Document:

exv10w1w41

 

EXHIBIT
10.1.41

REGISTRATION RIGHTS AGREEMENT

     THIS REGISTRATION RIGHTS AGREEMENT (the “Agreement”) is made and entered
into as of November ___, 2004 by and between SPECIALTY UNDERWRITERS’ ALLIANCE,
INC., a Delaware corporation (the “Company”) and FRIEDMAN, BILLINGS, RAMSEY
GROUP, INC., a Virginia corporation (the “Investor”).

RECITALS

     WHEREAS, the Company desires to issue and sell to the Investor, and the
Investor desires to purchase from the Company, [___] shares of common
stock, par value $0.01 per share, of the Company (the “Common Stock”), pursuant
to a Stock Purchase Agreement dated as of November ___, 2004 between the Company
and the Investor (the “Purchase Agreement”).

     WHEREAS, it is a condition precedent to the obligation of the Investor to
close the transactions contemplated by the Purchase Agreement that the Company
execute and deliver to the Investor this Agreement.

AGREEMENT

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

     1. Definitions. (a) As used in this Agreement, the following
terms shall have the meanings:

     (i) “Affiliate,” of any specified Person means any other Person who
directly, or indirectly through one or more intermediaries, is in control
of, is controlled by, or is under common control with, such specified
Person. For purposes of this definition, control of a Person means the
power, directly or indirectly, to direct or cause the direction of the
management and policies of such Person whether by contract, securities
ownership or otherwise; and the terms “controlling” and “controlled” have
the respective meanings correlative to the foregoing.

     (ii) “Agreement” means this Registration Rights Agreement, as the
same may be amended, supplemented or modified from time to time in
accordance with the terms hereof.

     (iii) “Commission” means the Securities and Exchange Commission.

     (iv) “Exchange Act” means the Securities Exchange Act of 1934, as
amended, and the rules and regulations of the Commission thereunder, or
any similar successor statute.

 

 

     (v) “Investors” means the Investor and any permitted transferee or
assignee of Registrable Securities who agrees to become bound by all of
the terms and provisions of this Agreement and the Purchase Agreement.

     (vi) “Person” means any individual, partnership, corporation,
limited liability company, joint stock company, association, trust,
unincorporated organization, or a government agency or political
subdivision thereof.

     (vii) “Prospectus” means the prospectus (including any preliminary
prospectus and/or any final prospectus filed pursuant to Rule 424(b)
under the Securities Act and any prospectus that discloses information
previously omitted from a prospectus filed as part of an effective
registration statement in reliance on Rule 430A under the Securities Act)
included in the Registration Statements, as amended or supplemented by
any prospectus supplement with respect to the terms of the offering of
any portion of the Registrable Securities covered by the Registration
Statements and by all other amendments and supplements to such
prospectus, including all material incorporated by reference in such
prospectus and all documents filed after the date of such prospectus by
the Company under the Exchange Act and incorporated by reference therein.

     (viii) “Public Offering” means an offer registered with the
Commission and the appropriate state securities commissions by the
Company of its Common Stock and made pursuant to the Securities Act.

     (ix) “Registrable Securities” means the shares of Common Stock
purchased pursuant to the Purchase Agreement; provided,
however, a share of Common Stock shall cease to be a Registrable
Security for purposes of this Agreement when it no longer is a Restricted
Security.

     (x) “Registration Expenses” means any and all expenses incident to
performance of or compliance with this Agreement, including without
limitation: (i) all Commission, stock exchange, NASD registration,
listing and filing fees, (ii) all fees and expenses incurred in
connection with compliance with federal or state securities or blue sky
laws (including any registration, listing and filing fees and reasonable
fees and disbursements of counsel in connection with blue sky
qualification of any of the Registrable Shares and the preparation of a
Blue Sky Memorandum and compliance with the rules of the NASD), (iii) all
expenses of printing, delivering and distributing any Registration
Statement, any Prospectus, any amendments or supplements thereto, any
certificates and other documents relating to the performance of and
compliance with this Agreement, (iv) all fees and expenses incurred in
connection with the listing of any of the Registrable Securities on any
securities exchange or The New York Stock Exchange pursuant to Section 2
hereof, (v) the fees and disbursements of counsel for the Company and of
the independent public accountants (including, without limitation, the
expenses of any special audit and “cold comfort” letters required by or
incident to such performance) of the Company and (vi) any fees and
disbursements customarily paid by issuers or sellers of securities
(including the fees and expenses of any experts retained by the Company
in connection with any Registration Statement), provided,
however, that Registration Expenses shall exclude brokers’
commissions and transfer taxes, if any,

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relating to the sale or disposition of
Registrable Securities by an Investor and the fees and expenses of any
counsel to the Investor.

     (xi) “Registration Statement” means any registration statement of
the Company, which covers any of the Registrable Securities pursuant to
the provisions of this Agreement, including the Prospectus, amendments
and supplements to such registration statement or Prospectus, including
pre- and post-effective amendments, all exhibits thereto, and all
material incorporated by reference or deemed to be incorporated by
reference, if any, in such registration statement.

     (xii) “Restricted Security” means any share of Common Stock except
any that (i) have been registered pursuant to an effective registration
statement under the Securities Act and sold in a manner contemplated by
the prospectus included in such registration statement, (ii) have been
transferred in compliance with the resale provisions of Rule 144 under
the Securities Act (or any successor provision thereto) or is
transferable pursuant to paragraph (k) of Rule 144 under the Securities
Act (or any successor provision thereto), or (iii) otherwise has been
transferred and a new share of Common Stock not subject to transfer
restrictions under the Securities Act has been delivered by or on behalf
of the Company.

     (xiii) “Securities Act” means the Securities Act of 1933, as
amended, and the rules and regulations of the Commission thereunder, or
any similar successor statute.

     (xiv) “Termination Date” has the meaning specified in Section
2(a)(i).

     (b) All capitalized terms used and not defined herein have the respective
meaning assigned to them in the Purchase Agreement.

     2. Registration. (a) Filing and Effectiveness of Registration
Statement.

     (i) As soon as reasonably practicable after the 120-day anniversary
of the effective date of the Company’s initial public offering (the
“IPO”), and in no event later than the 150-day anniversary of the
effective date of the IPO, the Company shall prepare and file with the
Commission (the “Filing Deadline”) a Registration Statement on Form S-1
under the Securities Act relating to the offer and sale of the
Registrable Securities by the Investor (including a plan of distribution
section specified by the Investor) and will promptly take all actions
that are necessary or advisable in connection with such registration,
including without limitation providing written responses to any comments
made by the Commission regarding such registration statement and filing
any necessary pre-effective amendments and all necessary exhibits
thereto, and will use its good faith best efforts to cause such
Registration Statement to be declared effective by the Commission as soon
as possible after the initial filing and in any event within 60 days
after the date of the initial filing. The Company will, subject to
customary blackout periods as necessary, use its commercially reasonable
efforts to keep such Registration Statement effective for the period
beginning on the date such Registration Statement becomes effective (the
“Effectiveness Date”) and terminating on the earlier of (x) the second anniversary of the Effectiveness Date and (y) the date upon
which all shares then

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held by the Investor may be resold without
restriction of any kind and without need for such Registration Statement
to be effective (such earliest date being the “Termination Date”).

     (ii) If the Company shall furnish to the Investor a certificate
signed by the Chief Executive Officer or the President of the Company
stating that in the good faith judgment of the Board of Directors it
would be seriously detrimental to the Company or its stockholders for a
registration statement to be filed at such time, then the Company’s
obligation to use its good faith best efforts to register, qualify or
comply under this Section 2(a) shall be deferred for a period not to
exceed 90 days from the date of the Filing Deadline, provided,
however, that the Company may not utilize this right more than
once.

     (b) Piggyback Registration Rights. (i) At any time after the
120th day anniversary of the IPO but prior to the Termination Date, if the
Company proposes to register any of its Common Stock or any other shares of
common stock of the Company under the Securities Act (other than a registration
on Form S-8 or S-4 or any successor or similar forms), whether or not for sale
for its own account, it will each such time, give prompt written notice at
least 20 calendar days prior to the anticipated filing date of the registration
statement relating to such registration to the Investor, which notice shall set
forth such Investor’s rights under this Section 2(b) and shall offer the
Investor the opportunity to include in such registration statement such number
of Registrable Securities as the Investor may request. Upon the written
request of the Investor made within 15 calendar days of the post office date
stamp on the notice from the Company (which request shall specify the number of
Registrable Securities intended to be disposed of by such Investor), the
Company will use its good faith best efforts to effect the registration under
the Securities Act of all Registrable Securities that the Company has been so
requested to register by the Investor, to the extent requisite to permit the
disposition of the Registrable Securities to be so registered; provided,
however, that (A) if such registration involves a Public Offering, the
Investors must sell their Registrable Securities to the underwriters on the
same terms and conditions as apply to the Company and (B) if, at any time after
giving written notice of its intention to register any Registrable Securities
pursuant to this Section 2(b) and prior to the effective date of the
registration statement filed in connection with such registration, the Company
shall determine for any reason not to register such Registrable Securities, the
Company shall give written notice to the Investor and, thereupon, shall be
relieved of its obligation to register any Registrable Securities in connection
with such registration.

