STOCK PURCHASE AGREEMENT

Stock Purchase Agreement

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PROASSURANCE CORP | MOTORS INSURANCE CORPORATION | MEEMIC INSURANCE SERVICES CORPORATION | MEEMIC INSURANCE COMPANY

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Title: STOCK PURCHASE AGREEMENT
Governing Law: Michigan Date: 11/7/2005
Industry: Insurance (Prop. and Casualty) Law Firm: Burr & Forman LLP Sector: Financial

STOCK PURCHASE AGREEMENT, Parties: proassurance corp , motors insurance corporation , meemic insurance services corporation , meemic insurance company

EXHIBIT 2.1: Stock Purchase Agreement dated as of November 4, 2005, among Motors

Insurance Corporation, MEEMIC Insurance Company, MEEMIC Insurance Services

Corporation, MEEMIC Holdings, and ProAssurance Corporation (without Exhibits &

Schedules).

STOCK PURCHASE AGREEMENT

DATED AS OF NOVEMBER 4, 2005

BY AND AMONG

MOTORS INSURANCE CORPORATION

(the "BUYER"),

MEEMIC INSURANCE SERVICES CORPORATION

("MEEMIC SERVICES"),

MEEMIC INSURANCE COMPANY

("MEEMIC INSURANCE," and together with MEEMIC Services, the "COMPANIES"),

MEEMIC HOLDINGS, INC.

("HOLDINGS")

AND

PROASSURANCE CORPORATION

(the "PARENT")

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TABLE OF CONTENTS

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Page

----

ARTICLE I SALE AND PURCHASE.......................................................................................1

SECTION 1.1. PURCHASE BY THE BUYER..................................................................1

SECTION 1.2. EXCLUDED ASSETS AND LIABILITIES........................................................1

SECTION 1.3. CLOSING................................................................................2

SECTION 1.4. PURCHASE PRICE.........................................................................2

ARTICLE II REPRESENTATIONS AND WARRANTIES OF THE COMPANIES, HOLDINGS AND THE PARENT...............................3

SECTION 2.1. ORGANIZATION...........................................................................3

SECTION 2.2. SUBSIDIARIES...........................................................................3

SECTION 2.3. GOOD STANDING..........................................................................3

SECTION 2.4. VALIDITY...............................................................................3

SECTION 2.5. CAPITALIZATION.........................................................................4

SECTION 2.6. OWNERSHIP OF THE SHARES................................................................5

SECTION 2.7. FINANCIAL STATEMENTS...................................................................5

SECTION 2.8. STATUTORY FINANCIAL STATEMENTS.........................................................7

SECTION 2.9. EVENTS SINCE DECEMBER 31, 2004.........................................................8

SECTION 2.10. REGULATORY FILINGS....................................................................10

SECTION 2.11. GUARANTY FUND ASSESSMENTS.............................................................11

SECTION 2.12. CONTRACTS.............................................................................11

SECTION 2.13. NO DEFAULT............................................................................14

SECTION 2.14. RENEWAL RIGHTS........................................................................14

SECTION 2.15. PERSONAL PROPERTY.....................................................................14

SECTION 2.16. REAL PROPERTY.........................................................................14

SECTION 2.17. TITLE; CONDITION OF ASSETS............................................................15

SECTION 2.18. ENVIRONMENTAL.........................................................................15

SECTION 2.19. ACCOUNTS RECEIVABLE...................................................................17

SECTION 2.20. BANK ACCOUNTS.........................................................................17

SECTION 2.21. GUARANTIES............................................................................17

SECTION 2.22. INSURANCE.............................................................................17

SECTION 2.23. EMPLOYEE BENEFITS.....................................................................17

SECTION 2.24. COMPENSATION..........................................................................19

SECTION 2.25. CERTAIN ADVANCES......................................................................20

SECTION 2.26. RELATED PARTIES.......................................................................20

SECTION 2.27. LICENSES AND PERMITS..................................................................20

SECTION 2.28. PROPRIETARY RIGHTS....................................................................21

SECTION 2.29. LABOR.................................................................................21

SECTION 2.30. COMPLIANCE WITH PRACTICES AND LAW.....................................................21

SECTION 2.31. LITIGATION............................................................................21

SECTION 2.32. NO CONFLICT...........................................................................22

SECTION 2.33. CONSENTS..............................................................................22

SECTION 2.34. TAXES.................................................................................22

SECTION 2.35. UNDERLYING DOCUMENTS..................................................................26

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SECTION 2.36. INSURANCE BUSINESS, MARKET CONDUCT AND BAD FAITH CLAIMS...............................27

SECTION 2.37. ASSETS NECESSARY TO BUSINESS..........................................................28

SECTION 2.38. BROKERS OR FINDERS....................................................................28

SECTION 2.39. ADVERSE COMMUNICATIONS................................................................28

SECTION 2.40. AGENTS, BROKERS AND TPA'S.............................................................29

SECTION 2.41. COMPUTER HARDWARE AND SOFTWARE........................................................29

SECTION 2.42. THE FOUNDATION........................................................................29

SECTION 2.43. DISCLOSURE OF MATERIAL FACTS..........................................................31

ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE BUYER..........................................................31

SECTION 3.1. INCORPORATION AND GOOD STANDING OF THE BUYER..........................................32

SECTION 3.2. VALIDITY OF AGREEMENT.................................................................32

SECTION 3.3. NO CONFLICT...........................................................................32

SECTION 3.4. CONSENTS..............................................................................32

SECTION 3.5. BROKERS OR FINDERS....................................................................32

SECTION 3.6. FINANCING.............................................................................32

ARTICLE IV COVENANTS.............................................................................................32

SECTION 4.1. CONDUCT OF BUSINESS...................................................................32

SECTION 4.2. PRESERVATION OF BUSINESS..............................................................33

SECTION 4.3. NEGATIVE COVENANTS....................................................................33

SECTION 4.4. UPDATING OF THE COMPANY DISCLOSURE SCHEDULE...........................................33

SECTION 4.5. ACCESS TO INFORMATION.................................................................34

SECTION 4.6. FULFILLMENT OF CONDITIONS AND COVENANTS...............................................34

SECTION 4.7. PRESS RELEASES........................................................................34

SECTION 4.8. CONSENTS..............................................................................35

SECTION 4.9. CERTAIN NOTIFICATIONS.................................................................35

SECTION 4.10. NO SOLICITATION.......................................................................35

SECTION 4.11. COMPETITIVE ACTIVITIES; NON-SOLICITATION OF EMPLOYEES.................................35

SECTION 4.12. USE OF NAMES..........................................................................37

SECTION 4.13. INVESTMENT PORTFOLIO..................................................................37

SECTION 4.14. GENERAL RELEASE.......................................................................37

SECTION 4.15. INTERCOMPANY ACCOUNTS AND CONTRACT....................................................37

SECTION 4.16. ENVIRONMENTAL AUDIT...................................................................37

SECTION 4.17. ASSUMPTION OF SEVERANCE AGREEMENTS....................................................37

SECTION 4.18. DELIVERY OF BUSINESS RECORDS..........................................................38

SECTION 4.19. FINANCIAL STATEMENTS..................................................................38

SECTION 4.20. RESERVE ADEQUACY AUDIT................................................................38

SECTION 4.21. CONTINUATION OF EMPLOYEE PLANS........................................................39

SECTION 4.22. RELEASE OF HOLDINGS FROM SALES REPRESENTATIVE AGREEMENTS..............................40

ARTICLE V TAX MATTERS............................................................................................41

SECTION 5.1. TAX COOPERATION AND EXCHANGE OF INFORMATION...........................................41

SECTION 5.2. SECTION 338(H)(10) ELECTION...........................................................45

SECTION 5.3. MISCELLANEOUS.........................................................................46

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SECTION 5.4. TRANSFER TAXES........................................................................46

