Document:

Filed by Bowne Pure Compliance

 

Exhibit 10.2

SUA INSURANCE COMPANY

PARTNER AGENT PROGRAM AGREEMENT

This Partner Agent Program Agreement (“Agreement”) is entered into as of the 1st day of October,
2007 (the “Effective Date”) by and between SUA Insurance Company and its property and casualty
insurance subsidiaries and affiliates (collectively the “Company”) and First Light Program
Managers, Inc. (the “Partner Agent”).

The parties hereto intend to develop and administer an insurance program (“Program”) as described
in Exhibit A attached hereto. This Agreement pertains only to the Program, with Company and Partner
Agent agreeing as follows:

I. DEFINITIONS

	 	A.	 	“Commission” shall mean the commission as described in Exhibit A.

	 
	 	B.	 	“Company Confidential Information” shall mean Company rates, rating manuals, forms,
Company Guidelines, program analysis, underwriting records, management reports, and any
information as may have been or shall be provided by Company to Partner Agent.

	 
	 	C.	 	“Company Guidelines” shall mean the terms of this Agreement, the Program description,
underwriting guidelines, system templates, service standards, form and rate and other
filings, and authority limits provided by Company to Partner Agent.

	 
	 	D.	 	“Company System” shall mean Company’s centralized technology system.

	 
	 	E.	 	“Compensation” shall mean both Commission and Profit Sharing.

	 
	 	F.	 	“Partner Agent Advisory Committee” shall mean Company’s Partner Agent committee.

	 
	 	G.	 	“Partner Agent Stock” shall mean the Class B exchangeable common stock, as more fully
described in Article III, Paragraph O. of this Agreement and specifically described in the
Securities Purchase Agreement.

	 
	 	H.	 	“Premium Trust Fund” shall mean an account separate and segregated from Partner Agent’s
own funds or funds held by Partner Agent on behalf of any other company or person as more
fully described in Article VII, Paragraph C.

	 
	 	I.	 	“Profit Sharing” shall mean a share of profits in accordance with Exhibit B attached
hereto.

	 
	 	J.	 	“Securities Purchase Agreement” shall mean the Securities Purchase Agreement by and
between Company and Partner Agent, which is incorporated by reference as an integral part
of this Agreement.

	 
	 	K.	 	“Statement” shall mean a monthly itemized statement to Partner Agent from Company of
money due Company as more fully described in Article VII, Paragraph B.

	 
	 	L.	 	“Term” shall be from the Effective Date until the termination of this Agreement.

	 
	 	M.	 	“Third Party Confidential Information” shall mean any and all information either
Company or Partner Agent may receive with regard to applicants, policyholders,
beneficiaries of policies, and claimants.

	 
	 	N.	 	“Vendor Selection and Claims Procedures” shall mean the selection of vendors and claims
handling procedures as more fully described in Article V, Paragraph D.

 

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II. AUTHORITY

	 	A.	 	Partner Agent’s authority is subject to the Company Guidelines. Company appoints
Partner Agent as its exclusive Partner Agent for five (5) years for the Program
from the Effective Date within the territory specified in the Company Guidelines solely for
the following purposes:

	 	1.	 	To solicit, receive, and bind proposals for commercial lines insurance in
accordance with the Company Guidelines.

	 
	 	2.	 	To pre-screen applications and estimate rates and/or premiums in accordance
with the Company Guidelines.

	 
	 	3.	 	To endorse in-force policies in accordance with the Company Guidelines.

	 
	 	4.	 	To collect, receive, account for, and pay to Company, premiums on policies
written by Company, and to refund to the policyholder or insured, as appropriate (or to
Company if requested by Company), return premiums as provided in the applicable policy.

	 
	 	5.	 	To issue, countersign (where necessary), and deliver policies executed by
authorized officers of Company.

	 
	 	6.	 	To effect conditional renewals, cancellation and non-renewal of policies in
accordance with the Company Guidelines and applicable law.

	 	B.	 	Partner Agent may delegate its authority in writing to designated employees.

	 
	 	C.	 	Partner Agent’s authority is subject to compliance with (and Partner Agent shall not
alter, modify, or change and shall not waive any provision in) the applicable forms, rules,
or rates of Company, according to their exact terms and to all applicable laws and
regulations.

	 
	 	D.	 	Company shall have the right to reject any application or business submitted by Partner
Agent or to modify, cancel, or refuse to renew any policies written by Company hereunder by
giving Partner Agent written notice of effective date of changes that would affect such
business.

	 
	 	E.	 	Partner Agent shall, within twenty (20) calendar days of the inception of coverage,
provide to Company all data and statistical information relating to the underwriting of
accounts. Partner Agent is authorized to issue binders, certificates or other evidence of
insurance.

	 
	 	F.	 	The Company Guidelines may be amended or new Company Guidelines may be adopted at
Company’s discretion without the need to amend this Agreement. Such amendments or new
Company Guidelines will be provided to Partner Agent in writing and must be implemented by
Partner Agent in accordance with Company’s instructions. Company will give Partner Agent
reasonable notice in which to enact such changes.

	 
	 	G.	 	Company retains the right to modify, cancel, conditionally renew or non-renew any and
all policies solely in Company’s discretion.

	 
	 	H.	 	Partner Agent has no authority to solicit, negotiate or place any reinsurance on behalf
of Company.

III. OBLIGATIONS OF PARTNER AGENT

	 	A.	 	Partner Agent represents and warrants that (i) Partner Agent has any and all ownership
or other rights in the business contemplated herein necessary to place such business with
Company under this Agreement; (ii) Partner Agent placing business under this Agreement is
not in violation of any duty or obligation owed to any other entity or person; and (iii)
Partner Agent is, and will continue to be, authorized and licensed to perform all acts set
out in this Agreement while providing services under this Agreement.

	 

 

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	 	B.	 	The Program, as more specifically described in the Company Guidelines and in Exhibit A,
will be mutually exclusive, unless otherwise stated in this Agreement. Partner Agent will
be allowed to complete existing obligations under insurance policies with other insurance
carriers for the Program. Unless otherwise specifically stated in this Agreement, Company
will not accept business encompassed within the Program from any entity other than Partner Agent during the Term of this Agreement. Partner Agent
shall exclusively represent Company and shall not represent any other insurance company or
similar entity in relation to the Program. In the event that a conflict exists as to
whether Partner Agent is authorized to represent an existing or prospective policyholder,
Company may honor the policyholder’s written producer of record designation signed by the
policyholder. Notwithstanding the foregoing, Company shall be under no obligation to honor
a written producer of record designation from a policyholder before accepting business from
a designated Partner Agent, and Company’s determination of which agent of Company represents
Company with regard to a particular policyholder shall be final and binding.

	 
	 	C.	 	Partner Agent shall be responsible for compliance with all applicable state and federal
laws, regulations, rules, and requirements relating to the performance of Partner Agent’s
obligations and the general standards, rules, and regulations of the insurance industry and
all Company Guidelines as provided by Company in writing.

	 
	 	D.	 	Partner Agent shall keep true, separate, accurate, and complete records of all
transactions related to the policies and all correspondence related thereto.

	 
	 	E.	 	All records and documents applicable to the business relationship between Company and
Partner Agent shall be maintained by Partner Agent in a form and manner that is (i)
requested by Company, and (ii) secure and in accordance with Company’s record retention
guidelines and insurance regulatory practices. Such records and documents shall continue
to be maintained in a secure manner during the Term and for a period of no less than five
(5) years (or such longer period as Company may request or is needed in order to preserve
such records and documents under state statutes of limitations) after termination
of this Agreement. At the end of such five (5) year period or at any time Company
requests, Partner Agent shall provide Company with originals or copies of such records and
documents. No records or documents shall be destroyed at any time prior to five (5) years
or according to state regulation without Company’s prior written consent.

	 
	 	F.	 	All records and documents of Partner Agent may be audited, examined, and/or copied by
representatives of Company at any time during normal business hours and shall be made
available for examination to reinsurers, or to any state insurance department or regulatory
authority which so requires. Additionally, Partner Agent shall permit authorized employees
and representatives of Company to review the operations of Partner Agent, both at its place
of business and at other locations during normal business hours upon ten (10) days written
notice by Company.

	 
	 	G.	 	Partner Agent shall notify Company immediately of notice or receipt of any complaint
filed with any state insurance department or other regulatory authority relating to the
policies, whether against Company or Partner Agent. The parties will work together to
promptly and adequately respond to any such complaint. If requested by Company, Partner
Agent shall prepare a response to any such complaint or, at Company’s discretion, provide a
complete written account to Company such that Company can respond; however, no response
shall be sent by Partner Agent prior to consulting with Company regarding such response.
Company retains the final authority on all responses relating to complaints against
Company. Company may establish formal complaint handling procedures for Partner Agent to
follow which are consistent with the requirements set forth herein.

	 
	 	H.	 	Partner Agent shall not contact any state insurance department or other regulatory
authority, directly or indirectly, with regard to Company’s business without the prior
written consent of Company. Partner Agent shall notify Company immediately in the event
that Partner Agent receives any contact from any such department or authority with regard
to Company’s business.

	 
	 	I.	 	Partner Agent shall utilize automated business processing through the Company System.
Partner Agent shall be responsible for any integration required for the Company System to
operate with other third party systems of Partner Agent.

