Document:

ex10-1.htm

    

    Exhibit
      10.1

    

    

    

    STOCK
      PURCHASE AGREEMENT

    

    among

    

    PMA
      CAPITAL CORPORATION,

    

    and

    

    Charles
      C. Caldwell,

    Thomas
      G. Hamill,

    Colin
      D. O’Connor,

    and

    J.
      Mark Davis

    (the
      Shareholders of Midlands Holding Corporation)

    

    and

    

    MIDLANDS
      HOLDING CORPORATION

    

    

    

    

    Dated
      as of October 1, 2007

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    TABLE
      OF CONTENTS

    Page

    
      
        
          
            	
                    1.

                  	
                    Certain
                      Matters of Construction; Definitions 

                  	
                    1

                  
	 	
                    1.1

                  	
                    Certain
                      Matters of Construction

                  	
                    1

                  
	 	
                    1.2

                  	
                    Cross
                      Reference Table for Definitions

                  	
                    2

                  
	 	
                    1.3

                  	
                    Certain
                      Definitions

                  	
                    3

                  
	
                    2.

                  	
                    Purchase
                      and Sale of Shares 

                  	
                    9

                  
	 	
                    2.1

                  	
                    Basic
                      Transaction

                  	
                    9

                  
	 	
                    2.2

                  	
                    Total
                      Purchase Price

                  	
                    9

                  
	 	
                    2.3

                  	
                    Allocations
                      Among Sellers of Total Purchase Price

                  	
                    10

                  
	 	
                    2.4

                  	
                    Payments
                      of Total Purchase Price

                  	
                    10

                  
	 	 	
                    (a)  Closing
                      Payment

                  	
                    10

                  
	 	 	
                    (b)  Closing
                      Payment Adjustments and Guaranteed Payments

                  	
                    10

                  
	 	 	
                    (c)  Earn-Out
                      Payments

                  	
                    12

                  
	 	 	
                    (d)  Aggregate
                      Look-Back Payment

                  	
                    14

                  
	 	 	
                    (e)  Cumulative
                      Incentive Payment

                  	
                    14

                  
	 	
                    2.5

                  	
                    Acceleration

                  	
                    14

                  
	 	
                    2.6

                  	
                    Income
                      Tax Allocation of Total Purchase Price

                  	
                    15

                  
	 	
                    2.7

                  	
                    Waiver
                      of Rights under Shareholders Agreement

                  	
                    15

                  
	
                    3.

                  	
                    Representations
                      and Warranties Regarding Company 

                  	
                    15

                  
	 	
                    3.1

                  	
                    Organization,
                      Standing, Power and Authorization

                  	
                    15

                  
	 	
                    3.2

                  	
                    Capitalization
                      of the Company

                  	
                    16

                  
	 	
                    3.3

                  	
                    Subsidiaries

                  	
                    16

                  
	 	
                    3.4

                  	
                    Corporate
                      Documents and Records

                  	
                    16

                  
	 	
                    3.5

                  	
                    Consents
                      and Approvals; No Violation

                  	
                    17

                  
	 	
                    3.6

                  	
                    Financial
                      Statements

                  	
                    17

                  
	 	
                    3.7

                  	
                    Events
                      Subsequent to Most Recent Fiscal Quarter

                  	
                    17

                  
	 	
                    3.8

                  	
                    Liabilities

                  	
                    19

                  
	 	
                    3.9

                  	
                    Compliance
                      with Laws

                  	
                    19

                  
	 	
                    3.10

                  	
                    Contracts

                  	
                    19

                  
	 	
                    3.11

                  	
                    Tax
                      Matters

                  	
                    21

                  
	 	
                    3.12

                  	
                    Properties

                  	
                    22

                  
	 	
                    3.13

                  	
                    Litigation

                  	
                    22

                  
	 	
                    3.14

                  	
                    Environmental
                      Matters

                  	
                    22

                  
	 	
                    3.15

                  	
                    Agent
                      and Trade Receivables

                  	
                    23

                  
	 	
                    3.16

                  	
                    Insurance

                  	
                    23

                  
	 	
                    3.17

                  	
                    Transactions
                      with Sellers

                  	
                    23

                  
	 	
                    3.18

                  	
                    Employees

                  	
                    24

                  
	 	
                    3.19

                  	
                    Intellectual
                      Property

                  	
                    24

                  
	 	
                    3.20

                  	
                    Employee
                      Benefits

                  	
                    24

                  
	 	
                    3.21

                  	
                    Clients

                  	
                    26

                  
	 	
                    3.22

                  	
                    Insurance
                      Companies

                  	
                    26

                  
	 	
                    3.23

                  	
                    Insurance
                      Accounts and Commissions

                  	
                    27

                  

          

          

          
            
              
              

            

            
              i

              
                

              

            

            
              
              

            

          

          
            	 	
                    3.24

                  	
                    Brokers

                  	
                    27

                  
	 	
                    3.25

                  	
                    List
                      of Bank Accounts

                  	
                    27

                  
	 	
                    3.26

                  	
                    Disclosure

                  	
                    27

                  
	
                    4.

                  	
                    Representations
                      and Warranties of Sellers Regarding Transaction 

                  	
                    27

                  
	 	
                    4.1

                  	
                    Title
                      to Shares

                  	
                    27

                  
	 	
                    4.2

                  	
                    Authority

                  	
                    27

                  
	 	
                    4.3

                  	
                    Litigation;
                      Impairment

                  	
                    28

                  
	
                    5.

                  	
                    Representations
                      and Warranties of Buyer

                  	
                    28

                  
	 	
                    5.1

                  	
                    Organization,
                      Standing and Power

                  	
                    28

                  
	 	
                    5.2

                  	
                    Authorization
                      and Enforceability

                  	
                    28

                  
	 	
                    5.3

                  	
                    Non-Contravention

                  	
                    28

                  
	 	
                    5.4

                  	
                    Financial
                      Statements

                  	
                    29

                  
	 	 	
                    (a)  Financial
                      Information

                  	
                    29

                  
	 	 	
                    (b)  Character
                      of Financial Information

                  	
                    29

                  
	 	
                    5.5

                  	
                    Change
                      in Condition

                  	
                    29

                  
	 	
                    5.6

                  	
                    Compliance
                      with Laws

                  	
                    29

                  
	 	
                    5.7

                  	
                    Litigation

                  	
                    30

                  
	 	
                    5.8

                  	
                    Insurance

                  	
                    30

                  
	 	
                    5.9

                  	
                    A.M.
                      Best Company

                  	
                    30

                  
	 	
                    5.10

                  	
                    Brokers

                  	
                    30

                  
	 	
                    5.11

                  	
                    Financing

                  	
                    30

                  
	
                    6.

                  	
                    Closing 

                  	
                    31

                  
	 	
                    6.1

                  	
                    Closing

                  	
                    31

                  
	 	
                    6.2

                  	
                    Deliveries
                      at Closing by the Company and Sellers

                  	
                    31

                  
	 	
                    6.3

                  	
                    Deliveries
                      at Closing by Buyer

                  	
                    32

                  
	
                    7.

                  	
                    Post-Closing
                      Covenants 

                  	
                    32

                  
	 	
                    7.1

                  	
                    Further
                      Assurances

                  	
                    32

                  
	 	
                    7.2

                  	
                    Access
                      to Records

                  	
                    32

                  
	 	
                    7.3

                  	
                    Errors
                      and Omissions Insurance; Directors’ and Officers’
Insurance

                  	
                    32

                  
	 	
                    7.4

                  	
                    Restrictive
                      Covenants of Sellers

                  	
                    33

                  
	 	 	
                    (a)  Non-Competition;
                      Non-Solicitation

                  	
                    33

                  
	 	 	
                    (b)  Exceptions

                  	
                    33

                  
	 	 	
                    (c)  Confidentiality

                  	
                    33

                  
	 	 	
                    (d)  Remedies
                      for Breach of Restrictive Covenants

                  	
                    34

                  
	 	 	
                    (e)  Acknowledgements
                      and Reformation

                  	
                    34

                  
	 	
                    7.5

                  	
                    Conduct
                      of MMC Business Post-Closing

                  	
                    34

                  
	 	
                    7.6

                  	
                    Public
                      Announcements

                  	
                    35

                  
	 	
                    7.7

                  	
                    Sellers’
                      Expenses

                  	
                    35

                  
	 	
                    7.8

                  	
                    No
                      Section 338 Election

                  	
                    35

                  
	
                    8.

                  	
                    Indemnification 

                  	
                    36

                  
	 	
                    8.1

                  	
                    Survival
                      Period

                  	
                    36

                  
	 	
                    8.2

                  	
                    Indemnification
                      By Each Seller

                  	
                    36

                  

          

          

          
            
              
              

            

            
              ii

              
                

              

            

            
              
              

            

          

          
            	 	
                    8.3

                  	
                    Indemnification
                      by Buyer

                  	
                    37

                  
	 	
                    8.4

                  	
                    Monetary
                      Limitations on Sellers’ Indemnification Obligations

                  	
                    37

                  
	 	
                    8.5

                  	
                    Monetary
                      Limitations on Buyer’s Indemnification Obligations

                  	
                    38

                  
	 	
                    8.6

                  	
                    Third
                      Party Claims

                  	
                    38

                  
	 	
                    8.7

                  	
                    Procedure
                      for Direct Claims

                  	
                    38

                  
	 	
                    8.8

                  	
                    Mitigation

                  	
                    39

                  
	 	
                    8.9

                  	
                    No
                      Circular Recovery

                  	
                    39

                  
	 	
                    8.10

                  	
                    Nature
                      of Indemnification Payments

                  	
                    39

                  
	 	
                    8.11

                  	
                    Exclusive
                      Remedy

                  	
                    39

                  
	 	
                    8.12

                  	
                    Limited
                      Remedies

                  	
                    39

                  
	 	
                    8.13

                  	
                    Insurance;
                      Tax Benefit

                  	
                    40

                  
	 	
                    8.14

                  	
                    No
                      Double Recovery

                  	
                    40

                  
	 	
                    8.15

                  	
                    Tax
                      Matters

                  	
                    40

                  
	 	 	
                    (a)  Tax
                      Indemnification

                  	
                    40

                  
	 	 	
                    (b)  Straddle
                      Period

                  	
                    40

                  
	 	 	
                    (c)  Refunds
                      and Tax Benefits

                  	
                    40

                  
	 	 	
                    (d)  Cooperation
                      on Tax Matters

                  	
                    41

                  
	 	 	
                    (e)  Tax
                      Sharing Agreements

                  	
                    41

                  
	 	 	
                    (f)  Certain
                      Taxes and Fees

                  	
                    41

                  
	
                    9.

                  	
                    Miscellaneous 

                  	
                    41

                  
	 	
                    9.1

                  	
                    Entire
                      Agreement; Waivers

                  	
                    41

                  
	 	
                    9.2

                  	
                    Amendment
                      or Modification

                  	
                    42

                  
	 	
                    9.3

                  	
                    Severability

                  	
                    42

                  
	 	
                    9.4

                  	
                    Binding
                      Effect

                  	
                    42

                  
	 	
                    9.5

                  	
                    Notices

                  	
                    42

                  
	 	
                    9.6

                  	
                    Jurisdiction;
                      Service of Process

                  	
                    43

                  
	 	
                    9.7

                  	
                    Governing
                      Law

                  	
                    44

                  
	 	
                    9.8

                  	
                    Headings

                  	
                    44

                  
	 	
                    9.9

                  	
                    Third
                      Party Beneficiaries

                  	
                    44

                  
	 	
                    9.10

                  	
                    Counterparts;
                      Facsimile Signatures

                  	
                    44

                  
	 	
                    9.11

                  	
                    Nature
                      of Seller’s Obligations

                  	
                    44

                  
	 	
                    9.12

                  	
                    Expenses
                      of Transaction

                  	
                    44

                  
	 	 	
                    (a)  Transaction
                      Costs of Sellers

                  	
                    44

                  
	 	 	
                    (b)  Transaction
                      Costs of Buyer

                  	
                    44

                  

          
 

      

    

    EXHIBITS:

     

    Exhibit
      A-1   – Subsidiaries of the Company

    

    Exhibit
      A-2   – Subsidiaries of MMC

    

    Exhibit
      B       – Schedule of Accelerated Values
      pursuant to Section 2.5

    

    Exhibit
      C       – Form of Executive Employment
      Agreement

     

    Exhibit
      D       – Form of Sellers’
Release

    

    
      
        
        

      

      
        iii

        
          

        

      

      
        
        

      

    

     

    SCHEDULES:

     

    
      	
              Sellers

            	 
	
              Schedule
                3.1

            	
              Directors,
                Officers, States of organization for Company and all
                Subsidiaries

            
	
              Schedule
                3.5

            	
              Filings
                and Consents

            
	
              Schedule
                3.7

            	
              Events
                Subsequent to June 30, 2007

            
	
              Schedule
                3.8

            	
              Liabilities

            
	
              Schedule
                3.9

            	
              Compliance
                with Laws

            
	
              Schedule
                3.10

            	
              List
                of Contracts

            
	
              Schedule
                3.11

            	
              Tax
                Sharing Agreements

            
	
              Schedule
                3.12

            	
              Leases

            
	
              Schedule
                3.13

            	
              Company
                Litigation

            
	
              Schedule
                3.16

            	
              Company
                Insurance Policies

            
	
              Schedule
                3.20

            	
              Employee
                Benefit Plans

            
	
              Schedule
                3.21

            	
              Certain
                Clients

            
	
              Schedule
                3.25

            	
              Bank
                Accounts

            
	
              Schedule
                8.2

            	
              Aged
                Receivables

            
	
              Buyer

            	 
	
              Schedule
                5.1

            	
              Directors
                and Officers of Buyer and MASIC

            
	
              Schedule
                5.3

            	
              Buyer’s
                Approvals

            
	
              Schedule
                5.6

            	
              Compliance
                with Laws

            
	
              Schedule
                5.7

            	
              Buyer’s
                Litigation

            

    

     

    

     

    
      
        
        

      

      
        iv

        
          

        

      

      
        
        

      

    

    

    STOCK
      PURCHASE AGREEMENT

    

    THIS
      STOCK PURCHASE AGREEMENT is made as of the 1st day of
      October,
      2007, by and among PMA CAPITAL CORPORATION, a Pennsylvania corporation (the
      “Buyer”), CHARLES C. CALDWELL (“Caldwell”), THOMAS G. HAMILL (“Hamill”), COLIN
      D. O’CONNOR (“O’Connor”) and J. MARK DAVIS (“Davis”) (collectively the
“Sellers,” and, individually, a “Seller”) and Midlands Holding Corporation, an
      Oklahoma corporation, solely for the purpose of Section 2.7.

    

    WITNESSETH

    

    WHEREAS,
      Sellers collectively own all of the authorized, issued and outstanding shares
      of
      Common Stock, par value $1.00 per share, of Midlands Holding Corporation, an
      Oklahoma corporation (the “Company”);

    

    WHEREAS,
      on and subject to the terms and conditions hereof, Buyer desires to purchase
      all
      of the issued and outstanding shares of Common Stock of the Company that are
      owned by Sellers; and

    

    WHEREAS,
      on and subject to the terms and conditions hereof, each Seller desires to sell
      and transfer to Buyer all of the shares of Common Stock of the Company owned
      by
      him.

    

    AGREEMENT

    

    NOW,
      THEREFORE, in consideration of the foregoing and the mutual agreements and
      covenants set forth below, which each Party acknowledges to be fair and adequate
      consideration for its obligations and commitments hereunder, and intending
      to be
      legally bound, the Parties hereby agree as follows:

    

    1.           Certain
      Matters of Construction; Definitions.

    

    1.1           Certain
      Matters of Construction.

    

    (a)           The
      words “hereof,” “herein,” “hereunder” and words of similar import shall refer to
      this Agreement as a whole and not to any particular Section or provision of
      this
      Agreement and any reference to a particular Section of this Agreement shall
      include all subsections thereof.

    

    (b)           The
      word “Party” shall refer to Buyer, the Company, any Seller or the Sellers, as
      the case may be, and the word “Parties” shall refer to Buyer, the Company and
      the Sellers, collectively.

    

    (c)           Definitions
      shall be equally applicable to both the singular and plural forms of the terms
      defined, and references to the masculine, feminine or neutral gender shall
      include each other gender.

    

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

    (d)           All
      references herein to Sections, Schedules and Exhibits shall be deemed to be
      references to Sections of, and Schedules and Exhibits to, this Agreement unless
      the context shall otherwise require. All Schedules and Exhibits attached hereto
      or delivered pursuant to the provisions hereof shall be deemed incorporated
      herein as if set forth in full herein and, unless otherwise defined therein,
      all
      terms used in any Schedule or Exhibit shall have the meanings ascribed to such
      terms in this Agreement.

    

    (e)           The
      Parties have participated jointly in the negotiation and drafting of this
      Agreement. 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 or disfavoring any
      Party by virtue of the authorship of any of the provisions of this
      Agreement.

    

    (f)           Unless
      otherwise expressly provided, wherever the consent of any Person is required
      or
      permitted herein, such consent may be withheld in such Person’s sole
      discretion.

    

    (g)           All
      references herein to obligations or liabilities of “Sellers” or a “Seller” shall
      mean the several, and not joint, obligations or liabilities of each
      Seller.

    

    (h)           Any
      reference to any federal, state or local statute or law shall be deemed also
      to
      refer to all rules and regulations promulgated there under, unless the context
      requires otherwise.

    

    (i)           The
      word “including” shall mean including without limitation.

