exv10w2



 




EXHIBIT 10.2




MANAGEMENT AGREEMENT




     THIS MANAGEMENT AGREEMENT ( this “Agreement”) is entered into this 16th day of April, 2007 by
and between MEADOWBROOK, INC., a Michigan corporation (the “Company”), and Evergreen/UNI RW
Acquisition Corp., an Ohio corporation the “Manager”). The Company and the Manager are referred to
individually as a “Party” and collectively as the “Parties.”



     WHEREAS, the Company, Meadowbrook Insurance Group, Inc. (“MIGI” and, together with the
Company, “Meadowbrook”), the Manager and the shareholders of the Manager entered into a certain
Asset Purchase Agreement dated as of April 16, 2007 (the “Asset Purchase Agreement”) and certain of
such parties entered into other ancillary agreements (including, without limitation, that certain
Noncompetition Agreement dated as of April 16, 2007 (the “Noncompetition Agreement”) among the
Company, MIGI, US Specialty Underwriters, Inc., an Arizona corporation, the Manager and the
shareholders of the Manager).



     WHEREAS, certain capitalized terms and conditions, if not defined in this Agreement, shall
have the same meaning as set forth in the Asset Purchase Agreement;



     WHEREAS, the Asset Purchase Agreement provides for the sale of substantially all of the
assets used or held for use by Seller in the operation of its business of providing excess workers
compensation coverage for low to moderate hazard business (the “Acquired Business”) to the Company
in exchange for cash, stock of MIGI, and certain contingent consideration;



     WHEREAS, the execution and delivery of this Agreement by the Parties (whereby the Manager
would, subject to the terms and conditions of the Asset Purchase Agreement and this Agreement,
manage the Acquired Business) is a condition to the Closing;



     WHEREAS, the Company desires that Manager manage the Acquired Business on the terms and
conditions described herein, and Manager wishes to so manage, with such management to commence on
the Closing Date; and



     NOW, THEREFORE, the Parties do hereby agree as follows:



     1. Appointment. Effective as of the Closing Date, the Company hereby appoints and
designates Manager to manage and operate the Acquired Business during the Management Term, and
Manager hereby accepts such appointment and designation, subject to the terms and conditions set
forth below. Except as set forth in the next sentence, Manager is not an agent of the Company with
respect to the Acquired Business or otherwise and does not have the authority to and shall not bind
the Company to any agreement or other obligation (including, without limitation, signing agreements
on behalf of the Company). Manager and Daniel J. Clark (“Clark”) are authorized to enter into
contracts on behalf of the Company in the ordinary course of the Acquired Business which would
include, but not be limited to, agency agreements, appointments of sub-agents, agreements with
policy holders and reinsurance arrangements, in any such case, only in a manner which relates
exclusively to the Acquired Business.





 









 





     2. Duties.



          2.1 Capacities.






               2.1.1 Subject to the terms of this Agreement (including, without limitation, Section 2.1.6),
(i) Manager shall manage and operate the ordinary course, day-to-day operations of the Acquired
Business, and in such capacity, shall have the attendant rights and responsibilities as set forth
in this Agreement, (ii) Manager’s duties in such capacity shall be to control, direct and supervise
the ordinary course, day-to-day operations of the Acquired Business, (iii) Manager will have
limited decision-making power with respect to the Acquired Business’s personnel, including
appointment of employees of the Acquired Business (which shall be employees of the Company for
payroll, tax, employee benefit and all other purposes), culture, compensation structure and
arrangements with respect to the Acquired Business (excluding the compensation of Manager), choice
of and dealings with Clients, prospects, suppliers and other business associates, and products and
services sold or rendered by the Acquired Business and (iv) Manager may control the manner of its
performance of its duties hereunder.



               2.1.2 In performing its duties hereunder, Manager shall, and shall use reasonable efforts to
cause each other representative of the Acquired Business to, in all material respects (i) abide by
and comply with all applicable laws, statutes, orders, rules, regulations, policies or guidelines
promulgated, or judgments, decisions or orders entered by, any court, arbitral tribunal,
administrative agency, or commission or other governmental or regulatory body, agency or
instrumentality or authority relating to the Acquired Business’ properties or business, (ii) adopt
and adhere to the accounting policies, financial reporting practices and standards and cash
management systems, policies and practices (as set forth on Exhibit A hereto) and otherwise as
adopted by Meadowbrook from time to time and applicable to its business generally (the “Meadowbrook
Policies”) provided that such Meadowbrook Policies shall allow for the efficient and effective
administration of the Asset Purchase Agreement including, without limitation, Section 2.14 thereof,
(iii) abide by and adhere to the provisions of the Articles of Incorporation and Bylaws of the
Company, and (iv) conduct itself with respect to the Acquired Business with the prudence, care,
dedication and skill as would be manifested by one in the operation and management of its own
assets and properties. Manager agrees to manage the Acquired Business in a reasonable and
judicious manner, including by selling the products and services of the kind or nature previously
sold by the Acquired Business. Manager shall not commingle any of its assets with those of the
Company or the Acquired Business.



