First Mercury Financial Corporation (a Delaware Corporation) 3,301,260 Shares1 Common Stock ($0.01 par value ) Underwriting Agreement
EXHIBIT 1.1
First Mercury Financial Corporation
(a Delaware Corporation)
(a Delaware Corporation)
3,301,260 Shares1
Common Stock
($0.01 par value )
Common Stock
($0.01 par value )
June ___, 2007
| X.X. Xxxxxx Securities Inc. | ||||
| Xxxxx, Xxxxxxxx & Xxxxx | ||||
| As Representatives of the several Underwriters listed in Schedule 1 hereto |
||||
| c/o | X.X. Xxxxxx Securities Inc. | |||
| 000 Xxxx Xxxxxx | ||||
| Xxx Xxxx, Xxx Xxxx 00000 | ||||
| and | ||||
| c/o | Keefe, Xxxxxxxx & Xxxxx | |||
| 000 Xxxxxxx Xxxxxx, 0xx Xxxxx | ||||
| Xxx Xxxx, Xxx Xxxx 00000 | ||||
Ladies and Gentlemen:
First Mercury Financial Corporation, a Delaware corporation (the “Company”), proposes
to issue and sell to the several Underwriters listed in Schedule 1 hereto (the
“Underwriters”), for whom you are acting as representatives (the
“Representatives”), an aggregate of 200,000 shares of common stock, par value $0.01 per
share (the “Common Stock”), of the Company and, at the option of the Underwriters, up to an
additional 495,189 shares of Common Stock of the Company, and Glencoe Capital, LLC, Xxxxxx X. Xxxx,
Xxxxxxx X. Xxxxxx and Xxxxxx X. Xxxxxx (collectively, the “Selling Stockholders”) propose
to sell to the Underwriters an aggregate of 3,101,260 shares of Common Stock of the Company. The
aggregate of 3,301,260 shares of Common Stock of the Company to be sold by the Company and the
Selling Stockholders are herein referred to as the “Underwritten Shares” and the aggregate
of 495,189 shares of Common Stock of the Company to be sold by the Company at the option of the
Underwriters are herein referred to as the “Option Shares.” The Underwritten Shares and
the Option Shares are herein referred to as the “Shares.” The shares of Common Stock of
the Company to be outstanding after giving effect to the sale of the Shares are herein referred to
as the “Stock.”
The Company and the Selling Stockholders hereby confirm their agreement with the several
Underwriters concerning the purchase and sale of the Shares, as follows:
| 1 | Plus an option to purchase from the Company up to 495,189 additional Shares to cover over-allotments. |
At or prior to the time when sales of the Shares were first made (the “Time of
Sale”), the Company had prepared the following information (collectively with the pricing
information set forth on Annex A, the “Time of Sale Information”): a Preliminary Prospectus
dated June 8, 2007, and each “free-writing prospectus” (as defined pursuant to Rule 405 under the
Securities Act) listed on Annex B hereto.
(a) The Company agrees to issue and sell, and each of the Selling Stockholders agrees,
severally and not jointly, to sell, the Underwritten Shares to the several Underwriters as provided
in this Agreement, and each Underwriter, on the basis of the representations, warranties and
agreements set forth herein and subject to the conditions set forth herein, agrees, severally and
not jointly, to purchase from the Company and the Selling Stockholders the respective number of
Underwritten Shares set forth opposite such Underwriter’s name in Schedule 1 hereto at a price per
share (the “Purchase Price”) of $[ ].
In addition, the Company agrees to issue and sell the Option Shares to the several
Underwriters as provided in this Agreement, and the Underwriters, on the basis of the
representations, warranties and agreements set forth herein and subject to the conditions set forth
herein, shall have the option to purchase, severally and not jointly, from the Company the Option
Shares at the Purchase Price.
If any Option Shares are to be purchased, the number of Option Shares to be purchased by each
Underwriter shall be the number of Option Shares which bears the same ratio to the aggregate number
of Option Shares being purchased as the number of Underwritten Shares set forth opposite the name
of such Underwriter in Schedule 1 hereto (or such number increased as set forth in Section 10
hereof) bears to the aggregate number of Underwritten Shares being
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purchased from the Company and the Selling Stockholders by the several Underwriters, subject,
however, to such adjustments to eliminate any fractional Shares as the Representatives in their
sole discretion shall make.