ARTICLE VI CONDITIONS TO OBLIGATIONS OF THE BUYER................................................................46

SECTION 6.1. PERFORMANCE...........................................................................46

SECTION 6.2. REPRESENTATIONS AND WARRANTIES........................................................46

SECTION 6.3. MATERIAL ADVERSE CHANGE...............................................................47

SECTION 6.4. LEGAL OPINION.........................................................................47

SECTION 6.5. CONSENTS..............................................................................47

SECTION 6.6. TERMINATION OF RELATED PARTY AGREEMENTS...............................................47

SECTION 6.7. GENERAL RELEASE.......................................................................47

SECTION 6.8. RESIGNATIONS..........................................................................47

SECTION 6.9. NO LITIGATION.........................................................................47

SECTION 6.10. GOVERNMENTAL APPROVALS................................................................48

SECTION 6.11. ENVIRONMENTAL AUDIT...................................................................48

SECTION 6.12. FOUNDATION INSURANCE COVERAGE.........................................................48

SECTION 6.13. APPROVAL OF PERMITTED DIVIDEND........................................................48

SECTION 6.14. CLOSING CERTIFICATES..................................................................49

ARTICLE VII CONDITIONS TO OBLIGATIONS OF THE COMPANIES, HOLDINGS AND THE PARENT..................................49

SECTION 7.1. PERFORMANCE...........................................................................49

SECTION 7.2. REPRESENTATIONS AND WARRANTIES........................................................49

SECTION 7.3. LEGAL OPINION.........................................................................49

SECTION 7.4. NO LITIGATION.........................................................................49

SECTION 7.5. GOVERNMENTAL APPROVALS................................................................49

SECTION 7.6. CLOSING CERTIFICATES..................................................................50

ARTICLE VIII TERMINATION.........................................................................................50

SECTION 8.1. TERMINATION...........................................................................50

SECTION 8.2. EFFECT OF TERMINATION.................................................................50

ARTICLE IX INDEMNIFICATION.......................................................................................50

SECTION 9.1. INDEMNIFIABLE CLAIMS..................................................................50

SECTION 9.2. NOTICE OF CLAIM.......................................................................51

SECTION 9.3. LIMITATION OF INDEMNIFICATION.........................................................52

SECTION 9.4. RIGHT OF OFFSET.......................................................................53

SECTION 9.5. TAX INDEMNIFICATION...................................................................53

SECTION 9.6. EXCLUSIVE REMEDY......................................................................56

ARTICLE X MISCELLANEOUS..........................................................................................56

SECTION 10.1. NOTICES...............................................................................56

SECTION 10.2. ENTIRE AGREEMENT......................................................................57

SECTION 10.3. WAIVERS AND AMENDMENTS................................................................57

SECTION 10.4. CONFIDENTIALITY.......................................................................57

SECTION 10.5. EXPENSES..............................................................................57

SECTION 10.6. FURTHER ACTIONS.......................................................................57

SECTION 10.7. SURVIVAL..............................................................................57

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SECTION 10.8. GOVERNING LAW; VENUE..................................................................57

SECTION 10.9. ASSIGNMENT............................................................................58

SECTION 10.10. COUNTERPARTS..........................................................................58

SECTION 10.11. THE COMPANY DISCLOSURE SCHEDULE AND EXHIBITS..........................................58

SECTION 10.12. HEADINGS..............................................................................58

SECTION 10.13. KNOWLEDGE.............................................................................58

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SCHEDULES AND EXHIBITS

Exhibits

--------

Exhibit 2.7(b) Monthly Financial Information

Exhibit 4.14 General Release

Exhibit 6.4 Legal Opinion of Counsel to the Companies, Holdings

and the Parent

Exhibit 7.3 Legal Opinion of Counsel to the Buyer

Schedules

---------

Schedule 1.2(a) Excluded Assets

Schedule 1.2(b) Excluded Liabilities

Schedule 2.3 Jurisdiction of Qualification

Schedule 2.8(d) Letters of Credit

Schedule 2.9 Events Since December 31, 2004

Schedule 2.10 Regulatory Filings

Schedule 2.11 Guaranty Fund Assessments

Schedule 2.12 Contracts

Schedule 2.12(b) Reinsurance Agreements

Schedule 2.12(c) Terminated and Modified Contracts

Schedule 2.14 Third Party Insurance Contracts

Schedule 2.15 Personal Property

Schedule 2.16 Real Property

Schedule 2.17 Liens

Schedule 2.19 Accounts Receivable

Schedule 2.21 Guaranties

Schedule 2.22 Insurance

Schedule 2.23 Employee Benefits

Schedule 2.24 Compensation

Schedule 2.25 Certain Advances

Schedule 2.26 Related Parties

Schedule 2.27 Licenses and Permits

Schedule 2.28 Proprietary Rights

Schedule 2.30 Compliance with Practice and Laws

Schedule 2.32 No Conflict

Schedule 2.33 Consents

Schedule 2.34 Taxes

Schedule 2.36 In-Force Insurance Contracts

Schedule 2.39 Adverse Communications

Schedule 2.40 Agents, Brokers and TPA's

Schedule 3.4 Buyer Consents

Schedule 3.5 Buyer Brokers or Finders

Schedule 4.11(b) Employees Subject to No-Hire

Schedule 4.15 Intercompany Accounts and Contracts

Schedule 6.5 Required Consents

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GLOSSARY

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Page

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<S> <C>

Acquisition.......................................................................................................1

Acquisition Proposal.............................................................................................35

Actuary..........................................................................................................38

Actuary's Best Estimate..........................................................................................38

Agreement.........................................................................................................1

Applicable Tax Law...............................................................................................22

Balance Sheets....................................................................................................5

Basket Amount....................................................................................................52

Business..........................................................................................................1

Buyer.............................................................................................................1

Buyer Disclosure Schedule........................................................................................31

Buyer Employee Plan..............................................................................................39

Claimant.........................................................................................................51

Closing...........................................................................................................2

Closing Date......................................................................................................2

Code.............................................................................................................24

Companies.........................................................................................................1

Company...........................................................................................................1

Company Disclosure Schedule.......................................................................................3

Company Employees................................................................................................39

Company-Leased Real Property.....................................................................................14

Company-Owned Real Property......................................................................................14

Confidentiality Agreement........................................................................................34

Continuing Employees.............................................................................................39

Contracts........................................................................................................11

Election.........................................................................................................45

Employee Benefit Plans...........................................................................................18

Environmental Laws...............................................................................................16

ERISA Affiliate..................................................................................................17

ERISA Plans......................................................................................................18

Excluded Assets...................................................................................................1

Final Tax Allocation Amount......................................................................................45

Financial Statements..............................................................................................5

Foundation.......................................................................................................29

Foundation Balance Sheet.........................................................................................29

GAAP..............................................................................................................2

General Release..................................................................................................37

Hazardous Materials..............................................................................................16

Holdings..........................................................................................................1

HSR Act..........................................................................................................48

Included Assets...................................................................................................2

Indemnifiable Claim..............................................................................................51

Indemnifying Parties.............................................................................................51

Insurance Policies...............................................................................................17

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<TABLE>

<S> <C>

Insurance Shares..................................................................................................1

IRS..............................................................................................................18

Licenses and Permits.............................................................................................20

Liens............................................................................................................15

Litigation.......................................................................................................21

Material Adverse Effect..........................................................................................47

MEEMIC Insurance..................................................................................................1

MEEMIC Services...................................................................................................1

Parent............................................................................................................1

Permitted Dividend...............................................................................................33

PIP Claims.......................................................................................................28

Post-Effective Period............................................................................................23

Pre-Effective Period.............................................................................................23

Prior 2005 Dividends..............................................................................................8

Proprietary Rights...............................................................................................21

Purchase Price....................................................................................................2