               2.1.3 Manager shall devote, and shall cause Clark to devote, such attention and time necessary
to fulfill Manager’s duties and responsibilities under this Agreement. It is expressly understood
that Clark (a) will perform such gainful work, in addition to the performance of Manager’s duties
hereunder, as reasonably determined by Clark (subject to Sections 9 and 10 of this Agreement), (b)
may devote other time to charitable, civic and industry-related boards or organizations and (c)
will manage the Manager’s business, financial and legal affairs. Manager may set the hours of work
for Clark with respect to the performance of the duties hereunder. The activities of Manager and
Clark which are permitted under this Section 2.1.3 shall not conflict with the terms and conditions
of this Agreement, the Asset Purchase Agreement, the Ancillary Agreements or the Meadowbrook
Policies.



               2.1.4 Any and all agreements or understandings, whether oral or written, relating to the
business, operations, activities, nature or otherwise within the purview of the Acquired Business,
shall only be entered into by and for the benefit of the Company. Manager shall not enter into,
directly or indirectly, any agreement or understanding, including with any



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employee, affiliate or customer of the Company or any entity that has a business relationship
with the Company, that is in violation of this Agreement.




               2.1.5 All expenses incurred by or on behalf of the Acquired Business or in connection with the
operations or activities of the Acquired Business shall be expenses of the Company and shall be
reflected on the books and records of the Company.



               2.1.6 Notwithstanding anything to the contrary contained in this Agreement, the following
provisions concerning the Manager and the management of the Acquired Business shall apply:



                    (i) Manager’s operation of the Acquired Business shall be subject to the oversight of the
President & CEO of the Company or his designee. Notwithstanding anything to the contrary,
management of the Acquired Business shall be vested in the Board of Directors of the Company as
provided by resolution or applicable law.



                    (ii) Subject to the other provisions of this Agreement, Manager may enter into affiliation
agreements or contracts with any insurance company, agent organization or producer in connection
with selling the products and services of the kind and nature generally sold by the Acquired
Business.



                    (iii) Manager shall report to the President & CEO of the Company or his designee in fulfilling
its responsibilities hereunder and Manager shall use its reasonable best efforts to comply with
such Person’s reasonable requests and directions.



                    (iv) Without the prior written consent of the President & CEO of the Company or his designee,
Manager shall not, on behalf of the Company, nor shall it permit any representative of the Acquired
Business, on behalf of the Company, to:



                         (A) enter into any Non-Ordinary Course Transaction (as defined in Section 28.6 of this
Agreement);



                         (B) make any expenditures or enter into any agreements, contracts or other commitments other
than on behalf of the Acquired Business;



                         (C) make any expenditures or enter into any agreements, contracts or other commitments not
contemplated by the Budget;



                         (D) enter into any agreements, contracts or other commitments that could restrict or result in
any restriction on the ability of the Company to choose where and with whom it does business; and



                         (E) cause the Acquired Business to operate outside the Ordinary Course of Business.



          2.2 Place of Performance. Manager and Clark shall be based in northeastern Ohio.
However, if and only if Manager determines it necessary or appropriate to conduct the operations of
the Acquired Business elsewhere, Manager and Clark shall be based at such other place or places as
Manager determines, subject to the advice and written consent of the Company.




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          2.3 Working Capital and Bank Accounts.




               2.3.1 The Company shall provide necessary cash to support reasonable working capital needs
within the Company’s cash management’s policies and procedures. Manager shall not be in default of
its obligations under this Agreement to the extent it is unable to perform any obligation due to
the lack of available funds for the operation of the Acquired Business due to the Company’s failure
to provide required working capital. In no event shall Manager be required to advance any of its
funds for the operation of the Acquired Business.



               2.3.2 The cash receipts of the Acquired Business shall be administered in accordance with the
Company’s cash receipts policies and procedures.



               2.3.3 All funds received in relation to the collection of premiums on behalf of the related
carrier, will be deposited into the appropriate premium trust account as designated by the Company.



