Document:

exv10w4

 

Exhibit 10.4

NON-COMPETITION AND CONFIDENTIALITY AGREEMENT

     This
Non-Competition and Confidentiality Agreement the
(“Agreement”) is dated June 7, 2004, and is effective as of June 7, 2004 (the “Effective Date”), by and between
First Financial Corporation, a Delaware corporation (“Holdings”), and Jerome M. Shaw
(“Stockholder”).

     WHEREAS, pursuant to that certain Stock Contribution Agreement (the “Exchange
Agreement”) dated as of June 7, 2004 by and among Holdings, Stockholder, First Mercury
Financial Corporation, a Delaware corporation (the “Company”), FMFC Holdings, LLC, a
Delaware limited liability company (the “Investor”), and certain other signatories thereto,
Stockholder will contribute to Holdings all of the shares of Company common stock and options to
purchase Company common stock owned by him, and in return Holdings will (i) issue shares of its
common stock and options to purchase its common stock to Stockholder and (ii) pay cash to
Stockholder in the amount of $45.5 million;

     WHEREAS, Stockholder will benefit from the consummation of the transactions contemplated by
the Exchange Agreement; and

     WHEREAS, as a condition to the consummation of the transactions contemplated by the Exchange
Agreement, Holdings has required that Stockholder execute and deliver this Agreement and
Stockholder desires to do so.

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

     1. Definitions. Capitalized terms used but not defined herein shall have the meanings
ascribed to them in the Exchange Agreement. For purposes of Sections 3, 4, 5 and 7 hereof, the
term “Holdings” shall include the Company and all Affiliates of Holdings.

     2. Consideration. The Company and Stockholder have entered into this Agreement and
made the covenants set forth herein in order to induce Holdings and the Investor to consummate the
transactions contemplated by the Exchange Agreement, which includes payments of cash and issuances
of stock and options to Stockholder.

     3. Non-Competition. Stockholder covenants and agrees that during the Non-Competition
Period (as defined below) Stockholder will not:

     (a) engage, directly or indirectly, in any manner (whether as an owner, officer,
director, partner, manager, employee, independent contractor, consultant or otherwise) in
the Business (as defined below) anywhere in the Territory; provided,
however, that the passive ownership by Stockholder of no more than one percent (1%)
of the total equity securities of a publicly-traded entity shall not violate the provisions
of this Section 3;

 

 

     (b) engage, directly or indirectly, in any activity that competes with the Business
anywhere in the Territory;

     (c) accept employment with or provide any services to, directly or indirectly, in any
manner (whether as an owner, officer, director, partner, manager, employee, independent
contractor, consultant or otherwise) any competitor of the Holdings or any of such
competitor’s successors, subsidiaries or affiliates; or

     (d) attempt in any way, directly or indirectly, to obtain for himself, or others, or
to divert from the Holdings any rights, benefits, sales or profits arising out of or in
connection with the Business.

For purposes hereof, “Territory” shall mean the United States.

For purposes hereof, the “Non-Competition Period” shall mean the period beginning on the
Effective Date and ending on the fifth anniversary of the Effective Date.

For purposes hereof, “Business” shall mean, collectively, (i) the provision or coordination
of accounting, finance, claims handling, underwriting, investment and general welfare services as a
third-party administrator for public entity risk pools or excess reinsurance pools and their
members, (ii) any brokerage, agency, managing general agency, administrator, third-party
administrator, insurance or other similar activities relating to the property and casualty or
excess and surplus segments of the insurance industry; and (iii) any other business in which
Holdings or any Subsidiary of Holdings is then engaged.

     4. Non-Solicitation. Stockholder covenants and agrees that during the Non-Competition
Period, Stockholder will not, directly or indirectly, in any manner (whether as an owner, officer,
director, partner, manager, employee, independent contractor, consultant or otherwise):

     (a) solicit any Producer or customer of the Holdings for policies, products or
services competitive with the Holdings or its Subsidiaries; or

     (b) solicit for employment or other services or employ or engage as a consultant or
otherwise any person who is or was an employee of Holdings.

