Document:

Exhibit 10.10

 

Badger State Ethanol, LLC

2000068448-003

 

REVOLVING PROMISSORY NOTE

 

	
  Omaha, Nebraska

  	
   

  	
  $3,500,000.00

  
	
  Note Date:  August 25, 2004

  	
   

  	
  Maturity Date:  August 24, 2005

  

 

On or before August 24, 2005, Badger State Ethanol, LLC (“BORROWER”)
promises to pay to the order of First National Bank of Omaha (“BANK”) at any of
its offices in Omaha, Nebraska the principal sum hereof, which shall be Three
Million Five Hundred Thousand and no/100 ($3,500,000.00) Dollars or so much
thereof as may have been advanced by BANK, under this Note and the loan
agreement executed by the BANK and BORROWER dated as of August 28, 2001, as it
may, from time to time, be amended.

 

Interest on the principal amount outstanding shall accrue at a rate
(the “RATE”) equal to one hundred (100) basis points higher than the BASE RATE
in effect from time to time until maturity, and six per cent (6%) above the
BASE RATE in effect from time to time after maturity, whether by acceleration
or otherwise.  For purposes hereof, BASE
RATE shall mean the rate announced by BANK from time to time as its “National
Base Rate”.  Each time the BASE RATE
shall change, the RATE shall change contemporaneously with such change in the
BASE RATE.

 

The interest rate applicable to this promissory note is subject to
reduction after a date six months subsequent to CONSTRUCTION COMPLETION DATE,
based on the business results of BORROWER. 
In the event that BORROWER maintains the following ratios, measured
monthly, the interest rates will be reduced accordingly:

 

	
  IF INDEBTEDNESS to NET

  WORTH is less than:

  	
   

  	
  Interest will be:

  	
   

  
	
  1.25 : 1.00

  	
   

  	
  BASE RATE plus 75 basis points

  	
   

  
	
  1.00 : 1.00

  	
   

  	
  BASE RATE plus 50 basis points

  	
   

  
	
  0.75 : 1.00

  	
   

  	
  BASE RATE plus 25 basis points

  	
   

  

 

Interest shall be calculated on the basis of a 360-day year, counting
the actual number of days elapsed. 
Interest on the REVOLVING LOAN shall be payable monthly, commencing
September 25, 2004.

 

This note is executed pursuant to a Construction Loan Agreement dated
as of August 28, 2001, between BANK and BORROWER (the “LOAN AGREEMENT”).  The LOAN AGREEMENT contains additional terms
of this Note, including, but not limited to enumerated events of default, and
the granting of liens to secure BORROWER’s performance.  All capitalized terms not otherwise defined
herein shall have the same meanings as set forth in the LOAN AGREEMENT.

 

As provided in the LOAN AGREEMENT, upon any such enumerated default,
BANK may accelerate the due date of this Note and declare all obligations set
forth herein immediately due and payable, and BANK shall also have such other
remedies as are described in the LOAN AGREEMENT and are provided by law.  All makers and endorsers hereby waive
presentment, demand, protest and notice of dishonor, consent to any number of
extensions and renewals for any period without notice; and consent to any
substitution, exchange or release of collateral, and to the addition or
releases of any other party primarily or secondarily liable.

 

Executed as of the 24 day of August, 2004.

 

Badger State Ethanol, LLC

 

 

	
  By:

  	
  /s/ Gary L. Kramer,

  	
   

  
	
   

  	
  Gary L. Kramer, President

  
				

 

(Notary Acknowledgment required on Page 2)

 

 

NOTARY ACKNOWLEDGMENT

 

	
  STATE OF
  WISCONSIN

  	
  )

  	
   

  
	
   

  	
  )

  	
  ss:

  
	
  COUNTY OF GREEN

  	
  )

  	
   

  

 

On this 25th day of August, 2004, before me,
the undersigned, a Notary Public, personally appeared Gary L. Kramer, the
President of Badger State Ethanol, LLC, to me known to be the identical person
named in and who executed the foregoing instrument, and acknowledged that he
executed the same as his voluntary act and deed on behalf of Badger State
Ethanol, LLC.

