Exhibit 10.3

 

REINSURANCE CAPACITY RIGHT OF FIRST REFUSAL AGREEMENT

 

THIS Reinsurance Capacity Right of First Refusal Agreement (this “Agreement”),
dated December 2, 2019 (the “Effective Date”), is entered into by and between
FEDNAT Holding Company, a Florida corporation (“FedNat”), and 1347 Property
Insurance Holdings Inc., a company organized and existing under the laws of
Delaware (“PIH”). Each of FedNat and PIH are, at times, each individually
referred to in this Agreement as a “Party,” and collectively referred to in this
Agreement as the “Parties.”

 

WHEREAS, insurance company subsidiaries of FedNat (each, a “FedNat Insurance
Company” and, collectively, the “FedNat Insurance Companies”) may, from time to
time, negotiate and procure reinsurance in such amounts and on such terms that
the FedNat Insurance Companies deem to be appropriate; and

 

WHEREAS, on the Effective Date, FedNat is entering into a transaction with PIH,
pursuant to which FedNat will acquire one hundred percent (100%) of the issued
and outstanding capital stock of three subsidiaries of PIH (the “Acquisition”);
and

 

WHEREAS, after the closing of the Acquisition, PIH may provide reinsurance
coverage to insurance providers through its insurance company subsidiaries, and
PIH desires to obtain the opportunity to provide reinsurance coverage to the
FedNat Insurance Companies pursuant to the terms and conditions set forth in
this Agreement; and

 

WHEREAS, it is a condition precedent to the consummation of the Acquisition for
the Parties to enter into this Agreement upon the terms and conditions set forth
herein.

 

NOW, THEREFORE, in consideration of the promises and the mutual covenants
contained herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Parties agree as follows:

 

1. Right of First Refusal.

 

(a) With respect to each purchase after the Effective Date until the conclusion
of the Term (as defined in Section 2) by one or more of the FedNat Insurance
Companies of each layer (each, a “Reinsurance Coverage Layer”) of their annual
property catastrophe excess of loss reinsurance program (the “CAT Reinsurance
Program”), PIH shall have a right of first refusal (each, a “Right of First
Refusal”) to sell through any of its insurance company subsidiaries a maximum of
seven and one-half percent (7.5%) of annual in force limit of any and each
Reinsurance Coverage Layer so purchased by the FedNat Insurance Companies (the
“ROFR Reinsurance Maximum”); provided, that in no event shall PIH have the right
to exercise a Right of First Refusal such that, immediately after the exercise
thereof, PIH and its affiliates collectively would have an annual aggregate in
force amount of all reinsurance coverage sold to the FedNat Insurance Companies,
in the aggregate, of greater than Fifteen Million and No/100 Dollars
($15,000,000.00) (the “Reinsurance Limit”). Each sale by PIH pursuant to a Right
of First Refusal shall be documented under the corresponding Firm Order Terms or
Modified Firm Order Terms, as applicable (each as defined below), and subject in
every case to: (I) the terms, conditions, and requirements of all applicable
regulations, rules, and laws (including, without limitation, the applicable
regulations and laws of the State of Florida) (collectively, “Applicable Laws”)
(it being acknowledged and agreed that PIH has no right to exercise a Right of
First Refusal or to sell reinsurance to any FedNat Insurance Company pursuant to
this Agreement if doing so would violate any Applicable Laws); and (II) the
other terms and conditions of this Section 1. All reinsurance sold by PIH
pursuant to a Right of First Refusal shall be memorialized by an agreement in
such form and subject to such terms and conditions as are customary in the
property and casualty insurance industry (each, a “Reinsurance Agreement”). If
any Reinsurance Agreement is entered into by PIH prior to the conclusion of the
Term, but the term of the applicable Reinsurance Agreement (the “Reinsurance
Period”) otherwise ends after the conclusion of the Term, then such Reinsurance
Agreement shall remain in full force and effect after the Term in accordance
with the terms and provisions of the applicable Reinsurance Agreement.