     (ii) If a registration pursuant to this Section 2(b) involves a
Public Offering and the managing underwriter thereof advises the Company
that, in its view, the number of shares of Common Stock, if any, or
other shares of Common Stock that the Company and the Investor intend to
include in such registration exceeds the largest number of shares of
Common Stock (including any other shares of Common Stock or warrants of
the Company) that can be sold without having an adverse effect on such
Public Offering (the “Maximum Offering Size”), the Company will include
in such registration only that number of shares of Common Stock which
does not exceed the Maximum Offering Size, in the following order of
priorities: (1) first, all securities the Company proposes to sell for
its own account, (2) second, up to the full number of securities proposed
to be registered for the account of the holders of securities entitled to
inclusion of their

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securities in the Registration Statement by reason of
demand registration rights, and (3) third, the securities requested to be
registered by other holders of securities entitled to participate in the
registration, drawn from them pro-rata based on the number of shares each
has requested to be included in such registration and the Investor.

     (iii) If as a result of the proration provisions of this Section
2(b), the Investor is not entitled to include all such Registrable
Securities in such registration, such Investor may elect to withdraw its
request to include any Registrable Securities in such registration.

     (iv) If the Investor decides not to include all of its Registrable
Securities in any Registration Statement thereafter filed by the Company,
the Investor shall nevertheless continue to have the right to include any
Registrable Securities in any subsequent Registration Statement as may be
filed by the Company with respect to offerings of its securities.

     (v) Notwithstanding the foregoing, the Company shall have no
obligations under this Section 2(b) hereof at any time that such
Registrable Securities are the subject of an effective registration
statement.

     (vi) As between the Company and the Investor, the Company shall pay
all Registration Expenses in connection with the registration of the
Registrable Securities pursuant to this Agreement; provided,
however, that the Company shall have no obligation to pay any
legal or other costs for the Investor for such registration.

     3. Obligations of the Company. In connection with the registration
of the Registrable Securities, the Company shall use its good faith best
efforts to:

     (a) Prepare and file with the SEC a Registration Statement, within the
relevant time period specified in Section 2, on the appropriate form under the
1933 Act (as shall be selected by the Company), which Registration Statement
(i) shall be available for the sale of the Registrable Securities by the
Investor, (ii) shall comply as to form in all material respects with the
requirements of the applicable form and include or incorporate by reference all
financial statements required by the SEC to be filed therewith or incorporated
by reference therein, and (iii) shall comply in all respects with the
requirements of Regulation S-T under the 1933 Act, and use commercially
reasonable efforts to cause such Registration Statement to become effective and
remain effective in accordance with Section 2 of this Agreement.

     (b) Prepare and file with the SEC such amendments and post-effective
amendments to each Registration Statement as may be necessary under applicable
law to keep such Registration Statement effective for the applicable period;
and cause each Prospectus to be supplemented by any required prospectus
supplement, and as so supplemented to be filed pursuant to Rule 424 (or an
similar provision then in force) under the 1933 Act and comply with the
provisions of the 1933 Act, the 1934 Act and the rules and regulations
thereunder applicable to them with respect to the disposition of all securities
covered by each Registration Statement during the applicable period in accordance with the intended method or
methods of distribution by the Investor thereof (including sales by any
broker-dealer);

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     (c) During such time as a Registration Statement is effective or such
shorter period that will terminate when all the Registrable Securities have
been sold (the “Registration Period”), comply with the provisions of the
Securities Act with respect to the Registrable Securities of the Company
covered by the Registration Statement until such time as all of such
Registrable Securities have been disposed of in accordance with the intended
methods of disposition by the Investor as set forth in the Prospectus forming
part of the Registration Statement;

     (d) (i) Notify the Investor at least twenty (20) calendar days prior to
filing, that a Registration Statement with respect to the Registrable
Securities is being filed and advising the Investor that the distribution of
Registrable Securities shall be made in accordance with the method stated in
the Agreement;

     (ii) Prior to the filing with the Commission of any Registration
Statement (including any amendments thereto) and the distribution or
delivery of any Prospectus (including any supplements thereto), provide
draft copies thereof (including a copy of the accountant’s consent letter
to be included in the filing) to the Investor and reflect in such
documents all such comments as the Investor reasonably may propose; and

     (iii) Furnish to the Investor (A) promptly after the same is prepared
and publicly distributed, filed with the Commission, or received by the
Company, one copy of the Registration Statement, each Prospectus, and
each amendment or supplement thereto, and (B) such number of copies of
the Prospectus and all amendments and supplements thereto and such other
documents, as the Investor may reasonably request in order to facilitate
the disposition of the Registrable Securities owned by the Investor;

     (e) (i) Register or qualify the Registrable Securities covered by a
Registration Statement under such securities or “blue sky” laws of all
jurisdictions requiring blue sky registration or qualification,

     (ii) Prepare and file in such jurisdictions such amendments
(including post-effective amendments) and supplements to such
registrations and qualifications as may be necessary to maintain the
effectiveness thereof at all times during the Registration Period,

     (iii) Take all such other lawful actions as may be necessary to
maintain such registrations and qualifications in effect at all times
during the Registration Period, and

     (iv) Take all such other lawful actions reasonably necessary or
advisable to qualify the Registrable Securities for sale in such
jurisdictions; provided, however, that the Company shall
not be required in connection with any of its obligations under this
Section 3(e) to (A) qualify to do business in any jurisdiction where it
would not otherwise be required to qualify but for this Section 3(e), (B)
subject itself to general taxation in any such jurisdiction or (C) file a
general consent to service of process in any such jurisdiction;

     (f) As promptly as practicable after becoming aware of such event, notify
the Investor of the occurrence of any event, as a result of which the
Prospectus included in a

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Registration Statement, as then in effect, includes an
untrue statement of a material fact or omits to state a material fact required
to be stated therein or necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading, and promptly
prepare an amendment to a Registration Statement and supplement to the
Prospectus to correct such untrue statement or omission, and deliver a number
of copies of such supplement and amendment to the Investor as the Investor may
reasonably request;

     (g) Notify the Investor (or, in the event of an underwritten offering, the
managing underwriters) of the issuance by the Commission of any stop order or
other suspension of the effectiveness of a Registration Statement on the date
of receipt of any such stop order or other suspension, and take all lawful
action to effect the withdrawal, recession or removal of such stop order or
other suspension;

     (h) Cause all the Registrable Securities covered by a Registration
Statement to be listed on a principal national securities exchange, or included
in an inter-dealer quotation system of a registered national securities
association, on or in which securities of the same class or series issued by
the Company are then listed or included;

     (i) Maintain a transfer agent and registrar, which may be a single entity,
for the Registrable Securities not later than the effective date of the first
Registration Statement;

     (j) Cooperate with the Investor to facilitate the timely preparation and
delivery of certificates for the Registrable Securities to be offered pursuant
to a Registration Statement and enable such certificates for the Registrable
Securities to be in such denominations or amounts, as the case may be, as the
Investor reasonably may request and registered in such names as the Investor
may request; and, within three business days after a registration statement
which includes Registrable Securities is declared effective by the Commission,
deliver and cause legal counsel selected by the Company to deliver to the
transfer agent for the Registrable Securities (with copies to the Investor an
appropriate instruction and, to the extent necessary, an opinion of such
counsel);

     (k) Take all such other lawful actions reasonably necessary to expedite
and facilitate the disposition by the Investor of its Registrable Securities in
accordance with the intended methods therefor provided in the Prospectus which
are customary under the circumstances;

     4. Obligations of the Investor. In connection with the
registration of the Registrable Securities, the Investor shall have the
following obligations:

     (a) It shall be a condition precedent to the obligations of the Company to
complete the registration pursuant to this Agreement with respect to the
Registrable Securities that such Investor shall furnish to the Company such
information regarding itself, the Registrable Securities held by it and the
intended method of disposition of the Registrable Securities held by it as
shall be reasonably required to effect the registration of such Registrable
Securities and shall execute such documents in connection with such
registration as the Company may reasonably request. At least ten business days prior to the first anticipated filing
date of a Registration Statement, the Company shall notify the Investor and its
counsel, whether in-house or otherwise

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(“Counsel”) of the information the Company requires from the Investor (the “Requested Information”). If at least
four business days prior to the anticipated filing date the Company has not
received the Requested Information from the Investor or its Counsel, then the
Company shall send the Investor and its Counsel a reminder of such information
request. If at least two business days prior to the anticipated filing date
the Company still has not received the Requested Information from the Investor
or its Counsel, then the Company may file the Registration Statement without
including Registrable Securities of the Investor. However, promptly upon
receipt of the Requested Information, and at the Investor’s expense, the
Company shall file such amendment(s) to the Registration Statement as may be
necessary to include therein the Registrable Securities.

     (b) The Investor by its acceptance of the Registrable Securities agrees to
cooperate with the Company in connection with the preparation and filing of
such Registration Statement hereunder, unless the Investor has notified the
Company in writing of its election to exclude all of its Registrable Securities
from such Registration Statement; the Company shall, on its part, ensure that
Item 507 of Regulation S-K of the Securities Act (regarding information on the
selling security holders) be complied with in connection with its preparation
and filing of such Registration Statement hereunder;

     (c) As promptly as practicable after becoming aware of such event, notify
the Company of the occurrence of any event, as a result of which the Prospectus
included in a Registration Statement, as then in effect, includes an untrue
statement of a material fact or omits to state a material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading; and

     (d) The Investor agrees that, upon receipt of any notice from the Company
of the occurrence of any event of the kind described in Section 3(f) or 3(g),
it shall immediately discontinue its disposition of Registrable Securities
pursuant to a Registration Statement covering such Registrable Securities until
the Investor’s receipt of the copies of the supplemented or amended Prospectus
contemplated by Section 3(f) and, if so directed by the Company, the Investor
shall deliver to the Company (at the expense of the Company) or destroy (and
deliver to the Company a certificate of destruction) all copies in the
Investor’s possession, of the Prospectus covering such Registrable Securities
current at the time of receipt of such notice.