The covenant in subparagraph (a) above applies to those Producers and customers and the related
entities of the Producers and customers through which wrote, sold or produced any of its policies,
products or services during the twelve (12) month period prior to the termination of Stockholder’s
employment with the Company, and those prospective Producers and customers with which Holdings
pursued sales during such period.

     5. Non-Disparagement. Stockholder covenants and agrees that from the Effective Date
and thereafter, (i) Stockholder shall not induce or incite claims of discrimination, wrongful
discharge, or any other claims against Holdings (including directors, officers, employees or equity
holders of Holdings), by any other persons, employees or entities, (ii) Stockholder shall not
undertake any harassing or disparaging

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conduct directed at Holdings (including any of the directors, officers, employees or equity
holders of Holdings), and (iii) Stockholder shall not make any negative or derogatory statements
concerning Holdings (including the officers, directors, employees, equity holders and agents of
Holdings) or the policies, products or services of Holdings.

     6. Assignment. Holdings shall have the right to assign, in whole or in part and from
time to time, to any purchaser of any segment of the Business, the rights of Holdings set forth in
Sections 3, 4 and 5 of this Agreement to the extent that they relate to the segment of the Business
that is transferred to such purchaser and, upon such assignment, the provisions of Sections 3, 4
and 5 shall continue to bind Stockholder in the same manner as prior to such assignment.

     7. Confidential Information.

     (a) Non-Disclosure. Stockholder in the past has learned and had access to and
may, from time to time, learn or have additional access to information and/or materials,
constituting trade secrets and other confidential and proprietary information of Holdings
or predecessors, or of third parties to whom Holdings or predecessors is obligated to
maintain the confidentiality of, including, but not by way of limitation, financial data,
pricing information, technical data, future plans, Producer and customer and prospective
Producer and customer requirements and marketing techniques and procedures (the
“Confidential Information”). Notwithstanding the foregoing, information which is
or becomes generally available to the public other than as a result of a disclosure by the
Stockholder in violation of this Agreement or other obligation of confidentiality shall not
be deemed Confidential Information for purposes hereof. Holdings shall not be required to
advise Stockholder specifically of the confidential nature of any such Confidential
Information, nor shall Holdings be required to affix a designation of confidentiality to
any tangible item delivered or made available to Stockholder, in order to establish and
maintain the confidential nature of the same. Confidential Information shall include the
work product of Stockholder developed or to be developed as a part or in furtherance of, or
during the working hours of, Stockholder’s engagement with Holdings, including all
financial data, Producers and customers and prospective Producers and customers developed
or to be developed or identified or to be identified by Stockholder. All Confidential
Information provided to Stockholder by Holdings or predecessors or to which Stockholder,
intentionally or inadvertently, otherwise becomes aware, knowledgeable, or in possession of
as a direct or indirect result of Stockholder’s involvement with Holdings in the capacity
of director, employee, or stockholder, shall be held and protected by Stockholder with the
strictest confidentiality, and Stockholder shall not, whether during or after employment,
cause or allow any of the Confidential Information to be disclosed, delivered, transferred,
or otherwise made known to any person or entity not expressly authorized by Holdings to
receive or be made aware of the same. Disclosure of Confidential Information by
Stockholder, except as specifically required in the performance of his duties to Holdings,
to any person or entity not then an employee of Holdings who is not
subject to a confidentiality agreement similar to this Section 7 and with a need to

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know such Confidential Information shall require prior written authorization by the Board
of Directors of Holdings.

     (b) Limitation on Use. All Confidential Information of Holdings or
predecessors, or of any third party to whom Holdings or predecessors owes a duty of
non-disclosure, which Stockholder has received, receives or becomes knowledgeable of shall
be utilized by Stockholder for the singular purpose of carrying out Stockholder’s duties
and undertakings on behalf of Holdings. Stockholder shall diligently protect and maintain
the confidentiality of the Confidential Information. In no event shall Stockholder,
whether during or after employment, copy any Confidential Information, except as needed,
nor utilize any Confidential Information in a manner so as to compete with Holdings, or to
aid or further the competition of any other person or entity with Holdings, or to otherwise
disclose or dispose thereof for personal gain or for any reason injurious to the interests
of Holdings. Upon termination of Stockholder’s employment for any reason, Stockholder
shall immediately turn over to Holdings all books, records, financial data, price lists,
Producer or customer lists and other material relating to Stockholder’s engagement or to
the business of Holdings.