The Underwriters may exercise the option to purchase the Option Shares at any time in whole,
but not more than twice, on or before the thirtieth day following the date of this Agreement, by
written notice from the Representatives to the Company. Such notice shall set forth the aggregate
number of Option Shares as to which the option is being exercised and the date and time when the
Option Shares are to be delivered and paid for which may be the same date and time as the Closing
Date (as hereinafter defined) but shall not be earlier than the Closing Date nor later than the
tenth full business day (as hereinafter defined) after the date of such notice (unless such time
and date are postponed in accordance with the provisions of Section 10 hereof). Any such notice
shall be given at least two Business Days prior to the date and time of delivery specified
therein. The option with respect to the Option Shares may only be exercised to cover
over-allotments in the sale of the Underwritten Shares by the Underwriters.
(b) The Company and the Selling Stockholders understand that the Underwriters intend to make a
public offering of the Shares as soon after the effectiveness of this Agreement as in the judgment
of the Representatives is advisable, and initially to offer the Shares on the terms set forth in
the Prospectus. Each of the Company and the Selling Stockholders acknowledges and agrees that the
Underwriters may offer and sell Shares to or through any affiliate of an Underwriter and that any
such affiliate may offer and sell Shares purchased by it to or through any Underwriter.
(c) Payment for the Shares shall be made by wire transfer in immediately available funds to
the respective accounts specified by the Company and the Selling Stockholders to the
Representatives in the case of the Underwritten Shares, at the offices of XxXxxxxxx Will & Xxxxx
LLP at [ ] Chicago time on June [ ], 2007, or at such other time or place on the same or such
other date, not later than the fifth business day thereafter, as the Representatives and the
Company may agree upon in writing or, in the case of the Option Shares, on the date and at the time
and place specified by the Representatives in the written notice of the Underwriters’ election to
purchase such Option Shares. The time and date of such payment for the Underwritten Shares is
referred to herein as the “Closing Date” and the time and date for such payment for the
Option Shares, if other than the Closing Date, is herein referred to as the “Additional Closing
Date.”
Payment for the Shares to be purchased on the Closing Date or the Additional Closing Date, as
the case may be, shall be made against delivery to the Representatives for the respective accounts
of the several Underwriters of the Shares to be purchased on such date, in definitive form
registered in such names and in such denominations as the Representatives shall request in writing
not later than two full business days prior to the Closing Date or the Additional Closing Date, as
the case may be, with any transfer taxes payable in connection with the sale of the Shares duly
paid by the Company or the Selling Stockholders. The certificates for the Shares will be made
available for inspection and packaging by the Representatives at the office of X.X. Xxxxxx
Securities Inc. (“JPMorgan”) set forth above not later than 1:00 P.M., New York City time,
on the business day prior to the Closing Date or the Additional Closing Date, as the case may be.
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(d) Each of the Company and the Selling Stockholders acknowledges and agrees that the
Underwriters are acting solely in the capacity of an arm’s length contractual counterparty to the
Company and the Selling Stockholders with respect to the offering of Shares contemplated hereby
(including in connection with determining the terms of the offering) and not as a financial advisor
or a fiduciary to, or an agent of, the Company, the Selling Stockholders or any other person.
Additionally, neither the Representatives nor any other Underwriter is advising the Company, any of
the Selling Stockholders or any other person as to any legal, tax, investment, accounting or
regulatory matters in any jurisdiction. The Company and the Selling Stockholders shall consult
with their own advisors concerning such matters and shall be responsible for making its own
independent investigation and appraisal of the transactions contemplated hereby, and the
Underwriters shall have no responsibility or liability to the Company or any of the Selling
Stockholders with respect to advising the Company or any of the Selling Stockholders as to tax,
investment, accounting or regulation matters in any jurisdiction. Any review by the Underwriters of
the Company, the transactions contemplated hereby or other matters relating to such transactions
will be performed solely for the benefit of the Underwriters and shall not be on behalf of the
Company or any of the Selling Stockholders.
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will not prepare, make, use, authorize, approve or refer to any “written communication” (as
defined in Rule 405 under the Securities Act) that constitutes an offer to sell or solicitation of
an offer to buy the Shares (each such communication by the Company or its agents and
representatives (other than a communication referred to in clause (i) below) an “Issuer Free
Writing Prospectus”) other than (i) any communication not constituting a prospectus pursuant to
Section 2(a)(10)(a) of the Securities Act or Rule 134 under the Securities Act or (ii) the
documents listed on Annex B hereto and other written communications approved in writing in advance
by the Representatives. Each such Issuer Free Writing Prospectus complied in all material respects
with the Securities Act, has been filed in accordance with the Securities Act (to the extent
required thereby) and, when taken together with the Preliminary Prospectus accompanying, or
delivered prior to delivery of, such Issuer Free Writing Prospectus, did not, and at the Closing
Date and as of the Additional Closing Date, as the case may be, will not, contain any untrue
statement of a material fact or omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were made, not misleading;
provided that the Company makes no representation and warranty with respect to any
statements or omissions made in each such Issuer Free Writing Prospectus in reliance upon and in
conformity with information relating to any Underwriter furnished to the Company in writing by such
Underwriter through the Representatives expressly for use in any Issuer Free Writing Prospectus.
