REGISTRATION RIGHTS AGREEMENT
Exhibit 10.2
This Registration Rights Agreement (this “Agreement”) is made as of this
7th day of June, 2004 by and among First Mercury Financial Corporation, a Delaware
corporation (together with any successor thereto, the “Company”), and FMFC Holdings, LLC, a
Delaware limited liability company (the “Investor”).
WHEREAS, the Company and the Investor are entering into a certain Series A Convertible
Preferred Stock Purchase Agreement, dated as of March 1, 2004 (the “Purchase Agreement”),
pursuant to which the Company has agreed to issue and sell, and the Investor has agreed to
purchase, shares of Series A Convertible Preferred Stock, par value $.01 per share (the “Series
A Preferred Stock”); and
WHEREAS, the execution of this Agreement is a condition precedent to the purchase by the
Investor of the Series A Preferred Stock under the Purchase Agreement.
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants and agreements
hereinafter set forth, the parties hereto agree as follows:
1. Certain Definitions. As used in this Agreement, the following terms shall have the
respective meanings set forth below:
An “Affiliate” of a Person means any person controlling, controlled by, or under
common control with, such Person. For purposes of this definition, “control” means the power to
direct the management and policies of a Person, whether through the ownership of voting securities,
by agreement or otherwise, including control within the meaning of Section 15 of the Securities Act
or Section 20 of the Exchange Act.
“Agreement” has the meaning set forth in the introduction to this Agreement.
“Commission” means the United States Securities and Exchange Commission or any other
federal agency at the time administering the Securities Act and the Exchange Act.
“Common Stock” means the Company’s common stock, par value $.01 per share.
“Company” has the meaning set forth in the introduction to this Agreement.
“Controlling Person” has the meaning set forth in Section 5 of this Agreement.
“Exchange Act” means the Securities Exchange Act of 1934, as amended from time to
time, or any similar successor federal statute, and the rules and regulations of the Commission
thereunder, all as the same shall be in effect at the time.
“Form S-1 Demand Registration” has the meaning set forth in Section 3(a) of this
Agreement.
“Holders” has the meaning set forth in Section 2 of this Agreement.
“Initial Public Offering” means the initial public offering of Common Stock by the
Company pursuant to an effective registration statement under the Securities Act.
“Inspector” has the meaning set forth in Section 4(h) of this Agreement.
“Investor” has the meaning set forth in the introduction to this Agreement.
“Person” means any individual, corporation, association, partnership, limited
liability company, joint venture, estate, trust, or unincorporated organization or any government
and any agency or political subdivision thereof.
“Purchase Agreement” has the meaning set forth in the introduction to this Agreement.
“Registrable Securities” means (i) any shares of Series A Preferred Stock held by the
Investor, (ii) the shares of Common Stock or any other securities issued or issuable upon
conversion of the Series A Preferred Stock, (iii) any other shares of Common Stock acquired by the
Investor and (iv) any other securities issued or issuable with respect to any such shares described
in clauses (i), (ii) and (iii) above by way of a stock dividend or stock split or in connection
with a combination of shares, recapitalization, merger, consolidation or other reorganization (it
being understood that for purposes of this Agreement, a Person will be deemed to be a holder of
Registrable Securities whenever such Person has the right to then acquire or obtain from the
Company any Registrable Securities, whether or not such acquisition has actually been effected).
“Securities Act” shall mean the Securities Act of 1933, as amended from time to time,
or any similar successor federal statute, and the rules and regulations of the Commission
thereunder, all as the same shall be in effect at the time.
“Selling Holder” has the meaning set forth in Section 5 of this Agreement.
“Series A Preferred Stock” has the meaning set forth in the introduction to this
Agreement.
“Stockholders Agreement” means the Stockholders Agreement of even date herewith by and
among the Company, the Investor and all the stockholders of the Company.
“Tier 1 Default” has the meaning set forth in the Purchase Agreement.
“Tier 2 Default” has the meaning set forth in the Purchase Agreement.