     5. Expenses of Registration. All Registration Expenses shall be
paid by the Company.

     6. Indemnification and Contribution. (a) The Company shall
indemnify and hold harmless the Investor, its officers and directors, and each
person who controls such Investor within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act (each such person being
sometimes hereinafter referred to as an “Indemnified Person”) from and against
any losses, claims, damages or liabilities, joint or several, to which such
Indemnified Person may become subject under the Securities Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon an untrue statement or alleged untrue statement of a material fact
contained in any Registration Statement or an omission or alleged omission to
state therein a material fact required to be stated therein or

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necessary to make the statements therein, in light of the circumstance in which they were
made, not misleading, or arise out of or are based upon an untrue statement or
alleged untrue statement of a material fact contained in any Prospectus or an
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; and the Company
hereby agrees to reimburse such Indemnified Person for all reasonable legal and
other expenses incurred by them in connection with investigating or defending
any such action or claim as and when such expenses are incurred;
provided, however, that the Company shall not be liable to any
such Indemnified Person in any such case to the extent that any such loss,
claim, damage or liability arises out of or is based upon (i) an untrue
statement or alleged untrue statement made in, or an omission or alleged
omission from, such Registration Statement or Prospectus in reliance upon and
in conformity with written information furnished to the Company by or on behalf
of such Indemnified Person expressly for use therein or (ii) in the case of the
occurrence of an event of the type specified in Section 3(f), the use by the
Indemnified Person of an outdated or defective Prospectus after the Company has
provided to such Indemnified Person written notice that such Prospectus is
outdated or defective.

     (b) Indemnification by the Investor. The Investor agrees, as a
consequence of the inclusion of any of its Registrable Securities in a
Registration Statement which facilitates the disposition of Registrable
Securities, to (i) indemnify and hold harmless the Company, its directors
(including any person who, with his or her consent, is named in the
Registration Statement as a director nominee of the Company), its officers and
each person, if any, who controls the Company within the meaning of either
Section 15 of the Securities Act or Section 20 of the Exchange Act, against any
losses, claims, damages or liabilities to which the Company or such other
persons may become subject, under the Securities Act or otherwise, insofar as
such losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon an untrue statement or alleged untrue statement
of a material fact contained in such Registration Statement or Prospectus or
arise out of or are based upon the omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein (in light of the circumstances under which they were made,
in the case of the Prospectus), not misleading, in each case to the extent, but
only to the extent, that such untrue statement or alleged untrue statement or
omission or alleged omission was made in reliance upon and in conformity with
written information furnished to the Company by or behalf of the Investor
expressly for use therein; provided, however, that Investor shall
not be liable under this Section 6(b) for any amount in excess of the gross
proceeds paid to such Investor or underwriter in respect of shares sold by it,
and (ii) reimburse the Company for any legal or other expenses incurred by the
Company in connection with investigating or defending any such action or claim
as such expenses are incurred.

     (c) Notice of Claims, etc. Promptly after receipt by a party
seeking indemnification pursuant to this Section 6 (an “Indemnified Party”) of
written notice of any investigation, claim, proceeding or other action in
respect of which indemnification is being sought (each, a “Claim”), the
Indemnified Party promptly shall notify the party against whom indemnification
pursuant to this Section 6 is being sought (the “Indemnifying Party”) of the
commencement thereof; but the omission to so notify the Indemnifying Party
shall not relieve it from any liability that it otherwise may have to the
Indemnified Party, except to the extent that the Indemnifying Party is
materially prejudiced and forfeits substantive rights and defenses by

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reason of such failure. In connection with any Claim as to which both the Indemnifying
Party and the Indemnified Party are parties, the Indemnifying Party shall be
entitled to assume the defense thereof. Notwithstanding the assumption of the
defense of any Claim by the Indemnifying Party, the Indemnified Party shall
have the right to employ separate legal counsel and to participate in the
defense of such Claim, and the Indemnifying Party shall bear the reasonable
fees, out-of-pocket costs and expenses of such separate legal counsel to the
Indemnified Party if (and only if): (i) the Indemnifying Party shall have
agreed to pay such fees, costs and expenses, (ii) the Indemnified Party and the
Indemnifying Party shall reasonably have concluded that representation of the
Indemnified Party by the Indemnifying Party by the same legal counsel would not
be appropriate due to actual or, as reasonably determined by legal counsel to
the Indemnified Party, potentially differing interests between such parties in
the conduct of the defense of such Claim, or if there may be legal defenses
available to the Indemnified Party that are in addition to or disparate from
those available to the Indemnifying Party, or (iii) the Indemnifying Party
shall have failed to employ legal counsel reasonably satisfactory to the
Indemnified Party within a reasonable period of time after notice of the
commencement of such Claim. If the Indemnified Party employs separate legal
counsel in circumstances other than as described in clauses (i), (ii) or (iii)
above, the fees, costs and expenses of such legal counsel shall be borne
exclusively by the Indemnified Party. Except as provided above, the
Indemnifying Party shall not, in connection with any Claim in the same
jurisdiction, be liable for the fees and expenses of more than one firm of
counsel for the Indemnified Party (together with appropriate local counsel).
The Indemnified Party shall not, without the prior written consent of the
Indemnifying Party (which consent shall not unreasonably be withheld), settle
or compromise any Claim or consent to the entry of any judgment that does not
include an unconditional release of the Indemnifying Party from all liabilities
with respect to such Claim or judgment.

     (d) Contribution. If the indemnification provided for in this
Section 6 is unavailable to or insufficient to hold harmless an Indemnified
Person under subsection (a) or (b) above in respect of any losses, claims,
damages or liabilities (or actions in respect thereof) referred to therein,
then each Indemnifying Party shall contribute to the amount paid or payable by
such Indemnified Party as a result of such losses, claims, damages or
liabilities (or actions in respect thereof) in such proportion as is
appropriate to reflect the relative fault of the Indemnifying Party and the
Indemnified Party in connection with the statements or omissions which resulted
in such losses, claims, damages or liabilities (or actions in respect thereof),
as well as any other relevant equitable considerations. The relative fault of
such Indemnifying Party and Indemnified Party shall be determined by reference
to, among other things, whether the untrue or alleged untrue statement of a
material fact or omission or alleged omission to state a material fact relates
to information supplied by such Indemnifying Party or by such Indemnified
Party, and the parties’ relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission. The parties
hereto agree that it would not be just and equitable if contribution pursuant
to this Section 6(d) were determined by pro rata allocation or by any other
method of allocation which does not take account of the equitable
considerations referred to in this Section 6(d). The amount paid or payable by
an Indemnified Party as a result of the losses, claims, damages or liabilities
(or actions in respect thereof) referred to above shall be deemed to include any legal or other
fees or expenses reasonably incurred by such Indemnified Party in connection
with investigating or defending any such action or claim. No person guilty of
fraudulent misrepresentation (within the meaning of

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Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. The obligations of the Investor
in this Section 6(d) to contribute shall be several in proportions to the
percentage of Registrable Securities registered or underwritten, as the case
may be, by them and not joint.

     (e) Notwithstanding any other provision of this Section 6, in no event
shall the Investor be required to undertake liability to any person under this
Section 6 for any amounts in excess of the dollar amount of the gross proceeds
to be received by the Investor from the sale of its Registrable Securities
pursuant to any Registration Statement under which such Registrable Securities
are to be registered under the Securities Act.

     (f) The obligations of the Company under this Section 6 shall be in
addition to any liability, which the Company may otherwise have to any
Indemnified Person and the obligations of any Indemnified Person under this
Section 6 shall be in addition to any liability, which such Indemnified Person
may otherwise have to the Company. The remedies provided in this Section 6 are
not exclusive and shall not limit any rights or remedies, which may otherwise
be available to an indemnified party at law or in equity.

     7. Compliance with Exchange Act Reporting. The Company agrees to
file with the Commission in a timely manner all reports and other documents
required to be filed by the Company pursuant to Section 13 or 15(d) under the
Exchange Act.

     8. Assignment. The rights to have the Company register Registrable
Securities pursuant to this Agreement may be assigned or transferred only with
the prior written consent of the Company, and any such assignment or transfer
without such consent shall be void and of no effect. Notwithstanding the
foregoing, such consent of the Company shall not be required with respect to
any assignment or transfer of Registrable Securities to an Affiliate of
Investor, including for this purpose if Investor is an investment company, any
fund or account advised by Investor’s investment adviser or any Affiliate
thereof. In the event of any such permitted assignment or transfer by the
Investor to any permitted transferee of all or any portion of such Registrable
Securities such transfer will be allowed only if: (a) the Investor agrees in
writing with the transferee or assignee to assign such rights, and a copy of
such agreement is furnished to the Company within a reasonable time after such
assignment, (b) the Company is, within a reasonable time after such transfer or
assignment, furnished with written notice of (i) the name and address of such
transferee or assignee and (ii) the securities with respect to which such
registration rights are being transferred or assigned, (c) immediately
following such transfer or assignment, the securities so transferred or
assigned to the transferee or assignee constitute Restricted Securities, (d) at
or before the time the Company received the written notice contemplated by
clause (b) of this sentence the transferee or assignee agrees in writing with
the Company to be bound by all of the provisions contained herein, and (e) the
Company is furnished with an opinion of counsel, which counsel and opinion
shall be reasonably satisfactory to the Company, to the effect that the
permitted assignment would be in compliance with the Securities Act and State
Acts.

     9. Amendment and Waiver. Any provision of this Agreement may be
amended and the observance thereof may be waived (either generally or in a
particular instance and either retroactively or prospectively), only with the
written consent of the Company and the

-11-

 

Investor. Any amendment or waiver effected in accordance with this Section 9 shall be binding upon the Investor
and the Company.