 

 

 

 

(b) FedNat shall cause the FedNat Insurance Companies, either through one or
more reinsurance brokers selected by FedNat (each, a “Broker” and, collectively,
the “Brokers”) or directly through a third party reinsurer of FedNat’s choosing,
in each case in FedNat’s sole discretion from time to time, to seek written
quotes for, and terms and conditions of, each Reinsurance Coverage Layer to be
purchased pursuant to the CAT Reinsurance Program in appropriate reinsurance
markets and from potentially eligible third party reinsurers (including PIH) for
a reasonable period of time, and to concurrently provide all exposure and
related information materially relevant and customarily requested for such
Reinsurance Coverage Layer to such potential third party reinsurers (including
PIH), subject to such third party reinsurers’ (and PIH’s) execution and delivery
to FedNat of a Standard Non-Disclosure Agreement. Thereafter, FedNat shall cause
the applicable FedNat Insurance Company to determine firm order terms for the
Reinsurance Coverage Layer (the “Firm Order Terms”) and communicate those Firm
Order Terms to the potential third party reinsurers (including PIH). The final
executed terms of the CAT Reinsurance Program for each Reinsurance Coverage
Layer entered into by applicable FedNat Insurance Company shall be the same as
described in the Firm Order Terms or Modified Firm Order Terms (as defined
below), as applicable. PIH shall have a period of three (3) business days after
its receipt of Firm Order Terms to elect in writing (in the manner provided in
Section 11) to provide all or a portion of the ROFR Reinsurance Maximum with
respect to that Reinsurance Coverage Layer at the Firm Order Terms without any
additional terms, conditions, or stipulations, but only if the exercise of the
Right of First Refusal and the sale of reinsurance pursuant thereto would not
cause PIH and its affiliates to collectively exceed the Reinsurance Limit as of
the applicable time. For the avoidance of doubt, PIH may exercise the Right of
First Refusal for only a portion of a ROFR Reinsurance Maximum applicable to any
or each of the Reinsurance Coverage Layer in order to comply with the
Reinsurance Limit. Any such election of a Right of First Refusal by PIH shall be
irrevocable once it has been made, but shall be subject to the terms of the
applicable Reinsurance Agreement as of the applicable time.

 

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(c) To the extent that PIH elects not to provide or participate in a Reinsurance
Coverage Layer at the Firm Order Terms, or fails to notify FedNat of its
election within the three (3) business day time frame set forth in Section 1(b),
then the applicable FedNat Insurance Company shall have the right to accept
PIH’s allotment of such Reinsurance Coverage Layer at the Firm Order Terms from
any combination of other eligible reinsurers willing to offer coverage at the
Firm Order Terms; provided, that in the event that the Firm Order Terms are
materially modified with respect to a Reinsurance Coverage Layer (which, for the
avoidance of doubt, shall mean any change that materially changes the price or
any material coverage terms or conditions of such Firm Order Terms that are more
favorable to reinsurance providers) (the “Modified Firm Order Terms”), FedNat
shall cause the applicable FedNat Insurance Company to first provide PIH with a
new Right of First Refusal with respect to that Reinsurance Coverage Layer at
the Modified Firm Order Terms. In such case, PIH shall have two (2) business
days following its receipt of the Modified Firm Order Terms to elect in writing
(in the manner provided in Section 11) to exercise the Right of First Refusal to
provide all or a portion of the ROFR Insurance Maximum for the applicable
Reinsurance Coverage Layer on such Modified Firm Order Terms; otherwise, the
applicable FedNat Insurance Company shall have the right to accept PIH’s
allotment of such Reinsurance Coverage Layer at the Modified Firm Order Terms
from any combination of other eligible reinsurers willing to offer coverage at
the Modified Firm Order Terms. Notwithstanding any provision of this Agreement
to the contrary, in no event shall PIH be eligible to sell reinsurance to any
FedNat Insurance Company in excess of the ROFR Reinsurance Maximum with respect
to any Reinsurance Coverage Layer, or make any sale that would cause PIH and its
affiliates to collectively exceed the Reinsurance Limit.

