Document:

SECURITIES PURCHASE AGREEMENT

 

This SECURITIES PURCHASE AGREEMENT (this
“Agreement”) is entered into as of November 11, 2005, by and among (i) Homeowners of America Holding
Corporation, a Delaware corporation (the “Company”); (ii) Spencer W. Tucker (the “Founder”),
and (iii) the entities listed on Schedule A hereto (each, an “Investor,” and collectively, the “Investors”).

 

RECITALS

 

The Company currently has outstanding an
aggregate of 1,000,000 restricted shares of the Company’s common stock, par value $0.0001 per share (the “Common
Stock”). Upon the terms and conditions stated in this Agreement, the Company desires to sell and issue to the Investors,
and the Investors desires to purchase, an aggregate of 4,500,00 Company’s Series A Preferred Stock, par value $0.0001 per
share (the “Series A Preferred Stock” and collectively, the shares of such stock, the “Shares”).
In addition, concurrently herewith, the Company is selling and issuing to certain investors (the “Series B Investors”)
an aggregate of 450,000 shares of the Company’s Series B Preferred Stock, par value $0.0001 per share (the “Series.
B Preferred Stock”) pursuant to subscription agreements (each, a “Series B Subscription Agreement”)
in connection with the Company’s offering of such shares to the Series B Investors listed on Schedule B annexed hereto (the
“Series B Offering”). In this Agreement, the Series A Preferred Stock and the Series B Preferred Stock
are sometimes collectively referred to as the “Preferred Stock.”

 

NOW, THEREFORE, in consideration
of the foregoing recitals and for good and other valuable consideration hereinafter set forth, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto, intending to be legally bound, hereby agree as follows:

 

ARTICLE I

AGREEMENT TO SELL AND PURCHASE

 

Section 1.1           Authorization
of Securities.

 

(a)          The
Company shall adopt and file with the Secretary of State of the State of Delaware on or before the Closing Date (as defined in
Section 2.1 below) the Amended and Restated Certificate of Incorporation in the form of Exhibit A attached to this
Agreement (the “Amended Charter”).

 

(b)          The
Company has authorized (i) the sale and issuance to the Investors of the Shares and (ii) the issuance of such shares of Common
Stock (including any increases therein resulting from any anti-dilution adjustments) to be issued upon conversion of the Shares
(the “Conversion Shares”). The Shares and the Conversion Shares are collectively referred to herein as
the “Securities.”

 

Section 1.2           Sale
and Purchase of Shares. Subject to the terms and conditions of this Agreement, at the Closing, the Company shall issue
and sell to each Investor, and each Investor shall purchase from the Company, that number of shares of Series A Preferred Stock
set forth opposite each Investor’s name on Schedule A hereto at a price of $1.00 per share.

 

    	 

    	 

    

 

Simultaneously herewith, the Company is
selling and issuing to the Series B Investors an aggregate of 450,000 shares of Series B Preferred Stock at a price of $1.00 per
share.

 

ARTICLE II

CLOSING OF SALE AND PURCHASE

 

Section 2.1           Closing.
The closing of the sale and purchase of the Shares pursuant to this Agreement (the “Closing”) shall take
place at the offices of Lowenstein Sandler PC, 1251 Avenue of the Americas, 18 floor, New York, New York 10020 at 10:00AM on November
11, 2005, or at such other time or place as the Company and the Investors may mutually agree (the “Closing Date”).
At the Closing, subject to the terms and conditions hereof, the Company will deliver to each Investor, among other things, a certificate
representing the number of shares of Series A Preferred Stock that such Investor is purchasing against payment of the purchase
price therefor by wire transfer to an account specified by Company.

 

Section 2.2           Conditions
to Investors’ Closing Obligations and Deliveries by the Company. The obligations of each Investor to purchase Shares
at the Closing is subject to the fulfillment, or the waiver by such Investor, of each of the following conditions on or before
the Closing:

 

(a)          Each
representation and warranty contained in ARTICLE III shall be true and correct in all material respects on and as of the
Closing Date with the same effect as though such representation and warranty had been made on and as of that date.

