Document:

Resignation and Restrictive Covenants Agreement - Jacqueline C. Adair

    RESIGNATION
      AND RESTRICTIVE COVENANTS AGREEMENT

     

    THIS
      RESIGNATION AND RESTRICTIVE COVENANTS AGREEMENT (this “Agreement”) is dated as
      of  December 4, 2006, and is entered into by and between Jacqueline C.
      Adair (“Executive”), Direct General Corporation, a Tennessee corporation (the
“Company”), and Elara Holdings, Inc., a Delaware corporation (“Holdco” or
      "Parent"). 

     

    RECITALS

     

    WHEREAS,
      pursuant to that certain Agreement and Plan of Merger (the “Merger Agreement”)
      by and among the Company, Holdco, and Elara
      Merger Corporation, a Tennessee corporation, and a wholly-owned subsidiary
      of
      Holdco ("Merger
      Sub"),
      Merger
      Sub will be merged with and into the Company, with the Company surviving as
      a
wholly-owned
      subsidiary of Holdco
      (the
      "Merger");

     

    WHEREAS,
      as of
      the date hereof, Executive is employed as the Executive Vice President and
      Chief
      Operating Officer ("COO") of the Company and is subject to an Executive
      Employment Agreement with the Company, dated July 21, 2003 (the "Employment
      Agreement");

     

    WHEREAS,
      in
      connection with, and effective upon the consummation of, the Merger, Executive
      and the Company have entered into that certain license agreement (the "License
      Agreement") under which, among other things, Executive agrees to permit the
      Company to use, and to authorize other persons to use, the "Licensed Material,"
      as defined in the License Agreement, for the purposes of promotion, advertising,
      marketing, distribution and sale of "Titan Products," as defined in the License
      Agreement; 

     

    WHEREAS,
      in
      connection with, and upon the consummation of, the Merger, Executive will
      receive substantial consideration in exchange for the sale of her interest
      in
      the Company; and

     

    WHEREAS,
      the
      parties hereto desire that effective as of and contingent upon the consummation
      of the Merger, Executive shall cease being an employee and officer of the
      Company in all respects, including as Executive Vice President and COO.

     

    AGREEMENT

     

    NOW,
      THEREFORE,
      in
      consideration of the mutual covenants and promises contained herein and for
      other good and valuable consideration, the receipt and sufficiency of which
      are
      hereby acknowledged, the parties hereto, each intending to be legally bound
      hereby, agree as follows:

     

    1.  Resignation

     

    Executive
      hereby resigns as Executive Vice President and COO of the Company effective
      as
      of, and contingent upon, the consummation of the Merger and agrees that at
      such
      time she shall no longer be an employee or officer of the Company in any
      capacity. 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    2.  Severance
      Benefit

     

    The
      parties expressly acknowledge and agree that effective as of, and contingent
      upon, the consummation of the Merger, Executive's resignation pursuant to the
      terms and conditions set forth in this Agreement, and Executive's execution
      and
      non-revocation of a binding general waiver and release of claims, as required
      by
      the Employment Agreement, Executive shall be entitled to receive the payments
      and benefits set forth in Section 3.3 of the Employment Agreement, provided,
      however, that the Company and Executive expressly acknowledge and agree that,
      notwithstanding anything to the contrary in the Employment Agreement,
      Executive's coverage under the Consolidated Omnibus Budget Reconciliation Act
      of
      1986 ("COBRA") shall be limited to the extent such coverage is required under
      and shall be governed solely by that statute. 

     

    In
      addition to the severance benefits set forth in Section 3.3 of the Employment
      Agreement, as amended herein, Executive also may be entitled to certain
      additional benefits. Specifically, effective as of, and contingent upon, the
      consummation of the Merger, Executive's resignation pursuant to the terms and
      conditions set forth in this Agreement, and Executive's execution and
      non-revocation of a binding general waiver and release of claims, Executive
      shall be entitled to retain as her own property at no cost to her the following
      items of property currently being provided by the Company for use by Executive,
      provided that Executive shall be responsible for any and all taxes associated
      with her retention of such property: 

     

    
      	(a)  	
              any
                and all cellular telephones and corresponding cellular telephone
                numbers;

            

    

     

    
      	(b)  	
              the
                2006 Lincoln Navigator having the vehicle identification number of
                5LMFU27566LJ23930.

            

    

     

    3.  Exclusive
      Services, Non-Solicitation and Non-Disclosure of Confidential
      Information

     

    (a)  Executive
      agrees that from the date her employment terminates and continuing for a period
      of five (5) consecutive years, Executive shall not, either directly or
      indirectly, make known to any person, firm, corporation or other legal entity
      the names or addresses of any of the prospective (to Executive’s knowledge) or
      current customers, clients, insureds, insurers, reinsurers, brokers, lenders,
      suppliers, service providers, employees, agents, representatives, and/or
      shareholders of the Company or any of its affiliates (hereinafter collectively
      referred to as “Business Contacts”) or any other information pertaining to them.
      Executive further agrees that, for a period of five (5) years immediately
      following the date Executive’s employment with the Company terminates, Executive
      shall not, either directly or indirectly, solicit (to the extent that such
      solicitation in any way relates to or arises out of the provision — whether
      proposed or actual or otherwise — of products and/or services similar in kind or
      purpose to those provided or expected to be provided by the Company and/or
      any
      of its affiliates), divert, take away, or attempt to solicit, divert, or take
      away any prospective (to Executive’s knowledge) or current Business Contacts or
      any persons or legal entities that were prospective (to Executive’s knowledge)
      or current Business Contacts at any point during Executive’s term of employment
      with the Company, either for Executive or for any other person, firm,
      corporation, or other legal entity. Nor shall Executive during the same period
      contact or attempt to contact any prospective (to Executive’s knowledge) or
      current Business Contacts for any reason in any way relating to or arising
      out
      of the provision (whether proposed or actual or otherwise) of products and/or
      services similar in kind or purpose to those provided or expected to be provided
      by the Company and/or any of its affiliates, other than ordinary course contact
      by Executive as a consumer.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (b)  Executive
      agrees that for a period of five (5) consecutive years from the date Executive's
      employment with the Company terminates, Executive shall not disrupt, damage,
      impair or interfere with the business of the Company and/or any of its
      affiliates, whether by way of interfering with or raiding their employees,
      disrupting their relationships with any prospective (to Executive’s knowledge)
      or current Business Contacts, or otherwise. Nor shall Executive during the
      same
      period either
      directly or indirectly solicit, induce, recruit, or encourage to leave the
      employment of the Company and/or any of its affiliates for any reason and/or
      to
      perform work for a competitor of the Company and/or any of its affiliates (as
      an
      employee, independent contractor, or otherwise) (such conduct is collectively
      referred to as “solicitation”) any person who is then employed by the Company
      and/or any of its affiliates or who left the employ of the Company and/or any
      of
      its affiliates less than one (1) year prior to the solicitation.

     

    (c)  Executive
      agrees that for a period of five (5) consecutive years from the date her
      employment with the Company terminates, she will not in any city, town, county,
      parish or other municipality in any state of the United States or any other
      place in the world that is indirectly or directly affected or reached by the
      activities or services rendered by Executive on behalf of the Company at any
      time during Executive's employment with the Company: (i) engage in a directly
      or
      indirectly competing business for Executive’s own account; (ii) enter the employ
      of, or render any consulting or any other services to, any entity that competes
      directly or indirectly with the Company and/or any of its affiliates; or (iii)
      become interested in any such entity in any capacity, including, without
      limitation, as an individual, partner, shareholder, officer, director,
      principal, agent, trustee or consultant; provided, however, that Executive
      may
      own, directly or indirectly, solely as a passive investment, securities of
      any
      entity traded on any national securities exchange if Executive is not a
      controlling person of, or a member of a group which controls, such entity and
      does not, directly or indirectly, own 5% or more of any class of securities
      of
      such entity.