     10. Miscellaneous. (a) If the Company (i) fails to file any
Registration Statement pursuant to Section 2(a) within the agreed time frame,
(ii) fails to cause any Registration Statement pursuant to Section 2(a) to
become effective within 60 days after it is filed, (iii) fails to keep any
Registration Statement pursuant to Section 2(a) current and effective for the
agreed period of time, or (iv) fails to provide the agreed piggy-back rights
pursuant to Section 2(b), then the Investor will be entitled as a remedy for
any and all concurrent breaches of this Agreement related to one or more
concurrent such failures, to liquidated and agreed upon damages payable on each
Registrable Share for each day of any such delay or failure, as the case may
be. Such liquidated damages shall be payable quarterly in arrears, provided
that multiple penalties shall not accrue for multiple defaults that overlap, in
arrears within ten (10) days of the end of each fiscal quarter and shall accrue
at a daily rate of (i) 10% of the initial purchase price per Registrable Share
per annum during the first 90 days of the delay or failure and (ii) the rate
will escalate by an additional 5% of the initial purchase price per Registrable
Share per annum for each successive three month period after the first 90 days
of the delay or failure.

     (b) A person or entity shall be deemed to be a holder of Registrable
Securities whenever such person or entity owns of record such Registrable
Securities. If the Company receives conflicting instructions, notices or
elections from two or more persons or entities with respect to the same
Registrable Securities, the Company shall act upon the basis of instructions,
notice or election received from the registered owner of such Registrable
Securities.

     (c) If after the date hereof and prior to the Commission declaring a
Registration Statement to be filed pursuant to Section 2(a) effective under the
Securities Act, the Company grants to any Person any registration rights with
respect to any Company securities which are more favorable to such other Person
than those provided in this Agreement, then the Company forthwith shall grant
(by means of an amendment to this Agreement or otherwise) identical
registration rights to the Investor hereunder.

     (d) Except as may be otherwise provided herein, any notice or other
communication or delivery required or permitted hereunder shall be in writing
and shall be delivered personally or sent by certified mail, postage prepaid,
by a nationally recognized overnight courier service or by facsimile as
follows, and shall be deemed given when actually received.

     If to the Company, to:

Specialty Underwriters’ Alliance, Inc.

8585 Stemmons Freeway

Suite 200, South Tower

Dallas, Texas 75247

Attn: Secretary

Fax: 214-689-1871

-12-

 

     If to the Investor, to:

Friedman, Billings, Ramsey Group, Inc.

1001 19th Street North

Arlington, Virginia 22209

Attn: General Counsel

Fax: 703-469-1140

     The Company or the Investor may change the foregoing address by notice
given pursuant to this Section 10(d).

     (e) Failure of any party to exercise any right or remedy under this
Agreement or otherwise, or delay by a party in exercising such right or remedy,
shall not operate as a waiver thereof.

     (f) This Agreement shall be governed by and interpreted in accordance with
the laws of the State of Delaware.

     (g) The remedies provided in this Agreement are cumulative and not
exclusive of any remedies provided by law. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction to
be invalid, illegal, void or unenforceable, the remainder of the terms,
provisions, covenants and restrictions set forth herein shall remain in full
force and effect and shall in no way be affected, impaired or invalidated, and
the parties hereto shall use good faith best efforts to find and employ an
alternative means to achieve the same or substantially the same result as that
contemplated by such term, provision, covenant or restriction. It is hereby
stipulated and declared to be the intention of the parties that they would have
executed the remaining terms, provisions, covenants and restrictions without
including any of such that may be hereafter declared invalid, illegal, void or
unenforceable.

     (h) The Company shall not enter into any agreement with respect to its
securities that is inconsistent with the rights granted to the holders of
Registrable Securities in this Agreement or otherwise conflicts with the
provisions hereof. Without limiting the generality of the foregoing, the
Company shall not grant to any person after the date hereof the right to
request it to register any of its securities under the Securities Act unless
the rights so granted are pari passu to the prior rights of the holders of Registrable Securities
set forth herein, and are not otherwise in conflict or inconsistent with the
provisions of this Agreement. The restrictions on the Company’s rights to
grant registration rights under this paragraph shall terminate on the date all
Registrable Securities have been registered pursuant to a Registration
Statement that has been declared effective by the Commission.

     (i) This Agreement and the Purchase Agreement constitute the entire
agreement among the parties hereto with respect to the subject matter hereof.
There are no restrictions, promises, warranties or undertakings, other than
those set forth or referred to herein.

-13-

 

This Agreement and the Purchase
Agreement supersede all prior agreements and undertakings among the parties
hereto with respect to the subject matter hereof.

     (j) Subject to the requirements of Section 8 hereof, this Agreement shall
inure to the benefit of and be binding upon the successors and assigns of each
of the parties hereto.

     (k) All pronouns and any variations thereof refer to the masculine,
feminine or neuter, singular or plural, as the context may require.

     (l) The headings in this Agreement are for convenience of reference only
and shall not limit or otherwise affect the meaning thereof.

     (m) From and after the date of this Agreement, upon the request of the
Investor or the Company, the Company and the Investor shall execute and deliver
such instruments, documents or other writings as may be reasonably necessary or
desirable to confirm and carry out and to effectuate fully the intent and
purposes of this Agreement.

     (n) This Agreement may be signed in any number of counterparts, each of
which shall be an original, with the same effect as if the signatures thereto
and hereto were upon the same instrument. Signatures delivered by facsimile
shall be deemed to be original signatures.

[Signature Page Follows]

-14-

 

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

	 	 	 	 	 
	 	COMPANY:

SPECIALTY UNDERWRITERS’ ALLIANCE, INC.,

a Delaware corporation

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

	 	 	 	 	 
	 	INVESTOR:

FRIEDMAN, BILLINGS, RAMSEY GROUP, INC.,

a Virginia corporation

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Titleexv10w1w42

 

STOCK PURCHASE AGREEMENT

     THIS STOCK PURCHASE AGREEMENT (this “Agreement”) is made and entered into
as of [___], 2004 (the “Closing Date”), by and between SPECIALTY
UNDERWRITERS’ ALLIANCE, INC., a Delaware corporation (the “Company”) and
FRIEDMAN, BILLINGS, RAMSEY GROUP, INC., a Virginia corporation (the
“Investor”).

RECITALS

     WHEREAS, the Company desires to issue and sell to the Investor, and the
Investor desires to purchase from the Company, in a private transaction that is
exempt from registration under Section 4(2) of the Securities Act of 1933, as
amended (the “Securities Act”) and Regulation D thereunder, [___] shares of
common stock on the terms and conditions set forth in this Agreement (the
"Private Transaction”).

     WHEREAS, the Company has delivered to the Investor certain information
about the Company and its business and about the Private Transaction.

     WHEREAS, concurrently with the Private Transaction, the Company intends to
make an initial public offering (the “Public Offering”) of [___] shares
of its common stock pursuant to a registration statement filed with the
Securities and Exchange Commission (the “Commission”) on Form S-1 (No.
333-117722) and a related preliminary prospectus for the registration of the
common stock under the Securities Act and the rules and regulations thereunder
(the “Securities Act Regulations”).

AGREEMENT

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

ARTICLE 1 

DEFINITIONS

     The following defined terms used herein and not otherwise defined shall
have the meaning set forth below:

     Acquisition shall mean the acquisition of all of the issued and
outstanding capital stock of PIC from its shareholders pursuant to the stock
purchase agreement dated as of March 22, 2004 (as amended through the date
hereof, the “PIC Agreement”).

     Closing shall have the meaning set forth in Article 3
hereof.

     Closing Date shall have the meaning set forth in the first
paragraph hereof.

     Closing Time shall have the meaning set forth in Article 3
hereof.

     Code shall have the meaning set forth in Section 4.1(ee).

1

 

     Commission shall have the meaning set forth in the recitals.

     Common Stock shall mean the common stock, $0.01 par value, of the
Company.

     Company Indemnitees shall have the meaning set forth in Section
8.14.

     Covered Entities shall have the meaning set forth in Section
4.1(m).

     ERISA shall have the meaning set forth in Section 4.1(ee).

     Exchange Act shall have the meaning set forth in Section
4.1(i).

     Intangibles shall have the meaning set forth in Section
4.1(y).

     Investor Indemnities shall have the meaning set forth in Section
8.14.

     Material Adverse Effect shall have the meaning set forth in
Section 4.1(c).

     PIC shall mean Potomac Insurance Company of Illinois.

     Private Transaction shall have the meaning set forth in the
recitals.

     Prospectus shall mean that certain prospectus, dated [November ___],
2004, relating to the concurrent public offering of Common Stock of the
Company, together with amendments thereto.

     Public Offering shall have the meaning set forth in the recitals.

     Registration Rights Agreement shall have the meaning set forth in
Section 6.1(d).

     Registration Statement shall mean the registration statement, as
amended at the time it became effective (including all information deemed
(whether by incorporation by reference or otherwise) to be a part of the
registration statement at the time it became effective pursuant to Rule 430A(b)
of the Securities Act Regulations), filed with the Commission on Form S-1 (No.
333-117722) in connection with the Public Offering; except that, if the Company
files a post-effective amendment to such registration statement which becomes
effective prior to the Closing Time, “Registration Statement” shall refer to
such registration statement as so amended. Any registration statement filed
pursuant to Rule 462(b) of the Securities Act Regulations is hereinafter called
the “Rule 462(b) Registration Statement,” and after such filing the term
“Registration Statement” shall include the 462(b) Registration Statement.

     Securities Act shall have the meaning set forth in the recitals.

     Securities Act Regulations shall have the meaning set forth in the
recitals.

