Document:

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                                                                   Exhibit 10.25

                                                               EXECUTION VERSION

                            STOCK PURCHASE AGREEMENT

                                  BY AND AMONG

                      O'SULLIVAN FILMS HOLDING CORPORATION,

                        O'SULLIVAN FILMS MANAGEMENT, LLC,

                                       AND

                                MATRIX FILMS, LLC

                                   DATED AS OF

                                FEBRUARY 15, 2006

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                                TABLE OF CONTENTS

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ARTICLE I DEFINITIONS ...................................................     2
   1.1  Certain Defined Terms ...........................................     2
   1.2  Other Interpretive Provisions ...................................     5

ARTICLE II PURCHASE AND SALE ............................................     6
   2.1  Subscription for the Shares .....................................     6
   2.2  Use of Proceeds .................................................     6

ARTICLE III DELIVERIES AND OTHER ACTIONS ................................     6
   3.1  Deliveries by the Seller ........................................     6
   3.2  Deliveries by the Buyers ........................................     7

ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE SELLER .................     8
   4.1  Organization ....................................................     8
   4.2  Authorization; Enforceability ...................................     8
   4.3  Capital Stock of the Seller .....................................     8
   4.4  Capital Stock of the Company ....................................     9
   4.5  Subsidiaries ....................................................     9
   4.6  No Conflicts or Approvals .......................................    10
   4.7  Proceedings .....................................................    10
   4.8  No Brokers' or Other Fees .......................................    10
   4.9  No Other Representations or Warranties ..........................    10

ARTICLE V REPRESENTATIONS AND WARRANTIES OF THE BUYERS ..................    11
   5.1  Organization ....................................................    11
   5.2  Authorization; Enforceability ...................................    11
   5.3  No Approvals or Conflicts .......................................    11
   5.4  Proceedings .....................................................    12
   5.5  No Brokers' or Other Fees .......................................    12
   5.6  Investment Intent ...............................................    12
   5.7  Ability to Bear Risk; Sophistication; Inquiry ...................    12
   5.8  Accredited Investor .............................................    13
   5.9  Financing .......................................................    13
   5.10 No Reliance .....................................................    13
   5.11 No Other Representations or Warranties ..........................    13

ARTICLE VI COVENANTS AND AGREEMENTS .....................................    13
   6.1  Transfer Taxes ..................................................    13
   6.2  Confidentiality .................................................    13
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   6.3  Injunctive Relief; Limitation on Scope ..........................    14

ARTICLE VII INDEMNIFICATION .............................................    14
   7.1  Indemnification by the Seller ...................................    14
   7.2  Indemnification by the Buyers ...................................    14
   7.3  Indemnification as Exclusive Remedy .............................    14
   7.4  Limitations on Indemnification ..................................    15
   7.5  Procedures ......................................................    15

ARTICLE VIII MISCELLANEOUS ..............................................    16
   8.1  Fees and Expenses ...............................................    16
   8.2  Governing Law ...................................................    16
   8.3  Projections .....................................................    16
   8.4  Amendment .......................................................    17
   8.5  Assignment ......................................................    17
   8.6  Waiver ..........................................................    17
   8.7  Notices .........................................................    17
   8.8  Complete Agreement ..............................................    19
   8.9  Counterparts ....................................................    19
   8.10 Publicity .......................................................    19
   8.11 Headings ........................................................    19
   8.12 Severability ....................................................    19
   8.13 Third Parties ...................................................    20
   8.14 Further Assurances ..............................................    20
   8.15 Arbitration .....................................................    20
   8.16 Consent to Jurisdiction; Waiver of Jury Trial ...................    20
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Schedules
Schedule 1.1(a)   Knowledge of the Buyers
Schedule 4.1      Organization
Schedule 4.3      Capital Stock of the Seller
Schedule 4.4      Capital Stock of the Company
Schedule 4.6(a)   No Conflicts (Seller)
Schedule 4.6(b)   Consents (Seller)
Schedule 4.7      Proceedings (Seller)
Schedule 5.3(a)   No Conflicts (Buyer)
Schedule 5.3(b)   Consents (Buyer)
Schedule 5.4      Proceedings (Buyer)

Exhibits
Exhibit A   Form of Promissory Note
Exhibit B   Form of Seller's Receipt
Exhibit C   Form of Stockholders' Agreement
Exhibit D   Form of Buyers' Receipt
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                            STOCK PURCHASE AGREEMENT

          This STOCK PURCHASE AGREEMENT, dated as of February 15, 2006, is by
and among O'Sullivan Films Holding Corporation, a Delaware corporation (the
"SELLER"), Matrix Films, LLC, a Virginia limited liability company (the "EQUITY
INVESTOR"), and O'Sullivan Films Management, LLC, a Virginia limited liability
company (the "MANAGEMENT INVESTOR" and, together with the Equity Investor, the
"BUYERS").

          A. All of the issued and outstanding shares of capital stock of the
Seller are owned by PolyOne Corporation, an Ohio corporation ("POLYONE");

          B. The Seller owns the issued and outstanding shares of capital stock
of O'Sullivan Films, Inc., a Delaware corporation (the "COMPANY");

          C. The Company is engaged in the business of developing and processing
polymer film and sheeting products and producing polymer film and sheeting, in
each case as conducted by the Company in the United States of America (the "EFG
BUSINESS"); and

          D. The Seller desires to sell to the Equity Investor, and the Equity
Investor desires to purchase and acquire from the Seller, upon the terms and
subject to the conditions set forth in this Agreement, 33 shares of the voting
Common Stock, par value $0.01 per share, of the Seller (the "EQUITY VOTING
SHARES"), and 187 shares of the non-voting Common Stock, par value $0.01 per
share, of the Seller (the "EQUITY NON-VOTING SHARES" and, together with the
Equity Voting Shares, the "EQUITY SHARES"), which Equity Shares will,
immediately after the execution of this Agreement, evidence approximately 25% of
the issued and outstanding capital stock of the Seller, all only to the extent
further described below, in consideration of certain payments by the Equity
Investor specifically described in this Agreement.

          E. The Seller desires to sell to the Management Investor, and the
Management Investor desires to purchase and acquire from the Seller, upon the
terms and subject to the conditions set forth in this Agreement, 49 shares of
the voting Common Stock, par value $0.01 per share, of the Seller (the
"MANAGEMENT VOTING SHARES"), and 491 shares of the non-voting Common Stock, par
value $0.01 per share, of the Seller (the "MANAGEMENT NON-VOTING SHARES" and,
together with the Management Voting Shares, the "MANAGEMENT SHARES"), which
Management Shares will, immediately after the execution of this Agreement,
evidence approximately 57% of the issued and outstanding capital stock of the
Seller, all only to the extent further described below, in consideration of
certain payments by the Management Investor specifically described in this
Agreement (the Management Shares together with the Equity Shares, the "SHARES").

          NOW, THEREFORE, in consideration of the mutual promises and
representations and upon the terms and subject to the conditions set forth in
this Agreement, and other good and valuable consideration, had and received, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
hereby agree as follows:

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                                    ARTICLE I
                                   DEFINITIONS

          1.1 CERTAIN DEFINED TERMS. As used in this Agreement, the following
terms have the following meanings:

          "1933 ACT" means the Securities Act of 1933, as amended, and the rules
          and regulations promulgated thereunder.

          "AAA" has the meaning set forth in SECTION 8.15.

          "AFFILIATE" means, with respect to any specified Person, any other
          Person that directly or indirectly controls, is controlled by, or is
          under common control with, such specified Person. The terms "control,"
          "controlled by" and "under common control with", with respect to the
          relationship between or among two or more Persons, means the
          possession, directly or indirectly, of the power to direct or cause
          the direction of the affairs or management of a Person, whether
          through the ownership of voting securities, by contract or otherwise,
          including the ownership, directly or indirectly, of securities having
          the power to elect a majority of the board of directors or similar
          body governing the affairs of such Person.

          "AGREEMENT" means this Stock Purchase Agreement (including the
          Disclosure Schedules), as amended, modified or supplemented from time
          to time.

          "ANCILLARY AGREEMENTS" means the Promissory Note, the Seller's
          Receipt, the Buyers' Receipt, the Stockholders' Agreement, and each
          other agreement, document, instrument or certificate contemplated by
          this Agreement or to be executed by the Buyers or the Seller in
          connection with the consummation of the transactions contemplated by
          this Agreement, in each case only as applicable to the relevant party
          or parties to such Ancillary Agreement, as indicated by the context in
          which such term is used.

          "BUSINESS DAY" means any day that is not a Saturday, a Sunday or other
          day on which banks in New York, New York are required or authorized by
          Law to be closed.

          "BUYERS" has the meaning set forth in the preamble.

          "BUYER INDEMNIFIED PERSONS" has the meaning set forth in SECTION
          7.1(A).

          "BUYER MATERIAL ADVERSE EFFECT" means any change, occurrence or
          development that has a material adverse effect on the business,
          results of operations or financial condition of either of the Buyers
          and its subsidiaries, taken as a whole, but excludes any effect (a)
          resulting from general economic conditions (whether as a result of
          acts of terrorism, war (whether or not declared), armed conflicts or
          otherwise), (b) affecting companies in the industry in which it
          conducts its business generally, (c) resulting from the announcement
          or performance of this

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          Agreement or the transactions contemplated hereby or (d) resulting
          from any actions required under this Agreement to obtain any Consent
          from any Person.

          "BUYERS' RECEIPT" has the meaning set forth in SECTION 3.2(B).

          "CLAIM" has the meaning set forth in SECTION 7.5(A).

          "CLAIM NOTICE" has the meaning set forth in SECTION 7.5(A).

          "CLOSING" means the time at which the Buyers and the Seller consummate
          the sale of the Shares as provided in this Agreement by the execution
          and delivery by the Seller of the documents and instruments referred
          to in SECTION 3.1 against delivery by the Buyers of the documents,
          items and instruments referred to in SECTION 3.2.

          "CLOSING DATE" means the date on which the Closing occurs.

          "COMMON STOCK" has the meaning set forth in SECTION 4.3.

          "COMPANY" has the meaning set forth in the recitals.

          "COMPANY MATERIAL ADVERSE EFFECT" means any change, occurrence or
          development that has a material adverse effect on the business,
          results of operations or financial condition of the EFG Business,
          taken as a whole, but excludes any effect (a) resulting from general
          economic conditions (whether as a result of acts of terrorism, war
          (whether or not declared), armed conflict or otherwise), (b) impacting
          companies in the industry in which the EFG Business is conducted
          generally, (c) resulting from the announcement or performance of this
          Agreement or the transactions contemplated hereby or (d) resulting
          from any actions required under this Agreement to obtain any Consent
          from any Person.

          "COMPANY STOCK" has the meaning set forth in SECTION 4.4.

          "CONSENT" means any consent, approval, authorization, waiver or
          notification required to be obtained from, filed with or delivered to
          any Governmental Authority or other Person in connection with the
          consummation of the transactions contemplated hereby.

          "DISCLOSURE SCHEDULES" means the schedules attached to this Agreement.

          "EFG BUSINESS" has the meaning set forth in the recitals.

          "EQUITY INVESTOR" has the meaning set forth in the preamble.

          "EQUITY NON-VOTING SHARES" has the meaning set forth in the recitals.

          "EQUITY SHARES" has the meaning set forth in the recitals.

          "EQUITY VOTING SHARES" has the meaning set forth in the recitals.

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          "GENERAL ENFORCEABILITY EXCEPTIONS" has the meaning set forth in
          SECTION 4.2.

          "GOVERNMENTAL AUTHORITY" means any government or other political
          subdivision (whether federal, state, local, feral or foreign), or any
          agency or instrumentality of any such government or political
          subdivision, or any federal, state, local, feral or foreign court or
          arbitrator, court sanctioned or agreed-upon.

          "GOVERNMENTAL ORDER" has the meaning set forth in SECTION 4.6(A).

          "INDEMNIFIED PARTY" means a party entitled to indemnification under
          this Agreement.

          "INDEMNIFYING PARTY" means a party obligated to provide
          indemnification under this Agreement.

          "KNOWLEDGE OF THE BUYERS" means the actual knowledge of the
          individuals listed on SCHEDULE 1.1(A).

          "LAW" means any law, statute, code, ordinance, rule or regulation of
          any Governmental Authority.

          "LECLAIR RYAN" has the meaning set forth in SECTION 2.2(C).

          "LIEN" means any voting trust, shareholder agreement, proxy or other
          similar restriction, lien, mortgage, pledge, security interest, or
          other encumbrance.

          "LOSSES" means any and all claims, liabilities, losses, damages,
          fines, penalties and costs (in each case including reasonable
          out-of-pocket expenses).

          "MANAGEMENT INVESTOR" has the meaning set forth in the preamble.

          "MANAGEMENT NON-VOTING SHARES" has the meaning set forth in the
          recitals.

          "MANAGEMENT SHARES" has the meaning set forth in the recitals.

          "MANAGEMENT VOTING SHARES" has the meaning set forth in the recitals.