    

    1.2           Cross
      Reference Table For Definitions.

    

    
      	
              “Adjusted
                2007 EBITDA”

            	
              Section
                2.4(c)(i)

            
	
              “Adjusted
                2008 EBITDA”

            	
              Section
                2.4(c)(ii)

            
	
              “Adjusted
                2009 EBITDA”

            	
              Section
                2.4(c)(iii)

            
	
              “Adjusted
                2010 EBITDA”

            	
              Section
                2.4(c)(iv)

            
	
              “Adjusted
                2011 EBITDA”

            	
              Section
                2.4(c)(v)

            
	
              “Aged
                Receivables”

            	
              Section
                8.2

            
	
              “Aggregate
                Look-Back Payment”

            	
              Section
                2.4(d)

            
	
              “Agreed
                Amount”

            	
              Section
                8.7

            
	
              “Buyer”

            	
              Introduction

            
	
              “Buyer
                Closing Documents”

            	
              Section
                5.2

            
	
              “Buyer
                Financial Statements”

            	
              Section
                5.4(a)(i)

            
	
              “Buyer
                Indemnitee”

            	
              Section
                8.2

            
	
              “Buyer
                Insurance Policies”

            	
              Section
                5.9

            
	
              “Buyer
                Interim Balance Sheet”

            	
              Section
                5.4(a)(ii)

            
	
              “Buyer
                Interim Financials”

            	
              Section
                5.4(a)(ii)

            
	
              “Buyer
                Permits”

            	
              Section
                5.6

            
	
              “Buyer
                Deductible”

            	
              Section
                8.5

            
	
              “Caldwell”

            	
              Introduction

            
	
              “Claimed
                Amount”

            	
              Section
                8.7

            

    

    

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

    
      	
              “Closing”

            	
              Section
                6.1

            
	
              “Closing
                Date”

            	
              Section
                6.1

            
	
              “Closing
                Payment”

            	
              Section
                2.4(a)

            
	
              “Closing
                Payment Adjustment”

            	
              Section
                2.4(b)

            
	
              “Company”

            	
              Recitals

            
	
              “Company
                Insurance Policies”

            	
              Section
                3.16

            
	
              “Confidential
                Information

            	
              Section
                7.4(c)

            
	
              “Cumulative
                Adjusted EBITDA”

            	
              Section
                2.4(d)

            
	
              “Cumulative
                Incentive Payment”

            	
              Section
                2.4(e)

            
	
              “Davis”

            	
              Introduction

            
	
              “Earn-Out
                Payment”, “Earn-Out Payments”

            	
              Section
                2.4(c)

            
	
              “Employment
                Agreement”

            	
              Section
                2.5

            
	
              “Estimated
                Retained Cash”

            	
              Section
                2.4(a)(ii)

            
	
              “Final
                Retained Cash Amount”

            	
              Section
                2.4(b)(ii)

            
	
              “Guaranteed
                Payment”, “Guaranteed Payments”

            	
              Section
                2.4(b)(iv)

            
	
              “Hamill”

            	
              Introduction

            
	
              "Holdback
                Amount”

            	
              Section
                2.4(b)(ii)

            
	
              “Indemnitee”

            	
              Section
                8.1

            
	
              “Indemnity
                Cap”

            	
              Section
                8.4(b)

            
	
              “June
                30, 2007 Balance Sheet”

            	
              Section
                3.12

            
	
              “MMC
                Financial Statements”

            	
              Section
                3.6

            
	
              “MASIC”

            	
              Section
                5.1

            
	
              “O’Connor”

            	
              Introduction

            
	
              “Party”
                or “Parties”

            	
              Section
                1.1(b)

            
	
              “Permits”

            	
              Section
                3.9

            
	
              “Pre-Closing
                Receivables”

            	
              Section
                2.4(b)(ii)

            
	
              “Pre-Closing
                Tax Period”

            	
              Section
                8.15(a)

            
	
              “Restrictive
                Period”

            	
              Section
                7.4(a)

            
	
              “Schedule”

            	
              Section
                3

            
	
              “Section
                7.5 Notice”

            	
              Section
                7.5(b)

            
	
              “Sellers”,
                “Seller”

            	
              Introduction

            
	
              “Seller
                Closing Documents”

            	
              Section
                4.2

            
	
              “Seller
                Indemnitee”, “Sellers’ Indemnitees”

            	
              Section
                8.3

            
	
              “Sellers’
                Deductible”

            	
              Section
                8.4(a)

            
	
              “Straddle
                Period”

            	
              Section
                8.15(b)

            
	
              “Total
                Purchase Price”

            	
              Section
                2.1

            

    

    

    1.3           Certain
      Definitions. As used in this Agreement, the following terms shall
      have the respective meanings set forth below:

    

    (a)           “Action”
      means any claim, action, cause of action or suit (in contract or tort or
      otherwise), litigation (whether at law or in equity, whether civil or criminal),
      controversy, assessment, hearing, charge, complaint, demand, notice,
      arbitration, proceeding or investigation to, from, by or before any Governmental
      Authority (and whether brought by any Governmental Authority or any other
      Person).

    

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

    (b)           “Adjusted
      EBITDA” means MMC’s audited consolidated earnings before taking into
      account any interest expense, income taxes, depreciation, and amortization
      for
      the applicable period and shall be calculated, for any applicable period, except
      for the three months ended December 31, 2007, and the nine months ended
      September 30, 2011, in accordance with MMC’s existing accounting policies and
      procedures, applied on a consistent basis.  For the three months ended
      December 31, 2007, and for the nine months ended September 30, 2011, the
      calculation of Adjusted EBITDA will be based on MMC’s unaudited consolidated
      financial statements for such periods.  Such financial statements will
      be prepared in accordance with GAAP, consistent with MMC’s audited consolidated
      financial statements used in calculating Adjusted EBITDA for the other
      measurement periods.

     

    In
      addition, Adjusted EBITDA shall (i) exclude (i.e., not be increased or reduced
      by) "extraordinary items" of gain or loss (pursuant to GAAP), (ii) exclude
      any
      amortization or impairment of intangible assets generated by the transactions
      contemplated by this Agreement, (iii) exclude any allocation of overhead
      expenses of Buyer or any of its Subsidiaries allocated to MMC’s operations
      (except to the extent that such overhead is for functions that are currently
      being performed by MMC and such overhead expenses are comparable in amount
      to
      those incurred by MMC for the same function), (iv) exclude any added expense
      attributable to compliance with Section 404 of the Sarbanes-Oxley Act of 2002,
      (v) exclude any Losses for which Buyer or any of its Affiliates as an
      Indemnified Party is indemnified in full pursuant to Section 8.2, (vi) exclude
      the costs of any data processing system or other system conversion of the
      Company or any of its Subsidiaries undertaken at the direction of Buyer to
      conform to Buyer’s systems, and (vii) include or exclude such other items as
      mutually agreed by Sellers and Buyer on a case-by-case basis.

     

    Further,
      EBITDA shall be adjusted at each measurement date for items (a), (b) and (c)
      below for the number of days that each were outstanding during the measurement
      period based on a 360 day year as follows:

    

    (i)           reduced
      by the product of 5% and the Estimated Retained Cash;

    

    (ii)           reduced
      by the product of 5% and the difference between Final Retained Cash Amount
      and
      the Estimated Retained Cash, if Final Retained Cash Amount is greater than
      the
      Estimated Retained Cash, or increased by the product of 5% and the difference
      between Final Retained Cash Amount and the Estimated Retained Cash, if Final
      Retained Cash Amount is less than the Estimated Retained Cash; and

    

    (iii)           increased
      by the product of 5% and the cumulative dividends withdrawn by Buyer from
      MMC.

    

    (c)           “Affiliate”
      means, as to any specified Person, any other Person that, at the time of
      determination, directly or indirectly through one or more intermediaries,
      controls, is controlled by or is under common control with such Person. For
      the
      purposes of this definition, “control,” when used with respect to any specified
      Person, means the power to direct the management and policies of such Person,
      directly or indirectly, whether through the ownership of voting securities,
      or
      by contract or otherwise; and the terms “controlling” and “controlled” have
      meanings correlative to the foregoing.

    

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

    (d)           “Affiliate
      Debt” means all Debt between the Company or any Subsidiary of the
      Company, on the one hand, and any of the Sellers or any of their Affiliates
      (other than the Company or any Subsidiary of the Company), on the other hand,
      and all intercompany advances of funds between any of the Sellers or any of
      their Affiliates (other than the Company or any Subsidiary of the Company),
      on
      the one hand, and the Company or any Subsidiary of the Company, on the other
      hand.

    

    (e)           “Affiliated
      Group” means any Affiliated Group within the meaning of Section 1504 of
      the Code or any consolidated, combined, unitary or similar group defined under
      a
      similar provision of state, local or foreign law.

    

    (f)           “Agreement”
      means this Stock Purchase Agreement as amended, modified, supplemented or
      restated.

    

    (g)           “Business
      Day” means any day other than Saturday or Sunday or a day on which
      banks in New York, New York are authorized or required to be
      closed.

    

    (h)           “Bylaws”
      means, with respect to a corporation, the bylaws as from time to time in
      effect.

    

    (i)           “Charter”
      means, with respect to a corporation, the certificate or articles of
      incorporation or organization as from time to time in effect.

    

    (j)           “Client”
      means a Person for whom MMC or one of its Subsidiaries acts as an agent,
      administrator, adjuster or consultant in return for a commission, fee or other
      revenue.

    

    (k)           “COBRA”
      means the requirements of Part 6 of Subtitle B of Title 1 of ERISA and Code
      Section 4980B(f) and of any similar state law.

    

    (l)           “Code”
      means the Internal Revenue Code of 1986, as amended.

    

    (m)           “Common
      Stock” means the shares of Common Stock, par value $1.00 per share, of
      the Company.

    

    (n)           “Compensation,”
      as applied to any Person, means all salaries, compensation, deferred
      compensation, remuneration, commissions or bonuses of any character, and
      medical, surgical, dental, hospital, disability, unemployment, retirement,
      pension, vacation, insurance, executive benefits or fringe benefits of any
      kind,
      or other payments or benefits of any kind whatsoever made or provided directly
      or indirectly by or on behalf of MMC or its Subsidiaries (or provided by Buyer
      to employees whose primary duties pertain to the MMC Business) to such Person
      or
      members of the immediate family of such Person.

    

    (o)           “Contractual
      Obligation” means, with respect to any Person, any written contract,
      agreement, deed, mortgage, lease, sublease, license, indenture, Guarantee,
      commitment, undertaking or arrangement, or other consensual document or
      instrument, but excluding the Charter and Bylaws of such Person, to which or
      by
      which such Person is a party or otherwise bound.

    

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

    (p)           “Debt”
      of any Person means all obligations of such Person (i) in respect of
      indebtedness for borrowed money, (ii) evidenced by notes, bonds, debentures
      or
      similar instruments, (iii) under capital leases and (iv) in the nature of
      Guarantees of obligations described in clauses (i) through (iii) above of any
      other Person.

    

    (q)           “Distribution”
      means, with respect to the capital stock of, or other Equity Securities in,
      any
      Person, (i) the declaration or payment of any dividend on or in respect of
      any
      shares of any class of such capital stock or in respect of any such Equity
      Security; (ii) the purchase, redemption or other retirement of any shares of
      any
      class of such capital stock or of any such Equity Security, directly, or
      indirectly through a Subsidiary of such Person, or otherwise; and (iii) any
      other distribution on or in respect of any shares of any class of such capital
      stock or on or in respect of any such Equity Security.

    

    (r)           “Employee
      Benefit Plan” means each “employee benefit plan” (as such term is
      defined in ERISA §3(3)) and any other material compensation, equity
      compensation, incentive, deferred compensation, retirement or supplemental
      retirement, pension, profit sharing, severance, vacation, health, life, accident
      or disability insurance, welfare, compensation or any other employee benefit
      plan, program or arrangement of any kind for the benefit of any present or
      former employee or director of the Company or any Subsidiary or under which
      the
      Company, any Subsidiary or any ERISA Affiliate has any liability.

    

    (s)           “Employee
      Pension Benefit Plan” has the meaning set forth in ERISA
§3(2).

    

    (t)           “Employee
      Welfare Benefit Plan” has the meaning set forth in ERISA
§3(1).

    

    (u)           “Enforceable”
      means, with respect to any Contractual Obligation, that such Contractual
      Obligation is the legal, valid and binding obligation of the Person in question,
      enforceable against such Person in accordance with its terms, subject to
      bankruptcy, reorganization, insolvency and other similar laws affecting the
      enforcement of creditors’ rights in general and to general principles of equity
      (regardless of whether considered in a proceeding in equity or an action at
      law).

    

    (v)           “Environmental
      Laws” means any Legal Requirement in effect on or prior to the Closing
      Date relating to (i) releases or threatened releases of Hazardous Substances,
      (ii) the manufacture, handling, transport, use, treatment, storage or disposal
      of Hazardous Substances or materials containing Hazardous Substances, or (iii)
      otherwise relating to pollution of the environment or the protection of human
      health or the environment.

    

    (w)           “Equity
      Securities” means, with respect to any Person that is not a natural
      person, all shares of capital stock, membership interest units or other equity
      or beneficial interests issued by or created in or by such Person, all stock
      appreciation or similar rights or grants of, or any other Contractual Obligation
      for, any right to share in the equity, income, revenues or cash flow of such
      Person, and all securities or other rights, options, warrants or other
      Enforceable Contractual Obligations to acquire any of the foregoing, whether
      by
      conversion, exchange, exercise or otherwise.

    

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

    (x)           “ERISA”
      means the Employee Retirement Income Security Act of 1974, as
      amended.

    

    (y)           “ERISA
      Affiliate” of the Company or a Subsidiary means any other Person (i)
      that is a member of a “controlled group” (determined for purposes of Section
      4001(a)(14) of ERISA) which includes the Company or the Subsidiary, or (ii)
      that
      is a member of a group of Persons which includes the Company or the Subsidiary
      that is treated as a “single employer” under of Code §414.

    

    (z)           “GAAP”
      means United States generally accepted accounting principles, consistently
      applied, in effect at the date of the financial statements to which it
      relates.

    

    (aa)           “Governmental
      Authority” means any United States federal, state, local or other
      foreign government, or political subdivision thereof, governmental authority
      or
      regulatory body, agency, governmental commission, court or tribunal or judicial
      or arbitral body.

    

    (bb)           “Governmental
      Order” means any order, writ, judgment, injunction, decree,
      stipulation, determination or award entered by or with any Governmental
      Authority.

    

    (cc)           “Guarantee”
      with respect to any Person, means: (i) any guarantee of the payment or
      performance of, or any contingent obligation in respect of, any Debt or other
      obligation of any other Person, (ii) any other arrangement whereby credit is
      extended to any other Person on the basis of any promise or undertaking of
      such
      Person (A) to pay the Debt of such other Person, (B) to purchase or lease assets
      under circumstances that would enable such other Person to discharge one or
      more
      of its obligations, or (C) to maintain the capital, working capital, solvency
      or
      general financial condition of such other Person.

    

    (dd)           “Hazardous
      Substances” means (i) substances which contain substances defined in or
      regulated under any Environmental Law; (ii) petroleum and petroleum products,
      including crude oil and any fractions thereof; (iii) radon; (iv) PCBs; (v)
      asbestos; and (vi) any other hazardous, noxious, radioactive or toxic materials
      or substances.

    

    (ee)           “Income
      Tax” means any Tax which is, in whole or in part, based on or measured
      by income or gains.

    

    (ff)           “Intellectual
      Property Rights” means patents, trademarks, trade names, service marks,
      trade secrets, copyrights and other proprietary intellectual property
      rights.

    

    (gg)           “Knowledge”
      means actual knowledge.

    

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

    (hh)           “Legal
      Requirement” means any United States federal, state, local or foreign
      statute, ordinance, code, order, rule, regulation, ordinance, resolution,
      promulgation or common law requirement or obligation, or any Governmental Order,
      or any license, franchise, consent, approval, permit or similar right granted
      under any of the foregoing, or any similar provision or, in each case having
      the
      force and effect of law.

    

    (ii)           “Liabilities”
      means any and all liabilities and obligations, whether accrued, fixed, absolute
      or contingent, matured or unmatured or determined or determinable, or
      otherwise.

    

    (jj)           “Lien”
      means, with respect to any asset or property, any mortgage, pledge, lien,
      security interest, charge, attachment, equity or other encumbrance with respect
      to such asset or property, or restriction on the creation of any of the
      foregoing, other than (a) statutory liens for Taxes to the extent that the
      payment thereof is not in arrears or otherwise due, (b) liens securing rental
      payments under capital lease arrangements, and (c) mechanic’s, materialmen’s,
      warehousemen’s, artisan’s and similar liens arising by operation of law, and
      relating to obligations which are reflected on the Financial Statements and
      are
      not yet due and payable.

    

    (kk)           “Losses”
      means any and all losses, damages, obligations, claims, awards (including,
      only
      to the extent claimed in a third party claim, awards of punitive damages or
      interest), assessments, amounts paid in settlement, judgments, orders, decrees,
      fines and penalties, costs and expenses (including reasonable legal costs and
      expenses and costs and expenses of collection).

    

    (ll)           “Material
      Adverse Effect” means any adverse change in or effect on the business,
      assets, liabilities, condition (financial or otherwise), results of operations,
      performance or properties of a Person that is material to such Person; provided,
      however, that such term shall not include changes or fluctuations in the economy
      or financial markets generally in the United States or Bermuda or changes or
      fluctuations that are the result of acts of war, armed hostilities or terrorism,
      changes in GAAP or changes in legal, accounting or regulatory rules and
      conditions that affect, in general, businesses in which such Person is engaged
      or the insurance industry in general. The phrase “Material Adverse Effect on the
      Company” and all variations thereof means the Company and its Subsidiaries taken
      as a whole and the phrase “Material Adverse Effect on the Buyer” and all
      variations thereof means the Buyer and its Subsidiaries taken as a
      whole.

    

    (mm)                      “MCA”
      means Midlands Claim Administrators, Inc., an Oklahoma corporation and a
      wholly-owned subsidiary of Midlands Management Corporation.

    

    (nn)           “MMC”
      means Midlands Management Corporation, an Oklahoma corporation, and all of
      its
      Subsidiaries, unless the context expressly requires otherwise.

    

    (oo)           “MMC
      Business” means, taken as a whole, the businesses conducted by MMC and
      its Subsidiaries as such businesses are being conducted by them as of the date
      of this Agreement.

    

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

    (pp)           “Ordinary
      Course of Business” means the ordinary course of MMC Business (or of
      another specified Person) consistent with past custom and practice (including
      with respect to frequency and quantity).

    

    (qq)           “Person”
      means any individual, legal representative, custodian, partnership, corporation,
      limited liability company, association, estate, trust, business trust, joint
      venture, unincorporated organization or Governmental Authority.

    

    (rr)           “Policies”
      means all insurance policies sold, placed or renewed by MMC or one of its
      Subsidiaries.

    

    (ss)           “Shares”
      means the 21,847 issued and outstanding shares of Common Stock, par value $1.00
      per share, of the Company being sold by the Sellers to Buyer pursuant to this
      Agreement.

    

    (tt)           “Subsidiaries”
      means, (i) with respect to the Company, those Persons listed on
Exhibit A-1, and (ii) with respect to MMC, those Persons
      listed on Exhibit A-2.

    

    (uu)           “Tax”
      (including with correlative meanings, the terms “Taxes” and
“Taxable”) means all United States federal, state,
      local, or
      foreign income, gross receipts, license, payroll, employment, excise, severance,
      stamp, occupation, premium, windfall profits, customs duties, capital stock,
      franchise, profits, withholding, social security (or similar), unemployment,
      disability, real property, personal property, sales, use, transfer,
      registration, value added, alternative or add-on minimum, estimated, or other
      tax, fee, levy, duty, impost or charge of any kind whatsoever, including any
      interest, penalty, or addition thereto, whether disputed or not.

     

    (vv)           “Tax
      Benefit” means any refund, credit or other reduction in otherwise
      required Tax payments.

    

    (ww)          “Tax
      Return” means any return, declaration, report, claim for refund, or
      information return or statement relating to Taxes, including any schedule or
      attachment thereto, and including any amendment thereof.

    

    (xx)           “Worker
      Safety Laws” means all applicable federal, state, local or foreign
      laws, rules and regulations, orders, decrees, judgments, permits and licenses
      relating to public and worker health and safety.