     Shares shall have the meaning set forth in Article 2.

     State Acts shall have the meaning set forth in Section
7.2(a).

     Transfer shall have the meaning set forth in Section 7.2(a).

2

 

     Underwriting Agreement shall mean the Underwriting Agreement
entered into in connection with the Public Offering, dated as of [___],
2004, by and between the Company and Friedman, Billings, Ramsey & Co., Inc.,
William Blair & Company, L.L.C. and Cochran, Caronia & Co., as representatives
of the several Underwriters (as defined therein).

ARTICLE 2 

AGREEMENT TO PURCHASE AND SELL STOCK

     Upon the basis of the warranties and representations and subject to the
other terms and conditions set forth herein, the Company agrees to sell to the
Investor at the Closing Time, and the Investor agrees to purchase from the
Company at the Closing Time, [___] shares of Common Stock (the “Shares”),
at the purchase price per share of $[___].

ARTICLE 3 

PAYMENT AND DELIVERY; CLOSING

     The purchase and sale of the Shares shall take place at the offices of
Sidley Austin Brown & Wood LLP, on [___], 2004 (the “Closing”). At the
Closing, the Company shall deliver to the Investor a certificate representing
the Shares and the Investor shall deliver the purchase price of $[___]
([___) in immediately available funds. The time at which such
payment and delivery are actually made is hereinafter sometimes called the
"Closing Time.”

ARTICLE 4 

REPRESENTATIONS AND WARRANTIES OF THE COMPANY

     4.1.          The Company hereby represents and warrants to the Investor that the
statements in the following paragraphs of this Article 4 are all true and
correct as of the date hereof and as of the Closing Time:

               (a)     the Company has an authorized capitalization, and will have
immediately after the Closing Time for the purchase and sale of the Shares, an
actual capitalization, as set forth in the Prospectus; the outstanding shares
of capital stock of the Company have been duly and validly authorized and
issued and are fully paid and non-assessable and free of pre-emptive rights;
except as disclosed in the Prospectus, there are no outstanding (i) securities
or obligations of the Company convertible into or exchangeable or redeemable
for any capital stock or other equity interests of the Company, (ii) warrants,
rights or options to subscribe for or purchase from the Company any such
capital stock or other equity interests or any such convertible or exchangeable
securities or obligations, or (iii) obligations of the Company to issue any
shares of capital stock or other equity interests, any such convertible or
exchangeable or redeemable securities or obligation, or any such warrants,
rights or options;

               (b)     the Company has been duly incorporated or organized and is validly
existing as a corporation in good standing under the laws of its jurisdiction
of incorporation with full corporate power and authority to own, lease or
operate its properties and to conduct its business (including its operations
upon consummation of the Acquisition) as described in the
Prospectus and to execute and deliver this Agreement and to consummate the
transactions contemplated herein;

3

 

               (c)     each of the Company and PIC is duly qualified or licensed and is in
good standing in each jurisdiction in which the nature or conduct of its
business requires such qualification or license and in which the failure,
individually or in the aggregate, to be so qualified or licensed could
reasonably be expected to have a material adverse effect on the assets,
business, operations, earnings, properties or financial condition, of the
Company and, after the completion of the Acquisition, PIC, taken as a whole (a
"Material Adverse Effect”) (it being understood that PIC is not qualified in
those jurisdictions so disclosed in the Prospectus and that PIC is expected to
be in good standing in Texas shortly following the Closing Time); except as
disclosed in the Prospectus, following the Closing Time, PIC shall not be
prohibited or restricted, directly or indirectly, from paying dividends to the
Company, or from making any other distribution with respect to PIC’s capital
stock or from repaying to the Company any amounts that may from time to time
become due under any loans or advances to PIC from the Company, or from
transferring any of PIC’s property or assets to the Company; other than PIC
following the completion of the Acquisition, the Company does not own, directly
or indirectly, any capital stock or other equity securities of any other
corporation or any ownership interest in any partnership, joint venture or
other association;

               (d)     each of the Company and PIC is in compliance with all federal, state,
local or foreign laws, regulations, rules, decrees, judgments and orders
applicable to it, including those relating to transactions with affiliates,
except where any failures to be in compliance would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect;

               (e)     the Company is not in breach of or in default under (nor has any event
occurred which with notice, lapse of time, or both could constitute a breach
of, or default under) its charter or bylaws, or in the performance or
observance of any obligation, agreement, covenant or condition contained in any
license, indenture, mortgage, deed of trust, loan or credit agreement or other
agreement or instrument to which the Company is a party or by which it or its
properties is bound, except for such breaches or defaults that, individually or
in the aggregate, would not reasonably be expected to have a Material Adverse
Effect;

               (f)     PIC is not in breach of, or in default under (nor has any event
occurred which with notice, lapse of time, or both would constitute a breach
of, or default under), its charter or bylaws or in the performance or
observance of any obligation, agreement, covenant or condition contained in any
indenture, mortgage, deed of trust, bank loan or credit agreement or other
agreement or instrument to which it is a party or by which it is bound, except
for such breaches or defaults which would not reasonably be expected to have a
Material Adverse Effect; and the Acquisition will not conflict with, or result
in any breach of or constitute a default under (nor constitute any event which
with notice, lapse of time, or both would constitute a breach of, or default
under), (1) any provision of the charter or bylaws of PIC, or (2) any provision
of any license, indenture, mortgage, deed of trust, bank loan or credit
agreement or other agreement or instrument to which PIC is a party or by which
the properties of PIC may be bound or affected, or under any federal, state,
local or foreign law, regulation or rule or any decree, judgment, permit or
order applicable to PIC, except in the case of this clause (2) for such
breaches or defaults which have been validly waived or would not reasonably be
expected to have a Material Adverse Effect;

               (g)     the execution, delivery and performance of this Agreement, the
issuance and sale of the Shares and the consummation of the transactions
contemplated herein and in the Prospectus, including the Acquisition, will not
(A) conflict with, or result in any breach of, or

4

 

constitute a default under
(nor constitute any event which with notice, lapse of time, or both could
constitute a breach of, or default under), (i) any provision of the charter or
bylaws of the Company, or (ii) any provision of any license, indenture,
mortgage, deed of trust, loan or credit agreement or other agreement or
instrument to which the Company is a party or by which it or its properties may
be bound or affected, or under any federal, state, local or foreign law,
regulation or rule or any decree, judgment or order applicable to the Company,
except in the case of this clause (ii) for such breaches or defaults that,
individually or in the aggregate, would not reasonably be expected to have a
Material Adverse Effect; or (B) result in the creation or imposition of any
lien, charge, claim or encumbrance upon any property or asset of the Company;

               (h)     this Agreement has been duly authorized, executed and delivered by the
Company and is a legal, valid and binding agreement of the Company enforceable
in accordance with its terms, except as may be limited by bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting creditors’
rights generally, and by general principles of equity, and except to the extent
that the indemnification provisions hereof may be limited by federal or state
securities laws and public policy considerations in respect thereof;

               (i)     no approval, authorization, consent or order of or filing with any
federal, state, local or foreign governmental or regulatory commission, board,
body, authority or agency is required in connection with the Company’s
execution, delivery and performance of this Agreement, its consummation of the
transactions contemplated herein, or the Company’s issuance, sale and delivery
of the Shares, other than (i) such as have been obtained, or will have been
obtained at the Closing Time, under the Securities Act and the Securities
Exchange Act of 1934, as amended (the “Exchange Act”), (ii) such approvals as
have been obtained in connection with the approval of the quotation of the
Shares on the Nasdaq National Market and (iii) any necessary qualification
under the securities or blue sky laws of the various jurisdictions in which the
Common Stock is being offered;

               (j)     except as described in the Prospectus, each of the Company and PIC has
filed (or will file within the required time period after the Closing Time, if
applicable) all applications for approval, authority or licensing from all
applicable regulatory agencies as are necessary to conduct its proposed
business, subject to capitalization, immediately following the Closing Time as
described in the Prospectus and has not received any notice of denial of any
such approval or authority; except as described in the Prospectus, following
the Closing Time and capitalization, each of the Company and PIC will have all
necessary licenses, authorizations, consents and approvals and will have made
all necessary filings required under any applicable law, regulation or rule,
and will have obtained all necessary authorizations, consents and approvals
from other persons, required in order to conduct its business as in effect
immediately following the Closing Time, except to the extent that any failure
to have any such licenses, authorizations, consents or approvals, to make any
such filings or to obtain any such authorizations, consents or approvals would
not, alone or in the aggregate, have a Material Adverse Effect with respect to
the operations for which approval, authority or licenses from applicable
regulatory agencies have not been obtained; and no such license, authorization,
consent or approval contains a materially burdensome restriction that is not
adequately disclosed
in the Prospectus; the Company is not required by any applicable law to
obtain accreditation or certification from any governmental agency or authority
in order to provide the products and services that it currently provides or
that it proposes to provide as set forth in the Prospectus

5

 

except to the extent
that any failure to have such accreditation or certification would not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect;

               (k)     the Prospectus and any further amendments or supplements thereto, when
they are filed with the Commission, will contain all material information
required to be included therein by the Securities Act and the Securities Act
Regulations and otherwise comply, in all material respects, with the
requirements of the Securities Act and the Securities Act Regulations; the
Prospectus does not, and any amendment or supplement thereto will not, as of
the applicable filing date and at the Closing, 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 statements therein, in the light of the circumstances
under which they were made, not misleading; provided, however, that no party
hereto makes any warranty or representation with respect to any statement
contained in the the Prospectus, or any amendments or supplements thereto, in
reliance upon and in conformity with the information concerning the
Underwriters (as defined in the Underwriting Agreement) and furnished in
writing by or on behalf of such Underwriters by their Representatives (as
defined in the Underwriting Agreement) to the Company expressly for use in the
Prospectus (that information being limited to that described in the penultimate
sentence of the first paragraph of Section 9(c) of the Underwriting Agreement);