2. Piggyback Registrations. If at any time or times after the date hereof the Company
shall seek to file a registration statement under the Securities Act with respect to an offering of
shares of Common Stock to the public for its own account or on the account of others (except with
respect to registration statements on Form S-4 or Form S-8 or another form not available for
registering the Registrable Securities for sale to the public), the Company will promptly give
written notice thereof to all holders of Registrable Securities (the “Holders”). If within
twenty (20) days after their receipt of such notice, one or more Holders request the
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inclusion of some or all of the Registrable Securities held by them in such registration
statement, the Company will use its best efforts to include such securities in such registration
statement. In the case of any underwritten public offering, if the managing underwriter determines
that marketing factors require a limitation on the number of Registrable Securities to be offered
under such registration statement, subject to the following sentence, the Company shall not be
required to include in such registration statement Registrable Securities of the Holders in excess
of the amount, if any, of shares of Common Stock which the managing underwriter of such
underwritten offering shall reasonably and in good faith agree to include in such offering in
addition to any amount to be registered for the account of the Company. If any limitation of the
number of shares of Registrable Securities to be registered by the Holders is required pursuant to
this Section 2, the number of such securities to be excluded from such registration statement shall
be determined in the following sequence: (i) first, securities held by any Persons not having any
contractual, incidental “piggyback” registration rights to include such securities in the
registration statement, (ii) second, securities held by any Persons having contractual, incidental
“piggyback” rights to include such securities on the registration statement pursuant to an
agreement which is not this Agreement and (iii) third, Registrable Securities to be registered by
the Holders as determined on a pro rata basis (based upon the relative number of Registrable
Securities held by such Holders requesting inclusion pursuant to this Section 2).
3. Required Registrations.
(a) Demand Registration. At any time on or after the two (2) year anniversary of
the date hereof (or at any time after the occurrence and during the continuation of a Tier 1
Default or a Tier 2 Default, the Holders of a majority of the then outstanding Registrable
Securities may request that the Company register under the Securities Act all or a portion of the
Registrable Securities held by such requesting Holders having an aggregate value of at least
$10,000,000 (based on the then current market price) (a “Form S-1 Demand Registration”);
provided however, that in the event of a Material Default (as defined in the
Purchase Agreement), the Holders shall be entitled to exercise their rights under this Section
3(a) at any time prior to the two (2) year anniversary of the date hereof or at any time
thereafter. Such requests shall be in writing and shall state the number of shares of
Registrable Securities to be disposed of and the intended method of disposition of such shares by
such requesting Holders. The Holders shall only be entitled to request two (2) Form S-1 Demand
Registrations pursuant to this Section 3(a). Notwithstanding anything to the contrary contained
herein, a registration will not count as a Form S-1 Demand Registration under this Section 3(a)
until the registration statement relating to all such Registrable Securities requested to be so
registered has been declared effective by the Commission at the request of the requesting Holders
and, if such method of disposition is a firm commitment underwritten
public offering, all of such shares shall have been sold pursuant thereto.
(b) Registration Requirements. Following receipt of a request for registration
pursuant to this Section 3, the Company will promptly notify all of the other Holders of such
request and such Holders shall then have twenty (20) days to notify the Company of their desire
to participate in the registration. Thereupon, the Company will use its best efforts to cause
such of the Registrable Securities as may be requested by the Holders to be registered under the
Securities Act in accordance with the terms of this Section 3. If the request for registration
contemplates an underwritten public offering, the Company shall state
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such in the written notice and in such event the right of any Person to participate in such
registration shall be conditioned upon their participation in such underwritten public offering
and the inclusion of their securities in the underwritten public offering to the extent provided
herein.