 

	
   

  	
  By:

  	
  /s/ [ILLEGIBLE]

  	
   

  
	
   

  	
   

  	
  Notary PublicExhibit
10.1

CONSULTING
AGREEMENT

This Consulting Agreement
(“Agreement”) is entered into by and between John J. Tickner (hereinafter
“Tickner”) and Zenith National Insurance Corp. (hereinafter “Zenith”) on behalf
of itself and its past and present officers, directors, agents, employees,
attorneys, parents, subsidiaries, related companies, divisions, affiliated
companies, successors and assigns, separately and collectively, with reference
to the following facts and circumstances:

A.                                   Tickner is employed by Zenith pursuant to
a written Employment Agreement that expires by its term on March 1, 2005.

B.                                     Although Tickner’s employment obligations
with Zenith pursuant to his employment agreement will terminate on March 1,
2005, Tickner will continue as an employee at will until March 31, 2005 at
which time Zenith is desirous of securing consulting services from Tickner, and
Tickner is willing to provide such consulting service to Zenith, with regard to
such matters that include, but are not limited to, regulatory/compliance audits
and training; assisting with provider fraud initiatives; Riscorp runoff issues;
litigation; reinsurance recoveries; reinsurance placement and recoverables; and
assistance in the transition to a new General Counsel.

NOW, THEREFORE, in
consideration of the foregoing and for good and valuable consideration, Zenith
and Tickner hereby agree as follows:

1.             Consultancy.

(a)           Effective April 1, 2005, Tickner
shall render services to Zenith as an independent contractor, consultant on a
non-exclusive basis for a four year term, (“Consulting Term”) commencing as of
April 1, 2005 and terminating March 31, 2009.

 

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(b)           During the period between April 1,
2005 and March 31, 2007, Tickner shall make himself reasonably available for
consulting with Zenith, at such times as Zenith may reasonably require not to
exceed 240 hours in any calendar quarter. 
During this period, Tickner shall be paid a consulting fee of $21,666.67
per month.  Zenith shall issue a Form 1099
with regard to such consulting fees.

(c)           During the period between
April 1, 2007 and March 31, 2009, Tickner shall make himself reasonably
available for consulting with Zenith, at such times as Zenith may reasonably
require not to exceed 120 hours in any calendar quarter.  During this period, Tickner shall be paid a
consulting fee of $10,833.33 per month. 
Zenith shall issue a Form 1099 with regard to such consulting fees.

(d)           In the event Tickner determines that
the consulting being requested of him in any quarter is reasonably likely to
exceed the hours limitations set forth in subparagraph (b) and (c) above, he
shall so notify Zenith and the parties shall discuss a mutually agreed upon
arrangement for additional compensation.

(e)           So long as Tickner shall serve as a
consultant pursuant to this Agreement, Zenith agrees to provide Tickner with an
office, phone, email, computer and secretarial support at its offices in
Woodland Hills.  The particular office
within its facilities shall be selected by Zenith at its discretion.  In addition, Zenith agrees to continue at its
expense to provide Tickner with a telephone line for facsimile and DSL service
at his home for so long as such service is needed by Tickner in connection with
his consulting assignments.  Tickner
shall not use his Zenith office address or email address for the conduct of
business on behalf of any entity other than Zenith.  Further, Tickner agrees that he will not use
his Zenith office, telephone or other Zenith services or facilities in a manner
that could create a conflict of interest, liability or embarrassment to Zenith.

 

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(f)            Tickner shall provide such
consulting services in the manner and at such location (including by telephone
or in person at Zenith offices) as Zenith reasonably determines in good faith
based on the nature and urgency of the matter(s) on which Tickner services are
sought.

(g)           Tickner shall be paid his consulting
fee on the first of each month during the period of his consultancy with the
first payment to be made April 1, 2005. 
Tickner shall be reimbursed for all reasonable out of pocket expenses to
the extent they are approved by Zenith in writing in advance, including but not
limited to expenses incurred for travel to the location of any consulting
services outside of the geographic area in which Tickner maintains his
principal residence.

