Document:

exv10w1w23

 

EXHIBIT 10.1.23

WARRANT EXCHANGE AGREEMENT

     This WARRANT EXCHANGE AGREEMENT (this “Agreement”) is dated as of August
31, 2004, among SPECIALTY UNDERWRITERS’ ALLIANCE, INC., a Delaware corporation
(the “Company”), FRIEDMAN, BILLINGS, RAMSEY GROUP, INC., a Virginia corporation
(“FBR”), COURTNEY SMITH (“Smith”), PETER JOKIEL (“Jokiel”), WILLIAM LODER
(“Loder”) and GARY FERGUSON (“Ferguson”).

     WHEREAS, (1) the Company has issued to FBR Warrant No. W-1A (the “Existing
FBR Warrant”), dated as of July 23, 2004, which is exercisable by FBR for the
number of shares of Common Stock of the Company that would be purchasable in
the Qualified Equity Offering for $4,000,000, for a Purchase Price of $0.01 per
share, (2) the Company has issued to Smith Warrant No. W-2A (the “Existing
Smith Warrant”), dated as of July 23, 2004, which is exercisable by Smith for
the number of shares of Common Stock of the Company that would be purchasable
in the Qualified Equity Offering for $520,000, for a Purchase Price of $0.01
per share, (3) ) the Company has issued to Jokiel Warrant No. W-3A (the
“Existing Jokiel Warrant”), dated as of July 23, 2004, which is exercisable by
Jokiel for the number of shares of Common Stock of the Company that would be
purchasable in the Qualified Equity Offering for $228,000, for a Purchase Price
of $0.01 per share, (4) the Company has issued to Loder Warrant No. W-4A (the
“Existing Loder Warrant”), dated as of July 23, 2004, which is exercisable by
Loder for the number of shares of Common Stock of the Company that would be
purchasable in the Qualified Equity Offering for $90,000, for a Purchase Price
of $0.01 per share, and (5) the Company has issued to Ferguson Warrant No. W-5A
(the “Existing Ferguson Warrant”), dated as of July 23, 2004, which is
exercisable by Ferguson for the number of shares of Common Stock of the Company
that would be purchasable in the Qualified Equity Offering for $62,000, for a
Purchase Price of $0.01 per share (the Existing FBR Warrant, the Existing Smith
Warrant, the Existing Jokiel Warrant, the Existing Loder Warrant and the
Existing Ferguson Warrant being referred to collectively herein as the
“Existing Warrants”).

     WHEREAS, each of the Company, FBR, Smith, Jokiel, Loder and Ferguson have
agreed that it is in their respective best interests to amend the economics of
the Existing Warrants, by having the Existing Warrants exchanged for new
warrants (the “New Warrants”), with the terms described in this Agreement.

     NOW THEREFORE, in consideration of the above premises and for other good
and valuable consideration, the receipt and adequacy of which are hereby
acknowledged, the parties hereto hereby agree as follows:

     1. Defined Terms. Capitalized Terms used and not otherwise defined
herein shall have the respective meanings assigned to such terms in the
Existing Warrants.

     2. Warrant Exchange Terms.

     (a) FBR shall surrender to the Company the Existing FBR Warrant and the
Company shall deliver to FBR two New Warrants, (i) Warrant No. W-1B exercisable
for the number of shares of Common Stock of the Company that would be
purchasable in the Qualified Equity

 

 

Offering for $4,500,000, for a Purchase Price per share equal to the price per
share at which such Common Stock is sold to the public, minus all underwriting
discounts and commissions, and (ii) Warrant No. W-1C exercisable for the number
of shares of Common Stock of the Company that would be purchasable in the
Qualified Equity Offering for $1,000,000, for a Purchase Price of $0.01 per
share.

     (b) Smith shall surrender to the Company the Existing Smith Warrant and
the Company shall deliver to Smith two New Warrants, (i) Warrant No. W-2B
exercisable for the number of shares of Common Stock of the Company that would
be purchasable in the Qualified Equity Offering for $480,000, for a Purchase
Price per share equal to the price per share at which such Common Stock is sold
to the public, minus all underwriting discounts and commissions, and (ii)
Warrant No. W-2C exercisable for the number of shares of Common Stock of the
Company that would be purchasable in the Qualified Equity Offering for
$100,000, for a Purchase Price of $0.01 per share.

     (c) Jokiel shall surrender to the Company the Existing Jokiel Warrant and
the Company shall deliver to Jokiel a New Warrant, Warrant No. W-3B exercisable
for the number of shares of Common Stock of the Company that would be
purchasable in the Qualified Equity Offering for $342,000, for a Purchase Price
per share equal to the price per share at which such Common Stock is sold to
the public, minus all underwriting discounts and commissions.