 

(b)          The
Company and the Founder shall have performed and complied in all material respects with all covenants, agreements, obligations,
and conditions contained in this Agreement that are required to be performed or complied with by, as applicable, the Company or
the Founder prior to or at the Closing.

 

(c)          The
Founder, signing individually and on behalf of the Company, shall have delivered to the Investors at the Closing a certificate
certifying that the conditions specified in Section 2.2(a) and Section 2.2(b) have been fulfilled.

 

(d)          All
authorizations, approvals, permits, consents, waivers, and clearances, except for the licenses necessary to organize and operate
the Company’s to-be-formed insurance Subsidiary (as defined below), of any governmental authority or other regulatory body
of the United States or of any state that are required in connection with the lawful issuance and sale of the Shares pursuant to
this Agreement shall have been obtained and effective as of the Closing.

 

(e)          The
Company shall have taken all actions necessary for the effectiveness of the private placement exemptions under the Securities Act
of 1933, as amended (the “Securities Act”) and the state securities laws of each jurisdiction in which
this offering of Series A Preferred Stock and the Series B Offering are being conducted and in which the shares of Preferred Stock
are being sold at the Closing.

 

(f)          All
corporate and other proceedings in connection with the transactions contemplated by this Agreement and all documents and instruments
incident to such transactions shall be reasonably satisfactory to the each Investor’s counsel, and each Investor and its
counsel shall have received all such counterpart originals or certified or other copies of such documents as each may reasonably
request.

 

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(g)          The
Investors shall have completed their due diligence investigation of the Company, and a majority in interest of the Investors shall
have determined that they are satisfied with the scope and results of such due diligence investigation.

 

(h)          Since
the date of the Company’s inception, in the reasonable discretion of each of the Investors, there shall not have been a material
adverse effect on the business, operations, properties, assets (including intangible assets), prospects, working capital, or condition
(financial or otherwise) of the Company or any event, condition, or contingency that is likely to result in such a material adverse
effect (a “Material Adverse Effect”).

 

(i)          The
authorized size of the board of directors of the Company and each Subsidiary shall be seven (7), and the board of directors of
the Company and each Subsidiary shall consist of individuals elected in accordance with the provisions of the Stockholders’
Agreement (as defined in Section 2.2(i)).

 

(j)          The
Company shall have paid the Transaction Expenses (as defined in Section 6.1) in accordance with Section 6.1 hereof and the
Structuring Fee (as defined in Section 3.21), as evidenced by summary invoices provided at the Closing.

 

(k)          The
Company shall have filed the Amended Charter with the Secretary of State of Delaware on or prior to the Closing, and the same shall
continue to be in full force and effect as of the Closing.

 

(l)          Each
of the Company, the Founder and the Series B Investors shall have delivered to the Investors counterpart originals of the Investor
Rights Agreement in substantially the form attached hereto as Exhibit B (the “Investor Rights Agreement”),
and each of the Company and all other shareholders of the Company’s stock shall have delivered the Stockholders’ Agreement
in substantially the form attached hereto as Exhibit C (the “Stockholders’ Agreement” and
together with the Investors’ Rights Agreement, the “Related Agreements”).

 

(m)         The
Company shall have delivered to each Investor each of the following documents and/or evidence:

 

(i)          A
certificate of the Secretary of State of the State of Delaware, dated as of a date not more than five business days before the
Closing Date, with respect to the good standing of the Company in the State of Delaware, and of the Secretary of State or equivalent
official of each other jurisdiction where the Company is qualified to do business as a foreign corporation, dated not more than
five business days before the Closing Date, with respect to such qualification and the good standing of the Company in such jurisdiction.

 

(ii)         A
certificate of the Secretary of the Company, dated the Closing Date, certifying (A) an attached copy of the Company’s Certificate
of Incorporation, (B) an attached copy of the Company’s Bylaws, (C) resolutions of the Company’s board of directors
approving this Agreement and the Related Agreements (as defined in Section 3.1), and (D) the incumbency of the Company’s
officers.