    

    2.           Purchase
      and Sale of Shares.

    

    2.1           Basic
      Transaction. On and subject to the terms of this Agreement, Buyer
      hereby purchases and acquires from each Seller, and each Seller hereby sells,
      assigns, transfers and delivers to Buyer, all of his Shares for the total
      purchase price specified below in Section 2.2 (“Total Purchase Price”) at a
      closing held as provided for in Section 6.1.

    

    2.2           Total
      Purchase Price. The Total Purchase Price shall be payable by Buyer
      to Sellers at the times specified in Section 2.4 in cash by wire transfer of
      immediately available funds to accounts specified by each of the Sellers and
      shall consist of the aggregate of the following payments (each term below is
      defined in Section 2.4):

    

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

    (i)           the
      “Closing Payment”;

    (ii)          the
      “Guaranteed Payments”;

    (iii)         the
      “Earn-out Payments”;

    (iv)         the
      “Aggregate Look-Back Payment”; and

    (v)          the
      “Cumulative Incentive Payment”.

    

    2.3           Allocations
      Among Sellers of Total Purchase Price. All payments of the Total
      Purchase Price to Sellers shall be allocated among Sellers and paid to each
      of
      them as set forth in Section 2.4.

    

    2.4           Payments
      of Total Purchase Price.

     

    (a)           Closing
      Payment. At the Closing, Buyer shall pay Sellers the “Closing
      Payment,” consisting of:

     

    
      	 	(i)	$19,800,000;
              and

      	 	 	 

      	
               

            	
              (ii)

            	
              $3,400,000
                of estimated retained cash of MMC (“Estimated Retained
                Cash”).

            

    

    

    The
      Closing Payment shall be allocated among the Sellers as follows:

    

    

    
      	 	 	
              Number
                of

            	 	 	
              Closing

            	 	 	
              Allocation
                of

              Closing

            	 
	
              Sellers

            	 	
              Shares

            	 	 	
              Payment

            	 	 	
              Payment

            	 
	
              Charles
                C. Caldwell

            	 	 	
              10,000

            	 	 	$	
              10,362,467.05

            	 	 	 	44.666	%
	
              Thomas
                G. Hamill

            	 	 	
              5,000

            	 	 	$	
              5,525,351.17

            	 	 	 	23.816	%
	
              Colin
                D. O'Connor

            	 	 	
              5,000

            	 	 	$	
              4,837,115.88

            	 	 	 	20.850	%
	
              J.
                Mark Davis

            	 	 	
              1,847

            	 	 	$	
              2,475,065.90

            	 	 	 	10.668	%
	
              Total

            	 	 	
              21,847

            	 	 	$	
              23,200,000.00

            	 	 	 	100.000	%

    

    

    (b)           Closing
      Payment Adjustment and Guaranteed Payments.

    

    (i)           The
      Final Retained Cash Amount (as defined below) shall be determined on or before
      April 1, 2008 based on the audited consolidated financial statements of MMC
      for
      the year ended December 31, 2007.

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

    (ii)           The
      “Final Retained Cash Amount” shall equal (x) shareholders’ equity as reflected
      on the audited consolidated financial statements of MMC for the year ended
      December 31, 2007, minus (a) $50,000 (the aggregate par value of the
      issued and outstanding shares of common stock of MMC), minus (b)
      consolidated net income of MMC for the period between the Closing Date and
      December 31, 2007, minus (c) any balance of goodwill on MMC’s balance
      sheet prior to the closing of this transaction, minus (d) an amount
      representing the market value adjustment for MMC’s deferred tax asset, such
      value to be determined by multiplying the Deferred Tax Asset on MMC’s balance
      sheet immediately prior to the Closing by the fraction of (one divided by (one
      plus the 10 Year US Treasury Rate) to the tenth power) and minus (e) 10%
      of the Accounts Receivable due MCA at September 30, 2007 which were billed
      by
      MCA after September 30, 2006 (such receivables are the “Pre-Closing
      Receivables”, and 10% of the Pre-Closing Receivables is the “Holdback
      Amount”).  The Holdback Amount includes MCA’s allowance for
      uncollectible balances.  The creation of the Holdback Amount in this
      Section 2.4(b) is solely for the purpose of calculating the Final Retained
      Cash
      Amount and is not intended to establish a precedent regarding the calculation
      of
      MCA’s allowance for uncollectible balances. After the Closing and until January
      1, 2008, Buyer and the Company shall not allow or cause MMC to make any
      Distributions of any kind to the Company or Buyer or any of their respective
      Subsidiaries or Affiliates.

     

    (iii)           If
      the Final Retained Cash Amount exceeds the Estimated Retained Cash paid to
      Sellers at the Closing, Buyer shall pay Sellers the excess amount within ten
      (10) days of the issuance by the auditors of their opinion with respect to
      the
      audited consolidated financial statements of MMC for the year ended December
      31,
      2007. If the Final Retained Cash Amount is less than the Estimated Retained
      Cash
      paid to Sellers at the Closing, Buyer shall recoup the difference by a set-off
      against the Guaranteed Payment payable to Sellers on October 1, 2008. Any
      payment pursuant to this Section 2.4(b)(iii) shall be referred to herein as
      a
“Closing Payment Adjustment”.

     

    (iv)           Subject
      to Buyer’s right to set-off in Section 2.4(b)(iii), Buyer shall pay Sellers
      $1,500,000 on October 1, 2008, and $1,500,000 on October 1, 2009 (each, a
“Guaranteed Payment” and collectively, the “Guaranteed Payments”). Interest
      shall accrue at the rate of 5% per annum on the unpaid Guaranteed Payments
      from
      the Closing Date until the Guaranteed Payments have been paid in full. Interest
      shall be paid by Buyer to Sellers on October 1, 2008 and October 1,
      2009.

     

    (v)           The
      Closing Payment Adjustment and the Guaranteed Payments shall be allocated among
      the Sellers as follows:

    

    
      	 	 	
              Number
                of

            	 	 	
              Allocation
                of

            	 
	
              Sellers

            	 	
              Shares

            	 	 	
              Payments

            	 
	
              Charles
                C. Caldwell

            	 	 	
              10,000

            	 	 	 	45.773	%
	
              Thomas
                G. Hamill

            	 	 	
              5,000

            	 	 	 	22.886	%
	
              Colin
                D. O'Connor

            	 	 	
              5,000

            	 	 	 	22.886	%
	
              J.
                Mark Davis

            	 	 	
              1,847

            	 	 	 	8.454	%
	
              Total

            	 	 	
              21,847

            	 	 	 	100.000	%

    

    

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

    (c)           Earn-Out
      Payments. Buyer shall pay Sellers (allocated among Sellers as set
      forth in Section 2.4(b)(v) above) the following amounts at the following times
      (each an “Earn-Out Payment”, and collectively the “Earn-Out
      Payments”):

    

    
      	
              (i)  

            	
              On
                April 1, 2008, if Adjusted EBITDA for the calendar quarter ending
                December
                31, 2007 (“Adjusted 2007 EBITDA”) equals or exceeds $839,563, Buyer shall
                pay:

            

    

     

    
      	
              A.  

            	
              $412,500,
                plus

            

    

     

     

    
      	
              B.  

            	
              118.56%
                of the positive difference, if any, between Adjusted 2007 EBITDA
                (up to a
                maximum of $1,187,500) and $839,563,
                plus

            

    

     

     

    
      	
              C.  

            	
              35.36%
                of the positive difference, if any, between Adjusted 2007 EBITDA
                (up to a
                maximum of $1,362,500) and
                $1,187,500.

            

    

     

     

    If
      Adjusted 2007 EBITDA is less than $839,563, no Earn-Out Payment will be paid
      on
      April 1, 2008. If Adjusted 2007 EBITDA exceeds $1,362,500, the maximum Earn-Out
      Payment paid on April 1, 2008 will be $886,875.

     

    
      	
              (ii)  

            	
              On
                April 1, 2009, if Adjusted EBITDA for the year ending December 31,
                2008
                (“Adjusted 2008 EBITDA”) exceeds $3,325,000, Buyer shall
                pay:

            

    

     

    
      	
              A.  

            	
              $1,650,000,
                minus

            

    

     

     

    
      	
              B.  

            	
              The
                October 1, 2008 Guaranteed Payment of $1,500,000 (or such lesser
                amount if
                any set off is made by Buyer for adjustments relating to the Final
                Retained Cash Amount made pursuant to Section 2.4(a)(ii)),
                plus

            

    

     

     

    
      	
              C.  

            	
              99.25%
                of the positive difference, if any, between Adjusted 2008 EBITDA
                (up to a
                maximum of $4,987,500) and $3,325,000,
                plus

            

    

     

     

    
      	
              D.  

            	
              52.56%
                of the positive difference, if any, between Adjusted 2008 EBITDA
                (up to a
                maximum of $6,000,000) and
                $4,987,500.

            

    

     

     

    If
      Adjusted 2008 EBITDA is less than $3,325,000, no Earn-Out Payment will be paid
      April 1, 2009. If Adjusted 2008 EBITDA exceeds $6,000,000, the maximum Earn-Out
      Payment paid on April 1, 2009 will be $3,832,125, which amount includes the
      Guaranteed Payment payable on October 1, 2008. No reduction will be made to
      such
      Earn-Out Payment for interest accrued and paid on the Guaranteed
      Payments.

     

    
      	
              (iii)  

            	
              On
                April 1, 2010, if Adjusted EBITDA for the year ending December 31,
                2009
                (“Adjusted 2009 EBITDA”) exceeds $3,325,000, Buyer shall
                pay:

            

    

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

    
      	
              A.  

            	
              $1,650,000,
                plus

            

    

     

     

    
      	
              B.  

            	
              86.3%
                of the positive difference, if any, between Adjusted 2009 EBITDA
                (up to a
                maximum of $5,236,875) and $3,325,000,
                plus

            

    

     

     

    
      	
              C.  

            	
              63.05%
                of the positive difference, if any, between Adjusted 2009 EBITDA
                (up to a
                maximum of $6,600,000) and
                $5,236,875.

            

    

     

     

    If
      Adjusted 2009 EBITDA is less than $3,325,000, no Earn-Out Payment will be paid
      on April 1, 2010. If Adjusted 2009 EBITDA exceeds $6,600,000, the maximum
      Earn-Out Payment paid on April 1, 2010 will be $4,159,444, which amount includes
      the Guaranteed Payment payable on October 1, 2009. No reduction will be made
      to
      such Earn-Out Payment for interest accrued and paid on the Guaranteed
      Payments.

     

    
      	
              (iv)  

            	
              On
                April 1, 2011, if Adjusted EBITDA for the year ending December 31,
                2010
                (“Adjusted 2010 EBITDA”) exceeds $3,325,000, Buyer shall
                pay:

            

    

     

    
      	
              A.  

            	
              $1,650,000,
                plus

            

    

     

     

    
      	
              B.  

            	
              75.91%
                of the positive difference, if any, between Adjusted 2010 EBITDA
                (up to a
                maximum of $5,498,719) and $3,325,000,
                plus

            

    

     

     

    
      	
              C.  

            	
              54.01%
                of the positive difference, if any, between Adjusted 2010 EBITDA
                (up to a
                maximum of $7,260,000) and
                $5,498,719.

            

    

     

     

    If
      Adjusted 2010 EBITDA is less than $3,325,000, no Earn-Out Payment will be paid
      on April 1, 2011. If Adjusted 2010 EBITDA exceeds $7,260,000, the maximum
      Earn-Out Payment paid on April 1, 2011 will be $4,251,261.

     

    
      	
              (v)  

            	
              On
                December 1, 2011, if Adjusted EBITDA for the three calendar quarters
                ending September 30, 2011 (“Adjusted 2011 EBITDA”) exceeds $2,493,750,
                Buyer shall pay:

            

    

     

    
      	
              A.  

            	
              $1,237,500,
                plus

            

    

     

     

    
      	
              B.  

            	
              67.38%
                of the positive difference, if any, between Adjusted 2011 EBITDA
                (up to a
                maximum of $4,330,241) and $2,493,750,
                plus

            

    

     

     

    
      	
              C.  

            	
              46.95%
                of the positive difference, if any, between Adjusted 2011 EBITDA
                (up to a
                maximum of $5,989,500) and
                $4,330,241.

            

    

     

     

    If
      Adjusted 2011 EBITDA is less than $2,493,750, no Earn-Out Payment will be paid
      on December 1, 2011. If Adjusted 2011 EBITDA exceeds $5,989,500, the maximum
      Earn-Out Payment paid on December 1, 2011 will be $3,254,083.

     

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

    (d)           Aggregate
      Look-Back Payment. On December 1, 2011, if the Cumulative Adjusted
      EBITDA during the forty-eight month period ending September 30, 2011 exceeds
      $21,241,000, Buyer shall pay Sellers (allocated among the Sellers as set
      forth in Section 2.4(b)(v) above) an “Aggregate Look-Back Payment”
equal to the positive difference, if any, between:

     

     

    
      	
              (i)  

            	
              the
                sum of the aggregate Earn-Out Payments paid under Section 2.4(c)
                above,
                plus the Guaranteed Payments, for the period between October 1, 2007
                and
                September 30, 2011; and

            

    

     

     

    
      	
              (ii)  

            	
              $13,200,000
                plus 53.32% of the excess of the Cumulative Adjusted EBITDA greater
                than
                $21,241,000 and less than $27,212,000 for the forty-eight month period
                ending September 30, 2011.

            

    

     

     

    “Cumulative
      Adjusted EBITDA” as used in Sections 2.4(d) and 2.4(e) means the aggregate
      amount of Adjusted EBITDA for the forty-eight month period ending September
      30,
      2011.

     

     

    The
      maximum amount of the total of the Guaranteed Payments (paid pursuant to Section
      2.4(b) above), the Earn-Out Payments (paid pursuant to Section 2.4(c) above),
      and the Aggregate Look-Back Payment paid pursuant to this Section 2.4(d), but
      excluding the Cumulative Incentive Payment provided for in Section 2.4(e) below,
      shall not exceed $16,383,788.

     

    (e)           Cumulative
      Incentive Payment. On December 1, 2011, if Adjusted EBITDA for the
      twelve-month period ending September 30, 2011 equals or exceeds $7,000,000,
      and
      the Cumulative Adjusted EBITDA equals or exceeds $27,212,000, Buyer shall pay
      Sellers (allocated among the Sellers as set forth in Section 2.4(b)(v) above)
      a
“Cumulative Incentive Payment” equal to 85% of the positive difference, if any,
      between the Cumulative Adjusted EBITDA (up to a maximum of $37,000,000) and
      $27,212,000, provided:

     

    
      	
              (i)  

            	
              No
                payment is due:

            

    

     

    
      	
              A.  

            	
              If
                the Cumulative Adjusted EBITDA is less than $27,212,000,
                or

            

    

     

     

    
      	
              B.  

            	
              If
                the Cumulative Adjusted EBITDA equals or exceeds $27,212,000, but
                Adjusted
                EBITDA for the twelve-month period ending September 30, 2011 is less
                than
                $7,000,000.

            

    

     

    
      	
              (ii)  

            	
              If
                the Cumulative Adjusted EBITDA exceeds $37,000,000, the maximum Cumulative
                Incentive Payment will be
                $8,319,800.

            

    

     

    2.5           Acceleration.
      If (a) prior to September 30, 2011, a majority of the outstanding capital stock
      or assets of MMC or MCA is disposed of in a single transaction or a series
      of
      transactions, upon the closing of any such disposition, (b) prior to September
      30, 2011, Buyer commits a material breach of Section 7.5(a)(i), (ii), (iii)
      or
      (v) that is not cured or resolved by the procedures set forth in such Section
      or, (c) prior to April 1, 2009, Caldwell’s employment as chief executive officer
      of MMC is terminated by the board of directors of MMC without Cause or by
      Caldwell for Good Reason based on Sections 6(f)(i) or (iv) in his Amended and
      Restated Employment Agreement dated October 1, 2007 between him and MMC (the
      “Employment Agreement”), then Buyer shall pay Sellers in cash the sum of the
      maximum amount of the Earn-Out Payments and the Cumulative Incentive Payment
      that could have been earned by Sellers hereunder.  If, on or after
      April 1, 2009, and prior to September 30, 2011, Caldwell’s employment as chief
      executive officer of MMC is terminated by the board of directors of MMC without
      Cause or by Caldwell for Good Reason based on Sections 6(f)(i) or (iv) in the
      Employment Agreement, then Buyer shall pay Sellers in cash the applicable
      Accelerated Value set forth in Exhibit B attached hereto based on the cumulative
      amount of Adjusted EBITDA earned by MMC through December 31 of the most recently
      ended year.  In calculating the amount owed to Sellers under this
      Section 2.5, any Accelerated Value shall be computed on a present value basis,
      with the amount of the payment being discounted from the date that such payment
      would have been due to the date of acceleration using an annual rate of 5%
      and
      Buyer shall be credited with any prior payments to Sellers. The terms “Cause”
and “Good Reason” as used in this Section 2.5 shall have the same meanings as
      those terms have in the Employment Agreement.

    

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

    2.6           Income
      Tax Allocation of Total Purchase
      Price.   The Total Purchase Price
      is allocated to the Shares, except that $50,000 is allocated to the covenants
      provided by Sellers in Section 7.4.

    

    2.7           Waiver
      of Rights under Shareholders Agreement. Company and Sellers hereby
      waive, release and extinguish any and all rights and options which Company
      and
      Sellers have or may have to purchase the Shares held by any Seller or to require
      any Seller to first offer to sell such Shares to the Company or any of its
      Subsidiaries or the Sellers, or any of them, or any of their respective
      Affiliates, or otherwise with respect to the offer, purchase or sale of Shares,
      including any such rights as may be contained in the Charter or Bylaws of the
      Company, the Midlands Holding Corporation Shareholders Agreement dated January
      1, 2005 among the Company and the Sellers or in any other agreement executed
      by
      such Seller with the other Sellers and/or with the Company or any of its
      Subsidiaries.

    

    3.           Representations
      and Warranties Regarding Company. Sellers, severally but not
      jointly, represent and warrant to Buyer as follows:

    

    3.1           Organization,
      Standing, Power and Authorization.

    

    (a)           The
      Company is a corporation validly existing and in good standing under the laws
      of
      the State of Oklahoma and has the requisite corporate power and authority to
      carry on its business as now being conducted. Each Subsidiary of the Company
      is
      a corporation validly existing and in good standing under the laws of its
      respective state of organization and has the requisite corporate power and
      authority to carry on its business as now being conducted. The Company and
      each
      Subsidiary are duly qualified to do business, and are in good standing, in
      each
      jurisdiction where the character of their respective properties held under
      lease
      or the nature of their activities makes such qualification necessary, except
      where the lack of such qualification would not have a Material Adverse Effect
      on
      the Company. Schedule 3.1 lists the directors and
      officers of the Company and each Subsidiary and their states of
      organization.

    

    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    

    (b)           The
      Company has all necessary power and authority to enter into this Agreement
      and
      to perform its obligations hereunder. The execution, delivery and performance
      of
      this Agreement has been duly authorized by the Company and this Agreement is
      Enforceable against the Company.  Each of the other documents and
      instruments to be delivered by Company or its Subsidiaries pursuant to Section
      6.2 (“Company Closing Documents”) to which any of Company or its Subsidiaries is
      a party has been duly authorized, and, on or before the Closing Date, will
      be
      duly executed and delivered by Company or its Subsidiaries and will be
      Enforceable against Company or its Subsidiaries.