     

    (d)  Executive
      acknowledges that, in her employment with the Company, she has occupied a
      position of trust and confidence with the Company and/or its affiliates and
      has
      received training that has enhanced her skill and experience. Executive agrees
      that she shall not without limitation in time or until such information shall
      have become public other than by Executive’s unauthorized disclosure, use,
      disclose or disseminate any trade secrets, confidential information or any
      other
      information of a secret, proprietary, confidential or generally undisclosed
      nature (hereinafter collectively referred to as “Confidential Information”)
      relating to the Company and/or any of its affiliates, or their respective
      businesses, contracts, projects, proposed projects, revenues, costs, operations,
      methods or procedures. Executive acknowledges that said information is
      specialized, unique in nature and of great value to the Company and/or its
      affiliates, and that such information gives the Company and/or its affiliates
      a
      competitive advantage in their businesses.

     

    (e)  Executive
      agrees that following the termination of her employment with the Company, she
      will not at any time, without the prior written consent of the Company,
      communicate to any person, any trade secrets, confidential information or any
      other information of a secret, proprietary, confidential or generally
      undisclosed nature relating to the Company and/or its affiliates and/or their
      businesses, or any other information referred to in subsection (d) of this
      Section, obtained by Executive during Executive’s employment by the Company that
      is not generally available public knowledge (other than by acts or omissions
      by
      Executive).

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (f)  Executive
      acknowledges and agrees that (i) the trade secrets and confidential and related
      information referred to in this Agreement and (ii) the relationships with the
      Business Contacts referenced in this Agreement each are of substantial value
      to
      the Company and/or its affiliates and that a breach of any of the terms and
      conditions of this Agreement relating to those subjects would cause irreparable
      harm to the Company and/or its affiliates, for which the Company and/or its
      affiliates would have no adequate remedy at law. Therefore, in addition to
      any
      other remedies that may be available to the Company and/or any of its affiliates
      under this Agreement or otherwise, the Company and/or its affiliates shall
      be
      entitled to obtain temporary restraining orders, preliminary and permanent
      injunctions and/or other equitable relief to specifically enforce Executive’s
      duties and obligations under this Agreement, or to enjoin any breach of this
      Agreement, without the need to post a bond or other security and without the
      need to demonstrate special damages. Furthermore, Executive agrees that any
      damages suffered by the Company and/or its affiliates as a result of Executive’s
      breach of Executive’s duties and obligations under this Agreement shall entitle
      the Company and/or its affiliates to offset such damages against any payments
      to
      be made pursuant to this Agreement or her Employment Agreement, to the extent
      permitted by applicable law.

     

    (g)  Executive
      and the Company intend that if any portion of the restrictions set forth in
      this
      Section 3 should, for any reason whatsoever, be declared invalid by an
      arbitrator or a court of competent jurisdiction, the validity or enforceability
      of the remainder of such restrictions shall not thereby be adversely affected,
      and Executive declares that in light of her knowledge of the Company and her
      position of trust and confidence as a founder and principal stockholder of
      the
      Company who, pursuant to the Merger will receive substantial consideration
      in
      exchange for the sale of her interest in the Company, the territorial and time
      limitations set forth in this Section 3 are reasonable and properly required
      for
      the adequate protection of the business of the Company and/or its affiliates.
      In
      the event that any such territorial or time limitation is deemed to be
      unreasonable by an arbitrator or a court of competent jurisdiction, Executive
      agrees to the reduction of the subject territorial or time limitation to the
      area or period which such arbitrator or court shall have deemed
      reasonable.

     

    (h)  All
      of
      the provisions of this Section 3 are in addition to any other written agreements
      on the subjects covered herein that Executive may have with the Company and/or
      any of its affiliates, and are not meant to and do not excuse any additional
      obligations that Executive may have under such agreements.

     

    4.  Return
      of Company Property

     

    Executive
      agrees, upon the termination of her employment with the Company, to return
      all
      physical, computerized, electronic or other types of records, documents,
      proposals, notes, lists, files and any and all other materials including,
      without limitation, computerized and/or electronic information that refers,
      relates or otherwise pertains to the Company and/or its affiliates, and any
      and
      all business dealings of said persons and entities. In addition, Executive
      shall
      return to the Company all property or equipment that Executive has been issued
      during the course of Executive’s employment or which Executive otherwise
      currently possesses, including, but not limited to, any computers, cellular
      phones, BlackBerries, PDAs, and/or pagers. Executive shall immediately deliver
      to the Company any such physical, computerized, electronic or other types of
      records, documents, proposals, notes, lists, files, materials, property and
      equipment that are in Executive’s possession. Executive acknowledges that
      Executive is not authorized to retain any physical, computerized, electronic
      or
      other types of copies of any such physical, computerized, electronic or other
      types of records, documents, proposals, notes, lists, files or materials, and
      is
      not authorized to retain any other property or equipment of the Company and/or
      its affiliates. Executive further agrees that Executive will immediately forward
      to the Company any business information regarding the Company and/or any of
      its
      affiliates that has been or is inadvertently directed to Executive following
      Executive’s last day of employment with the Company. The provisions of this
      Section 4 are in addition to any other written agreements on this subject that
      Executive may have with the Company and/or any of its affiliates, and are not
      meant to and do not excuse any additional obligations that Executive may have
      under such agreements. 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    5.  Cooperation
      in Third-Party Disputes

     

    At
      all
      times after Executive's employment with the Company has terminated, Executive
      shall cooperate with the Company and/or its affiliates and each of their
      respective attorneys or other legal representatives (collectively referred
      to as
“Attorneys”) in connection with any claim, litigation, or judicial or arbitral
      proceeding which is now pending or may hereinafter be brought or threatened
      against the Company and/or any of its affiliates by any third party. Executive’s
      duty of cooperation shall include, but shall not be limited to, (a) meeting
      with
      the Company’s and/or its affiliates’ Attorneys by telephone or in person at
      mutually convenient times and places in order to state truthfully Executive’s
      knowledge of the matters at issue and recollection of events; (b) appearing
      at
      the Company’s and/or its affiliates’ and/or their Attorneys’ request (and, to
      the extent possible, at a time convenient to Executive that does not conflict
      with the needs or requirements of Executive’s then-current employer) as a
      witness at depositions, trials or other proceedings, without the necessity
      of a
      subpoena, in order to state truthfully Executive’s knowledge of the matters at
      issue; and (c) signing at the Company’s and/or its affiliates’ and/or their
      Attorneys’ request declarations or affidavits that truthfully state the matters
      of which Executive has knowledge. The Company shall promptly reimburse Executive
      for Executive’s actual and reasonable travel or other out-of-pocket expenses
      that Executive may incur in cooperating with the Company and/or its affiliates
      and/or their Attorneys pursuant to this Section 5. The provisions of this
      Section 5 are in addition to any other written agreements on this subject that
      Executive may have with the Company and/or its affiliates, and are not meant
      to
      and do not excuse any additional obligations that Executive may have under
      such
      agreements.

     

    6.  Non-Disparagement
      of the Company

     

    Executive
      agrees that at all times following the termination of her employment, she will
      not make, directly or indirectly, any public or private statements, gestures,
      signs, signals or other verbal or nonverbal, direct or indirect communications
      that are or could be harmful to or reflect negatively on the Company and/or
      any
      of its affiliates and/or their businesses, or that are otherwise disparaging
      of
      the Company and/or any of its affiliates and/or their businesses, or any of
      their past, present or future officers, directors, employees, advisors, agents,
      policies, procedures, practices, decision-making, conduct, professionalism
      or
      compliance with standards. The provisions of this Section 6 are in addition
      to
      any other written agreements on this subject that Executive may have with the
      Company and/or any of its affiliates, and are not meant to and do not excuse
      any
      additional obligations that Executive may have under such
      agreements.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    7.  Continuing
      Rights and Obligations under Other Agreements Among the
      Parties

     

    Other
      than as provided herein, this Agreement shall not in any way affect any rights
      or obligations Executive or the Company has or may have under the Employment
      Agreement or the License Agreement.