 

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(iii)        Employment
and non-competition agreements (a) in substantially the form attached hereto as Exhibit D-1 executed by the Founder and
(b) in substantially the form attached hereto as Exhibit D-2 executed by Richard P. Backus and Alvin M. Johnston (the “Employment
and Non-Competition Agreements”).

 

(iv)         The
written legal opinion of Jones Day, addressed to the Investors, and substantially in the form of Exhibit E attached hereto.

 

(v)          The
business plan for the Company and its Subsidiaries, attached hereto as Exhibit F (the “Business Plan”).

 

(vi)         Evidence
that, at the Closing, at least 450,000 shares of Series B Preferred Stock are being sold to the Series B Investors at $1.00 per
share.

 

(vii)        Evidence
satisfactory to each of the Investors that each Series B Investor has made payment in full of the aggregate purchase price payable
pursuant to such Series B Investor’s Series B Subscription Agreement.

 

Section 2.3           Conditions
to Closing Obligations of the Company and the Founder and Closing Deliveries by the Investors. The obligation of the Company
to each Investor to sell the Shares at the Closing is subject to the fulfillment, or the waiver by the Company, of each of the
following conditions on or before the Closing:

 

(a)          Each
representation and warranty contained in ARTICLE IV shall be true and correct in all material respects on and as of the
Closing Date with the same effect as though such representation and warranty had been made on and as of that date.

 

(b)          The
Investor shall have performed and complied with in all material respects all covenants, agreements, obligations, and conditions
contained in this Agreement that are required to be performed or complied with by the Investor on or before such Closing.

 

(c)          The
Investor shall have delivered to the Company and to the Founder counterpart originals of this Agreement, the Investor Rights Agreement,
and the Stockholders’ Agreement, each duly executed by the Investor; and

 

(d)          The
Investor shall have delivered to the Company payment in full in accordance with Section 2.1 (subject to the rights of the
Investor as set forth in Section 6.1) of the aggregate purchase price to be paid by the Investor specified in Section
1.2.

 

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Section 2.4           Use
of Proceeds. All net proceeds that the Company receives from the sale of the shares of Series A Preferred Stock hereunder
and the shares of Series B Preferred Stock pursuant to the Series B Subscription Agreement shall be used (i) to meet the minimum
tangible net worth requirements and minimum reserve requirements required by the Texas Department of Insurance (the “Department”),
and (ii) for sales, marketing, development, and technical support, working capital, and other general corporate purposes. The Company
shall not use any part of the proceeds from the sale of the shares of Preferred Stock to purchase or carry any “margin security”
or “margin stock” (as such terms are defined in any regulation, rule, or interpretation of the Board of Governors of
the Federal Reserve System) or to pay any indebtedness of the Company or its Subsidiary, other than (i) the Structuring Fee, (ii)
the Transaction Expenses; (iii) reimbursement to the Founder for all costs and expenses incurred by or on behalf of the Founder
in connection with the organization of the Company and the negotiation, documentation and consummation of the investment by the
Investors, including without limitation the Consulting Fees set forth on Schedule 2.4 (the “Consulting Fees”),
attorney’s fees, travel and other out-of-pocket expenses, subject to the Investors’ approval as to amount, which approval
shall not to be unreasonably withheld by Investors; and (v) to repay in full the Subordinated Convertible Promissory Note, dated
April 1, 2005, issued to the Founder in the principal amount of $25,000. Notwithstanding the foregoing, the Company at all times
shall hold at least $4,000,000 of such net proceeds in cash or in short-term investments of cash equivalents until such time as
the Company’s to-be-formed insurance Subsidiary obtains a license to operate as an insurance company in the State of Texas.

 

Section 2.5           Consummation
of Transactions. All acts, deliveries, and confirmations comprising the Closing, regardless of chronological sequence,
shall be deemed to occur contemporaneously and simultaneously upon the occurrence of the last act, delivery, or confirmation of
such Closing and none of such acts, deliveries, or confirmations shall be effective unless and until the last of the same shall
have occurred.