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or prospects of the Company and its subsidiaries taken as a whole (a “Material Adverse
Effect”). The Company does not own or control, directly or indirectly, any corporation,
association or other entity other than the subsidiaries listed in Exhibit 21 to the Registration
Statement.
(k) Underwriting Agreement. This Agreement has been duly authorized, executed and delivered
by the Company.
(l) The Shares. The Shares to be issued and sold by the Company hereunder have been duly
authorized by the Company and, when issued and delivered and paid for as provided herein, will be
duly and validly issued and will be fully paid and nonassessable and will conform to the
descriptions thereof in the Time of Sale Information and the Prospectus; and the issuance of the
Shares is not subject to any preemptive or similar rights. The Shares are approved for listing on
the New York Stock Exchange, subject to official notice of issuance.
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or governmental or regulatory authority, except, in the case of clauses (ii) and (iii) above,
for any such default or violation that would not reasonably be expected, individually or in the
aggregate, to have a Material Adverse Effect.
(o) No Consents Required. No consent, approval, authorization, order, registration or
qualification of or with any court or arbitrator or governmental or regulatory authority is
required for the execution, delivery and performance by the Company of this Agreement, the issuance
and sale of the Shares and the consummation by the Company of the transactions contemplated hereby,
except for the registration of the Shares under the Securities Act and such consents, approvals,
authorizations, orders and registrations or qualifications as may be required under applicable
state securities laws or the New York Stock Exchange in connection with the purchase and
distribution of the Shares by the Underwriters and for such consents that have been obtained.
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(w) Licenses and Permits. The Company and its subsidiaries possess all licenses,
certificates, permits and other authorizations issued by, and have made all declarations and
filings with, the appropriate federal, state, local or foreign governmental or regulatory
authorities that are necessary for the ownership or lease of their respective properties or the
conduct of their respective businesses as described in the Registration Statement, the Time of Sale
Information and the Prospectus, except where the failure to possess or make the same would not
reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect; and
except as described in the Registration Statement, the Time of Sale Information and the Prospectus,
neither the Company nor any of its subsidiaries has received notice of any revocation or
modification of any such license, certificate, permit or authorization or has any reason to believe
that any such license, certificate, permit or authorization will not be renewed in the ordinary
course, except where the failure to renew such license, certificate, permit or authorization would
not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect.
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Subsidiaries are not required to be prepared pursuant to the Insurance Laws of any other
jurisdiction), and such statutory accounting practices have been applied on a consistent basis
throughout the periods involved, except as may otherwise be indicated therein or in the notes
thereto, and present fairly in all material respects the statutory financial position of the
Insurance Subsidiaries as of the dates thereof, and the statutory basis results of operations of
the Insurance Subsidiaries for the periods covered thereby.
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(uu) Status under the Securities Act. The Company is not an ineligible issuer as defined
under the Securities Act, in each case at the times specified in the Securities Act in connection
with the offering of the Shares.
4. Each of the Selling Stockholders represents and warrants, as to itself only, to each
Underwriter and the Company that:
(a) Required Consents; Authority. All consents, approvals, authorizations and orders necessary
for the execution and delivery by such Selling Stockholder of this Agreement, the Power of Attorney
(the “Power of Attorney”) and the Custody Agreement (the “Custody Agreement”)
hereinafter referred to and for the sale and delivery of the Shares to be sold by the Selling
Stockholder hereunder, have been obtained; and the Selling Stockholder has full right, power and
authority to enter into this Agreement, the Power of Attorney and the Custody Agreement and to
sell, assign, transfer and deliver the Shares to be sold by the Selling Stockholder hereunder; this
Agreement, the Power of Attorney and the Custody Agreement have each been duly authorized, executed
and delivered by or on behalf of the Selling Stockholder.
(b) No Conflicts. The execution, delivery and performance by or on behalf of the Selling
Stockholder of this Agreement, the Power of Attorney and the Custody Agreement, the
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sale of the Shares to be sold by the Selling Stockholder and the consummation by the Selling
Stockholder of the transactions herein and therein contemplated will not (i) conflict with or
result in a breach or violation of any of the terms or provisions of, or constitute a default
under, or result in the creation or imposition of any lien, charge or encumbrance upon any property
or assets of the Selling Stockholder pursuant to, any indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument to which the Selling Stockholder is a party or by which
the Selling Stockholder is bound or to which any of the property or assets of the Selling
Stockholder is subject, (ii) result in any violation of the provisions of the charter or by-laws or
similar organizational documents of the Selling Stockholder or (iii) result in the violation of any
law or statute or any judgment, order, rule or regulation of any court or arbitrator or
governmental or regulatory agency.