Qualified Plan...................................................................................................18

Quarter End Report................................................................................................5

Quarterly Balance Sheets..........................................................................................5

Real Property....................................................................................................14

Reinsurance Agreements...........................................................................................13

Related Party Agreements.........................................................................................11

Release and Severance Compensation Agreements....................................................................37

Representative...................................................................................................51

Reserve Deficiency Reimbursement.................................................................................39

Reserve Reviews..................................................................................................38

Restricted Business..............................................................................................35

Restrictive Period...............................................................................................35

Sales Representative Agreements..................................................................................40

SAP..............................................................................................................13

SEC...............................................................................................................6

SEC Filings.......................................................................................................6

Second Actuary...................................................................................................39

Services Shares...................................................................................................1

Shares............................................................................................................1

Statutory Insurance Statements...................................................................................10

Statutory Statements..............................................................................................7

Stock Ownership Plan.............................................................................................40

Straddle Period..................................................................................................23

Success Fee Letters..............................................................................................38

Tangible Book Value of Holdings...................................................................................2

Tax Allocation Agreement.........................................................................................45

Tax Authority....................................................................................................23

Tax Period.......................................................................................................23

Tax Returns......................................................................................................24

Taxes............................................................................................................23

Transaction Agreements............................................................................................3

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vii

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STOCK PURCHASE AGREEMENT

This Stock Purchase Agreement (this "Agreement") is dated as of November 4,

2005 and is by and among Motors Insurance Corporation, a Michigan corporation

(the "Buyer"), MEEMIC Insurance Services Corporation, a Michigan corporation

("MEEMIC Services"), MEEMIC Insurance Company, a Michigan stock insurance

corporation ("MEEMIC Insurance," and together with MEEMIC Services, the

"Companies" and each a "Company"), MEEMIC Holdings, Inc., a Michigan corporation

("Holdings"), and ProAssurance Corporation, a Delaware corporation (the

"Parent").

RECITALS

A. The Companies are engaged in the business of marketing, underwriting

and servicing personal lines insurance whose target market is individuals, and

their families, who are employed by educational institutions in the states of

Michigan and Wisconsin and MEEMIC Insurance also maintains certain insurance

licenses in Ohio and Minnesota (collectively, the "Business").

B. The authorized capital stock of MEEMIC Services consists solely of

60,000 shares of common stock, no par value, of which 100 shares are issued and

outstanding (the "Services Shares"). The authorized capital stock of MEEMIC

Insurance consists solely of 1,500,000 shares of common stock, $1.00 par value

per share, of which 1,500,000 shares are issued and outstanding (the "Insurance

Shares," and together with the Services Shares, the "Shares"). Holdings owns all

of the Shares, and the Parent is the ultimate parent company of Holdings and the

Companies.

C. Pursuant to this Agreement, at the Closing, the Buyer or an affiliate

(as hereinafter defined) of the Buyer will buy from Holdings, and Holdings will

sell to the Buyer, all of the Shares (the "Acquisition"), subject to the terms

and conditions set forth in this Agreement.

NOW THEREFORE, in consideration of the representations, warranties,

covenants and agreements contained herein, and intending to be legally bound

hereby, the parties to this Agreement agree as follows:

ARTICLE I

SALE AND PURCHASE

Section 1.1 Purchase by the Buyer. Subject to the terms and conditions set

forth in this Agreement, the Buyer agrees to purchase from Holdings, and

Holdings agrees to sell to the Buyer, the Shares.

Section 1.2 Excluded Assets and Liabilities.

(a) Anything herein to the contrary notwithstanding, prior to the Closing

Date, Holdings and the Companies shall cause the assets listed on Schedule

1.2(a) (the "Excluded Assets") to be transferred from the ownership of the

Companies.

<PAGE>

(b) All of the obligations and liabilities of the Companies set forth on

Schedule 1.2(b) shall be, prior to the Closing Date, either: (a) satisfied by

Holdings without the use of the funds or assets of the Companies, or (b)

assigned by the applicable Company to Holdings and assumed by Holdings, and

Holdings shall release the Companies from any ongoing liability with respect

thereto.

Section 1.3 Closing.

(a) The closing of the transactions contemplated by this Agreement (the

"Closing") shall take place at the Chicago, Illinois offices of the Buyer's

counsel or via facsimile and/or email on the date that is five (5) Business Days

following the satisfaction or waiver of all conditions set forth in Articles VI

and VII of this Agreement; provided, however, that the Closing shall not occur

prior to January 1, 2006. The date on which the Closing actually occurs shall be

the "Closing Date."

(b) On the Closing Date, the following actions shall be taken:

(i) The Buyer shall pay an amount equal to the Purchase Price (as

defined below) by wire transfer of immediately available funds payable to

Holdings;

(ii) Holdings shall deliver, or cause to be delivered, to the Buyer,

all of the Shares, together with executed consents, terminations and

assignments, including, without limitation, assignments of the certificates

representing the Shares and other instruments of consent and conveyance in

form and substance reasonably satisfactory to the Buyer, sufficient to

convey to the Buyer good and marketable title to the Shares and to preserve

the assets of the Companies other than the Excluded Assets (the "Included

Assets"); and

(iii) Each party shall execute and deliver such other documents or

certificates required under this Agreement or reasonably requested by the

other parties.

Section 1.4. Purchase Price.

(a) The "Purchase Price" shall be Three Hundred Twenty-Seven Million

Dollars ($327,000,000), plus (i) Seventy-Three Million Dollars ($73,000,000)

less the sum of the Prior 2005 Dividends (as defined in Section 2.9(d) hereof)

and the Permitted Dividends (as defined in Section 4.3 hereof) authorized,

declared and paid to Holdings by the Companies, less (ii) the Tangible Book

Value of Holdings. The "Tangible Book Value of Holdings" shall be calculated as

follows: (i) the sum of (a) fixed maturities, cash, accrued investment income

and deferred federal income tax, less (b) accrued expenses and other liabilities

and federal income taxes payable, less (ii) the sum of Prior 2005 Dividends and

Permitted Dividend declared and paid to Holdings by the Companies, less any

dividends declared and paid by Holdings to any affiliate of the Parent. The

Tangible Book Value of Holdings shall be based upon the then most recent

available balance sheet of Holdings, which shall be prepared in accordance with

United States generally accepted accounting principles consistently applied

("GAAP"), subject to any estimated adjustments prior to the Closing Date and

agreed to in good faith jointly in writing by the Parent and the Buyer.

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(b) The Purchase Price shall be allocated between the Services Shares and

the Insurance Shares as mutually determined by the Buyer and the Parent within

fifteen (15) days following the Closing Date.

ARTICLE II

REPRESENTATIONS AND WARRANTIES OF THE COMPANIES,

HOLDINGS AND THE PARENT

The Companies, Holdings and the Parent hereby, jointly and severally, make

the following representations and warranties, each of which is true and correct

on the date hereof, shall remain true and correct to and including the Closing

Date (other than those representations and warranties provided as of a specific

date), shall survive the Closing as herein provided and shall be unaffected by

any investigation heretofore or hereafter made by the Buyer. All representations

and warranties of the Companies, Holdings and the Parent are made subject to the

exceptions specifically disclosed by the Companies, Holdings or the Parent in

the Schedules delivered contemporaneously with the execution of this Agreement,

which shall consist of the aggregate of Schedules specifically set forth in this

Article (the "Company Disclosure Schedule").

Section 2.1. Organization. Each Company is a corporation duly organized,

validly existing and in good standing under the laws of Michigan and has all

requisite corporate power and authority to own, lease and operate its properties

and assets in the manner in which such properties and assets are now owned,

leased and operated and to carry on the business in which it is now engaged.

Prior to the date hereof, Holdings has delivered to the Buyer true and complete

copies of the articles of incorporation and bylaws of each Company, as currently

in effect.