	 
	 	J.	 	If Company provides access to Company information or networks through computer access,
Partner Agent shall be responsible for maintaining the security and integrity of such
information and of the Company System. Partner Agent shall not introduce into the Company
System any virus or other harmful agent. Partner Agent shall be responsible for assuring
the quality of policy, premium, accounting and statistical data submitted to Company
consistent with Company standards. Partner Agent agrees to adhere to the terms and
conditions governing Partner Agent’s use of any existing Company website or any website

 

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	 	 	 	Company may own, make available, operate, acquire, use from time to time, create or sponsor
in the future, and related services available under any such website. These terms and
conditions regarding use of any website or the content of any website may change without
notice to Partner Agent. Partner Agent’s use of these websites constitutes agreement to the
terms and conditions that exist at each point in time Partner Agent uses any such website.
Partner Agent may not use the name, logo, or service mark of Company in any advertising,
promotional material, internet site, or in any material disseminated by Partner Agent
without the prior written consent of Company. Partner Agent shall maintain copies and
provide an original to Company of any advertisement or other materials approved by Company
along with full details concerning where, when, and how it was used. Use of any authorized
item shall be limited to the scope of the current request and approval, unless specifically
authorized for broader use by Company. Partner Agent must obtain re-authorization of all
items at least annually.

	 
	 	K.	 	All expenses associated with Partner Agent’s performance hereunder shall be the
responsibility of Partner Agent, including but not limited to general office expenses,
automation expenses, systems integration expenses, marketing expenses, broker, producer, or
countersigning commissions, fees, and taxes.

	 
	 	L.	 	Partner Agent agrees that the Company Confidential Information, which is confidential
and proprietary to Company, shall be considered trade secrets of Company, and shall not be
disclosed to any third parties. Partner Agent agrees to maintain the confidentiality of
the Company Confidential Information. Partner Agent shall ensure that Partner Agent’s
employees, agents, and representatives are aware of and sensitive to the proprietary nature
of the Company Confidential Information, of the importance of confidentiality, and of the
need to comply with the confidentiality requirements in this Agreement. All Company
Confidential Information shall be returned by Partner Agent to Company immediately upon
request.

	 
	 	M.	 	Partner Agent agrees that Partner Agent and its employees, agents, and representatives
are (i) aware of the sensitive and proprietary nature of Third Party Confidential
Information; and (ii) aware of and will comply with: (a) any and all applicable laws,
regulations, rules, and requirements relating to Third Party Confidential Information; (b)
the general standards, rules, and regulations of the insurance industry relating to Third
Party Confidential Information; and (c) all written instructions provided to Partner Agent
from time to time by Company relating to Third Party Confidential Information. Partner
Agent shall comply with Company’s privacy policies and shall hold all Third Party
Confidential Information in trust and confidence in compliance with Company’s privacy
policy, and shall use Third Party Confidential Information only for the purpose
contemplated in this Agreement. Partner Agent agrees that it shall immediately refer any
question concerning any aspect of Company’s privacy policy to Company for resolution.

	 
	 	N.	 	If requested by Company, Partner Agent agrees to become a member of the Partner Agent
Advisory Committee. Partner Agent or appropriate designee shall attend all meetings of the
Partner Agent Advisory Committee, provide input at such meetings, and cooperate fully with
the Partner Agent Advisory Committee in all aspects.

	 
	 	O.	 	Partner Agent agrees to purchase a certain amount of Partner Agent Stock as more
specifically described in the Securities Purchase Agreement dated as of the date hereof by
and between Company and Partner Agent which is hereby incorporated by reference as an
integral part of this Agreement.

	 
	 	P.	 	Partner Agent agrees that it and its employees, agents and representatives will not
pledge any premiums due to Company as collateral or enter into similar arrangements such
that the Company would no longer have a continuing first priority security interest in the
premiums.

IV. OBLIGATIONS OF COMPANY

	 	A.	 	Company shall act in accordance with the terms of this Agreement and will pay Partner
Agent Compensation in accordance with Exhibit A and Exhibit B to this Agreement. Partner
Agent shall be responsible for paying any compensation due to its sub-producers.

 

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	 	B.	 	Company shall provide for the payment of all excise taxes, premium taxes, except
surplus lines taxes, and assessments.

	 
	 	C.	 	Company shall appoint Partner Agent as required by various state laws and regulations.

	 
	 	D.	 	Company will develop and maintain the Company System.

V. CLAIMS AND COVERAGE

	 	A.	 	Partner Agent shall immediately notify and cooperate with Company if Partner Agent
receives notice of any claim or potential claim which could involve Company or the business
written hereunder.

	 
	 	B.	 	Partner Agent has no authority to adjust or settle any claims arising out of or in
connection with policies, shall not make any statements regarding the application of
coverage to specific situations, whether actual or hypothetical, and shall not commit
Company to any liability in connection with any actual or potential claim or loss.

	 
	 	C.	 	Partner Agent shall immediately report all claims, or potential claims, suits, or
losses relating to the policies to Company or to an assigned adjuster or claim
representative who has been designated by Company. Partner Agent shall cooperate fully
with Company or the assigned adjuster or claim representative in the investigation,
adjustment, settlement, and payment of claims and coverage matters. All records, files,
correspondence, or other materials pertaining to claims shall be the sole property of
Company.

	 
	 	D.	 	Company will consult with Partner Agent on the Vendor Selection and Claims Procedures.
Company retains sole discretion for Vendor Selection and Claims Procedures.

VI. COMPENSATION OF PARTNER AGENT

	 	A.	 	Company shall pay Partner Agent the Commission and Profit Sharing as respectively
described in Exhibit A and Exhibit B.

	 
	 	B.	 	With one hundred eighty (180) days advance written notice, for reasons related to
regulatory constraints or industry issues including, but not limited, to Program coverage
resulting in an insurance industry or market downturn, Company reserves the right to adjust
Partner Agent’s Commission as described in Exhibit A.

	 
	 	C.	 	Effective at any time after a minimum of one hundred eighty (180) days advance written
notice to Partner Agent, Company may adjust the current payout period of Profit Sharing as
described in Exhibit B.

	 
	 	D.	 	It is understood and agreed that Compensation paid hereunder shall be full compensation
for all services rendered by Partner Agent pursuant to this Agreement.

	 
	 	E.	 	Partner Agent shall refund Commission, or other fees or amounts retained by Partner
Agent, to the policyholder or insured, as appropriate, or to Company if requested by
Company, from Partner Agent’s own funds on a pro-rata basis on return premiums at the same
rate as paid to Partner Agent.

	 
	 	F.	 	The Commission applicable to multiple year policies (if Company has bound such policies
through Partner Agent) shall be the Commission that is in effect for such policy during the
year in which the policy is initially written, and such Commission shall apply throughout
the term of any such policy.

	 
	 	G.	 	Partner Agent shall have no authority to, and shall not collect any fee(s) on, the
policies unless specifically authorized by Company and permitted by law.

	 
	 	H.	 	Partner Agent shall calculate Commission based on premiums collected by Partner Agent
for policies reported to Company.

 

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VII. PREMIUMS AND ACCOUNTING

	 	A.	 	Partner Agent shall be responsible for collecting premiums, whether advance, deposit,
developed, installment, audit, renewal, additional, or otherwise, on all policies other
than direct-bill policies. Despite the foregoing, however, Company reserves the right, in
its sole discretion, to communicate with, to directly collect premium from, and/or to
cancel or non-renew policies of, its insureds. Except as otherwise provided in this
Agreement, Partner Agent shall be liable for and pay all earned premium to Company, even if
Partner Agent does not collect such premium from the policyholder. Uncollected premiums
shall be remitted from Partner Agent’s own funds and not the Premium Trust Fund. Partner
Agent may deduct Commission from the Premium Trust Fund.

	 
	 	B.	 	Within fifteen (15) days from the last day of each month, Company shall provide Partner
Agent with a Statement. Amounts due to Company pursuant to the Statement shall be remitted
to Company on or before the tenth day of the following month the Statement was rendered.
In the event of differences between Partner Agent’s and Company’s records, Partner Agent
shall provide all necessary information to permit proper adjustment. Any dispute
respecting such Statement shall be resolved based on Company’s records.

	 
	 	C.	 	All premiums collected by Partner Agent are the property of Company, shall not be
commingled with any other funds, shall be held in trust on behalf of Company in a fiduciary
capacity, and shall be deposited and maintained in a Premium Trust Fund account separate
and segregated from Partner Agent’s own funds or funds held by Partner Agent on behalf of
any other company or person. The Premium Trust Fund shall be placed in an interest bearing
account in a bank and account approved by Company in advance. Unless Partner Agent has
breached this Agreement, Partner Agent shall be authorized to retain the interest on the
Premium Trust Fund. Company may request at any time, and Partner Agent shall provide, a
reconciliation of the funds deposited in, and balance due to Company from, the Premium
Trust Fund.

	 
	 	D.	 	The omission of any item(s) by Company from the Statement does not affect Partner
Agent’s responsibility to properly account for policies and pay all amounts due, nor does
it prejudice the rights of Company to collect such amounts.

	 
	 	E.	 	Partner Agent shall be liable for premiums on policies written through submissions to
Partner Agent by other brokers or producers, whether or not collected by Partner Agent or
such brokers or producers.

	 
	 	F.	 	No premium advances may be made by Partner Agent from the Premium Trust Fund, and
premium advanced on behalf of any insured by the Partner Agent shall not be reversed.
Partner Agent accepts full responsibility for such premiums.

	 
	 	G.	 	After making a diligent effort to collect such premiums and submitting documentation of
that diligent effort to Company which Company reasonably determines to be sufficient,
Partner Agent may request in writing that premiums due as a result of audit of a particular
insured be collected directly by Company. Company agrees to assume responsibility for
collecting such additional premiums. Company will have no obligation to collect amounts
hereunder unless Partner Agent’s written request is made within forty-five (45) days of the
billing date shown on the audit statement. Partner Agent shall not be entitled to
Compensation on premiums Partner Agent requests Company to collect or Company undertakes to
collect, regardless of the amounts collected by Company.

	 
	 	H.	 	Should Partner Agent default in any payment of premiums on any policy, Company shall
have the right to require that all premiums on all policies are due and payable
immediately.

	 
	 	I.	 	Partner Agent agrees to be responsible for the payment of any applicable surplus lines
taxes and the filing of all affidavits as required by the applicable entities, and shall
provide Company with written evidence of such payment and compliance on a quarterly basis.