(c) Underwritten Offering. If a requested registration pursuant to this Section 3
involves an underwritten public offering and the managing underwriter of such offering determines
in good faith that the number of securities sought to be offered should be limited due to market
conditions, then the number of securities to be included in such underwritten public offering
shall be reduced to a number deemed satisfactory by such managing underwriter; provided
that the shares to be excluded shall be determined in the following sequence: (i) first,
securities held by any Persons not having any contractual, incidental “piggyback” registration
rights to include such securities on the registration statement, (ii) second, securities held by
any Persons (other than the Holders) having contractual, incidental “piggyback” rights to include
such securities in the registration statement pursuant to an agreement which is not this
Agreement, (iii) third, securities to be registered by the Company for its own account and (iv)
fourth, Registrable Securities sought to be included by the Holders. If there is a reduction of
the number of Registrable Securities pursuant to clause (iv), such reduction shall be made on a
pro rata basis (based upon the relative number of Registrable Securities held by Holders
requesting inclusion pursuant to this Section 3). With respect to a request for registration
pursuant to this Section 3 which is for an underwritten public offering, the managing underwriter
shall be chosen by a majority-in-interest of the Holders requesting such registration, subject to
the approval of the Company, which approval will not be unreasonably withheld. If the managing
underwriter has not limited the number of Registrable Securities or other securities to be
underwritten, the Company may include securities for its own account in such registration if the
managing underwriter so agrees and if the number of Registrable Securities which would otherwise
have been included in such registration and underwriting will not thereby be limited. If
requested in good faith by the managing underwriter, the Holders agree not to offer, sell,
pledge, transfer or otherwise dispose of any Common Stock not registered under the Securities Act
for a period not to exceed ninety (90) days following the effective date of the registration
statement filed by the Company.
(d) Postponement. The Company may postpone the filing of a registration statement
requested by the Holders pursuant to this Section 3 for a reasonable period of time not more than
once during any twelve-month period, if the Company delivers to such Holders a certificate signed
by the President of the Company stating that the Board of Directors of the Company determined in
good faith that the filing of a registration statement would have a material adverse effect on
the Company at such time. The Company shall not be required to cause a registration statement
requested pursuant to this Section 3 to become effective within ninety (90) days following the
effective date of a registration statement on Form S-1 initiated by the Company, provided
that the Company had received the Holder’s request for registration after the Company had given
written notice, made in good faith, to the Holders that the Company was commencing to prepare a
Company-initiated registration statement (other than a registration effected solely to implement
an employee benefit plan or a transaction to which Rule 145 or any other similar rule under the
Securities Act is applicable); provided further, however, that the
Company shall use its best efforts to achieve such
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effectiveness promptly following such period.
4. Further Obligations of the Company. Whenever the Company is required hereunder to
include any Registrable Securities in a registration statement under the Securities Act, it agrees
that it shall also do the following:
(a) Pay all fees and expenses relating to such registrations and offerings (exclusive of
underwriting discounts and commissions) and the reasonable fees and expenses of not more than one
independent counsel for the Holders (chosen by a majority-in-interest of the Holders requesting
registration of Registrable Securities) in connection with any registrations pursuant to Sections
2 or 3 hereof;
(b) Use its best efforts to diligently prepare and file with the Commission a registration
statement and such amendments and supplements to such registration statement and the prospectus
used in connection therewith as may be necessary to keep such registration statement effective
until the Holder or Holders have completed the distribution described in the registration
statement relating thereto and to comply with the provisions of the Securities Act with respect
to the sale of securities covered by such registration statement for such period;
(c) Furnish to each selling Holder such copies of each preliminary and final prospectus and
such other documents as such Holder may reasonably request to facilitate the public offering of
its Registrable Securities;
(d) Enter into any reasonable underwriting agreement required by the proposed underwriter,
if any, in such form and containing such terms as are customary; provided,
however, that no Holder shall be required to make any representations or warranties other
than with respect to its title to the Registrable Securities and with respect to any written
information provided by the Holder to the Company;
(e) Use its best efforts to register or qualify the securities covered by such registration
statement under the securities or “blue sky” laws of such jurisdictions as any selling Holder may
reasonably request; provided that the Company shall not for any such purpose be required
to qualify to do business as a foreign corporation in any jurisdiction wherein it is not so
qualified;
(f) Immediately notify each selling Holder, at any time when a prospectus relating to his,
her or its Registrable Securities is required to be delivered under the Securities Act, of the
happening of any event as a result of which such prospectus contains an untrue statement of a
material fact or omits any material fact necessary to make the statements therein not misleading,
and, at the request of any such selling Holder, promptly prepare a supplement or amendment to
such prospectus so that, as thereafter delivered to the purchasers of such Registrable
Securities, such prospectus will not contain any untrue statement of a material fact or omit to
state any material fact necessary to make the statements therein not misleading;
(g) Cause all such Registrable Securities to be listed on each securities exchange or
quotation system on which similar securities issued by the Company are then
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listed or quoted (or if similar securities issued by the Company are not yet listed or
quoted, then on such exchange or quotation system as a majority-in-interest of the Holders
requesting such registration shall determine) and provide a transfer agent and registrar for all
such Registrable Securities not later than the effective date of such registration statement;
(h) Make available to each selling Holder, any underwriter participating in any disposition
pursuant to a registration statement, and any attorney, accountant or other agent or
representative retained by any such selling Holder or underwriter (each, an “Inspector”),
all financial and other records, pertinent corporate documents and properties of the Company, as
shall be reasonably necessary to enable them to exercise their due diligence responsibility, and
cause the Company’s officers to supply all information reasonably requested by any such Inspector
in connection with such registration statement as shall be reasonably necessary to enable them to
exercise their due diligence responsibility; provided, however, that such
Inspector shall agree in writing to hold in confidence and trust all information so provided and
to use such information only to satisfy such due diligence responsibility and no other.