(c) Title to Shares. Such Selling Stockholder has good and valid title to the Shares to be
sold at the Closing Date by the Selling Stockholder hereunder, free and clear of all liens,
encumbrances, equities or adverse claims; the Selling Stockholder will have, immediately prior to
the Closing Date good and valid title to the Shares to be sold at the Closing Date by the Selling
Stockholder, free and clear of all liens, encumbrances, equities or adverse claims; and, upon
delivery of the certificates representing such Shares and payment therefor pursuant hereto, good
and valid title to such Shares, free and clear of all liens, encumbrances, equities or adverse
claims, will pass to the several Underwriters.
(d) No Stabilization. The Selling Stockholder has not taken and will not take, directly or
indirectly, any action designed to or that could reasonably be expected to cause or result in any
stabilization or manipulation of the price of the Shares.
(e) Time of Sale Information. The Time of Sale Information, at the Time of Sale did not, and
at the Closing Date and as of the Additional Closing Date, as the case may be, will not, contain
any untrue statement of a material fact or omit to state a material fact necessary in order to make
the statements therein, in the light of the circumstances under which they were made, not
misleading; provided that the Selling Stockholder’s representation and warranty in this
sentence is made only with respect to those statements or omissions made in reliance upon and in
conformity with any information relating to such Selling Stockholder furnished in writing by such
Selling Stockholder to the Company or the Representatives expressly for use in the Time of Sale
Information (it being understood that the information regarding the Selling Stockholder set forth
under the caption “Principal and Selling Stockholders” in the Time of Sale Information constitutes
the only such information furnished by the Selling Stockholder). No statement of material fact
included in the Prospectus has been omitted from the Time of Sale Information and no statement of
material fact included in the Time of Sale Information that is required to be included in the
Prospectus has been omitted therefrom; provided that the Selling Stockholder’s
representation and warranty in this sentence is made only with respect to those statements or
omissions made in reliance upon and in conformity with any information relating to such Selling
Stockholder furnished in writing by such Selling Stockholder to the Company or the Representatives
expressly for use in the Time of Sale Information or the Prospectus (it being understood that the
information regarding the Selling Stockholder set forth under the caption “Principal and Selling
Stockholders” in the Time of Sale Information and Prospectus constitutes the only such information
furnished by the Selling Stockholder).
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(f) Free Writing Prospectus. Other than the Preliminary Prospectus and the Prospectus, the
Selling Stockholder (including its agents and representatives, other than the Underwriters in their
capacity as such) has not made, used, prepared, authorized, approved or referred to and will not
prepare, make, use, authorize, approve or refer to any free writing prospectus, other than (i) any
document not constituting a prospectus pursuant to Section 2(a)(10)(a) of the Securities Act or
Rule 134 under the Securities Act or (ii) the documents listed on Annex B hereto and other written
communications approved in writing in advance by the Company and the Representatives.
(g) Registration Statement and Prospectus. As of the applicable effective date of the
Registration Statement and any amendment thereto, the Registration Statement did not and will not
contain any untrue statement of a material fact or omit to state a material fact required to be
stated therein or necessary in order to make the statements therein not misleading; and as of the
date of the Prospectus and any amendment or supplement thereto and as of the Closing Date and as of
the Additional Closing Date, as the case may be, the Prospectus will not contain any untrue
statement of a material fact or omit to state a material fact required to be stated therein or
necessary in order to make the statements therein, in the light of the circumstances under which
they were made, not misleading; provided that the Selling Stockholder’s representation and
warranty in this sentence is made only with respect to those statements or omissions made in
reliance upon and in conformity with any information relating to such Selling Stockholder furnished
in writing by such Selling Stockholder to the Company or the Representatives expressly for use in
the Registration Statement or the Prospectus or any amendment or supplement thereto (it being
understood that the information regarding the Selling Stockholder set forth under the caption
“Principal and Selling Stockholders” in the Registration Statement and Prospectus constitutes the
only such information furnished by the Selling Stockholder).
(h) Material Information. As of the date hereof, as of the Closing Date and as of the
Additional Closing Date, as the case may be, the sale of the Shares by the Selling Stockholder is
not and will not be prompted by any material information concerning the Company which is not set
forth in the Registration Statement, the Time of Sale Information or the Prospectus.
