Document:

Exhibit 10.9.1

 

AMENDMENT NO. 1

 

TO 

 

AMENDED AND RESTATED EMPLOYMENT AGREEMENT

 

WHEREAS, on September 30,
2004 ACA Service Corporation (formerly known as American Capital Access Service
Corporation,), ACA Capital Holdings, Inc. and ACA Financial Guaranty Corporation
(collectively, the “Company”) entered into that certain Amended and Restated
Employment Agreement (the “Employment Agreement”) with William Tomljanovic (the
“Executive”); and

 

WHEREAS, on April 18,
2001 the Executive executed a promissory note in the principal amount of
$250,000 in favor of ACA Capital Holdings, Inc. (formerly known as
American Capital Access Holdings, Inc.), which note was amended to
increase the principal amount thereof to $500,000 and re-issued as so amended
effective on September 20, 2001, the proceeds of which were applied to the
purchase of shares of common stock of ACA Capital Holdings, Inc. (the “Existing
Indebtedness”); and

 

WHEREAS, payments of
principal and interest on the Existing Indebtedness are due annually on each February 28th,
beginning February 28, 2004; and

 

WHEREAS, Section 6(d) of
the Employment Agreement provides for the release, cancellation, forgiveness
and discharge of an amount equal to one third of the outstanding principal
amount and any accrued and unpaid interest on the Existing Indebtedness on each
anniversary of the Employment Agreement for so long as the Executive remains
employed by the Company on such date (and subject to other exceptions as
described in the Employment Agreement); and

 

WHEREAS, the parties hereto desire to amend Section 6(d) of
the Employment Agreement to make the annual waiver of principal and interest on
the Existing Indebtedness effective as of February 28 of each year and to
correct certain other errors contained in that provision;

 

NOW THEREFORE, the parties hereto agree as follows
(defined terms used herein having the meanings assigned thereto in the
Employment Agreement):

 

1.               The first sentence of Section 6(d) shall
be amended and restated to read in its entirety as follows:

 

“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 Dates, the Company shall release, cancel, forgive and forever
discharge an amount equal to one third o(l/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.”

 

2.               All other terms and provisions of the
Employment Agreement remain in full force and effect.

 

3.               This Amendment (i) shall be governed,
construed, performed and enforced in accordance with the laws of the State of
New York; and (ii) 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. 

 

IN WITNESS WHEREOF, the parties have executed this Amendment No. 1
to the Employment Agreement as of January 2, 2005.

 

	
  ACA
  CAPITAL HOLDINGS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/
  Nora J. Dahlman

  	
   

  
	
   

  	
  Name:

  	
  NORA
  J. DAHLMAN

  
	
   

  	
  Title:

  	
  GENERAL COUNSEL
 & SECRETARY

  
	
   

  	
   

  
	
   

  	
   

  
	
  ACA
  SERVICE CORPORATION

  
	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/
  Nora J. Dahlman

  	
   

  
	
   

  	
  Name:

  	
  NORA
  J. DAHLMAN

  
	
   

  	
  Title:

  	
  GENERAL COUNSEL
 & SECRETARY

  
	
   

  	
   

  
	
   

  	
   

  
	
  ACA
  FINANCIAL GUARANTY CORPORATION

  
	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/
  Nora J. Dahlman

  	
   

  
	
   

  	
  Name:

  	
  NORA
  J. DAHLMAN

  
	
   

  	
  Title:

  	
  GENERAL COUNSEL
 & SECRETARY

  
	
   

  	
   

  
	
  Executive:

  
	
   

  	
   

  
	
   

  	
   

  
	
  /s/ William Tomljanovic

  	
   

  
	
  William TomljanovicExhibit 10.10

 

EXECUTION
COPY

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

(d)                                 “Cause” means the Executive:

 

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

 

(ii)                                  performs an action or fails to take an action
that, 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,

 

2

 

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

 

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

 

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

 

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

 

(h)                                 “Constructive Termination” means a
termination by the Executive of her employment with the Company on written notice
given to the Company within thirty (30) days following the date on which she
learns of the occurrence, without her 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 her then current Base Salary
or in her 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 her (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;

 

3

 

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

 

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

 

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

 

(i)                                     “Disability” means the Executive’s
inability, due to physical or mental incapacity, to substantially perform her
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 her 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.

