AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT
Exhibit 10.22
AMENDED AND RESTATED
REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT
This Amended and Restated Registration Rights Agreement (this “Agreement”) is made as
of this 17th day of October, 2006 by and among First Mercury Financial Corporation, a Delaware
corporation (together with any successor thereto, the “Company”), and the stockholders
whose names are set forth under the heading “Stockholders” on the signature pages hereto (the
“Stockholders”).
WHEREAS, the Company and certain Stockholders are parties to a Registration Rights Agreement
dated as of June 7, 2004 (the “Original Agreement”) which such parties desire to amend and
restate in its entirety;
WHEREAS, the Stockholders hold shares of Common Stock of the Company; and
WHEREAS, the Stockholders and the Company desire to set forth the circumstances under which
the Company shall register and maintain the effectiveness with the Commission of a registration
statement or statements for the public resale of the Registrable Securities.
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.
“Glencoe Demand Registration” has the meaning set forth in Section 3(a) of this
Agreement.
“Glencoe Holders” means the Stockholders whose names are set forth under the
subheading “Glencoe Holders” on the signature pages hereto.
“Glencoe Registrable Securities” means (i) any shares of Common Stock held by the
Glencoe Holders, (ii) any other shares of Common Stock acquired by the Glencoe Holders and (iii)
any other securities issued or issuable with respect to any such shares described in clauses (i)
and (ii) 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 Glencoe Registrable
Securities whenever such Person has the right to then acquire or obtain from the Company any
Glencoe Registrable Securities, whether or not such acquisition has actually been effected).
“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.
“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.
“Registrable Securities” means the Glencoe Registrable Securities and the Xxxx
Registrable Securities.
“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.
“Xxxx Demand Registration” has the meaning set forth in Section 3(b) of this
Agreement.
“Xxxx Holders” means the Stockholders whose names are set forth under the subheading
“Xxxx Holders” on the signature pages hereto.
“Xxxx Priority Registration” means a Xxxx Demand Registration in which the Xxxx
Holders have priority over the Glencoe Holders with respect to cutbacks pursuant to Section
3(b)(iii)(A).
“Xxxx Registrable Securities” means (i) any shares of Common Stock held by the Xxxx
Holders, (ii) any other shares of Common Stock acquired by the Xxxx Holders and (iii) any other
securities issued or issuable with respect to any such shares described in clauses (i) and (ii)
above by way of a stock dividend or stock split or in connection with a combination of
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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 Xxxx Registrable
Securities whenever such Person has the right to then acquire or obtain from the Company any Xxxx
Registrable Securities, whether or not such acquisition has actually been effected).
“Stockholder” has the meaning set forth in the introduction of this 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 for 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 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 in good faith that
market conditions 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); provided, that, in
connection with a Glencoe Demand Registration or a Xxxx Demand Registration, the Registrable
Securities shall be excluded from such registration statement in accordance with the priorities set
forth in Section 3(a)(iii) or 3(b)(iii), as the case may be. Notwithstanding the foregoing, the
Xxxx Holders shall not have any “piggyback” registration rights pursuant to this Section 2 with
respect to any Glencoe Demand Registration which is not an underwritten public offering, nor shall
the Glencoe Holders have any “piggyback” registration rights pursuant to this Section 2 with
respect to any Xxxx Demand Registration which is not an underwritten public offering.
3. Required Registrations.
(a) Glencoe Registrations.
(i) Glencoe Demand Registration. At any time on or after the six (6) month
anniversary of the date hereof, the holders of a majority of the then outstanding
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Glencoe Registrable Securities may request that the Company register under the Securities Act,
on Form S-1 or Form S-3 (if the Company is then eligible to use such form), all or a portion of the
Glencoe 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 “Glencoe Demand
Registration”). Such request shall be in writing and shall state the number of shares of
Glencoe Registrable Securities to be disposed of, the intended method of disposition of such shares
by such requesting Glencoe Holders and whether such disposition shall be by means of an
underwritten public offering. The Glencoe Holders shall only be entitled to request two (2)
Glencoe Demand Registrations pursuant to this Section 3(a). Notwithstanding anything to the
contrary contained herein, a registration will not count as a Glencoe Demand Registration under
this Section 3(a) until the registration statement relating to all such Glencoe Registrable
Securities requested to be so registered has been declared effective by the Commission at the
request of the requesting Glencoe Holders and, if such method of disposition is a firm commitment
underwritten public offering, all of such shares shall have been sold pursuant thereto. In
addition, a registration will not count as a Glencoe Demand Registration if, after it has become
effective, the offering of Glencoe Registratable Securities is interfered with by a stop order,
injunction or other order of the SEC or other governmental agency or court.