Each of the Selling Stockholders represents and warrants that certificates in negotiable form
representing all of the Shares to be sold by such Selling Stockholder hereunder have been placed in
custody under a Custody Agreement relating to such Shares, in the form heretofore furnished to you,
duly executed and delivered by such Selling Stockholder to American Stock Transfer & Trust Company,
as custodian (the “Custodian”), and that such Selling Stockholder has duly executed and
delivered a Power of Attorney, in the form heretofore furnished to you, appointing the person or
persons indicated therein, and each of them, as such Selling Stockholder’s Attorneys-in-Fact (the
“Attorneys-in-Fact” or any one of them the “Attorney-in Fact”) with authority to
execute and deliver this Agreement on behalf of such Selling Stockholder, to determine the purchase
price to be paid by the Underwriters to the Selling Stockholders as provided herein, to authorize
the delivery of the Shares to be sold by such Selling Stockholder hereunder and otherwise to act on
behalf of such Selling Stockholder in connection with the transactions contemplated by this
Agreement and the Custody Agreement.
Each of the Selling Stockholders specifically agrees that the Shares represented by the
certificates held in custody for such Selling Stockholder under the Custody Agreement are
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subject to the interests of the Underwriters hereunder, and that the arrangements made by such
Selling Stockholder for such custody, and the appointment by such Selling Stockholder of the
Attorneys-in-Fact by the Power of Attorney, are to that extent irrevocable. Each of the Selling
Stockholders specifically agrees that the obligations of such Selling Stockholder hereunder shall
not be terminated by operation of law, whether by the death or incapacity of any individual Selling
Stockholder, or, in the case of an estate or trust, by the death or incapacity of any executor or
trustee or the termination of such estate or trust, or in the case of a partnership, corporation or
similar organization, by the dissolution of such partnership, corporation or organization, or by
the occurrence of any other event. If any individual Selling Stockholder or any such executor or
trustee should die or become incapacitated, or if any such estate or trust should be terminated, or
if any such partnership, corporation or similar organization should be dissolved, or if any other
such event should occur, before the delivery of the Shares hereunder, certificates representing
such Shares shall be delivered by or on behalf of such Selling Stockholder in accordance with the
terms and conditions of this Agreement and the Custody Agreement, and actions taken by the
Attorneys-in-Fact pursuant to the Powers of Attorney shall be as valid as if such death,
incapacity, termination, dissolution or other event had not occurred, regardless of whether or not
the Custodian, the Attorneys-in-Fact, or any of them, shall have received notice of such death,
incapacity, termination, dissolution or other event.
(a) Required Filings. The Company will file the final Prospectus with the Commission within
the time periods specified by Rule 424(b) and Rule 430A, 430B or 430C under the Securities Act,
will file any Issuer Free Writing Prospectus to the extent required by Rule 433 under the
Securities Act; and the Company will furnish copies of the Prospectus and each Issuer Free Writing
Prospectus (to the extent not previously delivered) to the Underwriters in New York City prior to
10:00 A.M., New York City time, on the business day next succeeding the date of this Agreement in
such quantities as the Representatives may reasonably request.
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copy of the proposed Issuer Free Writing Prospectus, amendment or supplement for review and
will not prepare, use, authorize, approve, refer to or file any such Issuer Free Writing Prospectus
or file any such proposed amendment or supplement to which the Representatives reasonably objects.
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Underwriters thereof and forthwith prepare and, subject to paragraph (c) above, file with the
Commission (to the extent required) and furnish to the Underwriters and to such dealers as the
Representatives may reasonably designate, such amendments or supplements to the Time of Sale
Information as may be necessary so that the statements in the Time of Sale Information as so
amended or supplemented will not, in the light of the circumstances, be misleading or so that the
Time of Sale Information will comply with law.
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(j) Exchange Listing. The Company will use its best efforts to list, subject to notice of
issuance, the Shares on the New York Stock Exchange.
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through them in connection with the transactions contemplated in this Agreement. This
paragraph shall not affect or modify any separate, valid agreement relating to the allocation of
payment of expenses between the Company on the one hand and the Selling Stockholder on the other
hand.
(a) It has not and will not use, authorize use of, refer to, or participate in the planning
for use of, any “free writing prospectus”, as defined in Rule 405 under the Securities Act (which
term includes use of any written information furnished to the Commission by the Company and not
incorporated by reference into the Registration Statement and any press release issued by the
Company) other than (i) a free writing prospectus that contains no “issuer information” (as defined
in Rule 433(h)(2) under the Securities Act) that was not included (including through incorporation
by reference) in the Preliminary Prospectus or a previously filed Issuer Free Writing Prospectus,
(ii) any Issuer Free Writing Prospectus listed on Annex B or prepared pursuant to Section 3(c) or
Section 5(c) above, or (iii) any free writing prospectus prepared by such underwriter and approved
by the Company in advance in writing (each such free writing prospectus referred to in clauses (i)
or (iii), an “Underwriter Free Writing Prospectus”).