     

    8.  Invalid
      Provision

     

    The
      parties understand and agree that if any provision of this Agreement shall,
      for
      any reason, be adjudged by any court or arbitrator of competent jurisdiction
      to
      be invalid or unenforceable, such judgment shall not affect, impair, or
      invalidate the remainder of this Agreement, but shall be confined in its
      operation to the provision of this Agreement directly involved in the
      controversy in which such judgment shall have been rendered.

     

    9.  Governing
      Law

     

    This
      Agreement shall be governed by and construed and enforced in accordance with
      the
      laws of the State of Tennessee, without regard to its conflict of laws
      rules.

     

    10.  Headings

     

    Titles
      or
      captions of Sections contained in this Agreement are inserted only as a matter
      of convenience and for reference, and in no way define, limit, extend or
      describe the scope of this Agreement or the intent of any provisions
      hereof.

     

    11.  Interpretation

     

    Executive
      understands that this Agreement is deemed to have been drafted jointly by the
      parties. Any uncertainty or ambiguity shall not be construed for or against
      any
      party based on attribution of drafting to any party.

     

    12.  Notice

     

    Any
      and
      all notice given hereunder shall be in writing and shall be deemed to have
      been
      duly given when received, if personally delivered; when transmitted, if
      transmitted by telecopy, or electronic or digital transmission method, upon
      receipt of telephonic or electronic confirmation; the day after the notice
      is
      sent, if sent for next day delivery to a domestic address using a generally
      recognized overnight delivery service (e.g.,
      FedEx);
      and upon receipt, if sent by certified or registered mail, return receipt
      requested. In each case notice will be sent as follows:

     

    If
      to the
      Company: Direct
      General Corporation

    1281
      Murfreesboro Road

    Nashville,
      Tennessee 37217

    Attention:
      [•]

    Fax
      Number: [•]

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

     

    with
      a
      copy to: Elara
      Holdings, Inc.

    c/o
      Fremont Partners III, L.P.

    199
      Fremont Street

    San
      Francisco, CA 94105

    Attention:
      Kevin Baker, Esq.

    Fax
      Number: (415) 284-8191

    

     

    If
      to
      Executive: Jacqueline
      C. Adair

                                                                                  
      [Address]

                                                                                  
      [City/State/Zip
      code]

                                                                                  
      Telephone:
      [•]

                                                                                  
      Facsimile:
      [•]

     

    

     

    Any
      party
      may change its address and/or facsimile number for notice purposes by duly
      giving notice to the other party pursuant to this Section.

     

    13.  Waiver

     

    Failure
      to insist upon strict compliance with any of the terms, covenants, or conditions
      hereof shall not be deemed a waiver of such term, covenant, or condition, nor
      shall any waiver or relinquishment of, or failure to insist upon strict
      compliance with, any right or power hereunder at any one or more times be deemed
      a waiver or relinquishment of such right or power at any other time or times.
      No
      waiver of any breach of any term or provision of this Agreement shall be
      construed to be, nor shall be, a waiver of any other breach of this Agreement.
      No waiver shall be binding unless in writing and signed by the party waiving
      the
      breach.

     

    14.  Counterparts

     

    This
      Agreement may be executed in counterparts, which together shall constitute
      one
      and the same Agreement. The parties may execute more than one copy of this
      Agreement, each of which copies shall constitute an original. A facsimile
      signature shall be deemed to be the same as an original signature. 

     

    

     

    
      
         

        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    IN
      WITNESS WHEREOF,
      the
      parties hereto, intending to be legally bound, have hereunto executed this
      Agreement on the day and year first written above.

     

    JACQUELINE
      C. ADAIR 

     

    /s/
      Jacqueline C.
      Adair                                                 

                                    Jacqueline
      C.
      Adair

     

    DIRECT
      GENERAL CORPORATION

     

    By:
      /s/ Tammy R.
      Adair                                                 

     

    Its:
      President

    

     

    ELARA
      HOLDINGS, INC.

     

    By:
      /s/ David
      Lorsch                                                      

     

                                    Its:
      Vice President,
      Secretary and TreasurerEmployment Agreement - Tammy Adair

    EMPLOYMENT
      AGREEMENT

     

    THIS
      EMPLOYMENT AGREEMENT (“Agreement”) is dated as of December 4, 2006, and is
      entered into by and between Tammy R. Adair (“Executive”), Direct General
      Corporation, a Tennessee corporation (the “Company”), and Elara Holdings, Inc.,
      a Delaware corporation (“Holdco” or "Parent"). Except where otherwise noted, all
      capitalized terms not defined herein shall have the meaning set forth in the
      “Merger Agreement,” as defined below.

     

    RECITALS

     

    WHEREAS,
      pursuant to that certain Agreement and Plan of Merger (the “Merger Agreement”)
      by and among the Company, Holdco, and Elara
      Merger Corporation, a Tennessee corporation, and a wholly-owned subsidiary
      of
      Holdco ("Merger
      Sub"),
      Merger
      Sub will be merged with and into the Company, with the Company surviving as
      a
wholly-owned
      subsidiary of Holdco
      (the
      "Merger");

     

    WHEREAS,
      the
      Company and Holdco desire to secure the exclusive services and employment of
      Executive on behalf of the Company, and Executive desires to be employed
      exclusively by the Company, upon the terms and conditions set forth in this
      Agreement, which shall become effective as of and contingent upon the occurrence
      of the Effective Time, as defined in the Merger Agreement;

     

    WHEREAS,
      in
      connection with and as a result of the Merger, Executive will receive
      substantial consideration in exchange for the sale of her ownership interest
      in
      the Company; 

     

    WHEREAS,
      the
      Merger Agreement requires the execution and delivery of this Agreement by
      Executive as a condition precedent to Holdco’s obligation to enter into the
      Merger Agreement;

     

    WHEREAS,
      the
      Company and Employee have entered into that certain Executive Employment
      Agreement, dated July 21, 2003 (the “Employment Agreement”); and 

     

    WHEREAS,
      the
      Company and Employee desire to terminate the Employment Agreement effective
      as
      of and contingent upon the occurrence of the Effective Time and to enter into
      this Agreement in lieu of the Employment Agreement, also effective as of and
      contingent upon the occurrence of the Effective Time.

     

    AGREEMENT

     

    NOW,
      THEREFORE,
      in
      consideration of the mutual covenants and promises contained herein and for
      other good and valuable consideration, the receipt and sufficiency of which
      are
      hereby acknowledged, the parties hereto, each intending to be legally bound
      hereby, agree as follows:

     

    1.  Effective
      Date of Agreement

     

    This
      Agreement shall be executed and delivered by Executive prior to Holdco’s
      execution of the Merger Agreement, and shall become effective only as of the
      Effective Time and conditioned on the consummation of the Merger. In the event
      that the Merger is not consummated, the parties hereto agree that this Agreement
      shall have no effect and shall be null and void.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    2.  The
      Position

     

    The
      Company hereby employs Executive as President of the Company, and Executive
      accepts such exclusive employment.

     

    3.  Duties

     

    During
      her employment with the Company, Executive will serve the Company and its
      affiliates faithfully, diligently and to the best of her ability and will devote
      all or substantially all of her time, energy, experience and talents during
      regular business hours and as otherwise reasonably necessary to such employment,
      to the exclusion of all other business activities. During her employment with
      the Company, Executive shall perform all duties and accept all responsibilities
      commensurate with such position as may be reasonably assigned to her from time
      to time by the Board of Directors of the Company (the “Board”), and/or the Chief
      Executive Officer (the "CEO") of the Company. Executive shall also be subject
      to
      and shall abide by all policies and procedures of the Company, except to the
      extent that such policies and procedures conflict with the other provisions
      of
      this Agreement, in which case this Agreement shall control.