(h)           Nothing contained herein shall
prevent Tickner after April 1, 2005, from seeking or accepting other consulting
clients or employment; provided, however, Tickner may not accept consulting
clients or employment from agents, insured parties competing insurance
companies or any other entity that could create a conflict of interest with
Zenith, without the express written approval from Zenith.  Tickner may, however, terminate his
consulting obligations under the Agreement at any time whether to accept
competitive employment or otherwise.  Any
such termination of services by Tickner shall be preceded by written notice to
Zenith setting forth the dates his consulting services will terminate.  Tickner shall earn no further fees pursuant
to paragraph 1(b) or (c), as applicable, after the date of cessation but
Tickner shall be entitled to be reimbursed for expenses appropriately incurred
prior to the date of his cessation of consulting services.

(i)            As of April 1, 2005, the
relationship between the parties is that of an independent contractor and not
an employer/employee.  Tickner is an
independent contractor, and Zenith shall not assume the duties and
responsibilities of an employer with respect to Tickner, including but not
limited to payroll deductions, withholding, 

 

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employer’s taxes,
workers’ compensation insurance, health insurance programs, sick leave
benefits, retirement programs or any other benefits granted by Zenith to its
employees; provided, however,  Tickner
shall continue to vest in the 7000 shares of restricted stock that had
previously been granted to him, on the terms and condition set forth in the
Restricted Stock Award Agreements and any amendments thereto.  Form W-2s shall be issued to Tickner with
regard to such restricted stock and the dividends related thereto as required
by law.  Except to the extent Zenith is
obligated to withhold taxes, and is liable for taxes, on income reported on
Form’s W-2, the payment of all taxes with regard to Tickner’s income and the
providing of all benefits, if any, to Tickner himself or to his spouse,
children or employees of Tickner shall be solely the responsibility of
Tickner.  Tickner understands and agrees
that as an independent contractor he is not eligible to participate in any
bonus or other program of employee benefits or equity based compensation sponsored
by Zenith.  Tickner agrees that he will
indemnify and hold Zenith harmless from any and all claims whether for taxes,
penalties, interest or otherwise based upon Tickner’s independent contractor
status, including Tickner’s failure to make any necessary reports, file any
necessary returns or pay any appropriate taxes or fees.

(j)            Tickner agrees that to the extent he
is requested to do so, he will assist in the transition of his duties to a new
General Counsel, or otherwise, as requested by Zenith.

(k)           Tickner agrees that during the
duration of his consultancy he will be bound by the same rules and duties,
including the duty of loyalty, as are employees of Zenith generally.  Tickner further agrees that he will not
engage in any activities which are directly or indirectly inconsistent with his
status as a consultant to Zenith.  This
Agreement, and Tickner’s consultancy hereunder, may be terminated by Zenith for
cause 

 

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in the event of
any breach of this Agreement or misconduct. 
In the event such breach or misconduct is reasonably capable of cure,
Zenith shall not have the right to terminate for cause unless and until the
matter has remained unremedied for 10 business days after written notice to
Tickner.

2.             Confidentiality of Zenith
Information and Other Obligations.

(a)           Tickner acknowledges, understands and
agrees that, as a result of his employment by Zenith and his consulting
hereunder, he may have developed, obtained, or learned, and/or will in the
future develop, obtain or learn, trade secrets or confidential information of
Zenith (including attorney client or attorney work product information and
information relating to Zenith’s data processing and/or claims handling
procedures, business policies, strategies and other information).  Tickner shall not, without the prior written
consent and approval of Zenith, divulge to any person, firm or corporation, nor
use to the detriment of Zenith or any other Released Party, nor use in any
business, venture, or any organization of any kind, at any time during the
Consulting Term or thereafter any trade secrets or confidential information
including, but not limited to, trade secret or confidential information of the
following types: claims handling, development, marketing, organizational,
financial, accounting, managerial, administrative, production, distribution and
sales information, data, specifications and processes presently owned, or
developed in whole or in part both during the Consulting Term or at any time
prior thereto (collectively, the “Confidential Material”).  Confidential Material shall not include
information that has been publicly disclosed by Zenith or included in any
publicly available filing, report, or analysis or which is available to the
public through lawful means unrelated to any disclosures by Tickner.  Except in the performance of Tickner’s duties
as a consultant to Zenith, Tickner shall not, directly or indirectly for any
reason whatsoever, disclose or use 