(b) It has not and will not distribute any Underwriter Free Writing Prospectus referred to in
clause (a)(i) in a manner reasonably designed to lead to its broad unrestricted dissemination.
(c) It has not and will not, without the prior written consent of the Company, use any free
writing prospectus that contains the final terms of the Shares unless such terms have previously
been included in a free writing prospectus filed with the Commission; provided that Underwriters
may use a term sheet substantially in the form of Annex A hereto without the consent of the
Company; provided further that any Underwriter using such term sheet shall notify the Company, and
provide a copy of such term sheet to the Company, prior to, or substantially concurrently with, the
first use of such term sheet.
(d) It will, pursuant to reasonable procedures developed in good faith, retain copies of each
free writing prospectus used or referred to by it, in accordance with Rule 433 under the Securities
Act.
(e) It is not subject to any pending proceeding under Section 8A of the Securities Act with
respect to the offering (and will promptly notify the Company if any such proceeding against it is
initiated during the Prospectus Delivery Period).
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the Prospectus and each Issuer Free Writing Prospectus shall have been timely filed with the
Commission under the Securities Act (in the case of an Issuer Free Writing Prospectus, to the
extent required by Rule 433 under the Securities Act) and in accordance with Section 5(a) hereof;
and all requests by the Commission for additional information shall have been complied with to the
reasonable satisfaction of the Representatives.
(i) The Representatives shall have received on and as of the Closing Date or
the Additional Closing Date, as the case may be, a certificate of the chief
financial officer and chief accounting officer of the Company (i) confirming that
such officers have reviewed the Registration Statement, the Time of Sale Information
and the Prospectus and, to the knowledge of such officers, the representations set
forth in Sections 3(b) and 3(d) hereof are true and correct, (ii) confirming, to
their knowledge, that the other representations and warranties of the Company in
this Agreement are true and correct and that the Company has complied in all
material respects with all agreements and satisfied all conditions on its part to be
performed or satisfied hereunder at or prior to such Closing Date
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or Additional Closing Date, as the case may be, and (iii) to the effect set
forth in paragraphs (a), (c) and (d) above.
(ii) The Representatives shall have received on and as of the Closing Date a
certificate of each Selling Stockholder (or an executive office thereof, in the case
of Glencoe Capital, LLC) (i) confirming that such Selling Stockholder has reviewed
the Registration Statement, the Time of Sale Information and the Prospectus and, to
the knowledge of such Selling Stockholder, the representations set forth in Sections
4(e) and 4(g) hereof are true and correct, and (ii) confirming, to the knowledge of
such Selling Stockholder, that the other representations and warranties of such
Selling Stockholder in this Agreement are true and correct and that the Selling
Stockholder has complied in all material respects with all agreements and satisfied
all conditions on its part to be performed or satisfied hereunder at or prior to
such Closing Date or Additional Closing Date, as the case may be.
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(l) Exchange Listing. The Shares to be delivered on the Closing Date or Additional Closing
Date, as the case may be, shall have been approved for listing on the New York Stock Exchange,
subject to official notice of issuance.
All opinions, letters, certificates and evidence mentioned above or elsewhere in
this Agreement shall be deemed to be in compliance with the provisions hereof only if they are in
form and substance reasonably satisfactory to counsel for the Underwriters.
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(including any Time of Sale Information that has subsequently been amended), or caused by any
omission or alleged omission to state therein a material fact necessary in order to make the
statements therein, in light of the circumstances under which they were made, not misleading, in
each case except insofar as such losses, claims, damages or liabilities arise out of, or are based
upon, any untrue statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with any information relating to any Underwriter furnished to the Company in
writing by such Underwriter through the Representatives expressly for use therein, it being
understood and agreed that the only such information furnished by any Underwriter consists of the
information described as such in subsection (c) below.
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the
caption “Underwriting” and the information contained in the
tenth, eleventh and twelfth paragraphs under the caption “Underwriting.”
(e) Any such separate firm for any Underwriter, its affiliates, directors and officers and any
control persons of such Underwriter shall be designated in writing by the Representatives, any such
separate firm for the Company, its directors, its officers who signed the Registration Statement
and any control persons of the Company shall be designated in writing by the Company, and any such
separate firm for a Selling Stockholder shall be designated in writing by such Selling Stockholder.