Section 2.2. Subsidiaries. Neither Company has any equity interest in any

entity, other than with respect to portfolio investments made in the ordinary

course of business.

Section 2.3. Good Standing. The Companies are each qualified or licensed to

transact business as a foreign corporation and/or insurer, as the case may be,

in each of the jurisdictions listed on Schedule 2.3, and each Company is in good

standing in each jurisdiction where it is so qualified. There is no other

jurisdiction in which the ownership, leasing, licensing or use of property or

assets by either Company or the conduct of any of their respective businesses

makes such qualification or licensing necessary, except where failure to be so

qualified or license would not have a Material Adverse Effect.

Section 2.4. Validity. Each Company, Holdings and the Parent each has full

power and authority, corporate and otherwise, to execute and deliver this

Agreement and all of the other agreements and documents referred to herein,

executed in connection herewith or contemplated hereby to which the Companies,

Holdings or the Parent is a party (all other agreements and documents referred

to herein, executed in connection herewith or contemplated hereby are herein

referred to as the "Transaction Agreements"), to perform their respective

obligations hereunder and thereunder and to consummate the transactions

contemplated hereby and thereby. This Agreement constitutes, and the Transaction

Agreements, when executed and delivered, will constitute, the valid and binding

obligations of the Companies, Holdings and the Parent, enforceable against the

<PAGE>

Companies, Holdings and the Parent, as applicable, in accordance with their

respective terms, subject to bankruptcy, insolvency or other laws affecting

creditors' rights generally. The execution and delivery of this Agreement by the

Companies, Holdings and the Parent and the consummation of the transactions

contemplated hereby have been duly authorized by the respective boards of

directors of each Company, Holdings and the Parent and, except as set forth on

Schedule 2.33, such execution and delivery of this Agreement and the

consummation of the transactions contemplated hereby do not and will not require

any further corporate approvals.

Section 2.5. Capitalization.

(a) The authorized capital stock of MEEMIC Services consists entirely of

60,000 shares of common stock, no par value, of which only the Service Shares

are issued or outstanding. All Service Shares are validly authorized and issued,

fully paid, nonassessable and free and clear of any pledges, security interests,

liens, encumbrances, restrictions, charges, claims or other charges of any kind,

including, without limitation, any agreements, commitments or other rights of

any character granted to any person, firm, corporation or other entity. There

are no (a) securities convertible into or exchangeable for any of MEEMIC

Services' capital stock or other securities, (b) options, warrants or other

rights to purchase or subscribe to capital stock or other securities of MEEMIC

Services or securities which are convertible into or exchangeable for capital

stock or other securities of MEEMIC Services, or (c) contracts, commitments,

agreements, understandings or arrangements of any kind relating to the issuance,

sale or transfer of any capital stock or other equity securities of MEEMIC

Services, any such convertible or exchangeable securities or any such options,

warrants or other rights.

(b) The authorized capital stock of MEEMIC Insurance consists entirely of

1,500,000 shares of common stock, $1.00 par value per share, of which only the

Insurance Shares are issued or outstanding. All Insurance Shares are validly

authorized and issued, fully paid, nonassessable and free and clear of any

pledges, security interests, liens, encumbrances, restrictions, charges, claims

or other charges of any kind, including, without limitation, any agreements,

commitments or other rights of any character granted to any person, firm,

corporation or other entity. There are no (a) securities convertible into or

exchangeable for any of MEEMIC Insurance capital stock or other securities, (b)

options, warrants or other rights to purchase or subscribe to capital stock or

other securities of MEEMIC Insurance or securities which are convertible into or

exchangeable for capital stock or other securities of MEEMIC Insurance, or (c)

contracts, commitments, agreements, understandings or arrangements of any kind

relating to the issuance, sale or transfer of any capital stock or other equity

securities of MEEMIC Insurance, any such convertible or exchangeable securities

or any such options, warrants or other rights.

<PAGE>

Section 2.6. Ownership of the Shares. Holdings owns all of the legal and

beneficial interests in the Shares, free and clear of any lien, security

interest, pledge, charge, claim, encumbrance or restriction of any kind or

nature, and at the Closing the Buyer shall receive good and marketable title to

the Shares, free and clear of any lien, security interest, pledge, charge,

claim, encumbrance or restriction of any kind or nature.

Section 2.7. Financial Statements.

(a) There have been delivered to the Buyer true, correct and complete

copies of (i) the consolidated audited balance sheets of Holdings and the

Companies as of December 31, 2001 and 2002, and the related consolidated audited

statements of earnings, shareholders' equity and cash flows of Holdings and the

Companies for the periods ended December 31, 2001 and 2002, together with

unqualified reports on all such financial statements by Ernst & Young LLP, and

(ii) the unaudited balance sheets of each Holdings and the Companies as of

December 31, 2003 and 2004 and as of September 30, 2005 (such September 30, 2005

balance sheets being referred to as the "Balance Sheets"), and the related

unaudited statements of earnings, shareholders' equity and cash flows for the

years ended December 31, 2003 and 2004 and for the nine (9)-month period ended

September 30, 2005 (collectively, the "Financial Statements").

(b) (i) As soon as practicable, but in any event within twenty-five (25)

days following the end of each calendar quarter which is completed prior to the

Closing Date, commencing December 31, 2005, Holdings shall cause to be delivered

to the Buyer the "Quarter End Report" prepared by Holdings with respect to such

quarter, which report shall include (x) a balance sheet of each of Holdings and

the Companies as of the end of such quarter prepared in a manner consistent

with, and in a format comparable to, the Balance Sheets ("Quarterly Balance

Sheets") and (y) a statement of earnings and shareholders' equity for each of

the Companies for the year-to-date period ending the end of such quarter,

prepared in a manner consistent with, and in a format comparable to, the

statements of earnings and shareholders' equity referred to in Section 2.7(a)

hereof.

(ii) As soon as practicable, but in any event within ten (10) business

days following the end of each calendar month which is completed prior to the

Closing Date, commencing October 31, 2005, Holdings shall cause to be delivered

to the Buyer monthly financial information of the Companies in the form of

Exhibit 2.7(b) attached hereto.

and (ii) presents (or will present) fairly the financial condition, assets,

liabilities and shareholders' equity of each of Holdings and the Companies as of

its date; each such statement of earnings or shareholders' equity referred to

above presents (or will present) fairly the results of operations of each of

Holdings and the Companies, as the case may be, for the periods indicated; and

each such statement of cash flows referred to above presents fairly the

information purported to be shown therein, except, in each case, interim

unaudited financial statements need not reflect year-end adjustments. The

financial statements referred to in Section 2.7(a) and Section 2.7(b)(i),

including all notes and schedules thereto, have been (or will be) prepared in

accordance with GAAP throughout the periods involved (except, in the case of

unaudited financial statements, for the absence of footnotes and year-end

adjustments) and are (or will be) in accordance with the books and records of

each of Holdings and the Companies, which books and records are correct and

complete in all material respects.

<PAGE>

(d) Each of the Companies maintains accurate books and records reflecting

its assets and liabilities and maintains proper and adequate internal accounting

controls over financial reporting which provide assurance that (i) transactions

are executed with management's authorization; (ii) transactions are recorded as

necessary to permit preparation of the financial statements of each of the

Companies and to maintain accountability for the assets of each of the

Companies; (iii) access to assets is permitted only in accordance with

management's authorization; (iv) the reporting of assets is compared with

existing assets at regular intervals; and (v) accounts, notes and other

receivables and inventory are recorded accurately, and proper and adequate

procedures are implemented to effect the collection thereof on a current and

timely basis. Neither the auditors nor the board of directors or audit committee

of either of the Companies or any of the Companies' corporate parents have been

advised of: (x) any significant deficiencies or material weaknesses in the

design or operation of the internal controls over financial reporting (as such

term is defined in Section 13(b)(2)(B) and Rules 13d-15(d) and 15d-15(d) of the

Securities Exchange Act of 1934) of either of the Companies which could

adversely affect either Company's ability to record, process, summarize and

report financial data, or (y) any fraud, whether or not material, that involves

management or other employees who have a role in the internal controls over

financial reporting of the Companies.

