiary” shall
mean any business in which Borrower holds, directly or indirectly, a controlling interest). Cessation; Bankruptcy. The death of, appointment of a guardian for, dissolution of, termination of existence of, loss of good standing status by,
appointment of a receiver for, assignment for the benefit of creditors of, or commencement of any bankruptcy or insolvency proceeding by or against Borrower, its Subsidiaries or Affiliates, if any, or any general partner of or the holder(s) of the
majority ownership interests of Borrower, or any party to the Loan Documents. Material Capital Structure or Business Alteration. Without prior written consent of Bank, (i) a material alteration in the kind or type of Borrower’s
business or that of Borrower’s Subsidiaries or Affiliates, if any, except for the possibility of withdrawing from the Atlanta, GA market which is hereby acknowledged by Bank; (ii) the sale of substantially all of the business or assets of
Borrower, any of Borrower’s Subsidiaries or Affiliates or any guarantor; (iii) the acquisition of substantially all of the business or assets or more than 50% of the outstanding stock or voting power of any other entity; or
(iv) should any Borrower or any of Borrower’s Subsidiaries or Affiliates or any guarantor enter into any merger or consolidation. Material Adverse Change. Bank determines in good faith, in its sole discretion, that the prospects for
payment or performance of the Obligations are impaired or there has occurred a material adverse change in the business or prospects of Borrower, financial or otherwise. 
 REMEDIES UPON DEFAULT. If a Default occurs under this Note or any Loan Documents, Bank may at any time thereafter, take the following actions: Bank Lien. Foreclose its security interest or lien against
Borrower’s deposit accounts and investment property without notice. Acceleration Upon Default. Accelerate the maturity of this Note and, at Bank’s option, any or all other Obligations, other than Obligations under any swap
agreements (as defined in 11 U.S.C. § 101, as in effect from time to time) between Borrower and Bank, or its affiliates, which shall be due in accordance with and governed by the provisions of said swap agreements; whereupon this Note and the
accelerated Obligations shall be immediately due and payable; provided, however, if the Default is based upon a bankruptcy or insolvency proceeding commenced by or against Borrower or any guarantor or endorser of this Note, all Obligations (other
than Obligations under any swap agreement as referenced above) shall automatically and immediately be due and payable. Cumulative. Exercise any rights and remedies as provided under the Note and other Loan Documents, or as provided by law or
equity. 
 FINANCIAL AND OTHER INFORMATION. Borrower shall deliver to Bank such information as Bank may reasonably request from time to time,
including without limitation, financial statements and information pertaining to Borrower’s financial condition. Such information shall be true, complete, and accurate. 
 WAIVERS AND AMENDMENTS. No waivers, amendments or modifications of this Note and other Loan Documents shall be valid unless in writing and signed by an officer of Bank. No waiver by Bank of any Default shall
operate as a waiver of any other Default or the same Default on a future occasion. Neither the failure nor any delay on the part of Bank in exercising any right, power, or remedy under this Note and other Loan Documents shall operate as a waiver
thereof, nor shall a single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power or remedy. 
 Except to the extent otherwise provided by the Loan Documents or prohibited by law, each Borrower and each other person liable under this Note waives presentment, protest, notice of dishonor, demand for payment, notice of intention to
accelerate maturity, notice of acceleration of maturity, notice of sale and all other notices of any kind. Further, each agrees that Bank may (i) extend, modify or renew this Note or make a novation of the loan evidenced by this Note, and/or
(ii) grant releases, compromises or indulgences with respect to any collateral securing this Note, or with respect to any Borrower or other person liable under this Note or any other Loan Documents, all without notice to or consent of each

  

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Borrower and other such person, and without affecting the liability of each Borrower and other such person; provided, Bank may not extend, modify or renew
this Note or make a novation of the loan evidenced by this Note without the consent of the Borrower, or if there is more than one Borrower, without the consent of at least one Borrower; and further provided, if there is more than one Borrower, Bank
may not enter into a modification of this Note which increases the burdens of a Borrower without the consent of that Borrower. 
 MISCELLANEOUS
PROVISIONS. Assignment. This Note and the other Loan Documents shall inure to the benefit of and be binding upon the parties and their respective heirs, legal representatives, successors and assigns. Bank’s interests in and rights under
this Note and the other Loan Documents are freely assignable, in whole or in part, by Bank. In addition, nothing in this Note or any of the other Loan Documents shall prohibit Bank from pledging or assigning this Note or any of the other Loan
Documents or any interest therein to any Federal Reserve Bank. Borrower shall not assign its rights and interest hereunder without the prior written consent of Bank, and any attempt by Borrower to assign without Bank’s prior written consent is
null and void. Any assignment shall not release Borrower from the Obligations. Applicable Law; Conflict Between Documents. This Note and, unless otherwise provided in any other Loan Document, the other Loan Documents shall be governed by and
interpreted in accordance with federal law and, except as preempted by federal law, the laws of the state named in Bank’s address on the first page hereof without regard to that state’s conflict of laws principles. If the terms of this
Note should conflict with the terms of any loan agreement or any commitment letter that survives closing, the terms of this Note shall control. Borrower’s Accounts. Except as prohibited by law, Borrower grants Bank a security interest in
all of Borrower’s deposit accounts and investment property with Bank and any of its affiliates. Swap Agreements. All swap agreements (as defined in 11 U.S.C. § 101, as in effect from time to time), if any, between Borrower and Bank
or its affiliates are independent agreements governed by the written provisions of said swap agreements, which will remain in full force and effect, unaffected by any repayment, prepayment, acceleration, reduction, increase or change in the terms of
this Note, except as otherwise expressly provided in said written swap agreements, and any payoff statement from Bank relating to this Note shall not apply to said swap agreements except as otherwise expressly provided in such payoff statement.
Jurisdiction. Borrower irrevocably agrees to non-exclusive personal jurisdiction in the state named in the Bank’s address on the first page hereof. Severability. If any provision of this Note or of the other Loan Documents shall
be prohibited or invalid under applicable law, such provision shall be ineffective but only to the extent of such prohibition or invalidity, without invalidating the remainder of such provision or the remaining provisions of this Note or other such
document. Payments. All payments shall be mailed to Bank at Construction Loan Administration, 1 W 4th Street, Winston Salem, NC 27101, Mail Code NC6256, Attn: Monica Feher; or other such address as provided by Bank in writing. Notices.
Any notices to Borrower shall be sufficiently given, if in writing and mailed or delivered to the Borrower’s address shown above or such other address as provided hereunder, and to Bank, if in writing and mailed or delivered to Wachovia Bank,
National Association, Attn: Patrick McGovern, 123 South Broad Street, Philadelphia, PA 19109, Mail Code PA1246, or such other address as Bank may specify in writing from time to time. Notices to Bank must include the mail code. In the event that
Borrower changes Borrower’s address at any time prior to the date the Obligations are paid in full, Borrower agrees to promptly give written notice of said change of address by registered or certified mail, return receipt requested, all charges
prepaid. Plural; Captions. All references in the Loan Documents to Borrower, guarantor, person, document or other nouns of reference mean both the singular and plural form, as the case may be, and the term “person” shall mean any
individual, person or entity. The captions contained in the Loan Documents are inserted for convenience only and shall not affect the meaning or interpretation of the Loan Documents. Advances. Bank may, in its sole discretion, make other
advances which shall be deemed to be advances under this Note, even though the stated principal amount of this Note may be exceeded as a result thereof. Posting of Payments. All payments received during normal banking hours after 2:00 p.m.
local time at the address for payments set forth above shall be deemed received at the opening of the next banking day. Joint and Several Obligations. If there is more than one Borrower, each is jointly and severally obligated together with
all other parties obligated for the Obligations. Fees and Taxes. Borrower shall promptly pay all documentary, intangible recordation and/or similar taxes on this transaction whether assessed at closing or arising from time to time.
LIMITATION ON LIABILITY; WAIVER OF PUNITIVE DAMAGES. EACH OF THE PARTIES HERETO, INCLUDING BANK BY ACCEPTANCE HEREOF, AGREES THAT IN ANY JUDICIAL, MEDIATION OR ARBITRATION 