    

    3.2           Capitalization
      of the Company. The entire authorized capital stock of the Company
      consists of 21,847 shares of Common Stock, par value $1.00 per share, of which
      21,847 shares are issued and outstanding, and there is no other class of equity
      authorized or outstanding. All of the Shares have been duly authorized, are
      validly issued, fully paid, nonassessable and free of preemptive rights and
      are
      held of record by each Seller as set forth in Section 2.4(a).  There
      are no outstanding options, warrants, subscriptions, puts, calls, conversion
      or
      other rights, or any agreements or commitments of any nature relating to the
      issuance, sale or transfer of any securities or shares of the capital stock
      of
      the Company, nor are there outstanding any securities which are convertible
      into
      or exchangeable for any shares of capital stock of the Company and the Company
      has no obligation of any kind to issue any additional Equity Securities of
      the
      Company and no authorization therefore has been given.

    

    3.3           Subsidiaries.
      The Company owns directly or indirectly all of the capital stock of the
      corporations listed on Schedule
      3.1 and does not own or control (directly or
      indirectly) any capital stock, bonds or other securities of, and does not have
      any proprietary interest in, any other corporation, partnership, joint venture
      or other business entity, and the Company does not control (directly or
      indirectly) the management or policies of any other corporation, partnership,
      joint venture or other business entity. All of the capital stock of the
      Subsidiaries of Company has been duly authorized and is validly issued, fully
      paid, nonassessable and free of preemptive rights and held of record directly
      or
      indirectly by Company. There are no outstanding options, warrants,
      subscriptions, puts, calls, conversion or other rights, or any agreements or
      commitments of any nature relating to the issuance, sale or transfer of any
      securities or shares of the capital stock of the Subsidiaries of Company, nor
      are there outstanding any securities which are convertible into or exchangeable
      for any shares of capital stock of the Subsidiaries of Company and the
      Subsidiaries of Company have no obligation of any kind to issue any additional
      Equity Securities and no authorization therefore has been given.

    

    3.4           Corporate
      Documents and Records. True and complete copies of the Company’s
      and its Subsidiaries’ Charters, Bylaws, all amendments thereto, and the stock
      records of the Company and its Subsidiaries, all as in effect on the date
      hereof, have been made available to Buyer and will be delivered to Buyer at
      the
      Closing. The minute books of the Company and its Subsidiaries have also been
      made available to Buyer and will be delivered to Buyer at the Closing, and
      reflect all corporate action and minutes and records maintained by the Company
      and its Subsidiaries regarding meetings heretofore held and consents heretofore
      signed by the directors and shareholders of the Company and its
      Subsidiaries.

    

    
      
        
        

      

      
        16

        
          

        

      

      
        
        

      

    

    3.5           Consents
      and Approvals; No Violation. Except as set forth on
Schedule 3.5, the execution and delivery of this
      Agreement by the Sellers do not, and the consummation of the transactions
      contemplated hereby and compliance with the provisions hereof by the Sellers
      will not, require further authorization under, result in any violation of,
      or
      default (with or without notice or lapse of time, or both) under, or give to
      others a right of termination, cancellation or acceleration of any obligation
      or
      the loss of a material benefit under, or result in the creation of any lien,
      security interest, charge or encumbrance upon any of the properties or assets
      of
      the Company or any of its Subsidiaries under, (i) any provision of the Charter
      or Bylaws of the Company, (ii) any provision of the Charter or Bylaws of any
      of
      the Company’s Subsidiaries, (iii) any provision of any loan or credit agreement,
      note, bond, mortgage, indenture, lease or other agreement, instrument, permit,
      concession, franchise or license applicable to the Company or any of its
      Subsidiaries, or (iv) any judgment, order, decree or Legal Requirement
      applicable to the Company or any of its Subsidiaries, or any of their respective
      properties or assets. No filing or registration with, or authorization, consent
      or approval of, any Governmental Authority is required by or with respect to
      the
      Company or any of its Subsidiaries in connection with the execution and delivery
      of this Agreement by the Sellers or is necessary for the consummation of the
      transactions contemplated by this Agreement, except for such filings and
      consents as may be required under state insurance laws, which filings and
      consents are set forth in Schedule 3.5 and have been
      made or obtained.

    

    3.6           Financial
      Statements. The Company has delivered to Buyer the following
      financial statements of MMC (collectively the “MMC Financial Statements”): (i)
      audited consolidated balance sheets of MMC as of December 31, 2004, 2005 and
      2006, respectively, and the related consolidated statements of operations,
      stockholders’ equity and comprehensive income and cash flows for the years then
      ended; (ii) consolidating balance sheets as of December 31, 2004, 2005 and
      2006,
      respectively, and the consolidating schedules of operations for the years then
      ended together with accompanying letters from MMC’s auditors; and (iii) interim
      unaudited consolidated balance sheets of MMC as of March 31, 2007 and June
      30,
      2007, respectively, and the related unaudited consolidated statements of
      operations, stockholders’ equity and comprehensive income and cash flows for the
      three and six-month periods then ended, respectively.  The Financial
      Statements are correct and complete and are based upon and consistent with
      the
      books and records of MMC and present fairly in all material respects the
      financial condition of MMC as of the dates indicated and the results of
      operations and cash flows for MMC for the periods referred to therein. The
      MMC
      Financial Statements have been prepared in accordance with GAAP consistently
      applied throughout the periods specified therein (except where otherwise noted
      therein) subject, in the case of the interim unaudited statements, to normal
      year-end audit adjustments (which will not be material in the aggregate) and
      the
      absence of footnotes.

    

    3.7           Events
      Subsequent to Most Recent Fiscal Quarter. Since June 30, 2007,
      there has not been any Material Adverse Effect on the Company. Without limiting
      the generality of the foregoing, since that date, except as set forth on
Schedule 3.7, neither the Company nor any of its
      Subsidiaries has:

    

    (i)           sold,
      leased, transferred, or assigned any assets, tangible or intangible, outside
      the
      Ordinary Course of Business;

    

    
      
        
        

      

      
        17

        
          

        

      

      
        
        

      

    

    (ii)           entered
      into any agreement, contract, lease, or license outside the Ordinary Course
      of
      Business;

    

    (iii)           imposed
      any Lien upon any of its assets, tangible or intangible;

    

    (iv)           made
      any capital expenditures outside the Ordinary Course of Business;

    

    (v)           made
      any capital investment in, or any material loan to, any other Person outside
      the
      Ordinary Course of Business;

    

    (vi)           transferred,
      assigned, or granted any license or sublicense of any material rights under
      or
      with respect to any Intellectual Property;

    

    (vii)           issued,
      sold, or otherwise disposed of any of its capital stock, or granted any options,
      warrants, or other rights to purchase or obtain (including upon conversion,
      exchange, or exercise) any of its capital stock;

    

    (viii)          declared,
      set aside, paid or made any Distribution with respect to its capital stock
      (whether in cash or in kind) or redeemed, purchased, or otherwise acquired
      any
      of its capital stock;

    

    (ix)            
      made any loan to, or entered into any other transaction with, any of its
      directors, officers, and employees outside the Ordinary Course of
      Business;

    

    (x)             
      entered into or terminated any written employment contract or modified the
      terms
      of any such existing contract;

    

    (xi)            
      granted any increase in the base compensation of any of its directors, officers,
      and employees outside the Ordinary Course of Business;

    

    (xii)           adopted,
      amended, modified, or terminated any bonus, profit sharing, incentive,
      severance, or other plan, contract, or commitment for the benefit of any of
      its
      directors, officers, and employees (or taken any such action with respect to
      any
      other Employee Benefit Plan);

    

    (xiii)           accelerated,
      terminated, made material modifications to, or canceled any material agreement,
      contract, lease, or license to which the Company or any of its Subsidiaries
      is a
      party or by which any of them is bound;

    

    (xiv)           created,
      incurred, assumed, or guaranteed more than $25,000 in aggregate indebtedness
      for
      borrowed money and capitalized lease obligations;

    

    (xv)           
      delayed or postponed the payment of accounts payable and other Liabilities
      outside the Ordinary Course of Business;

    

    
      
        
        

      

      
        18

        
          

        

      

      
        
        

      

    

    (xvi)           cancelled,
      compromised, waived or released any right or claim or series of related rights
      or claims outside the Ordinary Course of Business;

    

    (xvii)          made
      any loans or advances of money; or

    

    (xviii)         committed
      to any of the foregoing.

    

    3.8           Liabilities.
      Neither Company nor any of its Subsidiaries has any material Liabilities of
      any
      nature, whether accrued, absolute, contingent or otherwise, that would be
      required to be disclosed on a balance sheet prepared in accordance with GAAP,
      other than:

    

    
      	
               

            	
              (a)

            	
              as
                set forth on the audited MMC Financial Statements for the fiscal
                year
                ended December 31, 2006;

            

    

    

    
      	
               

            	
              (b)

            	
              as
                set forth on the unaudited MMC consolidated balance sheet for the
                six
                months ended June 30, 2007;

            

      	 	 	 

      	 	(c)	those
              incurred since June 30, 2007 in the Ordinary Course of Business;
              and

      	 	 	 

      	 	(d) 	as
              disclosed in Schedule
              3.8.

    

    

    3.9           Compliance
      with Laws. Except as set forth in Schedule
      3.9 (without regard to environmental matters which are covered in
      Section 3.14), (i) Company and its Subsidiaries are in compliance with all
      Legal
      Requirements, except where the failure to comply would not have a Material
      Adverse Effect on the Company, (ii) Company and its Subsidiaries have timely
      filed all material reports and returns required by Legal Requirements or any
      regulatory authority and all such reports and returns are true and correct
      in
      all material respects, and (iii) Company and its Subsidiaries have been duly
      granted and continues to hold, and at the Closing will hold, all licenses,
      permits, qualifications, consents, approvals, franchises and other
      authorizations under any Legal Requirement necessary for the conduct of the
      MMC
      Business as currently conducted (collectively, the “Permits”). All of the
      Permits are now and after giving effect to the transactions contemplated hereby
      will be in full force and effect, except such as will not have a Material
      Adverse Effect on Company. Company and its Subsidiaries have not received any
      notice that any Governmental Authority or other licensing authorities or
      association will revoke, cancel, rescind, materially modify or refuse to renew
      in the Ordinary Course of Business any of the Permits.

    

    3.10           Contracts.
      Schedule 3.10 contains a list of the following written
      agreements (other than the leases listed on Schedule
      3.12) in effect as of the date hereof to which MMC or any of its
      Subsidiaries is a party (correct and complete copies of which have been
      delivered to Buyer):

    

    (i)           any
      agreement relating to any consulting services involving more than $25,000 or
      to
      severance pay exceeding $25,000 for any Person;

    

    
      
        
        

      

      
        19

        
          

        

      

      
        
        

      

    

    
       

      (ii)          any
        agreement or group of related agreements with the same party for the purchase
        or
        sale of products or services, under which the undelivered balance of such
        products and services has a purchase price in excess of $50,000 for any
        individual agreement or for any group of related agreements in the
        aggregate;

      

      (iii)          any
        other agreement or group of related agreements with the same party continuing
        over a period of more than six months from the date or dates thereof, which
        is
        not entered into in the Ordinary Course of Business and is either not terminable
        by it on thirty days’ or less notice without penalty or involves more than
        $50,000 for any individual contract or for any group of related
        contracts;

      

      (iv)          any
        agreement, arrangement or understanding that materially restricts its ability
        to
        engage in any and all activities permissible under applicable laws and
        regulation;

      

      (v)           any
        agreement concerning a partnership or joint venture;

      

      (vi)           any
        agreement creating, incurring, assuming or guaranteeing indebtedness for
        borrowed money or any capitalized lease obligation;

      

      (vii)          any
        agreement concerning confidentiality or non-competition outside of the Ordinary
        Course of Business;

      

      (viii)         any
        agreement with any of Sellers and their Affiliates (other than Company and
        its
        Subsidiaries);

      

      (ix)          
        any profit sharing, stock option, stock purchase, stock appreciation, deferred
        compensation, severance or other material plan or arrangement for the benefit
        of
        current or former directors, officers or employees;

      

      (x)            
        any employment or severance agreement;

      

      (xi)           
        any agreement under which any amount has been loaned or advanced to directors,
        officers or employees of the Company or any of its Subsidiaries;

      

      (xii)           
        any agreement under which the consequences of a default or termination could
        be
        a Material Adverse Effect on the Company;

      

      (xiii)           any
        commitments for capital expenditures in excess of $50,000; and

      

      (xiv)           any
        other agreement material to the MMC Business which is not entered into in
        the
        Ordinary Course of Business.

       

    

    With
      respect to each such agreement, as
      of the date hereof: (A) the agreement is valid and Enforceable; (B) the
      agreement will continue to be valid and Enforceable and in full force and effect
      following the consummation of the transactions contemplated hereby; and (C)
      to
      the Knowledge of the Sellers, no party to any such agreement is in breach or
      default and no event has occurred, which with notice or lapse of time would
      constitute a breach or default, or permit termination, modification or
      acceleration under the agreement, and no such party has repudiated any provision
      of the agreement.

    

    
      
        
        

      

      
        20

        
          

        

      

      
        
        

      

    

    3.11           Tax
      Matters.

    

    (a)           (i)
      Each of the Company and its Subsidiaries (and all members of any Affiliated
      Group of which the Company or any of its Subsidiaries is a member) has filed
      on
      a timely basis (taking into account permissible extensions) all Tax Returns
      required to be filed under applicable law, (ii) all Tax Returns referred to
      in
      clause (a)(i) are true, complete and correct in all material respects, (iii)
      all
      Taxes due for the periods covered by such Tax Returns have been paid in
      full.

    

    (b)           Neither
      the Company nor any of its Subsidiaries has waived any statute of limitations
      with respect to Taxes or agreed to any extension of time with respect to any
      Income Tax assessment or deficiency.

    

    (c)           Neither
      the Company nor any of its Subsidiaries has received any notice of deficiency
      or
      assessment of additional Taxes.

    

    (d)           The
      charges, accruals, and reserves for Taxes provided for in the MMC Financial
      Statements, as adjusted to the date hereof and to the Closing Date in accordance
      with historical accounting principles and practices, are adequate to cover
      the
      aggregate liability of the Company and its Subsidiaries for Taxes in respect
      of
      all periods prior to the Closing Date for which Tax Returns have not been filed
      or for which Taxes are not yet due and payable.

    

    (e)           All
      Taxes that the Company or any of its Subsidiaries is or was required to withhold
      or collect have been duly withheld or collected in accordance with applicable
      law, and to the extent required by applicable law, have been paid to the proper
      Governmental Authority or other Person.

    

    (f)           For
      federal Income Tax purposes, the Company and its Subsidiaries are members of
      an
      Affiliated Group (of which the Company is the common parent), which has in
      effect a valid election to file consolidated federal Income Tax Returns. Neither
      the Company nor any of its Subsidiaries has been a member of any other
      Affiliated Group, and neither the Company nor any of its Subsidiaries have
      any
      liability for the Taxes of any Person other than any Tax liability of a Person
      who is currently a member of the Affiliated Group of which the Company is the
      common parent.

    

    (g)           Schedule
      3.11 sets forth a list of all Tax sharing agreements to which the
      Company or any of its Subsidiaries is a party. The Company has provided a true
      and correct copy of any such Tax sharing agreement to the Buyer.

    

    (h)           None
      of the Company or its Subsidiaries has made an election under Section 341(f)
      of
      the Code.

    

    
      
        
        

      

      
        21

        
          

        

      

      
        
        

      

    

    3.12           Properties.

    

    (a)           None
      of the Company or any of its Subsidiaries owns or has ever owned any real
      property. To the Knowledge of Sellers, the real property leased by the Company
      and its Subsidiaries is not subject to any present or future restriction on
      use
      as a result of its environmental condition that would have a Material Adverse
      Effect on the Company.

    

    (b)           Except
      as set forth on Schedule 3.12, Company and its
      Subsidiaries own and have good title to all of the personal property, fixtures,
      furniture, and equipment used by them or reflected on the unaudited MMC
      consolidated balance sheet as of June 30, 2007 (“June 30, 2007 Balance Sheet”),
      or acquired since the date thereof, free and clear of all Liens, except as
      disclosed on the June 30, 2007 Balance Sheet and except for property disposed
      of
      since June 30, 2007 in the Ordinary Course of Business.  The Company
      and its Subsidiaries own or lease all tangible assets necessary for the conduct
      of the MMC Business.

    

    (c)           Schedule
      3.12 sets forth a brief description, including the term, of each
      lease for real or personal property to which the Company or any of its
      Subsidiaries is a party as lessee. Sellers have delivered to the Buyer complete
      and accurate copies of each of the leases described in Schedule
      3.12, and none of such leases has been modified, except to the
      extent that such modifications are disclosed by the copies delivered to the
      Buyer. The leases described in Schedule 3.12 are in full
      force and effect in all respects. The Company and each of its Subsidiaries,
      as
      the case may be (if lessee under such lease), has a valid and existing leasehold
      interest under each lease described on Schedule 3.12,
      neither the Company nor any of its Subsidiaries is in default, and to Knowledge
      of the Company none of the other parties to any of such leases is in default
      under any of such leases.

    

    (d)           To
      the Knowledge of Sellers, there has been no cancellation or breach by any other
      party to any lease described in Schedule
      3.12.

    

    (e)           All
      of the fixtures, furniture, and equipment necessary for the conduct of the
      MMC
      Business are in good condition and repair, ordinary wear and tear excepted,
      and
      are usable in the Ordinary Course of Business of the MMC Business. MMC leases
      all office space, and leases or owns all fixtures, furniture, personal property
      and equipment, necessary for the conduct of the MMC Business as it is presently
      being conducted.

    

    3.13           Litigation.
      Except as set forth in Schedule 3.13, and without regard
      to environmental matters which are covered in Section 3.14, there is no Action
      against the Company or any of its Subsidiaries pending or, to the Knowledge
      of
      Sellers, threatened. There is no Action pending or, to the Knowledge of Sellers,
      threatened, that seeks rescission of, seeks to enjoin the consummation of,
      or
      otherwise relates to, this Agreement or any of the transactions contemplated
      hereby. No Governmental Order specifically directed at the Company or any of
      its
      Subsidiaries has been issued which has had or could reasonably be expected
      to
      have a Material Adverse Effect on the Company.

    

    3.14           Environmental
      Matters. Neither the conduct nor operation of Company or its
      Subsidiaries nor any condition of any property presently or previously leased
      or
      operated by it violates or violated Environmental Laws, and no condition has
      existed or event has occurred with respect to it or any such property that,
      with
      notice or the passage of time, or both, is reasonably likely to result in
      liability under Environmental Laws. None of Company or its Subsidiaries has
      received any written notice from any Person that it or the operation or
      condition of any property ever leased or operated by it is or was in violation
      of, or otherwise is alleged to have liability under, any Environmental Law,
      including responsibility (or potential responsibility) for the cleanup or other
      remediation of any pollutants, contaminants, or hazardous or toxic wastes,
      substances or materials at, on, beneath, or originating from, any such
      property.