 

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any such Confidential
Material at any time during the Consulting Term or thereafter.  All records, files, drawings, documents,
equipment and other tangible items, wherever located, relating in any way to
the Confidential Material or otherwise to Zenith’s business, which Tickner
shall prepare, use or encounter, shall be and remain Zenith’s sole and
exclusive property and shall be included in the Confidential Material.  Upon or at any time following the termination
of the Consulting Term, or sooner if requested by Zenith, Tickner shall
promptly deliver to Zenith any and all of the Confidential Material, not
previously delivered to Zenith, that may be in the possession or under the
control of Tickner.

(b)           Once Tickner has disclosed to Zenith
processes, developments and discoveries conceived by Tickner (collectively, the
“Tickner Work Product”), in any way related to the Confidential Material or the
development, production, financing or marketing activity carried on by Zenith,
whether conceived alone or with others during the performance of Tickner’s
duties, and whether or not conceived during the regular working hours of
Zenith, such Tickner Work Product shall become the sole and exclusive property
of Zenith, and Tickner hereby assigns to Zenith Tickner’s entire right, title
and interest in and to the Tickner Work Product. Zenith shall also have the
right to keep any and all of the Tickner Work Product as Zenith’s Confidential
Material.

(c)           During the term of this Agreement,
and for a period of twenty four months after the conclusion of Tickner’s
services pursuant to this Agreement, Tickner shall not, directly or indirectly,
solicit any employee or consultant of Zenith, encourage any such employee or
consultant to leave the employment of Zenith, or have any involvement in the
hiring (or retention) of any such employee or consultant without Zenith’s prior
written consent; provided, however, that this limitation shall not apply in any
event with regard to the hiring of any individual who has not been employed by,
or consulted with, Zenith for at least one year.

 

6

 

(d)           The parties acknowledge that damages
would not adequately compensate Zenith for any breach by Tickner of any of the
provisions of this paragraph 2 of this Agreement; that any such breach will
irreparably harm Zenith; and that in the event of allegations of irreparable
injury from this or any other type of conduct, any court of competent
jurisdiction may grant to Zenith provisional relief, including a temporary
restraining order or injunction, pending arbitration, to protect Zenith or its
Confidential Material.  Similarly, in the
event any alleged breach by Zenith shall threaten irreparable harm to the
Tickner, Tickner may seek from any court with appropriate venue, provisional relief,
including a temporary restraining order or injunction, to protect his
interests, pending arbitration.  The
parties further agree that their rights and remedies to seek provisional relief
from a court and injunctive relief from an arbitrator shall be in addition to
any other rights, including the right to suspend performance and/or to seek
damages, either would have in the event of a breach by the other.

3.             Zenith Property.  Tickner agrees that, upon request at any
time, he will immediately return to Zenith all records, documents, reports,
files, memoranda, credit cards, cardkey passes, door and file keys, computer
access codes, software, and other physical or personal property pertaining to
or owned by Zenith

4.             Cooperation and Indemnification.  Tickner agrees to cooperate with Zenith in
connection with any future or currently pending litigation, including without
limitation, by making himself reasonably available to testify in any action as
reasonably requested by Zenith.  With
respect to any such litigation, in the event Tickner is named as a defendant by
any party thereto, Zenith shall be responsible for providing a defense to, and
indemnifying, Tickner, to the same extent and under the same conditions as if
he were an officer and employee of Zenith, with 

 

7

 

respect to any litigation
including any third party litigation or other proceeding arising from his
lawful activities on behalf of Zenith and the discharge of his duties as an
employee or a consultant to Zenith.  In
the event that the interests of Tickner and Zenith in litigation should become
adverse, Tickner shall be entitled to select his own counsel, subject to the
approval of Zenith (which approval shall not be unreasonably withheld).