The Indemnifying Person shall not be liable for any settlement of any proceeding effected without
its written consent, but if settled with such consent or if there be a final judgment for the
plaintiff, the Indemnifying Person agrees to indemnify each Indemnified Person from and against any
loss or liability by reason of such settlement or judgment. Notwithstanding the foregoing
sentence, if at any time an Indemnified Person shall have requested that an Indemnifying Person
reimburse the Indemnified Person for fees and expenses of counsel as contemplated by this
paragraph, the Indemnifying Person shall be liable for any settlement of any proceeding effected
without its written consent if (i) such settlement is entered into more than 60 days after receipt
by the Indemnifying Person of such request and (ii) the Indemnifying Person shall not have
reimbursed the Indemnified Person in accordance with such request prior to the date of such
settlement. No Indemnifying Person shall, without the written consent of the Indemnified Person,
effect any settlement of any pending or threatened proceeding in respect of which any Indemnified
Person is or could have been a party and indemnification could have been sought hereunder by such
Indemnified Person, unless such settlement (x) includes an unconditional release of such
Indemnified Person, in form and
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substance reasonably satisfactory to such Indemnified Person, from all liability on claims
that are the subject matter of such proceeding and (y) does not include any statement as to or any
admission of fault, culpability or a failure to act by or on behalf of any Indemnified Person.
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contribute pursuant to this Section 9 are several in proportion to their respective purchase
obligations hereunder and not joint.
11. Termination. This Agreement may be terminated in the absolute discretion of the
Representatives, by notice to the Company and the Selling Stockholders, if after the execution and
delivery of this Agreement and prior to the Closing Date or, in the case of the Option Shares,
prior to the Additional Closing Date (i) trading generally shall have been suspended or materially
limited on or by any of the New York Stock Exchange, the American Stock Exchange or the Nasdaq
National Market; (ii) trading of any securities issued or guaranteed by the Company shall have been
suspended on any exchange or in any over-the-counter market; (iii) a general moratorium on
commercial banking activities shall have been declared by federal or New York State authorities; or
(iv) there shall have occurred any outbreak or escalation of hostilities or any change in financial
markets or any calamity or crisis, either within or outside the United States, that, in the
judgment of the Representatives, is material and adverse and makes it impracticable or inadvisable
to proceed with the offering, sale or delivery of the Shares on the Closing Date or the Additional
Closing Date, as the case may be, on the terms and in the manner contemplated by this Agreement,
the Time of Sale Information and the Prospectus.
(a) If, on the Closing Date or the Additional Closing Date, as the case may be, any
Underwriter defaults on its obligation to purchase the Shares that it has agreed to purchase
hereunder on such date, the non-defaulting Underwriters may in their discretion arrange for the
purchase of such Shares by other persons satisfactory to the Company and the Selling Stockholders
on the terms contained in this Agreement. If, within 36 hours after any such default by any
Underwriter, the non-defaulting Underwriters do not arrange for the purchase of such Shares, then
the Company and the Selling Stockholders shall be entitled to a further period of 36 hours within
which to procure other persons satisfactory to the non-defaulting Underwriters to purchase such
Shares on such terms. If other persons become obligated or agree to purchase the Shares of a
defaulting Underwriter, either the non-defaulting Underwriters or the Company and the Selling
Stockholders may postpone the Closing Date or the Additional Closing Date, as the case may be, for
up to five full business days in order to effect any changes that in the opinion of counsel for the
Company, counsel for the Selling Stockholders or counsel for the Underwriters may be necessary in
the Registration Statement and the Prospectus or in any other document or arrangement, and the
Company agrees to promptly prepare any amendment or supplement to the Registration Statement and
the Prospectus that effects any such changes. As used in this Agreement, the term “Underwriter”
includes, for all purposes of this Agreement unless the context otherwise requires, any person not
listed in Schedule 1 hereto that, pursuant to this Section 12, purchases Shares that a defaulting
Underwriter agreed but failed to purchase.
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(b) If, after giving effect to any arrangements for the purchase of the Shares of a defaulting
Underwriter or Underwriters by the non-defaulting Underwriters, the Company and the Selling
Stockholders as provided in paragraph (a) above, the aggregate number of Shares that remain
unpurchased on the Closing Date or the Additional Closing Date, as the case may be does not exceed
one-eleventh of the aggregate number of Shares to be purchased on such date, then the Company and
the Selling Stockholders shall have the right to require each non-defaulting Underwriter to
purchase the number of Shares that such Underwriter agreed to purchase hereunder on such date plus
such Underwriter’s pro rata share (based on the number of Shares that such Underwriter agreed to
purchase on such date) of the Shares of such defaulting Underwriter or Underwriters for which such
arrangements have not been made.
