Employment Agreement


     EMPLOYMENTAGREEMENT (this “Agreement”), dated as of June 30, 2006 (the “Effective Date”),between FIRST ALBANY COMPANIES INC., a New York corporation (the “Company”), and BRIAN COAD (the“Executive”).
W I T N E S S E T H:
          WHEREAS, the Company desires to employ the Executive as its Chief Financial Officer so that itwill have the benefit of his ability, experience and services, and the Executive is willing toenter into an agreement to that end, upon the terms and conditions hereinafter set forth.
          NOW, THEREFORE, in consideration of good and valuable consideration, the receipt andsufficiency of which are hereby acknowledged, the parties hereby covenant and agree as follows:
  1.   Employment
     The Company hereby agrees to employ the Executive as the Chief Financial Officer of theCompany, and the Executive hereby agrees to be employed by the Company in such capacity, on andsubject to the terms and conditions of this Agreement.
  2.   Agreement Term
     The period of this Agreement (the “Agreement Term”) shall commence on the Effective Date andshall expire on the second anniversary of the Effective Date. At least 90 days prior to expirationof the Agreement Term, each party hereto shall give notice to the other party of his or itsintention to (i) enter into a new employment agreement at the expiration of the Agreement Term, or(ii) terminate the Agreement at the expiration of the Agreement Term. The period of theExecutive’s employment hereunder shall be hereinafter referred to as the “Employment Period.”
  3.   Position, Duties and Responsibilities
     (a)      The Executive shall serve as, and with the title, office and authority of, the ChiefFinancial Officer of the Company. The Executive shall also hold such title, office and authoritywith the Company’s subsidiaries and its successors.
     (b)      The Executive shall have all the powers, authority, duties and responsibilitiesincident to the position and office of Chief Financial Officer of the Company set forth in theCompany’s by-laws. The Executive shall report directly to the Company’s Chief Executive Officer.
     (c)      The Executive agrees to devote substantially all of his business time, efforts andskills to the performance of his duties and responsibilities under this Agreement;provided, however, that nothing in this Agreement shall preclude the Executive fromdevoting reasonable



periods required for (i) participating in professional, educational, philanthropic, publicinterest, charitable, social or community activities, (ii) serving as a member of the board ofdirectors of other corporations, or (iii) managing his personal investments or other personalbusiness so long as these activities, individually or in the aggregate, do not materially interferewith the discharge of the Executive’s duties hereunder.
     (d)      After the Effective Date of this Agreement and prior to August 31, 2007, theExecutive shall perform his duties approximately (i) 40% of the time at the offices of the Companylocated in Albany, New York, and (ii) 60% of the time at the offices of the Company located in NewYork City, but from time to time the Executive may be required to travel to other locations in theproper conduct of his responsibilities under this Agreement. After August 31, 2007, the ChiefExecutive Officer may require Executive to relocate, and upon such direction the Executive shallrelocate, his principal office location to the Company’s offices located in New York City, it beingagreed that from time to time the Executive may be required to travel to other locations in theproper conduct of his responsibilities under this Agreement.
  4.   Compensation and Benefits
     In consideration of the services rendered by the Executive during the Employment Period, theCompany shall pay or provide the Executive the compensation and benefits set forth below.
     (a)      Base Salary. The Company shall pay the Executive a minimum base salary (the“Base Salary”) equal to $200,000 per annum. The Compensation Committee of the Board (the“Compensation Committee”) will review the Base Salary at least annually during the EmploymentPeriod with a view toward consideration of merit increases as the Compensation Committee deemsappropriate. The Base Salary shall be paid in accordance with the normal payroll practices of theCompany.
     (b)      Annual Bonuses. The Company shall provide the Executive with the opportunityto earn an annual bonus for each fiscal year of the Company ending during the Employment Period.The annual bonus will be based upon a target bonus amount established by the Board. The bonusobjectives for Executive’s annual bonus for any particular year will be developed by the Boardafter good faith consultation with the Chief Executive Officer consistent with the Company’sstrategic plan.
     (c)      Employee Benefits. The Executive shall be entitled to participate in allemployee benefit plans, programs, practices or arrangements of the Company in which other similarlysituated senior executives of the Company are eligible to participate from time to time, including,without limitation, any qualified or non-qualified pension or savings plans, any death benefit ordisability benefit plans, any medical, dental, health or other welfare plans that are approved bythe Compensation Committee, on terms and conditions at least as favorable to the Executive as areprovided to other similarly situated senior executives of the Company.