	 
	 	J.	 	Partner Agent shall not be entitled to any Compensation on any premium which Company
determines (i) to collect (whether or not collected), (ii) in its sole discretion to
write-off, or (iii) is overdue and is collected by Company, regardless of the amounts
collected. Nothing contained herein shall alter Partner Agent’s obligation to remit all
premium to Company, whether or not collected.

 

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VIII. INSURANCE AND INDEMNITY

	 	B.	 	Partner Agent shall maintain the following insurance amounts with an insurer having a
rating with A.M. Best of at least “A-”: (i) errors and omissions insurance covering Partner
Agent and its employees in the minimum amount of $3,000,000 per claim, $5,000,000
aggregate, with a deductible not exceeding an amount agreed by Company; (ii) fidelity
insurance covering Partner Agent and its employees in the minimum amount of $1,000,000; and
(iii) general liability insurance covering Partner Agent and its employees in the minimum
amount of $1,000,000. Partner Agent agrees to immediately notify Company when it receives
notice of lapse, increased deductibles, decreased coverage, non-renewal, or termination of
any such coverage. Partner Agent agrees to notify Company of any claim brought under any
errors and omissions or fidelity insurance which arises out of or is connected with a
policy or policies. At the inception of this Agreement and on or before January 31 of each
year thereafter, Partner Agent shall furnish Company proof of this insurance.

	 
	 	C.	 	Company agrees to fully indemnify, defend, and hold harmless Partner Agent from any and
all liability, claims, demands, suits, fines and penalties, expenses, costs and attorney
fees, made or assessed against or incurred by Partner Agent or the officers, directors, or
affiliates of Partner Agent, that may arise by reason of any act, error, or omission of or
any misrepresentation by Company or its officers or employees.

	 
	 	D.	 	Partner Agent agrees to fully indemnify, defend, and hold harmless Company from any and
all liability, claims, demands, suits, fines and penalties, expenses, costs and attorney
fees, made or assessed against or incurred by Company or the officers, directors, or
affiliates of Company, that may arise by reason of any act, error, or omission of or any
misrepresentation by Partner Agent, its officers or employees, or brokers or producers
submitting business to Partner Agent pursuant to this Agreement.

	 
	 	E.	 	The indemnifying party shall have the right to direct the investigation, settlement,
and defense of any such claim, complaint or action. If the indemnifying party assumes the
defense of any such action, such party shall not be liable to the indemnified party for any
expenses incurred by such indemnified party in connection with such action.

IX. TERM AND TERMINATION

	 	A.	 	At any time during the Term, Partner Agent may terminate this Agreement without cause
on one hundred eighty (180) days written notice of termination to Company. Partner Agent’s
authority to place new business with Company shall cease immediately upon receipt of such
notice of termination. Partner Agent’s authority to renew business with Company shall
cease as of the effective date of termination.

	 
	 	B.	 	At any time during the Term, Company may terminate this Agreement on one hundred eighty
(180) days (or such longer period as mandated by regulation) written notice of termination
to Partner Agent if Partner Agent has not met the Company Guidelines pertaining to
profitability and/or production. Partner Agent’s authority to submit new business with
Company will cease on ninety (90) days after receipt of such notice of termination.
Partner Agent’s authority to submit renewals with Company shall cease as of the effective
date of termination. Any disputes regarding Company Guidelines shall be determined by
Company in its sole discretion.

	 
	 	C.	 	Upon written notice, Company may immediately terminate this Agreement in whole or in
part for cause, which shall include, but not be limited to, the following:

	 	1.	 	Partner Agent, or its parent or any affiliated corporation becomes insolvent,
institutes or acquiesces in the institution of any bankruptcy, financial
reorganization, or liquidation proceeding or any such proceeding is instituted against
Partner Agent or its parent corporation (Partner Agent shall immediately notify Company
of same); or

	 
	 	2.	 	Partner Agent, or the owner of a controlling interest in Partner Agent, sells,
exchanges, transfers, assigns, consolidates, pledges or causes to be sold, exchanged,
transferred, assigned, consolidated, or pledged: (i) all or substantially all of the
assets of Partner Agent, or any entity controlling Partner Agent, to a third party, or
(ii) a controlling interest in Partner Agent, or any entity controlling Partner Agent,
to a third party (Partner Agent shall immediately notify Company of same); or

 

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	 	3.	 	Partner Agent fails to correct material deficiencies as noted in any agency
audit or program review within the time frame set out in the audit; or

	 
	 	4.	 	Partner Agent fails to render timely and proper reports or premium accounting
as required, or remit premiums when due; or

	 
	 	5.	 	Partner Agent fails to maintain premium funds in trust as required by this
Agreement; or

	 
	 	6.	 	Partner Agent engages in acts or omissions constituting abandonment, fraud,
insolvency, misappropriation of funds, material misrepresentation, or gross and willful
misconduct; or

	 
	 	7.	 	Partner Agent’s license or certificate of authority is cancelled, suspended, or
is declined renewal by any regulatory body within the territory where Partner Agent
transacts or services policies pursuant to this Agreement (Partner Agent shall
immediately notify Company of same); for fraud or if for more than thirty (30) days for
any other reason; or

	 
	 	8.	 	Partner Agent otherwise materially breaches this Agreement.

	 	D.	 	In the event this Agreement is terminated or any authority of Partner Agent is
suspended, limited, or terminated (whether by Company, Partner Agent, or agreement of the
parties), Partner Agent shall, subject to all terms, conditions, and restrictions contained
in this Agreement, service all business until all such business has been completely
cancelled, non-renewed, or otherwise terminated and all claims hereunder have been closed.
Company may, in its sole discretion, immediately suspend or terminate Partner Agent’s
continuing service obligation as outlined in the Company Guidelines. Notwithstanding the
foregoing, Partner Agent shall not, without the prior written approval of Company, increase
or extend Company’s liability under, extend the term(s) or condition(s) of, or cancel and
re-write, any policies.

	 
	 	 	 	If Partner Agent fails to fulfill any service obligation under this Agreement or comply with
this Agreement, then Partner Agent shall reimburse Company any expense incurred by Company
as a result of non-compliance, or in servicing or arranging for the servicing of business,
or such amounts may be offset by Company.

	 
	 	E.	 	Any notice of termination shall be in writing and sent by certified mail or personally
delivered. Such notice shall be deemed received three (3) days from the date of mailing
or, if personally delivered, the date delivered. Unless changed by giving written notice
to the other party, the addresses of the respective parties are:

Partner Agent:

First Light Program Managers, Inc.

2800 W. State Road 84, Suite 118

Dania, FL 33312

Facsimile: 1-954-942-9081

Attention: Anthony L. Johnson

Company:

SUA Insurance Company

222 South Riverside Plaza, Suite 1600

Chicago, IL 60606

Facsimile: 1-312-277-1800

Attention: Scott Goodreau, General Counsel

X. GENERAL PROVISIONS

	 	A.	 	If Partner Agent breaches this Agreement for any reason whatsoever, Company may, in
lieu of terminating the Agreement, suspend some or all of the authority of Partner Agent
under this Agreement. Additionally, Company may suspend the authority of Partner Agent during the pendency of any dispute
regarding termination or suspension.

 

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	 	B.	 	During the Term and following termination of the Agreement, if Partner Agent has made
full payments of all amounts due Company and continues to do so in a timely manner, then
the expirations and renewals shall be the property of Partner Agent; provided, however,
that Company shall have the absolute right to write or renew such business as may be
required by law, and to take any and all actions with regard to the business as may be
required in order to service the business or as may be required by law or pursuant to the
policy’s terms.

	 
	 	 	 	If, during the Term and following termination of this Agreement, Partner Agent has not made
full payment to Company, the expirations and renewals shall not be the property of Partner
Agent, and Company shall be entitled to the expirations and renewals, and the use and
control of the expirations and renewals shall be vested in Company for sale, use, or
disposal as Company deems fit.

	 
	 	C.	 	Partner Agent will advise Company promptly if it, an employee of Partner Agent, or any
of Partner Agent’s brokers or producers have been or are in the future convicted of a
felony.

	 
	 	D.	 	This Agreement and the Securities Purchase Agreement constitute the entire agreement
between Company and Partner Agent and supersedes any and all other agreements, either oral
or written, between Company and Partner Agent with respect to the business. No waiver by
either party to enforce any provisions of this Agreement will be effective unless made in
writing and signed by an authorized officer of Company and Partner Agent and shall be
effective as to the specifically stated waiver date. No amendment to this Agreement will
be effective unless made in writing and signed by the parties hereto, and specifying the
effective date of such amendment.

	 
	 	E.	 	Company may combine or offset any balances or funds owed by Partner Agent to Company
against any balances or funds owed to Partner Agent by Company under this Agreement or any
other agreement between the parties. Partner Agent may not offset any balance due from
Company to Partner Agent under this Agreement or under any other agreement with Company or
any other party against the Premium Trust Fund.

	 
	 	F.	 	This Agreement shall be governed by and construed in accordance with the laws of the
State of Delaware, without regard to its rules regarding conflict of laws. Notwithstanding
the foregoing, matters relating to agency termination and Partner Agent’s right or
Company’s obligations on termination shall be governed solely by the applicable insurance
laws, if any, of the state in which Partner Agent is domiciled. The parties hereto consent
to the jurisdiction of the courts of the State of Illinois in any matters pertaining to
this Agreement which are not otherwise resolved in accordance with subsection G. below.