     8. Construction. Whenever possible, each provision of this Agreement shall be
interpreted in such manner as to be effective and valid under applicable law, but if any provision
of this Agreement or the application thereof to any party or circumstance shall be prohibited by or
invalid under applicable law, including, without limitation, by reason of its being extended over
too great a period of time or too large a geographic area or over too great a range of activities
or otherwise, such provision shall be ineffective to the minimal extent of such prohibition or
invalidity, without invalidating the remainder of such provision or the remaining provisions of
this Agreement or the application of such provision and, if applicable, such provision shall be
interpreted to extend only over the maximum period of time, geographic area or range of activities
as to which is may be enforceable.

     9. Injunctive Relief and Other Remedies. Stockholder agrees that any breach of the
provisions hereof will result in irreparable damage to Holdings for which Holdings will have no
adequate remedy at law, and, therefore if such a breach should occur, Stockholder consents to any
temporary or permanent injunction or decree of specific performance by any court of competent
jurisdiction in favor of Holdings enjoining any such breach, without prejudice to any other right
or remedy to which Holdings shall be entitled and without requirement of a bond or other security.
Stockholder agrees that if Stockholder breaches any of his obligations hereunder, Holdings shall
not be obligated to pay Stockholder any salary or benefits with respect to such period during which
Stockholder is in breach pursuant to the Amended and Restated Employment Agreement, dated of even
date herewith, between Stockholder and the Company.

     10. Costs of Enforcement. In the event either party brings an action or proceeding to
enforce any provision or provisions of this Agreement or to obtain damages
as a result of a breach of this Agreement or to enjoin any breach of this Agreement, the
nonbreaching party in such action or proceeding shall be entitled to

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recover from the breaching
party any and all reasonable costs and expenses (including without limitation attorneys’ fees)
incurred by such nonbreaching party in connection with such action or proceeding.

     11. Extension of Time Period. The time periods for the restrictions set forth in this
Agreement shall be extended by the number of days in which Stockholder is in breach of such
restrictions.

     12. Notices. Any notice required to be given with respect to this Agreement shall be
in writing, and shall be deemed to have been duly given: (a) when delivered personally; (b) two (2)
business days after being deposited with a nationally recognized overnight courier with
instructions for next day delivery; (c) one (1) day after receipt of electronic confirmation if
sent by facsimile or electronic mail; and (d) five (5) business days after being deposited in the
mails, certified or registered, return receipt requested, and with the proper postage prepaid,
addressed as follows:

	 	 	 	 	 	 	 	 	 
	 	 	If to the Holdings:	 	First Financial Corporation	 	 
	 	 	 	 	29621 Northwestern Highway	 	 
	 	 	 	 	Southfield, Michigan 48034	 	 
	 	 	 	 	Attention:	 	 
	 

	 	 	 	 	 	 

	 	 
	 	 	 	 	Facsimile: 248-353-5879	 	 
	 

	 	If to Stockholder:	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Facsimile:	 	 	 	 
	 

	 	 	 	 	 	 	 	 

The address of any party hereto may be changed by a notice in writing given in accordance with the
provisions hereof.

     13. Amendments and Waiver. No amendment, waiver or consent with respect to any
provision of this Agreement shall in any event be effective, unless the same shall be in writing
and signed by each of the parties hereto, and then such amendment, waiver or consent shall be
effective only in the specific instance and for the specific purpose for which given.

     14. Entire Agreement. This Agreement contains the entire understanding of the parties
hereto respecting the subject matter hereof and supersedes all prior agreements, discussions and
understandings.

     15. Assignment; Successors. Stockholder may not assign any of his obligations
hereunder. Any assignment in violation of the foregoing shall be null and void. Subject to the
foregoing, this Agreement shall be binding upon the parties hereto and shall inure to
the benefit of the parties hereto and their respective heirs, executors, administrators, legal
representatives, successors and permitted assigns.