     (d)      Fringe Benefits; Vacation. The Executive shall be entitled to fringebenefits and perquisites at the same level as are generally made available to senior executives ofthe



Company. The Executive shall be entitled to the vacation time in accordance with the policythat applies to senior executives of the Company generally.
     (e)      Relocation Expenses. The Executive shall be reimbursed for all reasonable,documented, out-of-pocket expenses incurred with respect to the Executive’s relocation to the NewYork City area (i.e. broker’s commissions associated with buying and selling Executive’s home,transporting Executive’s household goods and vehicles, other incidental expenses); provided thatthe maximum amount the Company shall reimburse the Executive pursuant to the first sentence of thisSection 4(e) is $100,000. In addition to amounts payable under the preceding sentence, the Companyshall gross-up the Executive for all federal, state and local taxes on any non-deductible amountspaid to the Executive under this Section 4(e) that are treated as taxable income to the Executive.
  5.   Equity Incentives
     Effective as of the Effective Date, the Executive shall be granted 30,000 shares of restrictedcommon stock of the Company (the “Restricted Stock”). The Restricted Stock shall vest in two equalinstallments on each of the first and second anniversaries of the Effective Date, and shall becomefully vested upon a Change of Control (as defined under the Company’s 1999 Long-Term Incentive Plan)(“Change of Control”). The Executive shall also be eligible for future awards under the Company’sequity-based incentive plans, as determined on an annual basis by the Compensation Committee in itssole discretion.
  6.   Termination of Employment
     The Employment Period may be terminated upon the occurrence of any of the following events:
     (a)      Termination for Cause. The Company may terminate the Executive’s employmenthereunder for Cause. For purposes of this Agreement, the Executive shall be considered to beterminated for “Cause” only upon (i) the Executive’s conviction of, or plea of guilty or nolocontendere to, a felony under the laws of the United States or any state thereof, whether or notappeal is taken, (ii) the Executive’s conviction of, or plea of guilty or nolo contendere to, aviolation of criminal law involving the Company and its business, (iii) the willful materialmisconduct of the Executive or the Executive’s willful violation of material Company policies, ineither case which has a demonstrable adverse effect on the Company; (iv) the Executive’s continuedfailure to perform his duties (except as provided in Section 6(e)) hereunder after provision ofwritten notice by the Company requesting such performance; or (v) the willful fraud or materialdishonesty of the Executive in connection with his performance of duties to the Company.
     However, in no event shall the Executive’s employment be considered to have been terminated for“Cause” unless and until the Executive receives a copy of a resolution adopted by the Board findingthat, in the good faith opinion of the Board, the Executive is guilty of acts or omissionsconstituting Cause, which resolution has been duly adopted by an affirmative vote of a majority ofthe Board, excluding the Executive and any individual alleged to have participated in the actsconstituting “Cause.” Any such vote shall be taken at a meeting of the Board called and held for



such purpose, after reasonable written notice is provided to the Executive setting forth inreasonable detail the facts and circumstances claimed to provide a basis of termination for Causeand the Executive is given an opportunity, together with counsel, to be heard before the Board.
     (b)      Termination without Cause. The Board shall have the right to terminate theExecutive’s employment hereunder other than for Cause at any time, subject to the consequences ofsuch termination as set forth in this Agreement.