(c) If, after giving effect to any arrangements for the purchase of the Shares of a defaulting
Underwriter or Underwriters by the non-defaulting Underwriters, the Company and the Selling
Stockholders as provided in paragraph (a) above, the aggregate number of Shares that remain
unpurchased on the Closing Date or the Additional Closing Date, as the case may be, exceeds
one-eleventh of the aggregate amount of Shares to be purchased on such date, or if the Company and
the Selling Stockholders shall not exercise the right described in paragraph (b) above, then this
Agreement or, with respect to any Additional Closing Date, the obligation of the Underwriters to
purchase Shares on the Additional Closing Date, as the case may be, shall terminate without
liability on the part of the non-defaulting Underwriters. Any termination of this Agreement
pursuant to this Section 12 shall be without liability on the part of the Company or the Selling
Stockholders, except that the Company will continue to be liable for the payment of expenses as set
forth in Section 13 hereof and except that the provisions of Section 9 hereof shall not terminate
and shall remain in effect.
(d) Nothing contained herein shall relieve a defaulting Underwriter of any liability it may
have to the Company, the Selling Stockholders or any non-defaulting Underwriter for damages caused
by its default.
13. Payment of Expenses.
(a) Whether or not the transactions contemplated by this Agreement are consummated or this
Agreement is terminated, the Company will pay or cause to be paid all costs and expenses incident
to the performance of its obligations hereunder, including without limitation, (i) the costs
incident to the authorization, issuance, sale, preparation and delivery of the Shares and any taxes
payable in that connection; (ii) the costs incident to the preparation, printing and filing under
the Securities Act of the Registration Statement, the Preliminary Prospectus, any Issuer Free
Writing Prospectus, any Time of Sale Information and the Prospectus (including all exhibits,
amendments and supplements thereto) and the distribution thereof; (iii) the fees and expenses of
the Company’s counsel and independent accountants; (iv) the fees and expenses incurred in
connection with the registration or qualification and determination of eligibility for investment
of the Shares under the laws of such jurisdictions as the Representatives may designate and the
preparation, printing and distribution of a Blue Sky Memorandum, not to exceed $5,000; (v) the cost
of preparing stock certificates; (vi) the costs and charges of any transfer agent and any
registrar; (vii) all expenses and application fees incurred in connection with any filing with, and
clearance of the offering by, the National Association of Securities Dealers, Inc.; (viii) all
expenses incurred by the Company in connection with any “road show” presentation to potential
29
investors; (ix) all expenses and application fees related to the listing of the Shares on the
New York Stock Exchange and (x) all other costs and expenses incident to the performance of its
obligations hereunder that are not otherwise specifically provided for herein.
(b) If (i) this Agreement is terminated pursuant to clause (ii) of Section 11, (ii) the
Company or the Selling Stockholders fail to tender the Shares for delivery to the Underwriters
(other than due to the failure by the Underwriters to make payment for the Shares pursuant to
Section 2) or (iii) the Underwriters decline to purchase the Shares for any reason permitted under
this Agreement (other than pursuant to Section 12), the Company agrees to reimburse the
Underwriters for all out-of-pocket costs and expenses (including the fees and expenses reasonably
incurred by their counsel) reasonably incurred by the Underwriters in connection with this
Agreement and the offering contemplated hereby.
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Capital Markets. Notices to the Company shall be given to it at 00000 Xxxxxxx Xxxx, Xxxxx
0000, Xxxxxxxxxx, Xxxxxxxx 00000 (fax: (000) 000-0000), Attention: Chief Financial Officer.
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If the foregoing is in accordance with your understanding, please indicate your acceptance of
this Agreement by signing in the space provided below.
| Very truly yours, | ||||||
| FIRST MERCURY FINANCIAL CORPORATION | ||||||
| By | ||||||
| Title: | ||||||
| SELLING STOCKHOLDERS | ||||||
| By | ||||||
| Title: | ||||||
| As Attorney-in-Fact acting on behalf of each of the Selling Stockholders. | ||||||
Accepted: ___________________, 2007
| X.X. XXXXXX SECURITIES INC. | ||
| XXXXX, XXXXXXXX & XXXXX, INC. | ||
| For themselves and on behalf of the several Underwriters listed in Schedule 1 hereto. |
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| BY: X.X. XXXXXX SECURITIES INC. | ||||
By |
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Name:
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Title: |
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| BY: XXXXX, XXXXXXXX & XXXXX, INC. | ||||
By |
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