redemptionagreementexist






  CHAR1\1899856v4  REDEMPTION AGREEMENT      THIS REDEMPTION AGREEMENT (the “Agreement”) is made as of the 13th day of May, 2022  by and between Monarch National Insurance Company, a Florida corporation (the “Company”), and  FedNat Insurance Company, a Florida corporation (the “Holder”).  Capitalized terms used but not defined  herein have the meaning given in that certain Master Restructure Agreement of even date herewith by and  among MNIC, the Holder and the other parties thereto (the “Restructure Agreement”).    RECITALS:     WHEREAS, Holder currently owns 300,000 shares of the issued and outstanding common s tock  of MNIC, par value $10.00 (the “Redeemed Stock”); and     WHEREAS, as agreed in the Restructure Agreement, MNIC will redeem (the “Redemption”) all  of the Redeemed Stock, pursuant to the terms and conditions set forth herein.     NOW, THEREFORE, in consideration of the premises, the mutual covenants and conditions  herein contained, the parties hereto agree as follows:      Section 1. Redemption.  Subject to the terms and conditions contained herein, effective as  of the Redemption Closing, MNIC purchases and redeems from the Holder, and the Holder sells and  transfers to MNIC, the Redeemed Stock.  The redemption price (the “Redemption Price”) to be paid to  the Holder for the Redeemed Stock is that amount equal to 15% of the value of the surplus of MNIC at  Closing as agreed by the parties in accordance with the Hale Investment & Subscription Agreement .  The  Redemption Price shall be paid in the manner set forth in Section 3 below.     Section 2.  Closing.   The closing of the transaction (the “Redemption Closing”)  contemplated by this Agreement shall occur on the Closing Date (as defined in the Restructure  Agreement), remotely via electronic exchange of documents and signatures.  The time at which the  Redemption Closing occurs shall be 12:02 a.m. Eastern Time on the Closing Date (the “Effective Time”).      Section 3.  Redemption Closing Deliveries; Transaction Closing.       (a) The Holder covenants and agrees, at or prior to the Closing, to deliver  to MNIC  the stock certificate evidencing the Redeemed Stock or to execute a lost stock affidavit in form  mutually agreeable to MNIC and the Holder indicating the Holder’s failure to locate such  certificate and its release of all claims in connection with such certificate and the Redeemed  Stock upon receipt of the Redemption Note (as defined below).  At the Redemption Closing,  MNIC shall deliver to Holder a Redemption Note in amount equal to the Redemption Price in the  form attached hereto as Exhibit A (the “Redemption Note”).     (b) As outlined by the Restructure Agreement, MNIC is entering into a series of  transactions whereby it shall receive additional capital from the Hale Investors and either the  Holder or FNHC, assume certain policies of FNIC and amend its Articles of Incorporation and  Bylaws and certain Affiliate Service Agreements.  The Stock Certificate shall be cancelled on the  date of the Closing, effective as of the Effective Time.     (c) Notwithstanding the foregoing, in the event that that the Closing has not occurred  by July 31, 2022, (i) MNIC shall return the Stock Certificate to the Holder, (ii) the Redemption  Note shall never become effective, and (iii) the provisions of this Agreement, including without  





 