 

4

 

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

 

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

 

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

 

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

 

3.                                       Positions, Duties, and Responsibilities.

 

(a)                                  During the Term of Employment, the Executive
shall be employed as a Managing Director of each of Holdings, Service, and
Financial, and shall perform such normal duties, responsibilities,
functions and authority and exercise such powers as are incident to such
offices.  The Executive, in carrying out
her executive duties under this Agreement, shall report to the Executive Vice
President - Head of Structured Finance of such companies and shall devote her
best efforts and her 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 her
duties and responsibilities to the Company hereunder to the best of her
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

 

5

 

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 her personal
investments and affairs, provided that such activities do not materially
interfere with the proper performance of her duties and responsibilities as a
Managing Director of each of Holdings, Service, and Financial.

 

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

 

5.                                       Annual Incentive Awards. The Executive shall be eligible for an
annual incentive bonus award from the Company in respect of each fiscal year
ending during the Term of Employment. The Executive’s target annual incentive
bonus amount for each such year shall be an amount equal to one hundred percent
(100%) of her annualized Base Salary for such year, and her actual bonus amount
for each such year shall be determined based on criteria determined by the
Chief Executive Officer of the Company and approved by the Compensation
Committee in its sole discretion, and communicated to the Executive no later than
30 days after the beginning of the fiscal year; provided, however,
that the Executive’s minimum annual incentive bonus award for fiscal year 2004
shall be no less than $275,000. The Executive shall receive her 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.

 

6

 

(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 her positions and responsibilities at
the Company. The Executive shall also receive such additional fringe benefits
and perquisites as the Compensation Committee may, in its discretion, from time
to time provide.

 

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

 

7.                                       Reimbursement of Business and Other Expenses.

 

(a)                                  The Executive shall be authorized to incur reasonable
business expenses in carrying out her 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 her for all such expenses, subject to her
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 her death, her estate or her
beneficiaries (as the case may be) shall be entitled to the following:

 

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

 

(ii)                                  a Pro-Rata Annual Incentive Award for the
year in which her death occurs, payable in a lump sum promptly after the date
of her 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 her death
in respect of all accrued but unused vacation days at her Base Salary rate in
effect on the Termination Date, payment of any other amounts earned, accrued
and owing to the Executive but not yet paid and receipt of other vested
benefits in accordance with applicable plans and programs of the Company (the “Standard
Benefit”); and

 

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

 

7

 

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

 

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

 

(B)                                the Standard Benefit.

 

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

 

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

 

8

 

(ii)                                  the Standard Benefit; and

 

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

 

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

 

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

 

(3)                                  payment of COBRA premiums for the entire
period of eligibility for the Executive and eligible dependents and continued
participation for the Executive and each of her 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
her employment with the Company on her own initiative, other than by death, for
Disability or by a Constructive Termination, she 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
her 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 her dependents of obtaining such
benefit or coverage by himself on an individual basis. Payment of such
after-tax economic equivalent shall be made quarterly in advance, without
discount.

 

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

 

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

 

9

 

hereof shall thereupon become fully vested and nonforfeitable; and (ii) the
Executive shall have the continued right to exercise each outstanding vested
stock option, including, without limitation, any portion of the Executive’s
stock options vesting prior to or upon such Change of Control, to the extent
permitted by the applicable plan or, if more favorable to the Executive, grant
document. In the event that holders of Common Stock receive cash, securities,
or other property in respect of their Common Stock in connection with a Change
of Control transaction, the Company shall enable the Executive (if she so
elects) to exercise any stock option at a time and in a fashion that will
entitle her 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 she 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 she 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 her
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 she 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 her being made (or being threatened to be made) a party to any such
Proceeding contemplated by this Section 10(a) and the Company
is materially prejudiced by the Executive’s failure to so notify it.

 

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

 

10

 

(c)                                  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 her rights to compensation and benefits, which may be transferred
only by will or operation of applicable law, except as provided in Section 18(f).