(i) Permit any Holder, who, in its sole and exclusive judgment exercised in good faith,
believes that it might be deemed to be a Controlling Person (as defined in Section 5) of the
Company, to participate in good faith and at its own expense in the preparation of such
registration or comparable statement and to request the insertion therein of material furnished
to the Company in writing, which request shall not be denied by the Company without good reason;
provided, however, that preparation of the registration or comparable statement
shall be under the Company’s control and at the Company’s direction, and the Company shall retain
authority to determine the content of the registration or comparable statement.
(j) Otherwise use its best reasonable efforts to comply with the securities laws of the
United States and other applicable jurisdictions and all applicable rules and regulations of the
Commission and comparable governmental agencies in other applicable jurisdictions and make
generally available to the Holders, in each case as soon as practicable, but not later than
forty-five (45) days after the end of the twelve (12) month period beginning at the end of the
fiscal quarter of the Company during which the effective date of the registration statement
occurs (or ninety (90) days if such twelve (12) month period coincides with the Company’s fiscal
year), an earnings statement (which need not be audited) of the Company, covering such twelve
(12) month period, which will satisfy the provisions of Section 11(a) of the Securities Act;
(k) In the case of an underwritten public offering, furnish to a prospective selling Holder
holding at least a majority of the Registrable Securities being sold in such offering, upon
written request, a signed counterpart, addressed to such prospective selling Holder, of an
opinion of counsel for the Company, dated the effective date of the registration statement, and
covering substantially the same matters with respect to the registration statement (and the
prospectus included therein), as customarily covered in opinions of the Company’s counsel
delivered to the underwriters in underwritten public offerings of securities; and
(l) Otherwise cooperate with the underwriter or underwriters, the Commission
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and other regulatory agencies and take all actions and execute and deliver or cause to be
executed and delivered all documents necessary to effect the registration of any Registrable
Securities hereunder.
5. Indemnification; Contribution.
(a) Incident to any registration of any Registrable Securities under the Securities Act
pursuant to this Agreement, the Company will indemnify and hold harmless each underwriter, each
Holder who offers or sells any such Registrable Securities in connection with such registration
statement (including its partners (including partners of partners and stockholders of any such
partners), directors, officers, employees, representatives and agents of any of them) (each, a
“Selling Holder”), and each person who controls any of them within the meaning of Section
15 of the Securities Act or Section 20 of the Exchange Act (each, a “Controlling
Person”), from and against any and all losses, claims, damages, expenses and liabilities,
joint or several (including any investigative, legal and other expenses reasonably incurred in
connection with, and any amount paid in settlement of, any action, suit or proceeding or any
claim asserted, as the same are incurred), to which they, or any of them, may become subject
under the Securities Act, the Exchange Act or other federal or state statutory law or regulation,
at common law or otherwise, insofar as such losses, claims, damages or liabilities arise out of
or are based on (i) any untrue statement or alleged untrue statement of a material fact contained
in such registration statement (including any related preliminary or definitive prospectus, or
any amendment or supplement to such registration statement or prospectus), (ii) any omission or
alleged omission to state in such document a material fact required to be stated in it or
necessary to make the statements in it not misleading, (iii) any violation or alleged violation
by the Company of the Securities Act, the Exchange Act or any state securities law or any rule or
regulation promulgated under the Securities Act, the Exchange Act or any state securities law,
(iv) any failure to register or qualify the Registrable Securities in any state where the Company
or its agents has affirmatively undertaken or agreed in writing that the Company (the undertaking
of any underwriter chosen by the Company being attributed to the Company) will undertake such
registration or qualification on the Selling Holder’s behalf (provided that in such instance the
Company shall not be so liable if it has undertaken its best efforts to so register or qualify
the Registrable Securities), or (v) any blue sky application or other document executed by the