          "OUTSTANDING NON-VOTING COMMON STOCK" has the meaning set forth in
          SECTION 4.3.

          "OUTSTANDING STOCK" has the meaning set forth in SECTION 4.3.

          "OUTSTANDING VOTING COMMON STOCK" has the meaning set forth in SECTION
          4.3.

          "PERMITTED LIEN" means Liens for Taxes, assessments and other charges
          of Governmental Authorities not yet due and payable or being contested
          in good faith by appropriate proceedings.

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          "PERSON" means any individual, sole proprietorship, partnership, firm,
          corporation, association, trust, unincorporated organization, joint
          venture, limited liability company, Governmental Authority or other
          legal entity.

          "POLYONE" has the meaning set forth in the recitals.

          "PROCEEDING" means any action, suit, legal proceeding, administrative
          enforcement proceeding or arbitration proceeding before any
          Governmental Authority.

          "PROMISSORY NOTE" has the meaning set forth in SECTION 2.1.

          "PURCHASE PRICE" has the meaning set forth in SECTION 2.1.

          "RESPONSIBLE PARTY" has the meaning set forth in SECTION 7.5(B)(II).

          "SELLER" has the meaning set forth in the preamble.

          "SELLER INDEMNIFIED PERSONS" has the meaning set forth in SECTION 7.2.

          "SELLER'S RECEIPT" has the meaning set forth in SECTION 3.1(B).

          "SHARES" has the meaning set forth in the recitals.

          "STOCKHOLDERS' AGREEMENT" has the meaning set forth in SECTION 3.1(D).

          "SUBSCRIPTION" has the meaning set forth in SECTION 2.1.

          "TAX" or "TAXES" means any income, alternative or add-on minimum,
          gross receipts, sales, use, ad valorem, franchise, profits, license,
          transfer, withholding, payroll, employment, excise, severance, stamp,
          occupation, premium, value added, property, environmental or windfall
          profits taxes, customs, duties or similar fees, assessments or charges
          of any kind whatsoever, together with any interest and any penalties,
          additions to tax or additional amounts imposed by any Taxing
          Authority.

          "TAXING AUTHORITY" means any Governmental Authority responsible for
          the administration or imposition of any Tax.

          "THIRD PARTY CLAIM" has the meaning set forth in SECTION 7.5(B)(I).

          "TRANSFER TAXES" has the meaning set forth in SECTION 6.1.

          1.2 OTHER INTERPRETIVE PROVISIONS. The words "hereof," "herein" and
"hereunder" and words of similar import when used in this Agreement refer to
this Agreement as a whole (including any Disclosure Schedules hereto) and not to
any particular provision of this Agreement, and all Article, Section, Schedule
and Exhibit references are to this Agreement unless otherwise specified. The
words "include," "includes" and "including" will be deemed to be followed by the
phrase "without limitation." The meanings given to terms defined herein and

                                       -5-

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references herein will be equally applicable to both the singular and plural
forms of such terms. Whenever the context may require, any pronoun includes the
corresponding masculine, feminine and neuter forms. Except as otherwise
expressly provided herein, all references to "dollars" or "$" will be deemed
references to the lawful money of the United States of America.

                                   ARTICLE II
                                PURCHASE AND SALE

          2.1 SUBSCRIPTION FOR THE SHARES. Concurrently with the execution of
this Agreement and subject to the terms and conditions set forth in this
Agreement, the Buyers shall subscribe and apply for the purchase of the Shares
(the "SUBSCRIPTION"), and the Buyers shall pay to the Seller, in exchange
therefor, the aggregate sum of $1,515,000 (the "PURCHASE PRICE"), consisting of
$550,000 in cash from the Equity Investor, $875,000 in cash from the Management
Investor, and $90,000 of which will be paid in the form of a promissory note
issued by the Management Investor to the Seller as payee in substantially the
form attached hereto as EXHIBIT A (the "PROMISSORY NOTE"). The Buyers shall pay
the Purchase Price to the Seller by wire transfers of immediately available
funds to accounts designated in writing by Seller, which accounts will have been
designated at least one Business Day prior to the date of this Agreement, and by
delivery of the Promissory Note at Closing.

          2.2 USE OF PROCEEDS. At Closing, the Seller shall pay out of the
Purchase Price, by wire transfers of immediately available funds to accounts
designated in writing (which accounts will have been designated at least one
Business Day prior to the date of this Agreement) (a) $250,000 to Matrix Capital
Markets Group, Inc. as a closing fee; (b) $50,000 to PolyOne as reimbursement
for the prior payment by PolyOne of a retainer fee for Matrix Capital Markets
Group, Inc.; (c) $205,577.93 to PolyOne as reimbursement for the prior payment
by PolyOne of legal fees to LeClair Ryan, A Professional Corporation, which firm
serves as counsel for the Buyers ("LECLAIR RYAN"), in excess of $50,000; (d)
$105,000 to PolyOne as reimbursement for the prior payment by PolyOne to GMAC
Commercial Finance, LLC of certain due diligence deposits; (e) $50,000 to
PolyOne as reimbursement for the prior payment by PolyOne to LaSalle Business
Credit, LLC of a deposit; (f) $22,337.50 to PolyOne as reimbursement for the
prior payment by PolyOne to Chicago Title Insurance Co. of certain transfer
taxes and recording fees; (g) $1,200 to PolyOne as reimbursement for the prior
payment by PolyOne to Wachovia of environmental review completion expenses; and
(h) $29,150 to PolyOne as reimbursement for the prior payment by PolyOne to
Survey America Inc., or individual surveyors, for surveys of EFG Business real
estate in both Winchester, Virginia and Lebanon, Pennsylvania.

                                  ARTICLE III
                          DELIVERIES AND OTHER ACTIONS

          3.1 DELIVERIES BY THE SELLER. Concurrently with the execution of this
Agreement, the Seller shall deliver, or cause to be delivered, to each Buyer the
following items:

          (a) newly-issued stock certificate(s) representing the Shares
purchased by such Buyer and issued in the name of such Buyer;

          (b) a receipt, in substantially the form attached hereto as EXHIBIT B
(the "SELLER'S RECEIPT"), evidencing the Seller's receipt of the Purchase Price;

                                      -6-

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          (c) copies of the resolutions of the board of directors of the Seller
authorizing and approving this Agreement, the Subscription, and all other
transactions and agreements contemplated by this Agreement, certified by the
Secretary or an Assistant Secretary of the Seller to be true and complete and in
full force and effect and unmodified as of the date of this Agreement;

          (d) a stockholders' agreement, in the form attached hereto as EXHIBIT
C, by and among the Seller, the Buyers, and PolyOne (the "STOCKHOLDERS'
AGREEMENT"), duly executed by the Seller and PolyOne;

          (e) a copy of the certificate of incorporation of the Seller certified
as of a date no more than 16 days prior to the date of this Agreement by the
Secretary of State of the State of Delaware;

          (f) a certificate of the Secretary of State of the State of Delaware
as to the good standing of the Seller as of a date no more than 16 days prior to
the Closing Date;

          (g) a certificate of the Secretary or an Assistant Secretary of the
Seller, given by him or her on behalf of the Seller and not in his or her
individual capacity, certifying as to the bylaws of the Seller.

          (h) a copy of the certificate of incorporation of the Company
certified as of a date no more than 16 days prior to the date of this Agreement
by the Secretary of State of the State of Delaware;

          (i) a certificate of the Secretary of State of the State of Delaware
as to the good standing of the Company as of a date no more than 16 days prior
to the Closing Date; and

          (j) a certificate of the Secretary or an Assistant Secretary of the
Company, given by him or her on behalf of the Company and not in his or her
individual capacity, certifying as to the bylaws of the Company.

          3.2 DELIVERIES BY THE BUYERS. Concurrently with the execution of this
Agreement, the Buyers shall deliver, or cause to be delivered, to the Seller the
following items:

          (a) the Purchase Price as provided in SECTION 2.1, including the
Promissory Note, duly executed by the Management Investor.

          (b) a receipt, in substantially the form attached hereto as EXHIBIT D
(the "BUYERS' RECEIPT"), evidencing the Buyers' receipt of the Shares;

          (c) a copy of the Stockholders' Agreement, duly executed by the
Buyers;

          (d) copies of the resolutions of the boards of managers or the
members, as appropriate, of each Buyer authorizing and approving this Agreement,
the Subscription, and all other transactions and agreements contemplated by this
Agreement, certified by the Secretary or an Assistant Secretary of each Buyer to
be true and complete and in full force and effect and unmodified as of the date
of this Agreement;

                                      -7-

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          (e) a copy of the articles of organization of the Buyers certified as
of a date no more than 16 days prior to the date of this Agreement by the State
Corporation Commission of the Commonwealth of Virginia;

          (f) a certificate of existence issued by the State Corporation
Commission of the Commonwealth of Virginia for each Buyer as of a date no more
than 16 days prior to the Closing Date; and

          (g) a certificate of the Secretary or an Assistant Secretary of each
Buyer, given by him or her on behalf of such Buyer and not in his or her
individual capacity, certifying as to the operating agreement of such Buyer.

                                   ARTICLE IV
                  REPRESENTATIONS AND WARRANTIES OF THE SELLER

          The Seller hereby represents and warrants to the Buyers as follows:

          4.1 ORGANIZATION. Each of the Seller and the Company is a corporation
duly incorporated, validly existing and in good standing under the Laws of the
State of Delaware. The Seller has the requisite corporate power and authority to
carry on the EFG Business as currently conducted. The Company has the requisite
corporate power and authority to own, lease and operate its assets and to carry
on its business as now being conducted and, except as indicated on SCHEDULE 4.1,
is duly qualified or licensed to do business and is in good standing in the
jurisdictions in which the ownership of its property or the conduct of its
business requires such qualification or license, except where the failure to be
so qualified or licensed (a) would not reasonably be expected, individually or
in the aggregate, to have a material adverse effect on the ability of the Seller
to consummate the transactions contemplated by this Agreement or (b) with
respect to the Company, would not reasonably be expected, individually or in the
aggregate, to have a Company Material Adverse Effect.

          4.2 AUTHORIZATION; ENFORCEABILITY. The Seller has the requisite
corporate power and authority to execute and deliver this Agreement and the
Ancillary Agreements to which it is a party and to perform its obligations
hereunder and thereunder. The execution and delivery of this Agreement and all
applicable Ancillary Agreements by the Seller and the performance by it of its
obligations hereunder and thereunder have been duly authorized by all necessary
corporate action on the part of such party and no other corporate or stockholder
proceedings or actions are necessary to authorize and consummate this Agreement,
the Ancillary Agreements or the transactions contemplated hereby or thereby.
This Agreement has been duly executed and delivered by the Seller and, assuming
due authorization, execution and delivery by the Buyers, constitutes a valid and
binding agreement of the Seller, enforceable against it in accordance with its
terms, except as may be limited by applicable bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and other similar Laws relating to or
affecting creditors' rights generally and general equitable principles (whether
considered in a Proceeding in equity or at law) (the "GENERAL ENFORCEABILITY
EXCEPTIONS").

          4.3 CAPITAL STOCK OF THE SELLER. The authorized capital stock of the
Seller consists solely of 1,000 shares of common stock, par value $0.001 per
share (the "COMMON STOCK"), itself consisting of (a) 100 shares of voting Common
Stock, 18 of which are issued and

                                      -8-

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outstanding immediately prior to the effectiveness of this Agreement (the
"OUTSTANDING VOTING COMMON STOCK") and (b) 900 shares of non-voting Common
Stock, 162 of which are issued and outstanding immediately prior to the
effectiveness of this Agreement (the "OUTSTANDING NON-VOTING COMMON STOCK" and,
together with the Outstanding Voting Common Stock, the "OUTSTANDING STOCK"). The
shares of Outstanding Stock represent the only issued and outstanding shares of
capital stock of the Seller. All of the issued and outstanding shares of
Outstanding Stock are owned, beneficially and of record, free and clear of any
Liens, other than Permitted Liens, as set forth on SCHEDULE 4.3. All of the
shares of Outstanding Stock were duly authorized and validly issued and are
fully paid and nonassessable, and each issuance of such shares was in accordance
with the requirements of all applicable federal and state securities laws.
Except for this Agreement or as set forth on SCHEDULE 4.3, there are no
outstanding subscriptions, options, warrants, calls, conversion or other rights,
agreements, commitments, arrangements or understandings relating to the sale,
issuance or voting of any shares of the capital stock of the Seller, or of any
securities or other instruments convertible into, exchangeable for or evidencing
the right to purchase any shares of capital stock of the Seller. There are no
outstanding agreements or commitments obligating the Seller to repurchase,
redeem or otherwise acquire any outstanding shares or other equity interests of
the Seller. Concurrently with the execution of this Agreement, the Seller will
issue the Shares to the Buyers free and clear of any Liens other than Liens
created by or on behalf of the Buyers. Assuming the accuracy of the
representations and warranties of the Buyers contained in ARTICLE V of this
Agreement and that the offer, sale and issuance of the Shares is exempt from the
registration requirements of the 1933 Act and all applicable state securities
laws, the Shares that are being purchased by the Buyers hereunder, when issued,
sold, and delivered in accordance with the terms of this Agreement for the
consideration expressed herein, will be duly and validly issued, fully paid, and
nonassessable, and will be free of restrictions on transfer other than
restrictions on transfer contained in the Stockholders Agreement and under
applicable state and federal securities laws.