     (c) Resignation for Good Reason. The Executive may voluntarily terminate hisemployment hereunder for Good Reason. For purposes of this Agreement, “Good Reason” shall mean:
     (i) the assignment to the Executive of any duties materially inconsistent with theExecutive’s position (including status, offices, titles or reporting relationships),authority, duties or responsibilities as contemplated by Section 3 hereof, any adversechange in the Executive’s reporting responsibilities, or any action by the Company thatresults in a material diminution in such position, authority, duties or responsibilities;provided that the Executive shall not have Good Reason under this clause (i) if,after a Change of Control, the Executive continues as the senior most financial officer ofthe business of the Company and its subsidiaries as conducted immediately prior to theChange of Control;
     (ii) without limitation or any other provision of this Section 6(c), any failure by theCompany to comply with its obligations under Sections 4, 5, 8, 12(a) or 18 hereof;
     (iii) the relocation, without the consent of the Executive, of the Executive’sprincipal business office to a location outside of New York City;
     (iv) any failure to accomplish the following elements of the previously approved Boardrestructuring: (A) three individuals who are members of the Board on the Effective Date (allmembers collectively, “Current Members”) shall cease to serve on the Board effective on orbefore the 90th day following the Effective Date; (B) two other Current Members shall ceaseto serve on the Board, effective either before or promptly after the Chief Executive Officerhas proposed to the Board director candidates to be appointed in the resigning directors’place, such director candidates to be promptly appointed or elected to the Board; and (C)one other Current Member shall cease to serve on the Board before or effective on the dateof the Company’s 2007 annual meeting of stockholders (the “Annual Meeting”), provided thatthe Chief Executive Officer has identified a director candidate to take the resigningdirector’s place, such director candidate is appointed to the Board or is nominated by theBoard for approval by the stockholders at the Annual Meeting; and in the case of clauses (B)and (C) above, subject to the condition that (I) such director candidate(s) must be (A)ready, willing and able to serve on the Board, and (B) reasonably qualified by education,background and training to serve on the Board and (II) the appointment or election of suchdirector candidate(s) not violate law or any exchange listing requirement applicable to theCompany;



     (v) until the earlier of the completion of the Board restructuring described in clause(iv) or the date immediately following the Annual Meeting, the Board, by action or omission,either overrules, vetoes, countermands, obstructs, constrains or otherwise frustrates ordelays, in any material respect, the Chief Executive Officer’s good faith efforts toaccomplish any material aspect of the strategic plan approved by resolution of the Board onJune 29, 2006; and
     (vi) the Termination without Cause of Peter McNierney as the Company’s Chief ExecutiveOfficer.
However, in no event shall the Executive be considered to have terminated his employment for “GoodReason” unless and until the Company receives written notice from the Executive identifying inreasonable detail the acts or omissions constituting “Good Reason” and the provision of thisAgreement relied upon, and, to the extent such circumstance is susceptible to cure, such acts oromissions are not cured by the Company within 15 days of the Company’s receipt of such notice.
     (d) Resignation without Good Reason. The Executive may voluntarily terminate hisemployment hereunder for any reason at any time, including for any reason that does not constituteGood Reason.
     (e) Disability. The Executive’s employment hereunder shall terminate upon hisDisability. For purposes of this Agreement, “Disability” shall mean the inability of the Executiveto perform his duties to the Company on account of physical or mental illness or incapacity for aperiod of 180 calendar days, whether or not consecutive, during any 365 day period. TheExecutive’s employment hereunder shall be deemed terminated by reason of Disability on the last dayof the applicable period; provided, however, in no event shall the Executive beterminated by reason of Disability unless the Executive receives written notice from the Company,at least 15 days in advance of such termination, stating its intention to terminate the Executivefor reason of Disability.
     (f) Death. The Executive’s employment hereunder shall terminate upon his death.
  7.   Compensation upon Termination of Employment
     In the event the Executive’s employment by the Company is terminated during the AgreementTerm, the Executive shall be entitled to the severance payments and benefits specified below:
     (a)      Resignation for Good Reason; Termination without Cause. In the event theExecutive voluntarily terminates his employment hereunder for Good Reason or is terminated by theCompany other than for Cause, death or Disability, the Company shall pay the Executive and providehim with the following:
     (i) Accrued Rights. Upon the Executive’s termination of employment, theCompany shall pay the Executive a lump-sum amount equal to the sum of (A) his earned butunpaid Base Salary through the date of termination, (B) any earned but unpaid annual bonusfor any completed fiscal year, and (C) any unreimbursed business expenses or



other amounts due to the Executive from the Company as of the date of termination underany written Company policy or written agreement with the Executive. In addition, theCompany shall provide to the Executive all payments, rights and benefits due as of the dateof termination under the terms of the Company’s employee and fringe benefit plans andprograms in which the Executive participated during the Employment Period (together with thelump-sum payments described above, the “Accrued Rights”).
     (ii) Severance Payment. The Company shall pay the Executive a lump-sum paymentequal to 1.5 times the sum of (i) his then-current annual Base Salary and(ii) the average of the annual bonus amounts previously paid or payable to the Executive inrespect of the three most recently completed fiscal years or$150,000, whichever is greater. Such lump-sumseverance payments shall be made within five business days following the effective date oftermination of employment. The Executive shall also be entitled to a lump-sum payment ofthe pro-rata portion of the annual bonus the Executive would have earned if he had remainedemployed by the Company through the end of the applicable fiscal year, determined in thesame manner as for other senior executives of the Company. Such payment shall be made atthe time bonuses for the relevant fiscal year are made to other senior executives of theCompany. As a condition to receiving benefits under this Section 7(a)(ii), the Executiveshall be required to deliver an irrevocable general release of claims against the CompanyGroup (as defined below) and their current and former directors, officers and employees, inthe same form as attached hereto as Exhibit A.