     16. Counterparts. This Agreement may be executed in one or more counterparts, each of
which shall constitute but one and the same instrument. One or

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more counterparts of this Agreement
may be delivered via facsimile, with the intention that they shall have the same effect as an
original counterpart hereof.

     17. Non-Waiver of Breach. A waiver by any party hereto of a particular breach or
default by another party in connection with any provision of this Agreement must be in writing and
shall not be deemed a waiver of a default by a third party or any subsequent default or breach of
the same or any other provision of this Agreement.

     18. GOVERNING LAW. THE VALIDITY AND EFFECT OF THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE INTERNAL SUBSTANTIVE LAWS OF THE STATE OF ILLINOIS.
ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF, OR WITH RESPECT TO, THIS AGREEMENT OR ANY JUDGMENT
ENTERED BY ANY COURT IN RESPECT THEREOF SHALL BE BROUGHT EXCLUSIVELY IN THE COURTS OF ILLINOIS OR
IN THE U.S. DISTRICT COURT FOR THE NORTHERN DISTRICT OF ILLINOIS, AND THE PARTIES HERETO ACCEPT THE
EXCLUSIVE JURISDICTION OF THOSE COURTS FOR THE PURPOSE OF ANY SUIT, ACTION OR PROCEEDING. IN
ADDITION, EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY
OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUIT, ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY JUDGMENT ENTERED BY ANY COURT IN
RESPECT THEREOF BROUGHT IN ILLINOIS OR THE U.S. DISTRICT COURT FOR THE NORTHERN DISTRICT OF
ILLINOIS, AND HEREBY FURTHER IRREVOCABLY WAIVES ANY CLAIM THAT ANY SUIT, ACTION OR PROCEEDINGS
BROUGHT IN ILLINOIS OR IN SUCH DISTRICT COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. THE
PARTIES HERETO HEREBY WAIVE ANY RIGHT TO A TRIAL BY JURY IN ANY SUIT, ACTION OR PROCEEDING ARISING
OUT OF, OR WITH RESPECT TO, THIS AGREEMENT AND AGREE THAT ANY SUCH SUIT, ACTION OR PROCEEDING SHALL
BE TRIED BEFORE A COURT AND NOT BEFORE A JURY.

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     IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year
first above written.

	 	 	 	 	 	 	 
	 	 	HOLDINGS:	 	 
	 
	 	 	 	 	 	 
	 	 	First Mercury Financial Corporation	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	/s/ Richard H. Smith 	 	 
	 
	 	Name:	 	 

Richard H. Smith	 	 
	 	 	Title:	 	President 	 	 
	 
	 	 	 	 	 	 
	 	 	STOCKHOLDER:	 	 
	 
	 	 	 	 	 	 
	 	 	/s/ Jerome M. Shaw 	 	 
	 	 	 	 	 
	 	 	Name: Jerome M. Shaw	 	 

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Exhibit 10.5

Execution
Copy

NON-COMPETITION AND CONFIDENTIALITY AGREEMENT

     This
Non-Competition and Confidentiality Agreement the
(“Agreement”) is dated June 14,
2004, and is effective as of June 14, 2004 (the “Effective Date”), by and between American
Risk Pooling Consultants, Inc., a Michigan corporation (the “Company”), and Jerome M. Shaw
(“Stockholder”).

     WHEREAS, the Company, Public Entity Risk Services of Ohio, Inc., an Ohio corporation (together
with the Company, the “Companies”), ARPCO Holdings, Inc., a Delaware corporation (the
“Purchaser”), Stockholder, Larry J. Spilkin and William S. Weaver (Stockholder, Spilkin and
Weaver being collectively referred to herein as the “Sellers”) have entered into that
certain Stock Purchase Agreement dated as of March 1, 2004 (the “Purchase Agreement”),
pursuant to which the Purchaser has agreed to purchase from the Sellers all of the outstanding
shares of capital stock of the Companies;

     WHEREAS, Stockholder will benefit from the consummation of the transactions contemplated by
the Purchase Agreement; and

     WHEREAS, as a condition to the consummation of the transactions contemplated by the Purchase
Agreement, the Purchaser has required that Stockholder execute and deliver this Agreement and
Stockholder desires to do so.