(ii) Registration Requirements. Following receipt of a request for registration
pursuant to this Section 3(a), the Company will promptly notify all of the other Glencoe Holders of
such request and such Glencoe 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 Glencoe Registrable Securities as may be requested by the Glencoe 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 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.
(iii) Underwritten Offering. If a requested registration pursuant to this Section
3(a) 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 Glencoe 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, Glencoe Registrable Securities sought to be included by the
Glencoe Holders and Xxxx Registrable Securities sought to be included by the Xxxx Holders pursuant
to the “piggyback” rights granted to the Xxxx Holders pursuant to this Agreement. If there is a
reduction of the number of Glencoe Registrable Securities or Xxxx 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 the holders requesting inclusion in such
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registration statement). 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 Glencoe 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 Glencoe Registrable Securities, Xxxx 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 Glencoe Registrable
Securities or Xxxx 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 Glencoe Holders (and the Xxxx Holders if any of them participate in such
registration) 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.
(b) Xxxx Registrations.
(i) Xxxx Demand Registration. At any time on or after the six (6) month anniversary
of the date hereof, the holders of a majority of the then outstanding Xxxx Registrable Securities
may request that the Company register under the Securities Act, on Form S-1 or Form S-3 if the
Company is then eligible to use such form, all or a portion of the Xxxx 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 “Xxxx Demand Registration”). Such requests shall be in writing
and shall state the number of shares of Xxxx Registrable Securities to be disposed of, the intended
method of disposition of such shares by such requesting Xxxx Holders, whether such disposition
shall be by means of an underwritten public offering and whether such registration is a Xxxx
Priority Registration. The Xxxx Holders shall only be entitled to request two (2) Xxxx Demand
Registrations pursuant to this Section 3(b). Notwithstanding anything to the contrary contained
herein, a registration will not count as a Xxxx Demand Registration under this Section 3(b) until
the registration statement relating to all such Xxxx Registrable Securities requested to be so
registered has been declared effective by the Commission at the request of the requesting Xxxx
Holders and, if such method of disposition is a firm commitment underwritten public offering, all
of such shares shall have been sold pursuant thereto. In addition, a registration will not count as
a Xxxx Demand Registration if, after it has become effective, the offering of Xxxx Registratable
Securities is interfered with by a stop order, injunction or other order of the SEC or other
governmental agency or court.
(ii) Registration Requirements. Following receipt of a request for registration
pursuant to this Section 3, the Company will promptly notify all of the other Xxxx Holders of such
request and such Xxxx 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 Xxxx 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 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.
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(iii) Underwritten Offering. If a requested registration pursuant to this Section
3(b) 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:
(A) with respect to a Xxxx Priority Registration (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 Xxxx 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, (iv)
fourth, securities held by any Persons (other than the Xxxx Holders) having contractual,
incidental “piggyback” rights to include such securities in the registration statement
pursuant to this Agreement, and (v) fifth, Xxxx Registrable Securities sought to be included
by the Xxxx Holders. If there is a reduction of the number of Xxxx Registrable Securities
pursuant to clause (v), such reduction shall be made on a pro rata basis (based upon the
relative number of Xxxx Registrable Securities held by Xxxx Holders requesting inclusion
pursuant to this Section 3). If less than all Xxxx Registrable Securities sought to be
included in a Xxxx Priority Registration are included in such registration, such
registration will not count as a Xxxx Demand Registration; and
(B) with respect to a registration which is not a Xxxx Priority Registration: (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 Xxxx 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, Xxxx Registrable Securities sought to be
included by the Xxxx Holders and Glencoe Registrable Securities sought to be included by the
Glencoe Holders pursuant to the “piggyback” rights granted to the Glencoe Holders pursuant
to this Agreement. If there is a reduction of the number of Xxxx Registrable Securities or
Glencoe 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 the holders
requesting inclusion in such registration statement).
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 Xxxx
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 Xxxx
Registrable Securities, Glencoe 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 Xxxx Registrable Securities or Glencoe Registrable Securities which
would otherwise have been included in such registration and
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underwriting will not thereby be limited. If requested in good faith by the managing underwriter,
the Xxxx Holders (and the Glencoe Holders if any of them participate in such registration) 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.