(e) At the dates of the aforementioned balance sheets, neither Company had

(or will have with respect to such balance sheets dated subsequent to the date

hereof) any liabilities or obligations of any nature, whether accrued, absolute,

contingent or otherwise, whether due or to become due, and whether or not

required to be disclosed on a balance sheet prepared in conformity with GAAP,

not fully or properly reflected or reserved against in such balance sheets, or

in any notes thereto, other than liabilities pursuant to contractual obligations

identified in this Agreement or the Company Disclosure Schedule.

(f) Holdings has delivered or made available to the Buyer true, correct

and complete copies of all filings required to be made with the Securities and

Exchange Commission (the "SEC") by or with respect to Holdings since December

31, 2001, including, Holdings' (i) Annual Reports on Form 10-K for the years

ended December 31, 2001 and 2002, as filed with the SEC, (ii) proxy statements

relating to all of Holdings' meetings of stockholders since December 31, 2001,

and (iii) all other reports, statements and registration statements (including

Quarterly Reports on Form 10-Q and Current Reports on Form 8-K) filed by

Holdings with the SEC since December 31, 2001 (collectively, the "SEC Filings").

As of their respective dates, the SEC Filings did not contain any untrue

statement of a material fact or omit to state a material fact required to be

stated therein or necessary to make the statement therein, in light of the

circumstances under which they were made, not misleading.

(g) MEEMIC Insurance has $2 million on deposit with the Michigan Office of

Financial and Insurance Services.

(h) All receivables, bonds, notes, debts, liabilities and other

obligations of any kind or nature owed to the Companies, including agent

<PAGE>

balances, represent arm's length transactions actually made in the ordinary

course of business, are collectible in the ordinary course of business.

Section 2.8. Statutory Financial Statements.

(a) There have been made available to the Buyer true, correct and complete

copies of (i) the statutory financial statements (including the annual reports

filed in each state in which MEEMIC Insurance is admitted or approved) for

MEEMIC Insurance for the years ended December 31, 2002, 2003 and 2004 and (ii)

the statutory financial statements (including quarterly reports filed in each

state in which MEEMIC Insurance is admitted or approved) for MEEMIC Insurance

for the first two quarters in the year 2005, and Holdings will deliver to the

Buyer true, correct and complete copies of such statements for all quarters

which are filed prior to the Closing Date (collectively, the "Statutory

Statements").

(b) The Statutory Statements each present (or will present) fairly, on a

consistent basis and in accordance with the practices prescribed or permitted by

the appropriate regulatory agencies of each state in which the Statutory

Statements have been or may be required to be filed, the financial position of

MEEMIC Insurance at the date of each such statement and the results of MEEMIC

Insurance's operations for each such referenced period. Further, the exhibits

and schedules included in the Statutory Statements are fairly stated in relation

to MEEMIC Insurance and the Statutory Statements comply in all material respects

with applicable regulatory requirements.

liabilities for past and future insurance policy benefits, losses, claims and

expenses under insurance policies were computed in accordance with commonly

accepted actuarial standards consistently applied, were fairly stated in

accordance with sound actuarial principles, were based on actuarial assumptions

that were in accordance with those called for in policy provisions and met the

requirements of applicable insurance laws, and such amounts shown on Statutory

Statements filed after the date hereof and on or prior to the Closing Date will

be so computed and based on the same principles used in prior periods.

(d) MEEMIC Insurance has all necessary letters of credit or other security

devices in all cases where needed, and all such letters of credit and security

devices comply in all material respects with all applicable laws and

regulations, to enable it to take a credit against its liabilities in, or

increase its assets by, the amount of the letter of credit or security device.

Schedule 2.8(d) identifies all letters of credit and other security devices held

or maintained for the benefit of MEEMIC Insurance to support receivable balances

from unauthorized reinsurers.

(e) All reserves and other similar amounts with respect to insurance

written by MEEMIC Insurance as established or reflected in the Statutory

Statements were computed in accordance with commonly accepted actuarial

standards consistently applied and are fairly stated in accordance with sound

actuarial principles that are in accordance with those called for by the

provisions of the related insurance contracts and in the related reinsurance,

coinsurance, and other similar Contracts of MEEMIC Insurance, which meet the

requirements of the insurance laws and regulations of its state of domicile and

of the states in which such insurance contracts were issued or delivered. All

such reserves and related actuarial items held in support of the insurance

<PAGE>

contracts written by MEEMIC Insurance, when considered in light of the assets

held with respect to the reserves and related actuarial items, will make good,

sufficient and adequate provision (under commonly accepted actuarial standards

consistently applied and fairly stated in accordance with sound actuarial

principles) to cover the total amount of all reasonably anticipated matured and

unmatured benefits, dividends, claims, expenses and other liabilities of MEEMIC

Insurance under all insurance contracts under which MEEMIC Insurance has or will

have any liability (including, without limitation, any liability arising under

or as a result of any reinsurance, coinsurance, or other similar contract) on

the respective dates of such Statutory Statements. MEEMIC Insurance owns assets

that qualify as legal reserve assets under applicable insurance laws in an

amount at least equal to all such required reserves and other similar amounts.

Section 2.9. Events Since December 31, 2004. Since December 31, 2004,

except as set forth on Schedule 2.9 or as expressly disclosed in the SEC Filings

or the Statutory Statements, Holdings and the Companies have conducted business

only in the ordinary and usual course and, without limiting the generality of

the foregoing:

(a) Neither Company has sustained any damage, destruction or loss

(including, without limitation, by reason of revocation of license or right to

do business, total or partial termination, suspension, default or modification

of contracts or governmental restriction, regulation, investigation or inquiry),

whether or not covered by insurance, materially adversely affecting the

condition (financial or otherwise), business, net worth, operations, assets,

properties, liabilities, results of operations or future prospects of either

Company or the Business, taken as a whole.

(b) There have been no changes which, individually or in the aggregate,

have had or may reasonably be expected to have a Material Adverse Effect.

contracted for the extension or ability to borrow debt for borrowed money (even

if not yet incurred), or incurred any other obligation or liability (fixed,

contingent or otherwise), except in the ordinary and usual course of its

business and consistent with past practices.

(d) Neither Company has authorized, declared, paid or effected any

dividend, payment or other distribution on or with respect to any of its capital

stock, other than dividends already authorized, declared and paid to Holdings by

the Companies which are disclosed on Schedule 2.9 (the "Prior 2005 Dividends").

(e) Neither Company has purchased, redeemed or otherwise acquired or

committed itself to acquire, directly or indirectly, any of its capital stock.

(f) Neither Company has mortgaged, pledged or otherwise encumbered or

subjected to lien any of its assets or properties, tangible or intangible,

except for liens for current taxes which are not yet due and payable and other

liens arising in the ordinary and usual course of business. Neither Holdings,

the Parent nor any of their affiliates have mortgaged, pledged or otherwise

encumbered or subjected to lien any of its assets or properties used in the

Business, tangible or intangible, except for liens for current taxes which are

<PAGE>

not yet due and payable and other liens arising in the ordinary and usual course

of business. For purposes of this Agreement, "affiliate" shall mean, with

respect to any specified person or entity, any other person or entity that

directly, or indirectly through one or more intermediaries, controls, is

controlled by, or is under common control with, such specified person or entity.