  

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PROCEEDING OR ANY CLAIM OR CONTROVERSY BETWEEN OR AMONG THEM THAT MAY ARISE OUT OF OR BE IN ANY WAY CONNECTED WITH THIS AGREEMENT, THE LOAN DOCUMENTS OR ANY
OTHER AGREEMENT OR DOCUMENT BETWEEN OR AMONG THEM OR THE OBLIGATIONS EVIDENCED HEREBY OR RELATED HERETO, IN NO EVENT SHALL ANY PARTY HAVE A REMEDY OF, OR BE LIABLE TO THE OTHER FOR, (1) INDIRECT, SPECIAL OR CONSEQUENTIAL DAMAGES OR
(2) PUNITIVE OR EXEMPLARY DAMAGES. EACH OF THE PARTIES HEREBY EXPRESSLY WAIVES ANY RIGHT OR CLAIM TO PUNITIVE OR EXEMPLARY DAMAGES THEY MAY HAVE OR WHICH MAY ARISE IN THE FUTURE IN CONNECTION WITH ANY SUCH PROCEEDING, CLAIM OR CONTROVERSY,
WHETHER THE SAME IS RESOLVED BY ARBITRATION, MEDIATION, JUDICIALLY OR OTHERWISE. Patriot Act Notice. To help fight the funding of terrorism and money laundering activities, Federal law requires all financial institutions to obtain, verify,
and record information that identifies each person who opens an account. For purposes of this section, account shall be understood to include loan accounts. Final Agreement. This Note and the other Loan Documents represent the final agreement
between the parties and may not be contradicted by evidence of prior, contemporaneous or subsequent agreements of the parties. There are no unwritten agreements between the parties. 
 ARBITRATION. Upon demand of any party hereto, whether made before or after institution of any judicial proceeding, any claim or controversy arising out of or relating to the Loan Documents between parties
hereto (a “Dispute”) shall be resolved by binding arbitration conducted under and governed by the Commercial Financial Disputes Arbitration Rules (the “Arbitration Rules”) of the American Arbitration Association (the
“AAA”) and the Federal Arbitration Act. Disputes may include, without limitation, tort claims, counterclaims, a dispute as to whether a matter is subject to arbitration, or claims arising from documents executed in the future, but shall
specifically exclude claims brought as or converted to class actions. A judgment upon the award may be entered in any court having jurisdiction. Notwithstanding the foregoing, this arbitration provision does not apply to disputes under or related to
swap agreements. Special Rules. All arbitration hearings shall be conducted in the city named in the address of Bank first stated above. A hearing shall begin within 90 days of demand for arbitration and all hearings shall conclude within 120
days of demand for arbitration. These time limitations may not be extended unless a party shows cause for extension and then for no more than a total of 60 days. The expedited procedures set forth in Rule 51 et seq. of the Arbitration Rules
shall be applicable to claims of less than $1,000,000.00. Arbitrators shall be licensed attorneys selected from the Commercial Financial Dispute Arbitration Panel of the AAA. The parties do not waive applicable Federal or state substantive law
except as provided herein. Preservation and Limitation of Remedies. Notwithstanding the preceding binding arbitration provisions, the parties agree to preserve, without diminution, certain remedies that any party may exercise before or after
an arbitration proceeding is brought. The parties shall have the right to proceed in any court of proper jurisdiction or by self-help to exercise or prosecute the following remedies, as applicable: (i) all rights to foreclose against any real
or personal property or other security by exercising a power of sale or under applicable law by judicial foreclosure including a proceeding to confirm the sale; (ii) all rights of self-help including peaceful occupation of real property and
collection of rents, set-off, and peaceful possession of personal property; (iii) obtaining provisional or ancillary remedies including injunctive relief, sequestration, garnishment, attachment, appointment of receiver and filing an involuntary
bankruptcy proceeding; and (iv) when applicable, a judgment by confession of judgment. Any claim or controversy with regard to any party’s entitlement to such remedies is a Dispute. Waiver of Jury Trial. THE PARTIES ACKNOWLEDGE THAT
BY AGREEING TO BINDING ARBITRATION THEY HAVE IRREVOCABLY WAIVED ANY RIGHT THEY MAY HAVE TO JURY TRIAL WITH REGARD TO A DISPUTE AS TO WHICH BINDING ARBITRATION HAS BEEN DEMANDED. 
 IN WITNESS WHEREOF, Borrower, on the day and year first above written, has caused this Note to be duly executed under seal. 
  

							
	Comstock Homebuilding Companies, Inc.
				
	By:	 	                                       
               	 	(SEAL)	 	
	
	Name:
                                , Title:
                            

  

 6Executive Employment Agreement

 Exhibit 10.25 
 FIRST AMENDED AND RESTATED 
 EXECUTIVE EMPLOYMENT AGREEMENT 
 THIS FIRST AMENDED AND RESTATED EXECUTIVE EMPLOYMENT AGREEMENT (this “Agreement”) is made and entered into as of the 30th day of March,
2009 (the “Effective Date”) by and between Affirmative Insurance Holdings, Inc. (the “Company”) and Kevin R. Callahan (“Executive”). 
 PRELIMINARY STATEMENTS 
  

	 	A.	The Company has employed Executive as Chief Executive Officer since October 5, 2006; 

  

	 	B.	In connection with such employment, the Company and Executive entered into an Executive Employment Agreement dated October 5, 2006 (the “Anniversary Date”);

  

	 	C.	The Company and Executive desire to extend the Term of and amend other terms of the Executive Employment Agreement; and 

  

	 	D.	Each party desires to set forth in writing the terms and conditions of their understandings and agreements. 

 NOW, THEREFORE, in consideration of the mutual covenants and obligations contained herein, the Company hereby agrees to employ Executive and
Executive hereby accepts such employment upon the terms and conditions set forth in this Agreement: 
 STATEMENT OF AGREEMENT