	 
	 	G.	 	Except as provided herein, all unresolved differences of opinion or disputes between
Company and Partner Agent arising out of or in connection with this Agreement or any
transaction hereunder shall first be attempted to be settled by a good faith meeting of a
member of senior management of each of Company and Partner Agent and/or by mediation. If
any unresolved differences of opinion or disputes still exist after such meeting, then such
matters shall be submitted to arbitration in accordance with the rules relating to
commercial arbitration of the American Arbitration Association. Arbitration initiated by
one party will allow the other party to select the situs of the arbitration proceedings.
Notwithstanding the foregoing, Company shall be entitled to the issuance of an injunction
or other legal or equitable action to obtain premiums or monies due, to prohibit Partner
Agent’s use of funds, to prohibit Partner Agent’s writing business in violation of this
Agreement, or to require Partner Agent’s deposit of such funds in accordance with this
Agreement. If Company prevails in any such action, the cost and expense thereof, including
attorney fees, shall be borne by Partner Agent.

	 
	 	H.	 	Partner Agent may not assign this Agreement, delegate its duties, or assign its rights
under this Agreement, unless otherwise agreed upon and authorized in writing in advance by
Company.

	 
	 	I.	 	This Agreement may be executed in two or more counterparts, each of which shall be
deemed an original but which together shall constitute one and the same instrument.

	 
	 	J.	 	The parties hereby agree that all provisions of this Agreement shall survive
termination, except that Article II and Article IV hereof shall not survive.

 

9

 

	 	K.	 	Unless otherwise agreed to in writing by both parties, each party agrees that during
this Agreement and for a period of one (1) year after the termination or expiration of this
Agreement, it shall not directly or indirectly recruit, solicit or hire any employee of the
other party, or induce or attempt to induce any employee of the other party to discontinue
his or her employment relationship with the other party.

	 
	 	L.	 	Partner Agent shall submit to the Company, for Company’s approval, a copy of its
business continuity and disaster recovery plan on an annual basis, on or before the
anniversary date of this Agreement.

IN WITNESS WHEREOF, the parties have caused this Agreement to be executed effective as of the
Effective Date first above written.

	 	 	 	 	 	 
	 	 	SUA Insurance Company
	 
	 	 	 	 
	 

	 	By:
	 	/s/ William S. Loder
	 

	 	 	 	 
	 

	 	Name Printed:
	 	William S. Loder
	 

	 	Title:
	 	Senior Vice President and Chief Underwriting Officer
	 
	 	 	 	 
	 	 	First Light Program Managers, Inc.
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Anthony L. Johnson
	 

	 	 	 	 
	 

	 	Name Printed:
	 	Anthony L. Johnson
	 

	 	Title:
	 	President

 

10

 

EXHIBIT A

COMMISSION SCHEDULE

	A.	 	Except as otherwise provided in this commission schedule, Partner Agent’s Commission shall be
as follows:

	 	 	 	 	 	 	 
	Program Description	 	Line of Business	 	Maximum Rate of Commission
	Transportation operations
in the territories defined
in the Underwriting
Guidelines

	 	Commercial general
liability, commercial
automobile liability and
physical damage
	 	 	15	%

	B.	 	The Commission provided in this commission schedule does not relate to the following types of
business:

	 	1.	 	business which Company determines is specially rated, specially classified, or
specially reinsured;

	 
	 	2.	 	business written subject to a participating plan;

	 
	 	3.	 	business written subject to a retrospective plan, SIR, or large deductible; or

	 
	 	4.	 	business placed through assigned risks, fair plans, pools, or other
risk-sharing associations.

	 
	 	 	 	Commission for all such business shall be negotiated on an individual policy basis and
agreed to in writing by Company.

	C.	 	Commission different than provided herein may be agreed to in writing between Partner Agent
and Company, and such agreement shall supersede this commission schedule.

 

11

 

EXHIBIT B

PROFIT SHARING SCHEDULE

The Profit Sharing Due to Partner Agent will be calculated using the following Table:

Table

Profit Sharing Year [ ]

	 	 	 	 	 
	Premium	 	 
	 	 	 
	 	 
	1.
	 	Eligible Earned Premium before write off for Profit Sharing Year
	 	$                    
	 	 	 
	 	 
	2.
	 	Premium Written Off
	 	$                    
	 	 	 
	 	 
	3.
	 	Eligible Earned Premium
	 	$                    
	 	 	(Line 1 minus Line 2)
	 	 
	 	 	 
	 	 
	Expenses	 	 
	 	 	 
	 	 
	4.
	 	Losses and ALAE Incurred for Profit Sharing Year
	 	$                    
	 	 	 
	 	 
	5.
	 	TPA Claims Fee for Profit Sharing Year
	 	$                    
	 	 	 
	 	 
	6.
	 	Claims Charge for Profit Sharing Year
	 	$                    
	 	 	 
	 	 
	7.
	 	IBNR Charge for Profit Sharing Year
	 	$                    
	 	 	 
	 	 
	8.
	 	Commissions Incurred for Profit Sharing Year
	 	$                    
	 	 	 
	 	 
	9.
	 	Taxes, Licenses and Fees for Profit Sharing Year
	 	$                    
	 	 	 
	 	 
	10.
	 	Operating Charge
	 	$                    
	 	 	 
	 	 
	11.
	 	Dividends Incurred for Profit Sharing Year
	 	$                    
	 	 	 
	 	 
	12.
	 	Expense Total (Sum of Lines 4, 5, 6, 7, 8, 9, 10 and 11)
	 	$                    
	 	 	 
	 	 
	Profit Sharing Year Result	 	 
	 	 	 
	 	 
	13.
	 	Profit Sharing Year Result
	 	$                    
	 	 	(Line 3 minus line 12)

(Can be negative)	 	 
	 	 	 
	 	 
	14.
	 	Profit Sharing Factor
	 	50%
	 	 	 
	 	 
	15.
	 	Profit to be Shared (Line 13 times Line 14)
	 	$                    
	 	 	(Can be negative)
	 	 
	 	 	 
	 	 
	16.
	 	Payout Factor
	 	                     %
	 	 	 
	 	 
	17.
	 	Result (Line 15 times Line 16)

(Can be Negative)	 	$                    

Based on this Table, the Partner Agent’s Combined Ratio is                     % (line 12 divided by line 3).
The maximum Profit Sharing due Partner Agent will be limited to 7% of Eligible Earned Premium per
Profit Sharing Year.

 

12

 

A minimum total Eligible Written Premium of twenty million dollars ($20,000,000) and minimum
Eligible Written Premium of five million dollars ($5,000,000) for each program must be achieved
during the Profit Sharing Year to be paid out under the profit sharing calculation. The profit
sharing calculation will be completed regardless of whether Partner Agent meets its minimum
requirements.

Defined Terms Used in this Exhibit B

	A.	 	“Claims Charge” shall be a designated amount determined by Company based on unallocated loss
adjustment expense for the current Profit Sharing Year.

	 
	B.	 	“Combined Ratio” shall mean the ratio of Expense Total to Eligible Earned Premium.

	 
	C.	 	“Commissions Incurred” shall include the direct commissions and policy fees (if included in
Eligible Earned Premium) incurred by Company for the Profit Sharing Year, relating to Eligible
Earned Premium. Additionally, Company shall add to such total any amounts or expenses of
Partner Agent which Company agrees to reimburse, assume, or share.

	 
	D.	 	“Dividends Incurred” shall include all dividends incurred (paid plus an estimate of accrued
but not paid) for the Profit Sharing Year by Company.

	 
	E.	 	“Eligible Earned Premium” shall mean direct premium earned for Profit Sharing Year less
earned premium ceded (less ceding commission earned) for reinsurance.

	 
	F.	 	“Eligible Written Premium” shall mean direct premium written for Profit Sharing Year.

	 
	G.	 	“Expense Total” shall mean the sum of the following: Losses and ALAE Incurred for Profit
Sharing Year; TPA Claims Fee for Profit Sharing Year; Claims Charge for Profit Sharing Year;
IBNR Charge for Profit Sharing Year; Commissions Incurred for Profit Sharing Year; Taxes,
Licenses and Fees for Profit Sharing Year; Operating Charge; and Dividends Incurred for Profit
Sharing Year.

	 
	H.	 	“Final Profit Sharing Year” shall mean the Profit Sharing Year in which this Agreement is
terminated.

	 
	I.	 	“IBNR Charge” shall be determined solely by Company and shall include a provision for the
reserve for Losses and ALAE Incurred but not reported during the Profit Sharing Year, which
reserve shall include development on losses and ALAE already reported to Company less losses
for IBNR ceded.

	 
	J.	 	“Losses and ALAE Incurred” shall be direct losses and expenses incurred (paid plus case
reserves) less Losses and ALAE Incurred ceded for reinsurance by Company on claims reported
for the Profit Sharing Year relating to Eligible Earned Premium, excluding unallocated loss
adjustment expense, plus any extra contractual or bad faith payments or reserves.

	 
	K.	 	“Operating Charge” shall be a designated amount for the current Profit Sharing Year.
Operating Charge shall be determined solely at Company’s discretion and shall be based on the
operating expenses of Company not included in any of the line items described herein.

	 
	L.	 	“Payout Factor” shall be calculated according to the following chart:

 

13

 

PROFIT SHARING AGREEMENT

PAYOUT FACTORS

	 	 	 	 	 
	 	 	5 Years	 
	1st Valuation
	 	 	20	%
	2nd Valuation
	 	 	40	%
	3rd Valuation
	 	 	60	%
	4th Valuation
	 	 	80	%
	5th Valuation
	 	 	100	%

	M.	 	“Premium Written Off” shall include any premium due Company which Company has charged off as
uncollectible for the Profit Sharing Year.

	 
	N.	 	“Profit Sharing Year” shall mean January 1 to December 31, except for the initial Profit
Sharing Year which shall be from the Effective Date until December 31.

	 
	O.	 	“Taxes, Licenses and Fees” shall include any loss based or premium based assessments and any
expenses relating thereto, and premium taxes, boards, bureaus, and any miscellaneous taxes
including insurance department licenses and fees, relating to Eligible Earned Premium.