               (l)     there are no actions, suits, proceedings, inquiries or investigations
pending or, to the knowledge of the Company, threatened against the Company or
any of its officers and directors or to which its properties, assets or rights
are subject, at law or in equity, before or by any federal, state, local or
foreign governmental or regulatory commission, board, body, authority, arbitral
panel or agency the adverse outcome of which could reasonably be expected to
have a Material Adverse Effect;

               (m)     the financial statements, including the related supporting schedules
and notes thereto, included in the Prospectus present fairly the consolidated
financial position of the entities to which such financial statements relate
(the “Covered Entities”) as of the dates indicated and the consolidated results
of operations and changes in financial position and cash flows of the Covered
Entities for the periods specified; such financial statements have been
prepared in conformity with generally accepted accounting principles as applied
in the United States and on a consistent basis during the periods involved
(except as may be expressly stated in the related notes thereto) and in
accordance with Regulation S-X promulgated by the Commission; the financial
data in the Prospectus under the captions “Summary—Summary Unaudited Pro Forma
Financial Information,” “Selected Financial Information of Specialty
Underwriters’ Alliance, Inc.,” and “Selected Financial Information of Potomac”
fairly present the information shown therein and have been compiled on a basis
consistent with the financial statements included in the Prospectus;
no other
financial statements or supporting schedules are required to be included in the
Prospectus; the unaudited pro forma financial information (including the
related notes) included in the Prospectus complies as to form in all material
respects with the applicable accounting requirements of the Securities Act and
the Securities Act Regulations, and management of the Company believes that the
assumptions underlying the pro forma adjustments are reasonable; such pro forma
adjustments have been properly applied to the historical amounts in the
compilation of the information and such information fairly presents
with respect to the Covered Entities, the financial position, results of
operations and other information purported to be shown therein at the
respective dates and for the respective periods specified; no other pro forma
financial information is required to be included in the Prospectus;

6

 

               (n)     PricewaterhouseCoopers LLP, whose reports on the consolidated
financial statements referred to in paragraph (o) above are filed with the
Commission as part of the Prospectus, are, and were during the periods covered
by their reports, independent public accountants as required by the Securities
Act and the Securities Act Regulations;

               (o)     subsequent to the respective dates as of which information is given in
the Prospectus, and except as may be otherwise stated in the Prospectus, there
has not been (i) any event, circumstance or change that could reasonably be
expected to have a Material Adverse Effect, whether or not arising in the
ordinary course of business, (ii) any transaction, other than in the ordinary
course of business, that is material to the Company and PIC considered as one
enterprise, contemplated or entered into by the Company, (iii) any obligation,
contingent or otherwise, directly or indirectly incurred by the Company or PIC,
other than in the ordinary course of business, that is material to the Company
and PIC considered as one enterprise, (iv) any change in the capital stock or
outstanding indebtedness of the Company or PIC that is material to the Company
and PIC considered as one enterprise, (v) any dividend or distribution of any
kind declared, paid or made on the capital stock or other equity interests of
the Company or PIC, or (vi) any loss or damage (whether or not insured) to the
property of the Company or PIC that has been sustained or will have been
sustained that has or may reasonably be expected to have a Material Adverse
Effect;

               (p)     the Shares conform in all material respects to the description of the
Common Stock contained in this Agreement and in the Prospectus;

               (q)     except as set forth in the Prospectus, there are no persons with
registration or other similar rights to have any equity or debt securities,
including securities that are convertible into or exchangeable or redeemable
for equity securities, registered by the Company under the Securities Act;

               (r)     the Shares have been duly authorized and, when issued and duly
delivered against payment therefor as contemplated by this Agreement, will be
validly issued, fully paid and non-assessable, free and clear of any pledge,
lien, encumbrance, security interest or other claim, and the issuance and sale
of the Shares by the Company is not subject to preemptive or other similar
rights arising by operation of law, under the organizational documents of the
Company or under any agreement to which the Company is a party or otherwise;

               (s)     the Common Stock has been registered under Section 12(g) of the
Exchange Act and approved for quotation on the Nasdaq National Market;

               (t)     the Company has not relied upon the Investor or legal counsel for the
Investor for any legal, tax or accounting advice in connection with the
offering and sale of the Shares;

               (u)     any certificate signed by any officer of the Company delivered to the
Investor or to counsel for the Investor pursuant to or in connection with this
Agreement shall be
deemed a representation and warranty by the Company to the Investor as to
the matters covered thereby;

               (v)     all securities issued by the Company and the certificates used to
evidence the Shares have been issued and comply in all material respects with
all applicable statutory

7

 

requirements and with any applicable requirements of
the organizational documents of the Company;

               (w)     except for liens under the short-term senior loans provided to the
Company by the Investor and Standard American Insurance Limited, the Company
has good and marketable title in fee simple to all real property, if any, and
good title to all material personal property owned by it, in each case free and
clear of all liens, security interests, pledges, charges, encumbrances,
mortgages and defects, except such as are disclosed in the Prospectus or such
as do not materially and adversely affect the value of such property or do not
interfere with the use proposed to be made of such property by the Company; any
real property and buildings or material personal property held under lease by
the Company is held under valid, existing and enforceable leases, with such
exceptions as are disclosed in the Prospectus or are not, individually or in
the aggregate, material to the Company or do not interfere with the use
proposed to be made of such property and buildings or material personal
property by the Company;

               (x)     the descriptions in the Prospectus of the legal or governmental
proceedings, contracts, leases and other legal documents therein described
present fairly the information required to be shown, and there are no legal or
governmental proceedings, contracts, leases, or other documents of a character
required to be described in the Prospectus or to be filed as exhibits to the
Registration Statement that are not described or filed as required; all
agreements between the Company and third parties expressly referenced in the
Prospectus are legal, valid and binding obligations of the Company, enforceable
against the Company and, to the knowledge of the Company, the other parties
thereto in accordance with their respective terms, except to the extent
enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting creditors’ rights generally and by general
equitable principles and, to the knowledge of the Company, no party is in
breach or default under any such agreements; the copies of all contracts,
agreements, instruments and other documents (including governmental licenses,
authorizations, permits, consents and approvals and all amendments or waivers
relating to any of the foregoing) that have been previously furnished to the
Investor or its counsel are complete and genuine and include all material
collateral and supplemental agreements thereto;

               (y)     except as described in the Prospectus, each of the Company and PIC
owns or possesses such licenses or other rights to use all patents, trademarks,
service marks, trade names, copyrights, software and design licenses, trade
secrets, manufacturing processes, other intangible property rights and know-how
(collectively “Intangibles”) as are necessary to entitle it to conduct its
business as it will be conducted immediately after the Closing as described in
the Prospectus, and neither of them has received written notice of infringement
of or conflict with (and the Company knows of no such infringement of or
conflict with) asserted rights of others with respect to any Intangibles that
could reasonably be expected to have a Material Adverse Effect;

               (z)     after the Closing Time, the Company will maintain a system of internal
accounting controls sufficient to provide reasonable assurance that (i)
transactions are executed in accordance with management’s general or specific
authorizations; (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally accepted
accounting principles as applied in the United States and to maintain asset
accountability; (iii) access to assets is permitted only in accordance with
management’s general

8

 

or specific authorization; and (iv) the recorded
accountability for assets is compared with the existing assets at reasonable
intervals and appropriate action is taken with respect to any differences;

               (aa)     the Company has filed on a timely basis (including in accordance with
any applicable extensions) all necessary federal, state, local and foreign
income and franchise tax returns required to be filed through the date hereof
or have properly requested extensions thereof, and has paid all taxes shown as
due thereon, and if due and payable, any related or similar assessment, fine or
penalty levied against the Company; no tax deficiency has been asserted against
the Company, and the Company does not know of any tax deficiency that is likely
to be asserted against it that, if determined adversely to it, could reasonably
be expected to have a Material Adverse Effect;

               (bb)     the Company maintains insurance (issued by insurers of recognized
financial responsibility) of the types and in the amounts generally deemed
adequate for its business and consistent with insurance coverage maintained by
similar companies in similar businesses, including, but not limited to,
insurance covering real and personal property owned or leased by the Company
against theft, damage, destruction, environmental liabilities, acts of
vandalism, terrorism, earthquakes, flood and all other risks customarily
insured against, all of which insurance is in full force and effect;

               (cc)     the Company is not in violation, nor has it received notice of any
violation with respect to, any applicable safety or similar law, regulation or
rule applicable to the business of the Company; the Company has received all
permits, licenses or other approvals required of it under applicable federal
and state occupational safety and health and environmental laws, regulations
and rules to conduct its business, and the Company is in compliance with all
terms and conditions of any such permit, license or approval, except any such
violation of law, regulation or rule, failure to receive required permits,
licenses or other approvals or failure to comply with the terms and conditions
of such permits, licenses or approvals that would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect;

               (dd)     the Company is not in violation of nor has it received notice of any
violation with respect to any federal or state law, regulation or rule relating
to discrimination in the hiring, termination, promotion, employment or pay of
employees, nor any applicable federal or state wages and hours law, nor any
state law, regulation or rule precluding the denial of credit due to the
neighborhood in which a property is situated, the violation of any of which
could reasonably be expected to have a Material Adverse Effect;