 1. Position.  
 (a) The Company agrees to employ Executive in the position of Chief Executive Officer. Executive shall serve and perform the duties which may from time to time be assigned to him by the Company’s Board of
Directors (the “Board”). 
 (b) Executive agrees to serve as Chief Executive Officer and agrees that he will devote
his best efforts and all of his business time and attention to all facets of the business of the Company and will faithfully and diligently carry out the duties of these positions; provided, however, that Executive may participate on the Board of
Directors for Corus Bankshares, Inc. and the Advisory Board for AlphaConnect (or its affiliates), so long as neither entity beneficially owns or disposes of or acquires beneficial ownership in the stock of a Competitor or operates a Competitor, as
defined in Section 8(b)(i) below, and so long as such participation does not interfere with the performance of his duties hereunder. Executive agrees to comply with all Company policies in effect from time to time, and to comply with all laws,
rules and regulations applicable to the Company, including, but not limited to, those established by the Department of Insurance, the Securities and Exchange Commission, or any self-regulatory organization having jurisdiction or authority over
Executive or the Company. 
 (c) Executive will serve on the Company’s Board of Directors (“Board”), at the
continuing discretion of the stockholders, during the Term of this Agreement. Further and upon request by the Board of the Company and consent by Executive, Executive shall serve as a Director of any and all of Company’s subsidiaries, provided,
however, such consent shall not be unreasonably withheld. 
 (d) Executive agrees to travel as necessary to perform his duties
under this Agreement. 
 (e) The Company, in its sole discretion, may require that Executive be designated an employee of one
or more of the Company’s subsidiaries or affiliates for such purposes as payroll and benefits administration. The employment of Executive by any such subsidiary or affiliate to facilitate the Company’s internal administrative purposes
shall be considered employment by the Company within the meaning of this Agreement and shall not otherwise affect any of the rights or responsibilities of the Company or Executive hereunder, including, but not 

  

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limited to, Executive’s level of compensation. Notwithstanding the foregoing, the Company shall not be entitled to redesignate Executive’s
employment as contemplated in this Section, if such redesignation would preclude him from being represented in all public filings as the Chief Executive Officer of the Company. 
 (f) The position of Chief Executive Officer shall be located at the Company’s administrative offices, presently located in Chicago,
Illinois. 
 2. Term of Agreement. 
 (a) Extension of Initial Term. The Initial Term of this Agreement shall be extended to seven (7) years from the Anniversary Date (“Initial Term”), unless otherwise terminated pursuant to
Section 5 of this Agreement. For the avoidance of doubt, absent a termination pursuant to Section 5, the Initial Term of this Agreement shall expire on October 4, 2013. The Initial Term, and any further extension thereof shall be
referred to herein as the “Term.” 
 (b) Expiration of Term. This Agreement will terminate automatically upon
the expiration of the Term, or any extension thereof. The Company shall provide notice of its intention to renew or extend this Agreement to Executive at least one (1) year before the last day of the Term. In the event that the Company and the
Executive do not agree to a renewal or extension of this Agreement, then as of the last day of the Term: (1) One hundred percent (100%) of Executive’s then-unvested stock options will immediately vest, (2) One hundred percent
(100%) of Executive’s then-unvested restricted stock will immediately vest, and (3) Executive shall be entitled to an amount equal to the previous year’s Bonus paid to Executive prorated on a daily basis for the number of days
employed in the year of expiration of the Term, through the date of expiration of the Term. 
 3. Compensation and Benefits. 

 (a) Base Salary. Through October 4, 2009, the Company shall pay Executive an annual salary of at least Six
Hundred Fifty Thousand Dollars ($650,000) (the “Base Salary”). Commencing on October 5, 2009 and throughout the remaining duration of the Term, the Base Salary amount shall be at least Seven Hundred Ten Thousand Dollars ($710,000).
The Base Salary shall be paid on a bi-weekly basis pursuant to the Company’s standard payroll practices. Executive’s Base Salary shall be reviewed at least annually for consideration of appropriate merit increases and, once established,
the Base Salary shall not be decreased during the Term without the consent of Executive. 
 (b) Bonus Opportunities. In
addition to the Base Salary, Executive will be eligible to participate in the Company’s bonus plan(s) (“Bonus”) with eligibility for a target annual bonus of 100% of Base Salary. Annual bonus amount to be determined based on achieving
objectives as determined by the Board of Directors and the Compensation Committee. 
 (c) Stock. Executive will also be
eligible to participate in the Company’s 2004 Amended and Restated Stock Incentive Plan (“Stock Plan”), as may be amended from time to time. Except as expressly provided herein, nothing in this Agreement shall affect, alter or amend
any prior grants by the Company to Executive of restricted stock or stock options pursuant to the Executive Employment Agreement. 
 (d) Automobile Allowance. The Company shall provide Executive either with: (1) access to an automobile and driver for business-related ground transportation services; or (2) an automobile allowance in an amount to be
determined from time to time by the Board or the Company’s Compensation Committee, provided that such amount shall be no less than one thousand two hundred dollars ($1,200) per month. 
 (e) Payment. Payment of all compensation to Executive hereunder shall be made in accordance with the terms of this Agreement and
applicable Company policies in effect from time to time, including normal payroll practices, and shall be subject to all applicable withholdings and taxes. 
 (f) Benefits Generally. The Company shall make available to Executive, throughout the term of this Agreement, benefits as are generally provided by the Company to its executive officers, including but not
limited to any group life, health, dental, vision, disability or accident insurance, 401(k) plan, supplemental retirement plan, 

  

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deferred compensation plan, or other such benefit plan or policy which may presently be in effect or which may hereafter be adopted by the Company for its
executive officers and key management personnel; provided, however, that nothing herein contained shall be deemed to require the Company to adopt or maintain any particular plan or policy. 
 (g) Vacation. Executive shall be entitled to paid time off (“PTO”) of no less than thirty (30) days during each
calendar year, consistent with the policies then applicable to executive officers. 
 4. Reimbursement of Expenses. The Company shall
reimburse Executive for all business expenses, which are reasonable and necessary and are incurred by Executive while performing his duties under this Agreement, upon presentation of expense statements, receipts and/or vouchers, or such other
information and documentation as the Company may reasonably require. The Board reserves the right to deny any unreasonable business expense. 
 5. Termination.  
 (a) Termination by the Company.  
 (i) Without Cause. The Company may terminate this Agreement for any reason or no reason upon thirty (30) days written notice
to Executive. If the Company terminates this Agreement pursuant to this provision, the Company will provide Executive with the following: (1) the payment of all earned but unpaid Base Salary and PTO (“Accrued Compensation”),
(2) an amount equal to the previous year’s Bonus paid to Executive prorated on a daily basis for the number of days employed in year of termination through the date of termination (the “Pro Rata Bonus”), (3) the payment of
an amount equal to two (2) times the sum of (a) the Executive’s then-current Base Salary and (b) an amount equal to the previous year’s Bonus paid to Executive (this item (3) constituting the “Additional Severance
Payment”), and (4) the continuation of substantially similar medical, life, dental, vision and disability insurance for Executive and Executive’s eligible spouse and family members, for the twenty-four (24) month period following
termination or until Executive accepts new employment and becomes eligible for any such insurance, whichever time period is shortest. Executive shall provide Company with written notice within five (5) business days after he accepts new
employment. The continued medical benefits will initially be provided through COBRA, and will subsequently be provided through coverage purchased by the Company for Executive and his eligible spouse and family members. 
 (ii) For Cause. The Company may terminate this Agreement at any time for Cause. Upon termination by the Company for Cause,
Executive shall only be entitled to Accrued Compensation. “Cause” means any of the following: 
 a) Executive’s
commission of theft, embezzlement, any other act of dishonesty relating to his employment with the Company, or any material violation of Company policies (including the Company’s ethics policies), or any law, rules, or regulations applicable to
the Company, including, but not limited to, those established by the Department of Insurance, the Securities and Exchange Commission, or any self-regulatory organization having jurisdiction or authority over Executive or the Company or any failure
by Executive to inform the Company of any violation of any law, rule or regulation by the Company or one of its direct or indirect subsidiaries of which Executive has knowledge; 
 b) Executive’s conviction of, or pleading guilty or nolo contendere to, a felony or any lesser crime having as its predicate element
fraud, dishonesty, misappropriation, or moral turpitude; 
 c) Executive’s neglect of duties or failure to perform
obligations under this Agreement (other than due to disability) that materially causes harm to the Company or that has materially damaged or interfered with the Company’s relationships with its customers, suppliers, employees or other agents;
provided, however, that the Company shall give the Executive written notice of any actions or omissions alleged to constitute Cause under this subsection (c) and the Executive shall have thirty (30) days to cure any such alleged Cause;