(g) Neither Company, nor, with regard to the assets and properties used in

the Business, Holdings nor the Parent, has sold, leased or otherwise disposed of

any asset or property, tangible or intangible, except in the ordinary and usual

course of business and consistent with past practices, and in each case for a

consideration at least equal to the fair value of such asset or property, nor

has either Company, nor, with respect to the assets and property used in the

Business, Holdings nor Parent, leased or licensed to others (including officers

and directors) any asset or property.

(h) Neither Company, nor, with respect to the Business or the Companies,

Holdings nor the Parent, has paid or prepaid any obligation or liability (fixed,

contingent or otherwise), or discharged or satisfied any lien or encumbrance, or

settled any liability, claim, dispute, proceeding, suit or appeal, pending or

threatened against it or any of its assets or properties, except for current

liabilities included in the Balance Sheets and current liabilities incurred

since that date in the ordinary and usual course of business.

(i) Neither Company has purchased or otherwise acquired any debt or equity

securities of any corporation, partnership, joint venture, firm or other entity

other than investment securities in the ordinary course of business.

(j) Neither Company, nor, with respect to the Business or the Companies,

Holdings nor the Parent, has sold, assigned, transferred or conveyed any

Proprietary Right (as defined below).

(k) Neither Company, nor, with respect to the Business or the Companies,

Holdings nor the Parent, has entered into any transaction or contract, except in

the ordinary and usual course of business, nor has either Company, nor, with

respect to the Business or the Companies, Holdings nor the Parent, waived any

right of substantial value or canceled any material debts or claims or

voluntarily suffered any extraordinary losses.

(l) Neither Company, nor, with respect to the Business or the Companies,

Holdings nor the Parent, has effected any amendment or supplement to, or

extension of, any employee profit-sharing, stock option, stock purchase,

pension, bonus, incentive, retirement, medical reimbursement, life insurance,

deferred compensation, severance or termination agreements or any other employee

benefit plan or arrangement.

(m) Neither Holdings nor either Company has paid to or for the benefit of

any of its directors, officers, employees or shareholders any compensation of

any kind other than wages, salaries, bonuses and benefits at times and rates in

effect prior to December 31, 2004. Those certain Release and Severance

Compensation Agreements, each dated as of June 15, 2001, among the Parent,

Holdings, MEEMIC Insurance and each of Lynn Kalinowski and Christine Schmitt

have not been amended, restated or modified.

<PAGE>

(n) Neither Company has had any change in its directors or executive

management, and there has been no significant change in the number of employees

of either Company managing and processing their respective business.

(o) Neither Company has had any amendment or modification to its

respective charter documents, bylaws or other governing documents.

(p) Neither Company, nor, with respect to the Business or the Companies,

Holdings nor the Parent, has experienced any material problems in employee

relations, including, without limitation, strikes, shutdowns, slowdowns, work

stoppages or resignations of key employees.

(q) Neither Company, nor, with respect to the Business or the Companies,

Holdings nor the Parent, has made any change in accounting methods or principles

used for financial or regulatory reporting purposes, except for changes which

are required for all property and casualty insurers and concurred with by their

independent public accountants, and neither Company has materially changed its

practices with respect to loss reserves.

(r) There has been no material change in the terms of the in-force

insurance contracts written by MEEMIC Insurance or any material change in the

policies or actual processes used in calculating the reserves with respect to

such insurance contracts. There has been no termination, amendment, or execution

by MEEMIC Insurance of any reinsurance, coinsurance, or other similar contract,

as ceding or assuming insurer.

(s) There has been no change in the material business policies, practices

or procedures of the Companies, including those relating to underwriting, form

and rate filings, marketing, the establishment of reserves, investment, claims

handling or adjustment, accounting or any activity which (i) has had the effect

of accelerating the recording and billing of premiums or accounts receivable or

retarding the payment of expenses or establishing reserves in connection with

any accounts or business of MEEMIC Insurance, or (ii) has had the effect of

materially altering, modifying or changing the historic financial or accounting

practices or policies of MEEMIC Insurance, including accruals of and reserves

for tax liabilities.

(t) Neither Company, nor, with respect to the Business or the Companies,

Holdings or the Parent, has entered into any agreement or commitment, whether in

writing or otherwise, to take any action described in this Section.

Section 2.10. Regulatory Filings.

Except as set forth on Schedule 2.10:

(a) Each Company, and, with respect to the Business or the Companies,

Holdings and the Parent, have filed all reports, statements, documents,

registrations (including registrations with applicable state insurance

regulatory authorities as a member of an insurance holding company system),

filings or submissions and any supplements or amendments thereto (the "Statutory

Insurance Statements") required to be filed by any of them since December 31,

2001. The Statutory Insurance Statements were in compliance with applicable law

when filed and no deficiencies have been asserted by any governmental authority

<PAGE>

with respect to the Statutory Insurance Statements. No fine or penalty has been

imposed on either Company or otherwise with respect to the Business by any

insurance regulatory authority, except for incidental penalties of less than

$2,500 per occurrence or $10,000 in the aggregate, which in each case did not

have a material effect on operations or results of operations of the Business.

(b) The Companies, Holdings and the Parent have made available to the

Buyer copies of all examination reports, correspondence, reports of

investigations, inquiries and other materials relating to the Companies or the

Business received from any insurance regulatory authority.

either been resolved or are being resolved to the satisfaction of the applicable

insurance regulatory authority in all material respects, without any enforcement

action being taken against either Company.

(d) There are no examinations by any state insurance department examiners

in progress at either Company or otherwise with respect to the Business, nor, to

the knowledge of either Company, Holdings or the Parent, are any such

examinations pending or scheduled with respect to either Company or with respect

to the Business.

Section 2.11. Guaranty Fund Assessments. Other than as set forth on

Schedule 2.11, neither Company currently participates in, nor is either required

to participate in, any risk sharing plan, pool, joint underwriting association

or similar arrangement pursuant to any insurance laws. The liability of MEEMIC

Insurance Company for guaranty fund assessments with respect to insurance

insolvencies is accounted for as a current expense when notified of the

assessment. MEEMIC Insurance Company does not establish a reserve for guaranty

fund assessments. Schedule 2.11 reflects all notices of guaranty fund

assessments received by MEEMIC Insurance Company since June 30, 2005.

Section 2.12. Contracts.

(a) Schedule 2.12 constitutes a full and complete list of the following

described contracts or agreements to which either Company is a party, by which

either Company is bound in any respect or which relates, directly or indirectly,

to the Business (the "Contracts"):

(i) contracts or agreements relating to selling, servicing,

administering or acting as the obligor with respect to insurance contracts

(other than those entered into by MEEMIC Insurance in the ordinary course

of its business);

(ii) contracts between either Company on the one hand, and Holdings,

the Parent or any of their affiliates on the other hand (the "Related Party

Agreements");

(iii) contracts or agreements for the disposition, by sale, lease or

otherwise, of equipment, goods, materials, research and development,

supplies, studies or capital assets, or for the performance of services, in

any case involving more than $50,000;

<PAGE>

(iv) contracts or agreements for the joint performance of work or

services, and all other joint venture, partnership or other similar

agreements;

(v) management or employment contracts, consulting contracts,

collective bargaining contracts, or other agreements with any labor union,

or termination and severance agreements;

(vi) notes, mortgages, deeds of trust, loan agreements, security

agreements, guarantees, debentures, indentures, credit agreements,

warehousing agreements, repurchase agreements and other evidences of

indebtedness, other than endorsements for collection or deposit in the

ordinary course of business;

(vii) pension, retirement, profit-sharing, deferred compensation,

bonus, incentive, life insurance, hospitalization or other employee benefit

plans or arrangements (including, without limitation, any contracts or

agreements with trustees, insurance companies or others relating to any

such employee benefit plan or arrangement);

(viii) stock option, stock purchase, warrant, repurchase or other

contract or agreement with any employee or officer of Holdings or either

Company;

