SUAI Specialty Underwriters Allianc (MM)

Item 1.01 Entry into a Material Definitive Agreement.

On October 1, 2007, Specialty Underwriters’ Alliance, Inc. (the "Company") entered into a new partner agent contract (the "Partner Agent Agreement") with First Light Program Managers, Inc. ("First Light") to provide commercial general liability, commercial automobile and physical damage to selected classes within the trucking industry in the southeastern region.

Pursuant to the terms of the Partner Agent Agreement, the Company has appointed First Light as its exclusive partner agent for the next five years with respect to the type of insurance described in the preceding paragraph. Generally, First Light may only offer other companies’ products if the Company declines to offer coverage to a prospective insured. The Company has no obligation to accept business that does not meet its guidelines. First Light will have the right to terminate its relationship with the Company on 180 days’ notice, and the Company has the right to terminate its relationship with First Light for material breach of the Partner Agent Agreement, insolvency, or failure to maintain appropriate licenses. The Company also may terminate First Light if it is acquired by a third party, but cannot restrict the acquisition of First Light. In addition, the Company can terminate its relationship with First Light if First Light does not meet certain profitability and production guidelines under the Partner Agent Agreement. Upon termination, at Company’s discretion, First Light must service its existing business until it is terminated. At such point, First Light is allowed to place such business with other insurers. In the event, in the first five years of the Partner Agent Agreement, that the program and contract are terminated, for any reason, the Company will perform a final calculation to project future payout loss patterns and make a final payment of the outstanding profit commissions. If, after five years, the Partner Agent Agreement is terminated, for any reason, the profit sharing calculations will be performed annually until all payout periods and earned profit sharing periods are satisfied.

Under a separate agreement (the "Purchase Agreement"), First Light will purchase shares of the Company’s non-voting Class B common stock (the "Class B Shares"). The Class B Shares will become exchangeable, one-for-one with the Company’s common stock, five years after the effective date of the Partner Agent Agreement, as long as the Partner Agent Agreement is still in force. These Class B Shares will be subject to substantial restrictions on transferability during such period. If the Partner Agent Agreement is terminated prior to five years after the effective date of the Partner Agent Agreement, the Company may repurchase at the lower of cost or fair market value First Light’s Class B Shares. If the Partner Agent Agreement is terminated after five years, the Company may repurchase First Light’s Class B Shares at fair market value. After five years, First Light will be required to hold Class B Shares worth at least 50% of its aggregate investment commitment in the Company’s Class B Shares.