          2.4 Manager Compliance with Company Contracts. Manager’s obligation to comply with
Company contracts related to the conduct of the Acquired Business that are not otherwise entered
into on behalf of the Company at the direction of the Manager, shall be limited to the extent the
Manager’s performance under such contracts is consistent with its duties under this Agreement and
such contracts do not increase the Manager’s obligations or decrease the Manager’s rights under
this Agreement.




          2.5 Manager Employees. Manager shall be responsible for all payroll taxes and
withholdings associated with the performance of services by Manager and Clark and Manager’s other
employees and representatives under this Agreement.




          2.6 No Liability of Manager. All debts and liabilities to third persons incurred by
the Acquired Business pursuant to this Agreement shall be the debts and liabilities of the Company
only and Manager shall not be liable for any such obligations by reason of its management,
supervision, direction and operation of the Acquired Business. Subject to the terms of this
Agreement, Manager may so inform third parties with whom it deals on behalf of the Company and may
take any other reasonable steps to carry out the intent of this Section 2.6.




     3. Consideration. The Manager’s consideration for the performance of its duties
hereunder shall be the Management Fee payable by the Buyer to the Seller pursuant to Section 2.14
of the Asset Purchase Agreement.



     4. Management Term.




          4.1 Management Term. The “Management Term” shall commence on the Closing Date and
terminate on the earlier of (i) the Contingent Consideration Termination Date, or (ii) termination
of this Agreement, in accordance with Section 8 of this Agreement.




          4.2 Effect of Termination of Management Term. Upon termination of the Management
Term, Manager shall not be obligated to provide any management, consulting or similar services to
the Company.




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          4.3 No Effect on Asset Purchase Agreement. Except as otherwise contemplated by the
Asset Purchase Agreement, the termination of the Management Term shall not in any manner,
regardless of whether termination is for Cause, material breach, nonperformance or any other
reason, affect the right of the Seller to receive the Management Fee pursuant to Section 2.14 of
the Asset Purchase Agreement, until the Contingent Consideration Termination Date shall have
occurred (subject to payment of all Management Fees earned through such date), upon which
occurrence, except as otherwise contemplated by the Asset Purchase Agreement, the Company is
unconditionally and irrevocably required to pay to Seller, without offset, the Contingent
Consideration Termination Payment.




5. Reports and Budget.




          5.1 Monthly Report. The Company shall provide to the Manager monthly profit and loss
statements in accordance with the Company’s monthly financial close schedule. The Manager shall
provide to the Company monthly budget to actual variance analysis in accordance to the Company’s
variance reporting policy.




          5.2 Annual Report. The Company shall provide to the Manager an annual profit and loss
statement with a calculation of EBITDA and the Management Fee as set forth in Section 2.14 of the
Asset Purchase Agreement on or before the Management Fee Payment Date. The Manager has the ability
at its costs to audit the calculation as contemplated in Section 2.14 of the Asset Purchase
Agreement.




          5.3 Budgets.




               5.3.1 The budget for the Acquired Business for the remainder of calendar year 2007 is attached
hereto as Schedule 5.3. For all other calendar or fiscal years, Manager shall provide to the
Company annual budgets in accordance with the Company’s budget process guidelines and annual
timeline (the “Budgets”).



               5.3.2 Manager shall provide strategic oversight of the Acquired Business within the Company’s
risk profile and new business development policies and procedures.



               5.3.3 The Company acknowledges that: (a) the Budgets are estimates only; (b) the Manager does
not give any guarantee, warranty or representation whatsoever in connection with the Budgets; (c)
the Manager does not guarantee the accuracy of the information contained in the Budgets or the
results predicted therein; (d) the Manager shall not be held responsible for any divergence between
projections contained in the Budgets and the actual results achieved except to acknowledge that
those results will impact the EBITDA determinations under Section 2.14 of the Asset Purchase
Agreement; and (e) failure of the Acquired Business to achieve the projected results for any period
shall not constitute a default under this Agreement.



          5.4 Manager Reports. Manager shall provide to the Company quarterly reports
presenting an overview of the Acquired Business’ operations for the quarter including a summary of
any material agreements or arrangements entered into by the Manager or Clark on behalf of the
Company during the quarter.




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     6. Insurance. The Acquired Business, and its agents, employees, officers and
directors shall be insured by MIGI under its Errors & Omissions Policy during the Management Term
at the sole cost and expense of the Company, which shall be included as an expense in the Budgets.



     7. Legal Proceedings. 



          7.1 Except as otherwise set forth in this Section 7, Manager shall be involved in, but not
directly control legal proceedings involving or relating to the Acquired Business or the operation
thereof (other than as between Manager and the Company) at the sole cost and expense of the
Company. Manager’s involvement in legal proceedings shall include providing the Company written
notice of all legal proceedings and furnishing the Company such other information reasonably
requested, and fully cooperating in the defense of such legal proceedings. The Company shall
direct and control all legal proceedings involving or related to the Acquired Business. Manager
shall provide, at the Company’s expense, all cooperation reasonably requested by the Company in any
legal proceeding involving or related to the Acquired Business (other than as between Manager and
the Company).