     (iii) Continued Benefits. For the 18-month period following the date of theExecutive’s termination of employment, the Company shall continue to provide the Executiveand his eligible dependents with the medical, dental, disability and life insurancecoverages that were provided to the Executive immediately prior to termination of employment(with the same employee cost-sharing as active employees of the Company during such period),subject to cancellation by the Company in the event that the Executive becomes eligible forcoverage under plans of another employer. Following the expiration of such 18-month period,the Executive and his eligible dependents shall be entitled to continue participating in theCompany’s group health plans in accordance with the health care continuation requirements ofthe Consolidated Omnibus Reconciliation Act of 1985 (“COBRA”).
     (iv) Vesting of Equity. At the time of his termination of employment, anyunvested portion of the Restricted Stock or any other restricted stock, stock options orother equity-based awards held by the Executive at the time of his termination of employmentshall become fully vested and exercisable, notwithstanding the terms of any award agreementor equity plan applicable to such awards.
     (v) Other Benefits. Any deferred compensation benefits accrued to theExecutive as of the date of his termination of employment shall become fully vested andpayable upon his termination of employment.
     (b)      Resignation without Good Reason; Termination for Cause or upon Death orDisability. In the event the Executive voluntarily terminates his employment hereunder other



than for Good Reason, is terminated by the Company for Cause, or is terminated on account ofDisability or death, the Company shall pay the Executive and provide him with any Accrued Rightsunder Section 7(a)(i).
  8.   Parachute Tax Indemnity
     (a) If it shall be determined that any amount paid, distributed or treated as paid ordistributed by the Company to or for the Executive’s benefit (whether paid or payable ordistributed or distributable pursuant to the terms of this Agreement or otherwise, but determinedwithout regard to any additional payments required under this Section 8) (a “Payment”) would besubject to the excise tax imposed by Section 4999 of the Code or any interest or penalties areincurred by the Executive with respect to such excise tax (such excise tax, together with any suchinterest and penalties, being hereinafter collectively referred to as the “Excise Tax”), then theExecutive shall be entitled to receive an additional payment (a “Gross-Up Payment”) in an amountsuch that after payment by the Executive of all federal, state and local taxes (including anyinterest or penalties imposed with respect to such taxes), including, without limitation, anyincome taxes (and any interest and penalties imposed with respect thereto) and Excise Tax imposedupon the Gross-Up Payment, the Executive retains an amount of the Gross-Up Payment equal to theExcise Tax imposed upon the Payments.
     (b) All determinations required to be made under this Section 8, including whether and when aGross-Up Payment is required and the amount of such Gross-Up Payment and the assumptions to beutilized in arriving at such determination, shall be made by a nationally recognized accountingfirm appointed by the Company (the “Accounting Firm”), which shall provide detailed supportingcalculations both to the Company and the Executive within 15 business days of the receipt of noticefrom the Executive that there has been a Payment, or such earlier time as is requested by theparties. The Accounting Firm shall not be an accounting firm serving as accountant or auditor forthe Company or for the individual, entity or group affecting the Change of Control. All fees andexpenses of the Accounting Firm shall be borne by the Company. Any Gross-Up Payment, as determinedpursuant to this Section 8, shall be paid by the Company to the Executive within five days of thereceipt of the Accounting Firm’s determination. Any determination by the Accounting Firm shall bebinding upon the Company and the Executive. As a result of the uncertainty in the application ofSection 4999 of the Code at the time of the initial determination by the Accounting Firm hereunder,it is possible that Gross-Up Payments which will not have been made by the Company should have beenmade (“Underpayment”), consistent with the calculations required to be made hereunder. In theevent that the Company exhausts its remedies pursuant to this Section 8 and the Executivethereafter is required to make a payment of any Excise Tax, the Accounting Firm shall determine theamount of the Underpayment that has occurred and any such Underpayment shall be promptly paid bythe Company to or for the Executive’s benefit.