(c) 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 or S-3 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 effectiveness
promptly following such period. Notwithstanding the foregoing, the Company shall not be permitted
to postpone the filing or effectiveness of a registration statement with respect to a Glencoe
Demand Registration or Xxxx Demand Registration which is not an underwritten public offering by
virtue of the fact that another registration statement has been filed, is pending or contemplated
or has been declared effective, or any distribution pursuant thereto is pending or contemplated
or has been completed.
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 and
pursuant to “blue sky” laws, 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), including all fees and expenses associated with filings
with the National Association of Securities Dealers, Inc. (“NASD), 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;
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(c) Furnish to each selling Holder and underwriter such copies of each preliminary and final
prospectus and such other documents as such Holder or underwriter 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 or
underwriter may reasonably request and keep each such registration or qualification effective
until the Holder or Holders have completed the distribution described in the registration
statement relating thereto; 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 listed or quoted (or
if similar securities issued by the Company are not then 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.
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(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;
(l) Otherwise cooperate with the underwriter or underwriters, the Commission 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;
(m) cooperate with the Holders and each underwriter participating in the disposition of such
Registrable Securities and their respective counsel in connection with any filing required to be
made with the NASD; and
(n) advise the holders, promptly after it shall receive notice or obtain knowledge thereof,
of the issuance of any stop order by the SEC suspending the effectiveness of such registration
statement or the initiation or threatening of any proceeding for such purpose and promptly use
its best efforts to prevent the issuance of any stop order or to obtain its withdrawal at the
earliest possible moment if such stop order should be issued.
5. Indemnification; Contribution.
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(a) Incident to any registration of any Registrable Securities pursuant to this Agreement,
the Company will indemnify, reimburse and hold harmless to the fullest extent permitted by law,
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 statutory law or
any rule or regulation promulgated under the Securities Act, the Exchange Act or any state
statutory 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 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
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Company by such Selling Holder expressly for use in such registration statement, provided
that the obligation of the Selling Holder will be several and not joint and several. 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 each Selling Holder agrees 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. The Selling Holder’s obligations pursuant to this Section 5(b) shall
be several in proportion to the amount of Registrable Securities registered by it and not joint and
several.
(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
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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. 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 Glencoe Registrable Securities or
Xxxx Registrable Securities as the case may be. 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 Glencoe Registrable Securities and the
holders of a majority of the outstanding Xxxx 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 Glencoe Registrable Securities and the holders of not
less than a majority of the outstanding Xxxx 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 thereto, except as
otherwise provided therein, is required to be given shall be deemed to have
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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 Stockholders in writing.
(ii) If to the Glencoe Holders, FMFC Holdings, LLC, 000 Xxxx Xxxxx Xxxxxx, Xxxxx 0000,
Xxxxxxx, XX 00000, Attn: Xxxxxxx Xxxxxxxxx, or at such other address designated by the Glencoe
Holders to the Company in writing, with a copy to XxXxxxxxx, Will & Xxxxx, 000 Xxxx Xxxxxx Xxxxxx,
Xxxxxxx, XX 00000, Attn: Xxxxx X. Xxxxxxxx.
(iii) If to the Xxxx Holders, Xxxxxx X. Xxxx, 0 Xxxxx Xxxx, Xxxxxxxxx 0, Xxxxxxx Xxxxx,
Xxxxxxx 00000 or such other address as designated by either Xxxxxx X. Xxxx or holders of a majority
of the then outstanding Xxxx Registrable Securities to the Company in writing, with a copy to Xxxxx
X. Xxxxxxx, P.C., X.X. Xxx 0000, Xxxxxxxxxx, Xxxxxxxx 00000-0000.
(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
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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.
(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(k) 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, including the Original Agreement, which shall be of no further force or
effect.
[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, CEO and Director | |||
| STOCKHOLDERS: Glencoe Holders: FMFC HOLDINGS, LLC |
||||
| By: | Glencoe Capital, LLC | |||
| Its: | Manager | |||
| By: | /s/ Xxxxx X. Xxxxxxx | |||
| Name: | Xxxxx X. Xxxxxxx | |||
| Title: | Principal | |||
| Xxxx Holders: Xxxxxx X. Xxxx Revocable Trust |
||||
| By: | /s/ Xxxxxx X. Xxxx | |||
| Xxxxxx X. Xxxx, Trustee | ||||
| 4SFW, L.L.C. | ||||
| By: | /s/ Xxxxxx X. Xxxx | |||
| Xxxxxx X. Xxxx, Member | ||||
[Signature Page to Amended and Restated Registration Rights Agreement]
