This
Noncompetition Agreement (the “ Agreement ”) is
made as of this 15th day of September, 2005, between UICI, a
Delaware corporation (“ UICI ”), and James Joel
Jensen, an individual (“ Shareholder
”).
A. UICI, on
one hand, and Premium Finance LLC, a Delaware limited liability
company (“ SibCo I ”), Mulberry Finance Co.,
Inc., a Delaware corporation (“ SibCo 2 ”),
DLJMB IV First Merger LLC, a Delaware limited liability company
(“ SibCo 3 ” and, together with SibCo 1 and
SibCo 2, the “ SibCos ”), Premium Acquisition,
Inc., a Delaware corporation (“ Merger Co 1 ”),
Mulberry Acquisition, Inc., a Delaware corporation (“
Merger Co 2 ”), DLJMB IV First Merger Co Acquisition
Inc., a Delaware corporation (“ Merger Co 3 ,”
and, together with Merger Co 1 and Merger Co 2, the “
Merger Cos ”), on the other hand have entered into an
Agreement and Plan of Merger, dated as of September 14, 2005
(the “Merger Agreement”).
B. Prior to
the merger contemplated by the Merger Agreement (the “
Merger ”), Shareholder is the record holder of an
aggregate of 595,183 shares of UICI Common Stock, representing ___%
of the outstanding UICI Common Stock.
C. Pursuant
to the Merger, Merger Cos will merge with and into UICI on the
terms and subject to the conditions set forth therein, in a
transaction in which Shareholder’s and Shareholders’
Affiliates’ UICI Common Stock will be converted into
$37.00_per share in cash.
D. As an
inducement for the SibCos and the Merger Cos to enter into the
Merger Agreement, which provides for the Merger in which
Shareholder will receive significant cash value for such
Shareholders UICI Common Stock, Shareholder entered into this
Agreement.
NOW, THEREFORE,
the parties hereby agree as follows:
1. Restrictive
Covenants .
(a) Shareholder
agrees that it is a legitimate interest of the Company, and
reasonable and necessary for the protection of the confidential
information, goodwill and business of the Company, that Shareholder
make the covenants contained herein and that none of the SibCos,
the Merger Cos or UICI would have entered into the Merger Agreement
without these covenants. Accordingly, Shareholder agrees that for
three years after the Effective Time (as such term is defined in
the Merger Agreement) (such period, the “ Restricted
Period ”), he/she will not, as proprietor or owner,
partner, member, shareholder, joint venturer, employee, officer,
director, advisor or consultant, or in any other capacity alone, or
in association with any other Person engage in Competition with the
Company in North America. For this purpose, (1) “
Competition ” means any business engaged primarily in
the marketing,
sales and/or
distribution of (a) health insurance products or (b) any
other insurance product of a type offered by the Company at any
time during the 12 months ended as of the Effective Time;
(2) the “ Company ” includes any subsidiary
or Person (whether or not incorporated) that UICI directly or
indirectly owns or has the power to vote or control 50% or more of
any class or series of capital stock or other equity interests of
such Person or a majority of its board of directors or similar
body; and (3) the term “ Person ” includes
any individual, corporation, limited or general partnership,
limited liability company, limited liability partnership, trust,
association, joint venture or governmental entity. Notwithstanding
any other provision hereof but subject to Section 1(c), the
Shareholder will not be deemed to be engaging in “
Competition ” hereunder or otherwise to the extent
based upon or arising out of (1) passive investments in
publicly traded equity securities (not to exceed 5% of the
outstanding securities of such class of the relevant entity), and
(2) any of the other activities and investments listed on
Annex 1 as “ Non-Competitive Activities ” so
long as such Non-Competitive Activities are not expanded beyond the
scope of such otherwise competitive activities as of
September 15, 2005.
(b) Shareholder
further agrees that, during the Restricted Period, neither
Shareholder nor any Person that controls, is controlled by, or is
under common control with Shareholder will employ as an employee or
retain as a consultant or independent contractor any Person who is
then an employee of or exclusive consultant to or independent
contractor (including independent agent) with the Company, or
persuade or attempt to persuade any such employee, exclusive
consultant, or independent contractor to leave the employ of the
Company or to become employed as an employee or retained as a
consultant or agent by any Person other than the Company;
provided, however , that nothing hereunder shall prohibit or
restrict Shareholder from hiring any such employee or retaining as
a consultant or independent contractor any Person who
(i) responds to a general advertisement placed by Shareholder,
(ii) in the case of employees, has terminated employment with
UICI prior to commencement of solicitation of such employee,
(iii) approaches Shareholder on an unsolicited basis; or
(iv) in the case of independent agents, has terminated all
contractual relationships with the Company prior to commencement of
solicitation of such agent.
(c) In the course
of Shareholder’s involvement with the Company, Shareholder
may have acquired and may have had access to the confidential,
proprietary information of the Company and/or its business,
including without limitation financial information and records and
pricing and cost information (“ Confidential
Information ”). Shareholder also agrees that Shareholder
will not at any time disclose to anyone (other than
Shareholder’s counsel in the course of a dispute arising from
the alleged disclosure of Confidential Information or as required
by law) any Confidential Information, or utilize such Confidential
Information for his own benefit, or for the benefit of third
parties to the detriment of the Company. The foregoing covenants
will apply whether or not any such Confidential Information is
marked “confidential”. The term “ Confidential
Information ” does not include information which
(i) is or be
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