               (ee)     the Company is in compliance in all material respects with all
presently applicable provisions of the Employee Retirement Income Security Act
of 1974, as amended, including the regulations and published interpretations
thereunder (“ERISA”); no “reportable event” (as defined in ERISA) has occurred
with respect to any “pension plan” (as defined in ERISA) for which the Company
could have any material liability; the Company has not incurred
and does not reasonably expect to incur material liability under (i) Title
IV of ERISA with respect to termination of, or withdrawal from, any “pension
plan” or (ii) Section 412 or 4971 of the Internal Revenue Code of 1986, as
amended, including the regulations and published interpretations thereunder
(the “Code”); and each “pension plan” for which the Company could have any
material liability that is intended to be qualified under Section 401(a) of the
Code is so

9

 

qualified in all material respects and nothing has occurred, whether
by action or by failure to act, that could cause the loss of such
qualification;

               (ff)     there are no existing or, to the knowledge of the Company, threatened
labor disputes with the employees of the Company that could reasonably be
expected to have, individually or in the aggregate, a Material Adverse Effect;

               (gg)     neither the Company nor, to the knowledge of the Company, any officer
or director purporting to act on behalf of the Company has at any time (i) made
any contributions to any candidate for political office, or failed to disclose
fully any such contributions, in violation of law, (ii) made any payment to any
state, federal or foreign governmental officer or official, or other person
charged with similar public or quasi-public duties, other than payments
required or allowed by applicable law, (iii) made any payment outside the
ordinary course of business to any investment officer or loan broker or person
charged with similar duties of any entity to which the Company sells or from
which the Company buys (or will buy) loans or servicing arrangements for the
purpose of influencing such agent, officer, broker or person to buy loans or
servicing arrangements from or sell loans to the Company, or (iv) engaged in
any transactions, maintained any bank account or used any corporate funds
except for transactions, bank accounts and funds which have been and are
reflected in the normally maintained books and records of the Company;

               (hh)     except as otherwise disclosed in the Prospectus, there are no
material outstanding loans or advances or material guarantees of indebtedness
by the Company to or for the benefit of any of the officers, directors or
affiliates of the Company or any of the members of the families of any of them;

               (ii)     no relationship, direct or indirect, exists between or among the
Company on the one hand, and the directors, officers, stockholders, customers
or suppliers of the Company on the other hand, that is required by the
Securities Act and the Securities Act Regulations to be described in the
Prospectus and that is not so described;

               (jj)     neither the Company nor, to the knowledge of the Company, any
employee or agent of the Company, has made any payment of funds of the Company
or received or retained any funds in violation of any law, rule or regulation
or of a character required to be disclosed in the Prospectus;

               (kk)     all securities issued by the Company have been issued and sold in
compliance with (i) all applicable federal and state securities laws, and (ii)
the laws of the jurisdiction of incorporation of the Company, except where the
failure to comply with any such laws or requirements would not reasonably be
expected to have a Material Adverse Effect;

               (ll)     in connection with the Private Transaction and the Public Offering,
and assuming the truthfulness of the representations and warranties of the
Investor herein and the purchase and sale of the Shares as contemplated in this
Agreement, the Company has not offered
and will not offer its Common Stock or any other securities convertible
into or exchangeable or exercisable or redeemable for Common Stock in a manner
in violation of the Securities Act;

               (mm)     the Company has not incurred any liability for any finder’s fees or
similar payments in connection with the transactions herein contemplated;

10

 

               (nn)     the PIC Agreement has not been terminated;

               (oo)     the representations and warranties made with respect to the PIC in
the PIC Agreement are true and correct in all material respects;

               (pp)     the Company is not and, after giving effect to the offering and sale
of the Shares and the application of the net proceeds therefrom as described in
the Prospectus under the caption “Use of Proceeds”, will not be an “investment
company” or an entity “controlled” by an “investment company”, as such terms
are defined in the Investment Company Act of 1940, as amended;

               (qq)     the statistical and market related data included in the Prospectus
are based on or derived from sources that the Company believes to be reliable
and accurate; and

               (rr)     the conduct of business by the Company as presently and proposed to
be conducted is not subject to continuing oversight, supervision, regulation or
examination by any governmental official or body of the United States or any
other jurisdiction wherein the Company conducts or proposes to conduct such
business, except as described in the Prospectus and except such regulation as
is applicable to the insurance industry and/or insurance holding companies
generally.

ARTICLE 5

REPRESENTATIONS AND WARRANTIES OF INVESTOR

     The Investor hereby represents and warrants as of the date hereof and as
of the Closing Time to the Company that:

     5.1.     Authorization.

     The Investor has full power and authority to enter into this Agreement and
such agreement constitutes a valid and legally binding obligation, enforceable
in accordance with its respective terms except (i) as may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium, and other laws
of general application affecting enforcement of creditors’ rights generally,
and (ii) as may be limited by laws relating to the availability of specific
performance, injunctive relief, or other equitable remedies, and except to the
extent that the indemnification and contribution provisions of Section
8.14 hereof may be limited by federal or state securities laws and public
policy considerations in respect thereof.

     5.2.     Purchase Entirely for Own Account.

     This Agreement is made with the Investor in reliance upon the Investor’s
representation to the Company, which by the Investor’s execution of this
Agreement the Investor hereby confirms, that the Shares to be received by the
Investor will be acquired for investment for the Investor’s own account, not as
a nominee or agent, and not with a view to the resale or
distribution of any part thereof, and that the Investor has no present
intention of selling, granting any participation in, or otherwise distributing
the same. By executing this Agreement, the Investor further represents that
the Investor does not have any contract, undertaking, agreement or arrangement
with any person to sell, transfer or grant participation to such person or to
any third person, with respect to any of the Shares.

11

 

     5.3.     Disclosure of Information. 

     The Investor has received all the information it considers necessary or
appropriate for deciding whether to purchase the Shares. The Investor further
represents that it has had an opportunity to ask questions of and receive
answers from the Company regarding the terms and conditions of the offering of
Shares and the business, properties, prospects and financial condition of the
Company.

     5.4.     Investment Experience.

     The Investor understands that the purchase of the Shares involves
substantial risk. The Investor: (i) has experience as an investor in
securities and acknowledges that the Investor is able to fend for itself, can
bear the economic risk of the Investor’s investment in the Shares and has such
knowledge and experience in financial or business matters that the Investor is
capable of evaluating the merits and risks of this investment in the Shares and
protecting its own interests in connection with this investment and/or (ii) has
a preexisting personal or business relationship with the Company and certain of
its officers, directors or controlling persons of a nature and duration that
enables the Investor to be aware of the character, business acumen and
financial circumstances of such persons.

     5.5.     QIB Status.

     The Investor is a “Qualified Institutional Buyer” within the meaning of
Rule 144A promulgated under the Securities Act.

     5.6.     Restricted Securities.

     The Investor understands that the Shares are characterized as “restricted
securities” under the Securities Act inasmuch as they are being acquired from
the Company in a transaction not involving a public offering and that under the
Securities Act and applicable rules and regulations thereunder such securities
may be resold without registration under the Securities Act only in certain
limited circumstances.

     5.7.     Finder’s Fee.

     The Investor has not incurred any liability for any finder’s fees or
similar payments in connection with the transactions herein contemplated.

ARTICLE 6

CONDITIONS TO CLOSING

     6.1.     The obligation of the Investor to close the transaction contemplated
by this Agreement is subject to the satisfaction on or prior to the Closing of
the following conditions:

               (a)     The Company shall have executed this Agreement and delivered the same
to the Investor.

               (b)     Investor shall have received copies of all documents and information
which it may have reasonably requested in connection with the purchase and sale
of the Shares.

12

 

               (c)     The Company shall have delivered to the Investor a certificate of its
Chief Executive Officer and its Chief Financial Officer, to the effect that,
the representations and warranties of the Company set forth in this Agreement
are true and correct in all material respects and the conditions set forth in
this Section 6.1 have been satisfied, in each case as of such date.

               (d)     The Company shall have executed a registration rights agreement
substantially in the form attached hereto as Exhibit A (the
"Registration Rights Agreement”) and delivered the same to the Investor.

               (e)     The Company shall have successfully completed the closing of the
Public Offering of Common Stock to the satisfaction of the Investor.

               (f)     Between the time of execution of this Agreement and the Closing Time,
there shall not have been any change, or any development or event that
reasonably could be expected to result in a change, that has or reasonably
could be expected to have a Material Adverse Effect, whether or not arising in
the ordinary course of business.

     6.2.     The obligation of the Company to close the transaction contemplated
by this Agreement is subject to the satisfaction on or prior to the Closing of
the following conditions:

               (a)     The Investor shall have executed this Agreement and delivered the same
to the Company.

               (b)     The Investor shall have delivered to the Company a certificate of an
authorized officer, dated as of the Closing Date, to the effect that the
representations and warranties of the Investor in this Agreement are true and
correct, as if made on and as of the Closing Date, and the Investor has
complied with all the agreements and satisfied all the conditions on its part
to be performed or satisfied at or prior to the Closing;

               (c)     The Investor shall have executed the Registration Rights Agreement,
and delivered the same to the Company.

               (d)     The Company shall have successfully completed the closing of the
Public Offering of Common Stock.

               (e)     The Investor shall have delivered the Purchase Price as specified in
Article 3.

ARTICLE 7

COVENANTS OF THE PARTIES

     7.1.     Legends.

     It is understood that the certificates evidencing the Shares will bear the
legends set forth below:

               (a)     THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR UNDER THE SECURITIES LAWS OF
CERTAIN STATES. THESE SECURITIES ARE

13

 

SUBJECT TO RESTRICTIONS ON
TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS
PERMITTED UNDER THE ACT AND THE APPLICABLE STATE SECURITIES LAWS, PURSUANT TO
REGISTRATION OR EXEMPTION THEREFROM. INVESTORS SHOULD BE AWARE THAT THEY MAY
BE REQUIRED TO BEAR THE FINANCIAL RISKS OF THIS INVESTMENT FOR AN INDEFINITE
PERIOD OF TIME. THE ISSUER OF THESE SECURITIES MAY REQUIRE AN OPINION OF
COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER TO THE EFFECT THAT ANY
PROPOSED TRANSFER OR RESALE IS IN COMPLIANCE WITH THE ACT AND ANY APPLICABLE
STATE SECURITIES LAWS.