          7.2 Manager shall be entitled to participate at its sole cost and expense (which shall include
the cost of separate counsel if the Company’s counsel reasonably determines that such counsel
cannot ethically represent both the Company and the Manager) in any legal proceeding under the
direction and control of the Company in which Manager is a named defendant or which affects any
property or rights of Manager.




     8. Termination of Agreement.



          8.1 Termination.




               8.1.1 The Company may immediately terminate this Agreement for Cause by delivering written
notice thereof to the Manager.



               8.1.2 The Manager may immediately terminate this Agreement in the event of a Constructive
Termination by delivering written notice thereof to the Company.



               8.1.3 In the event the Company shall default in the making of any material payment required to
be made pursuant to the Asset Purchase Agreement or this Agreement and such material default shall
continue for a period of 10 days after written notice thereof is delivered to the Company by the
Manager, this Agreement shall terminate immediately.



               8.1.4 In the event of any material breach by the Manager (including, without limitation,
Clark) of its obligations under this Agreement, the Asset Purchase Agreement or the Ancillary
Agreements and such material breach shall continue for a period of 30 days after written notice
thereof is delivered to the Manager by the Company, this Agreement shall terminate immediately.



               8.1.5 In the event the Company delivers the Termination Notice referred to in Section
2.14(a)(iii) of the Asset Purchase Agreement, this Agreement shall terminate on the Contingent
Consideration Termination Date.



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          8.2 Effect. In the event of a termination of this Agreement pursuant to Sections
8.1.2 and 8.1.3, the Company shall be deemed to have delivered the Termination Notice referred to
in Section 2.14(a)(iii) of the Asset Purchase Agreement and the Company shall be obligated to pay
the Management Fee and Contingent Consideration Termination Payment required under Section 2.14 of
the Asset Purchase Agreement. In the event of a termination of this Agreement pursuant to Sections
8.1.1 and 8.1.4, the Company shall not be deemed to have delivered the Termination Notice referred
to in Section 2.14(a)(iii) of the Asset Purchase Agreement, but in such a case the Company shall be
obligated to deliver a Termination Notice and pay the Contingent Consideration Payment no later
than eighteen (18) months following such a termination of this Agreement.




          8.3 Replacement of Clark. In the event Clark is (i) is convicted of or pleads guilty
or nolo contendere to, a felony or a misdemeanor fraud, embezzlement or other crime of dishonesty
(including a lesser charge which results from plea bargaining) and whether related or unrelated to
the conduct of the Acquired Business; (ii) engages in conduct that constitutes fraud in carrying
out its duties with respect to the Acquired Business, including, without limitation, diverting
business opportunities or revenue from the Acquired Business to itself or other third parties; or
(iii) shall no longer be affiliated with Manager or shall not be principally involved in the
conduct of Manager’s performance under this Agreement for a continuous period of more than sixty
(60) days, then Clark shall immediately cease to be involved in any manner, directly or indirectly,
in the operation and control of Manager or the performance of Manager’s duties as Manager
hereunder. Upon such an occurrence, Manager shall promptly appoint, subject to the approval of the
Company, which approval shall not be unreasonably withheld, a successor to Clark (the “Successor”)
who is familiar with the affairs and conduct of the Acquired Business and capable of fulfilling a
similar role in the operation of Manager as was fulfilled by Clark prior to his replacement. The
Successor shall stand in the place of Clark for all purposes of this Agreement and the Company may
require the Successor to enter into a noncompetition agreement on substantially similar terms as
the Noncompetition Agreement.




     9. Noncompetition and Nonsolicitation Covenants. Manager and Manager’s shareholders,
including without limitation Clark, are subject to the noncompetition and nonsolicitation covenants
set forth in the Noncompetition Agreement and such covenants are incorporated herein and made a
part hereof by this reference.



     10. Disclosure of Confidential Information. Manager and Manager’s shareholders,
including without limitation Clark, are subject to the covenants regarding the disclosure of
confidential information set forth in the Noncompetition Agreement and such covenants are
incorporated herein and made a part hereof by this reference.