     (c) The Executive shall notify the Company in writing of any claim by the Internal RevenueService that, if successful, would require the payment by the Company of the Gross-Up Payment.Such notification shall be given as soon as practicable but no later then ten business days afterthe Executive is informed in writing of such claim and shall apprise the Company of the nature ofsuch claim and the date on which such claim is requested to be paid. The Executive shall not paysuch claim prior to the expiration of the 30-day period following the date on which



it gives such notice to the Company (or such shorter period ending on the date that anypayment of taxes with respect to such claim is due). If the Company notifies the Executive inwriting prior to the expiration of such period that it desires to contest such claim, the Executiveshall: (i) give the Company any information reasonably requested by the Company relating to suchclaim; (ii) take such action in connection with contesting such claim as the Company shallreasonably request in writing from time to time, including, without limitation, accepting legalrepresentation with respect to such claim by an attorney reasonably selected by the Company; (iii)cooperate with the Company in good faith in order to effectively contest such claim; and (iv)permit the Company to participate in any proceeding relating to such claim; provided,however, that the Company shall bear and pay directly all costs and expenses (includingadditional interest and penalties) incurred in connection with such contest and shall indemnify andhold the Executive harmless, on an after-tax basis, from any Excise Tax or income tax (includinginterest and penalties with respect thereto) imposed as a result of such representation and paymentof costs and expense. Without limitation on the foregoing provisions of this Section 8, the Companyshall control all proceedings taken in connection with such contest and, at its sole option, maypursue or forego any and all administrative appeals, proceedings, hearings and conferences with thetaxing authority in respect of such claim and may, at its sole option, either direct the Executiveto pay the tax claimed and sue for a refund or contest the claim in any permissible manner, and theExecutive agrees to prosecute such contest to a determination before any administrative tribunal,in a court of initial jurisdiction and in one or more appellate courts, as the Company shalldetermine; provided, however, that if the Company directs the Executive to pay suchclaim and sue for a refund, the Company shall, to the extent permitted by applicable law, advancethe amount of such payment to the Executive, on an interest-free basis, and shall indemnify andhold the Executive harmless, on an after-tax basis, from any Excise Tax or income tax (includinginterest or penalties with respect thereto) imposed with respect to such advance or with respect toany imputed income with respect to such advance; and further provided that any extension of thestatute of limitations relating to payment of taxes for the Executive’s taxable year with respectto which such contested amount is claimed to be due is limited solely to such contested amount.Furthermore, the Company’s control of the contest shall be limited to issues with respect to whicha Gross-Up Payment would be payable hereunder and the Executive shall be entitled to settle orcontest, as the case may be, any other issue raised by the Internal Revenue Service or any othertaxing authority, so long as such action does not have a material adverse effect on the contestbeing pursued by the Company.
     (d) If, after the Executive’s receipt of an amount advanced by the Company pursuant to thisSection 8, the Executive becomes entitled to receive any refund with respect to such claim, theExecutive shall (subject to the Company’s complying with the requirements of this Section 8)promptly pay to the Company the amount of such refund (together with any interest paid or creditedthereon after taxes applicable thereto). If, after the Executive’s receipt of an amount advancedby the Company pursuant to this Section 8, a determination is made that the Executive shall not beentitled to any refund with respect to such claim and the Company does not notify the Executive inwriting of its intent to contest such denial of refund prior to the expiration of 30 days aftersuch determination, then such advance shall be forgiven and shall not be required to be repaid andthe amount of such advance shall offset, to the extent thereof, the amount of Gross-Up Paymentrequired to be paid.
  9.   No Mitigation or Offset



      The Executive shall not be required to seek other employment or to reduce any severancebenefit payable to him under Section 7 hereof, and, except as provided in Section 7(a)(iii) hereof,no such severance benefit shall be reduced on account of any compensation received by the Executivefrom other employment. The Company’s obligation to pay severance benefits under this Agreementshall not be reduced by any amount owed by the Executive to the Company.
  10.   Tax Withholding; Method of Payment
     All compensation payable pursuant to this Agreement shall be subject to reduction by allapplicable withholding, social security and other federal, state and local taxes and deductions.Any lump-sum payments provided for in this Agreement shall be made in a cash payment, net of anyrequired tax withholding, no later than the fifth business day following the Executive’s date oftermination or other payment date.