 

ARTICLE IIIARTICLE
III

REPRESENTATIONS AND WARRANTIES

OF THE COMPANY AND THE FOUNDER

 

Except for the exceptions set forth on the
Disclosure Schedule attached hereto as Exhibit G and set forth on any amendment to the Disclosure Schedule delivered
to the Investors prior to Closing which exceptions shall be deemed to be part of the representations and warranties made hereunder,
the Company and the Founder, in his individual capacity, jointly and severally, represent and warrant to each Investor that the
following representations are true and complete as of the date hereof and as of the Closing Date, except as otherwise indicated.
The Disclosure Schedule shall be arranged in sections corresponding to the numbered and lettered sections and subsections contained
in this Article III, and the disclosures in any section or subsection of the Disclosure Schedule shall qualify other sections
and subsections in this Article III only to the extent it is readily apparent from a reading of the disclosure that
such disclosure is applicable to such other sections and subsections. The Disclosure Schedule may be amended by the Company after
the date hereof but only to reflect events and circumstances that have arisen after the date hereof but prior to the Closing Date.

 

For the purposes of these representations
and warranties, the phrase “to the Company’s knowledge” shall mean the actual conscience awareness, after due
investigation, of the Founder.

 

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Section 3.1           Organization;
Requisite Power. The Company is a corporation duly organized, validly existing, and in good standing under the laws of
the State of Delaware. The Company has all requisite corporate power and authority (a) to own and lease its properties and assets
and to carry on its business as now conducted and as presently proposed to be conducted; (b) to execute and deliver this Agreement
and the Related Agreements; (c) to issue and sell the Shares at the Closing and the Conversion Shares issuable upon conversion
of the Shares; and (d) to carry out the provisions of the Charter, this Agreement and the Related Agreements. The Company is duly
qualified and is authorized to do business and is in good standing as a foreign corporation in all jurisdictions in which the nature
of its activities and of its properties (both owned and leased) makes such qualification necessary, except for those jurisdictions
in which a failure to be so qualified or authorized would not have a Material Adverse Effect. The Company has made available to
the Investors a complete and correct copy of the Company’s and each Subsidiary’s certificate of incorporation and bylaws
or other organizational documents, each as amended to and in effect as of the date hereof.

 

Section 3.2           Authorization;
Binding Obligations. All corporate action on the part of the Company and its officers, directors, and stockholders necessary
for (a) the authorization of this Agreement and the Related Agreements; (b) the performance of all obligations of the Company hereunder
and thereunder; and (c) the authorization, sale, issuance, and delivery of the Shares and the issuance of the Conversion Shares
upon the conversion of the Shares in accordance with the Charter have been taken. This Agreement and the Related Agreements, when
executed and delivered, will be legal, valid, and binding obligations of the Company enforceable against the Company in accordance
with their respective terms, subject to bankruptcy, insolvency, fraudulent conveyance, or other similar statutes, rules, regulations
or other laws affecting the enforcement of creditor rights and remedies generally.

 

Section 3.3           Compliance
with Laws and Other Instruments. The Company is not in violation of or default under (a) any term of its Charter or Bylaws;
(b) any provision of any mortgage, indenture, agreement, instrument, or contract to which it is party or by which it is bound;
or (c) any judgment, decree, order, writ, injunction, law, statute, rule, regulation, or restriction of any domestic or foreign
government (whether federal, state, or local, including any political subdivision, department, instrumentality, commission, board,
bureau, or agency thereof, and any other insurance, regulatory, or administrative body, a “Governmental Entity”)
applicable to it, which violation or default could have a Material Adverse Effect. Without limiting the generality of the foregoing,
the Company is not in violation in any material respect of any applicable law, statute, rule, order, regulation, or restriction
relating to any insurance body.