 

(d) Upon entry into any Reinsurance Agreement, and as a condition precedent to
the exercise of a Right of First Refusal, the applicable PIH insurance company
that has entered into any Reinsurance Agreement shall both: (i) be duly licensed
and accredited in all applicable jurisdictions to provide all reinsurance
coverage that is contemplated by the Reinsurance Agreement; and (ii) either –
(A) both maintain an insurer financial strength rating from A.M. Best Company,
Inc. of not less than “A-” and be an accredited insurer in Florida such that
FedNat can take credit for reinsurance in accordance with all Applicable Laws,
or (B) fully collateralize with cash, letters of credit, or appropriate trust
agreement equal in value to one hundred percent (100%) of its share of the total
limit of each applicable Reinsurance Coverage Layer in a manner acceptable to
the applicable FedNat Insurance Company and acceptable to any applicable
insurance regulator pursuant to Applicable Laws; provided, that, if PIH utilizes
a trust agreement, whether in whole or in part, to satisfy this condition
precedent, then – (Y) no more than one trust agreement shall be used by PIH to
satisfy this condition with respect to all Insurance Coverage Layers, and (Z)
the materials terms and provisions of the Trust that relate to the availability
and release of funds to satisfy reinsurance obligations shall be in form and
substance reasonably satisfactory to FedNat. The applicable PIH insurance
company shall have seventy two (72) hours from such election, or until the
effective date of the applicable CAT Reinsurance Program (whichever is sooner),
to satisfy the condition set forth in Section 1(d)(ii) and provide reasonable
proof thereof to FedNat; otherwise, PIH’s election to exercise the Right of
First Refusal shall be deemed by the Parties to be waived and declined with
respect to the Reinsurance Coverage Layers in question. Each year during the
Term, within a reasonable period of time prior to the implementation of the CAT
Reinsurance Program for that year, FedNat may request that PIH reasonably
demonstrate to FedNat that either of the conditions listed in subparts (i) and
(ii) of this Section 1(d) will be satisfied prior to the effective date of such
CAT Reinsurance Program.

 

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(e) PIH’s right to exercise a Right of First Refusal shall exist each time that
FedNat or a FedNat Insurance Company desires to purchase Reinsurance Coverage
Layers pursuant to the CAT Reinsurance Program during the Term. For the
avoidance of doubt, neither FedNat nor any FedNat Insurance Company shall
purchase Reinsurance Coverage Layers from any other third party reinsurer unless
and until it has complied with the obligations to PIH in this Section 1.

 

2. Term. Subject to the terms of Section 17 below, PIH shall have a Right of
First Refusal with respect to any Reinsurance Coverage Layer purchased by a
FedNat Insurance Company pursuant to the CAT Reinsurance Program, pursuant to
the terms and conditions set forth in Section 1, for any Reinsurance Period
commencing on or after the Effective Date and prior to the fifth (5th)
anniversary of the Effective Date (the “Term”) only.

 

3. Confidential and Proprietary Information. The Parties acknowledge and agree
that this Agreement does not constitute a sale, lease, license or other transfer
by either Party of any proprietary systems or intellectual property of the other
Party. FedNat shall have the right to require, as a condition precedent to
providing exposure and related information (including, without limitation,
reinsurance submission and modelling data) that is materially relevant and
customarily requested for any Reinsurance Layer, to require all third party
reinsurers (including PIH) to execute and deliver to FedNat non-disclosure
agreements in reasonable form and substance provided by FedNat (with no material
deviation with respect to any individual reinsurer or PIH) with respect to such
information (a “Standard Non-Disclosure Agreement”).

 

4. Relationship among the Parties; Enforceability. The terms of this Agreement
are not intended to make any of the Parties, or any of their respective
subsidiaries or affiliates, a joint employer for any purpose. Each of the
Parties agrees that the provisions of this Agreement as a whole are not intended
to, and do not, constitute control by one Party of the other Party or any
subsidiaries or affiliates of the other Party, or provide a Party with the
ability to control the other Party or any subsidiaries or affiliates of the
other Party, and each Party expressly disclaims any right or power under this
Agreement to exercise any power whatsoever over the management or policies of
the other Party or any subsidiaries or affiliates of the other Party. The
Parties acknowledge and agree that FedNat and the FedNat Insurance Companies
have sole and absolute discretion over whether (a) to purchase reinsurance, and
(b) the timing, amount, and types of any reinsurance and Reinsurance Coverage
Layers they purchase (subject to the terms of this Agreement). Nothing in this
Agreement shall be construed to oblige either Party to act in breach of the
requirements of any Applicable Laws, including, without limitation, securities,
insurance and trade regulation laws and regulations, written policy statements
of securities commissions, insurance and other regulatory authorities, and the
bylaws, rules, regulations and written policy statements of relevant securities
and self-regulatory organizations. Each Party represents, warrants, covenants
and agrees to and in favor of the other Party that this Agreement, and the
obligations contained herein, are valid, binding and enforceable against it, and
that the execution, delivery and performance of the obligations set forth herein
will not violate any law, rule, order, judgment, decree, lien, regulation,
contract, agreement or other restriction of any kind binding on it.