Company specifically for the purpose or based upon written information furnished by the Company
filed in any state or other jurisdiction in order to qualify any or all of the Registrable
Securities under the securities laws thereof; provided, however, that the Company
will not be liable to the extent that such loss, claim, damage, expense or liability arises from
and is based on an untrue statement or omission of a material fact contained in such registration
statement or alleged untrue statement or omission made in reliance on and in conformity with
information furnished in writing to the Company by such underwriter, Selling Holder or
Controlling Person expressly for use in such registration statement. With respect to such untrue
statement or omission or alleged untrue statement or omission in the information furnished in
writing to the Company by such Selling Holder expressly for use in such registration statement,
such Selling Holder will indemnify and hold harmless each underwriter, the Company (including its
directors, officers, employees, representatives and agents), each other Holder (including its
partners (including partners of partners and stockholders of such partners), directors, officers,
employees, representatives and agents of
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any of them, and each Controlling Person of any of them), from and against any and all
losses, claims, damages, expenses and liabilities, joint or several, to which they, or any of
them, may become subject under the Securities Act, the Exchange Act or other federal or state
statutory law or regulation, at common law or otherwise as a direct result of such untrue
statement or omission or alleged untrue statement or omission in the information furnished in
writing to the Company by such Selling Holder expressly for use in such registration statement.
In no event, however, shall the liability of a Selling Holder for indemnification under this
Section 5(a) exceed the net proceeds received by such Selling Holder from its sale of Registrable
Securities under such registration statement.
(b) If the indemnification provided for in Section 5(a) above for any reason is held by a
court of competent jurisdiction to be unavailable to an indemnified party in respect of any
losses, claims, damages, expenses or liabilities referred to therein, then each indemnifying
party under this Section 5, in lieu of indemnifying such indemnified party thereunder, shall
contribute to the amount paid or payable by such indemnified party as a result of such losses,
claims, damages, expenses or liabilities in such proportion as is appropriate to reflect (i) the
relative benefits received by the Company, the Selling Holders and the underwriters from the
offering of the Registrable Securities and (ii) the relative fault of the Company, the Selling
Holders and the underwriters in connection with the statements or omissions which resulted in
such losses, claims, damages, expenses or liabilities, as well as any other relevant equitable
considerations; provided, however, that in the event of a registration statement
filed in response to a demand for registration under Section 3(a) or Section 3(b) and in which
the Company does not register any shares of capital stock, the proportion of contribution by the
Company, the Selling Holders and the underwriters shall in all cases be governed solely by clause
(ii) above. The relative benefits received by the Company, the Selling Holders and the
underwriters shall be deemed to be in the same respective proportions that the net proceeds from
the offering (before deducting expenses) received by the Company and the Selling Holders and the
underwriting discount received by the underwriters, in each case as set forth in the table on the
cover page of the applicable prospectus, bear to the aggregate public offering price of the
Registrable Securities. The relative fault of the Company, the Selling Holders and the
underwriters shall be determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission or alleged omission to state a
material fact relates to information supplied by the Company, the Selling Holders or the
underwriters and the parties’ relative intent, knowledge, access to information and opportunity
to correct or prevent such statement or omission.
The Company and the Selling Holders agree that it would not be just and equitable if
contribution pursuant to this Section 5(b) were determined by pro rata or per capita allocation or
by any other method of allocation which does not take account of the equitable considerations
referred to in the immediately preceding paragraph. In no event, however, shall a Selling Holder
be required to contribute any amount under this Section 5(b) in excess of the net proceeds received
by such Selling Holder from its sale of Registrable Securities under such registration statement.
No Person found guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any Person who was not found guilty of such
fraudulent misrepresentation.