     11. Representations and Warranties of Manager. The Manager represents and warrants to
the Company the following:



          11.1 Authority. The Manager is a corporation validly existing and in good standing
under the laws of the State of Ohio. Manager is duly authorized to conduct business as a foreign
corporation and is in good standing in each jurisdiction in which the property owned, leased or
operated by Manager, or the nature of the business conducted by Manager makes such qualification
necessary except where the failure to be duly authorized or in good standing would not have a
material adverse effect on the Manager. Manager has all requisite corporate power and

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authority to own or use the properties and assets that it purports to own or use and to
conduct its business as it is now being conducted. Manager has full power and authority to execute
and deliver this Agreement, to perform its obligations hereunder. The execution and delivery of
this Agreement and the performance of Manager’s obligations hereunder and thereunder have been duly
and validly authorized by all necessary corporate proceedings on the part of Manager.




          11.2 Capitalization. The authorized, issued and outstanding capital stock of each of
the Manager and USSU is as set forth in Schedule 11.1.2 attached hereto. Other than as set forth
in Schedule 11.1.2 attached hereto, there is no security, option, warrant, right, call,
subscription, agreement, commitment or understanding of any nature whatsoever, express or implied,
fixed or contingent, that directly or indirectly (i) calls for the issuance, sale, pledge, purchase
or other disposition or acquisition of any shares of capital stock or other securities of the
Manager or USSU, (ii) relates to the voting, ownership, transfer or control of the Manager or USSU
or (iii) obligates the Manager or USSU to grant, offer or enter into any of the foregoing.




          11.3 Directors; Officers. The directors and officers of the Manager and USSU are set
forth in Schedule 11.1.3 attached hereto.




     12. Representations and Warranties of the Company; Authority. The Company is a
corporation validly existing and in good standing under the laws of the State of Michigan. The
Company is duly authorized to conduct business as a foreign corporation and is in good standing in
each jurisdiction in which the property owned, leased or operated by the Company, or the nature of
the business conducted by the Company makes such qualification necessary except where the failure
to be duly authorized or in good standing would not have a material adverse effect on the Company.
The Company has all requisite corporate power and authority to own or use the properties and assets
that it purports to own or use and to conduct its business as it is now being conducted. The
Company has full power and authority to execute and deliver this Agreement, to perform its
obligations hereunder. The execution and delivery of this Agreement and the performance of the
Company’s obligations hereunder and thereunder have been duly and validly authorized by all
necessary corporate proceedings on the part of the Company.



     13. Intellectual Property. The Manager agrees to provide all assistance reasonably
requested by the Company, at the Company’s expense, in the preservation, establishment and/or
enforcement of the Company interests in the Intellectual Property.



     14. Effect of Agreement, Assignment, Required Assumption.



          14.1 As to Manager. The obligations of Manager hereunder require performance by
Manager and this Agreement shall be binding upon Manager and its successors and assigns. There
shall be no transfer, assignment, pledge or other encumbrance of any right or obligation of Manager
under this Agreement. There shall be no transfer of any voting or economic interest in the Manager
or USSU, either directly or indirectly (including, without limitation, (i) via purchase, exchange,
merger, consolidation or other business combination and (ii) of any voting or economic interest in
a shareholder of the Manager), other than a transfer as permitted by this Section 14.1 (a
“Permitted Transfer”). A Permitted Transfer shall mean: (i) a transfer of equity interests in the
Manager to family members of the existing shareholders of Manager or trusts for such family member
for estate planning purposes and (ii) any transfer so

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long as Clark and Joseph E. LoConti continue to control in excess of 50% of the direct or
indirect equity interests in the Manager. Upon written request of the Company, Manager shall
provide a written certification of its Secretary as to the capitalization, directors and officers
of Manager.




          14.2 As to the Company. Except with respect to a successor entity (as described
below), the Company may not assign any rights or obligations hereunder without the prior written
consent of Manager. The Company shall require any person who is the successor (whether direct or
indirect, by purchase, exchange, merger, consolidation or otherwise) to all or substantially all
of the business or assets of the Company (a “Successor Transaction”) to expressly assume the
obligations of the Company hereunder. The “Company” as used in this Agreement shall expressly
include any such successors in a Successor Transaction.




     15. Independent Contractor. The relationship of Manager and the Company which is
created hereunder is that of an independent contractor. This Agreement is not intended to be
construed as creating the relationship of employee and employer, affiliate, principal and agent,
joint venture, partnership or any other similar relationship, the existence of which is hereby
expressly denied.



     16. Notice. All notices, consents, waivers and other communications required or
permitted under this Agreement shall be sufficiently given for all purposes hereunder if in writing
and (a) hand delivered, (b) sent by certified or registered mail, return receipt requested and
proper postage prepaid, (c) sent by a nationally recognized overnight courier service, or (d) sent
by facsimile or email, confirmed receipt, in each case to the address, facsimile number or email
address and to the attention of the Person (by name or title) set forth below (or to such other
address and to the attention of such other Person as a Party may designate by written notice to the
other Parties):


If to Manager:



Evergreen/UNI RW Acquisition Corp.