          4.4 CAPITAL STOCK OF THE COMPANY. The authorized capital stock of the
Company consists solely of 1,000 shares of Common Stock, par value $0.001 per
share, 1,000 of which are issued and outstanding (the "COMPANY STOCK"). The
shares of Company Stock represent the only issued and outstanding shares of
capital stock of the Company. All of the issued and outstanding shares of
Company Stock are owned, beneficially and of record, free and clear of any
Liens, other than Permitted Liens, by the Seller. All of the shares of Company
Stock were duly authorized and validly issued and are fully paid and
nonassessable, and each issuance of such shares was in accordance with the
requirements of all applicable federal and state securities laws. Except as set
forth on SCHEDULE 4.4, there are no outstanding subscriptions, options,
warrants, calls, conversion or other rights, agreements, commitments,
arrangements or understandings relating to the sale, issuance or voting of any
shares of the capital stock of the Company, or of any securities or other
instruments convertible into, exchangeable for or evidencing the right to
purchase any shares of capital stock of the Company. There are no outstanding
agreements or commitments obligating the Seller or the Company to repurchase,
redeem or otherwise acquire any outstanding shares or other equity interests of
the Company.

          4.5 SUBSIDIARIES. The Seller does not own any equity interest in any
Person other than the Company. The Company does not own any equity interest in
any Person.

          4.6 NO CONFLICTS OR APPROVALS.

                                       -9-
<PAGE>

          (a) Except as set forth on SCHEDULE 4.6(A), the execution, delivery
and performance by the Seller of this Agreement and the Ancillary Agreements to
which it is a party, and the consummation by the Seller of the transactions
contemplated hereby and thereby, do not and will not (i) violate, conflict with
or result in a breach of the articles of incorporation or the bylaws of the
Seller or of the Company, (ii) subject to the receipt of the Consents set forth
on SCHEDULE 4.6(B), violate, conflict with or result in a breach of, or
constitute a default by the Seller or the Company (or create an event which,
with notice or lapse of time or both, would constitute a default) or give rise
to any right of termination, cancellation or acceleration under, or result in
the creation of any Lien, other than Permitted Liens, upon any of the properties
or assets of the Seller or the Company, or on the Shares, under any Material
Contract (as defined in that certain Asset Contribution and Assumption of
Liabilities Agreement, dated as of December 31, 2005, by and among PolyOne
Engineered Films, Inc., PolyOne and the Company), or (iii) subject to the
receipt of the Consents set forth on SCHEDULE 4.6(B), violate any Law or order,
writ, judgment, injunction or decree issued by any Governmental Authority (a
"GOVERNMENTAL ORDER") applicable to the Seller or the Company, or any of their
respective properties or assets, except as would not, individually or in the
aggregate, have a Company Material Adverse Effect or a material adverse effect
on the ability of the Seller to consummate the transactions contemplated by this
Agreement.

          (b) Except as set forth on SCHEDULE 4.6(B), no Consent is required to
be obtained by the Seller for the consummation by the Seller of the transactions
contemplated by this Agreement that if not obtained would have a Company
Material Adverse Effect or a material adverse effect on the ability of the
Seller to consummate the transactions contemplated by this Agreement.

          4.7 PROCEEDINGS. As of the date of this Agreement, except as set forth
on SCHEDULE 4.7, there are no Proceedings pending or, to the Knowledge of the
Seller, threatened against the Seller or the Company that, if adversely decided,
would have a material adverse effect on the ability of the Seller to consummate
the transactions contemplated by this Agreement.

          4.8 NO BROKERS' OR OTHER FEES. Except for KeyBanc Capital Markets, (a)
no Person has been employed by or on behalf of the Seller as a broker, finder or
investment banker in connection with the transactions contemplated hereby, and
(b) no Person with which Seller has had any dealings or communications of any
kind is entitled to any fee or commission or like payment in connection with the
transactions contemplated hereby. No Buyer will be liable for any such fees,
commissions, or like payments to KeyBanc Capital Markets.

          4.9 NO OTHER REPRESENTATIONS OR WARRANTIES. Except for the
representations and warranties contained in this ARTICLE IV, neither the Seller
nor any other Person makes any other express or implied representation or
warranty to the Buyers.

                                      -10-

<PAGE>

                                    ARTICLE V
                  REPRESENTATIONS AND WARRANTIES OF THE BUYERS

          Each of the Buyers hereby represents and warrants, severally and not
jointly, to the Seller as follows:

          5.1 ORGANIZATION. Such Buyer is a limited liability company duly
formed, validly existing and in good standing under the Laws of its jurisdiction
of formation. Such Buyer has the requisite limited liability company power and
authority to own, lease and operate its assets and to carry on its business as
now being conducted.

          5.2 AUTHORIZATION; ENFORCEABILITY. Such Buyer has the requisite
limited liability company power and authority to execute and deliver this
Agreement and the Ancillary Agreements to which the Buyer is a party and perform
its obligations hereunder and thereunder. The execution and delivery of this
Agreement by such Buyer and the Ancillary Agreements to which such Buyer is a
party and the performance by such Buyers of its obligations hereunder and
thereunder have been duly authorized by all necessary limited liability company
action on the part of such Buyer and, upon such authorization, no other limited
liability company or equityholder proceedings or actions are necessary to
authorize or consummate this Agreement, the Ancillary Agreements or the
transactions contemplated hereby or thereby. This Agreement and the Ancillary
Agreements to which such Buyer is a party have been duly executed and delivered
by such Buyer and, assuming due authorization, execution and delivery by the
Seller, constitute valid and binding agreements of such Buyer, enforceable
against it in accordance with their terms, subject to the General Enforceability
Exceptions.

          5.3 NO APPROVALS OR CONFLICTS.

          (a) The execution, delivery and performance by such Buyer of this
Agreement and the Ancillary Agreements to which such Buyer is a party and the
consummation by such Buyer of the transactions contemplated hereby and thereby
do not and will not (i) violate, conflict with or result in a breach by such
Buyer of the organizational documents of such Buyer, (ii) violate, conflict with
or result in a breach of, or constitute a default by such Buyer (or create an
event which, with notice or lapse of time or both, would constitute a default)
or give rise to any right of termination, cancellation or acceleration under, or
result in the creation of any Lien, other than a Permitted Lien, upon any of the
properties or assets of such Buyer under, any material note, bond, mortgage,
indenture, license, lease, contract, agreement or other instrument to which such
Buyer or any of its properties or assets may be bound, or (iii) subject to the
receipt of the requisite approvals referred to on SCHEDULE 5.3(A), violate any
Governmental Order or Law applicable to such Buyer or any of its properties or
assets, except as would not, individually or in the aggregate, have a Buyer
Material Adverse Effect or a material adverse effect on the ability of such
Buyer to consummate the transactions contemplated by this Agreement.

          (b) Except as set forth on SCHEDULE 5.3(B), no Consent is required to
be obtained by such Buyer for the consummation by such Buyer of the transactions
contemplated by this Agreement or the Ancillary Agreements to which such Buyer
is a party.

          5.4 PROCEEDINGS. Except as set forth on SCHEDULE 5.4, there are no
Proceedings pending or, to the Knowledge of the Buyers, threatened against such
Buyer or any

                                      -11-

<PAGE>

of its Affiliates that would reasonably be expected to have a material adverse
effect on the ability of such Buyer to consummate the transactions contemplated
by this Agreement or the Ancillary Agreements to which such Buyer is a party.
Except as set forth on SCHEDULE 5.4, such Buyer is not subject to any
Governmental Order that would reasonably be expected to have a material adverse
effect on the ability of such Buyer to consummate the transactions contemplated
by this Agreement or the Ancillary Agreements to which such Buyer is a party.

          5.5 NO BROKERS' OR OTHER FEES. Except for Matrix Capital Markets
Group, Inc., (a) no Person has been employed by or on behalf of such Buyer as a
broker, finder or investment banker in connection with the transactions
contemplated hereby, and (b) no Person with which such Buyer has had any
dealings or communications of any kind is entitled to any fee or commission or
like payment in connection with the transactions contemplated hereby. The Seller
will not be liable for any such fees, commissions, or like payments to Matrix
Capital Markets Group, Inc.

          5.6 INVESTMENT INTENT. Such Buyer is acquiring its Shares for the
Buyer's own accounts for investment and not with a view to or for sale in
connection with any distribution thereof other than in compliance with the 1933
Act. Such Buyer is aware that there are limitations and restrictions on the
circumstances under which the Buyers may offer to sell, transfer or otherwise
dispose of the Shares, so that it might not be possible to liquidate this
investment readily and it may be necessary to hold the Shares for an indefinite
period. Such Buyer agrees that it will not transfer any of the Shares, except in
compliance with the 1933 Act. Such Buyer further understands and acknowledges
that the Shares have not been registered under the 1933 Act and agrees that the
Shares may not be transferred unless (a) such transfer is pursuant to an
effective registration statement under the 1933 Act or (b) such transfer is
exempt from the provisions of Section 5 of the 1933 Act. Such Buyer agrees that
the Shares will not be offered for sale, sold, transferred, or otherwise
disposed of by such Buyer without compliance with the terms and conditions of
the Stockholders' Agreement, as amended from time to time, and applicable
federal and state securities laws.

          5.7 ABILITY TO BEAR RISK; SOPHISTICATION; INQUIRY. The financial
situation of such Buyer is such that (a) it can afford to bear the economic risk
of holding the Shares for an indefinite period and (b) it can afford to suffer
the complete loss of its investment in the Shares. Such Buyer acknowledges that
it has such knowledge and experience in financial and business matters that it
is capable of evaluating the merits and risks of the proposed investment. Such
Buyer is familiar with the type of investment that the Shares constitutes, and
has reviewed the purchase of the Shares subscribed for herein with tax and legal
counsel to the extent that such Buyer has deemed such review advisable. Such
Buyer has been provided, to its satisfaction, the opportunity to ask questions
concerning the Company and the Seller and the terms and conditions of the
offering of the Shares. Such Buyer has had all such questions answered to its
satisfaction, and has been supplied all additional information deemed necessary
by it to verify the accuracy of the information furnished. Such Buyer
acknowledges that the Seller is specifically relying on these representations in
connection with the consummation of the transactions contemplated by this
Agreement. Such Buyer also acknowledges that all information that such Buyer has
provided concerning itself and its financial position is true and correct in all
material respects.

                                      -12-

<PAGE>

          5.8 ACCREDITED INVESTOR. Such Buyer is an "accredited investor" as
defined in Rule 501(a) of Regulation D promulgated under the 1933 Act.

          5.9 FINANCING. Such Buyer has sufficient funds available to deliver
its respective portion of the Purchase Price and to consummate the transactions
contemplated by this Agreement.

          5.10 NO RELIANCE. Such Buyer or its representatives have inspected and
conducted such reasonable review and analysis (financial and otherwise) of the
Company as desired by such Buyer. The Subscriptions and the consummation of the
transactions contemplated hereunder and under the Ancillary Agreements by such
Buyer are not done in reliance upon any warranty or representation by, or
information from, the Seller or the Company of any sort, oral or written, except
the warranties and representation specifically set forth in this Agreement
(including the Disclosure Schedules and Exhibits hereto) and in any certificates
required to be delivered to such Buyer by the Seller or the Company hereunder
and thereunder. Such purchase and consummation are instead done entirely on the
basis of the Buyer's own investigation, analysis, judgment and assessment of the
present and potential value and earning power of the Seller and the Company as
well as those representations and warranties by the Seller or the Company
specifically set forth in this Agreement (including the Disclosure Schedules and
Exhibits hereto) and in any certificates required to be delivered to such Buyer
by the Seller or the Company hereunder and thereunder.

          5.11 PROMISSORY NOTE. The Promissory Note to be issued under this
Agreement, when issued by the Management Investor to the Seller pursuant to the
terms of this Agreement, will have been issued in compliance with all applicable
federal and state securities laws, and will be free and clear of all Liens.

          5.12 NO OTHER REPRESENTATIONS OR WARRANTIES. Except for the
representations and warranties contained in this ARTICLE V, neither such Buyer
nor any other Person makes any other express or implied representation or
warranty to the Seller.

                                   ARTICLE VI
                            COVENANTS AND AGREEMENTS

          6.1 TRANSFER TAXES. The Buyers, on the one hand, and the Seller, on
the other hand, shall each pay one-half of all transfer, documentary, sales,
use, registration and other such Taxes (including all applicable real estate
transfer Taxes, but excluding any Taxes based on or attributable to income or
gains) and related fees (including any penalties, interest and additions to Tax)
("TRANSFER TAXES") arising out of or incurred in connection with this Agreement.