 d) Executive’s substance abuse or illegal use of drugs that impairs Executive’s performance, that materially
causes harm to the Company or that, in the reasonable judgment of the Board, has damaged or interfered with the Company’s relationships with its customers, suppliers, employees or other agents; 
  

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 e) Executive’s commission of an act or acts in the performance of his duties under
this Agreement amounting to gross negligence or willful misconduct; or 
 f) Executive’s breach of Sections 7 or 8 of
this Agreement. 
 g) The Company may place Executive on paid administrative leave from work during any investigation by the
Company of a “cause” reason for Executive’s termination, and may prohibit Executive from coming into work, accessing the Company’s computer system, and contacting its employees or customers during this time; provided, however,
upon a failure of the Board of Directors to find that Cause exists, such placing of Executive on leave two times during the Term shall constitute Good Reason under Section 5 below. 
 h) Cause shall be determined by the affirmative vote of at least a majority of the members of the Board (excluding the Executive, if a
Board member). Executive shall be given fifteen (15) days written notice of the Board meeting at which Cause shall be decided, and shall be given an opportunity prior to the vote on Cause to appear before the Board, with or without counsel, at
Executive’s election, to present arguments on his own behalf. The notice to Executive of the Board meeting shall identify with reasonable detail the reasons for such consideration of Cause. The pendency of the notice period described herein
shall not prevent or delay the Company’s ability to enforce the restrictive covenants contained herein. 
 iii) Change
in Control. If following a Change in Control, (A) the Company terminates this Agreement for reasons other than Cause, or, (B) Executive terminates this Agreement for Good Reason, the Company shall provide Executive with the following:
(1) Accrued Compensation, (2) a Pro Rata Bonus, (3) an amount equal to the Additional Severance Payment, (4) the full and immediate vesting of all outstanding equity or equity based awards, and (5) the continuation of all
medical, life, dental, vision and disability insurance for Executive and Executive’s eligible spouse and family members, for the twenty-four (24) month period following termination. The term “Change in Control” shall mean a
transaction or event (or series of transactions or events) as a result of which any “person” as such term is used in Section l3(d) and 14(d) of the Exchange Act (other than any Excluded Person, the Company or any Company employee benefit
plan, including its trustees) is or becomes the “beneficial owner” (as defined in Rule l3d-3 under the Exchange Act), directly or indirectly, of all of the securities of the Company held by New Affirmative LLC held immediately prior to
such transaction or event (or series of transactions or events) and all director designees of New Affirmative LLC are no longer on the Company’s Board; provided, however, that in no event shall the distribution, sale, transfer, or acquisition
of securities of the Company held by New Affirmative LLC or any Excluded Persons (or any successor thereof) to any Excluded Person trigger a “Change in Control.” “Excluded Person” shall mean any of New Affirmative LLC,
Affirmative Investment LLC, The Enstar Group, Inc. and any of their respective stockholders, members, affiliates, subsidiaries, or any such persons under common control. 
 (b) Termination by Executive. 
 (i) No Good Reason. Executive may terminate this Agreement for any reason upon providing thirty (30) days written notice to the Company. If Executive terminates this Agreement pursuant to this provision,
the Company will pay Executive the Accrued Compensation. 
 (ii) For Good Reason. For purposes of this Agreement, the
term “Good Reason” shall mean termination of Executive’s employment with the Company by the Executive by giving at least thirty (30) days advance written notice within thirty (30) days of the occurrence of one of the
following events: 
 a) the Company’s material breach of any provision of this Agreement or any of the covenants
contained herein that, if capable of being cured, remains uncured after Executive has delivered a written notice of breach to the Company and after the Company has had thirty (30) days after receipt of such written notice to cure such breach;

 b) in the event of a requirement that Executive relocate Executive’s principal office to a location that is more than
forty (40) miles from the location of the Company’s administrative offices in Chicago, Illinois; provided, however, that travel as necessary to perform duties under this Agreement shall not be deemed a violation of this subsection (b).

  

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 c) without the Executive’s written consent: (A) a material adverse change in
the Executive’s status, office, title, position or responsibilities (including reporting responsibilities) as Chief Executive Officer which represents a material adverse change from his status, office, title, position or responsibilities as
Chief Executive Officer as in effect at any time within 90 days preceding such occurrence or at any time thereafter; provided, however, that if Executive holds the position of Chairman of the Board at any time during this Agreement, then any such
change as to the position of Chairman of the Board shall not be deemed a violation of this subsection (c); (B) the assignment to Executive of any duties or responsibilities which are materially inconsistent with and adverse to his status,
office, title, position or responsibilities as Chief Executive Officer in effect at any time within 90 days preceding such occurrence or at any time thereafter; provided, however, that if Executive holds the position of Chairman of the Board at any
time during this Agreement, then any such assignment as to the position of Chairman of the Board shall not be deemed a violation of this subsection (c); or (C) any removal of the Executive from any such material status, office, title, position
or responsibility as Chief Executive Officer; provided, however, that if Executive holds the position of Chairman of the Board at any time during this Agreement, then any such removal as to the position of Chairman of the Board shall not be deemed a
violation of this subsection (c); 
 d) without the Executive’s written consent, a reduction in the Executive’s Base
Salary or any failure to pay the Executive any compensation or benefits to which he is entitled within five days of the date due; provided, however, that the Executive shall give the Company written notice of any actions or omissions alleged to
constitute Good Reason under this subparagraph (d) and the Company shall have ten (10) business days to cure any such alleged Good Reason; or 
 e) without the Executive’s written consent, the Company fails to nominate Executive for a position on the Board in connection with the Company’s regularly scheduled annual stockholders’ meeting.