6140 Parkland Boulevard, Suite 300

Mayfield Heights, Ohio 44124

Attn: Dan Clark

Facsimile No.: (440) 995-5101

Email: djclark007@aol.com



with a mandatory copy to:



Baker & Hostetler LLP

3200 National City Center

1900 East Ninth Street

Cleveland, Ohio 44114

Attn: Phillip M. Callesen

Facsimile No.: (216) 696-0740

Email: pcallesen@bakerlaw.com



If to the Company:




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Meadowbrook, Inc.

26255 American Drive

Southfield, Michigan 48034-6112

Attn: Michael G. Costello, Esq.

Facsimile No.: 1-248-358-5792

Email: Mike.Costello@meadowbrook.com



with a mandatory copy to:



Bodman LLP

6th Floor at Ford Field

1901 St. Antoine Street

Attn: Forrest O. Dillon, Esq.

Facsimile No.: (313) 393-7579

Email: fdillon@bodmanllp.com




     The date of giving of any such notice, consent, waiver or other communication shall be (i) the
date of delivery if hand delivered, (ii) the date of receipt for certified or registered mail,
(iii) the day after delivery to the overnight courier service if sent thereby, (iv) the date of
telephone facsimile transmission on production of a transmission report by the machine from which
the facsimile was sent that indicates that the facsimile was sent in its entirety to the facsimile
number of the recipient, and (v) the date of email transmission on production of a confirmation of
receipt from the recipient.



17. Indemnification. 




          17.1 Manager agrees to indemnify and hold harmless the Company, its subsidiaries, and each of
their respective stockholders, directors, officers, employees (collectively, the “Company
Indemnified Persons”), from and against any and all losses, liabilities, claims, damages, costs and
expenses (including reasonable attorneys’ fees), fines and penalties (“Losses”) filed or claimed
against a Company Indemnified Person, directly or indirectly, arising from or relating to (a) any
material breach by Manager of this Agreement or (b) the willful misconduct or gross negligence of
the Manager in the management and/or operation of the Acquired Business during the Management Term;
provided that (i) neither Manager shall be required to indemnify any Company Indemnified Persons
from and against any Loss to the extent of any insurance proceeds received by any Company
Indemnified Person with respect to such Loss, excluding any required deductible that is paid or
owed by the Company and (ii) in no circumstance shall Manager be liable for any failure of the
Company to comply with any federal, state, local and foreign statutes, laws, ordinances,
regulations, rules, permits, judgments, orders and decrees affecting labor union activities, civil
rights or employment in the United States, including, without limitation, the Civil Rights Act of
1870, 42 U.S.C. § 1981, the Civil Rights Act of 1871, 42 U.S.C. § 1983, the Fair Labor Standards
Act, 29 U.S.C. § 201, et seq., the Civil Rights Act of 1964, 42 U.S.C. §2000e, et seq., the
Rehabilitation Act, 29 U.S.C. § 701, et seq., the Americans with Disabilities Act of 1990, 29
U.S.C. § 706, 42 U.S.C. § 12101, et seq., the Employee Retirement Income Security Act of 1974, 29
U.S.C. § 301, et seq., the Equal Pay Act, 29 U.S.C. § 201, et seq., the National Labor Relations
Act, 29 U.S.C. § 151, et seq., and any regulations promulgated pursuant to such statutes and any
similar laws or regulations now or hereafter enacted.




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          17.2 Except to the extent such Loss is the result of any breach by Manager of this Agreement
or its willful misconduct or gross negligence in the management and/or operation of the Acquired
Business during the Management Term, the Company agrees to indemnify and hold harmless Manager, its
subsidiaries, stockholders, directors, officers, and employees (collectively, the “Manager
Indemnified Persons”), from and against any and all Losses suffered by the Manager Indemnified
Person, directly or indirectly, arising from or relating to (a) the performance by Manager of its
obligations under this Agreement or (b) any act or omission of the Company relating to the Acquired
Business arising after the Closing Date, during the Management Term or after termination of this
Agreement.