          6.2 CONFIDENTIALITY. Following the date of this Agreement, all
proprietary information obtained at any time in connection with this Agreement
or the transactions contemplated hereby (including without limitation any
information obtained in due diligence therefor) by the Buyers from or on behalf
of the Company, the Seller, PolyOne, or PolyOne's Affiliates will be kept
confidential and will not be disclosed by the Buyer; provided, that the
foregoing restriction does not apply to information that (a) is lawfully and
independently obtained by the Buyers from a third party without restriction as
to disclosure by the Buyers, (b)

                                      -13-

<PAGE>

was known by the Buyers prior to its disclosure by or on behalf of the Company,
the Seller, PolyOne, or PolyOne's Affiliates, (c) is in the public domain or
enters into the public domain through no fault of the Buyers, (d) is
independently developed by the Buyers without reference to proprietary
information provided by or on behalf of the Company, the Seller, PolyOne, or
PolyOne's Affiliates, or (e) the Buyers are required by law or legal process to
disclose.

          6.3 INJUNCTIVE RELIEF; LIMITATION ON SCOPE. The Buyers acknowledge
that any breach or threatened breach of the provisions of SECTION 6.2 of this
Agreement may cause irreparable injury to the Seller or the Company for which an
adequate monetary remedy does not exist. Accordingly, in the event of any such
breach or threatened breach, the Seller and the Company shall be entitled, in
addition to the exercise of other remedies, to injunctive relief, without
necessity of posting a bond, restraining the Buyers from committing such breach
or threatened breach. The rights provided under this SECTION 6.3 shall be in
addition to, and not in lieu of, any other rights and remedies available to the
Seller and the Company.

                                   ARTICLE VII
                                 INDEMNIFICATION

          7.1 INDEMNIFICATION BY THE SELLER. Subject to the terms and conditions
set forth in this ARTICLE VII, from and after the date of this Agreement, the
Seller shall indemnify and hold harmless the Buyers, their Affiliates (other
than the Seller), and their respective officers, directors, shareholders,
employees, agents and representatives (collectively, the "BUYER INDEMNIFIED
PERSONS"), from and against any and all Losses actually sustained by any Buyer
Indemnified Person based upon the failure of or any breach of any (a)
representation or warranty by the Seller contained in this Agreement to be true
and correct on the date of this Agreement or (b) any covenant or agreement of
the Seller.

          7.2 INDEMNIFICATION BY THE BUYERS. Subject to the terms and conditions
set forth in this ARTICLE VII, from and after the Closing Date, each Buyer,
severally and not jointly, shall indemnify and hold harmless the Seller, its
Affiliates, and their respective officers, directors, shareholders, employees,
agents, and representatives (collectively, the "SELLER INDEMNIFIED PERSONS"),
from and against any and all Losses actually sustained by the Seller Indemnified
Person based upon the failure of or any breach of any (a) representation or
warranty by such Buyer contained in this Agreement to be true and correct on the
date of this Agreement or (b) any covenant or agreement of such Buyer.

          7.3 INDEMNIFICATION AS EXCLUSIVE REMEDY. All representations,
warranties, covenants and obligations in this Agreement and any other
certificate or document delivered pursuant to this Agreement will survive the
date of this Agreement and the consummation of the transactions contemplated
hereby and thereby. The indemnification provided for in this ARTICLE VII,
subject to the limitations set forth herein, is the exclusive post-Closing
remedy available to any party in connection with any Losses arising out of the
matters set forth in this Agreement or the transactions contemplated under this
Agreement.

          7.4 LIMITATIONS ON INDEMNIFICATION.

          (a) The right to indemnification of a Buyer Indemnified Person under
SECTION 7.1(A) will be reduced by (i) any third party insurance proceeds
received by or payable to, or (ii)

                                      -14-
<PAGE>

any tax benefits actually realized by, (x) the Buyer Indemnified Person or (y)
the Company or the Seller, as applicable, provided that such reduction will be
equal to the product of the Buyers' percentage ownership of the capital stock of
the Seller at the time of the Loss and the dollar amount of the proceeds
actually received by or payable to, or the tax benefits actually realized by,
the Company or the Seller, as applicable. If a Buyer Indemnified Person receives
such insurance proceeds in connection with such Losses for which it has received
indemnification, the Buyers shall refund to the Seller or the Company, as
applicable, the amount of such insurance proceeds when received, up to the
amount of indemnification received. A Buyer Indemnified Person shall use all
good faith efforts to pursue third party insurance claims with respect to any
such Losses. The parties agree that any indemnification payments made pursuant
to this Agreement will be treated for tax purposes as an adjustment to the
Purchase Price, unless otherwise required by Law.

          (b) No Indemnified Party will be entitled to indemnification pursuant
to this ARTICLE VII for punitive damages, or for lost profits, consequential,
indirect, exemplary or special damages.

          7.5 PROCEDURES.

          (a) Notice of Losses. As soon as is reasonably practicable after the
Seller or either of the Buyers has actual knowledge of any Losses for which
indemnification is available under SECTION 7.1(A) or SECTION 7.2 (a "CLAIM"),
such party shall give written notice thereof (a "CLAIM NOTICE") to the other
parties. A Claim Notice must describe the Claim in reasonable detail, and must
indicate the amount (estimated as necessary and to the extent feasible) of the
Loss that has been or will be suffered by the Indemnified Party. No delay in or
failure to give a Claim Notice by the Indemnified Party to the Indemnifying
Party will adversely affect any other rights or remedies that the Indemnified
Party has under this Agreement, or alter or relieve the Indemnifying Party of
its obligations to indemnify the Indemnified Party to the extent that such delay
or failure has not materially prejudiced the Indemnifying Party.

          (b) Third Party Claims.

               (i) If any Claim Notice identifies any Claim brought by a third
     person (a "THIRD PARTY CLAIM"), the Indemnifying Party will have the right,
     exercisable by written notice to the Indemnified Party, to assume the
     defense of such Third Party Claim, with counsel selected by the
     Indemnifying Party. If the Indemnifying Party assumes the defense of such
     Third Party Claim, the Indemnifying Party will not be liable to the
     Indemnified Party for any legal expenses of other counsel or any other
     expenses subsequently incurred by such Indemnified Party in connection with
     the defense thereof and the Indemnified Party will have the right to
     participate at its own expense in the defense of such Third Party Claim. If
     the Indemnifying Party does not assume the defense of such Third Party
     Claim, the Indemnified Party may defend such Third Party Claim at the sole
     cost of the Indemnifying Party and the Indemnifying Party may still
     participate in, but not control, the defense of such Third Party Claim at
     the Indemnifying Party's sole cost and expense.

               (ii) The party responsible for the defense of any Third Party
     Claim (a "RESPONSIBLE PARTY") shall, to the extent reasonably requested by
     the other party, keep

                                      -15-

<PAGE>

     such other party informed as to the status of such Third Party Claim,
     including all settlement negotiations and offers. With respect to a Third
     Party Claim for which the Seller is the Responsible Party, the Buyers shall
     use all reasonable efforts to make available to the Seller all books and
     records of the Buyers relating to such Third Party Claim and shall
     cooperate with the Seller in the defense of the Third Party Claim. No
     settlement or compromise of any Third Party Claim may be effected (A) by
     the Indemnifying Party without the written consent of the Indemnified Party
     (which consent may not be unreasonably withheld or delayed) unless all
     relief provided is paid or satisfied in full by the Indemnifying Party or
     (B) by the Indemnified Party without the consent of the Indemnifying Party.
     In no event will an Indemnifying Party be liable for any settlement
     effected without its prior written consent.

                                  ARTICLE VIII
                                  MISCELLANEOUS

          8.1 FEES AND EXPENSES. Except as otherwise provided in this Agreement
and the Ancillary Agreements, each of the Seller and the Buyers shall bear their
own expenses and the expenses of their Affiliates in connection with the
preparation and negotiation of this Agreement and the Ancillary Agreements and
the consummation of the transactions contemplated by this Agreement and the
Ancillary Agreements. Each of the Seller and the Buyers shall bear the fees and
expenses of any broker or finder retained by such party and its respective
Affiliates in connection with the transactions contemplated by this Agreement
and the Ancillary Agreements.

          8.2 GOVERNING LAW. This Agreement will be construed under and governed
by the Laws of the State of Delaware applicable to contracts made and to be
performed in the State of Delaware.

          8.3 PROJECTIONS. In connection with the Buyers' investigation of the
Seller, the Company and the EFG Business, the Buyers may have received from the
Seller, the Company and/or their respective representatives certain projections
and other forecasts for the EFG Business, and certain business plan and budget
information. The Buyers acknowledge that (a) there are uncertainties inherent in
attempting to make such projections, forecasts, plans and budgets, (b) the
Buyers are familiar with such uncertainties, (c) the Buyers are taking full
responsibility for making their own evaluation of the adequacy and accuracy of
all estimates, projections, forecasts, plans and budgets so furnished to them,
and (d) the Buyers will not assert any claim against the Seller or any of its
directors, officers, employees, Affiliates or representatives, or hold the
Seller or any such Persons liable, with respect thereto. Accordingly, the Buyers
acknowledge that the Seller makes no representation or warranty with respect to
such projections, forecasts or plans and that the Seller makes only those
representations and warranties explicitly set forth in ARTICLE IV.

          8.4 AMENDMENT. This Agreement may be amended only with the written
consent of the parties hereto.

          8.5 ASSIGNMENT. Neither this Agreement nor any of the rights,
interests or obligations hereunder may be assigned by any party hereto without
the prior written consent of the other parties. Subject to the preceding
sentence, this Agreement will be binding upon, inure

                                      -16-

<PAGE>

to the benefit of and be enforceable by, the parties hereto and their respective
successors and permitted assigns, and is not intended to confer upon any Person
other than the parties hereto and their respective successors and permitted
assigns any rights or remedies hereunder.

          8.6 WAIVER. Any of the terms or conditions of this Agreement that may
be lawfully waived may be waived in writing at any time by any party that is
entitled to the benefits thereof. Any waiver of any of the provisions of this
Agreement by any party hereto will be binding only if set forth in an instrument
in writing signed on behalf of such party. No failure to enforce any provision
of this Agreement will be deemed to or will constitute a waiver of such
provision and no waiver of any of the provisions of this Agreement will be
deemed to or will constitute a waiver of any other provision hereof (whether or
not similar) nor will such waiver constitute a continuing waiver.

          8.7 NOTICES.

          (a) Any notice, demand, or communication required or permitted to be
given by any provision of this Agreement must be in writing and will be deemed
to have been sufficiently given or served for all purposes if (i) personally
delivered, (ii) sent by a nationally recognized overnight courier service to the
recipient at the address below indicated, (iii) sent by registered or certified
mail, return receipt requested, postage prepaid, or (iv) delivered by facsimile
with confirmation of receipt:

          If to the Equity Investor:

               Matrix Capital Markets Group, Inc.
               11 South 12th Street, 3rd Floor
               Richmond, Virginia 23219
               Attn: Bill Weirich
               Telephone: (804) 780-0060
               Telecopy: (804) 780-0158

          If to the Management Investor:

               O'Sullivan Films Management, LLC
               1944 Valley Avenue
               Winchester, Virginia 22601
               Attn: President
               Telephone: (540) 667-6666
               Telecopy: (540) 722-2695

          With a copy to:

               LeClair Ryan, A Professional Corporation
               123 East Main Street
               8th Floor
               Charlottesville, Virginia 22902
               Attn: Michael P. Drzal, Esq.
               Telephone: (434) 245-3431
               Telecopy: (434) 296-0905

                                      -17-

<PAGE>

          If to the Seller:

               PolyOne Corporation
               c/o O'Sullivan Films Holding Corporation
               33587 Walker Road
               Avon Lake, Ohio 44012
               Attn: Chief Legal Officer
               Telephone: 440-930-1000
               Telecopy: 440-930-1002

          With a copy to:

               Jones Day
               North Point
               901 Lakeside Avenue
               Cleveland, Ohio 44114
               Attn: Denise Carkhuff, Esq.
               Telephone: 216-586-3939
               Telecopy: 216-579-0212

or to such other address as any party hereto may, from time to time, designate
in a written notice given in like manner.

          (b) Except as otherwise provided herein, any notice under this
Agreement will be deemed to have been given (i) on the date such notice is
personally delivered or delivered by facsimile, (ii) the next succeeding
Business Day after the date such notice is delivered to the overnight courier
service if sent by overnight courier, or (iii) five Business Days after the date
such notice is sent by registered or certified mail.

          8.8 COMPLETE AGREEMENT. This Agreement and any confidentiality
agreement by and between PolyOne and Matrix Capital Markets Group, Inc.,
together with the Exhibits, Disclosure Schedules, Ancillary Agreements,
certificates and other documents and instruments delivered hereunder, contain
the entire understanding of the parties with respect to the subject matter
hereof and thereof and supersede all prior agreements and understandings, both
written and oral, between the parties with respect to the subject matter hereof
and thereof

          8.9 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, all of which will be considered one and the same agreement and
each of which will be deemed an original.