 

Section 3.4           Governmental
Permits and Consents. The Company has all franchises, permits, licenses, authorizations, and approvals necessary for the
conduct of its business as is now conducted or as proposed to be conducted as set forth in the Business Plan, and reasonably believes
that it can obtain, without undue burden or expense, any other franchises, permits, licenses, authorizations, and approvals for
the conduct of its business as presently conducted and as proposed to be conducted. No orders, permissions, consents, approvals,
or authorizations of any Governmental Entity are required to be obtained, and no registrations or declarations with any Governmental
Entity are required to be filed, in connection with the execution and delivery of this Agreement and the Related Agreements and
the offer, sale, and issuance of the Securities, except such as have been duly and validly obtained or filed, or, with respect
to any filings that must be made after the Closing, that will be filed in a timely manner.

 

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Section 3.5           No
Conflicts. The execution, delivery, and performance of, and compliance with, this Agreement, the execution and delivery
of the Related Agreements, and the issuance and sale of the Securities will not, with or without the passage of time or giving
of notice, (a) violate, be in conflict with, or constitute a default under (i) any term of the Company’s Charter or Bylaws,
(ii) any provision of any mortgage, indenture, contract, agreement, instrument, or contract to which the Company is party or by
which it is bound, or (iii) any judgment, decree, order, writ, injunction, law, statute, rule, regulation, or restriction of any
Governmental Entity applicable to the Company; or (b) result in (i) the creation of any mortgage, pledge, lien, claim, encumbrance,
or charge (each, an “Encumbrance”) upon any of the properties or assets of the Company, or (ii) the suspension,
revocation, impairment, forfeiture, or nonrenewal of any franchise, permit, license, authorization, or approval applicable to the
Company, its business, or operations or any of its properties or assets.

 

Section 3.6           Capitalization.

 

(a)          Immediately
before the Closing, the authorized capital stock of the Company consists of: (i) 10,000,000 shares of Common Stock, of which (A)
1,000,000 shares are issued and outstanding and contain such restrictions as set forth in the applicable stock purchase agreements
provided to each Investor and its counsel, (B) no shares of Common Stock held in treasury, (C) 315,790 shares of Common Stock reserved
for issuance upon the exercise of options authorized for issuance under the Homeowners of America Holding Corporation 2005 Management
Incentive Plan (the “Option Plan”), and (D) no shares (other than the shares to be issued upon conversion
of the Preferred Stock) are reserved for issuance upon the conversion, exchange, or exercise of any share of capital stock or other
security of the Company; and (ii) 5,500,000 shares of Preferred Stock, of which 4,500,000 shares have been designated as “Series
A Preferred Stock” and 1,000,000 shares have been designated as “Series B Preferred Stock,” none of which are
issued and outstanding, held in treasury, or reserved for issuance.

 

(b)          Except
as set forth in the Related Agreements, there are no outstanding options, warrants, rights (including conversion or preemptive
rights, anti-dilution rights, and rights of first refusal), proxy or stockholder agreements, or other agreements of any kind (whether
oral or written, contingent, or otherwise) relating to the issuance, conversion, registration, voting, sale, or transfer of any
shares of capital stock or other securities of the Company or obligating the Company or any other person or entity to purchase
or redeem any such capital stock or other securities.

 

(c)          All
issued and outstanding shares of Common Stock have been duly authorized and validly issued, are fully paid and nonassessable, and
were issued in compliance with all applicable federal and state securities laws. The Conversion Shares have been duly and validly
reserved for issuance. The Shares, when issued in compliance with the provisions of this Agreement and the Conversion Shares (collectively,
the “Securities”), when issued upon conversion of the Shares in compliance with the provisions of the
Charter, will have been duly authorized and validly issued, will be fully paid and nonassessable, will have been issued in compliance
with all applicable laws concerning the issuance of securities, and will be free and clear of any Encumbrances; provided,
however, that the Securities may be subject to restrictions on transfer under applicable securities laws, the Stockholders’
Agreement, and the Investor Rights Agreement. The issuance and sale of the Securities are not subject to any preemptive rights
or rights of first refusal.