	 
	P.	 	“TPA Claims Fee” shall be third party claims fees incurred by Company on behalf of the
Partner Agent for the current Profit Sharing Year.

	 
	Q.	 	“Valuation Date” shall mean June 30 of each year. Except as otherwise set forth below,
Company shall continue providing calculations for each Profit Sharing Year through the June 30
of each successive year following termination of this Agreement, the Final Profit Sharing
Year, or until the parties mutually agree in writing to close the calculations for a
particular Profit Sharing Year or Profit Sharing Years.

Timing of Calculation of Profit Sharing Due

	A.	 	If Partner Agent meets the Minimum Eligible Written Premium requirements for profit sharing,
Company shall calculate Profit Sharing Due to Partner Agent for the Profit Sharing Year based
on Company’s records. Such calculation shall be provided to Partner Agent sixty (60) days
after each Valuation Date for each Profit Sharing Year.

	 
	B.	 	Each Profit Sharing Year’s calculation will include a separate re-calculation of each prior
Profit Sharing Year. Re-calculations for each prior Profit Sharing Year will be as of the
current Valuation Date, and will be made utilizing the formula set forth in the Table.

	 
	C.	 	Provided that all premium or other amounts due Company shall have been received by Company,
within sixty (60) days after completion of the calculation of Profit to be Shared, Company
shall pay the amount of Profit Sharing Due to Partner Agent for the Profit Sharing Year.

Term and Termination

In the event this Agreement is terminated prior to the fifth anniversary of the Effective Date by
the Partner Agent, Company shall provide no further profit sharing calculations. In the event that
this Agreement is terminated prior to the fifth anniversary of the Effective Date by Company in
accordance with Section IX, Company shall provide no further profit sharing calculations.

 

14

 

General

No charge, offset, credit, or deduction for any Profit Due to Partner Agent which is or may be due
Partner Agent shall be made or claimed by Partner Agent in accounts submitted to Company under this
Agreement or any other agreement. Profit Due to Partner Agent shall be payable only by Company’s
check. Company may combine or offset any amount owed to Partner Agent by Company hereunder against
any amount owed to Company by Partner Agent under any other agreement between the parties.

 

15Filed by Bowne Pure Compliance

 

Exhibit 10.3

SECURITIES PURCHASE AGREEMENT

This Securities Purchase Agreement (this “Agreement”) is made as of October 1, 2007, by and
among the purchaser listed on Schedule A attached hereto (the “Purchaser”) and Specialty
Underwriters’ Alliance, Inc., a Delaware corporation (the “Company”).

WHEREAS, the Company desires to sell to Purchaser shares of the Company’s Class B Common
Stock, par value $.01 per share (the “Shares”),

NOW THEREFORE, in consideration of the foregoing recitals and the mutual covenants, agreements
and other consideration set forth herein, the parties hereto, intending to be legally bound hereby,
agree as follows:

PART III — 1. Sale and Purchase of Securities; Closing.

Item 1: (a) Authorization. The Company has authorized the issuance and sale of the
Shares, having the rights, preferences, privileges and restrictions set forth in the Company’s
Amended and Restated Certificate of Incorporation, a copy of which is attached hereto as Schedule B
(the “Certificate of Incorporation”).

Item 2: (b) Sale and Purchase. Subject to the terms, conditions, representations,
warranties, covenants and agreements contained in this Agreement, the Purchaser agrees to purchase
from the Company, and the Company agrees to sell, assign, transfer and deliver to the Purchaser,
from time to time, as set forth herein, the applicable number of Shares for the consideration
specified in Section 1(c).

(c) Purchase Price. The Purchaser agrees to pay to the Company an aggregate purchase
price of $1,000,000 (the “Purchase Price”) to purchase Shares in installments, as provided for on
Schedule C attached hereto (the “Installment Schedule,” and each date individually, an “Installment
Date”). The number of Shares that Purchaser will receive in consideration for such payments will
be determined by dividing (i) the applicable portion of the purchase price due on each Installment
Date (each individually, a “Payment”) by (ii) the Closing Price of the Company’s Common Stock on
the date of actual payment (with fractional Shares rounded up to the next whole Share). If
Purchaser fails to make full payment on any Installment Date, the number of Shares that Purchaser
shall be entitled to receive, with respect to such Installment Date, will be equal to the Payment
divided by the Closing Price of the Common Stock on the date of actual payment, or if such day is
not a Trading Day, the Trading Day first preceding the date of actual payment. Each Payment shall
be made by wire transfer in immediately available funds to an account designated by the Company.
Notwithstanding the foregoing, with respect to any Installment Date, the Company shall not issue,
and the Purchaser shall not be required to make Payment for, any Shares if the issuance of such
Shares would result in (i) the aggregate number of all Shares issued pursuant to this Agreement
being greater than 19.9% of the number of shares of the Company’s Common Stock issued and
outstanding on the date hereof (exclusive of any shares held by affiliates of the Company) or (ii)
the Company being in violation of any listing requirements, corporate governance rules or any other
rules and regulations of the NASD or the Nasdaq National Market or any other market or exchange on
which the Company’s Common Stock is then listed or quoted; in which case the Company and the
Purchaser will, if legally permissible, adjust the amount of the Payment due, and the number of
Shares to be issued, so that the conditions specified in sub-clauses (i) and (ii) would be
satisfied.

(d) Delivery. With respect to each installment, the Company shall deliver, or cause
to be delivered, the applicable number of Shares to the Purchaser as promptly as practical after
full payment was made.

2. Representations and Warranties of the Purchaser.

The Purchaser hereby represents and warrants to the Company as follows:

(a) The Purchaser is purchasing the Shares for its own account, for investment purposes only,
and not with a view to, or in connection with, any resale or other distribution of the Shares.

 

1

 

(b) The Purchaser has such knowledge and experience in financial and business matters that the
Purchaser is capable of evaluating the merits and risks of its investment in the Company and of
protecting its own interests in connection therewith. The Purchaser is an “accredited investor”
within the meaning of Rule 501(a) promulgated under the Securities Act.

(c) The Purchaser has had the opportunity to review all documents and information that the
Purchaser has requested concerning its investment in the Company. The Purchaser has had the
opportunity to ask questions of the Company’s management, which questions were answered to its
satisfaction.

(d) The Purchaser acknowledges that an investment in the Company involves substantial risks.
The Purchaser is able to bear the economic risk of its investment for an indefinite period of time.

(e) The Purchaser has not paid or given any commission or other remuneration in connection
with the purchase of the Shares. The Purchaser has not received any public media advertisements
and has not been solicited by any form of mass mailing solicitation.

(f) This Agreement has been duly executed and delivered by the Purchaser and has been duly
authorized by the Purchaser by all necessary action. This Agreement is a valid and binding
obligation of the Purchaser, enforceable in accordance with its terms, except as such enforcement
may be limited by bankruptcy, insolvency, moratorium or other similar laws affecting creditors’
rights generally or by the principles governing the availability of equitable remedies.

(g) Neither the execution and delivery of this Agreement nor the consummation of the
transactions contemplated hereby will violate or result in any violation of, or be in conflict with
or constitute a default under, or require the consent of any person under any agreement,
instrument, judgment, decree, order, statute, rule or governmental regulation applicable to the
Purchaser, except such that are obtained or waived. No consent, approval, order or authorization
of, or registration, declaration or filing with, any governmental authority is required on the part
of the Purchaser in connection with the execution and delivery of this Agreement or the performance
by the Purchaser of its obligations hereunder.

3. Representations and Warranties of the Company.

The Company hereby represents and warrants to the Purchaser as follows:

(a) The Company is a corporation duly organized, validly existing and in good standing under
the laws of the state of Delaware.

(b) The Company has full corporate power and authority to execute and deliver this Agreement
and to sell, transfer, assign and deliver the Shares to the Purchaser.

(c) This Agreement has been duly executed and delivered by the Company and constitutes a valid
and binding obligation of the Company, enforceable in accordance with its terms, except as such
enforcement may be limited by bankruptcy, insolvency, moratorium or other similar laws affecting
creditors’ rights generally or by the principles governing the availability of equitable remedies.

(d) All of the Shares, when delivered in accordance with the terms of this Agreement, will be
validly issued and outstanding, fully paid and nonassessable.

(e) Neither the execution and delivery of this Agreement nor the consummation of the
transactions contemplated hereby will violate or result in any violation of, or be in conflict with
or constitute a default under, or require the consent of any person under any agreement,
instrument, judgment, decree, order, statute, rule or governmental regulation applicable to the
Company, except such that are obtained or waived. No consent, approval, order or authorization of,
or registration, declaration or filing with, any governmental authority is required on the part of
the Company in connection with the execution and delivery of this Agreement or the performance by
the Company of its obligations hereunder.

 

2

 

(f) The Company has delivered to the Purchaser true, correct and complete copies of the
Company’s Certificate of Incorporation and By-laws of the Company, reflecting all amendments
thereto. Such Certificate of Incorporation and By-laws have not been amended, modified or waived
since the date thereof.

4. Terms of the Class B Common Stock.

(a) Voting Rights; Redemption Rights. Holders of Class B Stock are not entitled to
any voting rights in the Company. Holders of Class B Stock have no redemption or preemptive
rights, except as provided herein.

(b) Dividends; Liquidation and Distribution. Subject to the terms of any outstanding
series of preferred stock of the Company, holders of Class B Stock are entitled to dividends in
amounts and at times as may be declared by the board of directors of the Company out of funds
legally available, in the same proportion as holders of the Company’s common stock, par value $.01
per share (the “Common Stock”). Upon liquidation or distribution, holders of Class B Stock will be
entitled to share ratably, pari passu with the holders of the Common Stock, in all net assets
available for distribution to stockholders, after payment of any liquidation preferences to holders
of preferred stock of the Company.