    

    
      
        
        

      

      
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    3.15           Agent
      and Trade Receivables.  All agent and trade receivables
      of MMC that are reflected on the MMC Financial Statements represent valid
      obligations arising from services actually performed in the Ordinary Course
      of
      Business. The allowance for uncollectible accounts set forth in the MMC
      Financial Statements was calculated consistent with past practices and
      procedures.

    

    3.16           Insurance.  Schedule
      3.16 sets forth a true and correct summary of the insurance
      policies held by, or for the benefit of, the Company and its Subsidiaries and
      the amount of coverage therein (the “Company Insurance Policies”) and a
      description of all currently pending claims.  True, correct and
      complete copies of all Company Insurance Policies have been previously delivered
      or made available to the Buyer. All premiums due and payable on any of the
      Company Insurance Policies or renewals thereof have been paid or will be paid
      timely through the Closing Date, and there is no default (including with respect
      to the payment of premiums or the giving of notices) by Company or any of its
      Subsidiaries under the Company Insurance Policies, and, to the Knowledge of
      Sellers, no event has occurred which, with notice or the lapse of time, would
      constitute such a default or permit termination, modification or acceleration
      of
      any Company Insurance Policy.  Except as disclosed in
Schedule 3.16, neither the Company nor any of its
      Subsidiaries have received any written notice from the insurer denying coverage
      with respect to a particular claim currently pending under any Company Insurance
      Policy or with respect to any Company Insurance Policy in
      general.  Since June 30, 2007, neither Company nor any of its
      Subsidiaries has incurred any loss, damage, expense or liability that was or
      would be covered by any Company Insurance Policy for which it has not properly
      asserted a claim under such Company Insurance Policy.  The Company and
      its Subsidiaries have been covered during the past 10 years by insurance in
      scope and amount customary and reasonable for the business in which they have
      been engaged.

    

    3.17           Transactions
      with Sellers. After the Closing, neither the Company nor any of its
      Subsidiaries will have any liability or obligation outside the Ordinary Course
      of Business to or for the benefit of the Sellers or any of their Affiliates
      other than in connection with their status as directors, officers and employees
      of MMC and its Subsidiaries. There are no material MMC assets (including
      Intellectual Property) that Sellers or any of their Affiliates (other than
      the
      Company or one of its Subsidiaries) own or license or otherwise have the right
      to use which are used in or necessary to the conduct of the MMC
      Business.

    

    
      
        
        

      

      
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     3.18           Employees.

    

    (a)           No
      resignation of any officer or key employee of MMC or any Subsidiary of MMC
      has
      been announced or is anticipated. MMC and each Subsidiary of MMC has complied
      in
      all material respects with all laws relating to the employment of labor,
      including provisions thereof relating to wages, hours, equal opportunity,
      non-discrimination, and the payment of social security and other
      taxes.

    

    (b)           Neither
      MMC nor any of its Subsidiaries is a party to, or is bound by, any collective
      bargaining agreement, contract, or other agreement or understanding with a
      labor
      union or labor organization, nor is MMC or any of its Subsidiaries the subject
      of any proceeding asserting that MMC or any of its Subsidiaries has committed
      an
      unfair labor practice or seeking to compel MMC or any of its Subsidiaries to
      bargain with any labor organization as to wages or conditions of employment,
      nor
      is there any strike, work stoppage, or work slowdown involving MMC or any of
      its
      Subsidiaries pending or threatened, nor are Sellers aware of any activity
      involving MMC’s or any its Subsidiaries’ employees seeking to certify a
      collective bargaining unit or engaging in any organizational
      activity.

    

    3.19           Intellectual
      Property. MMC and its Subsidiaries have, through ownership or
      licensing, all Intellectual Property Rights necessary to conduct the MMC
      Business. To the Knowledge of Sellers, neither MMC nor any of its Subsidiaries
      has infringed upon, misappropriated or violated any material Intellectual
      Property Rights of any third party in any material respect. Sellers have no
      Knowledge of any unauthorized use or disclosure or misappropriation of any
      of
      the Intellectual Property Rights of MMC and its Subsidiaries.

    

     
      3.20           Employee
      Benefits.

    

    (a)           Schedule
      3.20 lists each Employee Benefit Plan.

    

    (i)           Each
      Employee Benefit Plan (and each related trust, insurance contract, or fund)
      has
      been operated, funded and administered in accordance with the terms of such
      Employee Benefit Plan and complies in form and in operation with the applicable
      requirements of ERISA (if subject thereto), the Code, and all other applicable
      Law, and to the Knowledge of Sellers all persons who participate in the
      operation of such plans and all plan “fiduciaries” (within the meaning of
      Section 3(21) of ERISA) have acted in accordance with the provisions of all
      applicable Law, including, ERISA (if subject thereto) and the Code.

    

    (ii)           All
      required reports and descriptions (including Form 5500 annual reports, summary
      annual reports, and summary plan descriptions) have been timely filed and/or
      distributed in accordance with the applicable requirements of ERISA and the
      Code
      with respect to each Employee Benefit Plan. The requirements of COBRA have
      been
      met in all material respects with respect to each Employee Benefit Plan that
      is
      an Employee Welfare Benefit Plan subject to COBRA.

    

    (iii)           Except
      as disclosed in Schedule 3.20, all contributions,
      including all employer contributions and employee salary reduction
      contributions) that are due have been made within the time periods prescribed
      by
      ERISA and the Code to each Employee Benefit Plan that is an Employee Pension
      Benefit Plan and all contributions for any period ending on or before the
      Closing Date have been paid with respect to each such Employee Benefit Plan
      that
      is an Employee Welfare Benefit Plan, and a reasonable amount has been accrued
      for contributions to each such plan for the current plan year to the extent
      required by GAAP.

    

    
      
        
        

      

      
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    (iv)           Each
      Employee Benefit Plan that is intended to meet the requirements of a “qualified
      plan” under Code §401(a) and each corresponding trust intended to be exempt
      under Code §501(a) has received a current, favorable determination letter from
      the Internal Revenue Service, and Sellers have no Knowledge of any facts or
      circumstances that could adversely affect the qualified status of any such
      Employee Benefit Plan.

    

    (v)           There
      have been no Prohibited Transactions (as such term is defined in Section 406
      of
      ERISA and Section 4975 of the Code) with respect to any Employee Benefit
      Plan.  No fiduciary has any liability for material breach of fiduciary
      duty or any other material failure to act or comply in connection with the
      administration or investment of the assets of any Employee Benefit
      Plan.  No legal action, suit, proceeding, hearing or claim, including
      any audit, inquiry or investigation by the Internal Revenue Service, United
      States Department of Labor or other Governmental Authority, is pending or,
      to
      the Knowledge of Sellers, threatened with respect to any Employee Benefit Plan
      (other than claims for benefits in the ordinary course) and, to the Knowledge
      of
      Sellers, no fact or event exists that could give rise to any such action, suit,
      claim, audit, inquiry or investigation.

    

    (v)          
       No Employee Benefit Plan is subject to the requirements of §412 or §430 of
      the Code or Title IV of ERISA.  Neither the Company nor any Subsidiary
      nor any of their ERISA Affiliates has (i) terminated or reorganized any Employee
      Benefit Plan subject to Title IV of ERISA or (ii) withdrawn from any
      multiemployer plan (within the meaning of Section 3(37) or 4001(a)(3) of ERISA)
      (a “Multiemployer Plan”) or a single employer pension plan (within the meaning
      of Section 4001(a)(15) of ERISA) for which the Company or any Subsidiary could
      incur liability under Section 4063 or 4064 of ERISA (a “Multiple Employer
      Plan”).

    

    (vi)           
      Neither the Company nor any of its Subsidiaries nor any of their ERISA
      Affiliates has incurred any liability for any penalty or tax arising under
      Section 4972, 4980, 4980B or 6652 of the Code or any liability under Section
      502
      of ERISA, and no fact or event exists which could give rise to any such
      liability.  No complete or partial termination has occurred within the
      five (5) years preceding the date hereof with respect to any Employee Benefit
      Plan.

    

    (vii)           For
      each Employee Benefit Plan, the Company has delivered to Buyer (in each case
      where applicable) (A) correct and complete copies of the plan documents and
      summary plan descriptions, (B) the most recent determination letter received
      from the Internal Revenue Service, (C) the most recent annual report (Form
      5500,
      with all applicable attachments), (D) the most recent audited financial
      statement and actuarial valuation (E) all related trust agreements, insurance
      contracts, and other funding arrangements, (F) all material service provider
      contracts, (G) any material correspondence with the Internal Revenue Service,
      United States Department of Labor, Pension Benefit Guaranty Corporation, state
      or local government agency or a representative of any of them received or sent
      within the last five years, (H) any investment policy statements and fiduciary
      committee charters, fiduciary insurance policies, and (I) evidence of
      satisfaction of ERISA bonding requirements.

    

    
      
        
        

      

      
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    (viii)           Except
      as disclosed in Schedule 3.20, with respect to each
      Employee Benefit Plan, other than restrictions under the Code and ERISA, there
      are no restrictions on the ability of the sponsor of each Employee Benefit
      Plan
      to amend or terminate such plan, the plans sponsor has expressly reserved in
      itself the right to amend, modify or terminate any such Employee Benefit Plan,
      or any portion of it, and has made no material written representations which
      would conflict with or contradict such reservation of right.

    

    (ix)            
      No Employee Benefit Plan that is a Employee Welfare Benefit Plan is funded
      by a
      trust or subject to Section 419 or 419A of the Code.

    

    (x)            
      No Employee Benefit Plan or other agreement or arrangement provides for
“deferred compensation” subject to Section 409A of the Code.  Any
      Employee Benefit Plan that provides deferred compensation subject to Section
      409A of the Code has been operated in good faith compliance with Section
      409A.

    

    (xi)        
         The transactions contemplated herein will not directly or
      indirectly result in an increase in benefits, acceleration of vesting or
      acceleration of timing for payment of any benefit to any participant in or
      beneficiary of any Employee Benefit Plan.

    

    (xii)           There
      is currently no outstanding loan or extension of credit from the Company or
      any
      Subsidiary to any executive officer or director of the Company or any
      Subsidiary.

    

    (b)           None
      of the Plans provides for the payment of separation, severance, termination
      or
      similar-type benefits to any Person or obligates
      the Company or any Subsidiary to pay separation,
      severance, termination or similar-type benefits as a result of any transaction
      contemplated by this Agreement that alone, or together with any other payment,
      is subject to tax under Section 4999 of the Code. None of the Plans provides
      for
      or promises retiree medical, disability or life insurance benefits to any
      current or former employee, officer or director of the Company or any
      Subsidiary. Each of the Plans is subject only to the laws of the United States
      or a political subdivision thereof.

    

    3.21           Clients.
      Except as disclosed in Schedule 3.21, since January 1,
      2007, no Client representing a material portion of MMC’s consolidated revenues
      has cancelled, modified, or otherwise terminated, or notified MMC in writing
      of
      its intent to cancel, modify or otherwise terminate, its relationship with
      MMC,
      or decreased materially, or notified MMC in writing of its intent to decrease
      materially, the amount of business it places with MMC.

    

    3.22           Insurance
      Companies. To Sellers’ Knowledge, no insurance company, agent or
      broker has indicated an intention to cancel or modify in any material respect
      the agency appointment or agreement of MMC or any of its Subsidiaries with
      such
      insurance company, agent or broker or cease doing business with MMC or any
      of
      its Subsidiaries because of the execution of this Agreement or the consummation
      of the transactions contemplated hereby.

    

    
      
        
        

      

      
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    3.23           Insurance
      Accounts and Commissions. The insurance accounts of MMC represent
      genuine insurance placed through MMC for the commissions and fees set forth
      on
      its books and records. Other than in the Ordinary Course of Business and as
      permitted by applicable Legal Requirements, there are no material agreements,
      commitments or understandings with any Client or any other Person whereby any
      of
      the insurance commissions and fees received by MMC are being returned directly
      or indirectly to any Client or any other Person.

    

    3.24           Brokers.
      Except for Sandler O’Neill + Partners, L.P., no broker, finder, intermediary,
      investment bank or banker or similar agent is entitled to any brokerage,
      finder’s or other fee, compensation or reimbursement of expenses in connection
      with the transactions contemplated by this Agreement based upon agreements
      or
      arrangements made by or on behalf of the Sellers, the Company, any Subsidiary
      of
      the Company or any of their respective Affiliates. Sellers shall be solely
      responsible for the payment of all fees and expenses of Sandler O’Neill +
      Partners, L.P.

    

    3.25           List
      of Bank Accounts. Schedule 3.25 sets forth
      all bank accounts of the Company and its Subsidiaries.

    

    3.26           Disclosure.
      To the Knowledge of Sellers, none of the representations and warranties
      contained in this Section 3 (i) contains any untrue statements of a material
      fact or (ii) intentionally omits to state a material fact (A) required to be
      stated therein or (B) necessary in order to make the statements therein, in
      light of the circumstances under which they were made, not
      misleading.

    

    4.           Representations
      and Warranties of Sellers Regarding Transaction. Each Seller
      severally represents and warrants to Buyer as follows:

    

    4.1           Title
      to Shares. Such Seller holds of record and owns all right, title
      and interest in the number of Shares set forth opposite his name in Section
      2.4(a), free and clear of all Liens, claims, encumbrances, options, pledges,
      trusts, voting trusts and restrictions of any kind whatsoever. Other than the
      Midlands Holding Corporation Shareholders Agreement dated January 1, 2005 among
      the Company and the Sellers, Seller is not a party to any option, warrant,
      purchase right or other contract or commitment that could require Seller to
      sell, transfer or otherwise dispose of the Shares or any voting trust, proxy
      or
      other agreement or understanding with respect to the voting of the
      Shares.  The certificates representing the Shares to be delivered to
      the Buyer at the Closing, and the signatures on endorsements thereof or stock
      powers delivered therewith, will be valid and genuine.

    

    4.2           Authority.
      Such Seller has full right, power, capacity and authority to execute and deliver
      this Agreement, to perform his obligations under this Agreement, and to
      consummate the transactions contemplated hereby, including the execution and
      delivery of the other documents and instruments to be delivered by such Seller
      pursuant to Section 6.2 (“Seller Closing Documents”). This Agreement is, and the
      Seller Closing Documents, when executed and delivered by such Seller, will
      be,
      Enforceable against such Seller. Neither the execution and delivery of this
      Agreement and the Seller Closing Documents, nor the consummation by such Seller
      of the transactions contemplated herein, violates or will violate any Legal
      Requirement to which Seller is subject, conflicts with or will conflict with,
      constitutes or will constitute a default under, will result in a breach or
      the
      acceleration of or will create in any party the right to accelerate, terminate,
      modify or cancel any contract, commitment, lease, agreement, understanding,
      arrangement or restriction of any kind to which each such Seller is a party
      or
      by which such Seller or his properties may be bound, or will result in the
      imposition or creation of a Lien upon or with respect to the
      Shares.

    

    
      
        
        

      

      
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    4.3           Litigation;
      Impairment. There are no Actions pending or, to the Knowledge of
      such Seller, threatened against such Seller, which, if adversely determined,
      could in any respect prevent or impair the ability of such Seller to perform
      the
      obligations of such Seller under this Agreement. No matters (individually or
      in
      the aggregate) exist or may reasonably be expected to exist which prevent or
      impair the ability of such Seller to perform his obligations under this
      Agreement.

    

    5.           Representations
      and Warranties of Buyer.  Buyer represents and warrants
      to the Sellers as follows:

    

    5.1           Organization,
      Standing and Power. Buyer is a corporation validly existing and
      subsisting under the laws of the Commonwealth of Pennsylvania and has the
      requisite corporate power and authority to carry on its business as now being
      conducted.  Mid-Atlantic States Investment Company (“MASIC”), a
      wholly-owned subsidiary of Buyer, is a corporation validly existing and in
      good
      standing under the laws of the State of Delaware and has the requisite corporate
      power and authority to carry on its business as now being conducted. Buyer
      and
      MASIC are duly qualified to do business, and are in good standing, in each
      jurisdiction where the character of their respective properties held under
      lease
      or the nature of their respective activities makes such qualification necessary,
      except where the lack of such qualification would not have a Material Adverse
      Effect on Buyer.  Schedule 5.1 lists the
      directors and officers of Buyer and MASIC.

    

    5.2           Authorization
      and Enforceability. The execution, delivery and performance of this
      Agreement have been duly authorized by Buyer and this Agreement is Enforceable
      against Buyer. Each of the other documents and instruments to be delivered
      by
      Buyer pursuant to Section 6.3 (“Buyer Closing Documents”) to which Buyer is a
      party has been duly authorized, and, on or before the Closing Date, will be
      duly
      executed and delivered by Buyer and will be Enforceable against
      Buyer.

    

    5.3           Non-Contravention.
      No approval, consent, waiver, authorization or other order of, and no filing,
      notice, registration, qualification or recording with, any Governmental
      Authority or any other Person is required to be obtained or made by or on behalf
      of Buyer or its Subsidiaries in connection with the execution, delivery or
      performance of this Agreement and the consummation of the transactions
      contemplated hereby, except for the items listed in Schedule
      5.3, each of which shall have been obtained or made and shall be
      in
      full force and effect at the Closing. Except as set forth in Schedule
      5.3, neither the execution, delivery and performance of

     

    
      
        
        

      

      
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    this
      Agreement nor the consummation of any of the transactions contemplated hereby
      (including the execution, delivery and performance of the Buyer Closing
      Documents) does or will constitute, result in or give rise to (i) a breach
      or
      violation or default under any material Legal Requirement applicable to Buyer
      or
      any of Buyer’s Subsidiaries (assuming the accuracy of the representations and
      warranties of Sellers in Section 3), (ii) a breach of or a default under any
      Charter or Bylaws provision of Buyer or any of Buyer’s Subsidiaries, (iii) the
      acceleration of the time for performance of any material  obligation
      under any Enforceable contractual obligation of Buyer or any of Buyer’s
      Subsidiaries, (iv) the imposition of any material Lien upon or the forfeiture
      of
      any material asset of Buyer or any assets of any of Buyer’s Subsidiaries, or (v)
      a breach of or a default under any material Enforceable contractual obligation
      of Buyer or any of Buyer’s Subsidiaries.

    

    5.4           Financial
      Statements.

    

    (a)           Financial
      Information. Buyer has delivered to the Company and each Seller the
      following consolidated financial statements of Buyer:

    

    (i)           The
      audited consolidated balance sheets of Buyer and its Subsidiaries as of December
      31, 2004, December 31, 2005 and December 31, 2006 and the related audited
      consolidated statements of income, stockholders’ equity and cash flows of Buyer
      for such fiscal years ended December 31, 2004, and December 31, 2005 and
      December 31, 2006 (collectively, the “Buyer Financial Statements”);
      and

    

    (ii)           The
      unaudited consolidated balance sheet of Buyer and its Subsidiaries as of June
      30, 2007 (“Buyer Interim Balance Sheet”) and related unaudited consolidated
      statement of income, stockholders’ equity and cash flows for the six months
      ended June 30, 2007 (collectively, the “Buyer Interim Financials”).