          8.10 PUBLICITY. The Seller and the Buyers shall consult with each
other and shall mutually agree upon any publication or press release of any
nature with respect to this Agreement or the transactions contemplated hereby
and shall not issue any such publication or press release prior to such
consultation and agreement except as may be required by Law or by obligations
pursuant to any listing agreement with any securities exchange or any securities
exchange regulation, in which case the party proposing to issue such publication
or press release shall make all good faith efforts to consult and agree with the
other party or parties before

                                      -18-

<PAGE>

issuing any such publication or press release and shall provide a copy thereof
to the other party or parties prior to such issuance.

          8.11 HEADINGS. The headings contained in this Agreement are for
reference only and do not affect in any way the meaning or interpretation of
this Agreement.

          8.12 SEVERABILITY. If any term, provision, agreement, covenant or
restriction of this Agreement or the application of any term, provision,
covenant or restriction of this Agreement to any party or circumstance is
finally adjudged invalid, ineffective, null, void or unenforceable, the
application of the remainder of such term, provision, agreement, covenant or
restriction to such party or circumstance, the application of such term,
provision, agreement, covenant or restriction to other parties or circumstances,
and the application of the remainder of the terms, provisions, agreements,
covenants and restrictions of this Agreement will remain in full force and
effect and will in no way be affected, impaired or invalidated so long as the
economic or legal substance of the transactions contemplated hereby is not
affected in any manner materially adverse to any party hereto. The invalid,
ineffective, null, void or unenforceable provision will, without further action
by the parties, be automatically amended to effect the original purpose and
intent of the invalid, ineffective, null, void or unenforceable provision;
provided, however, that such amendment will apply only with respect to the
operation of such provision in the particular jurisdiction in which such
adjudication is made.

          8.13 THIRD PARTIES. Nothing herein expressed or implied is intended or
will be construed to confer upon or give to any Person, other than the parties
hereto and their permitted successors or assigns, any rights or remedies under
or by reason of this Agreement.

          8.14 FURTHER ASSURANCES. The parties shall execute such further
instruments and take such further actions as may be reasonably necessary to
carry out the intent of this Agreement. Each party hereto shall cooperate
affirmatively with the other parties, to the extent reasonably requested by such
other parties, to enforce rights and obligations herein provided.

          8.15 ARBITRATION. All disputes under this Agreement must be resolved
pursuant to an arbitration before, and according to the rules and procedures of
the American Arbitration Association ("AAA") before a three-neutral panel
sitting in Cleveland, Ohio. The following procedure will apply in such
arbitration:

          (a) The party seeking arbitration shall make application with AAA for
arbitration, attaching these provisions to the request, with concurrent notice
to the other party. Such party shall attach this Agreement to the application,
and set forth in detail the precise issues and matters the applicant wishes to
have the arbitrators decide, all to enable the AAA to better determine which
arbitrators' qualifications best qualify them to serve on a panel. The AAA shall
nominate an odd number of arbitrators having the experience and qualifications
with the subject matter of the arbitration reasonably qualifying them to serve,
but in no event less than seven potential arbitrators.

          (b) The parties shall strike arbitrators from the listing until only
three remain, with the party requesting arbitration striking first. If a
selected arbitrator(s) cannot serve for any reason, the last struck
arbitrator(s) will serve in his or her place and stead.

                                      -19-

<PAGE>

          (c) Initially each party to this Agreement shall submit a detailed,
comprehensive proposal for resolving the matter being arbitrated. The
arbitrators may allow the parties, in the discretion of the panel, to support
their proposal through briefing, testimony and oral argument. The arbitrators
shall select the proposed resolution put forth by one of the parties as their
decision; the arbitrators have no authority to modify that proposed resolution.

          (d) The decision of a majority of the panel will determine the
arbitration, and constitute a final and binding determination of the matter
arbitrated, which either party may enforce in a court of law having competent
venue over the other party.

          8.16 CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL. Each of the
parties irrevocably submits to the exclusive jurisdiction of the courts of the
State of Delaware, for the purposes of any Proceeding arising out of this
Agreement or any transaction contemplated hereby. Each of the parties hereto
irrevocably and fully waives the defense of an inconvenient forum to the
maintenance of such Proceeding. Each of the parties further agrees that service
of any process, summons, notice or document to such party's respective address
listed above in one of the manners set forth in SECTION 8.7 will be deemed in
every respect effective service of process in any such Proceeding, and waives
any objection it might otherwise have to service of process under Law. Nothing
herein will affect the right of any Person to serve process in any other manner
permitted by Law. The parties hereto hereby irrevocably and unconditionally
waive trial by jury in any Proceeding relating to this Agreement or any other
agreement entered into in connection therewith and for any counterclaim with
respect thereto.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

                                      -20-
<PAGE>

          IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be executed by its duly authorized officer, in each case as of the
date first above written.

                                        O'SULLIVAN FILMS HOLDING
                                        CORPORATION

                                        By:
                                            ------------------------------------
                                        Name: John L. Rastetter
                                        Title: Vice President, Finance

                                        MATRIX FILMS, LLC

                                        By
                                           -------------------------------------
                                        Name:
                                              ----------------------------------
                                        Title:
                                               ---------------------------------

                                        O'SULLIVAN FILMS MANAGEMENT, LLC

                                        By
                                           -------------------------------------
                                        Name:
                                              ----------------------------------
                                        Title:
                                               ---------------------------------

                                      -21-EX-10.5

 

EXHIBIT 10.5

Executive Employment Agreement

     This Executive Employment Agreement (this “Agreement”), is made this 22nd day of February
2006 by and between ProCentury Corporation (the “Company”) and Erin E. West,
(“Executive”).

Recitals

     Whereas, the Company desires to employ Executive as its Chief Financial Officer and
Treasurer, and Executive desires to be so employed under the terms and conditions hereinafter set
forth for a period through at least the second anniversary of the Effective Date.

Statement of Agreement

     Now, therefore, in consideration of the mutual promises and covenants hereinafter set
forth, and for other good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, the Company and Executive agree as follows:

SECTION 1

EMPLOYMENT AND DUTIES

     1.1 Duties and Position. During the term of this Agreement, Executive shall provide services
to the Company in accordance with this Agreement in the capacities of Chief Financial Officer and
Treasurer of the Company and as an executive officer, in the capacities identified on Exhibit A, of
one or more Affiliates (as that term is defined in Section 5.4) of the Company; provided, however,
that at the request of the Company’s Board of Directors (the “Board”) at any time and from time to
time, Executive shall serve in such other capacity or capacities, of at least equal standing and
dignity as Chief Financial Officer and Treasurer of the Company and, with respect to any Affiliate
of the Company, of at least equal standing and dignity as the positions identified on Exhibit A;
and provided further that Executive shall serve as chief financial officer of any Affiliate of the
Company that is required to file periodic reports pursuant to section 13(a) or 15(d) of the
Securities Exchange Act of 1934, as amended (“the Exchange Act”) and of any Affiliate that, as a
result of any reorganization involving the Company, is an entity controlling the Company or the
assets or operations that were the Company’s immediately prior to such reorganization. Executive
shall report directly to the Chief Executive Officer and shall perform such duties and
responsibilities consistent with her positions as shall be assigned to her by the Board. Executive
shall serve as director of the board of directors of each operating subsidiary that is an Affiliate
controlled by the Company.

 

 

     1.2 Standard of Performance. Executive shall faithfully perform the duties assigned to her
pursuant to this Agreement. Executive agrees to abide by the
Company’s rules, regulations, policies and practices as they are presently in force and as they may be revoked,
adopted or modified at any time and from time to time during the term of this Agreement.

     1.3 Time Devoted to the Company. Executive shall be required to devote substantially full
time and attention to her duties under this Agreement. Subject to the obligations of Executive
pursuant to Section 4.5 hereof and the immediately preceding sentence, Executive may engage in any
other activity, whether for pecuniary gain or not, which does not materially interfere with her
obligations under this Agreement.

SECTION 2

COMPENSATION AND BENEFITS

     2.1 Base Salary. The Company agrees to pay or cause to be paid to Executive for Executive’s
services during the term of this Agreement an annual base salary at the gross rate prior to all
taxes and other withholdings of not less than $200,000 effective October 1, 2005 through March 1,
2006 and not less than $225,000 effective March 1, 2006. The base salary will be subject to annual
review and may be adjusted from time to time under the direction of the Board (or, if the Board so
directs, its Compensation Committee) considering factors such as Executive’s performance,
compensation of similar executives of similarly sized companies and other pertinent factors (the
“Base Salary”). The Base Salary shall be payable to Executive in accordance with the then current
payment policies of the Company for its employees.

     2.2 Performance Based Incentive Bonus. Executive shall be entitled to an annual performance
based cash incentive bonus in an amount up to 40 percent of the Base Salary (the “Bonus”). The
Bonus shall be earned and paid in accordance with the Company’s performance based incentive
compensation plan (the “Incentive Plan”); provided, however, that with respect to Executive, the
“Performance Period” (as defined in the Incentive Plan) shall be the calendar year beginning with
the 2005 calendar year and continuing for each calendar year thereafter, and the Performance Goals
(as defined in the Incentive Plan) for each Performance Period shall include maintaining, to the
extent within the control of the Company’s management, the Company’s rating by A.M. Best Company
(which is currently A-). A copy of the Performance Goals as so established shall be provided to
Executive. The Bonus shall be payable as provided in the Incentive Plan. The Performance Goals
for 2005 shall be as set forth in the March 22, 2005 Executive Compensation Committee Meeting
Minutes. Notwithstanding the forgoing, with the express approval by the Board after
review of Executive’s performance for the Performance Period, the actual amount of Incentive Award
may exceed 40 percent of the Base Salary for such Performance Period, provided that the
amount of any such excess shall be paid in shares of Stock or other property having a Fair Market
Value (as defined in the Incentive Plan) equal to such excess.

2

 

     2.3 Stock Options and Restricted Stock. To the extent not contrary to applicable law, all of
the options granted to the Executive prior to the date hereof
pursuant to the Company’s 2004 Stock
Option and Award Plan (the “Stock Option Plan”) shall become fully vested and remain exercisable
pursuant to their respective terms for the remainder of their
respective Exercise Periods (as defined in the Stock Option Plan), and all unvested Shares, if any, of restricted stock
granted to the Executive prior to the date hereof pursuant to the Stock Option Plan shall become
fully vested, effective upon termination of Executive’s employment by reason of death, discharge by
the Company pursuant to 3.4(a) other than for Cause, resignation by Executive pursuant to Section
3.4(b) for Good Reason, termination by resignation or discharge for any reason other than Cause
upon or after a Change in Control, or “retirement” or “disability” within the meaning of the Stock
Option Plan; and all options granted, all shares of restricted stock awarded, and any and all other
awards made to Executive pursuant to the Stock Option Plan after the date hereof shall be subject
to such terms and conditions as shall be determined at the time of any such award under the
direction of the Board pursuant to the Stock Option Plan. The Company shall exercise best efforts
to register with the Securities and Exchange Commission under the Securities Act of 1933, as
amended, the issuance of shares of stock issued pursuant to the Stock Option Plan and to satisfy
the current public information requirements of Rule 144(c) for purpose of allowing Executive to
resell such shares.

     2.4 Benefits. In addition to the compensation to be paid under this Agreement, the Company
shall provide to, or for the benefit of, Executive the following employee benefits:

	 	(a)	 	Participation in retirement or welfare benefit plans, if any, which are made
available from time to time to the salaried employees of the Company or its Affiliates,
to the extent that Executive is eligible to participate therein pursuant to the terms
and conditions of such plans.
	 
	 	(b)	 	Participation in health, disability and other insurance plans, if any, which are
made available from time to time to the salaried employees of the Company or its
Affiliates, to the extent that Executive is eligible to participate therein pursuant to
the terms and conditions of such plans.

3

 

	 
	 	(c)	 	At the option of Executive, (1) whole life insurance on the life of Executive
in an amount equal to 2.5 times Executive’s Base Salary, the premiums for which shall
be timely paid by the Company for so long as Executive remains employed with the duties
and position described in Section 2.1, provided that Executive is insurable at
reasonable prevailing rates; or (2) additional benefits specified by Executive at an
annual cost to the Company equal to the annual premium that would otherwise be payable
for such life insurance. If Executive is not insurable at reasonable prevailing rates,
then the Company shall not be obligated to provide life insurance coverage pursuant to
Section 2.4(c)(1), but shall be obligated to provide additional benefits pursuant to
Section 2.4(c)(2) at an annual cost to the Company equal to such reasonable prevailing
rates. The beneficiary of the life insurance policy covering the life of Executive
(the “Policy”) shall be Executive’s spouse or such other person(s) as Executive shall
designate in writing to the insurance company. The owner of the Policy shall be the
Company. The Company shall not borrow against the cash surrender value of such Policy
nor cause the value thereof to become subject to any lien. If Executive’s employment
is terminated pursuant to Section 3.3, 3.4(a), 3.5(a), 3.5(b), of this Agreement, or
“Qualified Retirement” as defined in the Incentive Plan, Executive shall have the
election, at her option, to require the Company (A) to assign
the Policy to Executive, provided that Executive shall be responsible for paying or reimbursing
the Company for all premiums and other policy charges which are or become due and
payable, in the case of terminations pursuant to Section 3.3 or 3.5(a), unless
otherwise agreed, on or after the date of termination of Executive’s employment, and
in the case of terminations pursuant to Section 3.4(a) or 3.5(b) or “Qualified
Retirement” as defined in the Incentive Plan, on or after the date that severance
benefits cease to be payable pursuant to Section 3.6(c), or (B) to cancel the Policy
or to permit it to lapse, and to pay the cash value of the Policy, in the case of
terminations pursuant to Section 3.3 or 3.5(a), unless otherwise agreed, as of
Executive’s date of termination to Executive, and in the case of terminations
pursuant to Section 3.4(a) or 3.5(b) or “Qualified Retirement” as defined in the
Incentive Plan, as of the date that severance benefits cease to be payable pursuant
to Section 3.6(c); provided, however, that if it is determined by the Company upon
the advice of legal counsel that this election would be an extension of credit in
the form of a personal loan within the meaning of section 13(k) of the Exchange Act,
the election provided in this sentence shall be null and void. The option granted
by Section 2.4(c) may be exercised at one or more times during the term of
Executive’s employment, with Executive having the right to select either the
insurance or additional benefit, so long as the total cost to the Company during
each year and in the aggregate does not exceed the cost that the Company would have
realized had Executive elected whole life insurance at the time of the Effective
Date.
	 