5.             Modifications.  No modification, amendment or waiver of any
of the provisions contained in this Agreement, or any future representation,
promise, or condition in connection with the subject matter of this Agreement,
shall be binding upon any party to this Agreement unless made in writing and
signed by such party or by a duly authorized officer or agent of such party.

6.             Severability.  In the event that any provision of this
Agreement, or portion thereof, should be held to be void, voidable, unlawful or
for any reason unenforceable, the remaining provisions or portions of this
Agreement shall remain in full force and effect.

7.             Covenant Not to Sue.  Except to the extent required by law, each
party hereto covenants and agrees not to bring or assert, or to induce or assist
any person, firm, corporation, or other entity whatsoever to bring or assert,
any claim released by this Agreement. 
Each party hereto further covenants and agrees that this Agreement is a
bar to bringing, asserting, inducing or assisting, except to the extent
required by law, any such claim, and that each party shall, in the event of
such a breach, restore to the other all consideration received under this
Agreement and indemnify all other parties and hold them harmless, from and
against any liability, loss, cost, or expense (including, but not limited to,
attorneys’ fees) 

 

8

 

incurred as a direct or
indirect result of a breach of this paragraph of this Agreement.

8.             No Pre-Existing Claims.  Tickner represents and warrants that he has
not filed any statutory, civil, or administrative complaint or charge of any
kind with any state or federal court, administrative agency, or tribunal of any
kind whatsoever, asserting any claim released under this Agreement.  The parties agree that this Agreement and the
consideration exchanged in this Agreement are contingent upon this
representation and warranty.

9.             Non-Assignment of Claims.  The parties represent and warrant that they
have not assigned or transferred any portion of the claims released under this
Agreement to any other person, firm, corporation or other entity, and that no
other person, firm, corporation or other entity has any lien or interest in any
such claims.  Each party shall indemnify
all other parties, and defend and hold them harmless, from and against any
liability, loss, cost, and expense whatsoever (including, without limitation,
attorneys’ fees) incurred as a direct or indirect result of any breach of this
paragraph of this Agreement.

10.           Integration.  When effective, this Agreement shall
constitute a single, integrated written contract expressing the entire
agreement of the parties concerning the subject matter referred to in this
Agreement.  No covenants, agreements,
representations, or warranties of any kind whatsoever, whether express or
implied in law or fact, have been made by any party to this Agreement, except
as specifically set forth in this Agreement or other written agreements of the
parties.  As of the date this Agreement
is executed, all prior and contemporaneous discussions, negotiations, and
agreements have been and are merged and integrated into, and are superseded by,
this Agreement.

 

9

 

11.           Governing Law.  This Agreement shall be construed in
accordance with, and governed by, the laws of the State of California without
giving effect to principles of conflict of laws.

12.           Additional Documents.  The parties will execute all such further and
additional documents and undertake all such other actions as shall be
reasonable, convenient, necessary or desirable to carry out the provisions of
this Agreement.

13.           Counterparts.  This Agreement may be executed in
counterparts.  When each party has signed
and delivered at least one such counterpart, each counterpart shall be deemed
an original, and, when taken together with other signed counterparts, shall
constitute one Agreement which shall be binding upon and effective as to all
parties.

14.           Miscellaneous Terms.  Each of the parties to this Agreement further
represents, warrants, and agrees as follows:

(a)           Each party has read the Agreement
carefully, knows and understands the contents of this Agreement, and has made
such investigation of the facts pertaining to this Agreement and of all matters
pertaining to this Agreement as such party deems necessary or desirable.

(b)           The terms of this Agreement are
contractual, not a mere recital, and are the result of negotiations between the
parties.

(c)           Each party agrees that such party
will not take any action that would interfere with the performance of this
Agreement by any of the parties to this Agreement or which would adversely
affect the rights provided for in this Agreement.

(d)           Whenever the context so requires, the
singular number shall include the plural number, and vice versa.

 

10

 

(e)           Each party to this Agreement has the
full authoirty to enter into this Agreement.