     

    4.  Compensation

     

    Executive
      shall be paid the following as compensation for all services to be rendered
      by
      Executive pursuant to this Agreement:

    

    (a)  Base
      salary. During
      the Term (as defined in Section 6 hereof), Executive shall be entitled to a
      base
      salary (the “Base Salary”), payable in equal biweekly installments, according to
      the Company’s normal payroll practices, at an annual rate of three hundred
      thousand dollars ($300,000), less all applicable federal, state and/or local
      taxes and all other authorized payroll deductions. Executive’s Base Salary will
      be subject to an approximately annual review, and increases (but not reductions)
      may be made to Executive’s Base Salary at any time based upon the Board’s and/or
      CEO's review of Executive’s performance and the performance of the Company.

     

    (b)  Bonus
      eligibility.
       During
      the Term, Executive shall be entitled to participate in a Company bonus plan
      or
      program to be adopted by the Board, pursuant to which she shall be eligible
      to
      receive annual bonuses up to a specified percentage of Executive's Base Salary
      and subject to a combination of the Executive's achievement of pre-established
      performance goals and the Company's achievement of pre-determined financial
      objectives, in each case, as determined in the sole and absolute discretion
      of
      the Board, and further subject to the terms and conditions of such plan or
      program.

     

     

    (c)
       Holdco
      stock option plan.
      During
      the Term, Executive shall be eligible to participate in, and receive an award
      or
      awards of stock options under, a Holdco stock option plan to be adopted by
      the
      Board, effective as of or following the Effective Time, as determined in the
      sole and absolute discretion of the Board (or any committee designated by the
      Board for this purpose) and subject to such other terms and conditions,
      including the terms of the applicable award agreements, as are determined from
      time to time by the Board or such committee; provided, however, that Executive
      shall be granted such number of options as are commensurate with her position
      as
      President of the Company. 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    

    5.  Treatment
      of Company Stock Options. 

     

    Executive
      acknowledges that all outstanding options to purchase shares of the Company's
      common stock that Executive has or that are attributable to the Executive as
      of
      the Effective Time (the "Company Options") shall be treated solely pursuant
      to
      the applicable terms of the Merger Agreement and that Executive shall have
      no
      further or greater rights other than those specified therein; provided, however,
      that in the event that Executive exercises any options to purchase shares of
      Holdco stock, following the Effective Time, Executive agrees that at the time
      of
      each such exercise, she shall execute and become a party to that certain
      Management Stockholders' Agreement dated as of December __, 2006, between
      Holdco, Fremont and Management Stockholders (as each such entity or person
      is
      defined in such agreement). 

     

    6.  Term;
      Employment At Will

     

    Subject
      to the terms of this Agreement (including, without limitation, Section 10
      hereof), the term of this Agreement (the “Term”) shall commence on the Effective
      Time and shall be and continue on an at-will basis, until such time as
      Executive’s employment is terminated by the Company or Executive. Executive’s
      employment shall not be for a fixed term, and may be terminated at any time,
      with or without cause, by either the Company or Executive.

     

    7.  Perquisites/Expenses

     

    Executive
      shall be entitled to reimbursement of reasonable expenses incurred by Executive
      in the course of Executive’s duties, to the extent allowed under applicable
      policies of the Company.

     

    8.  Benefits

     

    (a)  During
      the Term, Executive and, to the extent applicable, Executive’s eligible
      dependents, shall be entitled to compensation and benefits that are in the
      aggregate not materially less favorable than such benefits that the Company
      provides to similarly-situated executives of the Company as of the Effective
      Time; provided, however that such benefits shall include (i) continued use
      of an
      automobile provided by the Company under substantially similar terms and
      conditions as were applicable immediately prior to the Effective Time and (ii)
      a
      rate of annual vacation accrual that is no less than that to which Executive
      was
      entitled immediately prior to the Effective Time.

     

    (b)  Nothing
      in this Agreement shall preclude the Company from amending or terminating any
      employee benefit plan or practice.

     

    9.  Effect
      of Death or Disability

     

    In
      the
      event of Executive’s termination of employment by reason of death or
“disability” (as defined from time to time in any applicable disability plan or
      program of the Company) during the Term, this Agreement shall terminate
      effective as of the date of Executive’s death or, subject to any applicable
      disability plan or program of the Company or federal or state disability or
      leave laws, disability, and Executive shall receive such compensation and
      benefits (if any) in connection with such termination consistent with Section
      8
      of this Agreement.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    10.  Termination
      of Employment and Severance

     

    
      	(a)  	
              General

            

    

     

    (i)  Termination
      by the Company for Cause or by Executive other than for Good
      Reason.
      At any
      time during the Term, the Company may terminate Executive’s employment under
      this Agreement for “Cause” (as hereinafter defined), or Executive may terminate
      her employment with the Company other than for “Good Reason” (as hereinafter
      defined), after which Executive shall be entitled to the payment of any amount
      of unpaid Base Salary and any unreimbursed reasonable expenses incurred in
      the
      performance of Executives' duties in accordance with the Company's policies,
      in
      each case accrued through such termination date. Except as set forth in the
      preceding sentence, the Company shall have no further obligation hereunder
      to
      Executive.

     

    (ii)  Termination
      by Executive for Good Reason or by the Company other than for Death, Disability
      or Cause.
      At any
      time during the Term, if Executive’s employment is terminated by Executive for
      Good Reason, or by the Company for any reason other than Executive’s death,
      disability or for Cause, Executive shall be entitled to the following payments
      (less all applicable federal, state and/or local taxes and all other authorized
      payroll deductions): (A) payment of any amount of unpaid Base Salary and
      unreimbursed reasonable expenses incurred in the performance of Executives'
      duties in accordance with the Company's policies, in each case accrued through
      the termination date and (B) provided that Executive complies with the
      notice requirements of this Section and this Agreement and signs and returns
      to
      the Company a Severance Agreement and General Release of All Claims (“Release”)
      that is acceptable (in form and substance) to the Company and such Release
      has
      become irrevocable by Executive, severance compensation equal to (I) two hundred
      percent (200%) of Executive’s annual Base Salary at the rate in effect at the
      time of termination, payable in equal biweekly installments over a twenty-four
      (24) calendar-month period, in accordance with the Company’s normal payroll
      practices; plus (II) if Executive’s annual bonus has not been paid and is
      payable for the applicable plan or program year commencing immediately prior
      to
      her termination of employment because Executive is not a participant for the
      full plan or program year by reason of her termination of employment, a lump-sum
      payment equal to the annual bonus award that she would have received from the
      Company had she remained employed through the remainder of the plan or program
      year (or any longer period required under the terms of such annual bonus award),
      prorated to reflect the number of days in the plan or program year ending as
      of
      her date of termination, calculated based on such other assumptions as the
      Company shall reasonably determine, and payable no later than at such time
      as
      the Company pays such annual bonuses to other eligible participants and (III)
      continued health benefits for twenty-four (24) months, during which time
      Executive will be required to pay the same portion of such health benefits
      as
      she was required to pay during employment; provided, however, that to the extent
      the applicable health plan does not permit Executive to continue to participate
      in the plan during all or a part of the 24-month period, the Company shall
      pay
      the premiums relating to such continued coverage under the Consolidated Omnibus
      Budget Reconciliation Act of 1985 ("COBRA"), less any portion of the premium
      that Executive would otherwise have been required to pay had the plan permitted
      continued coverage following termination of employment. Except as set forth
      in
      the preceding sentence, the Company shall have no further obligation hereunder
      to Executive.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (iii)  Executive
      may terminate her employment with the Company, whether for Good Reason or not,
      only by giving the Company thirty (30) days’ advance notice in writing, in
      accordance with the notice provisions of this Agreement.