               (b)     Any legend required by the laws of the State of Delaware or any other
state securities laws.

     The legend set forth in (a) above shall be removed by the Company from any
certificate evidencing the Shares upon delivery to the Company of an opinion by
counsel, reasonably satisfactory to the Company, that a registration statement
under the Securities Act is at that time in effect with respect to the legended
security or that such security can be freely transferred in a public sale
without such a registration statement being in effect and that such transfer
will not jeopardize the exemption or exemptions from registration pursuant to
which the Company issued the Shares.

     7.2.      Restrictions on Transfer; Registration Rights. 

               (a)     The Investor agrees that, for a period of 180 days from the date of
the Prospectus, it will not, without the prior written consent of the Company,
sell, assign, transfer or otherwise dispose of (“Transfer”) any of the Shares
and will not, at any time, Transfer any Shares in violation of the Securities
Act or any applicable state or other securities laws (“State Acts”).

               (b)     The Shares issued pursuant to this Agreement may not be transferred
except in a transaction, which is in compliance with the Securities Act and
State Acts. Except as provided hereafter with respect to registration of the
Shares or sale under Rule 144 as contemplated in Exhibit A, it shall be
a condition to any such transfer that the Company shall be furnished with an
opinion of counsel, which counsel and opinion shall be reasonably satisfactory
to the Company, to the effect that the proposed transfer would be in compliance
with the Securities Act and State Acts. Notwithstanding the foregoing,
furnishing such opinion of counsel shall not be a condition to any transfer of
the Shares to an affiliate of Investor, including for this purpose if Investor
is an investment company, any fund or account advised by Investor’s investment
adviser or any affiliate thereof.

ARTICLE 8

MISCELLANEOUS

     8.1.     Payment of Expense.

     Payment of Expenses. The Company shall be responsible for all
costs and expenses associated with future registrations and issuances of Common
Stock contemplated by this Agreement and the Registration Rights Agreement
attached as Exhibit A hereto, but shall have no obligation for any legal
or other costs incurred by the Investor for such future registrations.

14

 

     8.2.     Survival of Warranties.

     The representation, warranties and covenants of the Company and the
Investor contained in or made pursuant to this Agreement shall survive the
execution and delivery of this Agreement and the Closing for a period of one
year after the Closing and shall in no way be affected by any investigation of
the subject matter thereof made by or on behalf of the Investor, its counsel or
the Company or its counsel, as the case may be.

     8.3.     Successors and Assigns.

     The terms and conditions of this Agreement shall inure to the benefit of
and be binding upon the respective successors and assigns of the parties. This
Agreement may not be assigned by either party without the prior written consent
of the other party; provided, however, that the Investor may assign its rights,
but may not delegate its obligations, hereunder to a wholly-owned subsidiary.
In no event will a sale by the Investor of all or substantially all of its
capital stock or assets, or a merger, consolidation, share exchange or other
business combination transaction involving the Investor constitute an
assignment for purposes of this Section 8.3.

     8.4.     Governing Law.

     This Agreement and any claim, counterclaim or dispute of any kind or
nature whatsoever arising out of or in any way relating to this Agreement,
directly or indirectly, shall be governed by, and construed in accordance with,
the laws of the State of Delaware, without regard to conflicts of laws
principles.

     8.5.     Counterparts; Facsimile Signatures.

     This Agreement may be executed in two or more counterparts, each of which
shall be deemed an original, but all of which together shall constitute one and
the same instrument. Signatures delivered by facsimile shall be deemed to be
original signatures.

     8.6.     Headings.

     The headings and captions used in this Agreement are used for convenience
only and are not to be considered in construing or interpreting this Agreement.
All references in this Agreement to sections, paragraphs, exhibits and
schedules shall, unless otherwise provided, refer to sections and paragraphs
hereof and exhibits and schedules attached hereto, all of which exhibits and
schedules are incorporated herein by this reference.

     8.7.     Notices.

     Unless otherwise provided, any notice required or permitted under this
Agreement shall be given in writing and shall be deemed effectively given upon
personal delivery to the party to be notified or upon deposit with the United
States Post Office, by registered or certified mail, postage prepaid and
addressed, by a nationally recognized overnight courier service or by
facsimile, as follows:

15

 

If to the Company, to:

Specialty Underwriters’ Alliance

8585 Stemmons Freeway, Suite 200

South Tower

Dallas, Texas 75247

Attention: Courtney C. Smith

With a copy to:

Stroock & Stroock & Lavan LLP

180 Maiden Lane

New York, New York 10038

Attention: William W Rosenblatt, Esq.

If to the Investor, to:

Friedman, Billings, Ramsey Group, Inc.

1001 19th Street North

Arlington, Virginia 22209

Attention: General Counsel

With a copy to:

Sidley Austin Brown & Wood LLP

Bank One Plaza

10 South Dearborn Street

Chicago, Illinois 60603

Attention: John J. Sabl, Esq.

     or at such other address as the Investor or the Company may designate by
giving ten (10) days advance written notice to the other parties.

     8.8.     Attorneys’ Fees.

     If any action at law or in equity, proceeding or counterclaim is necessary
to enforce or interpret the terms of this Agreement or to recover damages,
costs and expenses in connection with any breach of the Agreement, the
prevailing party shall be entitled to be reimbursed by the opposing party for
all of the prevailing party’s reasonable attorneys’ fees, costs and other
reasonable out-of-pocket expenses incurred in connection with such action,
proceeding or counterclaim in addition to any other relief to which such party
may be entitled.

     8.9.     Amendments and Waivers.

     Any term of this Agreement may be amended and the observance of any term
of this Agreement may be waived (either generally or in a particular instance
and either retroactively or prospectively), only with the written consent of
the Company and the Investor. Any amendment

16

 

or waiver effected in accordance
with this Section shall be binding upon each holder of any Shares at the time
outstanding, each future holder of such securities, and the Company.

     8.10.     Termination.

     In the event any of the conditions to a party’s obligations to close the
transactions contemplated under this Agreement is not satisfied or waived, that
party shall have the right to terminate this Agreement. In addition, in the
event the Company does not complete the Public Offering of its Common Stock by
[___] the Investor shall have the right to terminate this Agreement.

     8.11.     Severability.

     If one or more provisions of this Agreement are held to be unenforceable
under applicable law, such provision(s) shall be excluded from this Agreement
and the balance of the Agreement shall be interpreted as if such provision(s)
were so excluded and shall be enforceable in accordance with its terms.

     8.12.     Entire Agreement.

     This Agreement, together with all exhibits and schedules hereto,
constitutes the entire agreement and understanding of the parties with respect
to the subject matter hereof and supersedes any and all prior negotiations,
correspondence, agreements, understandings, duties or obligations between the
parties with respect to the subject matter hereof. The Exhibits hereto shall
be deemed a part of this Agreement for all purposes.

     8.13.     Further Assurances.

     From and after the date of this Agreement, upon the request of the
Investor or the Company, the Company and the Investor shall execute and deliver
such instruments, documents or other writings as may be reasonably necessary or
desirable to confirm and carry out and to effectuate fully the intent and
purposes of this Agreement.

     8.14.     Indemnity.

     The Company shall indemnify, defend and hold harmless Investor and each of
its agents, partners, members, officers, directors, representatives and
affiliates (each an “Investor Indemnitee” and collectively, the “Investor
Indemnitees”) from and against any and all losses, liabilities, claims and
expenses, including reasonable attorneys’ fees, sustained by any Investor
Indemnitee resulting from, arising out of, or connected with any material
inaccuracy in, breach of, or non-fulfillment of any representation, warranty,
covenant or agreement made by or other
obligation of the Company contained in this Agreement (including the
exhibits and schedules hereto) or in any document delivered in connection
herewith.

     The Investor shall indemnify, defend and hold harmless the Company and
each of its agents, partners, members, officers, directors, representatives and
affiliates (each a “Company Indemnitee” and collectively, the “Company
Indemnitees”) from and against any and all actual damages sustained or incurred
by any Company Indemnitee upon a finding by a court of competent jurisdiction
in a final non-appealable judgment that the Investor has in fact breached

17

 

its
representations and warranties under Article 5 of this Agreement and that the
Company Indemnitee has in fact been damaged as a direct result of such breach.

     8.15.     Press Release.

     The Company shall not issue any public statement or press release, or
otherwise disclose in any manner the identity of the Investor or that Investor
has purchased the Shares, without the prior written consent of the Investor,
except as may be required by applicable law or as disclosed in the Registration
Statement; provided, however, that the Company may disclose such
information in any registration statement filed with the Commission pursuant to
the registration rights agreement to be executed and delivered by the parties
on the Closing Date pursuant to Sections 6.1(d) and 6.2 (c) hereof.

[Signature page follows]

18

 

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

	 	 	 	 	 
	 	COMPANY:

SPECIALTY UNDERWRITERS’ ALLIANCE, INC.,

a Delaware Corporation

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

	 	 	 	 	 
	 	INVESTOR:

FRIEDMAN, BILLINGS, RAMSEY GROUP, INC.,

a Virginia corporation

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

19

 

Exhibit A

Registration Rights Agreement

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00074-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00074-of-00352.parquet"}]]