	 	(d)	 	Sick leave in accordance with the policies of the Company in effect from time
to time.
	 
	 	(e)	 	Reasonable vacation time consistent with past practice or as otherwise approved
by the President or the Board.
	 
	 	(f)	 	Such other benefits as may be approved by the Board or appropriate oversight
committee of the Board on a case-by-case basis for proper business purpose.

     2.5 Reimbursement of Business Expenses. Executive shall be entitled to receive reimbursement
for, or payment of, the legitimate business expenses incurred by Executive on behalf of the Company
in accordance with the Company policy in effect from time to time, including meals, lodging,
transportation and other travel expenses.

4

 

SECTION 3

TERM OF AGREEMENT; TERMINATION

     3.1 Term. This Agreement shall become effective on the date first written above and shall
continue in force until terminated in accordance with this Section 3. Executive’s employment with
the Company pursuant to this Agreement shall terminate concurrently with the termination of this
Agreement.

     3.2 Termination upon Death. Executive’s employment under this Agreement shall terminate
automatically upon the death of Executive.

     3.3 Termination by Mutual Agreement. This Agreement may terminate at any time upon the mutual
agreement of the Company and Executive.

     3.4 Termination by the Company.

     (a) The Company may terminate Executive’s employment under this Agreement at any time, without
Cause (as defined in Section 3.4(c)), upon thirty (30) days prior written notice of termination to
Executive. The Company, in its sole discretion but without derogation to any rights of Executive
under Section 2, may place Executive on administrative leave during the thirty (30) day notice
period.

     (b) The Company may terminate Executive’s Employment under this Agreement with Cause
immediately upon written notice of termination to Executive, unless a later termination date is
specified in the notice.

     (c) For the purposes of this Agreement, “Cause” for termination shall exist if Executive is:

	 	(1)	 	Convicted of, or pleads guilty or nolo contendere to, in a court of competent
jurisdiction, a felony amounting to embezzlement, fraud, theft or other act of
dishonesty harming the Company or any employee, supplier, customer or other person
doing business with the Company;
	 
	 	(2)	 	Convicted of, or pleads guilty or nolo contendere to, in a court of competent
jurisdiction, a felony resulting in death or substantial bodily or psychological harm
to, or other act of moral turpitude harming, any person;
	 
	 	(3)	 	Barred or suspended for a period of more than 60 days by any court or
regulatory agency of competent jurisdiction from performing employment duties for,
engaging in any activities on behalf of, or otherwise being associated with, the
Company;
	 
	 	(4)	 	Found liable by any court of competent jurisdiction for conduct undertaken with
deliberate intent to cause harm or injury, or undertaken with reckless disregard to the
harm or injury that would be caused, to the Company or any employee, supplier, customer
or other person doing business with the Company other than conduct taken pursuant to
advice of legal counsel to the Company; or

5

 

	 
	 	(5)	 	Found by the Chief Executive Officer on behalf of the Company to have

	 	(A)	 	Failed to exercise reasonable efforts (as
determined in the reasonable judgment of the Chief Executive Officer)
to properly perform any of the Executive’s obligations under this
Agreement or any direction of the Chief Executive Officer consistent
with this agreement; however, that the refusal to perform an obligation
or direction should not constitute “Cause” if Executive in
good faith
reasonably believes that such obligation or direction is not legal,
ethical or moral and Executive so notifies the Board of her belief.
	 
	 	(B)	 	Willfully caused the Company other than
pursuant to the advice of Company legal counsel to violate a law which,
in the opinion of Company legal counsel, is reasonable grounds for
civil or criminal penalties against the Company;
	 
	 	(C)	 	Willfully engaged in conduct which constitutes
a violation of the established written policies or procedures of the
Company regarding the conduct of its employees, including policies
regarding sexual harassment of employees and use of illegal drugs or
substances;
	 
	 	(D)	 	Willfully engaged in conduct demonstrably and
materially injurious to the goodwill and reputation of the Company;
	 
	 	(E)	 	Willfully engaged in any act of dishonesty
against the Company; or
	 
	 	(F)	 	Intentionally criticized, ridiculed or
disparaged the Company in any communications or with any customer or
client, vendor or supplier, or in any public statement.

     3.5 Termination by Executive.

     (a) Executive may terminate his employment under this Agreement at any time without Good
Reason (as defined in Section 3.5(c) below) upon thirty (30) days prior written notice to the
Company. The Company, in its sole discretion but without derogation to any rights of Executive
under Section 2, may place Executive on administrative leave during the thirty (30) day notice
period.

     (b) Executive may terminate her employment under this Agreement, upon fifteen (15) days prior
written notice to the Company, if she resigns for Good Reason; provided that Executive shall not
resign pursuant to this Section 3.5(b) if, prior to the expiration of the fifteen (15) day notice
period, the Company causes the facts or events giving rise to the Good Reason for resignation to no
longer exist and provides evidence of a form and nature satisfactory to Executive that such facts
or events no longer and will not in the foreseeable future exist. The Company, in its sole
discretion but without derogation to any rights of Executive under Section 2, may place Executive
on administrative leave during the fifteen (15) day notice period. Notwithstanding anything to the
contrary contained herein, Executive shall not be required to perform any act stated in his written
notice of resignation as Good Reason for her resignation for the period beginning with the giving
of such written notice and ending with the effective date of the termination of her employment.

	 	(c)	 	Executive shall be considered to have resigned for Good Reason if:
	 
	 	(1)	 	Executive ceases to hold the positions and titles of Chief Financial Officer
and Treasurer as contemplated by Section 1.1 of this Agreement;

6

 

	 	(2)	 	Executive is assigned, without her consent, authority or responsibility
materially inconsistent with the authority and responsibility contemplated by Section
1.1 of this Agreement, including without limitation any material diminution of her
authority and responsibility or change in reporting requirements;
	 
	 	(3)	 	Executive’s Base Salary is reduced, or there is any material delay in the
payment of Executive’s Base Salary, or there is any material reduction in the nature
and amount of benefits (including benefits under the Incentive Plan or the Stock Option
Plan or any successor plans thereto) theretofore provided to Executive pursuant to
Section 2;
	 
	 	(4)	 	Any requirement is imposed for Executive to reside or travel outside of the
Columbus, Ohio area, other than on travel reasonably required to carry out Executive’s
obligations under this Agreement and consistent with past practice;
	 
	 	(5)	 	Executive becomes disabled to the extent that she cannot, with reasonable
accommodation, effectively perform the requirements of her position for a period of
three consecutive months (which determination shall be made by a physician of
Executive’s choice who is reasonably acceptable to the Company);
	 
	 	(6)	 	The Company commits a material breach of this Agreement (other than breaches
which may be covered by some other subsection of this Section 3.5(c)), which breach is
not cured within thirty (30) days after written notice thereof is given by Executive;
or
	 
	 	(7)	 	For so long as Executive remains employed with the duties and position
described in Section 2.1, Executive and Messrs. Edward F. Feighan, and Christopher J.
Timm, so long as each of them remains employed by the Company or its Affiliate, do not
continue to constitute a majority of directors of, or otherwise control, the board of
directors of each operating subsidiary that is an Affiliate controlled by the Company.
	 
	 	(d)	 	A Change in Control shall be deemed to have occurred if there is:
	 
	 	(1)	 	A purchase or other acquisition in any one or more transactions by any person,
entity or group of persons (within the meaning of section 13(d)(3) or 14(d)(2) of the
Exchange Act or any comparable successor provisions), directly or indirectly, which
results in the beneficial ownership (within the meaning of Rule 13d-3 promulgated under
the Exchange Act) of such person, entity or group of persons equaling fifty percent
(50%) or more of the combined voting power of the then outstanding voting securities of
the Company entitled to vote generally in the election of directors (“Voting
Securities”); excluding, however, any acquisition (A) by the Company or any person
controlled by the Company or the Board of Directors of the Company, (B) by any employee
benefit plan or related trust sponsored or maintained by the Company, (C) by Executive;
or (D) by another group including Executive, but only if Executive and other executives
of the Company control such group;

7

 

	 	(2)	 	A change, within any rolling two-year period beginning with any date on or
after the Effective Date, in the composition of the Board such that the individuals who
constitute the Board (the “Incumbent Board”) at the beginning of such rolling period
cease for any reason to constitute at least a majority of the Board; provided, however,
that for purposes of this definition, any individual who becomes a member of the Board
after the Effective Date, whose election, or nomination for election, by the Company’s
security-holders was approved by a vote of at least a majority of those individuals who
are members of the Board and who were also members of the Incumbent Board shall be
considered as though such individual were a member of the Incumbent Board; and
provided, however, that any such individual whose initial assumption of office occurs
as a result of or in connection with either an actual or threatened election contest
(as such terms are used in Rule 14a-11 of Regulation 14A promulgated under the Exchange
Act) or other actual or threatened solicitation of proxies or consents by or on behalf
of any person other than the Board shall not be so considered as a member of the
Incumbent Board;
	 
	 	(3)	 	A merger, reorganization or consolidation to which the Company is a party or a
sale or other disposition of all or substantially all of the assets of the Company
(each, a “Corporate Transaction”); excluding however, any Corporate Transaction
pursuant to which (A) persons who were security holders of the Company immediately
prior to such Corporate Transaction own (solely because of their Voting Securities
owned immediately prior to such Corporate Transaction) immediately thereafter more than
50 percent of the combined voting power entitled to vote in the election of directors
of the then outstanding securities or the company surviving the Corporate Transaction
and (B) individuals who constitute the Incumbent Board will immediately after the
consummation of the Corporate Transaction constitute at least a majority of the members
of the board of directors of the company surviving such Corporate Transaction; or
	 
	 	(4)	 	Approval by the security-holders of the Company of a plan of complete
liquidation or dissolution of the Company.

     3.6 Compensation Upon Termination. In addition to any employee benefits to which Executive is
entitled pursuant to Section 2.4 and any reimbursement of business expenses pursuant to Section 2.5
(with respect to which Executive and the Company shall reasonably cooperate), Executive shall be
entitled to the following upon termination of Employment under this Agreement:

	 	(a)	 	In the event that the Company discharges Executive pursuant to Section 3.4(b)
for Cause, or Executive resigns (other than for Good Reason) pursuant to Section
3.5(a), Executive shall be entitled to receive and the Company shall cause to be paid
(1) any earned but unpaid Base Salary through the effective date of termination and (2)
any award for which a Bonus was earned under the Incentive Plan for any Performance
Period which ended prior to the effective date of termination but was not theretofore
paid to Executive.

8

 

	 	(b)	 	In the event that Executive’s employment is terminated by death, Executive’s
estate or personal representative shall be entitled to receive and the Company shall
cause to be paid (1) any earned but unpaid Base Salary through the date of Executive’s
death; (2) any award for which a Bonus was earned under the Incentive Plan for any
Performance Period which ended prior to the effective date of termination but was not
theretofore paid to Executive; (3) continued payment of Executive’s then current Base
Salary for the ninety (90) day period following the date of her death; (4) an amount
equal to the Target Incentive Award established for Executive under the Incentive Plan
for the then current Performance Period had Executive’s employment not been terminated
and had Executive satisfied all Performance Goals established with respect to such
Performance Period, multiplied by a fraction the numerator of which is the number of
days in the then current Performance Period under the Incentive Plan occurring prior to
and including the date of Executive’s death, and the denominator of which is the number
of days of the whole Performance Period; and (5) continued benefits (to the same extent
and at the same level as were provided by the Company to Executive’s family members
immediately prior to Executive’s death) under the health insurance plan(s) referenced
in Section 2.4(b), for the ninety (90) day period following the date of termination,
and, to the extent permitted pursuant to such health insurance plan(s), for such longer
period as to which Executive’s beneficiaries pay the cost of coverage thereof. Except
as otherwise agreed to between Executive’s estate or personal representative and the
Company, all such amounts (other than health benefits continued pursuant to Section
3.6(b)(5) above, which shall be payable in accordance with the terms of the applicable
plan) shall be paid by the Company in a lump sum within thirty (30) days after the date
of Executive’s death.