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

     1. Definitions. Capitalized terms used but not defined herein shall have the
meanings ascribed to them in the Purchase Agreement.

     2. Consideration. In consideration of the covenants made by Stockholder herein, the
Company shall pay Stockholder $250,000 per year for each year of the Non-Competition Period (as
defined below), which amount shall be payable quarterly in advance; provided,
however, that in the event Stockholder breaches in any material respect any of the
covenants set forth herein and such breach is not cured to the reasonable satisfaction of the
Company within ten (10) days after written notice thereof is delivered to Stockholder, Stockholder
shall return all amounts paid to him by the Company and the Company shall have no further
obligation to make any payments hereunder.

     3. Non-Competition. Stockholder covenants and agrees that during the Non-Competition
Period (as defined below) Stockholder will not:

     (a) engage, directly or indirectly, in any manner (whether as an owner, officer,
director, partner, manager, employee, independent contractor, consultant or otherwise) in
the Business (as defined below) anywhere in the Territory; provided,
however, that the passive ownership by Stockholder of no more than

 

 

one percent
(1%) of the total equity securities of a publicly-traded entity shall not violate the
provisions of this Section 3;

     (b) engage, directly or indirectly, in any activity that competes with the Business
anywhere in the Territory;

     (c) accept employment with or provide any services to, directly or indirectly, in any
manner (whether as an owner, officer, director, partner, manager, employee, independent
contractor, consultant or otherwise) any competitor of the Business; or

     (d) attempt in any way, directly or indirectly, to obtain for himself, or others, or
to divert from the Company or its Subsidiary and Affiliates any rights, benefits, sales or
profits arising out of or in connection with the Business.

For purposes hereof, “Territory” shall mean the United States.

For purposes hereof, the “Non-Competition Period” shall mean the period beginning on the
Effective Date and ending upon a Change of Control. For purposes hereof, “Change of
Control” shall mean (i) a merger or consolidation of the Company or the Purchaser with or into
another corporation or other entity pursuant to which the equity holders of the surviving
corporation or entity that did not beneficially own a majority of the voting power of the
outstanding shares of capital stock of the Company immediately prior to such merger or
consolidation, the effect of which is that such party or group beneficially owns at least a
majority of such voting power immediately after such merger or consolidation; (ii) the sale, lease,
license, conveyance or transfer of all or substantially all of the assets of the Company or the
Purchaser; (iii) except for the transactions contemplated by the Purchase Agreement, any purchase
of shares of capital stock of the Company or the Purchaser (either through a negotiated stock
purchase or a tender for such shares) by any party or group, through one, or a series of related
transactions, that did not beneficially own a majority of the voting power of the outstanding
shares of capital stock of the Company or the Purchaser immediately prior to such purchase, the
effect of which is that such party or group beneficially owns at least a majority of such voting
power immediately after such purchase; or (iv) any liquidation, dissolution or winding up of the
Company or the Purchaser, whether voluntary or involuntary.

For purposes hereof, “Business” shall mean, collectively, (i) the provision or coordination
of accounting, finance, claims handling, underwriting, investment and general welfare services as a
third party administrator for public entity risk pools or excess reinsurance pools and their
members; (ii) any brokerage, agency, managing general agency, administrator, third-party
administrator, insurance or other similar activities relating to the property and casualty or
excess and surplus segments of the insurance industry; and (iii) any other business in which the
Company or any direct or indirect parent company or Subsidiary of the Company is engaged during the
term hereof.

     4. Non-Solicitation. Stockholder covenants and agrees that during the
Non-Competition Period, Stockholder will not, directly or indirectly, in any manner (whether

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as an
owner, officer, director, partner, manager, employee, independent contractor, consultant or
otherwise):

     (a) solicit any customer of the Company or its Subsidiary for products or services
competitive with the Company or its Subsidiary; or

     (b) solicit for employment or other services or employ or engage as a consultant or
otherwise any person who is or was an employee of the Company or its Subsidiary and
Affiliates.