     

    (b)  Definitions.
      For
      purposes of this Agreement, the following definitions shall apply:

     

    (i)  “Cause”
      shall mean any of the following: (A) Executive’s engaging in and/or failure
      to take all appropriate action in response to any acts of fraud, theft,
      embezzlement, or any other acts or omissions that are harmful or injurious
      to
      the Company and/or any of its affiliates; (B) Executive’s unreasonable
      neglect or refusal to perform any of the duties or responsibilities: (I)
      assigned to Executive by the Board and/or the CEO, (II) assigned to Executive
      pursuant to any employment agreement or other agreement that Executive now
      has
      or later has with the Company and/or any of its affiliates, and/or (III)
      otherwise appropriate to Executive’s position after Executive's failure to cure
      such conduct within thirty (30) days following her receipt of written notice
      from the Board and/or the CEO; (C) Executive’s failure to timely carry out any
      reasonable directive of the Board and/or the CEO or concerning the operations
      of
      the Company, provided, however, that Executive shall be subject to termination
      under this subsection (C) only upon Executive’s failure to carry out the
      directive for thirty (30) days following written notice from the Board of such
      failure; (D) Executive’s engaging in any act of dishonesty, disloyalty, or moral
      turpitude in connection with Executive’s responsibilities to the Company and/or
      any of its affiliates as an employee, officer, director, or otherwise;
      (E) Executive’s commission of, or conviction for, any felony, including any
      plea of guilty or nolo contendere or placement in a pretrial diversion program;
      (F)  Executive’s material violation of any policies or procedures of the
      Company and/or any of its affiliates; and/or (G) Executive’s breach of any
      of the material terms of this Agreement or any other agreement that Executive
      now has or later has with the Company and/or any of its affiliates, and failure
      to cure such breach within thirty (30) days following Executive's receipt of
      written notice of such breach from the Board and/or the CEO; provided, however,
      that notice shall not be required if it is reasonably determined by the Board
      that the breach cannot be cured by Executive. ; provided, however, that notice
      required with respect to subparts (B), (C) and (G) of this Section 10(b)(1)
      shall not be required if the conduct of Executive involves intentional
      misconduct.

     

    (ii)  “Good
      Reason” shall mean Executive's termination of her employment following the
      Executive's giving notice of her voluntary resignation within thirty (30) days
      after the occurrence of any of the following, without Executive’s written
      consent: (A) a material reduction in Executive's base salary or aggregate
      benefits, (B) a material demotion in position and/or a material reduction in
      job
      duties and responsibilities, (C) a required relocation from the Memphis,
      Tennessee metropolitan area, or (D) a material breach by the Company of any
      of
      its obligations under this Agreement and failure by the Company to cure such
      breach within ten (10) days following receipt of written notice from Executive
      of such breach. "Good Reason": shall also mean Executive's termination of her
      employment following the Executive's giving 180 days written notice of her
      voluntary resignation within thirty (30) days following the termination of
      Daniel Tarantin or his removal as Chief Executive Officer of the Company.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    11.  Exclusive
      Services, Non-Solicitation and Non-Disclosure of Confidential
      Information

     

    (a)  Executive
      agrees that, during the Term and for a period of five (5) years immediately
      following the termination of Executive’s employment with the Company, Executive
      shall not, either directly or indirectly, make known to any person, firm,
      corporation or other legal entity the names or addresses of any of the
      prospective (to Executive’s knowledge) or current customers, clients, insureds,
      insurers, reinsurers, brokers, lenders, suppliers, service providers, employees,
      agents, representatives, and/or shareholders of the Company or any of its
      affiliates (hereinafter collectively referred to as “Business Contacts”) or any
      other information pertaining to them. Executive further agrees that, for a
      period of five (5) years immediately following the end of Executive’s employment
      with the Company, Executive shall not, either directly or indirectly, either
      for
      Executive or for any other person, firm, corporation, or other legal entity,
      divert, take away, or attempt to divert, or take away any prospective (to
      Executive’s knowledge) or current Business Contacts or any persons or legal
      entities that were prospective (to Executive’s knowledge) or current Business
      Contacts at any point during Executive’s term of employment with the Company.
      Nor shall Executive during the Term and for the Non-Compete Period (defined
      below) solicit or contact or attempt to solicit or contact any prospective
      (to
      Executive’s knowledge) or current Business Contacts for any reason in any way
      relating to or arising out of the providing of (whether proposed (to Executive's
      knowledge) or actual) of products and/or services similar in kind or purpose
      to
      those provided or, to Executive's knowledge expected to be provided, by the
      Company and/or any of its affiliates other than ordinary course contact by
      Executive as a consumer.

     

    (b)  Executive
      agrees that, during the Term and for the Non-Compete Period (defined below)
      following the termination of Executive’s employment with the Company, Executive
      shall not disrupt, damage, impair or interfere with the business of the Company
      and/or any of its affiliates, whether by way of interfering with or raiding
      their employees, disrupting their relationships with any prospective (to
      Executive’s knowledge) or current Business Contacts, or otherwise. Nor shall
      Executive during the same period either
      directly or indirectly solicit, induce, recruit, or encourage to leave the
      employment of the Company and/or any of its affiliates for any reason and/or
      to
      perform work for a competitor of the Company and/or any of its affiliates (as
      an
      employee, independent contractor, or otherwise) (such conduct is collectively
      referred to as “solicitation”) any person who is then employed by the Company
      and/or any of its affiliates or who left the employ of the Company and/or any
      of
      its affiliates less than one (1) year prior to the solicitation.

     

    (c)  During
      the Term and for the Non-Compete Period (defined below) following the
      termination of Executive’s employment with the Company, Executive shall not,
      either directly or indirectly, without the written consent of the Company,
      in
      any state in the United States in which the Company is doing Business (as
      defined below) at the time the Executive's employment with the Company
      terminates: (i) engage in the business of providing private passenger automobile
      insurance services or products or financing of private passenger automobile
      insurance premiums or providing any other services or products that the Company
      offers as of the time Executive's employment terminates (the "Business"); (ii)
      enter the employ of, or render any consulting or any other services to, any
      entity that is principally engaged in the Business; or (iii) become interested
      in any such entity in any capacity, including, without limitation, as an
      individual, partner, shareholder, officer, director, principal, agent, trustee
      or consultant; provided, however, Executive may own, directly or indirectly,
      solely as a passive investment, securities of any entity traded on any national
      securities exchange if Executive is not a controlling person of, or a member
      of
      a group which controls, such entity and does not, directly or indirectly, own
      5%
      or more of any class of securities of such entity, and provided, further that
      it
      shall not be a violation of this Section 11 for Executive to become employed
      by
      an entity that competes in the Business if such employment is solely in a line
      of the entity's business that is wholly unrelated to the Business. For the
      purposes of this Section 11, the "Non-Compete Period" is defined as follows:
      upon Executive's termination of employment from the Company after less than
      two
      (2) years of employment, the Non-Compete Period shall be four (4) years; upon
      Executive's termination from the Company after two (2) years but less than
      three
      (3) years of employment, the Non-Compete period shall be three (3) years; upon
      Executive's termination from the Company after three (3) years but less than
      four (4) years of employment, the Non-Compete period shall be two (2) years;
      upon Executive's termination from the Company at or anytime after four (4)
      years, the Non-Compete period shall be one (1) year. If the applicable
      Non-Compete Period is determined to be one (1) year, as referenced above, the
      Company shall have the option, which it may exercise in its sole and absolute
      discretion, of extending the Non-Compete Period an additional one (1) year,
      provided that Executive is paid 100% of her Base Salary during such one (1)
      year
      period, and regardless of the reason for the termination of Executive's
      employment. The Company shall have thirty (30) days following Executive's
      termination to notify Executive in writing of its intention to exercise its
      option with respect to the potential one (1) year period. Such written notice
      shall be provided to Executive at the address referenced below or such other
      address as Executive may later provide to the Company in writing. 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (d)  Executive
      acknowledges that, in her employment hereunder, she will occupy a position
      of
      trust and confidence with the Company and/or its affiliates and will receive
      training which will enhance Executive's skill and experience. Executive agrees
      that Executive shall not, except as may be required to perform her duties
      hereunder with the written consent of the Company or as required by applicable
      law and without the written consent of the Company, without limitation in time
      or until such information shall have become public other than by Executive’s
      unauthorized disclosure, use, disclose or disseminate any trade secrets,
      confidential information or any other information of a secret, proprietary,
      confidential or generally undisclosed nature (hereinafter collectively referred
      to as “Confidential Information”) relating to the Company and/or any of its
      affiliates, or their respective businesses, contracts, projects, proposed
      projects, revenues, costs, operations, methods or procedures. Executive
      acknowledges that said information is specialized, unique in nature and of
      great
      value to the Company and/or its affiliates, and that such information gives
      the
      Company and/or its affiliates a competitive advantage in their businesses.
      Except where otherwise noted