          17.3 Any Party obligated to indemnify a Person under this Agreement (the “Indemnifying Party”)
shall have the right, by notice to the other Party, to assume the defense of any claim with respect
to which the applicable Person is entitled to indemnification hereunder; provided that the
Indemnifying Party expressly acknowledges its obligation to provide indemnity hereunder. If the
Indemnifying Party gives such notice, (i) such defense shall be conducted by counsel selected by
the Indemnifying Party and approved by the other Party, such approval not to be unreasonably
withheld or delayed (provided, however, that the other Party’s approval shall not be required with
respect to counsel designated by the Indemnifying Party’s insurer); (ii) so long as the
Indemnifying Party is conducting such defense with reasonable diligence, the Indemnifying Party
shall have the right to control said defense and shall not be required to pay the fees or
disbursements of any counsel engaged by the Person seeking indemnification for services rendered
after the Indemnifying Party has given the notice provided for above to the other Party, except if
there is a conflict of interest between the Indemnifying Party and the Persons seeking
indemnification with respect to such claim or defense; and (iii) the Indemnifying Party shall have
the right, without the consent of the Person seeking indemnification, to settle such claim, but
only provided that such settlement involves only the payment of money, the Indemnifying Party pays
all amounts due in connection with or by reason of such settlement and, as part thereof, the Person
seeking indemnification is unconditionally released from all liability in respect of such claim.
The Person seeking indemnification shall have the right to participate in the defense of any claim
being defended by the Indemnifying Party at the expense of the Person seeking indemnification, but
the Indemnifying Party shall have the right to control such defense (other than in the event of a
conflict of interest between the Indemnifying Party and the Person seeking indemnification with
respect to such claim or defense). In no event shall (i) the Person seeking indemnification settle
any claim without the consent of the Indemnifying Party so long as the Indemnifying Party is
conducting the defense thereof in accordance with this Agreement; or (ii) if a claim is covered by
the Indemnifying Party’s liability insurance, take or omit to take any action which would cause the
insurer not to defend such claim or to disclaim liability in respect thereof.




     18. Governing Law. This Agreement shall be governed by and construed in accordance
with the laws of the State of Michigan without regard to conflicts-of-law principles that would
require the application of any other law.



     19. Resolution of Disputes. Any dispute or controversy between the Parties relating
to or arising out of this Agreement or any amendment or modification hereof shall be determined by
arbitration in Cuyahoga County, Ohio by and pursuant to the rules then prevailing of the American
Arbitration Association, other than claims for injunctive relief under Sections 9 or 10. The
arbitration award shall be final and binding upon the Parties and judgment may be entered thereon
by any court of competent jurisdiction. The service of any notice, process, motion or



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other document in connection with any arbitration under this Agreement or the enforcement of
any arbitration award hereunder may be effectuated either by personal service upon a Party or by
certified mail duly addressed to it or to its executors, administrators, personal representatives,
next of kin, successors or assigns, at the last known address or addresses of such Party or
Parties.



     20. Survival. The provisions of Sections 9 through 28 shall survive the termination
of the Management Term and the termination of this Agreement to the extent applicable.



     21. Amendments; Waivers. This Agreement may be amended or modified only by an
instrument in writing signed by each of the Parties. Neither any failure nor any delay by any
Party in exercising any right, power or privilege under this Agreement will operate as a waiver of
such right, power or privilege, and no single or partial exercise of any such right, power or
privilege will preclude any other or further exercise of such right, power or privilege or the
exercise of any other right, power or privilege. To the maximum extent permitted by applicable law,
(a) no claim or right arising out of this Agreement can be discharged by one Party, in whole or in
part, by a waiver or renunciation of the claim or right unless in writing signed by each other
Party; (b) no waiver that may be given by a Party will be applicable except in the specific
instance for which it is given; and (c) no notice to or demand on one Party will be deemed to be a
waiver of any obligation of that Party or of the right of the Party giving such notice or demand to
take further action without notice or demand as provided in this Agreement.



     22. Execution of Agreement/Counterparts. This Agreement may be executed in one or
more counterparts, each of which will be deemed to be an original copy of this Agreement and all of
which, when taken together, will be deemed to constitute one and the same agreement. This
Agreement shall become effective when one or more counterparts have been executed by each of the
Parties and delivered to each other Party. The exchange of copies of this Agreement and of
signature pages by facsimile transmission or email transmission confirmed by the recipient shall
constitute effective execution and delivery of this Agreement as to the Parties and may be used in
lieu of the original Agreement for all purposes. Signatures of the Parties transmitted by facsimile
or by email shall be deemed to be their original signatures for all purposes.



     23. Entire Agreement. This Agreement and the Asset Purchase Agreement and the other
ancillary agreements contain the entire agreement of the Parties with respect to the appointment
and designation of Manager.