The covenant in subparagraph (a) above applies to those customers and the related entities of the
customers to which the Company or its Subsidiary sold any of its products or services during the
twelve (12) month period prior to the termination of Stockholder’s relationship with the Company as
an owner, officer, director, employee, consultant or otherwise, and those prospective customers
with which the Company or its Affiliates pursued sales during such period. The covenant in
paragraph (b) above will not prohibit any general solicitation for employment by Stockholder or any
of his Affiliates not specifically directed at employees of the Company or its Subsidiary and
Affiliates.

     5. Non-Disparagement. Stockholder covenants and agrees that from the Effective Date
and thereafter, (i) Stockholder shall not induce or incite claims of discrimination, wrongful
discharge, or any other claims against the Company, or any of its Affiliates (including their
directors, officers, employees or equity holders), by any other persons, employees or entities,
(ii) Stockholder shall not undertake any harassing or disparaging conduct directed at the Company,
or any of its Affiliates (including any of their directors, officers, employees or equity holders),
and (iii) Stockholder shall not make any negative or derogatory statements concerning the Company,
or the any of its Affiliates (including their officers, directors, employees, equity holders and
agents) or the Company’s products or services.

     6. Assignment. The Company shall have the right to assign, in whole or in part and
from time to time, to any purchaser of any segment of the Business, the rights of the Company set
forth in Sections 3, 4 and 5 of this Agreement to the extent that they relate to the segment of the
Business that is transferred to such purchaser and, upon such assignment, the provisions of
Sections 3, 4 and 5 shall continue to bind Stockholder in the same manner as prior to such
assignment.

     7. Confidential Information.

     (a) Non-Disclosure. Stockholder in the past has learned and had access to and
may, from time to time, learn or have additional access to information and/or materials,
constituting trade secrets and other confidential and proprietary information of the
Company or its Subsidiary or predecessors, or of third parties to whom the Company or its
Subsidiary or predecessors is obligated to maintain the
confidentiality of, including, but not by way of limitation, financial data, pricing
information, technical data, future plans, customer and prospective customer requirements
and marketing techniques and procedures (the

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“Confidential Information”).
Notwithstanding the foregoing, information which is or becomes generally available to the
public other than as a result of a disclosure by the Stockholder in violation of this
Agreement or other obligation of confidentiality shall not be deemed Confidential
Information for purposes hereof. Neither the Company nor its Subsidiary shall be required
to advise Stockholder specifically of the confidential nature of any such Confidential
Information, nor shall the Company or its Subsidiary be required to affix a designation of
confidentiality to any tangible item delivered or made available to Stockholder, in order
to establish and maintain the confidential nature of the same. Confidential Information
shall include any work product of Stockholder developed or to be developed as a part or in
furtherance of, or during the working hours of, Stockholder’s relationship with the Company
as an owner, officer, director, employee, consultant or otherwise, including all financial
data, customers and prospective customers developed or to be developed or identified or to
be identified by Stockholder. All Confidential Information provided to Stockholder by the
Company or its Subsidiary or predecessors or to which Stockholder, intentionally or
inadvertently, otherwise becomes aware, knowledgeable, or in possession of as a direct or
indirect result of Stockholder’s relationship with the Company as an owner, officer,
director, employee, consultant or otherwise shall be held and protected by Stockholder with
the strictest confidentiality, and Stockholder shall not, whether during or after the
termination of such relationship, cause or allow any of the Confidential Information to be
disclosed, delivered, transferred, or otherwise made known to any person or entity not
expressly authorized by the Company to receive or be made aware of the same. Disclosure of
Confidential Information by Stockholder, except as specifically required in the performance
of his duties to the Company, to any person or entity not then an employee of the Company
who is not subject to a confidentiality agreement similar to this Section 7 and with a need
to know such Confidential Information shall require prior written authorization by the
Board of Directors of the Company.