 

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5. Governing Law. This Agreement and all actions and proceedings (whether at
law, in contract or in tort) that may be based upon, arise out of or relate to
this Agreement, or the negotiation, execution or performance hereof, shall be
governed by and construed in accordance with the laws of the State of Florida
without regard to principles of conflicts of law.

 

6. Submission to Jurisdiction. Each Party agrees that it shall bring any action
or proceeding between the Parties arising out of or related to this Agreement or
the transactions contained in or contemplated by this Agreement exclusively in
the United States District Court for the Southern District of Florida or another
court sitting in Broward County, Florida (the “Chosen Courts”), and with respect
to any such action or proceeding: (a) irrevocably submits to the exclusive
jurisdiction of the Chosen Courts; (b) waives any objection to laying venue in
any such action or proceeding in the Chosen Courts; (c) waives any objection
that the Chosen Courts are an inconvenient forum or do not have jurisdiction
over any party hereto; and (d) agrees that service of process upon such party in
any such action or proceeding shall be effective if notice is given in
accordance with Section 11.

 

7. Waiver of Jury Trial. EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY
WHICH MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND
DIFFICULT ISSUES, AND THEREFORE EACH SUCH PARTY HEREBY IRREVOCABLY AND
UNCONDITIONALLY WAIVES ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN
RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO
THIS AGREEMENT, OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT. EACH PARTY
CERTIFIES AND ACKNOWLEDGES THAT (I) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY
OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD
NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, (II) EACH
PARTY UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (III) EACH
PARTY MAKES THIS WAIVER VOLUNTARILY, AND (IV) EACH PARTY HAS BEEN INDUCED TO
ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS IN THIS SECTION 7.

 

8. Assignment.

 

(a) Definitions. As used in this Agreement, the term “affiliate(s)” or
“affiliated” shall mean any entity that controls, is controlled by or is under
common control with the other entity. As used in this Agreement, the term
“subsidiary” or “subsidiaries” with respect to any person means any entity of
which (or in which) more than 50% of the issued and outstanding voting interests
are directly or indirectly owned by that person or the entity is otherwise
controlled by that person. The term “person” means any individual, corporation,
limited liability company, partnership, joint venture, association, trust, or
any such entity.

 

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(b) Prohibition on Assignment; Exceptions. Neither this Agreement nor the rights
or obligations hereunder shall be assignable by FedNat or FedNat Insurance
Companies or their affiliates without the prior written consent of PIH. Except
as expressly set forth in this Section 8(b), neither this Agreement nor the
rights or obligations hereunder shall be assignable by PIH, its affiliates, or
its successors and assigns without the prior written consent of FedNat.
Notwithstanding anything to the contrary contained in Section 10 hereof, this
Agreement may be assigned, sold or otherwise transferred by PIH without any
consideration to FedNat or FedNat Insurance Companies in the following manners,
subject to the terms and conditions of Section 8(c) and subject to the approval
of FedNat (such approval not to be unreasonably withheld, conditioned, or
delayed so long as the terms and requirements of Section 8(c) are satisfied):

 

(i) PIH may assign this entire Agreement (but not a portion hereof) to any one
of its subsidiaries or affiliates.

 

(ii) PIH may sell assign or otherwise transfer (“Transfer”) this entire
Agreement (but not a portion hereof) to an unaffiliated party (“Transferee”).
The consideration for the Transfer will be at the sole discretion of PIH and the
Transferee.

 

(c) Conditions to Assignment.

 

(i) As a condition precedent to PIH’s or any successor’s or permitted assign’s
(an “Assignor”) assignment of this Agreement to one of the persons set forth in
Section 8(b) (an “Assignee”), the Assignor shall deliver to FedNat prior to such
assignment: (A) an assignment and assumption agreement in form and substance
reasonably satisfactory to FedNat and pursuant to which Assignee agrees to be
bound by all of the terms and provisions of this Agreement in its entirety as
“PIH” (including all of the conditions required for the exercise of a Right of
First Refusal), without condition or reservation; and (B) a Standard
Non-Disclosure Agreement provided by FedNat and executed by the Assignee
pursuant to which Assignee agrees to maintain the confidentiality of all
exposure and related information (including, without limitation, reinsurance
submission and modelling data).