15.           Release by Tickner.  Tickner knowingly and voluntarily on behalf
of himself and any spouse, dependents, descendants, ancestors, representatives,
heirs, executors, administrators, grantees, assigns and successors-in-interest
of Tickner, and each of them, hereby completely releases and forever discharges
Zenith and any parent, subsidiary, division, related or affiliated entity, past
and present, and their directors, officers, shareholders, employees, agents,
representatives, insurers, attorneys, assigns, predecessors and
successors-in-interest, past and present, and each of them (hereinafter
collectively referred to as the “Released Parties”), of and from any and all
claims, rights, agreements, contracts, covenants, promises, demands, actions,
causes of action, suits, liens, judgments, orders, debts, obligations,
liabilities, wages, accounts, damages, costs, attorneys’ fees or any other
expenses whatsoever, of whatever kind or nature, in law, equity or otherwise,
whether known or unknown, suspected or unsuspected, which Tickner now has or
has at any time heretofore had, relating to or arising out of any state,
municipal, or Federal constitution, statute, regulation, ordinance, order, or
common law, including, but not limited to: 
Title VII of the Civil Rights Act of 1964, as amended, 42 U.S.C.
§ 2000(e), et  seq.; the Civil Rights Act of 1866, as
amended, 42 U.S.C. § 1981, et  seq.; the Equal Pay Act, as
amended, 29 U.S.C. § 206(d); the Americans With Disabilities Act, 42
U.S.C., § 12101, et  seq.; the Fair Labor Standards Act of
1938, as amended, 29 U.S.C. § 201, et seq.; the Family and Medical Leave
Act, 29 U.S.C. § 2601, et seq.; the Americans with
Disability Act of 1990, as amended, 42 U.S.C. § 12101, et  seq.;
the Age Discrimination in Employment Act of 1967, as amended, 29 U.S.C.
§ 621 et  seq.; 

 

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the Employee Retirement
Income Security Act, 29 U.S.C. § 1001, et  seq.; any
equivalent state statute, and any action based on misrepresentation, fraud,
work place injury, breach of public policy, contract, quasi-contract, implied
contract, an accounting, wrongful or constructive discharge, breach of the
covenant of good faith and fair dealing, libel, slander, malicious prosecution,
negligent or intentional infliction of emotional distress, any other tort,
discrimination on any basis prohibited by statute, regulation, ordinance, or
public policy, negligence, interference with business opportunity or with
contracts, or unfair practices arising out of any acts or omissions occurring
before the execution of this Agreement. 
This release shall not be deemed to release or discharge any obligations
under this Agreement or any benefits to which Tickner may be entitled under
Zenith’s 401(k) Plan.

16.           Waiver of Unknown Claims.  In connection with the foregoing release,
Tickner acknowledges that he is aware that he may later discover facts in
addition to or different from those which he currently knows or believes to be
true with respect to the subject matters of the above release, but that it is
his intention hereby fully, finally, and forever, to settle and release all of
these matters which now exist, may exist, or previously existed between Tickner
and the Release Parties, whether known or unknown, suspected or
unsuspected.  In furtherance of such
intent, the releases given herein shall be and shall remain in effect as full
and complete releases, notwithstanding the discovery or existence of such
additional or different facts.  In this
regard, Tickner specifically waives the benefits of the provisions of Section
1542 of the Civil Code of the State of California and any other analogous state
or federal law or regulation.  Said
Section 1542 of the California Civil Code reads as follows:

 

12

 

A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE
CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF
EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS
SETTLEMENT WITH DEBTOR.