     (b) Limitation on Use. All Confidential Information of the Company or its
Subsidiary or predecessors, or of any third party to whom the Company or its Subsidiary or
predecessors owes a duty of non-disclosure, which Stockholder has received, receives or
becomes knowledgeable of shall be utilized by Stockholder for the singular purpose of
carrying out Stockholder’s duties and undertakings on behalf of the Company. Stockholder
shall diligently protect and maintain the confidentiality of the Confidential Information.
In no event shall Stockholder, whether during or after termination of his relationship with
the Company, copy any Confidential Information, except as needed, nor utilize any
Confidential Information in a manner so as to compete with the Company or its Subsidiary,
or to aid or further the competition of any other person or entity with the Company or its
Subsidiary, or to otherwise disclose or dispose thereof for personal gain or for any
reason injurious to the interests of the Company or its Subsidiary. Upon termination
of Stockholder’s relationship with the Company, Stockholder shall immediately turn over to
the Company all books, records,

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financial data, price lists, customer lists and other
material relating to the business of the Company or its Subsidiary.

     8. Release. In the event the Company fails to make payments required hereunder
(other than in connection with a good faith dispute with Stockholder) and such failure continues
for a period of twenty (20) days after written notice thereof is delivered to the Company,
Stockholder shall have no further obligations under Section 3 above.

     9. Construction. Whenever possible, each provision of this Agreement shall be
interpreted in such manner as to be effective and valid under applicable law, but if any provision
of this Agreement or the application thereof to any party or circumstance shall be prohibited by or
invalid under applicable law, including, without limitation, by reason of its being extended over
too great a period of time or too large a geographic area or over too great a range of activities
or otherwise, such provision shall be ineffective to the minimal extent of such prohibition or
invalidity, without invalidating the remainder of such provision or the remaining provisions of
this Agreement or the application of such provision and, if applicable, such provision shall be
interpreted to extend only over the maximum period of time, geographic area or range of activities
as to which it may be enforceable.

     10. Injunctive Relief and Other Remedies. Stockholder agrees that any breach of the
provisions hereof will result in irreparable damage to the Company for which the Company will have
no adequate remedy at law, and, therefore if such a breach should occur, Stockholder consents to
any temporary or permanent injunction or decree of specific performance by any court of competent
jurisdiction in favor of the Company enjoining any such breach, without prejudice to any other
right or remedy to which the Company shall be entitled and without requirement of a bond or other
security.

     11. Costs of Enforcement. In the event either party brings an action or proceeding to
enforce any provision or provisions of this Agreement or to obtain damages as a result of a breach
of this Agreement or to enjoin any breach of this Agreement, the prevailing party in such action or
proceeding shall be entitled to recover from the non-prevailing party any and all reasonable costs
and expenses (including, without limitation, attorneys’ fees) incurred by such prevailing party in
connection with such action or proceeding.

     12. Extension of Time Period. The time periods for the restrictions set forth in this
Agreement shall be extended by the number of days in which Stockholder is in breach of such
restrictions.

     13. Notices. Any notice required to be given with respect to this Agreement shall be
in writing, and shall be deemed to have been duly given: (a) when delivered personally; (b) two (2)
business days after being deposited with a nationally recognized
overnight courier with instructions for next day delivery; (c) one (1) day after receipt of
electronic confirmation if sent by facsimile or electronic mail; and (d) five (5) business days
after being deposited in the mails, certified or registered, return receipt requested, and with the
proper postage prepaid, addressed as follows:

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	 	If to the Company:
	 	American Risk Pooling Consultants, Inc.
	 

	 	 	 	c/o Glencoe Capital, LLC
	 

	 	 	 	222 West Adams Street, Suite 1000
	 

	 	 	 	Chicago, Illinois 60606
	 

	 	 	 	Attention: Douglas Patterson
	 

	 	 	 	Facsimile: (312) 795-0455
	 
	 	 	 	 
	 

	 	 	 	with a copy to:
	 
	 	 	 	 
	 

	 	 	 	McDermott, Will & Emery
	 

	 	 	 	227 West Monroe Street
	 

	 	 	 	Chicago, Illinois 60606
	 

	 	 	 	Attention: Scott M. Williams, Esq.
	 