(c) Exchange Right. (i) At any time and from time to time after the fifth
anniversary of the date of that certain Partner Agent Program Agreement between the Company and the
Purchaser (the “Partner Agent Agreement”), provided that the Partner Agent Agreement is still in
effect and has not been terminated by either party thereto, the Purchaser shall have the right, but
not the obligation, to exchange its shares of Class B Stock for an equal number of shares of Common
Stock (subject to equitable adjustment in the event of any stock dividend, stock split,
combination, reorganization, recapitalization, reclassification or other similar event involving a
change in such security); provided, further, that after the fifth anniversary of the date of the
Partner Agent Agreement and for so long as the Partner Agent Agreement is in effect, including any
day or days on which the Purchaser exercises such exchange right, the Purchaser must retain legal
and beneficial ownership for its own benefit of such number of shares of Class B Stock as could be
exchanged for the same number of shares of Common Stock with a value on such date of $500,000, as
determined pursuant to Section 4(g).

(ii) Upon the Purchaser’s exercise of the exchange right, the Purchaser shall surrender the
certificate or certificates for the shares of Class B Stock to be so exchanged, accompanied by
written notice of exchange duly executed, to the Company at any time during regular business hours
at the office of the Company. If so required by the Company, the shares of Class B Stock so
exchanged shall be accompanied by a written instrument or instruments of transfer in form
satisfactory to the Company, duly executed by the Purchaser.

(d) Issuance of Shares on Exchange. (i) As promptly as practicable after the
surrender, as provided herein, of any shares of Class B Stock for exchange, the Company shall
deliver to the Purchaser certificates representing the number of fully paid and nonassessable
shares of Common Stock into which such shares of Class B Stock have been exchanged in accordance
with the provisions of Section 4(c)(i). Such exchange shall be deemed to have been made as of the
close of business on the date that such shares of Class B Stock shall have been surrendered for
exchange by delivery thereof with a written notice of exchange duly executed, so that the rights of
the Purchaser as a holder of the shares of Class B Stock so exchanged shall cease at such time and,
subject to the following provisions of this section, the Purchaser shall be treated for all
purposes as having become the record holder of such shares of Common Stock at such time; provided,
however, that no such surrender on any date when the stock transfer books of the Company shall be
closed shall be effective to constitute the Purchaser as the record holder of such shares of Common
Stock on such date, but such surrender shall be effective to constitute the Purchaser as the record
holder thereof for all purposes at the close of business on the next succeeding day on which such
stock transfer books are open. The Company shall issue and deliver to the Purchaser, at the
expense of the Company, a new certificate covering the number of shares of Class B Stock
representing the unexchanged portion of the certificate so surrendered, which new certificate shall
entitle in all respects the Purchaser to the rights of the Class B Stock represented thereby to the
same extent as if the certificate theretofore covering such unexchanged shares had not been
surrendered for exchange.

(ii) All shares of Class B Stock that shall have been surrendered for exchange as provided
herein shall no longer be deemed to be outstanding and all rights with respect to such shares shall
immediately cease and terminate on the surrender date, except only the right of the Purchaser to
receive shares of Common Stock in
exchange therefor, and such shares shall not thereafter be transferred on the books of the
Company or be deemed to be outstanding for any purpose whatsoever.

 

3

 

(e) Repurchase Right. (i) (A) At any time prior to the fifth anniversary of the
execution of the Partner Agent Agreement, if the Partner Agent Agreement is terminated by either
the Company or the Purchaser, for any reason, the Company shall have the right, but not the
obligation, to repurchase the Shares currently held by the Purchaser for a price per Share equal to
the lesser of (1) the weighted average purchase price per Share as provided herein or (2) the
Current Market Price (as defined herein) of the Common Stock; and (B) at any time on or after the
fifth anniversary of the execution of the Partner Agent Agreement, if the Partner Agent Agreement
is terminated by either the Company or the Purchaser, for any reason, the Company shall have the
right, but not the obligation, to repurchase the Shares currently held by the Purchaser for a price
per Share equal to the Current Market Price of the Common Stock. Such right of the Company may be
exercised by providing a notice of repurchase (the “Repurchase Notice”) to the Purchaser not less
than five business days prior to the date repurchase is to be made pursuant to this Section 4(e),
specifying the date of such repurchase (the “Repurchase Date”) and the number of shares of Class B
Stock to be repurchased. The Repurchase Notice having been so given by the Company, the aggregate
repurchase price for the shares of Class B Stock to be so repurchased shall become due and payable
on the Repurchase Date.

(ii) For purposes of this Agreement:

(A) “Current Market Price” per share of a security at any date herein shall mean the average
daily Closing Price (as defined herein) of such security for the 20 consecutive Trading Days (as
defined herein) preceding such date (subject to equitable adjustment in the event of any stock
dividend, stock split, combination, reorganization, recapitalization, reclassification or other
similar event involving a change in such security); provided, however, that in the case of the
Common Stock, where no public market exists for the Common Stock at the time of exchange, the
Current Market Price per share of the Common Stock shall be as determined by an independent
investment banking firm experienced in the valuation of securities of property and casualty
insurance companies and selected by the Company (at the Company’s expense); provided that, after
receipt of the determination by such firm, the Purchaser shall have the right to select (at the
expense of the Purchaser) a second such investment banking firm to make such determination, in
which case the Current Market Price shall be the average of the two determinations; and provided
further that such determination need not be made more frequently than once every six months and any
determination shall be superceded by a good faith determination by the Company’s board of directors
that shall be required if a material event reasonably likely to affect the value of the Common
Stock (such as a placement of equity securities) should occur after the next preceding
determination, whether by an investment banking firm or firms, or by the Company’s board of
directors.

(B) “Closing Price” shall mean, with respect to any Trading Day: (1) if the Common Stock is
listed or admitted to trading on a national securities exchange, the last reported sale price of
the Common Stock, regular way, or in case no sale takes place on such day, the average of the
reported closing bid and asked prices of the Common Stock, regular way, in either case as reported
on such exchange; or (2) if the Common Stock is not listed or admitted to trading on any national
securities exchange, but is listed on the Nasdaq National Market, the closing sale price of the
Common Stock on such day, or in case no sale is publicly reported for such day, the average of the
representative closing bid and asked quotations for the Common Stock, as reported on Nasdaq; or (3)
if the Common Stock is not listed or admitted to trading on the Nasdaq National Market, the average
of the bid and asked prices for the Common Stock as furnished for such day by Nasdaq, or, if not
furnished by Nasdaq, by any New York Stock Exchange, Inc. member firm regularly making a market in
the Common Stock and selected for such purpose by the Company’s board of directors.

(C) “Trading Day” shall mean, in the case of any security, any day on which trading takes
place (1) if such security is then listed or admitted to trading on a national securities exchange,
on the principal national securities exchange on which such security is then listed or admitted to
trading, (2) if such security is then listed or admitted to trading on the Nasdaq National Market,
on the Nasdaq National Market, or (3) otherwise, in the over-the-counter market.

(iii) On or prior to the Repurchase Date, the Purchaser shall surrender such shares of Class B
Stock to the Company in the manner and at the place designated by the Company. From and after the
Repurchase Date, unless there shall have been a default in the payment of the repurchase price, all
rights of the Purchaser with
respect to the Shares shall cease, and such Shares shall not thereafter be transferred on the
books of the Company or be deemed to be outstanding for any purpose whatsoever.

 

4

 

(f) Provisions in Case of a Change of Control. In case of any “Change of Control”;
that is: (i) any sale, lease, exchange or other transfer of all or substantially all of the
property and assets of the Company to a non-affiliated third party; (ii) any merger or
consolidation with a non-affiliated third party to which the Company is a party and as a result of
which the holders of the voting securities of the Company immediately prior thereto own less than a
majority of the outstanding voting securities of the surviving entity immediately following such
transaction; or (iii) any Person or group of Persons (as such term is used in Section 13(d) of the
Securities Exchange Act of 1934, as amended (the “Exchange Act”)) shall beneficially own (as
defined in Rule 13d-3 under the Exchange Act) securities of the Company representing 50% or more of
the combined voting power of the voting securities of the Company then outstanding, then the
Purchaser shall thereafter have the right to convert its shares of the Class B Stock into the kind
and amount of securities, cash and other property receivable upon such reorganization,
reclassification, consolidation, merger or disposition by the Purchaser of the number of shares of
Common Stock that the Purchaser would have received had it converted its shares of Class B Stock
immediately prior to such reorganization, reclassification, consolidation, merger or disposition
pursuant to Section 4(c)(i). For purposes of this section, “voting securities” shall mean
securities, the holders of which are ordinarily, in the absence of contingencies, entitled to elect
the corporate directors (or Persons performing similar functions). The foregoing provisions of
this section shall similarly apply to successive reorganizations, reclassifications,
consolidations, mergers or dispositions.

(g) Purchase obligation. Following the five-year anniversary of the date of this
Agreement, on each six-month anniversary thereafter, the Company shall determine the aggregate
value of the shares of Class B Stock held by the Purchaser. The value of each share of Class B
Stock shall equal the fair market value of one share of the Common Stock on such date, to be
calculated as follows: (i) if the Common Stock is listed or admitted to trading on a national
securities exchange, the last reported sale price of the Common Stock, regular way, on such day or
in case no sale takes place on such day, the average of the reported closing bid and asked prices
of the Common Stock, regular way, on such day, in either case as reported on such exchange; or (ii)
if the Common Stock is not listed or admitted to trading on any national securities exchange, but
is listed on the Nasdaq National Market, the closing sale price of the Common Stock on such day, or
in case no sale is publicly reported for such day, the average of the representative closing bid
and asked quotations for the Common Stock, as reported on Nasdaq; or (iii) if the Common Stock is
not listed or admitted to trading on the Nasdaq National Market, the average of the bid and asked
prices for the Common Stock as furnished for such day by Nasdaq, or, if not furnished by Nasdaq, by
any New York Stock Exchange, Inc. member firm regularly making a market in the Common Stock and
selected for such purpose by the Company’s board of directors; or (iv) if no public market exists
for the Common Stock, as determined in good faith by the Company’s board of directors. If the
aggregate value of the Class B Stock held by the Purchaser is determined to be less than $500,000,
then the Purchaser shall purchase from the Company such number of shares of Class B Stock as would
equal the difference between the value of the Class B Stock as determined herein and $500,000. The
purchase price of such shares of Class B Stock would be payable to the Company by wire transfer in
immediately available funds to an account designated by the Company no later than one business day
after the determination of the value as provided herein. If such six-month anniversary falls on
any day that is not a business day, then the determination of the value of the Class B Stock shall
be made on the next immediately following business day.