    

    (b)           Character
      of Financial Information. The Buyer Financial Statements and the
      Buyer Interim Financials, including in each case the notes thereto, were
      prepared in accordance with GAAP consistently applied throughout the periods
      specified therein and present fairly, in all material respects, the consolidated
      financial position and results of operations of the Buyer at the respective
      dates and for the periods specified therein.

    

    5.5           Change
      in Condition. Since June 30, 2007:

    

    (a)           The
      business of the Buyer and its Subsidiaries has been conducted only in the
      Ordinary Course of Business (except as may be otherwise required by the terms
      of
      this Agreement);

    

    (b)           No
      Material Adverse Effect has occurred with respect to Buyer.

    

    5.6           Compliance
      with Laws. Except as set forth in Schedule
      5.6, (i) Buyer and its Subsidiaries are in compliance with all
      Legal Requirements, except where the failure to comply would have a Material
      Adverse Effect on Buyer, (ii) Buyer and its Subsidiaries have timely filed
      all
      material reports and returns required by Legal Requirements or any regulatory
      authority and all such reports and returns are true and correct in all material
      respects, and there are no material deficiencies with respect to such filings
      or
      submissions, and (iii) Buyer and the Subsidiaries of Buyer have been duly
      granted and continue to hold, and at the Closing will hold, all material
      licenses, permits, qualifications, consents, approvals, franchises and other
      authorizations under any material Legal Requirement necessary for the conduct
      of
      the their respective businesses as currently conducted (collectively, the “Buyer
      Permits”), except such as have not had and will not have individually or in the
      aggregate a Material Adverse Effect on Buyer. All of the Buyer Permits are
      now
      and after giving effect to the transactions contemplated hereby will be in
      full
      force and effect, except such as will not have a Material Adverse Effect on
      Buyer. Buyer and its Subsidiaries have not received any notice that any
      Governmental Authority or other licensing authority or association will revoke,
      cancel, rescind, materially modify or refuse to renew in the Ordinary Course
      of
      Business any material Buyer Permits.

    

    
      
        
        

      

      
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    5.7           Litigation.
      Except as set forth in Schedule 5.7, there is no Action
      against Buyer or any Subsidiary of Buyer pending or, to the knowledge of Buyer,
      threatened, except Actions that relate to the Buyer and its Subsidiaries in
      the
      Ordinary Course of Business. There is no Action pending or, to the knowledge
      of
      Buyer, threatened, that seeks rescission of, seeks to enjoin the consummation
      of, or otherwise relates to, this Agreement or any of the
      transactions  contemplated hereby. No Governmental Order specifically
      directed at Buyer or any of its Subsidiaries has been issued which has had
      or
      could reasonably be expected to have a Material Adverse Effect on
      Buyer.

    

    5.8           Insurance
      Buyer and its Subsidiaries have been covered during the past 10 years by
      insurance in scope and amount customary and reasonable for the business in
      which
      they have been engaged, except where the failure to have been so covered would
      not have a Material Adverse Effect on Buyer.

    

    5.9           A.M.
      Best Company. A.M. Best Company has affirmed that it will not
      reduce the insurance financial strength ratings of the PMA Insurance Group
      below
“A-” as a result of the purchase of the Shares.

    

    5.10           Brokers.
      Except for Keefe, Bruyette & Woods, Inc., no broker, finder, investment bank
      or similar agent is entitled to any brokerage, finder’s or other fee,
      compensation or reimbursement of expenses in connection with the transactions
      contemplated by this Agreement based upon agreements or arrangements made by
      or
      on behalf of the Buyer or any of its Affiliates. Buyer shall be solely
      responsible for the payment of the fees and expenses of Keefe, Bruyette &
Woods, Inc.

    

    5.11           Financing. Buyer
      has, or has arranged for, sufficient assets and/or equity and debt financing
      to
      provide adequate funds for the purchase of the Shares from Sellers in accordance
      with the terms of this Agreement and to otherwise fully perform this Agreement
      and the transactions contemplated herein.

    

    
      
        
        

      

      
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    6.           Closing.

    

    6.1           Closing.
      The Closing of the transactions provided for by this Agreement
      (“Closing”) shall take place contemporaneously with the execution and delivery
      of this Agreement by the parties at 9:00 a.m., local time, on October 1, 2007
      (the “Closing Date”) at the offices of Fellers, Snider, Blankenship, Bailey
& Tippens, P.C., 100 North Broadway, Suite 1700, Oklahoma City, Oklahoma
      73102. On the Closing Date, all transactions contemplated by this Agreement
      shall be consummated.  All actions taken at Closing shall be deemed to
      have occurred simultaneously, and shall be effective as of the dates and times
      specified in this Agreement.

    

    6.2           Deliveries
      at Closing by the Company and Sellers. At the Closing, the Sellers
      will deliver to Buyer:

    

    
      	
               

            	
              (a)

            	
              Executed
                copy of this Agreement;

            

    

    

    
      	
               

            	
              (b)

            	
              Certificates
                representing the Shares duly endorsed in blank, ready for transfer
                to
                Buyer;

            

    

    

    
      	
               

            	
              (c)

            	
              Resolutions
                of the Board of Directors of the Company, certified by the Secretary
                of
                the Company, approving the execution, delivery and performance of
                this
                Agreement by the Company;

            

    

    

    
      	
               

            	
              (d)

            	
              Amended
                and Restated Employment Agreements substantially in the form of
                Exhibit C executed by MMC and each of Caldwell,
                Hamill and Davis;

            

    

    

    
      	
               

            	
              (e)

            	
              A
                Release in the form of Exhibit D executed by each
                Seller in favor of the Company and its
                Subsidiaries;

            

    

    

    
      	
               

            	
              (f)

            	
              Certificates
                of good standing of the Company, MMC and MCA in Oklahoma, certified
                by the
                Oklahoma Secretary of State, dated as of a date not more than fifteen
                (15)
                days prior to the Closing Date and such other certificates of good
                standing of any of MMC’s Subsidiaries as may be requested by
                Buyer;

            

    

    

    
      	
               

            	
              (g)

            	
              The
                resignations, effective as of the Closing, of three directors of
                each of
                the Company and MMC;

            

    

    

    
      	
               

            	
              (h)

            	
              All
                books and records, including all minute books, stock books, stock
                transfer
                ledgers, employment records, financial and accounting records, and
                files
                of the Company and its Subsidiaries;
                and

            

    

    

    
      	
               

            	
              (i)

            	
              All
                other agreements, certificates, consents, certified board resolutions,
                approvals and documentary evidence required to be delivered pursuant
                to
                the obligations of the Company and Sellers
                hereunder.

            

    

    

    
      
        
        

      

      
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    6.3           Deliveries
      at Closing by Buyer. At the Closing, the Buyer will deliver to
      Sellers:

    

    
      	
               

            	
              (a)

            	
              Executed
                copy of this Agreement;

            

    

    

    
      	
               

            	
              (b)

            	
              The
                Closing Payment payable by wire transfer to accounts specified by
                each of
                Sellers allocated among the Sellers as set forth in Section
                2.4(a)(ii);

            

    

    

    
      	
               

            	
              (c)

            	
              Resolutions
                of the Board of Directors of the Buyer, certified by the Secretary
                of the
                Buyer, approving the execution, delivery and performance of this
                Agreement
                by the Buyer;

            

    

    

    
      	
               

            	
              (d)

            	
              Subsistence
                certificate of Buyer in Pennsylvania certified by the Pennsylvania
                Secretary of State and Certificate of Good Standing of MASIC certified
                by
                the Delaware Secretary of State each dated as of a date not more
                than
                fifteen (15) days prior to the Closing Date;
                and

            

    

    

    
      	
               

            	
              (e)

            	
              All
                other agreements, certificates, consents, certified board resolutions,
                approvals and documentary evidence required to be delivered pursuant
                to
                the obligations of Buyer hereunder.

            

    

    

    7.           Post-Closing
      Covenants. Buyer and Sellers agree as follows with respect to the
      period following the Closing:

    

    7.1           Further
      Assurances. In case at any time after the Closing, any further
      action is necessary or desirable to carry out the purposes of this Agreement,
      each of the Parties will take such further action (including the execution
      and
      delivery of such further instruments and documents) as the other Party or
      Parties reasonably may request, all at the sole cost and expense of the
      requesting Party or Parties.

    

    7.2           Access
      to Records. Subject to applicable Legal Requirements, on and after
      the Closing Date, Buyer shall afford each Seller and his representatives
      reasonable access, upon reasonable advance notice and during normal business
      hours, to the books and records of Buyer and its Subsidiaries, including MMC,
      to
      the extent necessary to permit each Seller to determine any matter relating
      to
      payments hereunder; provided, however, that any such access shall not
      unreasonably disrupt the normal operations of Buyer or MMC. The Seller
      requesting such access shall bear all of the out-of-pocket costs and expenses
      (but excluding reimbursement for general overhead, salaries and employee
      benefits) reasonably incurred in connection with the foregoing. If Buyer shall
      desire to dispose of any of such books and records prior to the expiration
      of
      the six-year anniversary of the Closing Date, Buyer shall, prior to such
      disposition, give Sellers a reasonable opportunity, at Sellers’ expense, to
      segregate and remove such books and records as Sellers may select.

    

    7.3           Errors
      and Omissions Insurance; Directors’ and Officers’ Insurance. After
      the Closing, Buyer shall cause MMC to continue errors and omissions coverage
      with MMC’s current limits and deductibles, for all periods arising on or after
      the Closing, and premiums for such coverage shall be included as expenses in
      calculating Adjusted EBITDA. Notwithstanding the foregoing, if MMC is not
      permitted by its carrier to continue such errors and omissions coverage after
      the Closing, then Buyer shall cause MMC and its Subsidiaries and Affiliates
      to
      be covered under Buyer’s errors and omissions coverage, and premiums for such
      coverage shall be included as expenses in calculating Adjusted
      EBITDA.

    

    
      
        
        

      

      
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    7.4           Restrictive
      Covenants of Sellers.

    

    (a)           Non-Competition;
      Non-Solicitation. In furtherance of the sale of the Shares to Buyer
      hereunder, and to more effectively protect the value and goodwill of the Shares,
      each Seller covenants and agrees that, for a period commencing on the Closing
      Date and ending on the fourth (4th) anniversary
      of
      the Closing Date (the “Restrictive Period”), except as required under the
      Executive Employment Agreements for the benefit of MMC and Buyer, neither he
      nor
      any of his Affiliates will:

    

    (i)           directly
      or indirectly (whether as principal, agent, independent contractor, employee,
      producer, director, investor, partner, shareholder or otherwise) own, manage,
      operate, conduct, control, participate in, consult with, perform services for
      or
      otherwise carry on, a business similar to or competitive with the MMC Business
      anywhere in the United States (it being understood and acknowledged by each
      Seller that the prohibited business activities are not limited to any particular
      region within the United States because the MMC Business has been and will
      continue to be conducted throughout the United States and may be engaged in
      effectively from any location within the United States);

    

    (ii)           directly
      or indirectly employ, hire, solicit, interfere with the relationship with,
      or
      attempt to entice away, any employee of MMC or any of its Subsidiaries;
      or

    

    (iii)          directly
      or indirectly solicit, call on, service, place insurance on behalf of, refer
      to
      another insurance agency or broker, or interfere with, disrupt or attempt to
      interfere with or disrupt MMC’s relationship with, any Client or any Person that
      was a Client at any time within the one-year period prior to the Closing
      Date.

    

    (b)           Exceptions.  Nothing
      in Section 7.4(a) shall prohibit any Seller from being (i) a stockholder in
      a
      mutual fund or a diversified investment company or (ii) a passive owner of
      not
      more than 5% in the aggregate of any Equity Securities of a Person, so long
      as
      such Seller and its Affiliates have no active participation in the business
      of
      such Person.

    

    (c)           Confidentiality.  Each
      Seller also covenants and agrees that during the Restrictive Period, he will
      not, and will not permit any of his Affiliates to, disclose, divulge or make
      use
      of any trade secrets or other Confidential Information of MMC other than to
      Buyer and as required under the Executive Employment Agreements for the benefit
      of MMC and Buyer. For purposes of this Section 7.4, “Confidential Information”
means confidential information pertaining to the MMC Business, including any
      relationships with insurance carriers, employee and producer compensation
      structures, Client underwriting and policy renewal information, internal
      accounting procedures, policies and information, unique insurance product
      features, insurance programs developed by MMC, marketing strategies and
      information, employee training procedures, manuals and handbooks, Client lists,
      Client accounts, and information regarding business and contractual arrangements
      with Clients, business plans, objectives and strategies, financial information,
      sales information, pricing information, computer programs and data, and any
      other confidential information that gives MMC an opportunity to claim a
      competitive advantage or has economic value.

    

    
      
        
        

      

      
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    (d)           Remedies
      for Breach of Restrictive Covenants. Each Seller acknowledges and
      agrees that Buyer would be irreparably damaged in the event that any provision
      of this Section 7.4 were not performed in accordance with its terms or otherwise
      were breached and that the money damages would be an inadequate remedy for
      any
      such nonperformance or breach.  Accordingly, each Seller agrees that
      in the event of any actual or threatened violation of breach of this Section
      7.4, Buyer shall be entitled, in addition to all other rights and remedies
      that
      it may have, to seek injunctive or other equitable relief (including a temporary
      restraining order, a preliminary injunction and a final injunction) to prevent
      any actual or threatened breach of any of such provisions and to enforce such
      provisions specifically, without the necessity of posting a bond or other
      security or of proving actual damages. The prevailing party in any action
      commenced under this Section 7.4(d) (whether through a monetary judgment,
      injunctive relief or otherwise) also shall be entitled to receive reasonable
      attorneys’ fees and court costs.

    

    (e)           Acknowledgements
      and Reformation. Each Seller acknowledges and agrees that, in view
      of the nature of the MMC Business and the business objectives of Buyer in
      acquiring the Shares, and the consideration paid to Sellers hereunder, the
      limitations of this Section 7.4 are reasonable and necessary in order to protect
      Buyer’s legitimate business interests.  If, however, a final judicial
      determination is made by a court of competent jurisdiction that any restriction
      set forth in this Section 7.4 is unreasonable or otherwise unenforceable under
      applicable Law, Buyer and Sellers hereby authorize such court to revise and
      reform the provisions of this Section 7.4 so as to produce the maximum legally
      Enforceable restrictions, and, if such court refuses to do so, Buyer and Sellers
      agree that the provisions of this Section 7.4 shall not be rendered null and
      void, but rather shall be deemed amended to provide for the maximum Enforceable
      restrictions (not greater than those contained herein) and shall be valid and
      Enforceable under applicable Law.

    

    7.5           Conduct
      of MMC Business Post-Closing.

    

    (a)           With
      respect to the period from and after the Closing Date through September 30,
      2011, Buyer covenants and agrees that, except with the consent of the Sellers
      or
      representatives, executors or successors of Sellers who held 60% or more of
      the
      Shares immediately prior to the Closing:

    

    (i)           it
      will cause MMC to continue to operate in a manner consistent with its past
      practices, policies and operations prior to the Closing Date;

    

    (ii)           it
      will not terminate, discontinue, close or dispose of a material portion of
      the
      MMC Business;

    

    
      
        
        

      

      
        34

        
          

        

      

      
        
        

      

    

    (iii)           it
      will exercise its business judgment in a manner that is consistent with MMC
      and
      Sellers’ efforts to achieve the Adjusted EBITDA that is required for Sellers to
      receive the Earn-Out Payments, the Aggregate Look-Back Payment and the
      Cumulative Incentive Payment pursuant to Sections 2.4(c), (d) and
      (e);

    

    (iv)           it
      will not change or cause to be changed the business name used by MMC to be
      other
      than Midlands Management Corporation;

    

     (v)           it
      will cause the board of directors of MMC, immediately after Closing, to consist
      of five members: three members to be selected by Buyer and two members to be
      selected by Sellers; and

    

    (vi)           it
      will not relocate MMC’s Oklahoma City office more than 20 miles from its current
      location.

    

    (b)           Sellers
      shall give Buyer written notice of any respect in which the Sellers believe
      that
      any change made by Buyer constitutes a material breach of its obligations set
      forth in this Section 7.5 (each, a “Section 7.5 Notice”). Any Section 7.5 Notice
      shall be given promptly and in any event within ten (10) days following the
      date
      that the Sellers shall have Knowledge that such change has been made or the
      date
      upon which the Sellers shall have been advised by Buyer’s chief executive
      officer that such change will be made.  Any and each Section 7.5
      Notice shall describe with reasonable particularity each change asserted to
      be a
      breach of this Section 7.5 and the action or actions that the Sellers request
      be
      taken by the Buyer to remedy such breach. Sellers and Buyer shall meet and
      confer within fifteen (15) days following the giving of the Section 7.5 Notice
      in a good faith effort to resolve the matters specified in the Section 7.5
      Notice. If such matters cannot be resolved, and such breach has continued
      without cure for a period of 60 calendar days following receipt by Buyer of
      the
      Section 7.5 Notice, then Sellers may invoke the provisions of Section
      2.5.

    

    7.6           Public
      Announcements. Neither Buyer nor any Seller shall issue any public
      report, statement, press release or similar item or make any other public
      disclosure with respect to the substance of this Agreement prior to consultation
      with and approval of Buyer and Sellers, provided, that Buyer may make any public
      disclosure it reasonably believes is required by Law or rule of any stock
      exchange or self-regulatory agency to which the Buyer is subject upon advice
      of
      its external legal counsel.

    

    7.7           Sellers’
      Expenses. Prior to the Closing, the Company shall pay for all
      financial advisory, including Sandler O’Neill + Partners, L.P., legal,
      accounting and other fees and expenses incurred by Sellers or any of their
      Affiliates in connection with the transactions contemplated by this Agreement.
      Sellers shall pay the Company for all such expenses by a reduction in the Final
      Retained Cash Amount and the Guaranteed Payments, if necessary, equal to such
      expenses as provided in Section 9.12(a).

    

    7.8           No
      Section 338 Election. Buyer shall not make an election under
      Section 338 of the Code with respect to the purchase of the Shares and the
      transactions provided for in this Agreement.

    

    
      
        
        

      

      
        35

        
          

        

      

      
        
        

      

    

    8.           Indemnification

    

    8.1           Survival
      Period. All representations and warranties made by or on behalf of
      any Party in this Agreement shall survive the execution and delivery of this
      Agreement and the Closing until September 30, 2009 (unless the damaged Party
      had
      Knowledge of any misrepresentation or breach of warranty at the time of
      Closing); provided, with respect to Sections 3.1, 3.2, 3.3, 3.11. 3.14, 3.20,
      3.24, 4, 5.1, 5.2 and 5.10 and all claims based on fraud, there shall be no
      time
      limitation with respect to any such claims or any suit instituted with respect
      thereto, other than any applicable statute of limitations. If written notice
      of
      a claim has been given by any “Indemnitee” (herein, either a “Buyer Indemnitee”
or a “Seller Indemnitee”) to any indemnifying party prior to the expiration of
      any time period set forth herein, then the relevant representations and
      warranties shall survive as to such claim until such claim has been finally
      resolved.  The post-Closing covenants of Section 7 survive for the
      various periods stated therein.