 

(ii) In the event that an Assignor elects to assign this Agreement to a person
who is not an affiliate or subsidiary of PIH (a “Proposed Third-Party
Assignee”), prior to such assignment and as a condition precedent thereof, the
Assignor shall deliver written notice (in the manner required by Section 11) to
FedNat of all material terms and conditions of such assignment (the “Assignment
Terms”). FedNat shall then have a period of three (3) business days after its
receipt of written notice of all material terms and conditions to elect in
writing (in the manner provided in Section 11) to elect to assume this Agreement
from the Assignor pursuant to the Assignment Terms, without any additional
terms, conditions, or stipulations. Any such election by FedNat shall be
irrevocable once it has been made. To the extent that FedNat elects not to
exercise its right to assume this Agreement pursuant to the Assignment Terms, or
fails to notify Assignor of its election within the three (3) business day time
frame set forth above in this Section 8(c)(ii), then Assignor shall have the
right for a period of thirty (30) days to assign this Agreement to the Proposed
Third-Party Assignee pursuant to the Assignment Terms (subject to the other
conditions precedent set forth in this Section 8); provided, that in the event
that the assignment is not consummated within such thirty (30) day period, or
the Assignment Terms are materially modified (which, for the avoidance of doubt,
shall mean any change that materially affects the price or any material terms or
conditions of the Assignment Terms that are more favorable to the Proposed
Assignee) (the “Modified Assignment Terms”), the Assignor shall again provide
FedNat with a new right of first refusal with respect to the assignment of this
Agreement at the Modified Assignment Terms. In such case, FedNat shall have two
(2) business days following its receipt of the Modified Additional Terms to
elect in writing (in the manner provided in Section 11) to assume this Agreement
on such Modified Additional Terms. No Assignor shall make any assignment of this
Agreement unless and until it has complied with the requirements of this Section
8(c)(ii).

 

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(iii) Notwithstanding anything to the contrary set forth in this Agreement, in
no event shall PIH or any of its successors or permitted assigns assign this
Agreement to a person that sells residential property insurance in the State of
Florida directly to the primary insured.

 

(d) Binding Effect. This Agreement shall inure to the benefit of and be binding
upon the Parties and their respective successors and permitted assigns.

 

9. Entire Agreement. This Agreement constitutes the entire agreement, and
supersedes all prior agreements and understandings (oral and written), by and
among the Parties with respect to the subject matter hereof.

 

10. No Third Party Rights. Nothing contained in this Agreement, express or
implied, establishes or creates, or is intended or will be construed to
establish or create, any right in or remedy of, or any duty or obligation to,
any third party.

 

11. Notices. All notices, requests, claims, demands, and other communication
hereunder will be in writing and shall be deemed to have been duly given: (a) on
the date of delivery, if delivered by hand to the address below (or to such
other address as a Party may designate by written notice to other Party); (b) on
the date of confirmed receipt if delivered by certified mail, postage prepaid
and return receipt requested addressed as below (or to such other address as a
Party may designate by written notice to other Party); or (c) for the purposes
of notices, elections and other communications pursuant to the procedures set
forth in Section 1, on the date of transmittal via electronic mail to the e-mail
addresses of the applicable person or party involved with the reinsurance
arrangements for the reinsurance coverage at such time, with a copy delivered to
the individuals identified below.

 

If to FedNat or any FedNat Insurance Company:

 

FedNat Holding Company

14050 NW 14th Street, Suite 180

Sunrise, FL 33323

Attention: Michael H. Braun, CEO and President

E-Mail: mbraun@fednat.com

 

with a copy (which shall not constitute notice) to:

 

Nelson Mullins Broad and Cassel

2 S. Biscayne Blvd., # 2100

Miami, FL 33131

Attention: Nina Gordon, Esq.