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(c) The amount required to be paid by an indemnifying party or payable to an indemnified
party as a result of the losses, claims, damages and liabilities referred to in this Section 5
shall be deemed to include, subject to the limitations set forth above, any legal or other
expenses reasonably incurred by such indemnified party in connection with investigating or
defending any such action or claim, payable as the same are incurred. The indemnification and
contribution provided for in this Section 5 will remain in full force and effect regardless of
any investigation made by or on behalf of the indemnified parties or any officer, director,
employee, agent or Controlling Person of the indemnified parties. No indemnifying party, in the
defense of any such claim or litigation, shall enter into a consent of entry of any judgment or
enter into a settlement without the consent of the indemnified party, which consent will not be
unreasonably withheld.
6. Rule 144 and Rule 144A Requirement. In the event that the Company becomes subject
to Section 13 or Section 15(d) of the Exchange Act, the Company shall use its best efforts to take
all action as may be required as a condition to the availability of Rule 144 or Rule 144A under the
Securities Act (or any successor or similar exemptive rules hereafter in effect). The Company
shall furnish to any Holder, within fifteen (15) days of a written request, a written statement
verifying its compliance with the current public information requirement of Rule 144 or Rule 144A
or such successor rules.
7. Transferability of Registration Rights. The registration rights set forth in this
Agreement are transferable to any transferee of 5% or more of the Registrable Securities. Each
subsequent holder of Registrable Securities must consent in writing to be bound by the terms and
conditions of this Agreement in order to acquire the rights of a Holder granted pursuant to this
Agreement.
8. Rights Which May Be Granted to Subsequent Investors. Other than transferees of
Registrable Securities under Section 7 hereof, the Company shall not, without the prior written
consent of the holders of a majority of the outstanding Registrable Securities, grant any other
registration rights to any third parties.
9. Miscellaneous.
(a) Amendments. For the purposes of this Agreement and all agreements executed
pursuant hereto, no course of dealing between the parties hereto and no delay on the part of
either party hereto in exercising any rights hereunder or thereunder shall operate as a waiver of
the rights hereof and thereof. This Agreement may be amended, modified or terminated and any
provision hereof may be waived by the joint written consent of the Company and the holders of not
less than a majority of the outstanding Registrable Securities; provided that no
amendment, modification or waiver may treat adversely one Holder in a manner different from the
Holders as a group without the consent of such Holder. Any amendment, modification, termination
or waiver effected in accordance with this Section 9(a) shall be binding upon all Holders of
Registrable Securities even if they do not execute such joint written consent.
(b) Notices and Demands. Any notice or demand which, by any provision of this
Agreement or any agreement, document or instrument executed pursuant hereto or
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thereto, except as otherwise provided therein, is required to be given shall be deemed to
have been sufficiently given or served and received for all purposes when delivered by hand or
facsimile or five (5) days after being sent by certified or registered mail, postage and charges
prepaid, return receipt requested, or two (2) days after being sent by overnight delivery
providing receipt of delivery, to the following addresses:
(i) If to the Company, First Mercury Financial Corporation, 00000 Xxxxxxxxxxxx Xxxxxxx,
Xxxxxxxxxx, XX 00000, Attn: Xxxxxxx Xxxxx, or at such other address designated by the Company to
the Investor in writing, with a copy to Xxxxxxxxx Xxxxxx PLLC, 000 X. Xxxxxxxxxx Xxxxxx, Xxxxx 000,
Xxxxxxx, XX 00000, Attn: Xxxxxx X. Xxxx.
(ii) If to the Investor, FMFC Holdings, LLC, 000 Xxxx Xxxxx Xxxxxx, Xxxxx 0000, Xxxxxxx, XX
00000, Attn: Xxxxxxx Xxxxxxxxx, or at such other address designated by the Investor to the Company
in writing, with a copy to XxXxxxxxx, Will & Xxxxx, 000 Xxxx Xxxxxx Xxxxxx, Xxxxxxx, XX 00000,
Attn: Xxxxx X. Xxxxxxxx.
(c) Remedies; Severability. It is specifically understood and agreed that any
breach of the provisions of this Agreement by either party will result in irreparable injury to
the other party, that the remedy at law alone will be an inadequate remedy for such breach, and
that, in addition to any other remedies which it may have, such other party may enforce its
rights by an action or actions for specific performance in the federal or state courts in the
State of Illinois (to the extent permitted by law). Whenever possible, each provision of this
Agreement shall be interpreted in such a manner as to be effective and valid under applicable
law, but if any provision of this Agreement shall be deemed prohibited or invalid under such
applicable law, such provision shall be ineffective to the extent of such prohibition or
invalidity, and such prohibition or invalidity shall not invalidate the remainder of such
provision or the other provisions of this Agreement.