 Upon termination for “Good Reason” pursuant to this provision, Executive shall be entitled to all benefits and payments as provided in
Section 5(a)(i) hereof for a termination by the Company without Cause. Executive shall only be required to give notice one time under this Section 5(b)(ii) and shall not be required to provide notice and a cure period for any breach or
other action that is not capable of cure. 
 (c) Disability. The Company may terminate this Agreement at any time
Executive shall be deemed by the Board to have sustained a “disability.” Executive shall be deemed to have sustained a “disability” if he shall have been unable, with reasonable accommodation, to perform his duties for a period
of more than ninety (90) consecutive days in any twelve (12) month period. Upon termination of this Agreement for disability, the Company shall pay Executive his Accrued Compensation, and the Pro Rata Bonus. 
 (d) Death. This Agreement will terminate automatically upon Executive’s death. Upon termination of this Agreement because of
Executive’s death, the Company shall pay Executive’s estate his Accrued Compensation, and the Pro Rata Bonus. 
 (e)
Employment. Upon termination of this Agreement for any reason, including expiration of the Term pursuant to Section 2 or a termination for a reason specified in this Section 5, Executive’s employment shall also terminate and
cease, and Executive will voluntarily resign any Director or Board positions he holds, unless otherwise requested by the Company. 
 (f) Transition Period. Upon termination of this Agreement, and for a period of thirty (30) days thereafter (the “Transition Period”), Executive agrees to make himself available to assist the Company with transition
projects reasonably assigned to him by the Board. Executive will be paid at a daily rate of Two Thousand Five Hundred Dollars ($2,500.00) dollars per day, for each day which Executive worked on behalf of the Company pursuant to this
Section 5(f). 
  

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 (g) Severance Payment. Any payment to Executive under this Section 5 (other
than pursuant to Section 5(a)(iii)) will be payable in equal monthly installments due on the first day of each month during the course of the Non-Interference Period. In the event of a payment to be made to Executive pursuant to
Section 5(a)(iii), such payment shall be made within five (5) business days of such termination. Executive shall not be entitled to, and the Company shall not pay, any severance under any other plan, program or policy of the Company.

 (h) Notwithstanding the foregoing severance provisions, if the Board (or its delegate) determines in its or his or her
discretion that Executive is a “Specified Employee” (as defined in Section 409A of the United States Internal Revenue Code of 1986, as amended (“Section 409A”)), as of the date of termination, and that Section 409A
applies with respect to any payment(s) to Executive pursuant to any of the paragraphs of this Section 5, such payment(s) shall not (solely to the extent required by Section 409A) begin until the six (6) month anniversary of the date
of termination, and at which time Executive shall be paid a single lump sum equal to those payment(s) he would otherwise have received during such six (6) months, and then the balance of the payment(s) will continue in monthly installments
thereafter through completion of the Non-Interference Period (with each monthly installment being paid in the gross sum of the full payment(s) divided by 24) as may be provided herein; provided, however, that if the Board (or its delegate)
determines in its or his or her discretion that Executive is not a Specified Employee as of the date of termination (or that Section 409A does not apply with respect to a payment to Executive pursuant to Section 5), such payment shall be
made in accordance with the provisions of this Section 5, provided that the requirements set forth in Section 6 have been met by Executive. 
 6. Release. Notwithstanding any other provision in this Agreement to the contrary, as a condition precedent to receiving any payment set forth in Section 5 of this Agreement, Executive agrees to execute
(and not revoke) a severance and release agreement in the form attached hereto as Exhibit A (the “Release”). If Executive fails to execute and deliver the Release, or revokes the Release, Executive agrees that he shall not be entitled to
receive the above-stated severance payments. For purposes of this Agreement, the Release shall be considered to have been executed by Executive if it is signed by his legal representative in the case of legal incompetence or on behalf of
Executive’s estate in the case of his death. No payments shall be made under Section 5 until the period to revoke the release has terminated. 
 7. Nondisclosure.  
 (a) The Company shall, immediately after executing this
Agreement, provide Executive with some or all of the Company’s various trade secrets and confidential or proprietary information, including information he has not received before, consisting of, but not limited to, all information: that is
non-public or proprietary to the Company, or its affiliates including, but not limited to, information concerning its business activities including, but not limited to, the present marketing and administration of certain insurance business and
processes, including but not limited to any and all information concerning non-standard automobile insurance business, financial information, administrative procedures, pricing methods and policies, client lists and information, business and
marketing strategies, claims and underwriting procedures and guidelines, claims and underwriting files, utilization review and manuals, data format, data gathering retrieval systems and methods, ideas about current and future services. Confidential
Information shall not include: (i) information that Executive may furnish to third parties regarding his obligations under Sections 7 and 8; or (ii) information that becomes generally available to the public by means other than
Executive’s breach of Section 7 (for example, not as a result of Executive’s unauthorized release of marketing materials). 
 (b) Executive agrees that all Confidential Information, whether prepared by Executive or otherwise coming into his possession, shall remain the exclusive property of the Company during Executive’s employment with
the Company and thereafter. Executive further agrees that he shall not, without the prior written consent of the Company, use or disclose to any third party any of the Confidential Information described herein, directly or indirectly, either during
Executive’s employment with the Company or at any time following the termination of Executive’s employment with the Company, except as Executive may be required by Court Order. If such Court Order is issued, Executive shall inform the
Company a reasonable time prior to compliance. 
 (c) Upon termination of this Agreement, Executive agrees that all
Confidential Information and other files, documents, materials, records, notebooks, customer lists, business proposals, contracts, agreements and other repositories containing information concerning the Company or the business of the Company
(including all copies thereof) in Executive’s possession, custody or control, whether prepared by Executive or others, shall remain with or be returned to the Company promptly (within seventy-two (72) hours) after the termination or
expiration of this Agreement for any reason. 
  