	     (c)	(1)	 	 Except as provided in Section 3.6(c)(2) below, in the event that the
Company discharges Executive pursuant to Section 3.4(a) other than for Cause or
Executive resigns pursuant to Section 3.5(b) for Good Reason, Executive shall be
entitled to receive and the Company shall cause to be paid (A) any earned but unpaid
Base Salary through the date of termination; (B) any award for which a bonus was earned
under the Incentive Plan for any Performance Period which ended prior to the effective
date of termination but was not theretofore paid to Executive; (C) continued payment of
Executive’s then current Base Salary for the twelve (12) month period following the
date of termination;6 (D) an amount equal to the product of (i) the Target
Incentive Award established for Executive under the Incentive Plan for the then current
Performance Period had Executive’s employment not been terminated and had Executive
satisfied all Performance Goals established with respect to such Performance Period,
multiplied by (ii) a fraction, the denominator of which shall be twelve (12) and the
numerator of which shall be twelve (12); and (E) continued benefits (to the
same extent and at the same benefit level as were provided by the Company to Executive immediately prior to
termination)
under the retirement and welfare benefit plans referenced in Section 2.4(a),
the health, disability and other insurance plans referenced in Section
2.4(b), and the Policy referenced in Section 2.4(c), for the twelve (12)
month period following the date of termination, and, to the extent permitted
pursuant to such health insurance plan(s), for such longer period as to
which Executive’s beneficiaries pay the cost of coverage thereof; provided,
that if any such plans are terminated, or benefits thereunder reduced or
eliminated, during such twelve (12) month period, or if, as a result of
termination or otherwise, Executive ceases to be eligible to participate in
any such plans during such twelve (12) month period, the Company shall
provide to Executive substitute benefits which are no less favorable to
Executive than those received by Executive under such plan(s).
Subject to Section 3.8, and except as otherwise agreed to between Executive
and the Company, all such amounts (other than the amounts referenced in
Section 3.6(c)(1)(C), which shall be paid in accordance with the then
current payment policies of the Company for its employees, and the
Continuation Benefits referenced in Section 3.6(c)(2), which shall be
payable in accordance with the terms of the applicable benefit plan), shall
be paid by the Company in a lump sum within thirty (30) days after the date
of Executive’s discharge or resignation.

9

 

	 
	 	(2)	 	Notwithstanding anything to the contrary in Section 3.6(C)(1)
above, in the event that (A) a Change in Control occurs and (B) within the
twelve (12) month period immediately following the date on which the Change in
control occurs, (i) the Company discharges Executive pursuant to Section 3.4(a)
other than for Cause or (ii) Executive resigns pursuant to Section 3.5(b) for
Good Reason, Executive shall be entitled to receive and the Company shall cause
to be paid in lump-sum and within thirty (30) days of Executive’s termination
of employment an amount equal to ((a)) any earned but unpaid Base Salary
through the date of termination; ((b)) any award for which a bonus was earned
under the Incentive Plan for any Performance Period which ended prior to the
effective date of termination but was not theretofore paid to Executive; (C)
the product of one (1) times Executive’s then current Base Salary at the date
of termination; (iv) the product of one (1) times the Target Incentive Award
established for Executive under the Incentive Plan for the then current
Performance Period had Executive’s employment not been terminated and had
Executive satisfied all Performance Goals established with respect to such
Performance Period. In addition, Executive shall be entitled to continued
benefits (to the same extent and at the same benefit level as were provided by
the Company to Executive immediately prior to termination)(the “Continuation
Benefits”) under the retirement and welfare benefit plans referenced in Section
2.4(a), the health, disability and other insurance plans referenced in Section
2.4(b), and the Policy referenced in Section
2.4(c), for the twelve (12) month period following the date of termination,
and, to the extent permitted pursuant to such health insurance plan(s), for
such longer period as to which Executive’s beneficiaries pay the
cost of coverage thereof; provided, that if any such plans are terminated, or
benefits thereunder reduced or eliminated, during such twelve (12) month
period, or if, as a result of termination or otherwise, Executive ceases to
be eligible to participate in any such plans during such twelve (12) month
period, the Company shall provide to Executive substitute benefits which are
no less favorable to Executive than those received by Executive under such
plan(s). Subject to Section 3.8, and except as otherwise agreed to between
Executive and the Company, all such amounts (other than the amounts
referenced in Section 3.6(c)(2)(C), which shall be paid in accordance with
the then current payment policies of the Company for its employees, and the
Continuation Benefits, shall be paid by the Company in a lump sum within
thirty (30) days after the date of Executive’s discharge or
resignation.

10

 

	 	(d)	 	Except as otherwise provided in Section 3.6(b) or 3.6(c), Executive’s right,
upon and after the termination of her employment under this Agreement pursuant to this
Section 3 or otherwise, to receive any benefit under the plans, if any, in which
Executive is entitled to participate pursuant to Section 2.4 shall be determined under
the provisions of those plans.

     3.7 Notices. Any termination of Executive’s employment for which notice of termination is
required to be given pursuant to this Section 3 shall be communicated in a writing which shall
indicate the specific provision in this Section 3 relied upon and shall set forth in reasonable
detail the facts and circumstances claimed to provide a basis for termination under the provision
so indicated.

     3.8 General Release. Notwithstanding anything in this Section 3 or otherwise to the contrary,
at the election of the Company no amount shall be payable under this Section 3 in excess of (a) any
earned but unpaid Base Salary through the date of Executive’s death; (b) any award under the
Incentive Plan which was earned pursuant to the terms and conditions of such plan prior to the
effective date of termination but was not theretofore paid to Executive, unless Executive (or her
personal representative or trustee of her estate, in the case of her disability or death) executes
a general release of known claims (in form and containing provisions reasonably required by the
Company), provided, however, that any such general release shall be mutual with respect to known
claims of the Company against Executive and known claims of Executive against the Company.

     3.9 No Mitigation. In the event of the termination of Executive’s employment hereunder for
any reason, Executive shall have no obligation to mitigate damages.

11

 

SECTION 4

CONFIDENTIALITY AND NON-COMPETITION

     4.1 Confidential Information. Except as otherwise provided in Section 4.2, the term
“Confidential Information” shall mean all trade secrets and
confidential and proprietary information of the Company, whether in written or oral, tangible or intangible form, including,
without limitation, the following:

	 	(a)	 	The whole or any portion or phase of any data or information relating to the
Company’s processes or techniques relating to its business, whether or not copyrighted,
copyrightable, patented or patentable, (1) which is or has been disclosed to Executive
or about which Executive became or shall become aware of as a consequence of, or
through or during Executive’s employment with the Company; (2) which has value to the
Company; and (3) which is not generally known by others;
	 
	 	(b)	 	Any software, programs, calculations, instructions or other intellectual
property and embodiments thereof of any media, including electro magnetic, and in any
form, including source code and object code, whether or not copyrighted, copyrightable,
patented or patentable;
	 
	 	(c)	 	Business plans, marketing concepts and marketing and sales information of the
Company;
	 
	 	(d)	 	Financial, pricing and/or credit information regarding the Company or customers
and/or suppliers of the Company;
	 
	 	(e)	 	The names, addresses, policy expiration dates and telephone numbers of
customers, agents and/or suppliers of the Company;
	 
	 	(f)	 	The internal corporate policies and procedures of the Company;
	 
	 	(g)	 	Any information of any nature whatsoever that gives the Company the opportunity
to obtain any advantage over its competitors who do not have access to or use of such
information; and
	 
	 	(h)	 	Any other information designated by the Company as confidential or proprietary
at the time of its disclosure to Executive.

The term “Confidential Information” also shall include all trade secrets and confidential and
proprietary information of any customer, agent, supplier, or prospective customer, agent or
supplier of the Company, whether in written or oral, tangible or intangible form, which have been
disclosed to the Company pursuant to the Company’s agreement to maintain the confidentiality of
such information.

     4.2 Excluded Information. Notwithstanding anything in Section 4.1 to the contrary, the term
“Confidential Information” shall not include any data or information that (a) is voluntarily
disclosed by the Company or has otherwise become generally known to the insurance industry (except
for such public disclosure that has been made by or through Executive or by a
third person with the knowledge of Executive without authorization by the Company); (b) has
been independently developed and disclosed by parties other than Executive or the Company to the
public generally without a breach of any obligation of confidentiality by any such person running
directly or indirectly to the Company; or (c) otherwise enters the public domain through lawful
means.

12

 

     4.3 Confidentiality Agreement. Executive agrees and acknowledges that the Confidential
Information is the property of the Company, and that such information is sensitive, confidential
and important and is furnished by the Company to Executive under the terms and conditions of this
Agreement. Executive shall keep the Confidential Information (whether obtained prior to or after
the date of this Agreement) strictly confidential during the term of this Agreement and at all
times thereafter provided, however, that Executive may disclose Confidential Information in the
performance of his employment to the extent that she reasonably believes such disclosure is
necessary or convenient, in her sole discretion, in order to perform her duties.

     4.4 Return of Company Property. Executive agrees that upon termination of this Agreement,
Executive shall immediately surrender to the Company, without request, or, at the Company’s request
and in the Company’s sole discretion, destroy or cause to be destroyed all memoranda, notes,
reports, documents, software and disks and all copies and other reproductions and extracts thereof,
including those prepared by Executive, which are in Executive’s possession or under her control and
which contain or are derived from Confidential Information.

     4.5 Covenant Not to Compete or Solicit. Executive shall not, directly or indirectly, do any
of the following during the term of this Agreement and for a period of twelve (12) months or, if
longer, the entire period for which Executive is entitled to (i) payments of Base Salary or Target
or other Incentive Awards or (ii) other benefits pursuant to Section 3 other than payments and
benefits pursuant to Section 3.6(c)(2) after a Change in Control:

	 	(a)	 	Be employed by, serve as consultant or independent contractor to, directly or
indirectly beneficially own any equity or similar interest in (except as the holder of
not more than one percent (1%) of the voting securities of any publicly traded entity
or as a shareholder of the Company or any successor thereto), or otherwise engage in,
any property and casualty insurance company business that directly competes with any
insurance company subsidiary of the Company in the continental United States, Canada or
the Bahamas;
	 
	 	(b)	 	Solicit or cause to be solicited, directly or indirectly, any property and
casualty wholesale agents under contract with the Company for any purpose (other than,
during the term of this Agreement, as an employee of the Company on behalf of the
Company), without the prior written consent of the Company, which written consent
specifically refers to this Agreement; or
	 
	 	(c)	 	Solicit or cause to be solicited, directly or indirectly, or in any way be
responsible for, an offer of employment to any employee of the Company by any other
person.

The restrictions contained in this Section 4.5 shall cease to apply to, and shall not bind,
Executive in the event that the Company fails to timely and completely pay all amounts due and
owing to Executive pursuant to Section 3.6 of this Agreement. For the purposes of the preceding
sentence, the Company will be deemed to have failed to timely and completely pay all amounts due
and owing to Executive pursuant to Section 3.6 if the Company
fails (other than as the result of a
prior breach of this Section 4.5 by Executive) to make any such payment to Executive within ten
(10) days of its due date.

13

 

     4.6 Additional Covenants. During the term of this Agreement, Executive shall not take
advantage of any Company opportunity without first offering the opportunity with full disclosure of
material facts to the Company and receiving notice that the Company has declined such opportunity.
For this purpose, “Company opportunity” means any opportunity to engage in a business activity: (a)
of which Executive becomes aware (1) by virtue of Executive’s relationship with, or in connection
with performing functions in the business of, or in using facilities or other resources of the
Company; and (2) under circumstances that should reasonably lead Executive to believe that the
person offering the opportunity expects it to be offered to the Company; or (b) which Executive
knows is closely related to a business in which the Company is engaged or expected to engage.

     4.7 Remedies for Breach. Executive agrees that, in the event of any breach or threatened
breach of any provision of this Section 4 by Executive, the Company shall be entitled to a
temporary restraining order and other temporary or permanent injunctive relief, provided that the
Company has shown irreparable harm. No remedy conferred upon the Company by this Agreement is
intended to be exclusive of any other available remedy or remedies, but each and every such remedy
shall be cumulative and shall be in addition to every other remedy given under this Agreement or
now or hereafter existing at law, in equity or by statute.

     4.8 Reasonableness of Restrictions. Executive agrees and understands that there are
significant business reasons for the restrictions contained in this Agreement and that such
restrictions are reasonable and necessary to protect legitimate business interests of the Company.
Without limiting the generality of the foregoing, Executive agrees and understands that because the
Company may sell its products, technology and services nationally and internationally, the
geographic scope of Executive’s agreement not to compete with the Company is both reasonable and
necessary.