5. Taxes on Exchange. The Company will pay any and all stamp or similar taxes that may be
payable in respect of the issuance and delivery of shares of Common Stock upon exchange of shares
of Class B Stock pursuant to Section 4(c)(i).

6. No Registration under Federal or State Securities Laws. (a) The Purchaser acknowledges
that the Shares have not been registered under the Securities Act or the securities laws of any
state by reason of a specific exemption or exemptions from registration under the Securities Act
and applicable state securities laws, and that the Company’s reliance on such exemptions is
predicated on the accuracy and completeness of the Purchaser’s representations, warranties,
acknowledgements and agreements contained herein. Accordingly, the Shares may not be offered,
sold, transferred, pledged or otherwise disposed of by the Purchaser without an effective
registration statement under the Securities Act and any applicable state securities laws or an
opinion of counsel acceptable to the Company that the proposed transaction will be exempt from
registration. The Purchaser acknowledges that the
Company is not required to register the Shares under the Securities Act or any applicable state
securities laws or to make any exemption from registration available. The Purchaser understands
that the Shares, and any shares of Common Stock issued in exchange for Shares, will bear legends
substantially to the effect of the following:

 

5

 

“THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR THE
SECURITIES LAWS OF ANY STATE. THE SHARES MAY NOT BE OFFERED, SOLD,
TRANSFERRED, PLEDGED OR OTHERWISE DISPOSED OF WITHOUT AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE ACT AND UNDER ANY APPLICABLE STATE
SECURITIES LAWS, RECEIPT OF A NO-ACTION LETTER ISSUED BY THE
SECURITIES AND EXCHANGE COMMISSION (TOGETHER WITH EITHER
REGISTRATION OR AN EXEMPTION UNDER APPLICABLE STATE SECURITIES LAWS)
OR AN OPINION OF COUNSEL ACCEPTABLE TO THE COMPANY THAT THE PROPOSED
TRANSACTION WILL BE EXEMPT FROM REGISTRATION UNDER THE ACT AND
APPLICABLE STATE SECURITIES LAWS.”

and that the Company will place a stop order against the transfer of the certificates representing
the Shares and refuse to effect any transfers thereof in the absence of satisfying the conditions
contained in the foregoing legend.

(b) The Purchaser acknowledges that no public market now exists for Class B Common Stock and
there is no assurance that a public market will ever exist for the such securities.

7. Transfers. The Purchaser shall not sell, assign, transfer, pledge, hypothecate,
mortgage or dispose of, by gift or otherwise, or in any way encumber, any shares of Class B Stock
owned by the Purchaser, except for exchanges and repurchases in compliance with Section 4.

8. No Preemptive Rights. The Purchaser shall have no preemptive or preferential right of
subscription to any shares of stock of the Company, or to options, warrants or other interests
therein or therefor, or to any obligations convertible or exchangeable into stock of the Company
(except as provided herein), issued or sold, or any right of subscription to any security thereof
other than such, if any, as the Company’s board of directors, in its discretion, may determine from
time to time and at such price or prices as the Company’s board of directors may fix from time to
time.

9. Miscellaneous.

(a) Payment of Expenses. Each party shall pay its own expenses incurred in connection
with this Agreement.

(b) Entire Agreement; Amendments. This Agreement constitutes the entire agreement of
the parties with respect to the transactions contemplated hereby and may not be modified, amended,
altered or supplemented except upon the execution and delivery of a written agreement executed by
the party or parties sought to be affected.

(c) Binding Effect. This Agreement shall be binding upon, inure to the benefit of and
be enforceable by, the Company and the Purchaser, and the Company’s or the Purchaser’s respective
heirs, beneficiaries, executors, successors, representatives and assigns, as the case may be.

(d) Further Assurances. From time to time, at the other party’s request and without
further consideration, each party hereto shall execute and deliver such additional documents and
take all such further lawful action as may be necessary or desirable to consummate and make
effective, in the most expeditious manner practicable, the transactions contemplated by this
Agreement.

(e) Notices. All notices, claims, requests, demands and other communications
hereunder shall be in writing and shall be deemed to have been duly given at the time when hand
delivered, when received if sent by
facsimile or by same day or overnight recognized commercial courier service, or three days
after being mailed (registered or certified mail, postage prepaid, return receipt requested) as
follows:

 

6

 

If to the Purchaser:

First Light Program Managers, Inc.

2800 W. State Road 84, Suite 118

Dania, FL 33312

Facsimile: 1-954-942-9081

Attention: Anthony L. Johnson

If to the Company:

Specialty Underwriters’ Alliance, Inc.

222 South Riverside Plaza

Chicago, Illinois 60606

Facsimile: 312-277-1800

Attention: Scott W. Goodreau

with a copy to:

Stroock & Stroock & Lavan LLP

180 Maiden Lane

New York, New York 10038

Facsimile: 212-806-6006

Attention: William W. Rosenblatt, Esq.

or to such other address as the person to whom notice is to be given may have previously furnished
to the other party in writing in the manner set forth above (provided that notice of any change of
address shall be effective only upon receipt thereof).

(f) Severability. Whenever possible, each provision or portion of any provision of
this Agreement will be interpreted in such manner as to be effective and valid under applicable
law; however, if any provision or portion of any provision of this Agreement is held to be invalid,
illegal or unenforceable in any respect under any applicable law or rule in any jurisdiction, such
invalidity, illegality or unenforceability will not affect any other provision or portion of any
provision in such jurisdiction, and this Agreement will be reformed, construed and enforced in such
jurisdiction as if such invalid, illegal or unenforceable provision or portion of any provision had
never been contained herein.

(g) Remedies Cumulative. All rights, powers and remedies provided under this
Agreement or otherwise available in respect hereof at law or in equity shall be cumulative and not
alternative, and the exercise of any thereof by any party shall not preclude the simultaneous or
later exercise of any other such right, power or remedy by such party. All representations,
warranties, covenants and agreements contained herein shall survive the execution and delivery of
this Agreement, the closing and any investigation made by any party hereto.

(h) No Waiver. The failure of any party hereto to exercise any right, power or remedy
provided under this Agreement or otherwise available in respect hereof at law or in equity, or to
insist upon compliance by any other party hereto with its obligations hereunder, and any custom or
practice of the parties at variance with the terms hereof, shall not constitute a waiver by such
party of its right to exercise any such or other right, power or remedy or to demand such
compliance.

(i) No Third Party Beneficiaries. This Agreement is not intended to be for the
benefit of, and shall not be enforceable by, any person or entity who or which is not a party
hereto.

 

7

 

(j) Counterparts. This Agreement may be executed in two or more counterparts, each of
which will be deemed to be an original, but all of which together will constitute one and the same
instrument.

(k) Governing Law. This Agreement will be governed as to formation, performance,
interpretation and enforcement by the laws of the state of New York, without regard to principles
of conflicts of law to the extent that the application of the laws of another jurisdiction would be
required thereby.

(l) Arbitration. (i) Any dispute arising out of the interpretation, performance or
breach of this Agreement, including the formation or validity thereof, shall be submitted for
decision to a panel of three arbitrators. Notice requesting arbitration shall be in writing and
sent certified or registered mail, return receipt requested. One arbitrator shall be chosen by
each of the Company and the Purchaser and the two arbitrators shall, before instituting the
hearing, choose an impartial third arbitrator who shall preside at the hearing. If either party
fails to appoint its arbitrator within thirty (30) days after being requested to do so by the other
party, the latter, after ten (10) days’ notice by certified or registered mail of its intention to
do so, shall request the American Arbitration Association (“AAA”) to appoint the second arbitrator.
If the two arbitrators are unable to agree upon the third arbitrator within thirty (30) days of
their appointment, the arbitrators shall request the AAA to select the third arbitrator.

(ii) Within thirty (30) days after notice of appointment of all arbitrators, the panel shall
meet and determine timely periods for briefs, discovery procedures and schedules for hearings. The
panel shall be relieved of all judicial formality and shall not be bound by the strict rules of
procedure and evidence. Unless the panel agrees otherwise, arbitration shall take place in New
York, New York, and the panel shall apply the law of the state of New York. The decision of any
two arbitrators when rendered in writing shall be final and binding. The panel is empowered to
grant interim relief, as it may deem appropriate. In no event shall the panel award punitive or
exemplary damages. The panel shall make its decision considering the custom and practice of the
applicable insurance business within forty-five (45) days following the termination of the
hearings. Either party may apply to a United States District Court or to a State Court of
competent jurisdiction for an order confirming the arbitration award; a judgment of such court
shall thereupon be entered on the award. If such an order is issued, the attorneys’ fees of the
party so applying and court costs will be paid by the party against whom confirmation is sought.

(iii) The parties hereto shall share the expense of the arbitrators equally. The remaining
costs of the arbitration shall be allocated by the panel. The panel may, at its discretion, award
such further costs, interest and expenses as it considers appropriate, including but not limited to
attorneys’ fees, to the extent not prohibited by law.

(iv) Any arbitration proceeding under this Agreement will not be consolidated or joined with
any arbitration proceeding under any other agreement, or involving any other property or premises,
and will not proceed as a class action.