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 8. Noncompete, Nonsolicitation, and Non-Disparagement.  
 (a) Business Relationships and Goodwill. Executive acknowledges and agrees that, as an employee and representative of the Company,
Executive will be given Confidential Information. Executive acknowledges and agrees that this creates a special relationship of trust and confidence between the Company, Executive and the Company’s current and prospective customers, limited
partners, and investors. Executive further acknowledges and agrees that there is a high risk and opportunity for any person given such responsibility and Confidential Information to misappropriate the relationship and goodwill existing between the
Company and the Company’s current and prospective customers, limited partners, and investors. Executive therefore acknowledges and agrees that it is fair and reasonable for the Company to take steps to protect itself from the risk of such
misappropriation. Consequently, Executive agrees to the following noncompetition and nonsolicitation covenants. 
 (b)
Scope of Noncompetition Obligation.  
 (i) Executive acknowledges and agrees that the period of two (2) years
following the termination or expiration of this Agreement for any reason will constitute the non-compete, non-solicit and non-divert period (the “Non-Interference Period”). During his employment and during the Non-Interference Period,
Executive will not engage in duties or provide services to a Competitor which are substantially similar to those Executive provided to the Company under this Agreement, in any capacity, upon the termination or expiration of this Agreement in states
where the Company is doing business or has expended resources in pursuit of, or in preparation to do, business (“Prohibited Market); provided, however, that the foregoing shall not apply in the event that the Term of this Agreement expires by
reason of the Company’s election not to renew or extend this Agreement. The term “Competitor” means (i) insurance companies providing non-standard automobile insurance coverage of any type or class as a primary line of business
(in excess of fifteen percent (15%) of aggregate revenues), (ii) underwriting agencies (or managing general agencies) that produce and administer non-standard automobile insurance as a primary line of business, and (iii) retail
agencies that sell non-standard automobile insurance policies as a primary line of business. 
 (ii) Executive agrees that he
shall not at any time during his employment divert away or attempt to divert away any business from the Company to another company, business, or individual. Additionally, Executive shall not, during the Non-Interference Period, solicit, divert away
or attempt to divert away business from any Company Customer, either directly or indirectly. “Company Customer” is defined as any then-current customer that Executive contacted, solicited, serviced, or had accessed Confidential Information
about. “Solicit” is defined as soliciting, inducing, attempting to induce, or assisting any other person, firm, entity, business or organization, whether direct or indirect, in any such solicitation, inducement or attempted inducement, in
all cases regardless of whether the initial contact was by Executive, the Company Customer, or any other person, firm, entity, business, or organization. 
 (iii) Executive further agrees that during the Non-Interference Period, he will not directly or indirectly: (a) solicit, entice, persuade or induce any employee, agent or representative of the Company, who was an
employee, agent or representative of the Company upon the termination or expiration of this Agreement, to terminate such person’s relationship with the Company or to become employed by any business or person other than the Company;
(b) approach any such person for any of the foregoing purposes; (c) authorize, solicit or assist in the taking of such actions by any third party; or (d) take actions to hire any such person. 
 (iv) Executive further agrees that, during the Non-Interference Period, he shall not own, manage, operate, control, invest or acquire an
interest in, or otherwise similarly engage or participate in (whether as a proprietor, owner, member, partner, stockholder, director, officer, employee, consultant, joint venturer, investor, sales representative or other participant) any Competitor
or business or entity that owns or operates, or controls another business or entity that owns or operates a Competitor located in the Prohibited Market; provided, however, that the foregoing provisions shall not prohibit the Employee from:
(a) being a passive investor in any publicly traded entity, as long as any such investment does not exceed ten percent (10%) of the outstanding equity securities of such entity; (b) continuing as a non controlling investor in any
entity which subsequent to the date of the Executive’s 

  

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investment therein becomes the owner or operator of, or acquires control of another business or entity that owns or operates, a Competitor in a Prohibited
Market (provided that if any entity in which the Executive is a non controlling investor acquires a non-standard automobile insurance in a Prohibited Market, the Executive shall limit his participation in such entity to a passive role); or
(c) investing in or becoming employed by any entity whose ownership, operation or control of a Competitor is not material relative to its principal business activities provided Executive’s participation in such a Competitor is not a
material part of Executive’s duties. 
 (c) Non-Disparagement. During the term of Executive’s employment with
the Company and following the termination or expiration of this Agreement for any reason, Executive shall not disparage, discredit or otherwise criticize, directly or indirectly, verbally or in writing, the Company or any of its subsidiaries, or any
of their respective businesses, products, practices, trademarks, employees, officers, or directors. Further, during the term of Executive’s employment with the Company and following the termination or expiration of this Agreement, the officers
of the Company shall not disparage, discredit or otherwise criticize, directly or indirectly, verbally or in writing, including issuing a public statement, Executive. 
 (d) Acknowledgement. Executive acknowledges that the compensation and Confidential Information provided to Executive pursuant to
this Agreement, give rise to the Company’s interest in restraining Executive from competing with the Company, that the noncompetition and nonsolicitation covenants are designed to enforce such consideration and that any limitations as to time,
geographic scope and scope of activity to be restrained as defined herein are reasonable and do not impose a greater restraint than is necessary to protect the goodwill or other business interest of the Company. 
 (e) Survival of Covenants. Sections 7 and 8 shall survive the expiration or termination of this Agreement for any reason. Executive
agrees not to challenge the enforceability or scope of Sections 7 and 8. Executive further agrees to notify all future persons, businesses, or other entities, with which he becomes affiliated or employed by, of the restrictions set forth in Sections
7 and 8, prior to the commencement of any such affiliation or employment. 
 9. Severability and Reformation. If any one or more of
the terms, provisions, covenants or restrictions of this Agreement shall be determined by a court of competent jurisdiction to be invalid, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions shall remain in full
force and effect, and the invalid, void or unenforceable provisions shall be deemed severable. Moreover, if any one or more of the provisions contained in this Agreement shall for any reason be held to be excessively broad as to duration,
geographical scope, activity or subject, it shall be reformed by limiting and reducing it to the minimum extent necessary, so as to be enforceable to the extent compatible with the applicable law as it shall then appear. 
 10. Entire Agreement. This Agreement sets forth the entire agreement between the parties hereto and fully supersedes any and all prior agreements
or understandings, written or oral, between the parties hereto pertaining to the subject matter hereof. 
 11. Notices. All notices
and other communications required or permitted to be given hereunder shall be in writing and shall be deemed to have been duly given if delivered personally, mailed by certified mail (return receipt requested) or sent by overnight delivery service,
or electronic mail, or facsimile transmission (with electronic confirmation of successful transmission) to the parties at the following addresses or at such other addresses as shall be specified by the parties by like notice, in order of preference
of the recipient: if to the Company, General Counsel, 150 Harvester Drive, Suite 300, Burr Ridge, Illinois 60527, and if to Executive, to such address as specified by the Executive to the Company from time to time in writing. Notice so given shall,
in the case of mail, be deemed to be given and received on the fifth calendar day after posting, in the case of overnight delivery service, on the date of actual delivery and, in the case of facsimile transmission or personal delivery, on the date
of actual transmission or, as the case may be, personal delivery. 
 12. Governing Law and Venue. This Agreement will be governed by
and construed in accordance with the laws of the State of Illinois, without regard to any conflict of laws rule or principle which might refer the governance or construction of this Agreement to the laws of another jurisdiction. Any action or
arbitration in regard to this Agreement or arising out of its terms and conditions, pursuant to Sections 26 and 27, shall be instituted and litigated only in Chicago, Illinois. 
  