(d) Successors and Assigns. This Agreement shall be binding upon and shall inure to
the benefit of the respective successors and permitted assigns of the parties hereto as
contemplated herein, and any successor to the Company by way of merger or otherwise shall
specifically agree to be bound by the terms hereof.
(e) Counterparts. This Agreement may be executed in one or more counterparts, each
of which shall constitute an original but all of which shall constitute but one and the same
instrument. One or more counterparts of this Agreement may be delivered via telecopier or other
electronic means, with the intention that they shall have the same effect as an original
counterpart hereof.
(f) Effect of Heading. The Section headings herein are for convenience only and
shall not affect the construction hereof.
(g) Governing Law. This Agreement shall be deemed a contract made under the laws of
the State of Delaware and together with the rights and obligations of the parties hereunder,
shall be construed under and governed by the laws of the State of Delaware, without giving effect
to its conflict of laws principles.
(h) Jurisdiction; Venue; Waiver Of Jury Trial.
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(i) Each of the parties to this Agreement hereby agrees that the state and federal courts of
the State of Illinois shall have exclusive jurisdiction to hear and determine any claims or
disputes between the parties hereto pertaining directly or indirectly to this Agreement, and all
documents, instruments and agreements executed pursuant hereto or thereto, or to any matter arising
herefrom (unless otherwise expressly provided for herein or therein). To the extent permitted by
law, each party hereby expressly submits and consents in advance to such jurisdiction in any action
or proceeding commenced by the other party hereto in any of such courts, and agrees that service of
such summons and complaint or other process or papers may be made by registered or certified mail
addressed to such party at the address to which notices are to be sent pursuant to this Agreement.
Each of the parties waives any claim that Chicago, Illinois is an inconvenient forum or an improper
forum based on lack of venue. The choice of forum set forth in this Section shall not be deemed to
preclude the enforcement of any judgment obtained in such forum or the taking of any action to
enforce the same in any other appropriate jurisdiction.
(ii) Each party hereto hereby waives, to the fullest extent permitted by applicable law, any
right it may have to a trial by jury in respect of any litigation directly or indirectly arising
out of, under or in connection with this Agreement. Each party hereto (a) certifies that no
representative, agent or attorney of the other party has represented, expressly or otherwise, that
the other party would not, in the event of litigation, seek to enforce the foregoing waiver and (b)
acknowledges that it and the other party hereto have been induced to enter into this Agreement by,
among other things, the mutual waivers and certifications in this Section.
(i) Further Assurances. From and after the date of this Agreement, upon the request
of either party hereto, the other party shall execute and deliver such instruments, documents and
other writings as may be reasonably necessary or desirable to confirm and carry out and to
effectuate fully the intent and purposes of this Agreement.
(j) Term. The provisions contained in Sections 2, 3 and 4 shall terminate ten (10)
years from the date of the Company’s Initial Public Offering or the date on which all Registrable
Securities held by and issuable to a Holder may be sold without restriction pursuant to Rule 144
of the Securities Act following the Company’s Initial Public Offering, whichever is later.
(k) Integration. This Agreement, including the exhibits, documents and instruments
referred to herein or therein, constitutes the entire agreement, and supersedes all other prior
agreements and understandings, both written and oral, between the parties with respect to the
subject matter hereof.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the parties hereto have caused this Registration Rights Agreement to be
duly executed as of the date first set forth above.
| COMPANY: | ||||||||
| FIRST MERCURY FINANCIAL CORPORATION | ||||||||
| By: | /s/ Xxxxxxx X. Xxxxx | |||||||
| Name: | Xxxxxxx X. Xxxxx | |||||||
| Title: | President | |||||||
| INVESTOR: | ||||||||
| FMFC HOLDINGS, LLC | ||||||||
| By: Glencoe Capital, LLC | ||||||||
| Its: Manager | ||||||||
| By: | /s/ Xxxxx X. Xxxxxxx | |||||||
| Name: | Xxxxx X. Xxxxxxx | |||||||
| Title: | ||||||||