	 	 	 	Facsimile: (312) 984-7700
	 
	 	 	 	 
	 

	 	If to Stockholder:
	 	Jerome M. Shaw
	 

	 	 	 	4751 Cove Road
	 

	 	 	 	Orchard Lake, Michigan 48323
	 
	 	 	 	 
	 

	 	 	 	and
	 
	 	 	 	 
	 

	 	 	 	Jerome M. Shaw
	 

	 	 	 	3 Grove Isle
	 

	 	 	 	Penthouse 1
	 

	 	 	 	Coconut Grove, Florida 33133
	 
	 	 	 	 
	 

	 	 	 	with a copy to:
	 
	 	 	 	 
	 

	 	 	 	Spilkin, Shapiro & Feeney, P.C.
	 

	 	 	 	29621 Northwestern Hwy.
	 

	 	 	 	Southfield, Michigan 48034
	 

	 	 	 	Attention: Larry J. Spilkin, Esq.

The address of any party hereto may be changed by a notice in writing given in accordance with the
provisions hereof.

     14. Amendments and Waiver. No amendment, waiver or consent with respect to any
provision of this Agreement shall in any event be effective, unless the same shall be in writing
and signed by each of the parties hereto, and then such amendment, waiver or consent shall be
effective only in the specific instance and for the specific purpose for which given.

     15. Entire Agreement. This Agreement contains the entire understanding of the parties
hereto respecting the subject matter hereof and supersedes all prior agreements, discussions and
understandings.

- 6 -

 

     16. Assignment; Successors. Stockholder may not assign any of his obligations
hereunder. Any assignment in violation of the foregoing shall be null and void. Subject to the
foregoing, this Agreement shall be binding upon the parties hereto and shall inure to the benefit
of the parties hereto and their respective heirs, executors, administrators, legal representatives,
successors and permitted assigns.

     17. Counterparts. This Agreement may be executed in one or more counterparts, each of
which shall constitute but one and the same instrument. One or more counterparts of this Agreement
may be delivered via facsimile, with the intention that they shall have the same effect as an
original counterpart hereof.

     18. Non-Waiver of Breach. A waiver by any party hereto of a particular breach or
default by another party in connection with any provision of this Agreement must be in writing and
shall not be deemed a waiver of a default by a third party or any subsequent default or breach of
the same or any other provision of this Agreement.

     19. GOVERNING LAW. THE VALIDITY AND EFFECT OF THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE INTERNAL SUBSTANTIVE LAWS OF THE STATE OF DELAWARE.
EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION
WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUIT, ACTION OR PROCEEDING ARISING
OUT OF OR RELATING TO THIS AGREEMENT OR ANY JUDGMENT ENTERED BY ANY COURT IN RESPECT THEREOF
BROUGHT IN ILLINOIS OR THE U.S. DISTRICT COURT FOR THE NORTHERN DISTRICT OF ILLINOIS, AND HEREBY
FURTHER IRREVOCABLY WAIVES ANY CLAIM THAT ANY SUIT, ACTION OR PROCEEDINGS BROUGHT IN ILLINOIS OR IN
SUCH DISTRICT COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. THE PARTIES HERETO HEREBY WAIVE ANY
RIGHT TO A TRIAL BY JURY IN ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF, OR WITH RESPECT TO, THIS
AGREEMENT AND AGREE THAT ANY SUCH SUIT, ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT
BEFORE A JURY.

*      *      *

- 7 -

 

     IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year
first above written.

	 	 	 	 	 	 	 
	 	 	COMPANY:	 	 
	 
	 	 	 	 	 	 
	 	 	American Risk Pooling Consultants, Inc.	 	 
	 
	 	 	 	 	 	 
	                                                       
	 

	 	By:	 	/s/ Richard H. Smith	 	 
	 

	 	 
	 	 

	 	 
	 

	 	Name:
	 	Richard H. Smith
	 	 
	 

	 	Title:	 	Vice President	 	 
	                                                        
	 
	 	 	 	 	 	 
	 	 	STOCKHOLDER:	 	 
	 
	 	 	 	 	 	 
	                                                       
	 	 	/s/ Jerome M. Shaw	 	 
	                                                        
	 	 	 	 	 
	 	 	Jerome M. Shaw	 	 

- 8 -

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