17.           Release by Zenith.  In consideration of the release given above
by Tickner, Zenith knowingly and voluntarily hereby completely releases and
forever discharges Tickner of and from any and all claims, rights, agreements,
contracts, covenants, promises, demands, actions, causes of action, suits,
liens, judgments, orders, debts, obligations, liabilities, wages, accounts,
damages, costs, attorneys’ fees or any other expenses whatsoever, of whatever
kind or nature, in law, equity or otherwise, whether known or unknown,
suspected or unsuspected, which Zenith now has or has at any time heretofore
had, excepting only claims of fraud, dishonesty or willful concealment.  Except as provided above, this release is
intended to apply to claims relating to or arising out of any state, municipal,
or Federal constitution, statute, regulation, ordinance, order or common law, including,
but not limited to, Title VII of the Civil Rights Act of 1964, as amended,
42 U.S.C. § 2000(e), et  seq.; the Civil Rights Act of 1866,
as amended, 42 U.S.C. § 1981, et seq.; the Equal Pay
Act, as amended, 29 U.S.C. § 206(d); the Americans With Disabilities Act,
42 U.S.C., § 12101, et  seq.; the Fair Labor Standards Act of
1938, as amended, 29 U.S.C. § 201, et seq.; the Family
and Medical Leave Act, 29 U.S.C. § 2601, et  seq.; the
Americans with Disabilities Act of 1990, as amended, 42 U.S.C. § 12101, et
seq.; the Age Discrimination in Employment Act of 1967, as amended, 29
U.S.C. § 621 et  seq.; the Employee Retirement Income
Security Act, 29 U.S.C. § 1001, et  seq.; any equivalent
state statute, and any action based on misrepresentation, work place injury,
breach of public policy, contract, quasi-

 

13

 

contract, implied
contract, an accounting, wrongful or constructive discharge, breach of the
covenant of good faith and fair dealing, libel, slander, malicious prosecution,
negligent or intentional infliction of emotional distress, any other tort,
discrimination on any basis prohibited by statute, regulation, ordinance, or
public policy, negligence, interference with business opportunity or with
contracts, or unfair practices arising out of any acts or omissions occurring
before the execution of this Agreement. 
This release shall not be deemed to release any obligations of Tickner
under this Agreement.

18.           Waiver of Unknown Claims.  In connection with the foregoing release,
Zenith specifically waives the benefits of the provisions of Section 1542 of
the California Civil Code quoted in full above and any other analogous state or
federal law or regulation.

19.           Prohibition Against Defamation and Willful Disparagement.  Zenith, with respect to Tickner, and Tickner with
respect to Zenith and the other Released Parties, agree that they will
not at any time orally or in writing defame or intentionally make disparaging
remarks that could be expected to have a material adverse impact upon the
business reputation or business prospects of the other party or person, except
as may be required by law.  

20.           Age Discrimination in Employment
Act Waiver.  The waiver given below
is given only in exchange for consideration in addition to anything of value to
which Tickner is already entitled.  The
waiver set forth below does not waive rights or claims that may arise after the
date of execution of this Agreement. 
Tickner acknowledges that (i) this paragraph is written in a manner calculated
to be understood by Tickner, (ii) by reviewing this paragraph or drafts thereof
he has been advised in writing to consult with an attorney before executing
this 

 

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Agreement, (iii) he was
given a period of 21 days within which to consider this paragraph, and (iv) to
the extent he executes this Agreement, including this paragraph, before the
expiration of the 21 day period, he does so knowingly and voluntarily.  Tickner shall have the right to cancel and
revoke this paragraph during a period of seven days following his execution of
the Agreement and this paragraph shall not become effective, and no money shall
be paid to Tickner pursuant to this Agreement, until such seven-day period has
expired without this paragraph’s having been revoked.  The seven-day period of revocation shall
commence upon the date of Tickner’s execution of this Agreement. Within the
seven-day revocation period, Tickner shall forward to Zenith a copy of this
Agreement fully executed by Tickner.  In
order to revoke this paragraph, Tickner shall deliver to Zenith, prior to the
expiration of said seven-day period, a written notice of cancellation.

In addition to the
release set forth in paragraph 15 hereof, Tickner hereby voluntarily and
knowingly waives all rights or claims arising under the Federal Age
Discrimination in Employment Act.