 

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(d)          The
Company has delivered to the Investors its current capitalization table, a true and complete copy of which is attached hereto as
Schedule 3.6, which sets forth the name of each holder of securities of the Company (including, without limitation, any options
issued under the Option Plan) and the type and number of securities held by each such holder, both immediately prior to and immediately
after the Closing (giving effect to the transactions contemplated hereby).

 

Section 3.7           Subsidiaries.

 

(a)          The
Company has no Subsidiaries. For purposes of this Agreement, “Subsidiary” means (i) any corporation,
of which a majority of the total voting power of shares of stock entitled (without regard to the occurrence of any contingency)
to vote generally in the election of directors thereof is at the time owned or controlled, directly or indirectly, by the Company
or one or more of the other Subsidiaries of the Company or a combination thereof or (ii) any limited liability company, partnership,
association or other business entity, of which a majority of the partnership or other similar ownership interests thereof is at
the time owned or controlled, directly or indirectly, by the Company or one or more Subsidiaries of the Company or a combination
thereof. For purposes of this definition, the Company will be deemed to have a majority ownership interest in a limited liability
company, partnership, association or other business entity if the Company will be allocated a majority of limited liability company,
partnership, association or other business entity gains or losses, or is or controls the managing member, manager or general partner,
or similar management or decision-making body, of such limited liability company, partnership, association or other business entity.

 

(b)          The
Company does not directly or indirectly own any equity, debt (other than trade payables) or similar interest in, or any interest
convertible into or exchangeable or exercisable for any equity, debt or similar interest in, any corporation, partnership, joint
venture, or other business association or entity.

 

Section 3.8           Projections.
The Company has delivered to the Investors the projections of the Company’s operating results that have been prepared by
the Company’s management (the “Projections”), a true and complete copy of which is attached as
Schedule 3.8. The Projections reflect the good faith reasonable estimate of the Company’s management, at the time
such projections were prepared, of expected results of operations in the periods covered thereby, and nothing has come to the attention
of the Company’s management that would lead it to believe that such Projections are not still reasonable estimates.

 

Section 3.9           Liabilities.
The Company has no liabilities or obligations of any nature, whether accrued, absolute, contingent, or otherwise, asserted or unasserted,
known or unknown, except liabilities and obligations stated on Schedule 3.9.

 

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Section 3.10         Agreements.

 

(a)          Schedule
3.10 sets forth a true and complete list of all agreements, understandings, instruments, and contracts, proposed transactions
(including a description of those currently being negotiated), judgments, orders, writs, or decrees to which the Company or the
Founder is a party or, to the Company’s knowledge, by which it is bound that may involve the sale of the Company’s
products or services to any customer, vendor, or provider; obligations (contingent or otherwise) of, or payments to, the Company
in excess of $10,000; the license of any Proprietary Rights (as defined in Section 3.13 below) to or from the Company (other
than licenses arising from the purchase of “off the shelf’ or other standard products); (iv) the development, administration,
or distribution of the Company’s products or services, including without limitation, any that involve any brokers or dealers;
(v) provisions restricting or affecting the development, manufacture, or distribution of the Company’s products or services
or the Company’s freedom to compete in any line of business; (vi) any joint venture or similar arrangement; (vii) any restriction
or limitation on the ability of the Company to pay dividends or make any other distributions or to repurchase, redeem, or otherwise
acquire any of its equity securities; or (viii) indemnification by the Company of any other person or entity (except as may be
provided in this Agreement and the Related Documents (each, a “Material Contract”).

 

(b)          The
Company has delivered to the Investors true and complete copies of each Material Contract. Each Material Contract is in full force
and effect and is binding and enforceable against the parties thereto in accordance with its terms, and the Company has performed
in all material respects all obligations required to be performed by it under each Material Contract, and no condition exists or
events have occurred that, with or without the passage of time or giving of notice, would constitute a default by the Company under
any Material Contract.