  CHAR1\1899856v4 2     limitation, the intended effects of the Redemption Transaction described in Section 4 of this  Agreement shall be null and void and will have no force or effect.    Section 4. Redemption Effect; Termination of Stockholder Rights.  The parties  acknowledge and agree that from and after the Effective Time, Holder shall no longer have any of the  rights of a stockholder of MNIC based upon ownership of the Redeemed Stock, including without  limitation the right to vote, except the right to receive payment for the Redeemed Stock as provided in  Section 3 above. The parties acknowledge and agree that any payments under this Agreement will be  reported to the Holder as required by applicable law.    Section 5. Representations and Warranties of the Holder.  Holder hereby represents and  warrants to MNIC and its successors and assigns as of the date hereof and as of the Redemption Clos ing  that:    (a) it has all requisite right, power and authority to execute and deliver this  Agreement and consummate the transactions contemplated hereby;    (b) this Agreement has been duly authorized and has been executed and delivered by  Holder and constitutes its legal, valid and binding obligation, enforceable in accordance with the  terms hereof;    (c) the execution and delivery of this Agreement by the Holder and the  consummation of the transactions contemplated hereby will not breach, violate or cause a default  under or conflict with, as applicable, any contract, agreement, instrument, order, injunction or  decree to which it is a party or otherwise bound or any applicable law;     (d) the Holder has good, valid, marketable, legal and beneficial title to the Redeemed  Stock free and clear of Liens (as defined below); and    (e)  title to the Redeemed Stock shall duly transfer and vest in MNIC at the Effec tive  Time, free and clear of all liens, encumbrances, charges, equities, pledges, options, warrants  and  other rights or claims of third parties (collectively, “Liens”), but subject to the terms and  conditions herein.     Holder hereby affirms the representations and warranties given in Section 2.1 of the Restructure  Agreement and the release provided to MNIC in Section 4.1 of the Restructure Agreement.    Section 6. Advice of Counsel.  The Holder has carefully read the provisions of this  Agreement, has reviewed such provisions with its attorneys, has consulted its attorneys regarding its  rights and obligations under this Agreement, has had ample and sufficient opportunity to consider the  terms of this Agreement without duress or coercion, understands and freely accepts all o f  the terms  and  conditions of this Agreement, knowingly and voluntarily enters into this Agreement in reliance wholly  upon his respective judgment, belief and knowledge and this Agreement has been entered into by him  without reliance upon any statement from MNIC, any of its representatives or any other third party.      Accordingly, the Holder forever waives all rights to assert that this Agreement was the result of   a mistake in law or in fact or to assert that any or all of the legal theories or factual assumptions used for   negotiating purposes are for any reason inaccurate or inappropriate.     





 






  CHAR1\1899856v4 3      Section 7. Counterparts.  This Agreement may be executed simultaneously in tw o or more  counterparts, each of which shall be deemed an original, but all of which together shall constitute one and  the same instrument.  Delivery of an executed signature page by facsimile or other electronic transmission  (e.g. “pdf” or “tif” format) shall be effective as delivery of a manually executed counterpart hereof and  may be used in lieu of the original agreement for all purposes.  Without limiting the foregoing, the words   “execution,” “execute,” “signed,” “signature,” and words of like import in or related to this Agreement  shall be deemed to include electronic signatures (e.g., through DocuSign© or other similar elec tronic  e- signature application), each of which shall be of the same legal effect, validity or enforceability as a  manually executed signature, to the extent and as provided for in any applicable law, including the  Federal Electronic Signatures in Global and National Commerce Act or any other similar state laws based  on the Uniform Electronic Transactions Act.     Section 8. Severability.  Any provision of this Agreement which is prohibited or  unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such  prohibition or unenforceability without invalidating the remaining provisions hereof, and any such  prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such  provision in any other jurisdiction.       Section 9. Assigns.  This Agreement shall be binding upon and inure to the benefit of any  and all successors and assigns of the parties hereto.  This Agreement may not be ass igned by any party  without the prior written consent of the other party hereto.     Section 10. Merger Clause.  This Agreement contains the final, complete and exclusive  statement of the agreement between the parties with respect to the transactions contemplated herein and  all prior or contemporaneous written or oral agreements with respect to the subject matter hereof are  merged herein.     Section 11. Amendments.  No change, amendment, qualification or cancellation hereof shall  be effective unless in writing and duly executed by each of the parties hereto.     Section 12. Governing Law.  This Agreement shall be governed by and construed in  accordance with the laws of the State of Florida without regard to the principles of conflicts of law  thereof.  Each party hereto hereby irrevocably submits to the jurisdiction of the courts of the State of  Florida for the adjudication of any dispute hereunder or in connection herewith or with any transaction  contemplated hereby or discussed herein, and hereby irrevocably waives, and agrees not to assert in any  suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any such c ourt,   that the venue thereof may not be appropriate, that such suit, action or proceeding is improper or that this   Agreement or any of the documents referred to in this Agreement may not be enforced in or by said  courts, and each party hereto irrevocably agrees that all claims with respect to such suit, action or  proceeding may be heard and determined in such a Florida state or federal court.  EACH PARTY  HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO  REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN  CONNECTION HEREWITH OR ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTION  CONTEMPLATED HEREBY.     





 






  REDEMPTION AGREEMENT    IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the date first  above written.     MNIC:    MONARCH NATIONAL INSURANCE COMPANY    By:  /s/ Michael Braun      Name:  Michael Braun      Title: President             HOLDER:    FEDNAT INSURANCE COMPANY    By:  /s/ Michael Braun      Name:  Michael Braun      Title: President       





 






  CHAR1\1899856v4  EXHIBIT A  Redemption Note      Omitted pursuant to Item 601(a)(5) of Regulation S-K.