21.           Arbitration.  Any controversy, dispute, or claim between
the parties to this Agreement, including any claim arising out of, in
connection with, or in relation to the formation, interpretation, performance
or breach of this Agreement shall be settled exclusively by arbitration, before
a single arbitrator, in accordance with this section and the then most
applicable rules of the American Arbitration Association.  Judgment upon any award rendered by the
arbitrator may be entered by any state or federal court having jurisdiction
thereof.  Such arbitration shall be the
administered by the office of the American Arbitration Association assigned to
administer cases arising from the greater Los Angeles area.  Arbitration shall be 

 

15

 

exclusive remedy for
determining any such dispute, regardless of its nature.  Notwithstanding the foregoing, either party
may in an appropriate matter apply to a court pursuant to California Code of
Civil Procedure Section 1281.8, or any comparable provision, for
provisional relief, including a temporary restraining order or a preliminary
injunction, on the ground that the award to which the applicant may be entitled
in arbitration may be rendered ineffectual without provisional relief.

In the event the parties
are unable to agree upon an arbitrator, the parties shall select a single
arbitrator from a list of nine arbitrators drawn by the parties at random from
the “Independent” (or “Gold Card”) list of retired judges or, at Tickner’s
option, from a list of nine persons from the Employment Panel and provided by
the American Arbitration Association.  If
the parties are unable to agree upon an arbitrator from the list so drawn, then
the parties shall each strike names alternately from the list, with the first
to strike being determined by lot.  After
each party has used four strikes, the remaining name on the list shall be the
arbitrator.  If such person is unable to
serve for any reason, the parties shall repeat this process until an arbitrator
is selected.

This agreement to
resolve any disputes by binding arbitration shall extend to claims against any
parent, subsidiary or affiliate of each party, and, when acting within such
capacity, any officer, director, shareholder, employee or agent of each party,
or of any of the above, and shall apply as well to claims arising out of state
and federal statutes and local ordinances as well as to claims arising under
the common law.  In the event of a
dispute subject to this paragraph the parties shall be entitled to reasonable
discovery subject to the discretion of the arbitrator.  The remedial authority of the arbitrator
shall be the same as, but no greater than, would be the remedial power of a
court having jurisdiction over the parties and their dispute.  The arbitrator shall, upon an appropriate
motion, dismiss any claim 

 

16

 

without an evidentiary hearing if the party bringing the motion
establishes that he or it would be entitled to summary judgment if the matter
had been pursued in court litigation.  In
the event of a conflict between the applicable rules of the American
Arbitration Association and these procedures, the provisions of these
procedures shall govern.

Each party to this
Agreement shall be responsible for one half of the costs and fees of the
arbitrator.  The prevailing party in such
arbitration, as determined by the arbitrator, and in any enforcement or other
court proceedings, shall be entitled, to the extent permitted by law, to
reimbursement from the other party for all of the prevailing party’s costs
(including but not limited to the arbitrator’s compensation), expenses, and attorneys’
fees.

The arbitrator
shall render an award and written opinion, and the award shall be final and
binding upon the parties.  If any of the
provisions of this paragraph, or of this Agreement, are determined to be
unlawful or otherwise unenforceable, in whole or in part, such determination
shall not affect the validity of the remainder of this Agreement, and this
Agreement shall be reformed to the extent necessary to carry out its provisions
to the

greatest extent possible and to insure that the resolution of all
conflicts between the parties, including those arising out of statutory claims,
shall be resolved by neutral, binding arbitration.  If a court should find that this section’s
arbitration provisions are not absolutely binding, then the parties intend any
arbitration decision and award to be fully admissible in evidence in any
subsequent action, given great weight by any finder of fact, and treated as
determinative to the maximum extent permitted by law. 

 

17

 

                Unless mutually agreed by the parties
otherwise, any arbitration shall take place in the City of Los Angeles,
California.

 

IN WITNESS
WHEREOF, the parties hereto have set their hands on the day or days and year
written below.

PLEASE READ CAREFULLY.

	
  Dated: February
  24, 2005

  	
  /s/ John J.
  Tickner

  
	
   

  	
  John J. Tickner

  
	
   

  	
   

  
	
   

  	
  Zenith National
  Insurance Corp.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Dated: February
  24, 2005

  	
  By

  	
  /s/ Jack D. Miller

  
	
   

  	
   

  	
  Jack D. Miller

  
	
   

  	
   

  	
  Executive Vice President

  

 

18

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