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 13. Assignment. This Agreement is personal to Executive and may not be assigned in any way by
Executive without the prior written consent of the Company. The Company may assign its rights and obligations under this Agreement. 
 14.
Counterparts. This Agreement may be executed in counterparts, each of which will take effect as an original, and all of which shall evidence one and the same Agreement. 
 15. Amendment. This Agreement may be amended only in writing signed by Executive and by a duly authorized representative of the Company (other
than Executive). 
 16. Construction. The headings and captions of this Agreement are provided for convenience only and are intended
to have no effect in construing or interpreting this Agreement. The language in all parts of this Agreement shall be in all cases construed in accordance to its fair meaning and not strictly for or against the Company or Executive. 
 17. Non-Waiver. The failure by either party to insist upon the performance of any one or more terms, covenants or conditions of this Agreement
shall not be construed as a waiver or relinquishment of any right granted hereunder or of any future performance of any such term, covenant or condition, and the obligation of either party with respect hereto shall continue in full force and effect,
unless such waiver shall be in writing signed by the Company (other than Executive) and Executive. 
 18. Announcement. Company shall
have the right to make public announcements concerning the execution of this Agreement and the terms contained herein, at the Company’s discretion. 
 19. Use of Name, Likeness and Biography. Company shall have the right (but not the obligation) to use, publish and broadcast, and to authorize others to do so, the name, approved likeness and approved
biographical material of Executive to advertise, publicize and promote the business of Company and its affiliates, but not for the purposes of direct endorsement without Executive’s consent. This right shall terminate upon the termination of
this Agreement. An “approved likeness” and “approved biographical material” shall be, respectively, any photograph or other depiction of Executive, or any biographical information or life story concerning the professional career
of Executive that is approved in advance by Executive. 
 20. Corporate Opportunities. Executive acknowledges that during the course
of Executive’s employment by Company, Executive may be offered or become aware of business or investment opportunities in which Company may or might have an interest (a “Corporate Opportunity”) and that Executive has a duty to advise
Company of any such Corporate Opportunities before acting upon them. Accordingly, Executive agrees: (a) that Executive will disclose to the Board any Corporate Opportunity offered to Executive or of which Executive becomes aware, and
(b) that Executive will not act upon any Corporate Opportunity for Executive’s own benefit or for the benefit of any Person other than Company without first obtaining consent or approval of the Board (whose consent or approval may be
granted or denied solely at the discretion of the Board; provided, that Executive, at Executive’s election, may act upon any such Corporate Opportunity for Executive’s benefit or the benefit of any other Person if the Board has not caused
Company to act upon any such Corporate Opportunity within sixty (60) days after disclosure of such Corporate Opportunity to Company by Executive. 
 21. Right to Insure. Company shall have the light to secure, in its own name or otherwise, and at its own expense, life, health, accident or other insurance covering Executive, and Executive shall have no
right, title or interest in and to such insurance. Executive shall assist Company in procuring such insurance by submitting to reasonable examinations and by signing such applications and other instruments as may be reasonably required by the
insurance carriers to which application is made for any such insurance. 
 22. Assistance in Litigation. Executive shall reasonably
cooperate with the Company in the defense or prosecution of any claims or actions now in existence or that may be brought in the future against or on behalf of the Company that relate to events or occurrences that transpired while Executive was
employed by the Company. Executive’s cooperation in connection with such claims or actions shall include, but not be limited to, being available to meet with counsel to prepare for discovery or trial and to act as a witness on behalf of the
Company at mutually convenient times. Executive also shall reasonably cooperate with the Company in connection with any investigation 

  

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or review by any federal, state, or local regulatory authority as any such investigation or review relates to events or occurrences that transpired while
Executive was employed by the Company. The Company will pay Executive a reasonable hourly rate for Executive’s cooperation pursuant to this Section 22. 
 23. No Inconsistent Obligations. Executive represents and warrants that to his knowledge he has no obligations, legal, in contract, or otherwise, inconsistent with the terms of this Agreement or with his
undertaking employment with the Company to perform the duties described herein. Executive will not disclose to the Company, or use, or induce the Company to use, any confidential, proprietary, or trade secret information of others. Executive
represents and warrants that to his knowledge he has returned all property and confidential information belonging to all prior employers, if he is obligated to do so. 
 24. Notification of New Employer. Upon termination of this Agreement for any reason, or expiration of this Agreement, Executive hereby consents to the notification by the Company to Executive’s new
employer of the provisions of Sections 7, 8, and 9 of this Agreement. In addition, in the event that Executive plans to render services to a company that works in a similar field as the Company, Executive agrees to provide the Company with as much
notice as possible of Executive’s intention to join that company or business but in no event will Executive provide less than two weeks notice of that intention; provided, however, the provision of such notice and the Company’s receipt
thereof shall not constitute a waiver of any breach of any provision of this Agreement. 
 25. Binding Agreement. This Agreement shall
inure to the benefit of and be binding upon Executive, his heirs and personal representatives, and the Company, its successors and assigns. 
 26. Remedies. The parties recognize and affirm that in the event of a breach of Sections 7 and 8 of this Agreement, money damages would be inadequate and the Company would not have an adequate remedy at law. Accordingly, the parties
agree that in the event of a breach or a threatened breach of Sections 7 and 8, the Company may, in addition and supplementary to other rights and remedies existing in its favor, apply to any court of law or equity of competent jurisdiction for
specific performance and/or injunctive or other relief in order to enforce or prevent any violations of the provisions hereof (without posting a bond or other security). In addition, Executive agrees that in the event a court of competent
jurisdiction or an arbitrator finds that Executive violated Sections 7 or 8, the time periods set forth in those Sections shall be tolled until such breach or violation has been cured. Executive further agrees that the Company shall have the right
to offset the amount of any damages resulting from a breach by Executive of Sections 7 or 8 against any payments due Executive under this Agreement; provided, however, that any such amount offset will be deposited into an escrow account pending
adjudication of the dispute giving rise to the offset. The parties agree that if one of the parties is found to have breached this Agreement by a court of competent jurisdiction, the breaching party will be required to pay the non-breaching
party’s attorneys’ fees. 
 27. Arbitration. Other than as stated in Section 26, the parties agree that any controversy
or claim arising out of or relating to this Agreement, or the breach thereof, shall be resolved by arbitration administered by the American Arbitration Association (“AAA”) under its Commercial Arbitration Rules. The arbitration will take
place in Chicago, Illinois. All disputes shall be resolved by a one (I) arbitrator. The method for selecting the arbitrator is set forth in the AAA’s Commercial Arbitration Rules. The arbitrator will have the authority to award the same
remedies, damages, and costs that a court could award, and will have the additional authority to award those remedies set forth in Section 26. The arbitrator shall issue a reasoned award explaining the decision, the reasons for the decision,
and any damages awarded, including those set forth in Section 26 where the arbitrator finds Executive violated Sections 7 or 8. The arbitrator’s decision will be final and binding. The judgment on the award rendered by the arbitrator may
be entered in any court having jurisdiction thereof. The arbitration proceedings, any record of the same, and the award shall be considered Confidential Information under this Agreement. This provision and any decision and award hereunder can be
enforced under the Federal Arbitration Act. 
 28. Fees and Expenses. To induce the Executive to execute this Agreement and to provide
the Executive with reasonable assurance that the purposes of this Agreement will not be frustrated by the cost of its enforcement should the Company fail to perform its obligations under this Agreement: 
 (a) In the event that the Executive’s employment is terminated by the Company prior to a Change in Control either for Cause or
without Cause, the Company shall reimburse the Executive for any reasonable attorneys’ fees, expenses and court costs incurred by the Executive as a result of any litigation by the Executive 