E-Mail: nina.gordon@nelsonmullins.com

 

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If to PIH:

 

D. Kyle Cerminara

Fundamental Global Investors, LLC

4201 Congress Street, Suite 140

Charlotte, North Carolina 28209

E-Mail: kyle@fundamentalglobal.com

 

with a copy (which shall not constitute notice) to:

 

Thompson Hine LLP

3900 Key Center

127 Public Square

Cleveland, OH 44114

Attention: Derek D. Bork, Esq.

E-Mail: derek.bork@thompsonhine.com

 

12. Counterparts. This Agreement may be executed in one or more counterparts,
and may be exchanged in electronic form (including by PDF), each of which shall
be deemed an original, but all of which shall constitute one and the same
instrument.

 

13. Amendment; Modification. The Parties may by written agreement duly signed by
both Parties, subject to any regulatory approval that may be required: (a)
extend the time for the performance of any of the obligations or other acts of
the Parties; (b) waive any inaccuracies in the documents delivered pursuant to
this Agreement; and (c) waive compliance with or modify, amend or supplement any
of the agreements contained in this Agreement or waive or modify performance of
any of the obligations of any of the Parties. This Agreement may not be amended
or modified except by an instrument in writing duly signed on behalf of the
Parties.

 

14. Waiver. No failure by any Party to take any action or assert any right
hereunder shall be deemed to be a waiver of its right to take any action or
assert any right hereunder with respect to any future occurrence of those
circumstances.

 

15. Severability. To the extent any provision of this Agreement shall be invalid
or unenforceable, it shall be considered deleted from this Agreement and the
remaining provisions of this Agreement shall be unaffected and shall continue in
full force and effect. Notwithstanding any implication in this Section 15 to the
contrary, if any part of the Agreement is found to be unlawful or impermissible
by a court or administrative body of competent jurisdiction, the Parties shall
use reasonable efforts to amend this Agreement to address the concerns in a
manner that results in a lawful and permissible agreement.

 

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16. Headings. Headings contained in this Agreement are for reference purposes
only, and they shall not affect in any way the meaning or interpretation of this
Agreement.

 

17. Termination. This Agreement, the Right of First Refusal, and all rights of
PIH (including its affiliates and assigns) and any Transferee(s) to participate
in any Reinsurance Coverage Layers shall terminate upon the expiration of the
Term, except as set forth in Section 1(a). This Agreement may only otherwise be
terminated by mutual consent of the Parties, or as otherwise provided herein.
Either Party may terminate this Agreement in the event that the other Party
either: (a) commits a material breach of the terms of the Agreement and has been
given written notice and at least thirty (30) days’ prior opportunity to cure
such breach, and fails to do so; or (b) is deemed insolvent by applicable
regulatory or judicial authorities, or is the subject of conservation,
rehabilitation, liquidation, bankruptcy or other similar insolvency proceedings,
which proceedings, if involuntarily instituted, are not dismissed within sixty
(60) days after the initiation of the proceedings (provided, that a Party may
elect to terminate this Agreement immediately if such proceedings are
voluntarily initiated by the other Party with respect to itself).

 

18. Survival. The provisions of Sections 3 through 16, and this Section 18,
shall survive the expiration or earlier termination of this Agreement.

 

19. Attorneys’ Fees. In the event of any dispute or controversy between the
Parties relating to the interpretation of this Agreement or to the transactions
contemplated hereby, the prevailing Party shall be entitled to recover from the
non-prevailing Party reasonable attorneys’ fees and expenses incurred by the
prevailing Party. Such award shall include post-judgment attorneys’ fees and
costs.

 

[Remainder of Page Intentionally Blank. Signature Page Follows.]

 

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IN WITNESS WHEREOF, the Parties have caused to be executed and delivered by
their duly authorized officers this Agreement to be effective as of the
Effective Date.

 

  FEDNAT:         FEDNAT HOLDING COMPANY, a Florida corporation         By: /s/
Michael Braun   Name:  Michael Braun   Title: Chief Executive Officer        
PIH:         1347 Property Insurance Holdings, Inc., a Delaware corporation    
    By: /s/ John S. Hill   Name: John S. Hill   Title: Vice President, Chief
Financial Officer and Secretary

 

[End of Agreement.]

 

SIGNATURE PAGE TO
REINSURANCE CAPACITY RIGHT OF FIRST REFUSAL AGREEMENT