    

    8.2           Indemnification
      by Each Seller.

    

    (a)              In
      addition to his Tax indemnification obligations under Section 8.15, each Seller,
      severally and not jointly, hereby agrees to indemnify Buyer and its Affiliates
      (including the Company and its Subsidiaries from and after the Closing) (each
      in
      its capacity as an indemnified party for the purpose of this Section 8.2, a
      “Buyer Indemnitee”), and hold each Buyer Indemnitee harmless, from, against and
      in respect of any and all Losses arising from any of the following:

    

    (i)           any
      breach of any representation or warranty made with respect to the Company in
      Section 3 (excluding Section 3.11 and other matters related to Taxes, as to
      which Buyer’s sole and exclusive remedy is provided in Section 8.15) and by such
      Seller in Section 4, provided, however, as to the representations in Section
      4,
      such Seller shall only provide indemnification hereunder to the extent that
      such
      representations, only as they relate to such Seller, have been
      breached;

    

    (ii)           any
      material breach, non-fulfillment or violation of any covenant or agreement
      made
      by the Sellers in this Agreement;

    

    (iii)           any
      claim by a Person (including Sandler O’Neill + Partners, L.P.) for brokerage or
      investment banking fees or similar payments based upon any agreement or
      understanding alleged to have been made by any Person acting on behalf of
      Sellers, the Company or MMC in connection with the transactions contemplated
      by
      this Agreement;

    

    (iv)           the
      failure of MMC to collect in full the trade and agent receivables (“Aged
      Receivables”) specified in Schedule 8.2 on or before March 31, 2009;
      or

    

    (v)           any
      failure to timely segregate participant contributions to the Midlands Management
      Corporation 401(k) Plan from MMC’s assets that constitutes a loan from the
      Midlands Management Corporation 401(k) Plan to MMC under the Code or
      ERSIA..

    

    
      
        
        

      

      
        36

        
          

        

      

      
        
        

      

    

    (b)           The
      indemnification liability of each Seller hereunder (including Sections 8.2
      and
      8.15) shall be allocated among Sellers pro rata based on the number of Shares
      sold by each Seller to Buyer hereunder, except as otherwise expressly provided
      in the proviso in Section 8.2(a)(i) above.

    

    (c)           The
      amount of Aged Receivables that remains uncollected at March 31, 2009 will
      be
      deducted from the Guaranteed Payment payable on October 1, 2009 with the amount
      of deduction made pro rata as to each Seller based on the number of Shares
      sold
      by each Seller hereunder.  All Aged Receivables collected after March
      31, 2009 will be for the account of  MMC.

    

    (d)           The
      Holdback Amount shall be released by the Buyer (i) to MCA to offset
      uncollectible balances, then (ii) to the Seller on a quarterly basis when
      cumulative collections of Pre-Closing Receivables exceed 90% of Pre-Closing
      Receivables.  These payments will end on December 31,
      2011.

    

    8.3           Indemnification
      by Buyer. Buyer hereby agrees to indemnify each Seller and its
      Affiliates (other than, after the Closing, the Company and its Subsidiaries)
      (each in his or its capacity as an indemnified party for the purpose of this
      Section 8.3, a “Seller Indemnitee” or collectively, “Seller Indemnitees”), and
      hold each Seller Indemnitee harmless from, against and in respect of any and
      all
      Losses arising from or related to any of the following:

    

    (i)           any
      breach of any representation or warranty made by Buyer in this
      Agreement;

    

    (ii)           any
      material breach, non-fulfillment or violation of any covenant or agreement
      made
      by Buyer in this Agreement; or

    

    (iii)           any
      claim by a Person (including Keefe, Bruyette & Woods, Inc.) for brokerage or
      investment banking fees or similar payments based upon any agreement or
      understanding alleged to have been made by any Person acting on behalf of Buyer
      in connection with the transactions contemplated by this Agreement.

    

    8.4           Monetary
      Limitations on Sellers’ Indemnification Obligations.

    

    (a)           Sellers
      shall not have any obligation to indemnify Buyer Indemnitees under Section
      8.2,
      unless the aggregate cumulative total of all indemnifiable Losses exceed
      $200,000 (the “Sellers’ Deductible”), whereupon Buyer Indemnitees shall be
      entitled to indemnification only for the amount of such Losses in excess of
      the
      Sellers’ Deductible.

    

    (b)           Notwithstanding
      anything contained herein to the contrary, but subject to Section 8.4(c), the
      aggregate amount of Losses recoverable by Buyer Indemnitees from each Seller
      pursuant to the provisions of this Section 8 shall be limited to the sum of
      (i)
      the amount of Estimated Retained Cash and Guaranteed Payments actually received
      by such Seller, plus (ii) any Earn-out Payments actually received by such Seller
      (the “Indemnity Cap”). Buyer 

     

    
      
        
        

      

      
        37

        
          

        

      

      
        
        

      

    

    Indemnitees
      shall be entitled to set-off Losses subject to indemnification hereunder against
      unpaid amounts payable under Section 2.4.

    

    (c)           The
      Sellers’ Deductible and the Indemnity Cap shall not apply with respect to
      Sections 3.1, 3.2, 3.3, 3.14, and 3.24, Section 4 and the indemnification
      provided in Section 8.2(a)(iv), or claims based on fraud and the Indemnity
      Cap
      shall not apply with respect to Section 3.11 and 3.20.

    

    8.5           Monetary
      Limitations on Buyer’s Indemnification Obligations. Except with
      respect to claims based on fraud, Buyer shall not have any obligation to
      indemnify Sellers’ Indemnitees under Section 8.3 in respect of any Loss incurred
      by Sellers’ Indemnitees unless the aggregate cumulative total of all Losses
      (other than Losses arising out of claims based on fraud) incurred by Sellers’
Indemnitees exceeds $200,000 (the “Buyer’s Deductible”), whereupon Sellers’
Indemnitees shall be entitled to indemnification for the amount of such Losses
      in excess of the Buyer’s Deductible. Notwithstanding anything herein to the
      contrary, the maximum amount of the aggregate liability of Buyer and its
      Affiliates for any indemnification obligations hereunder shall be limited to
      the
      Closing Payment. The Buyer’s Deductible and the limitation of aggregate
      liability of Buyer and its Affiliates provided in the preceding sentence shall
      not apply with respect to Sections 5.1, 5.2 and 5.10 or claims based on
      fraud.

    

    8.6           Third
      Party Claims. Promptly after the receipt by any Indemnitee of
      notice of the commencement of any Action against such Indemnitee by a third
      party, such Indemnitee shall, if a claim with respect thereto is or may be
      made
      against any indemnifying party pursuant to this Section 8, give such
      indemnifying party written notice thereof. The failure to timely provide such
      notice shall not relieve any indemnifying party from any obligation there under
      except to the extent the indemnifying party is prejudiced by such delay or
      omission. Such indemnifying party shall have the right to defend such Action,
      at
      such indemnifying party’s expense and with counsel of its choice reasonably
      satisfactory to the Indemnitee, provided, that the indemnifying party so
      notifies the Indemnitee that it will defend such Action. If the indemnifying
      party fails to defend or, after undertaking such defense, fails to prosecute
      or
      withdraws from such defense, the Indemnitee shall have the right to undertake
      the defense and settlement thereof; provided, that the indemnifying party shall
      be entitled to notice of and to participate in any settlement discussions with
      respect to any such Action. If the indemnifying party is defending such Action,
      the Indemnitee may retain separate counsel at its sole cost and expense and
      may
      participate in defense of such Action. An indemnifying party may only settle
      an
      Action with the consent of the Indemnitee, which consent shall not be
      unreasonably withheld or delayed; provided, that no such consent shall be
      required where such compromise or settlement provides for (i) payment of
      monetary damages, which monetary damages are paid in fully by the indemnifying
      party, and (ii) a full release of the indemnifying party from all claims
      comprising such Action.

    

    8.7           Procedure
      for Direct Claims. In the event an Indemnitee should have a claim
      for indemnification hereunder that does not involve a third party claim, the
      Indemnitee shall, as promptly as practicable, deliver to the indemnifying party
      a written notice that contains (a) a description and the amount (the “Claimed
      Amount”) of any Losses incurred or suffered by the Indemnitee, (b) a statement
      that the Indemnitee is entitled to indemnification under this Section 8

     

    
      
        
        

      

      
        38

        
          

        

      

      
        
        

      

    

    and
      a
      reasonable explanation of the basis therefore, and (c) a demand for payment
      by
      the indemnifying party.  Within 30 days after delivery of such written
      notice, the indemnifying party shall deliver to the Indemnitee a written
      response in which the indemnifying party shall (i) agree that the Indemnitee
      is
      entitled to receive all of the Claimed Amount (in which case such response
      shall
      be accompanied by a payment by the indemnified party of the Claimed Amount),
      (ii) agree that the Indemnitee is entitled to receive part, but not all, of
      the
      Claimed Amount (the “Agreed Amount”) (in which case such response shall be
      accompanied by payment by the indemnifying party of the Agreed Amount), or
      (iii)
      contest that the Indemnitee is entitled to receive any of the Claimed
      Amount.  If the indemnifying party disputes the payment of all or part
      of the Claimed Amount, the indemnifying party and the Indemnitee shall use
      good
      faith efforts to resolve such dispute as promptly as practicable.  If
      such dispute is not resolved within 30 days following the delivery by the
      indemnifying party of such response, the indemnifying party and the Indemnitee
      shall each have the right to submit such dispute to a court of competent
      jurisdiction in accordance with the provisions of Section 9.6.

    

    8.8           Mitigation.
      Each Indemnitee agrees to take reasonable steps to mitigate and minimize its
      or
      his Losses upon and after becoming aware of any event or condition that could
      reasonably be expected to give rise to any Losses that are indemnifiable
      hereunder. Any costs and expenses reasonably incurred by such Indemnitee in
      connection with such mitigation shall constitute “Losses” that may be recovered
      hereunder.

    

    8.9           No
      Circular Recovery.  Solely with respect to any Action
      brought by Buyer against Sellers pursuant to this Agreement, Sellers agree
      that
      they will not make any claim for indemnification against Buyer, the Company
      or
      MMC (except in connection with valid insurance claims under Section 8.13) by
      reason of the fact that any of the Sellers was a controlling person, director,
      officer, employee, agent or other representative of Company or MMC or was
      serving as such for another Person at the request of Company or
      MMC.

    

    8.10           Nature
      of Indemnification Payments. Any and all indemnification payments
      pursuant to this Section 8 shall be deemed for all purposes to be adjustments
      to
      the Total Purchase Price paid pursuant to Section 2.  For Income Tax
      purposes, any indemnification payments attributable to a breach of the covenants
      provided by Sellers in Section 7.4 shall be treated as adjustments to the
      portion of the Total Purchase Price paid for such covenants and any other
      indemnification payments shall be treated as adjustments to the portion of
      the
      Total Purchase Price paid for the Shares.

    

    8.11           Exclusive
      Remedy. Except for Sellers’ rights under Section 2.5, the rights to
      indemnification provided for in this Section 8 shall constitute the exclusive
      remedy of Buyer, Sellers, and their respective Affiliates with respect to
      matters in any way relating to this Agreement or arising in connection herewith,
      whether under any laws, at common law or otherwise.

    

    8.12           Limited
      Remedies. Notwithstanding anything to the contrary herein, no Party
      shall be liable for special, punitive, exemplary, incidental, indirect or
      statutory damages, lost profits or diminution in value whether based on
      contract, tort, strict liability, other law or otherwise and whether or not
      arising from any other Party’s sole, joint or concurrent negligence,

     

    
      
        
        

      

      
        39

        
          

        

      

      
        
        

      

    

    strict
      liability or other fault; provided, however, that this Section 8.12 shall not
      limit a Party’s right to recover under this Section 8 for any such damages to
      the extent such Party is required to pay such damages to a third party in
      connection with a matter for which such Party is otherwise entitled to
      indemnification under this Section 8.

    

    8.13           Insurance;
      Tax Benefit. Payments by Sellers pursuant to Section 8.2 shall be
      limited to the amount of any Losses that remain after deducting there from
      any
      insurance proceeds and any indemnity, contribution or other similar payment
      actually recovered by any Buyer Indemnitee from any third party with respect
      thereto.  Sellers shall be permitted to defer payments pursuant to
      Section 8.2 while pursuing remedies against applicable insurers; provided,
      however, that after 60 days, interest shall accrue on unpaid amounts at the
      rate
      of 5% per annum and that full payment shall be made prior to the first
      anniversary of the claim for indemnification.  The amount of Losses
      otherwise recoverable under Section 8.2 shall be reduced to the extent the
      present value (determined using a discount rate of 5% per annum) of any current
      Federal, state, local or foreign Tax liabilities of the Buyer Indemnitees (or
      any of their respective Affiliates) has been decreased by reason of any Losses
      in respect of which such Buyer Indemnitees shall be entitled to indemnification
      under Section 8.2.

    

    8.14           No
      Double Recovery. Any Loss for which Buyer received actual payment
      under this Agreement shall be disregarded and not included as an expense or
      otherwise for purposes of calculating Adjusted EBITDA for any purposes under
      this Agreement and any cost or expense included in the calculation of Adjusted
      EBITDA pursuant to this Agreement shall not be subject to indemnification claims
      under this Agreement.

    

    8.15           Tax
      Matters. The following provisions shall govern the allocation of
      responsibility as between Buyer and Sellers for certain Tax matters following
      the Closing Date:

    

    (a)           Tax
      Indemnification. Each Seller, severally (and not jointly), hereby
      agrees to indemnify the Company and its Subsidiaries, and Buyer and its
      Affiliates, and hold them harmless from and against (i) any and all Income
      Taxes
      (or the non-payment thereof) of the Company and its Subsidiaries for all Taxable
      periods ending on or before the Closing Date and the portion ending on the
      Closing Date of any Taxable period that includes (but does not end on) the
      Closing Date (“Pre-Closing Tax Period”), and (ii) any and all Income Taxes of
      any member of the Affiliated Group of which the Company or any of its
      Subsidiaries is or has been a member on or prior to the Closing Date (to the
      extent such Income Taxes are not described in clause (i) of this Section
      8.15(a)).

    

    (b)           Straddle
      Period. In the case of any Taxable period that includes (but does
      not end on) the Closing Date (a “Straddle Period”), the amount of any Income
      Taxes for the Pre-Closing Tax Period shall be determined based on an interim
      closing of the books as of the close of business on the Closing
      Date.

    

    (c)           Refunds
      and Tax Benefits. All unaccrued federal Income Tax refunds that are
      received by Buyer or Company to which Buyer or Company become entitled that
      relate to the federal or state Income Tax of the Affiliated Group of which
      Company has been the common parent for Taxable periods ending on or before
      the
      Closing Date shall be for the account 

     

    
      
        
        

      

      
        40

        
          

        

      

      
        
        

      

    

    of
      Sellers, and Buyer shall pay or cause Company to pay over to Sellers any such
      refund within 15 days after receipt or entitlement thereof.

    

    (d)           Cooperation
      on Tax Matters.

    

    (i)           Buyer
      and Sellers shall cooperate fully, as and to the extent reasonably requested
      by
      the other Party, in connection with any audit, litigation or other proceeding
      with respect to Taxes.  Such cooperation shall include the retention
      and (upon the other Party’s request) the provision of records and information
      that are reasonably relevant to any such audit, litigation or other proceeding
      and making employees available on a mutually convenient basis to provide
      additional information and explanation for any material provided hereunder.
      Buyer agrees to retain all books and records with respect to Tax matters
      pertinent to the Company and its Subsidiaries relating to any taxable period
      beginning before the Closing Date until the expiration of the statute of
      limitations plus one year (and, to the extent notified by Sellers, any
      extensions thereof) of the respective taxable periods, and to abide by all
      record retention agreements entered into with any taxing authority.

    

    (ii)           Buyer
      and Sellers further agree, upon request, to use their reasonable best efforts
      to
      obtain any certificate or other document from any governmental authority or
      any
      other Person as may be necessary to mitigate, reduce or eliminate any Tax that
      could be imposed (including, but not limited to, with respect to the
      transactions contemplated hereby).

    

    (iii)           Buyer
      and Sellers further agree, upon request, to provide the other Party with all
      information that either Party may be required to report pursuant to any
      applicable provision of the Code the Treasury Regulations.

    

    (e)           Tax
      Sharing Agreements. All Tax-sharing agreements or similar
      agreements with respect to or involving Company or any of its Subsidiaries
      shall
      be terminated as of the Closing Date and, after the Closing Date, neither
      Company nor any of its Subsidiaries shall be bound thereby or have any liability
      there under.

    

    (f)           Certain
      Taxes and Fees. All transfer, documentary, sales, use, stamp,
      registration and other such Taxes, and all conveyance fees, recording charges
      and other fees and charges (including any penalties and interest) incurred
      in
      connection with the consummation of the transactions contemplated by this
      Agreement shall be borne 50% by Buyer and 50% by Sellers.

    

    9.           Miscellaneous.

    

    9.1           Entire
      Agreement; Waivers. This Agreement and the Closing Documents
      delivered pursuant hereto constitute the entire agreement among the Parties
      pertaining to the subject matter hereof and thereof and supersede all prior
      and
      contemporaneous agreements, understandings, negotiations and discussions,
      whether oral or written, including the Term Sheet dated August 6, 2007, of
      the
      Parties with respect to such subject matter. No waiver of any provision of
      this
      Agreement shall be deemed or shall constitute a waiver of any other provision
      

     

    
      
        
        

      

      
        41

        
          

        

      

      
        
        

      

    

    hereof
      (whether or not similar), shall constitute a continuing waiver unless otherwise
      expressly provided or shall be effective unless in writing and executed (i)
      in
      the case of a waiver by Buyer, by Buyer, and (ii) in the case of a waiver by
      Sellers, by Sellers.

    

    9.2           Amendment
      or Modification. The Parties may not amend or modify this Agreement
      except in such manner as may be agreed upon by a written instrument executed
      and
      delivered by Buyer and Sellers.

    

    9.3           Severability.
      In the event that any provision hereof would, under applicable law, be invalid
      or unenforceable in any respect, such provision shall (to the extent permitted
      under applicable law) be construed by modifying or limiting it so as to be
      valid
      and Enforceable to the maximum extent compatible with, and possible under,
      applicable law. The provisions hereof are severable, and in the event any
      provision hereof should be held invalid or unenforceable in any respect, it
      shall not invalidate, render unenforceable or otherwise affect any other
      provision hereof.