(m) Approval. The Purchaser acknowledges that (i) the Company has not sought, or
received, stockholder approval as may be required under the rules and regulations of the NASD or
Nasdaq National Market in respect of transactions that may result in, among other things, a change
of control or the issuance of more than 20% of a company’s outstanding common stock, (ii) all of
the Company’s representations and warranties contained herein are deemed modified by the
disclosures in this Section 9(m), (iii) the restrictions on the issuance of Shares set forth in the
last sentence of Section 1(c) are intended to ensure that the Company does not violate any rules,
regulations or listing requirements of the NASD or the Nasdaq National Market, and (iv) if the
Company ever needs to seek stockholder approval with respect to such matters, the Purchaser shall
not be entitled to vote on such matters. 

(n) Descriptive Headings. The descriptive headings used herein are inserted for
convenience of reference only and are not intended to be part of or to affect the meaning or
interpretation of this Agreement.

(o) Gender and Number. Any words used in the masculine, feminine or neuter shall read
and be construed in the masculine, feminine or neuter where they would so apply. Words in the
singular shall be read and construed as though used in the plural in all cases where they would so
apply.

 

8

 

IN WITNESS WHEREOF, this Agreement has been duly executed and delivered by the Purchaser and
the Company as of the day and year first above written.

	 	 	 	 	 
	 	THE COMPANY:

SPECIALTY UNDERWRITERS’ ALLIANCE, INC.

 	 
	 	By:  	/s/ William S. Loder
 	 
	 	 	Name:  	William S. Loder 	 
	 	 	Title:  	Senior Vice President and

Chief
Underwriting Officer 	 
	 
	 	THE PURCHASER:

 	 
	 	By:  	/s/ Anthony L. Johnson
 	 
	 	 	Name:  	Anthony L. Johnson 	 
	 	 	Title:  	President 	 
	 

 

9

 

Schedule A

PURCHASER:

First Light Program Managers, Inc.

2800 W. State Road 84, Suite 118

Dania, FL 33312

Facsimile: 1-954-942-9081

Attention: Anthony L. Johnson

 

10

 

Schedule B

AMENDED AND RESTATED

CERTIFICATE OF INCORPORATION OF

SPECIALTY UNDERWRITERS’ ALLIANCE, INC.

The undersigned, being the Chief Executive Officer of Specialty Underwriters’ Alliance, Inc.
(the “Corporation”), a corporation organized and existing under the laws of the State of Delaware,
hereby certifies as follows:

1. The name of the Corporation is Specialty Underwriters’ Alliance, Inc. The original
Certificate of Incorporation of the Corporation was filed with the Secretary of State of the State
of Delaware on April 3, 2003. The Amended and Restated Certificate of Incorporation was filed with
the Secretary of State of the State of Delaware on May 14, 2004.

2. This Amended and Restated Certificate of Incorporation was duly adopted by the stockholders
at the 2005 annual meeting in accordance with the applicable provisions of Sections 228, 242 and
245 of the Delaware General Corporation Law.

3. This Amended and Restated Certificate of Incorporation restates and integrates and further
amends the provisions of the Corporation’s Certificate of Incorporation as heretofore restated and
amended.

4. The text of the Amended and Restated Certificate of Incorporation is hereby amended and
restated in its entirety to read as follows:

FIRST: The name of the Corporation is Specialty Underwriters’ Alliance, Inc.

SECOND: The Corporation’s registered office in the State of Delaware is at 160 Greentree
Drive, Suite 101, in the City of Dover, County of Kent. The name of its registered agent at such
address is National Registered Agents, Inc.

THIRD: The nature of the business of the Corporation and its purpose is to engage in any
lawful act or activity for which corporations may be organized under the General Corporation Law of
the State of Delaware.

FOURTH: The maximum number of shares that the Corporation shall be authorized to issue and
have outstanding at any one time shall be (i) thirty million (30,000,000) shares of Common Stock,
par value $0.01 per share (the “Common Stock”), (ii) two million (2,000,000) shares of Class B
Common Stock, par value $0.01 per share (the “Class B Stock”), and (iii) one million (1,000,000)
shares of Preferred Stock, par value $0.01 per share (the “Preferred Stock”).

Common Stock

The holders of the Common Stock shall be entitled to one vote per share. The holders of the
Class B Stock shall not be entitled to any voting rights except as otherwise required by law but
shall otherwise have the same rights as the holders of Common Stock, including the right to share
equally in any dividends distributed to the holders of the Common Stock and in any distribution to
the holders of the Common Stock pursuant to a dissolution. Certain holders of the Class B Stock
may have a contractual right to exchange their shares into shares of Common Stock. The Corporation
may have a contractual right to repurchase shares of the Class B Stock from certain holders
thereof.

 

11

 

Preferred Stock

The Board of Directors of the Corporation is authorized, subject to limitations prescribed by
law and the provisions of this Paragraph FOURTH, to provide for the issuance of the shares of
Preferred Stock in series, and to
establish from time to time the number of shares included in each such series, but not below
the number of shares then issued, and to fix the designation, powers, preferences, and relative
rights of the shares of each such series and the qualifications, or restrictions thereof. The
authority of the Board of Directors with respect to each shall include, but not be limited to,
determination of the following:

	 	(a)	 	The number of shares constituting that series and the distinctive designation
of that series;

	 
	 	(b)	 	The dividend rate on the shares of that series, whether dividends shall be
cumulative, and, if so, from which date or dates, and the relative rights of priority,
if any, of payments of dividends on shares of that series;

	 
	 	(c)	 	Whether that series shall have voting rights, in addition to the voting rights
provided by law, and, if so, the terms of such voting rights;

	 
	 	(d)	 	Whether that series shall have conversion privileges, and, if so, the terms and
conditions of such conversion, including provisions for adjustment of the conversion
rate in such events as the Board of Directors shall determine;

	 
	 	(e)	 	Whether or not the shares of that series shall be redeemable, and, if so, the
terms and conditions of such redemption, including the date or dates upon or after
which they shall be redeemable, and the amount per share payable in case of redemption,
which amount may vary under different conditions and at different rates;

	 
	 	(f)	 	Whether that series shall have a sinking fund for the redemption or purchase of
 shares of that series, and, if so, the terms and amount of such sinking fund;

	 
	 	(g)	 	The rights of the shares of that series in the event of voluntary or
involuntary liquidation, dissolution or winding-up of the Corporation, and the relative
rights of priority, if any, of payment of shares of that series; and

	 
	 	(h)	 	Any other relative rights, preferences and limitations of that series.

FIFTH: The name and mailing address of the incorporator is as follows:

Purvi Shah

Debevoise & Plimpton

919 Third Avenue

New York, New York 10022

SIXTH: The following provisions are inserted for the management of the business and for the
conduct of the affairs of the Corporation and for the purpose of creating, defining, limiting and
regulating the powers of the Corporation and its directors and stockholders:

	 	(a)	 	The number of directors of the Corporation shall be fixed and may be altered
from time to time in the manner provided in the By-Laws, and vacancies in the Board of
Directors and newly created directorships resulting from any increase in the authorized
number of directors may be filled, and directors maybe removed, as provided in the
By-Laws.

	 
	 	(b)	 	The election of directors may be conducted in any manner approved by the
stockholders at the time when the election is held and need not be by written ballot.

	 
	 	(c)	 	All corporate powers and authority of the Corporation (except as at the time
otherwise provided by law, by this Certificate of Incorporation or by the By-Laws)
shall be vested in and exercised by the Board of Directors.

 

12

 

	 	(d)	 	The Board of Directors shall have the power without the assent or vote of the
stockholders to adopt, amend, alter or repeal the By-Laws of the Corporation, except to
the extent that the By-Laws or this Certificate of Incorporation otherwise provide.

	 
	 	(e)	 	The personal liability of the directors of the corporation is hereby eliminated
to the fullest extent permitted by the provisions of paragraph (7) of subsection (b) of
Section 102 of the General Corporation Law of the State of Delaware, as the same may be
amended and supplemented. Neither the amendment or repeal of this section nor the
adoption of any provision of this Certificate of Incorporation inconsistent with this
section shall adversely affect any right or protection of a director of the Corporation
existing at the time of such amendment, repeal or adoption.

	 
	 	(f)	 	The Corporation shall, to the fullest extent permitted by Section 145 of the
General Corporation Law of the State of Delaware, as the same may be amended and
supplemented, or by any successor thereto, indemnify any and all persons whom it shall
have power to indemnify under said section from and against any and all of the
expenses, liabilities or other matters referred to in or covered by said section. The
Corporation shall advance expenses to the fullest extent permitted by said Section.
Such right to indemnification and advancement of expenses shall continue as to a person
who has ceased to be a director, officer, employee or agent and shall inure to the
benefit of the heirs, executors and administrators of such a person. The
indemnification and advancement of expenses provided for herein shall not be deemed
exclusive of any other rights to which those seeking indemnification or advancement of
expenses may be entitled under any By-Law, agreement, vote of stockholders or
disinterested directors or otherwise.

SEVENTH: The Corporation reserves the right to amend or repeal any provision contained in
this Certificate of Incorporation in the manner now or hereafter prescribed by the laws of the
State of Delaware, and all rights herein conferred upon stockholders or directors are granted
subject to this reservation.

IN WITNESS WHEREOF, the Corporation has caused this Amended and Restated Certificate of
Incorporation to be signed by Courtney C. Smith, its Chief Executive Officer, this 19th day of May,
2005.

	 	 	 	 	 
	 	 	 
	 	                     /s/ Courtney C. Smith
 	 
	 	Name:  	Courtney C. Smith 	 
	 	Title:  	Chief Executive Officer 	 

 

13

 

	 	 	 	 	 

Schedule C

INSTALLMENT SCHEDULE

$250,000 due and payable at the execution of this Agreement and each ninety days thereafter, until
the obligation under this Agreement is satisfied.

 

14

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