liabilities, losses, damages, costs and expenses (including, without limitation, attorneys’ feesand expenses) arising out of or relating to the foregoing responsibilities of Consultant.     5. Tower shall indemnify, defend and hold Consultant and his successors, assigns, heirs,executors, administrators and legal representatives harmless from and against any and all claims,liabilities, losses, damages, costs and expenses (including, without limitation, attorneys’ feesand expenses) arising out of or relating to (a) the foregoing responsibilities of Consultant,except to the extent Consultant has acted with gross negligence or willful misconduct, and (b) anybreach by Tower of its obligations under paragraph 3.     6. Consultant is not an employee of Tower and, except as expressly provided in the SeparationAgreement, is not entitled to participate in any of Tower’s employee benefit plans including, butnot limited to, any retirement, pension, profit sharing, group insurance, health insurance orsimilar plans that have been or may be instituted by Tower for the benefit of its employees. Towerwill reimburse Consultant for all reasonable expenses incurred by Consultant and approved inadvance by Tower, upon the receipt by Tower of appropriate supporting documentation acceptable toTower, in connection with Consultant’s performance of consulting services hereunder. For purposesof satisfying Section 409A of the Internal Revenue Code of 1986, as amended, and any relatedregulations or other effective guidance promulgated thereunder (“Section 409A”), (i) allreimbursement payments, if any, shall in all events be made no later than the end of the calendaryear following the calendar year in which the applicable expense is incurred, (ii) the amount ofexpenses eligible for reimbursement during any calendar year may not affect the amount of expenseseligible for reimbursement in any other calendar year, and (iii) the right to reimbursement underthis paragraph 6 is not subject to liquidation or exchange for another benefit.     7. All proposals, research, records, reports, recommendations, manuals, findings, evaluations,forms, reviews, information, data and written materials originated or prepared by Consultant forand in the performance of the consulting services hereunder shall become the exclusive property ofTower, and shall be considered to be works for hire belonging to Tower, and Consultant shallrelinquish and hereby assigns any and all right, title, and interest in and to such material toTower. Consultant agrees to execute any and all documents prepared by Tower and to do any and allother lawful acts as may be required by Tower to establish, document and protect such rights ofTower.     8. Consultant agrees not to disclose (except for the purpose of performing hisresponsibilities under this Consulting Agreement), nor use for Consultant’s benefit or the benefitof any other person or entity, any information received from Tower which is confidential orproprietary and (i) has not been disclosed publicly by Tower, (ii) is not otherwise a matter ofpublic knowledge or (iii) is a matter of public knowledge but which Consultant knows or has reasonto know became a matter of public knowledge through an unauthorized disclosure. Proprietary orconfidential information shall include but not be limited to information the unauthorizeddisclosure or use of which would reduce the value of such information to Tower. Such informationincludes, without limitation, Tower’s client lists, its trade secrets, any confidential informationabout (or provided by) any client or prospective or former client of Tower, information concerning Tower’s business or financial affairs, including its books andrecords, commitments, procedures, plans and prospects, products developed by Tower, securities
 

 
positions, or current or prospective transactions or business of Tower. Consultant hereby confirmsthat on or, immediately upon Tower’s request, at any time prior to the conclusion of the Term,Consultant will deliver to Tower and retain no copies of any written materials, records anddocuments (including those that are electronically stored) made by Consultant or coming intoConsultant’s possession during the Term which contain or refer to any such proprietary orconfidential information. Consultant further confirms that on or, immediately upon Tower’srequest, at any time prior to the conclusion of the Term, Consultant will deliver to Tower any andall property and equipment of Tower, which is in Consultant’s possession, but excludingConsultant’s laptop computer.     9. Except for matters covered under paragraphs 7 or 8 hereof, in the event of any dispute ordifference between Tower and Consultant with respect to the subject matter of this ConsultingAgreement and the enforcement of rights hereunder, either Consultant or Tower may, by writtennotice to the other, require such dispute or difference to be submitted to arbitration. Thearbitrator or arbitrators shall be selected by agreement of the parties or, if they cannot agree onan arbitrator or arbitrators within 30 days after the date arbitration is required by either party,then the arbitrator or arbitrators shall be selected by the American Arbitration Association uponthe application of Consultant or Tower. The determination reached in such arbitration shall befinal and binding on both parties without any right of appeal or further dispute. Execution of thedetermination by such arbitrator or arbitrators may be sought in any court of competentjurisdiction. The arbitrator or arbitrators shall not be bound by judicial formalities and mayabstain from following the strict rules of evidence and shall interpret this Consulting Agreementas an honorable engagement and not merely as a legal obligation. Unless otherwise agreed by theparties, any such arbitration shall take place in New York, New York.     10. If any of the provisions, terms or clauses of this Consulting Agreement are declaredillegal, unenforceable or ineffective in a legal forum, those provisions, terms and clauses shallbe deemed severable, such that all other provisions, terms and clauses of this Consulting Agreementshall remain valid and binding upon both parties.     11. All notices and other communications hereunder shall be in writing and shall be mailed byfirst class, registered or certified mail, return receipt requested, or postage prepaid orpersonally delivered (including delivery by overnight couriers such as Federal Express), addressedas follows:If to Tower:Tower Group, Inc.