     

    (e)  For
      purposes of this Section 11, Confidential Information shall not include
      information that: (i) is or becomes generally available to the public other
      than
      as a result of an unauthorized disclosure by Executive; (ii) becomes available
      to Executive in a manner that is not in contravention of applicable law from
      a
      source (other than the Company) that is not known by Executive, after reasonable
      investigation, to be bound by a confidential relationship with the Company;
      or
      (iii) is required to be disclosed by law, court order or other legal
      process.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (f)  Executive
      acknowledges and agrees that (a) the trade secrets and confidential and related
      information referred to in this Agreement and (b) the relationships with the
      Business Contacts referenced in this Agreement each are of substantial value
      to
      the Company and/or its affiliates and that a breach of any of the terms and
      conditions of this Agreement relating to those subjects would cause irreparable
      harm to the Company and/or its affiliates, for which the Company and/or its
      affiliates would have no adequate remedy at law. Therefore, in addition to
      any
      other remedies that may be available to the Company and/or any of its affiliates
      under this Agreement or otherwise, the Company and/or its affiliates shall
      be
      entitled to obtain temporary restraining orders, preliminary and permanent
      injunctions and/or other equitable relief to specifically enforce Executive’s
      duties and obligations under this Agreement, or to enjoin any breach of this
      Agreement. Furthermore, Executive agrees that any damages suffered by the
      Company and/or its affiliates as a result of Executive’s breach of Executive’s
      duties and obligations under this Agreement shall entitle the Company and/or
      its
      affiliates to offset such damages against any payments to be made pursuant
      to
      this Agreement, to the extent permitted by applicable law.

     

    (g)  Executive
      and the Company intend that: (i) this Section 11 concerning (among
      other things) the exclusive services of Executive to the Company and/or its
      affiliates shall be construed as a series of separate covenants; (ii) if
      any portion of the restrictions set forth in this Section 11 should, for
      any reason whatsoever, be declared invalid by an arbitrator or a court of
      competent jurisdiction, the validity or enforceability of the remainder of
      such
      restrictions shall not thereby be adversely affected; and (iii) Executive
      declares that in light of her knowledge of the Company and her position of
      trust
      and confidence as an executive officer of the Company who, pursuant to the
      Merger will receive substantial consideration in exchange for the sale of her
      interest in the Company, the territorial and time limitations set forth in
      this
      Section 11 are reasonable and properly required for the adequate protection
      of the business of the Company and/or its affiliates. In the event that any
      such
      territorial or time limitation is deemed to be unreasonable by an arbitrator
      or
      a court of competent jurisdiction, Executive agrees to the reduction of the
      subject territorial or time limitation to the area or period which such
      arbitrator or court shall have deemed reasonable.

     

    (h)  All
      of
      the provisions of this Section 11 are in addition to any other written
      agreements on the subjects covered herein that Executive may have with the
      Company and/or any of its affiliates, and are not meant to and do not excuse
      any
      additional obligations that Executive may have under such
      agreements.

     

    12.  Representations
      and Covenants Relating to Confidential Information of Third
      Parties

     

    Executive
      understands and acknowledges that it is the policy of the Company to respect
      the
      Confidential Information belonging to third parties. Therefore, in addition
      to
      agreeing not to disclose or use Confidential Information belonging to the
      Company in violation of any applicable confidentiality agreement or Company
      policies as may be in effect or amended from time to time, as a condition of
      employment with the Company, Executive also hereby represents, covenants and
      agrees as follows:

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (a)  Executive
      is not subject to any agreement of any kind with any prior employer or other
      person or entity relating in any way to Executive’s right or Executive’s ability
      to be employed by and/or to perform services for the Company;

     

    (b)  The
      Company has instructed Executive not to bring to, disclose to or use in
      connection with Executive’s employment or potential employment with the Company
      any Confidential Information from any prior employer or other person or
      entity;

     

    (c)  Executive
      has not brought to, disclosed to or used in connection with Executive’s
      employment or potential employment with the Company any Confidential Information
      from any prior employer or other person or entity;

     

    (d)  Executive
      will not bring to, disclose to or use in connection with Executive’s employment
      with the Company any Confidential Information from any prior employer or other
      person or entity; and

     

    (e)  During
      Executive’s employment with the Company and thereafter, Executive will not take,
      disclose or use any Confidential Information acquired as a result of Executive’s
      employment with the Company, except as authorized by the Company.

     

    13.  Return
      of Company Property

     

    Executive
      agrees, upon the termination of her employment with the Company, to return
      all
      physical, computerized, electronic or other types of records, documents,
      proposals, notes, lists, files and any and all other materials including,
      without limitation, computerized and/or electronic information that refers,
      relates or otherwise pertains to the Company and/or its affiliates, and any
      and
      all business dealings of said persons and entities. In addition, Executive
      shall
      return to the Company all property or equipment that Executive has been issued
      during the course of Executive’s employment or which Executive otherwise
      currently possesses, including, but not limited to, any computers, cellular
      phones, BlackBerries, PDAs, and/or pagers. Executive shall immediately deliver
      to the Company any such physical, computerized, electronic or other types of
      records, documents, proposals, notes, lists, files, materials, property and
      equipment that are in Executive’s possession. Executive acknowledges that
      Executive is not authorized to retain any physical, computerized, electronic
      or
      other types of copies of any such physical, computerized, electronic or other
      types of records, documents, proposals, notes, lists, files or materials, and
      is
      not authorized to retain any other property or equipment of the Company and/or
      its affiliates. Executive further agrees that Executive will immediately forward
      to the Company any business information regarding the Company and/or any of
      its
      affiliates that has been or is inadvertently directed to Executive following
      Executive’s last day of employment with the Company. The provisions of this
      Section are in addition to any other written agreements on this subject that
      Executive may have with the Company and/or any of its affiliates, and are not
      meant to and do not excuse any additional obligations that Executive may have
      under such agreements. 