     (d) Loder shall surrender to the Company the Existing Loder Warrant and
the Company shall deliver to Loder a New Warrant, Warrant No. W-4B exercisable
for the number of shares of Common Stock of the Company that would be
purchasable in the Qualified Equity Offering for $135,000, for a Purchase Price
per share equal to the price per share at which such Common Stock is sold to
the public, minus all underwriting discounts and commissions.

     (e) Ferguson shall surrender to the Company the Existing Ferguson Warrant
and the Company shall deliver to Ferguson a New Warrant, Warrant No. W-5B
exercisable for the number of shares of Common Stock of the Company that would
be purchasable in the Qualified Equity Offering for $93,000, for a Purchase
Price per share equal to the price per share at which such Common Stock is sold
to the public, minus all underwriting discounts and commissions.

     (f) The Company shall cancel the Existing Warrants upon receipt thereof.

     3. Successors and Assigns. This Agreement shall be binding upon
the parties hereto and their respective successors and assigns.

     4. Section Headings. The various headings and sub-headings of this
Agreement are inserted for convenience only and shall not affect the meaning or
interpretation of this Agreement or any provision hereof or thereof.

     5. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE SUBSTANTIVE LAWS OF THE COMMONWEALTH OF
VIRGINIA AND THE OBLIGATIONS, RIGHTS AND REMEDIES

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OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.

     6. Counterparts. This Agreement may be executed in one or more
counterparts and by the different parties hereto on separate counterparts,
including without limitation counterparts transmitted by facsimile, each of
which, when so executed, shall be deemed to be an original and such
counterparts, together, shall constitute one and the same agreement.

[Signature Page To Follow]

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IN WITNESS WHEREOF, each undersigned party has caused this Agreement to be duly
executed by one of its officers thereunto duly authorized as of the date and
year first above written.

	 	 	 	 	 
	 	 	SPECIALTY UNDERWRITERS’ ALLIANCE, INC.
	 
	 	 	 	 
	

	 	By:
	 	/s/ Courtney Smith
	

	 	 	 	
 
	

	 	 	 	Name: Courtney Smith
	

	 	 	 	Title: President
	 
	 	 	 	 
	 	 	FRIEDMAN, BILLINGS, RAMSEY GROUP, INC.
	 
	 	 	 	 
	

	 	By:	 	/s/ Edward M. Wheeler
	

	 	 	 	
 
	

	 	 	 	Name: Edward M. Wheeler
	

	 	 	 	Title: MD
	 
	 	 	 	 
	

	 	 	 	/s/ Courtney Smith
	 	 	
 
	

	 	 	 	Courtney Smith
	 
	 	 	 	 
	

	 	 	 	/s/ Peter Jokiel
	 	 	
 
	

	 	 	 	Peter Jokiel
	 
	 	 	 	 
	

	 	 	 	/s/ William Loder
	 	 	
 
	

	 	 	 	William Loder
	 
	 	 	 	 
	

	 	 	 	/s/ Gary Ferguson
	 	 	
 
	

	 	 	 	Gary Ferguson

- 4 -exv10w1w24

 

Exhibit 10.1.24

September 7, 2004

Confidential

Courtney C. Smith

Chief Executive Officer

Specialty Underwriters’ Alliance

8585 Stemmons Fwy.

Dallas, TX 75247

Re: Engagement Letter – Second Amendment

Dear Courtney:

     In connection with the Engagement Letter dated November 24, 2003 entered
into by and between Specialty Underwriters’ Alliance, Inc. (collectively,
“you,” “your,” or the “Company”) and MMC Securities Corp (“MMCSC,” “we,” “us”
or “our”) and the first amendment thereto dated June 24, 2004 (collectively,
the “Engagement Letter”), the parties have agreed to a second amendment to
Section 5. Fees. This letter agreement (the “Second Amendment”) amends that
section of the Engagement Letter.

     Specifically, the first sentence of Section 5. Fees. shall be deleted and
replaced with the following sentence:

     “In consideration of the services provided or to be provided by us
pursuant to Section 1, you hereby agree to pay a success fee to MMCSC in cash,
equal to $1 million, payable at the earlier of (i) November 30, 2004 or (ii)
the closing of the purchase and sale pursuant to the Offering (as defined in
that certain engagement letter dated September 5, 2003, by and among the
Company and Friedman, Billings, Ramsey & Co., Inc. (the “FBR Engagement
Letter”)) (the “Closing).”

     All other terms and conditions set forth in the Engagement Letter remain
unchanged, and in full force and effect.

 

 

     If the foregoing is in accordance with your understanding, please indicate
your agreement to the above amendment to the Engagement Letter.

Yours very truly,

MMC SECURITIES CORP.

	 	 	 
	By:

	 	/s/ Christopher M. McGhee
	

	 	

	Name:

	 	Christopher M. McGhee
	Title:

	 	Managing Director

The foregoing is in accordance with our understanding and is agreed by us this
   day of September, 2004.