  11.   Restrictive Covenants
     (a) Confidential Information. The Executive acknowledges that during the course ofhis employment by the Company he has or will have access to and knowledge of certain informationand data which the Company considers confidential and the release of such information or data tounauthorized persons would be extremely detrimental to the Company. As a consequence, theExecutive hereby agrees and acknowledges that he owes a duty to the Company not to disclose, andagrees that without the prior written consent of the Company, at any time, either during or afterhis employment with the Company, he will not communicate, publish or disclose, to any personanywhere or use, any Confidential Information (as hereinafter defined), except as may be necessaryor appropriate to conduct his duties hereunder, provided the Executive is acting in good faith andin the best interest of the Company, or as may be required by law or judicial process. TheExecutive will use his best efforts at all times to hold in confidence and to safeguard anyConfidential Information from falling into the hands of any unauthorized person and, in particular,will not permit any Confidential Information to be read, duplicated or copied. The Executive willreturn to the Company all Confidential Information in the Executive’s possession or under theExecutive’s control whenever the Company shall so request, and in any event will promptly returnall such Confidential Information if the Executive’s relationship with the Company is terminatedfor any or no reason and will not retain any copies thereof. For purposes hereof the term“Confidential Information” shall mean any information or data used by or belonging or relating tothe Company or any of its subsidiaries or Affiliates (the “Company Group”) that is not knowngenerally to the industry in which the Company is or may be engaged and which the Company maintainson a confidential basis, including, without limitation, any and all trade secrets, proprietary dataand information relating to the Company’s business and products, price list, customer lists,processes, procedures or standards, know-how, manuals, business strategies, records, drawings,specifications, designed, financial information, whether or not reduced to writing, or informationor data which the Company advises the Executive should be treated as confidential information.
     (b) Nonsolicitation. During the Employment Period and for the twelve-month periodfollowing the end of the Employment Period, the Executive shall not, directly or indirectly,without the express written consent of the Company, solicit any person who is or shall be in the



employ or service of the Company to leave such employ or service for any other employmentopportunity.
     (c) Work Product. All documents, data, recordings, or other property, whether tangibleor intangible, including all information stored in electronic form, obtained or prepared by or forthe Executive and utilized by the Executive in the course of the Executive’s employment with theCompany Group shall remain the exclusive property of the Company. The Executive shall return suchproperty that is in the Executive’s possession or control promptly after receipt of a writtenrequest from the Company and, in any event, upon the Executive’s termination of employment for anyreason. The results and proceeds of the Executive’s services to the Company Group hereunder,including, without limitation, any works of authorship related to the Company resulting from theExecutive’s services during the Executive’s employment with the Company and/or any of itsaffiliates and any works in progress, shall be works-made-for-hire and the Company shall be deemedthe sole owner throughout the universe of any and all rights of whatsoever nature therein, whetheror not now or hereafter known, existing, contemplated, recognized or developed, with the right touse the same in perpetuity in any manner the Company determines in its sole discretion without anyfurther payment to the Executive whatsoever. If, for any reason, any of such results and proceedsshall not legally be a work-for-hire and/or there are any rights which do not accrue to the Companyunder the preceding sentence, then the Executive hereby irrevocably assign and agree to assign anyand all of the Executive’s right, title and interest thereto, including, without limitation, anyand all copyrights, patents, trade secrets, trademarks and/or other rights of whatsoever naturetherein, whether or not now or hereafter known, existing, contemplated, recognized or developed tothe Company, and the Company shall have the right to use the same in perpetuity throughout theuniverse in any manner the Company determines without any further payment to the Executivewhatsoever. The Executive shall, from time to time, as may be requested by the Company and at theCompany’s sole expense, do any and all things which the Company may deem useful or desirable toestablish or document the Company’s exclusive ownership of any an all rights in any such resultsand proceeds, including, without limitation, the execution of appropriate copyright and/or patentapplications or assignments. To the extent the Executive have any rights in the results andproceeds of the Executive’s services to the Company that cannot be assigned in the manner describedabove, the Executive unconditionally and irrevocably waive the enforcement of such rights. ThisSection 11(c) is subject to, and shall not be deemed to limit, restrict or constitute any waiver bythe Company of any rights of ownership to which the Company may be entitled by operation of law byvirtue of the Company or any of its affiliates being the Executive’s employer.