     

    14.  All
      Developments the Property of the Company

     

    All
      confidential, proprietary or other trade secret information, all work performed,
      and all other ideas, discoveries, inventions, designs, processes, methods and
      improvements, conceived, developed, or otherwise made by Executive, during
      her
      employment with the Company, alone or with others, and in any way relating
      to
      the Company’s and/or any of its affiliates’ present or planned businesses or
      products, whether or not patentable or subject to copyright protection and
      whether or not reduced to tangible form or reduced to practice during the period
      of Executive’s employment with the Company (“Developments”) shall be the sole
      property of the Company, provided, however, that the foregoing shall not apply
      to any invention made by Executive that was developed entirely on Executive’s
      own time during the period of her employment with the Company, without using
      the
      Company’s equipment, supplies, facilities, or trade secret information except
      for those inventions that either: (i) relate at the time of conception or
      reduction to practice of the invention to the Company’s and/or any of its
      affiliates’ businesses, or actual or demonstrably anticipated research or
      development of the Company and/or its affiliates; or (ii) result from any work
      performed by Executive for the Company. Executive agrees to advise the Company
      promptly in writing of any inventions that Executive believes meet the preceding
      criteria that are not otherwise disclosed pursuant to Section 15 below.
      Executive further agrees to disclose all Developments promptly, fully and in
      writing to the Company promptly after development of the same, and at any time
      upon request. Executive understands that Company will keep in confidence and
      will not disclose to third parties without Executive’s consent any confidential
      information disclosed in writing to Company relating to inventions that meet
      the
      criteria set forth herein. Executive agrees to, and hereby does assign to the
      Company all of Executive’s right, title and interest throughout the world in and
      to all Developments. Executive agrees that each of the Developments shall
      constitute a “work made for hire,” as defined in 17 U.S.C. § 101, and hereby
      irrevocably assigns to the Company all copyrights, patents and any other
      proprietary rights Executive may have in any Developments without any obligation
      on the part of the Company to pay royalties or any other consideration to
      Executive in respect of such Developments. Executive hereby grants to the
      Company an irrevocable power of attorney to perform any and all acts and execute
      any and all documents and instruments on behalf of Executive as the Company
      may
      deem appropriate in order to perfect or enforce the rights defined in this
      Section. Executive agrees to assist the Company (without charge, but at no
      cost
      to Executive) to obtain and maintain for itself such rights, and agrees that
      such obligation to assist the Company shall continue after the termination
      of
      this Agreement. The provisions of this Section are in addition to any other
      written agreements on this subject that Executive may have with the Company
      and/or any of its affiliates, and are not meant to and do not excuse any
      additional obligations that Executive may have under such agreements.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    15.  Inventions
      Retained and Licensed

     

    Executive
      has attached hereto, as
      Exhibit 1,
      a list
      describing any and all inventions, original works of authorship, developments,
      improvements, and trade secrets which were made by Executive prior to her
      employment with Company (collectively referred to as “Prior Inventions”), which
      belong to Executive, which relate to the Company’s and/or any of its affiliates’
actual or future businesses, products or research and development, and which
      are
      not assigned to the Company hereunder; or, if no such list is attached hereto
      upon delivery of the signed Agreement to the Company, Executive represents
      that
      there are no such Prior Inventions. Executive agrees that Executive will not
      incorporate, or permit to be incorporated, any Prior Invention owned by
      Executive or in which Executive has an interest into a Company product, process
      or machine without the Company’s prior written consent. Notwithstanding the
      foregoing sentence, if, in the course of Executive’s employment with the
      Company, Executive incorporates into a Company product, process or machine
      a
      Prior Invention owned by Executive or in which Executive has an interest, the
      Company is hereby granted and shall have a nonexclusive, royalty-free,
      irrevocable, perpetual, worldwide license to make, have made, modify, use and
      sell such Prior Invention as part of or in connection with such product, process
      or machine.

     

    16.  Indemnification

     

    With
      respect to any claim, loss, damage or expense (including attorneys’ fees)
      arising from the performance by Executive of her duties as an officer or
      director of the Company (but excluding any breach or alleged breach of the
      terms
      of this Agreement), Executive shall be entitled to indemnification by the
      Company to the fullest extent permitted by law, as set forth in the Company's
      Bylaws, and to reimbursement under any directors’ and officers’ liability
      insurance policy of the Company that may be in effect from time to
      time.

     

    17.  Survival
      of Provisions

     

    The
      rights and obligations contained in Sections 8 through 30, inclusive, of
      this Agreement shall survive the termination or expiration of this Agreement
      or
      of Executive’s employment with the Company, and shall be fully enforceable
      thereafter. Further, all other rights
      and obligations of the parties hereto, other than those applicable by their
      express terms only during the Term, shall survive any termination or
      expiration
      of this
      Agreement
      or of
      Executive’s employment with the Company, and shall be fully enforceable
      thereafter.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    18.  Cooperation
      in Third-Party Disputes

     

    At
      all
      times during and after Executive's employment with the Company, Executive shall
      cooperate with the Company and/or its affiliates and each of their respective
      attorneys or other legal representatives (collectively referred to as
“Attorneys”) in connection with any claim, litigation, or judicial or arbitral
      proceeding which is now pending or may hereinafter be brought against the
      Company and/or any of its affiliates by any third party. Executive’s duty of
      cooperation shall include, but shall not be limited to, (a) meeting with the
      Company’s and/or its affiliates’ Attorneys by telephone or in person at mutually
      convenient times and places in order to state truthfully Executive’s knowledge
      of the matters at issue and recollection of events; (b) appearing at the
      Company’s and/or its affiliates’ and/or their Attorneys’ request (and, to the
      extent possible, at a time convenient to Executive that does not conflict with
      the needs or requirements of Executive’s then-current employer) as a witness at
      depositions, trials or other proceedings, without the necessity of a subpoena,
      in order to state truthfully Executive’s knowledge of the matters at issue; and
      (c) signing at the Company’s and/or its affiliates’ and/or their Attorneys’
request declarations or affidavits that truthfully state the matters of which
      Executive has knowledge. The Company shall promptly reimburse Executive for
      Executive’s actual and reasonable travel or other out-of-pocket expenses that
      Executive may incur in cooperating with the Company and/or its affiliates and/or
      their Attorneys pursuant to this Section 18, and shall compensate Executive
      at a
      reasonable hourly or per diem rate to be agreed upon by the parties to the
      extent such cooperation is required on more than an occasional and limited
      basis. The provisions of this Section are in addition to any other written
      agreements on this subject that Executive may have with the Company and/or
      its
      affiliates, and are not meant to and do not excuse any additional obligations
      that Executive may have under such agreements.

     

    19.  Non-Disparagement
      of the Company

     

    During
      Executive’s employment with the Company and at all times thereafter, Executive
      agrees, to the fullest extent permissible by law, not to make, directly or
      indirectly, any public or private statements, gestures, signs, signals or other
      verbal or nonverbal, direct or indirect communications that are or could be
      harmful to or reflect negatively on the Company and/or any of its affiliates
      and/or their businesses, or that are otherwise disparaging of the Company and/or
      any of its affiliates and/or their businesses, or any of their past, present
      or
      future officers, directors, employees, advisors, agents, policies, procedures,
      practices, decision-making, conduct, professionalism or compliance with
      standards. The provisions of this Section are in addition to any other written
      agreements on this subject that Executive may have with the Company and/or
      any
      of its affiliates, and are not meant to and do not excuse any additional
      obligations that Executive may have under such agreements.

     

    20.  Withholding
      Obligations; Internal Revenue Code Section 409A

     

    The
      Company shall make such deductions and withhold such amounts from each payment
      made to Executive hereunder as may be required from time to time by law,
      governmental regulation and/or order. It is the intention of the Company and
      Executive that this Agreement not result in unfavorable tax consequences to
      Executive under section 409A of the Internal Revenue Code of 1986, as amended
      (the "Code"). The Company and Executive agree to work together in good faith
      in
      an effort to comply with section 409A of the Code including, if necessary,
      amending this Agreement based on further guidance issued by the Internal Revenue
      Service from time to time, provided that the Company shall not be required
      to
      assume any increased economic burden.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    21.  Successor
      in Interest

     

    This
      Agreement and the rights and obligations hereunder shall be binding upon and
      inure to the benefit of the parties hereto and their respective legal
      representatives, and shall also bind and inure to the benefit of any successor
      of the Company by merger or consolidation or any purchaser or assignee of all
      or
      substantially all of its assets. Neither this Agreement nor any of the rights
      or
      benefits hereunder may be assigned by either party hereto, except to any such
      aforementioned successor, purchaser, or assignee of the Company. Executive
      may
      not assign any of her obligations or duties under this Agreement.