 

12.                                 Representations.

 

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

 

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

 

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

 

11

 

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

 

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

 

(i)                                     the execution, delivery and performance of
this Agreement by the Executive do not and shall not conflict with, breach,
violate or cause a default under any contract, agreement, instrument, order,
judgment or decree to which the Executive is a party or by which she 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 her rights and obligations
under this Agreement, has so consulted to the extent desired by the Executive
in her sole discretion, and fully understands the terms and conditions
contained herein.

 

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

 

(a)                                  Covenant Not to Compete.

 

(i)                                     In further consideration of the compensation
to be paid to the Executive hereunder, the Executive acknowledges that during
the course of her employment with the Company she 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 her 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 twelve (12) months thereafter (the “Noncompete Period”), the
Executive shall not directly or indirectly (whether as an employee, consultant,
investor, independent contractor, or director):

 

12

 

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

 

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

 

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

 

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

 

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

 

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

 

13

 

(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 she 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 her 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 her duties hereunder, to forever maintain such
information in confidence and not to disclose to any Person or use for her 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 her receipt of any request or demand (whether
through legal process or otherwise) that she provide such disclosure, and
thereafter the Executive shall cooperate fully with any Company efforts to
resist, restrict or modify any such request or demand. The Executive shall
deliver to the Company at the Termination Date, or at any other time the
Company may request, all memoranda, notes, plans, records, reports,
computer files, disks and tapes, printouts and software and other documents and
data (and all copies thereof) embodying or relating to Third Party Information,
Confidential Information, Work Product (as defined below) or the business of
the Company or any of its Subsidiaries which she may then possess or have
under her control.

 

(ii)                                  The Executive shall be prohibited in the
course performing her 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

 

14

 

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

 

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

 

15.                                 Resolution of Disputes.    Except as specifically contemplated in this Agreement,
any Claim arising out of or relating to this Agreement, the Executive’s employment
with the Company, or the termination of such employment shall be resolved by binding
confidential arbitration, to be held in New York, New York, in accordance with
the Commercial Arbitration Rules of the American Arbitration Association. Judgment
upon the award rendered by the arbitrator may be entered by any Party in
any court having jurisdiction thereof. During the resolution of any dispute
under this Section 15, each Party shall bear the cost of its own
attorneys’ fees and expenses. If the Executive prevails in the arbitration,
then the Company shall promptly pay all reasonable costs and expenses,
including, without limitation, reasonable attorneys’ fees, incurred by the
Executive or her 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

 

15

 

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

 

If to the Company, to:

 

American Capital Access Service Corporation

140 Broadway

New York, NY 10005

Attention: General Counsel

Telephone: (212) 375-2000

Facsimile: (212) 375-2100

 

If to the Executive, to:

 

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

 

with a copy to:

 

the Executive at the Company’s address.

 

If to a beneficiary of the Executive, to:

 

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

 

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

 

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

 

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,

 

16

 

understandings, discussions, negotiations, and undertakings, whether
written or oral, between the Parties with respect thereto.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

(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.

 

17

 

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

 

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

 

18

 

SIGNATURE PAGE TO

EMPLOYMENT AGREEMENT

 

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

 

	
   

  	
  AMERICAN CAPITAL ACCESS
  SERVICE

  
	
   

  	
  CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ ALAN S. ROSEMAN

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  ACA
  CAPITAL HOLDINGS, INC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ ALAN S. ROSEMAN

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  ACA
  FINANCIAL GUARANTY CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ ALAN S. ROSEMAN

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
  /s/
  Laura Schwartz

  	
   

  
	
   

  	
  LAURA
  SCHWARTZ

  

 

19

 

Exhibit A

 

GENERAL RELEASE

 

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

 

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

 

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

 

20

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

21

 

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

 

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

 

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

 

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

 

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

 

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

 

1.                                       I HAVE READ IT CAREFULLY;

 

22

 

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

 

3.                                       I VOLUNTARILY CONSENT TO EVERYTHING IN IT;

 

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

 

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

 

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

 

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

 

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

 

	
  NAME:

  	
   

  	
   

  
	
   

  
	
   

  
	
  DATE:

  	
   

  	
   

  

 

23

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