(ix) contracts or agreements with insurance or title underwriters,

agents (broken down by agent and each agent's volume), brokers or sales

representatives;

(x) contracts or agreements with any director or officer of Holdings,

either Company or with any person or entity affiliated or associated with

such director or officer, or with any affiliate of the Parent;

(xi) powers of attorney or similar authorizations to any third party;

(xii) licenses, sublicenses, royalty agreements, confidentiality,

non-disclosure, non-use or other similar contracts or agreements and any

other contract or agreement relating to technical assistance or Proprietary

Rights;

(xiii) deeds or executory contracts relating to real property owned of

record or beneficially;

(xiv) leases, whether as lessor or lessee, with respect to (A)

individual items of personal property, which are not terminable without

penalty in thirty (30) days and (B) any real property;

(xv) contracts or agreements for the purchase of any equipment,

capital assets or services, other than any such contract or agreement made

in the ordinary course of business involving less than $50,000; provided,

however, that if there are multiple agreements or service orders with one

party or any affiliate of such party exceeding $50,000 in the aggregate,

such information shall be included on Schedule 2.12;

(xvi) except for items listed on Schedule 2.8(d), all letters of

credit and other security devices held or maintained for the benefit of

either Company;

<PAGE>

(xvii) contracts or agreements containing covenants limiting the

freedom of either Company to compete in any line of business or with

respect to any particular product or service or with any person;

(xviii) any material contract or agreement, not of the type covered by

or excluded from any of the other items of this Section, which by its terms

is either (1) not to be completely performed by either Company within

thirty (30) days of the date hereof or (2) is not to terminate, or is not

terminable, without penalty to the applicable Company prior to thirty (30)

days from the date hereof, and which in either case involves more than

$50,000;

(xix) any other contract or agreement which by its terms, is (1)

either not to be completely performed by either Company within twelve (12)

months of the date hereof or (2) is not to terminate, or is not terminable,

without penalty to the applicable Company prior to twelve (12) months from

the date hereof, and which in either case involves more than $50,000; and

(xx) any listing or similar agreement with a person having an

ownership or other interest in real estate or a business operation with

respect to the sale, lease or other disposition of such real estate or

business operation and any agreement with a prospective purchaser, lessee

or other transferee with respect to the purchase, lease or other transfer

of an ownership or other interest in real estate or a business operation.

(b) Schedule 2.12(b) separately sets forth all the contracts relating to

reinsurance, coinsurance or similar arrangements (the "Reinsurance Agreements")

and the effective date and termination date of each Reinsurance Agreement.

MEEMIC Insurance is not in default as to any provision of any Reinsurance

Agreement, and has satisfied all applicable underwriting standards required

thereunder in all material respects. All benefits to MEEMIC Insurance reflected

on the Statutory Statements in respect of the Reinsurance Agreements are

appropriately calculated under the terms of the Reinsurance Agreements. All

amounts owing by MEEMIC Insurance in respect of the Reinsurance Agreements are

properly reflected in the Statutory Statements and in accordance with Statutory

Accounting Principles ("SAP"). The termination of any Reinsurance Agreement will

not result in adverse tax consequences to MEEMIC Insurance. The reinsurance

recoverables, net of related reserves for uncollectible accounts, set forth on

the Statutory Statements are consistent with industry practice and past

experience.

Contract listed on Schedule 2.12(a) or (b) has been modified or terminated other

than in accordance with its terms, and neither Holdings, either Company or the

Parent has received notice of any possible modification or termination of any

such Contract.

(d) Holdings has made available to the Buyer written summaries of all oral

contracts and agreements referred to in this Section 2.12 and has made available

to the Buyer with true and correct copies of all of such written contracts and

agreements. As used in this Agreement, the terms "contract" and "agreement" each

mean and include every binding contract, agreement, commitment, understanding

and promise, whether written or oral.

<PAGE>

Section 2.13. No Default. Holdings, the respective Company, or the Parent,

as applicable, has performed, or is now performing, the obligations of, and is

not in default (and would not by the lapse of time and/or the giving of notice

be in default), nor has received notice of default or notice of termination, in

respect of any Contract. To the knowledge of either Company, Holdings or the

Parent, no other party who is a party to or bound by any of the Contracts is in

default thereunder. Each of the Contracts is a legal, binding and enforceable

obligation of or against Holdings, the applicable Company, or the Parent, as

applicable. Without limiting the generality of the foregoing, to the knowledge

of either Company, Holdings or the Parent, there are no facts or circumstances

which make a default under, or termination or suspension of, any of the

contracts or obligations referred to in this Section likely to occur subsequent

to the date hereof nor has any third party raised any claim, dispute or

controversy with respect to such contracts or obligations.

Section 2.14. Renewal Rights. MEEMIC Insurance and MEEMIC Services

exclusively control all renewal rights in all insurance policies written by or

on behalf of MEEMIC Insurance, subject to claims of agents for compensation. Set

forth on Schedule 2.14 is a list of all contracts and agreements pursuant to

which MEEMIC Services acts as an agent or producer for third party insurers. To

the extent that any such agreement conditions MEEMIC Service's control of

renewal rights on MEEMIC Insurance's satisfaction of certain terms or conditions

under such agreement, MEEMIC Services has complied in all respects with such

terms and conditions.

Section 2.15. Personal Property. Schedule 2.15 contains a list of all of

the tangible personal property used by either Company or otherwise used in or

related to the Business, excluding those assets having an acquisition cost per

item of less than $5,000.

Section 2.16. Real Property.

(a) Schedule 2.16 constitutes a full and complete list of all (i) real

property owned by either Company (the "Company-Owned Real Property"), and (ii)

real property leased, or under option to be leased, to either Company (the

"Company-Leased Real Property," and together with the Company-Owned Real

Property, the "Real Property"). No real property leased by Holdings, the Parent

or any other entity is occupied or used, in whole or in part, by either Company.

(b) Schedule 2.16 sets forth a description of all encumbrances, easements

or rights of way of record granted on or appurtenant to or otherwise affecting

the Company-Owned Real Property. All Company-Leased Real Property is held under

valid and existing leases. The applicable Company enjoys peaceful and

undisturbed possession of all Real Property. All buildings or structures located

on the Real Property and occupied by either Company are of a general type or

nature customarily used for office and commercial purposes in the applicable

geographic area. All of the Company-Owned Real Property has permanent rights of

access to dedicated public highways. There is not (i) any claim of adverse

possession or prescriptive rights involving any of the Company-Owned Real

Property, (ii) any structure located on any Company-Owned Real Property which

encroaches on or over the boundaries of neighboring or adjacent properties or

(iii) any structure of any other party which encroaches on or over the

boundaries of any of such Company-Owned Real Property. Except as set forth on

<PAGE>

Schedule 2.16, none of the Company-Owned Real Property is located in a flood

plain, flood hazard area, wetland or lakeshore erosion area within the meaning

of any law, regulation or ordinance. No public improvements have been commenced,

neither Company, Holdings nor the Parent have received notice that any public

improvements are planned, which in either case may result in special assessments

against or otherwise materially adversely affect any Company-Owned Real

Property. Neither the whole nor any portion of the Company-Owned Real Property

is subject to any judgment, order or decree of any governmental authority to be

sold or is being condemned, expropriated or otherwise taken with or without

payment of compensation therefor, nor, to the knowledge of either Company,

Holdings or the Parent, has any such condemnation, expropriation or taking been

proposed.

Section 2.17. Title; Condition of Assets.