     

    22.  Invalid
      Provision

     

    The
      parties understand and agree that if any provision of this Agreement shall,
      for
      any reason, be adjudged by any court or arbitrator of competent jurisdiction
      to
      be invalid or unenforceable, such judgment shall not affect, impair, or
      invalidate the remainder of this Agreement, but shall be confined in its
      operation to the provision of this Agreement directly involved in the
      controversy in which such judgment shall have been rendered.

     

    23.  Arbitration
      of Disputes

     

    Except
      as
      is necessary for Executive and the Company to preserve their respective rights
      under this Agreement by seeking necessary equitable relief (including, but
      not
      limited to, the Company’s rights under Section 11 of this Agreement) from a
      court of competent jurisdiction, the Company and Executive agree that any and
      all disputes based upon, relating to or arising out of this Agreement,
      Executive’s employment relationship with the Company and/or the termination of
      that relationship, and/or any other dispute by and between the Company and
      Executive, including any and all claims Executive may at any time attempt to
      assert against the Company, shall be submitted to binding arbitration in
      Davidson County, Tennessee, pursuant
      to the American Arbitration Association’s (“AAA”) National Rules for the
      Resolution of Employment Disputes (the “Rules”),
      provided
      that the Rules shall be modified by the arbitrator to the extent necessary
      to be
      consistent with applicable law. Executive
      acknowledges and agrees that by agreeing to arbitrate claims pursuant to this
      Section 23, she is irrevocably waiving her right to a jury trial of any and
      all
      claims relating to or arising out of this Agreement, Executive’s employment
      relationship with the Company and/or the termination of that relationship,
      and/or any other dispute by and between the Company and Executive.
 

     

    The
      arbitrator shall be mutually agreed upon by the parties. If, however, the
      parties are unable to agree upon such an arbitrator, then an arbitrator shall
      be
      selected by AAA in accordance with the Rules. The
      Company and Executive further agree that each party shall pay its own costs
      and
      attorneys’ fees, if any; provided, however, that if either party prevails on a
      claim which affords the prevailing party an award of attorneys’ fees, then the
      arbitrator may award reasonable attorneys’ fees to the prevailing party,
      consistent with applicable law. The Company and Executive further agree that
      any
      hearing must be transcribed by a certified shorthand reporter, and that the
      arbitrator shall issue a written decision and award supported by essential
      findings of fact and conclusions of law in order to facilitate judicial
      review.
      Said
      award and decision shall be issued within thirty (30) days of the completion
      of
      the arbitration. Judgment in a court of competent jurisdiction may be had on
      said decision and award of the arbitrator. For these purposes, the parties
      agree
      to submit to the jurisdiction of the state and federal courts located in
      Nashville, Tennessee.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    24.  Governing
      Laws

     

    This
      Agreement shall be governed by and construed and enforced in accordance with
      the
      laws of the State of Tennessee, without regard to its conflict of laws
      rules.

     

    25.  Headings

     

    Titles
      or
      captions of Sections contained in this Agreement are inserted only as a matter
      of convenience and for reference, and in no way define, limit, extend or
      describe the scope of this Agreement or the intent of any provisions
      hereof.

     

    26.  Interpretation

     

    Executive
      understands that this Agreement is deemed to have been drafted jointly by the
      parties. Any uncertainty or ambiguity shall not be construed for or against
      any
      party based on attribution of drafting to any party.

     

    27.  Notice

     

    Any
      and
      all notice given hereunder shall be in writing and shall be deemed to have
      been
      duly given when received, if personally delivered; when transmitted, if
      transmitted by telecopy, or electronic or digital transmission method, upon
      receipt of telephonic or electronic confirmation; the day after the notice is
      sent, if sent for next day delivery to a domestic address using a generally
      recognized overnight delivery service (e.g.,
      FedEx);
      and upon receipt, if sent by certified or registered mail, return receipt
      requested. In each case notice will be sent as follows:

     

    If
      to the
      Company: Direct
      General Corporation

    1281
      Murfreesboro Road

    Nashville,
      Tennessee 37217

    Attention:
      [•]

    Fax
      Number: [•]

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    with
      copies to: Elara
      Holdings, Inc.

    c/o
      Fremont Partners III, L.P.

    199
      Fremont Street

    San
      Francisco, CA 94105

    Attention:
      Kevin Baker, Esq.

    Fax
      Number: (415) 284-8191

    

    and

    

    Skadden,
      Arps, Slate, Meagher & Flom LLP

    525
      University Avenue

    Palo
      Alto, CA 94301

    Attn:
      Kenton J. King, Esq.

    Fax:
      (888)-329-2950

    

     

    If
      to
      Executive: Tammy
      R.
      Adair

     

    1321
      Ranch Drive

     

    Senatobia,
      MS 38668

     

    Telephone:
      (901)
      359-3882

     

    Home
      telephone: (662) 562-8477

     

    

     

    Any
      party
      may change its address and/or facsimile number for notice purposes by duly
      giving notice to the other party pursuant to this Section.

     

    28.  Entire
      Agreement; Amendment

     

    This
      Agreement represents the entire agreement and understanding between the parties
      and, except as expressly stated in this Agreement, supersedes any prior
      agreement, understanding or negotiations respecting such subject, including,
      without limitation, the Employment Agreement and any and all stock option or
      other equity related agreements between Executive and the Company. No change
      to
      or modification of this Agreement shall be valid or binding unless it is in
      writing and signed by Executive, a duly authorized director of the Company,
      and
      a duly authorized director of Holdco.

     

    29.  Waiver

     

    Failure
      to insist upon strict compliance with any of the terms, covenants, or conditions
      hereof shall not be deemed a waiver of such term, covenant, or condition, nor
      shall any waiver or relinquishment of, or failure to insist upon strict
      compliance with, any right or power hereunder at any one or more times be deemed
      a waiver or relinquishment of such right or power at any other time or times.
      No
      waiver of any breach of any term or provision of this Agreement shall be
      construed to be, nor shall be, a waiver of any other breach of this Agreement.
      No waiver shall be binding unless in writing and signed by the party waiving
      the
      breach.

     

    30.  Counterparts

     

    This
      Agreement may be executed in counterparts, which together shall constitute
      one
      and the same Agreement. The parties may execute more than one copy of this
      Agreement, each of which copies shall constitute an original. A facsimile
      signature shall be deemed to be the same as an original signature. 

     

    
      
        AM

        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    IN
      WITNESS WHEREOF,
      the
      parties hereto, intending to be legally bound, have hereunto executed this
      Agreement on the day and year first written above.

     

    TAMMY
      R.
      ADAIR 

     

    /s/
      Tammy R.
      Adair                                                        

                                    Tammy
      R.
      Adair

     

    DIRECT
      GENERAL CORPORATION

     

    By:
      /s/ William C. Adair,
      Jr.                                            

     

    Its:
      Chairman and Chief Executive Officer

    

     

    ELARA
      HOLDINGS, INC.

     

    By:
      /s/ David
      Lorsch                                                        

     

    Its:
      Vice
      President, Secretary and Treasurer

     

    

     

    

    
      
        
           

        

        
        

      

      
        
        

        
          

        

      

      
        
        

        
          

        

      

    

     

    EXHIBIT
      1

     

    List
      of Inventions

     

    

     

    

     

    

     

    

     

    

     

    

     

    

     

    

     

    

     

    

     

    

     

    

     

    

     

    

     

    

     

    

     

    

     

    

    TAMMY
      R.
      ADAIR

     

    ____________________________________

    Tammy
      R.
      Adair

     

    ____________________________________

    Date

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