     24. Severability. In the event that a court or arbitral body of competent
jurisdiction holds any provision of this Agreement invalid, illegal or unenforceable, such decision
shall not affect the validity or enforceability of any of the other provisions of this Agreement,
which other provisions shall remain in full force and effect, and the application of such invalid,
illegal or unenforceable provision to persons or circumstances other than those as to which it is
held invalid, illegal or unenforceable shall be valid and be enforced to the fullest extent
permitted by law. To the extent permitted by applicable law, each Party waives any provision of
law that renders any provision of this Agreement invalid, illegal or unenforceable in any respect.



     25. Third Parties. Nothing in this Agreement, express or implied, is intended to or
shall be construed to confer upon or give any person other than the Parties and their respective



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successors and permitted assigns, any legal or equitable right, remedy or claim under or with
respect to this Agreement.



     26. Headings. Captions, titles and headings to articles, sections or paragraphs of
this Agreement are inserted for convenience of reference only and shall not affect the construction
or interpretation of this Agreement.



     27. Cumulative Remedies. The rights and remedies of the Parties under this Agreement
are cumulative and not alternative and are in addition to any other right or remedy set forth in
any other agreement between the Parties, or that may now or subsequently exist at law or in equity,
by statute or otherwise.



     28. Certain Definitions.



          28.1 Capital Expenditure” shall mean any capital expenditure, including without limitation,
any acquisition of capital assets or any purchase of any business or any ownership interest
therein, equal to or in excess of $10,000.




          28.2 “Cause” shall mean the occurrence of either of the following:




               28.2.1 Manager is convicted of or pleads guilty or nolo contendre to, a felony or a
misdemeanor fraud, embezzlement or other crime of dishonesty (including a lesser charge which
results from plea bargaining) and whether related or unrelated to the conduct of the Acquired
Business;



               28.2.2 Manager engages in conduct that constitutes fraud in carrying out its duties with
respect to the Acquired Business, including, without limitation, diverting business opportunities
or revenue from the Acquired Business to itself or other third parties.



          28.3 “Client” shall mean any person or entity that is a client of the Acquired Business prior
to or during the Management Term whether known or unknown to the Manager.




          28.4 “Constructive Termination” shall mean: (a) any material breach by the Company of its
obligations under this Agreement or the Purchase Agreement that shall remain uncured for thirty
(30) days after Manager notifies the Company of such breach in writing; or (b) any other act or
omission by the Company which prevents Manager from managing and operating the affairs of the
Acquired Business in accordance with legal requirements and past practices and operations of the
Acquired Business and such act or omission shall persist for thirty (30) days after Manager
notifies the Company that such act or omission is preventing Manager from managing and operating
the affairs of the Acquired Business in accordance with legal requirements and past practices and
operations of the Acquired Business; provided in each such case, that Manager has not been in
material breach of its obligations under this Agreement or the Purchase Agreement.




          28.5 “Legal Proceeding” shall include any claim or lawsuit alleged or filed against the
Manager, the Company and their employees relating to the Acquired Business and the operation
thereof.




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          28.6 “Non-Ordinary Course Transaction” shall mean, except as otherwise specified in the
Budgets: the incurrence of any indebtedness other than in the ordinary course of operating the
Acquired Business in a manner consistent with the business of the Acquired Business; the sale or
issuance of any debt or equity securities of or relating to the Acquired Business or any rights,
options, warrants or convertible securities with respect to the consolidation, exchange,
recapitalization or other business combination or restructuring of the Acquired Business; the
entering into of any lease transaction; the acquisition or disposition of assets in excess of
$10,000 or outside the ordinary course of business; the making of any material change in the manner
in which the operations of the Acquired Business is conducted; the making of any Capital
Expenditure in excess of $10,000; the execution, amendment or modification of any contract or
agreement having a term, actual or expected, of two years or more, or any other material contract
or agreement; the execution, amendment or modification of any contract or agreement, or the
entering into any transaction, with any affiliate of Manager, family member of an owner of Manager
or affiliate of any such family member; or the entering into any agreement, arrangement or
understanding to do any of the foregoing.




[SIGNATURE PAGE FOLLOWS]




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     IN WITNESS WHEREOF, the Parties have duly executed this Agreement as of the date first above
written.



	 	 	 	 	 
	 	MEADOWBROOK, INC.

 	 
	 	By:  	/s/ Robert S. Cubbin
 	 
	 	Name: 	Robert S. Cubbin 	 
	 	Title: 	President & CEO 	 
	 



	 	 	 	 	 
	 	EVERGREEN/UNI RW ACQUISITION CORP.

 	 
	 	By:	/s/  Daniel J. Clark
 	 
	 	Name: 	Daniel J. Clark 	 
	 	Title: 	President 	 
	 



(Signature page to Management Agreement)