(a) Each Company has good and marketable title to all of its respective

real and tangible personal property, including, without limitation, all such

properties reflected in the Balance Sheet of such Company, as applicable, free

and clear of all mortgages, liens, security interests, claims, pledges,

licenses, equities, options, conditional sales contracts, assessments, levies,

easements, covenants, reservations, restrictions, rights of way, exceptions,

limitations, charges or encumbrances of any nature whatsoever (collectively,

"Liens") except those described on Schedule 2.17 and, in the case of any

Company-Owned Real Property, Liens for taxes not yet due or which are being

contested in good faith by appropriate proceedings (and which have been

sufficiently accrued or reserved against in the applicable Balance Sheet),

municipal and zoning ordinances and easements for public utilities, none of

which interfere with the use of the property as currently utilized. None of each

Company's assets, business or properties is subject to any restrictions with

respect to the transferability thereof; and such Company's title thereto will

not be affected in any way by the transactions contemplated hereby.

(b) All property and assets owned or utilized by each Company are in good

operating condition and repair in all material respects.

Section 2.18. Environmental.

(a) No Hazardous Materials (as defined in paragraph (e) below) have been

used, stored or otherwise handled in any manner by Holdings, either Company, the

Parent or any other affiliate of the Parent on, under, in, from or affecting any

of the Real Property, other than cleaning solvents and similar materials used in

de minimis amounts in the ordinary course of business and in compliance with

Environmental Laws (as defined below). To the knowledge of either Company,

Holdings or the Parent, no current or prior owner or occupant of the Real

Property has used Hazardous Materials on, under, in, from or affecting the Real

Property in violation of any Environmental Laws.

(b) No Hazardous Materials have at any time been released into, stored or

deposited by Holdings, either Company, the Parent or any other affiliate of the

Parent within or on the Real Property, by Holdings, either Company, the Parent

or any other affiliate of the Parent into any water systems on or below the

surface of the Real Property, or by Holdings, either Company, the Parent or any

<PAGE>

other affiliate of the Parent directly or indirectly onto any property or water

system adjoining, adjacent to or abutting the Real Property, or have been used

by Holdings, either Company, the Parent or any other affiliate of the Parent in

the construction of any improvements located on or about the Real Property.

of the Parent has received any notice of any violations (nor do they know of any

existing violations) of any applicable laws governing the use, storage,

treatment, transportation, manufacture, refinement, handling, production or

disposal of Hazardous Materials on, under, in, from or affecting the Real

Property and there are not any legal actions or proceedings commenced or, to the

knowledge of either Company, Holdings or the Parent, threatened by any person

with respect to any such violations.

(d) The Real Property is currently being, and has in the past been,

operated by Holdings, the Companies and the Parent in accordance with, and in

compliance with, all applicable Environmental Laws.

(e) "Hazardous Materials" means any hazardous materials, hazardous wastes,

hazardous constituents, hazardous or toxic substances or petroleum products

(including gasoline, crude oil or any fraction thereof), defined or regulated as

such in or under any Environmental Law, including, without limitation, asbestos,

polychlorinated biphenyls and urea formaldehyde insulation. "Environmental Laws"

are any and all federal, state, local or municipal laws, rules, orders,

regulations, statutes, ordinances, codes, decrees, requirements of any

governmental authority or other requirements of law (including common law)

regulating, relating to or imposing liability or standards of conduct concerning

protection of human health or the environment.

<PAGE>

Section 2.19. Accounts Receivable. All of the accounts receivable of the

Companies shown on the Balance Sheets or thereafter acquired arose and are

collectible in the ordinary and usual course of the Business consistent with

past practice. The values at which accounts receivable are carried reflect the

amounts deemed fully collectible. Except as set forth on Schedule 2.19, all

accounts receivable of the Companies owing by Holdings, the Parent or any other

affiliate of the Parent, or by any director, officer or shareholder of Holdings,

the Companies, the Parent or any other affiliate of the Parent, have been paid

in full prior to the date hereof or shall have been paid in full prior to the

Closing Date.

Section 2.20. Bank Accounts. Holdings has provided to the Buyer a full and

complete list of all the bank accounts, including escrow accounts, of the

Companies, together with the names of persons authorized to draw thereon. Except

as otherwise disclosed to Buyer in writing prior to the date hereof, all cash in

such accounts is held in demand deposits and is not subject to any restriction

or limitation as to withdrawal. All of such accounts are reconciled on a timely

basis.

Section 2.21. Guaranties. Except as set forth on Schedule 2.21, none of the

obligations or liabilities of either Company is guaranteed by any person, firm,

association or corporation. Schedule 2.21 contains a correct and complete list

of all guarantees by, or other contingent obligations of, either Company showing

the parties and amounts involved and the expiration dates thereof.

Section 2.22. Insurance. Schedule 2.22 constitutes a full and complete list

of all policies of insurance to which either Company is a beneficiary or named

insured (the "Insurance Policies"). The applicable Company has in full force and

effect, with all premiums due thereon paid, the Insurance Policies. Schedule

2.22 also sets forth a list of insurance policies to which other entities are a

party or a beneficiary which relate to the properties, assets or operations of

the Companies or the Business and the name of such other parties. No notice of

cancellation or termination has been received with respect to any insurance

policy described in this Section. Except as specifically disclosed on Schedule

2.22, no claims have been asserted by either Company under any of the Insurance

Policies or relating to its properties, assets or operations.

Section 2.23. Employee Benefits.

(a) Neither Company has any ERISA Affiliates other than the entities

identified on Schedule 2.23. For purposes of this Section 2.23, "ERISA

Affiliate" means any trade or business, whether or not incorporated, which is a

member of a controlled group or which is under common control with the Companies

within the meaning of Section 414 of the Code or which is a member of an

"affiliated service group" within the meaning of Section 414 of the Code which

includes the Companies.

(b) Schedule 2.23 sets forth an accurate and complete list of all

compensation, retirement, savings, incentive, fringe or benefit plan, program,

policy, commitments or other similar arrangements under which any employee,

former employee, director or consultant of any of the Companies, or any

beneficiary of any such individual, is covered, is eligible for coverage, has

benefit rights under, or with respect to which Holdings or any ERISA Affiliate

<PAGE>

has or may have any liability or funding obligation ("Employee Benefit Plans").

Those Employee Benefit Plans which are "employee benefit plans" within the

meaning of Section 3(2) of ERISA ("ERISA Plans") are separately identified.

Those Employee Benefit Plans which cover only employees of the Companies are

separately identified. Those Employee Benefit Plans which cover only employees

of the Companies which are non-qualified deferred compensation plans for

purposes of Section 409A of the Code are separately identified. Except as set

forth on Schedule 2.23, neither Company (i) maintains or contributes to any

Employee Benefit Plans or has any current or contingent obligation to contribute

to any Employee Benefit Plan not listed on Schedule 2.23, (ii) has any legally

binding commitment to establish any Employee Benefit Plan or modify any Employee

Benefit Plan currently in effect (except to the extent required by law), and

(iii) except as set forth on Schedule 2.23, has not maintained, established,

sponsored, participated in, contributed to, or been obligated to contribute to

any plan subject to Title IV of ERISA or Section 412 of the Code, and at no time

has either Company or any ERISA Affiliate contributed to or been requested to

contribute to any "multiemployer plan" as such term is defined in ERISA or to

any plan described in Section 413(c) of the Code.

complete copies of all documents embodying each Employee Benefit Plan, (ii) the

most recent annual report (Form Series 5500) filed with respect to each ERISA

Plan for which such filing is required, including all schedules and other

attachments thereto, (iii) the most recent summary plan description, and all

subsequent summaries of material modification, with respect to each ERISA Plan,

(iv) the most recent Internal Revenue Service ("IRS") determination letter with

respect to the qualification of each ERISA Plan which is intended to be a

qualified plan within the meaning of Section 401(a) of the Code ("Qualified

Plan"), (v) all discrimination tests performed during the last three (3) plan

years with respect to each Qualified Plan, and (vi) all administrative service

agreements (including agreements with Professional Employee Organizations),

group annuity contracts, group insurance contracts, an

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