SPECIALTY UNDERWRITERS’ ALLIANCE, INC.

	 	 	 
	By:

	 	/s/ Courtney C. Smith
	

	 	

	Name:

	 	Courtney C. Smith
	Title:

	 	CEOexv10w1w27

 

EXHIBIT 10.1.27

INFORMATION FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED PURSUANT TO
RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED, IS OMITTED AND IS NOTED
WITH **. A COPY OF THIS AGREEMENT, INCLUDING ALL INFORMATION FOR WHICH
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED HAS BEEN FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.

August 16, 2004

Mr. Chris Michaels

Chief Executive Officer

American Team Managers Insurance Services, Inc.

1030 North Armando Street

Anaheim, CA 92806

Dear Chris:

     This letter agreement (the “Agreement”) dated as of August 16th, 2004, by
and between American Team Managers Insurance Services, Inc., a California C
Corporation (“ATM”), and Specialty Underwriters’ Alliance, Inc., a Delaware
corporation (“SUA”), confirms the parties’ understanding as to certain terms
and conditions relating to the issuance by SUA to ATM of shares of Class B
Common Stock, par value $.01 per share (the “Class B Stock”).

     SUA and ATM are parties to that certain Securities Purchase Agreement,
dated May 1, 2004 (the “Purchase Agreement”), as amended and restated, whereby
ATM agreed to purchase such number of shares of Class B Stock (the “Shares”) as
determined herein for an aggregate purchase price of $**. Such purchase shall
be contingent on the closing of an Initial Public Offering by SUA. For
purposes hereof, an “Initial Public Offering” shall mean a public equity
offering of the capital stock of SUA in which the proceeds to SUA are not less
than $100,000,000.00, before deduction of underwriting commissions, placement
agent fees or similar charges, and other offering expenses. Capitalized terms
not otherwise defined herein shall have the meanings set forth in the Purchase
Agreement.

	**	 	This information is confidential and has been omitted and separately filed
with the Securities and Exchange Commission

     After the closing of a Public Offering, the price of each share of Class B
Stock shall equal the fair market value of one share of SUA’s common stock, par
value $.01 per share (the

 

 

“Common Stock”), on such date, to be calculated as follows: (i) if the Common
Stock is listed or admitted to trading on a national securities exchange, the
last reported sale price of the Common Stock, regular way, on such day or in
case no sale takes place on such day, the average of the reported closing bid
and asked prices of the Common Stock, regular way, on such day, in either case
as reported on such exchange; or (ii) if the Common Stock is not listed or
admitted to trading on any national securities exchange, but is listed on the
NASDAQ

 

 

National Market, the closing sale price of the Common Stock on such day, or in
case no sale is publicly reported for such day, the average of the
representative closing bid and asked quotations for the Common Stock, as
reported on NASDAQ; or (iii) if the Common Stock is not listed or admitted to
trading on the NASDAQ National Market, the average of the bid and asked prices
for the Common Stock as furnished for such day by NASDAQ, or, if not furnished
by NASDAQ, by any New York Stock Exchange, Inc. member firm regularly making a
market in the Common Stock and selected for such purpose by the SUA’s board of
directors.

     Notwithstanding the terms of the Purchase Agreement, the parties hereby
agree that ATM shall pay the Purchase Price in installments as set forth in the
Promissory Note (the “Note”), the terms of which are incorporated herein by
reference. Upon payment by ATM of each installment of the Purchase Price, as
set forth in the Note, SUA shall deliver to ATM such number of shares of Class
B Stock as can be purchased for the amount of such payment, as calculated
above. The date of each payment and delivery of shares of Class B Stock shall
be defined as a “Closing Date.”

     This Agreement may not be amended or changed without the written consent
of SUA and shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns.

	 	 	 	 	 	 	 
	 	 	 	 	Sincerely,
	 
	 	 	 	 	 	 
	 	 	 	 	SPECIALTY UNDERWRITERS’
ALLIANCE, INC.
	 
	 	 	 	 	 	 
	

	 	 	 	By:
	 	/S/ Courtney C. Smith
	

	 	 	 	 	 	
 
	

	 	 	 	 	 	Name: Courtney C. Smith
	

	 	 	 	 	 	Title:   President & CEO
	 
	 	 	 	 	 	 
	ACCEPTED AND AGREED:	 	 	 	 
	 
	 	 	 	 	 	 
	AMERICAN TEAM MANAGERS

INSURANCE SERVICES, INC.	 	 	 	 
	 
	 	 	 	 	 	 
	By:

	 	/S/ Chris Michaels	 	 	 	 
	

	 	
 	 	 	 	 
	

	 	Name: Chris Michaels	 	 	 	 
	

	 	Title:   Chief
Executive Officer

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