     4.9 Severability. If any provision of this Section 4 is held invalid, illegal or
unenforceable, the remaining provisions shall continue in full force and effect. If any provision
of this Section 4 is for any reason held to be excessively broad as to time, duration, geographic
scope, activity or subject, it shall be construed, by limiting and reducing it, so as to be
enforceable to the extent permitted by applicable law.

     4.10 Scope of Section 4. As used in this Section 4, the term the “Company” shall include all
Affiliates of the Company.

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SECTION 5

MISCELLANEOUS

     5.1 Indemnification. The Company shall indemnify Executive if she was or is a party or is
threatened to be made a party to any threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative or investigative (including, without limitation, an action
by or in the right of the Company) by reason of the fact that she is or was a director, officer,
employee or agent of the Company, or is or was serving at the request of the Company as a director,
trustee, officer, employee, partner, joint venturer or agent of another corporation, partnership,
joint venture, trust or other enterprise, against expenses (including attorneys’ fees and
expenses), judgments, fines and amounts paid in settlement actually and reasonably incurred by her
in connection with such action, suit or proceeding if she acted in good faith and in a manner she
reasonably believed to be in or not opposed to the best interests of the Company, and, with respect
to any criminal action, suit or proceeding, had no reasonable cause to believe her conduct was
unlawful. No indemnification shall be made in respect of any derivative claim, issue or matter as
to which Executive shall have been adjudged to be liable to the Company unless, and only to the
extent that, the court in which such action, suit or proceeding was brought shall determine upon
application that, despite the adjudication of liability, but in view of all the circumstances of
the case, Executive is fairly and reasonably entitled to indemnity for such expenses. Expenses
(including reasonable attorneys’ fees and expenses) incurred in defending any civil or criminal
action, suit or proceeding referred to in this Section shall be paid by the Company in advance of
the final disposition of such action, suit or proceeding upon receipt of an undertaking by or on
behalf of Executive to repay such amount, unless it shall ultimately be determined that she is not
entitled to be indemnified by the Company as authorized in this Section. The indemnification
provided by this Section shall not be deemed exclusive of any other rights to which Executive may
be entitled under the common law, the Ohio corporate law or the charter documents of the Company or
any agreement, vote of its shareholders or directors, or otherwise, both as to action in her
official capacity or as to action in another capacity while holding such office.

     5.2 Key Man Life Insurance; COLI. Executive agrees to cooperate with the Company in
connection with, and consent to the placement of, “key man” or other corporate owned insurance on
Executive’s life by the Company, provided that, except as provided in Section 2.4(c), nothing
herein shall require the Company to obtain or maintain any such insurance on Executive’s life.

15

 

     5.3 Breach of Agreement by Company. The Company agrees that, in the event of any breach or
threatened breach of this Agreement by the Company, Executive shall be entitled to any appropriate
remedy in law or in equity. No remedy conferred upon Executive by this Agreement is intended to be
exclusive of any other available remedy or remedies, but each and every such remedy shall be
cumulative and shall be in addition to every other remedy given under this Agreement or now or
hereafter existing at law, in equity or by statute. The Company shall pay all legal expenses
(including reasonable attorney’s fees and expenses) and other damages incurred by Executive as the
result of or in connection with any breach of this Agreement by the Company. The Company is aware
that, following a Change in Control, the Board or a shareholder of the Company may cause or attempt
to cause the Company to refuse to comply with its obligations under this Agreement, or may cause or attempt to cause the Company
to institute, or may institute, litigation seeking to have this Agreement declared unenforceable,
or may take, or attempt to take, other action to deny Executive the benefits intended under this
Agreement. In these circumstances, the purpose of this Agreement could be frustrated. It is the
intent of the Company that Executive not be required to incur the expenses associated with the
enforcement of her rights under this Agreement by litigation or other legal action because the cost
and expense thereof would substantially detract from the benefits intended to be extended to
Executive hereunder, nor be bound to negotiate any settlement of her rights hereunder under threat
of incurring such expenses. Accordingly, (a) if following a Change in Control (1) Executive
concludes that the Company has failed to comply with any of its obligations under this Agreement or
(2) the Company or any other person on behalf of the Company or any shareholder or Affiliate of the
Company takes any action to declare this Agreement void or unenforceable, or institutes any
litigation or other legal action designed to deny, diminish, or recover from Executive the benefits
intended to be provided to Executive hereunder, and (b) if Executive has complied with all of her
obligations under this Agreement, the Company irrevocably authorizes Executive from time to time to
retain counsel of her choice at the expense of the Company as provided in this 5.3, to represent
Executive in connection with the initiation or defense of any litigation or other legal action,
whether by or against the Company or any director, officer, shareholder or other person affiliated
with the Company, in any jurisdiction. Notwithstanding any existing or prior attorney-client
relationship between the Company and such counsel, the Company irrevocably consents to Executive’s
entering into an attorney-client relationship with such counsel, and in that connection, the
Company and Executive agree that a confidential relationship shall exist between Executive and such
counsel. The reasonable fees and expenses of counsel selected from time to time by Executive as
hereinabove provided shall be paid or reimbursed to Executive by the Company on a regular periodic
basis upon presentation by Executive of a statement or statements prepared by such counsel in
accordance with its customary practices (provided that such statements need not contain
descriptions of the services performed). The payment of such fees and expenses shall not be
contingent upon the success of such counsel. Executive shall repay to the Company all such amounts
paid by the Company under this Section, and the Company shall not be obligated to make further
payments hereunder, in connection with a contest originated by Executive if the trier of fact in
such contest determines that Executive’s claim was patently frivolous.

     5.4 Affiliates. As used in this Agreement, an entity shall be deemed to be an Affiliate of
another entity if it controls, is controlled by or is under common control with the other entity,
where “control” means the power to vote not less than ten percent (10%) of the voting securities of
an entity.

     5.5 No Conflict. Executive represents that the performance by Executive of all the terms of
this Agreement, as an Executive of the Company, has not, does not and will not breach any agreement
as to which Executive is or was a party and which requires Executive to keep any information in
confidence or in trust. Executive has not entered into, and will not enter into, any written or
oral agreement in conflict herewith.

16

 

     5.6 Notices. Any and all notices required to be given under this Agreement shall be given,
and be deemed given, as follows: (a) by personal delivery which
shall be deemed given when delivered; (b) by U. S. first-class mail, postage prepaid, which shall be deemed given
the third (3rd) day after deposit; or (c) by telecopy (if telecopy number is listed)
with confirmation of receipt which shall be deemed given when sent. Any such notice shall be
addressed, if to the Company at its principal place of business (attn: President) and, if to
Executive at her most current home address on record with the Company for payroll and other
corporate purposes, unless a different address for notice purposes is designated by Executive in a
written notice complying with and referring to this Section 5.6.

     5.7 Governing Law. This Agreement shall be governed by and construed in accordance with the
laws of the State of Ohio without regard to conflict of law principles.

     5.8 Amendment and Waiver. This Agreement shall not be amended or modified, and none of the
provisions hereof shall be waived, except in a writing signed on behalf of the Company and by
Executive or, in the case of a waiver, on behalf of the party making a waiver. In the event that
any obligation, agreement or covenant contained in this Agreement should be breached by either
party and thereafter waived by the other party, such waiver shall be limited to the particular
breach so waived and shall not be deemed to waive any other breach hereunder.

     5.9 Section Headings. Section headings contained in this Agreement are for convenience only
and shall not be considered in construing any provision hereof.

     5.10 Assignment. This Agreement is personal to Executive and Executive may not assign or
delegate any of her rights or obligations hereunder. Subject to the foregoing, this Agreement
shall inure to the benefit of and be binding upon Executive and the Company and their respective
heirs, administrators, executors, successors and assigns, including successive as well as immediate
heirs, administrators, executors, successors and assigns.

     5.11 Entire Agreement. This Agreement terminates, cancels and supersedes all previous written
and oral employment agreements or other agreements relating to the relationship of Executive with
the Company entered into between the parties hereto. This Agreement contains the entire
understanding of the parties hereto with respect to the subject matter of this Agreement. Executive
is represented by independent legal counsel or has had the opportunity to retain independent legal
counsel to represent Executive’s interests. In the event an ambiguity or question of intent or
interpretation arises, this Agreement shall be construed as if drafted jointly by the parties and
no presumption or burden of proof shall arise favoring any party by virtue of authorship of any of
the specific provisions of the Agreement. EXECUTIVE ACKNOWLEDGES THAT, BEFORE PLACING HER
SIGNATURE HEREUNDER, SHE HAS READ ALL OF THE PROVISIONS OF THIS AGREEMENT, AND HAS THIS DAY
RECEIVED A COPY HEREOF.

     5.12 Severability. Any term or provision of this Agreement which is invalid or unenforceable
in any jurisdiction shall, as to such jurisdiction, be ineffective only to the extent of such
invalidity or unenforceability without thereby rendering invalid or unenforceable the remaining
terms and provisions hereof or affecting the validity or enforceability of any of the terms or
provisions of this Agreement in any other jurisdiction.

17

 

     5.13 Dispute Resolution.

	 	(a)	 	Notwithstanding any provision herein to the contrary, any determination of (1)
whether Cause for termination or Good Reason for resignation exists and (2) whether
something “materially” affects anything, or is “substantially” or “reasonably” or
“effectively” done, or is “material” or “reasonable,” as such terms are used in this
Agreement, shall be made in the first instance by the Board or one of its appropriate
oversight committees.
	 
	 	(b)	 	Any controversy, claim or dispute arising out of or relating to this Agreement
or the breach, termination, enforceability or validity of this Agreement, including the
determination of the scope or applicability of the agreement to arbitrate set forth in
this Section 5.13(b) and any dispute of any determination by the Company pursuant to
Section 5.13(a), shall be determined exclusively by binding arbitration in the City of
Columbus, Ohio. The arbitration shall be governed by the rules and procedures of the
American Arbitration Association (the “AAA”) under its Commercial Arbitration Rules and
its Supplementary Procedures for Large, Complex Disputes; provided that persons
eligible to be selected as arbitrators shall be limited to attorneys-at-law each of
whom (i) is on the AAA’s Large, Complex Case Panel or a Center for Public Resources
(“CPR”) Panel of Distinguished Neutrals, or has professional credentials comparable to
those of the attorneys listed on such AAA and CPR Panels and (ii) has actively
practiced law (in private or corporate practice or as a member of the judiciary) for at
least 15 years in the State of Ohio concentrating in either general commercial
litigation or general corporate and commercial matters. Any arbitration proceeding
shall be before one arbitrator mutually agreed to by the parties to such proceeding
(who shall have the credentials set forth above) unless the amount in question exceeds
$100,000, in which event, the mediation shall be by a panel of three mediators or, if
the parties are unable to agree to the arbitrator(s) within 15 business days of the
initiation of the arbitration proceedings, then by the AAA. No provision of, nor the
exercise of any rights under, this Section 5.13(b) shall limit the right of any party
to request and obtain from a court of competent jurisdiction in the State of Ohio,
County of Franklin (which shall have exclusive jurisdiction for purposes of this
Section 5.13) before, during or after the pendency of any arbitration, provisional or
ancillary remedies and relief including injunctive or mandatory relief or the
appointment of a receiver. The institution and maintenance of an action or judicial
proceeding for, or pursuit of, provisional or ancillary remedies shall not constitute a
waiver of the right of any party, even if it is the plaintiff, to submit the dispute to
arbitration if such party would otherwise have such right. Each of the parties hereby
submits unconditionally to the exclusive jurisdiction of the state and federal courts
located in the County of Franklin, State of Ohio for purposes of this provision, waives
objection to the venue of any proceeding in any such court or that any such court
provides an inconvenient forum and consents to the service of process upon it in
connection with any proceeding instituted under this Section 5.13 in the same manner as
provided for the giving of notice under this Agreement. Judgment upon the award
rendered may be entered in any court having jurisdiction. The parties hereby expressly
consent to the nonexclusive jurisdiction of the state and federal courts situated in the County of Franklin,
State of Ohio for this purpose and waive objection to the venue of any proceeding in
such court or that such court provides an inconvenient forum. The arbitrator(s)
shall award recovery of all costs (including attorneys’ fees, administrative fees,
arbitrators’ fees and court costs) to the prevailing party. No arbitrator shall
have power, by award or otherwise, to vary any of the provisions of this Agreement.

18

 

Signatures

     In Witness Whereof, the parties have executed this Agreement as of the date set forth
above.

	 	 	 	 	 
	THE COMPANY:
	 	 	 	 
	PROCENTURY CORPORATION

	 	EXECUTIVE:	 	 
	 
	 	 	 	 
	/s/ Edward F. Feighan
 

Edward F. Feighan, Chairman of the Board

	 	/s/ Erin E. West
 

Erin E. West
	 	 
	President, Chief Executive Office and
	 	 	 	 
	Director
	 	 	 	 

19

 

Exhibit A

Executive’s Positions for Subsidiaries

Member of the Board of Directors and Vice President of each subsidiary

 

 

Exhibit B

Performance Goals for 2005 are set forth in the March 22, 2005 Executive Compensation

Committee Minutes.

2

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