    

    9.4           Binding
      Effect. This Agreement shall be binding upon and inure to the
      benefit of each of the Parties and their respective heirs, personal
      representatives and successors, and permitted assigns. Neither the Buyer nor
      the
      Sellers shall have the right to assign this Agreement without the prior written
      consent of all other Parties; provided, however, that the Buyer may assign
      its
      rights and obligations under this Agreement to MASIC; provided further that
      such
      assignment shall not relieve Buyer of any of its obligations
      hereunder.

    

    9.5           Notices.
      Any notices or other communications required or permitted hereunder shall be
      sufficiently given if in writing (including telecopy, facsimile or similar
      teletransmission), addressed as follows:

    

    
      
        	
                If
                  to Buyer at:

              	
                PMA
                  CAPITAL CORPORATION

              
	 	
                380
                  Sentry Parkway

              
	 	
                Blue
                  Bell, PA 19422

              
	 	
                Facsimile:
                  (610) 397-5334Attn:  Vincent T. Donnelly,

              
	 	
                     President
                  and CEO

              
	 	 
	
                with
                  a mandatory copy to:

              	
                Justin
                  P. Klein

              
	
                (which
                  shall not constitute notice)

              	
                Ballard
                  Spahr Andrews & Ingersoll LLP

              
	 	
                1735
                  Market Street, 51st
                  Floor

              
	 	
                Philadelphia,
                  PA  19103-7599

              
	 	
                Facsimile:
                  (215) 864-8999

              
	 	 
	
                If
                  to Sellers:

              	
                Charles
                  C. Caldwell

              
	 	
                3503
                  NW 63rd, Suite 305

              
	 	
                Oklahoma
                  City, OK  73116

              
	 	
                Facsimile:
                  (405) 840-5432

              

      

      

      
        
          
          

        

        
          42

          
            

          

        

        
          
          

        

      

      
        	 	 
	 	
                Thomas
                  G. Hamill

              
	 	
                51
                  E. 42nd,
                  Suite 616

              
	 	
                New
                  York, NY 10017

              
	 	
                Facsimile:
                  (212) 681-8307

              
	 	 
	 	
                Colin
                  D. O’Connor

              
	 	
                c/o
                  Black & Company, Solicitors

              
	 	
                28
                  South Frederick Street

              
	 	
                Dublin
                  2 Ireland

              
	 	
                Phone:
                  00353-1-679-5170

              
	 	
                Facsimile:
                  00353-1-679-4726.

              
	 	
                Attention:
                  John Black or

              
	 	
                Ms.
                  Niamh Lomasney

              
	 	 
	 	
                J.
                  Mark Davis

              
	 	
                3503
                  NW 63rd, Suite 305

              
	 	
                Oklahoma
                  City, OK  73116

              
	 	
                Facsimile:
                  (405) 840-5432

              
	 	 
	
                with
                  a mandatory copy to:

              	
                Lon
                  Foster, III

              
	
                (which
                  shall not constitute notice)

              	
                Fellers,
                  Snider, Blankenship, Bailey & Tippens, P.C.

              
	 	
                321
                  South Boston, Suite 800

              
	 	
                Tulsa,
                  OK  74103-3318

              
	 	
                Facsimile:
                  (918) 583-9659

              

      

    Unless
      otherwise specified herein, such notices or other communications shall be deemed
      received (a) in the case of any notice or communication sent other than by
      mail,
      on the date actually delivered to such address (evidenced, in the case of
      delivery by overnight courier, by confirmation of delivery from the overnight
      courier service making such delivery, and in the case of a facsimile
      transmission, by receipt of a transmission confirmation form or the addressee’s
      confirmation of receipt), or (b) in the case of any notice or communication
      sent
      by mail, three (3) Business Days after being sent, if sent by registered or
      certified mail, with first-class postage prepaid (except in the case of Colin
      O’Connor, seven (7) Business Days). Each Party shall be entitled to specify a
      different address by giving notice as aforesaid to each of the other
      Parties.

    

    9.6           Jurisdiction;
      Service of Process. Any Action seeking to enforce any provision of,
      or based on any right arising out of, this Agreement shall be brought
      exclusively against any of the Parties in the federal courts located in the
      City
      of Oklahoma City, Oklahoma, and in the event that such federal courts shall
      not
      have jurisdiction over the relevant proceeding, then in the state courts located
      in the City of Oklahoma City, Oklahoma, and each of the Parties consents to
      the
      jurisdiction of such courts (and of the appropriate appellate courts) in any
      such Action or proceeding and waives any objection to venue laid
      therein.  Each Party hereby consents to service of process in any such
      proceeding in any manner permitted by Oklahoma law, and agrees that service
      of
      process by registered or certified mail, return receipt requested, at its
      address specified pursuant to Section 9.5 is reasonably calculated to give
      actual notice.

    

    
      
        
        

      

      
        43

        
          

        

      

      
        
        

      

    

    9.7           Governing
      Law. This Agreement shall be governed by and construed in
      accordance with the domestic substantive law of the State of Oklahoma, without
      giving effect to any choice or conflict of law provision or rule that would
      cause the application of the law of any other jurisdiction.

    

    9.8           Headings.
      Section and subsection headings are not to be considered part of this Agreement,
      are included solely for convenience, are not intended to be full or accurate
      descriptions of the content thereof and shall not affect the construction
      hereof.

    

    9.9           Third
      Party Beneficiaries. Nothing expressed or referred to in this
      Agreement will be construed to give any Person other than the Parties any legal
      or equitable claim, cause of action, remedy or right of any kind under or with
      respect to this Agreement or any provision of this Agreement. This Agreement
      and
      all of its provisions and conditions are for the sole and exclusive benefit
      of
      the Parties and their successors and assigns.

    

    9.10           Counterparts;
      Facsimile Signatures. This Agreement may be executed in any number
      of counterparts and by the different Parties on separate counterparts each
      of
      which shall be deemed an original, but all of which together shall constitute
      but one and the same instrument. The Parties acknowledge and agree that original
      signatures delivered by facsimile transmission shall be accepted as original
      to
      evidence execution of this Agreement and the other agreements, stock
      assignments, documents, instruments and notices contemplated
      herein.

    

    9.11           Nature
      of Sellers’ Obligations. The covenants and agreements of each
      Seller in this Agreement and all representations and warranties of each Seller
      in Section 4 concerning the transaction are several and not joint
      obligations.  This means that the particular Seller making the
      representation, warranty, covenant or agreement shall be individually
      responsible solely to the extent provided in Section 8.2 for any Losses Buyer
      may suffer as a result of any breach thereof.

    

    9.12           Expenses
      of Transaction.

    

    (a)           Transaction
      Costs of Sellers. Except to the extent specifically otherwise
      provided herein, the Sellers shall be responsible for all financial advisory,
      including Sandler O’Neill + Partners, L.P., legal, accounting and other fees and
      expenses incurred by Sellers or any of their Affiliates in connection with
      the
      transactions contemplated by this Agreement. These amounts will be paid by
      the
      Company before the Closing. This will reduce the “Final Retained Cash Amount”
payable to Sellers pursuant to Section 2.4(b).  If the Final Retained
      Cash Amount payable to Sellers is less than the amount of such transaction
      costs
      paid by the Company, Buyer may offset the difference against the Guaranteed
      Payments.

    

    (b)           Transaction
      Costs of Buyer. Except to the extent specifically otherwise
      provided herein, Buyer shall be responsible for all financial advisory,
      including Keefe, Bruyette & Woods, Inc., legal, accounting and other fees
      and expenses incurred by Buyer in connection with the transactions contemplated
      by this Agreement.

    

    [
      SIGNATURES ON FOLLOWING PAGES ]

     

    
      
        
        

      

      
        44

        
          

        

      

      
        
        

      

    

    IN
      WITNESS WHEREOF, the Parties, intending to be legally bound hereby, have
      executed, or have caused to be executed by their respective officers thereunto
      duly authorized, this Stock Purchase Agreement as of the date first above
      written.

    

      
        	
                BUYER:

              	
                PMA
                  CAPITAL CORPORATION

              
	 	 	 
	 	 	 
	 	
                By:

              	
                /s/
                  Vincent T. Donnelly

              
	 	 	
                Vincent
                  T. Donnelly,

              
	 	 	
                President
                  and CEO

              
	 	 	 
	 	 	 
	
                SELLERS:

              	 	 
	 	 	 
	 	
                /s/
                  Charles C. Caldwell

              
	 	
                CHARLES
                  C. CALDWELL

              
	 	 	 
	 	 	 
	 	
                /s/
                  Thomas G. Hamill

              
	 	
                THOMAS
                  G. HAMILL

              
	 	 	 
	 	 	 
	 	
                /s/
                  Colin O’Connor

              
	 	
                COLIN
                  O’CONNOR

              
	 	 	 
	 	 	 
	 	
                /s/
                  J. Mark Davis

              
	 	
                J.
                  MARK DAVIS

              
	 	 	 
	
                Solely,
                  for purposes of Section 2.7:

              	 	 
	 	 	 
	
                COMPANY:

              	
                MIDLANDS
                  HOLDING CORPORATION

              
	 	 	 
	 	 	 
	 	
                By:

              	
                /s/
                  Charles C. Caldwell

              
	 	 	
                Charles
                  C. Caldwell,

              
	 	 	
                President
                  and CEO

              

      

    

     

    45exhibit4e10b.htm

    Exhibit
      4(e), 10(b)

     

    Execution
      Copy

     

    AMENDMENT
      NO. 1 TO THE CREDIT AGREEMENT

     

                                                                Dated
      as of April 24,
      2007

     

    AMENDMENT
      NO. 1 TO THE CREDIT AGREEMENT (this
“Amendment”) among CBRL GROUP, INC., a Tennessee
      corporation (the “Borrower”), the banks, financial
      institutions and other institutional lenders parties to the Credit Agreement
      referred to below (collectively, the “Lenders”) and
      WACHOVIA BANK, NATIONAL ASSOCIATION., as administrative agent  (in
      such capacity, the “Agent”) for the
      Lenders.

     

    PRELIMINARY
      STATEMENTS:

     

    (1)           The
      Borrower, the Guarantors, the Lenders and the Agent have entered into a Credit
      Agreement dated as of April 27, 2006 (the “Credit
      Agreement”).  Capitalized terms not otherwise defined in
      this Amendment have the same meanings as specified in the Credit
      Agreement.

     

    (2)           The
      Borrower has requested that the Required Lenders agree to amend certain
      provisions of the Credit Agreement.

     

    (3)           The
      Required Lenders are, on the terms and conditions stated below, willing to
      grant
      the request of the Borrower and the Borrower and the Required Lenders have
      agreed to amend the Credit Agreement as hereinafter set forth.

     

    NOW,
      THEREFORE, in consideration of the premises and for other good and valuable
      consideration, the sufficiency and receipt of all of which is hereby
      acknowledged, the parties hereto hereby agree as follows:

     

    SECTION
      1.  Amendment
      to Credit Agreement.  Effective as of the date hereof and subject
      to the satisfaction of the conditions precedent set forth in Section 2, Article
      V of the Credit Agreement is hereby amended by (a) amending and restating
      Section 5.02(g)(iv), such Section to read in full as follows:

     

    
      	
               

            	
              “
                (iv) the Borrower may repurchase, acquire or redeem the Convertible
                Notes
                and/or any notes exchanged (“New Notes”) for
                such Convertible Notes (and/or any common stock into which such
                Convertible Notes or New Notes are converted) with the proceeds of
                the
                Term B-2 Facility and/or cash on
                hand;”

            

    

     

    
      and
        (b)
        amending and restating Section 5.02(j)(i)(C), such Section to read in full
        as
        follows:

    

     

    
      	
               

            	
              “(iv)(C)
                the conversion of subordinated debt into equity in accordance with
                its
                terms and any transaction permitted by Section
                5.02(g)(iv);”

            

    

     

    SECTION
      2.  Conditions
      to Effectiveness.  This Amendment shall become effective when, and
      only when, the Agent shall have received (a) counterparts of this Amendment
      executed by the Borrower and the Required Lenders or, as to any of the Lenders,
      advice satisfactory to the Agent that such Lender has executed this Amendment,
      (b) the consent attached hereto (the “Consent”)
      executed by each Guarantor and (c) payment in full of all expenses of counsel
      for the Agent in connection with this Amendment and the Credit
      Agreement.

     

     

    CBRL
      GROUP, INC. - AMENDMENT NO. 1

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    SECTION
      3.  Reference
      to and Effect on the Credit Agreement(a)  On and after the
      effectiveness of this Amendment, each reference in the Credit Agreement to
“this
      Agreement”, “hereunder”, “hereof” or words of like import referring to the
      Credit Agreement, and each reference in any of the Loan Documents to “the Credit
      Agreement”, “thereunder”, “thereof”, or words of like import referring to the
      Credit Agreement, shall mean and be a reference to the Credit Agreement, as
      amended by this Amendment.

     

    (b)  The
      Credit Agreement, as specifically modified by this Amendment, is and shall
      continue to be in full force and effect and is hereby in all respects ratified
      and confirmed. Without limiting the generality of the foregoing, the Collateral
      Documents and all of the Collateral described therein do and shall continue
      to
      secure the payment of all Obligations of the Loan Parties under the Loan
      Documents, in each case as amended by this Amendment.

     

    (c)  The
      execution, delivery and effectiveness of this Amendment shall not, except as
      expressly provided herein, operate as a waiver of any right, power or remedy
      of
      any Lender or the Agent, nor constitute a waiver of any provision of the Credit
      Agreement.

     

    SECTION
      4.  Costs
      and Expenses.  The Borrower agrees to pay on demand all costs and
      expenses of the Agent in connection with the preparation, execution, delivery
      and administration, modification and amendment of this Amendment and the other
      instruments and documents to be delivered hereunder (including, without
      limitation, the reasonable fees and expenses of counsel for the Agent) in
      accordance with the terms of Section 9.04 of the Credit Agreement.

     

    SECTION
      5.  Execution
      in Counterparts. This Amendment may be executed in any number of
      counterparts and by different parties hereto in separate counterparts, each
      of
      which when so executed shall be deemed to be an original and all of which taken
      together shall constitute but one and the same agreement.  Delivery of
      an executed counterpart of a signature page to this Amendment by telecopier
      shall be effective as delivery of a manually executed counterpart of this
      Amendment.

     

    SECTION
      6.  Governing
      Law. This Amendment shall be governed by, and construed in accordance with,
      the laws of the State of New York.

     

     

    [Remainder
      of page intentionally left blank]

     

     

    CBRL
      GROUP, INC. - AMENDMENT NO. 1

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    IN
      WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed
      by
      their respective officers thereunto duly authorized, as of the date first above
      written.

     

     

    
      	CBRL
              GROUP, INC., as Borrower
	 	 	 
	 	 	 
	 	 	 
	By	 	/s/
              Lawrence E.
              White            
	 	Name:	Lawrence
              E. White
	 	Title:
	Senior
              Vice President-Finance and
	 	 	   
Chief
              Financial
              Officer

    

     

     

     

    CBRL
      GROUP, INC. - AMENDMENT NO. 1

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

            

     
      
        	WACHOVIA
                BANK, NATIONAL ASSOCIATION, as 
	   Agent
                and Lender
	 	 	 
	 	 	 
	By	 	/s/
                Jorge A. Gonzalez        
	 	Name:	Jorge
                A. Gonzalez
	 	Title:	Managing
                Director
	 	 	 

      

    

     

     

     

    CBRL
      GROUP, INC. - AMENDMENT NO. 1

            

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    

    CONSENT

     

                                Dated
      as of April 24,
      2007

     

    

     

    Each
      of
      the undersigned, in connection with each of the Collateral Documents and the
      Guaranty referred to in the Credit Agreement dated as of April 27, 2006 (the
      “Credit Agreement”) among CBRL GROUP, INC., the
      Guarantors named therein, the Lenders and agents named therein, and WACHOVIA
      BANK, NATIONAL ASSOCIATION, as administrative agent, hereby consents to the
      foregoing Amendment No. 1 to the Credit Agreement (the
“Amendment”) and hereby confirms and agrees that
      notwithstanding the effectiveness of such Amendment, (a) the Guaranty is, and
      shall continue to be, in full force and effect and is hereby ratified and
      confirmed in all respects, except that, on and after the effectiveness of the
      Amendment, each reference in the Guaranty to the “Credit Agreement”,
“thereunder”, “thereof” or words of like import shall mean and be a reference to
      the Credit Agreement, as amended by the Amendment and (b) the Collateral
      Documents and all of the Collateral described therein do, and shall continue
      to,
      secure the payment of all Obligations of the Loan Parties under the Loan
      Documents, in each case as amended by this Amendment.

     

    

    CB
      MUSIC,
      LLC

    

    

    By  
      /s/ N.B. Forrest Shoaf            

    Name:
      N.B. Forrest Shoaf

    Title:
      Assistant Secretary

    

    CBOCS
      DISTRIBUTION, INC.

    

    

    By  
      /s/ N.B. Forrest Shoaf            

    Name:
      N.B. Forrest Shoaf

    Title:
      Assistant Secretary

    

    CBOCS
      PARTNER I, LLC

    

    

    By
/s/
      Michael J. Zylstra             

    Name:
      Michael Zylstra

    Title: Secretary

    

    CBOCS
      PARTNER II, LLC

    

    By
/s/
      Ursula Holmes               

    Name:
      Ursula Holmes

    Title:
      President

    

     

    CBRL
      GROUP, INC. - AMENDMENT NO. 1

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    CBOCS
      PENNSYLVANIA, LLC

    

    By 
      /s/ N.B. Forrest Shoaf           

    Name:
      N.B. Forrest Shoaf

    Title:
      Assistant Secretary

    

    CBOCS
      PROPERTIES, INC.

    

    By
/s/
      Ursula Holmes              

    Name:
      Ursula Holmes

    Title:
      President

    

    CBOCS
      SUPPLY, INC.

    

    By
/s/
      Michael J. Zylstra            

    Name:
      Michael Zylstra

    Title:
      Secretary

    

    CBOCS
      TEXAS LIMITED PARTNERSHIP

    

    By:
      CBOCS
      Partner I, LLC, its general partner

     

    

    By 
      /s/ Michael J. Zylstra           

    Name:
      Michael Zylstra

    Title: Secretary

    

    CBOCS
      WEST, INC.

    

    By 
      /s/ N.B. Forrest Shoaf           

    Name:
      N.B. Forrest Shoaf

    Title:
      Assistant Secretary

    

    

    CRACKER
      BARREL OLD COUNTRY

    STORE,
      INC.

    

    

    By 
      /s/ N.B. Forrest Shoaf            

    Name:
      N.B. Forrest Shoaf

    Title:
      Assistant Secretary

    

    

    ROCKING
      CHAIR, INC.

    

    By 
      /s/ Mindy Riddle                

    Name: 
      Mindy Riddle

    Title:
      President

    

    CBRL
      GROUP, INC. - AMENDMENT NO. 1

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    GUN
      BARREL ROAD LOGAN’S, INC.

    

    By
/s/
      N.B. Forrest Shoaf            

    Name:
      N.B. Forrest Shoaf

    Title:
      Secretary

    
 

    CBRL
      GROUP, INC. - AMENDMENT NO. 1

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