 

Section 3.11         Obligations
to Related Parties. Except as set forth on Schedule 3.11, there are no obligations of the Company to any officers, directors,
stockholders, or employees of the Company, or any of their respective Immediate Family Members (as defined below), other than for
(a) payment of salary for services rendered, (b) reimbursement for reasonable expenses incurred on behalf of the Company, and (c)
other standard employee benefits made generally available to all employees of the same category (including stock option agreements
outstanding under the Option Plan). None of the officers, directors, stockholders, or employees of the Company, or any of their
respective Immediate Family Members, (i) is indebted to the Company; (ii) is a party to or otherwise interested in any Material
Contract; (iii) owns or holds, directly or indirectly, in whole or in part, any interest in any Proprietary Rights that the Company
uses, or that may be necessary for the Company to use, in its business as now conducted, or as proposed to be conducted, as set
forth in the Business Plan; (iv) has notified the Company of any claim, charge, action or cause of action against the Company (and
the Company has no knowledge that there is any such claim, charge, action, or cause of action); or (v) has any direct or indirect
ownership interest in any firm or corporation with which the Company is affiliated or has a business relationship or that competes
with the Company (except for ownership interests of less than one percent in publicly traded companies). The Company is not a guarantor
or indemnitor of any indebtedness of any officer, director, stockholder, or employee of the Company, or any of their respective
Immediate Family Members. For purposes of this Agreement, “Immediate Family Member” means a child, stepchild,
grandchild, parent, stepparent, grandparent, spouse, sibling, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law,
or sister-in-law, including adoptive relationships, of a person referred to herein.

 

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Section 3.12         Title
to Properties and Assets. The Company has (a) good and valid title to its properties and assets, which properties and assets
constitute all of the properties and assets necessary for the Company to conduct its business as presently conducted; and (b) good
title to its leasehold estates, subject to no Encumbrances other than (i) those resulting from taxes that have not yet become due;
and (ii) minor Encumbrances arising in the ordinary course of business that do not, individually or in the aggregate, have a Material
Adverse Effect. All facilities, machinery, equipment, fixtures, vehicles, and other properties and assets owned, leased, or used
by the Company are in good operating condition and repair, are reasonably fit and usable for the purposes for which they are being
used, ordinary wear and tear excepted, and are sufficient for the conduct of the Company’s business as now conducted and
as presently proposed to be conducted as set forth in the Business Plan. The Company is in compliance with all material terms of
each lease to which it is a party or is otherwise bound. The Company does not own any real property.

 

Section 3.13         Proprietary
Rights. The Company owns or possesses sufficient legal rights to all patents, trademarks, service marks, trade names, copyrights,
trade secrets, licenses, inventions, developments, information, and other proprietary rights and processes (collectively, “Proprietary
Rights”) necessary for its business as now conducted and as proposed to be conducted, without any known infringement
of the rights of others. There are no outstanding options, licenses, or agreements of any kind relating to the foregoing, nor is
the Company bound by or a party to any options, licenses, or agreements of any kind with respect to the Proprietary Rights of any
other person or entity, other than such licenses, or agreements arising from the purchase of “off the shelf’ or other
standard products. The Company has not received any communications alleging that the Company has violated or, by conducting its
business as now conducted or as presently proposed to be conducted pursuant to the Business Plan, any of the Proprietary Rights
of any other person or entity. To the Company’s knowledge, it is not now necessary, nor will it become necessary, for the
Company to utilize any Proprietary Rights of any of its employees made prior to any such employee’s employment by the Company,
except for any such Proprietary Rights that have been validly assigned to the Company.

 

Section 3.14         Litigation.
There is no claim, action, suit, proceeding, or investigation pending or, to the Company’s knowledge, currently threatened
against the Company or the Founder including, without limitation, actions pending or threatened (or any basis therefor known to
the Company) involving the prior employment of the Founder or any of the Company’s employees, their use in connection with
the Company’s business of any information or techniques allegedly proprietary to any of their former employers or their obligations
under any agreements with their former employers. Neither the Founder nor the Company is a party to, or subject to, the provisions
of any judgment, decree, order, writ, or injunction of any court or Governmental Entity. There is no action, suit, proceeding,
or investigation by the Company currently pending or that the Company intends to initiate.