  

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regarding the validity, enforceability or interpretation of any provision of this Agreement (including as a result of any litigation by the Executive
regarding the benefits payable to the Executive pursuant to tins Agreement); provided, however, that such reimbursement shall only be payable by the Company (i) if the Executive prevails on any material issues involved in such litigation and
(ii) upon receipt of proof of such expenses. 
 (b) In the event that the Executive’s employment is terminated after
a Change in Control either by the Company either for Cause or Without Cause or by the Executive for Good Reason, the Company shall reimburse the Executive for any reasonable attorneys’ fees, expenses and court costs incurred by the Executive as
a result of any litigation by the Executive regarding the validity, enforceability or interpretation of any provision of this Agreement (including as a result of any litigation by the Executive regarding the benefits payable to the Executive
pursuant to this Agreement) upon receipt of proof of such expenses regardless of which party, if any, prevails in the contest. 
 29. Tax
Gross Up.  
 (a) If, as a result of payments provided for under or pursuant to this Agreement together with all other
payments in the nature of compensation provided to or for the benefit of Executive under any other agreement in connection with a Change in Control, Executive becomes subject to taxes of any state, local or federal taxing authority that would not
have been imposed on such payments but for the occurrence of a Change in Control, including any excise tax under Section 4999 of the Code an any successor or comparable provision, then, in addition to any other benefits provided under or
pursuant to this Agreement or otherwise, Company (including any successor to Company) shall pay to Executive at the time any such payments are made under or pursuant to this or the other agreements, an amount equal to the amount of any such taxes
imposed or to be imposed on Executive (the amount of any such payment, the “Parachute Tax Reimbursement”). 
 (b) In
addition, Company (including any successor to Company) shall “gross up” such Parachute Tax Reimbursement by paying to Executive at the same time an additional amount equal to the aggregate amount of any additional taxes (whether income
taxes, excise taxes, special taxes, employment taxes or otherwise) that are or will be payable by Executive as a result of the Parachute Tax Reimbursement being paid or payable to Executive and/or as a result of the additional amounts paid or
payable to Executive pursuant to this sentence, such that after payment of such additional taxes Executive shall have been paid on a net after-tax basis an amount equal to the Parachute Tax Reimbursement. 
 (c) The amount of any Parachute Tax Reimbursement and of any such gross-up amounts shall be determined by a nationally recognized
accounting firm selected by the Company (with all such cost borne by the Company), whose determination, absent manifest error, shall be treated as conclusive and binding absent a binding determination by a governmental taxing authority that a
greater amount of taxes is payable by Executive. 
 30. Voluntary Agreement. Each party to this Agreement has read and fully
understands the terms and provisions hereof, has had an opportunity to review this Agreement with legal counsel, has executed this Agreement based upon such party’s own judgment and advice of counsel (if any), and knowingly, voluntarily, and
without duress, agrees to all of the terms set forth in this Agreement. The parties have participated jointly in the negotiation and drafting of this Agreement. If an ambiguity or question of intent or interpretation arises, this Agreement will be
construed as if drafted jointly by the parties and no presumption or burden of proof will arise favoring or disfavoring any party because of authorship of any provision of this Agreement. Except as expressly set forth in this Agreement, neither the
parties nor their affiliates, advisors and/or their attorneys have made any representation or warranty, express or implied, at law or in equity with respect of the subject matter contained herein. Without limiting the generality of the previous
sentence, the Companies, their affiliates, advisors, and/or attorneys have made no representation or warranty to Executive concerning the state or federal tax consequences to Executive regarding the transactions contemplated by this Agreement.

 31. No Set-Off; No Mitigation. Except as provided herein, the Company’s obligation to make the payments provided for in this
Agreement and otherwise to perform its obligations hereunder shall not be affected by any circumstances, including any set-off, counterclaim, recoupment, defense or other right which the Company may have against Executive or others. In no event
shall Executive be obligated to seek other employment or take any other action by way of mitigation of the amounts payable to Executive under any of the provisions of this Agreement, and such amounts shall not be reduced whether or not Executive
obtains other employment. 
  

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 32. Indemnification. The Company agrees that if Executive is made a party to or involved in, or is
threatened to be made a party to or otherwise to be involved in, any action, suit or proceeding, whether civil, criminal, administrative or investigative (a “Proceeding”), by reason of the fact that he is or was an officer or employee of
the Company or is or was serving at the request of the Company as an officer, member, employee or agent of another corporation, limited liability corporation, partnership, joint venture, trust or other enterprise, including service with respect to
employee benefit plans, whether or not the basis of such Proceeding is Executive’s alleged action in an official capacity while serving as an officer, member, employee or agent, Executive shall be indemnified and held harmless by the Company
against any and all liabilities, losses, expenses, judgments, penalties, fines and amounts reasonably paid in settlement in connection therewith, and shall be advanced reasonable expenses (including attorneys’ fees) as and when incurred in
connection therewith, to the fullest extent legally permitted or authorized by the Company’s By-laws or, if greater, by the laws of the State of Delaware, as may be in effect from time to time, except that this Section 32 shall not apply
to the following Proceedings: (a) any Proceeding initiated or brought voluntarily by Executive against the Company or its directors, officers employees or other indemnitees, unless the Board of Directors has authorized or consented to the
initiation of the Proceeding (or any part of the Proceeding), and (b) for an accounting of profits made from the purchase and sale (or sale and purchase) by Executive of securities of the Company within the meaning of Section l6(b) of the
Exchange Act or any similar successor statute. The rights conferred on Executive by this Section 32 shall not be exclusive of any other rights which Executive may have or hereafter acquire under any statute, the By-laws, agreement, vote of
stockholders or disinterested directors, or otherwise. The indemnification and advancement of expenses provided for by this Section 32 shall continue until and terminate upon the latest of: (a) the statute of limitations applicable to any
claim that could be asserted against Executive with respect to which he may be entitled to indemnification under this Section 32, (b) ten years after the date that Executive has ceased to serve as a director or officer of the Company or as
a director, officer, employee, member, or agent of any other corporation, limited liability corporation, partnership, joint venture, trust or other enterprise at the request of the Company, or (c) if, at the later of the dates referred to in
(a) and (b) above, there is a pending Proceeding in respect of which Executive is granted rights of indemnification under this Section 32, one year after the final termination of such Proceeding, including any and all appeals. The
indemnification and advancement of expenses provided for by this Section 32 shall inure to the benefit of his heirs, executors and administrators. 
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 IN WITNESS WHEREOF, the Company and Executive have executed this Agreement, effective as of the day and year first above
written. 
  

									
		 		 	        COMPANY
					
	Dated:	 	March 30, 2009	 		 	By:	 	/s/ Joseph G. Fisher
		 		 		 		 	Name: Joseph G. Fisher
		 		 		 		 	Title: Executive Vice President

  

									
		 		 	        EXECUTIVE
					
	Dated:	 	March 30, 2009	 		 	By:	 	/s/ Kevin R. Callahan
		 		 		 		 	Name: Kevin R. Callahan

  

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