     (d) Specific Performance. Recognizing the irreparable damage will result to theCompany in the event of the breach or threatened breach of any of the foregoing covenants, and thatthe Company’s remedies at law for any such breach or threatened breach will be inadequate, theCompany, in addition to such other remedies which may be available to them, shall be entitled to aninjunction, including a mandatory injunction, to be issued by any court of competent jurisdictionordering compliance with this Agreement or enjoining and restraining the Executive from thecontinuation of such breach. The Executive acknowledges the importance to the Company of theprovisions of this Section 11 and agrees that he shall not at any time contest the reasonablenessof these provisions or otherwise claim that such provisions are not enforceable under applicablelaw.



  12.   Successors
     (a)      This Agreement shall be binding upon and shall inure to the benefit of the Company,its successors and any person, firm, corporation or other entity which succeeds to all orsubstantially all of the business, assets or property of the Company. The Company will require anysuccessor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all orsubstantially all of the business, assets or property of the Company, to expressly assume and agreeto perform this Agreement in the same manner and to the same extent that the Company would berequired to perform it if no such succession had taken place. As used in this Agreement, the“Company” shall mean the Company as hereinbefore defined and any successor to its business, assetsor property as aforesaid which executes and delivers an agreement provided for in this Section 12or which otherwise becomes bound by all the terms and provisions of this Agreement by operation oflaw. This Agreement shall not be assignable by the Company (other than to a successor by merger,consolidation or purchase) without the prior written consent of the Executive.
     (b) This Agreement and all rights of the Executive hereunder shall inure to the benefit of andbe enforceable by the Executive’s personal or legal representatives, executors, administrators,successors, heirs, distributees, devisees and legatees. If the Executive should die while anyamounts are due and payable to him hereunder, all such amounts, unless otherwise provided herein,shall be paid to the Executive’s designated beneficiary or, if there be no such designatedbeneficiary, to the legal representatives of the Executive’s estate. This Agreement shall not beassignable by the Executive.
  13.   Entire Agreement
     This Agreement contains the entire understanding of the parties with respect to the subjectmatter hereof and, except as specifically provided herein, cancels and supersedes any and all otheragreements between the parties with respect to the subject matter hereof. Any amendment ormodification of this Agreement shall not be binding unless in writing and signed by the Company andthe Executive.
  14.   Severability
     In the event that any provision of this Agreement is determined to be invalid orunenforceable, the remaining terms and conditions of this Agreement shall be unaffected and shallremain in full force and effect, and any such determination of invalidity or unenforceability shallnot affect the validity or enforceability of any other provision of this Agreement.
  15.   Notices
     All notices which may be necessary or proper for either the Company or the Executive to giveto the other shall be in writing and shall be deemed given (i) when personally delivered to therecipient (provided a written acknowledgement of receipt is obtained), (ii) one (1) business dayafter being sent by a nationally recognized overnight courier (provided that a writtenacknowledgement of receipt is obtained by the overnight courier) or (iii) four (4) business daysafter mailing by certified or registered mail, postage prepaid, return receipt requested, to theExecutive at the address on record with the Company, and shall be sent in the manner described



above to the Secretary of the Company at the Company’s principal executives offices ordelivered by hand to the Secretary of the Company.
  16.   Governing Law
     This Agreement shall be governed by and enforceable in accordance with the laws of the Stateof New York, without giving effect to the principles of conflict of laws thereof.
  17.   Arbitration
     Any controversy or claim arising out of, or related to, this Agreement, or the breach thereof,shall be settled by binding arbitration in the City of New York, New York, in accordance with therules then obtaining of the American Arbitration Association, and the arbitrator’s decision shallbe binding and final, and judgment upon the award rendered may be entered in any court havingjurisdiction thereof.
  18.   Indemnification
     The Company shall indemnify and hold harmless the Executive to the fullest extent permitted byapplicable law or the Company’s by-laws and certificate of incorporation for any action or inactionof the Executive while serving as an officer or director of the Company. In addition, the Companyshall cover the Executive under directors’ and officers’ liability insurance both during and, whilepotential liability exists, after the term of employment in the same amount and to the same extentas the Company covers its other officers and directors.
  19.   Legal Fees and Expenses
     The parties agree that in the event of any claim regarding this Agreement or the Executive’sperformance of services for the Company, each party shall bear its own costs and expenses incurredin connection with such claim.
     IN WITNESS WHEREOF, the Company and the Executive have executed this Agreement as of the datefirst above written.
  /s/Brian Coad
  Brian Coad
  /s/ Peter McNierney
  By:  Peter McNierney
  Title: President and ChiefExecutive Officer