 

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Section 3.15         Tax
Returns and Payments. The Company has timely filed all tax returns, reports, declarations, statements, and other information
required by law to be filed with or supplied to any taxing authority with respect to the Taxes (as defined below) owed by the Company
(the “Tax Returns”). All Taxes due and payable on or before the Closing have been paid or will be paid
prior to the time they become delinquent. All Taxes that the Company is or was required by law to withhold or collect have been
duly withheld or collected and, to the extent required, have been paid to the proper Governmental Entity. The Company has not been
advised (a) that any of the Tax Returns have been or are being examined or audited as of the date hereof, (b) that any such examination
or audit is currently threatened or contemplated, or (c) of any deficiency in assessment or proposed judgment to its Taxes. The
Company has not elected pursuant to the Code, to be treated as a Subchapter S corporation or a collapsible corporation pursuant
to Section 1362(a) or Section 341(f) of the Code, respectively, nor has it made any other elections pursuant to the Code (other
than elections that relate solely to methods of accounting, depreciation or amortization) that would have a material effect on
the Company, its financial condition, its business as presently conducted or any of its properties or material assets. The Company
has no knowledge of any liability for any Taxes to be imposed upon its properties or assets as of the date of this Agreement. The
Company has delivered or made available to the Investors true and complete copies of all federal income Tax Returns, examination
reports, and statements of deficiencies filed by, assessed against or agreed to by the Company in the past three years. The Company
has never been a member of a consolidated or affiliated group of corporations filing a consolidated or combined income Tax Return,
nor does the Company have any liability for Taxes of any other person or entity. The Company is not a party to any tax allocation
or sharing arrangement or tax indemnity agreement. For purposes of this Agreement, the term “Taxes” shall
mean all taxes, charges, fees, levies, or other similar assessments or liabilities, including, without limitation, income, gross
receipts, ad valorem, premium, value-added, excise, real property, personal property, sales, use, transfer, withholding, employment,
payroll, and franchise taxes imposed by the United States of America or any other Governmental Entity, and any interest, fines,
penalties, assessments, or additions to tax resulting from, attributable to or incurred in connection with any tax or any contest
or dispute thereof

 

Section 3.16         Employment
Matters.

 

(a)          Schedule
3.16 sets forth a true and complete list of all “employee benefit plans” (as defined in Section 3(3) of the Employee
Retirement Income Security Act of 1974, as amended (including the rules and regulations promulgated thereunder and any successor
statute of similar import, “ERISA”)) that are maintained or operated by either the Company or any other
person or entity (each, an “ERISA Affiliate”) that is treated as a single employer with the Company under
Section 414 of the Internal Revenue Code of 1986, as amended (including the regulations issued by the U.S. Department of the Treasury
from time to time as final or temporary, the “Code”) (each such employee benefit plan so listed, an “Employee
Benefit Plan”). Neither the Company nor any ERISA Affiliate maintains or contributes to any “employee pension
benefit plan” (as defined in Section 3(2) of ERISA) or “multiemployer plan” (as defined in Section 3(37) of ERISA).
To the extent applicable, (i) each such Employee Benefit Plan has been maintained and operated in all material respects in compliance
with its terms and with all applicable provisions of ERISA, the Code and all applicable regulations, rulings and other authority
issued thereunder; (ii) all contributions required by law to have been made under each such Employee Benefit Plan (without regard
to any waivers granted under Section 412 of the Code) to any fund or trust established thereunder or in connection therewith have
been made by the due date thereof; (iii) no such Employee Benefit Plan is subject to Title IV of ERISA or Section 412 of the Code;
(iv) none of such Employee Benefit Plans that are “employee welfare benefit plans” (as defined in Section 3(1) of ERISA)
provides for continuing benefits or coverage for any participant or beneficiary of a participant after such participant’s
termination of employment, except as required by applicable law, including Section 4980B of the Code or Section 601 of ERISA; (v)
there are currently no, and during the past three years there have been no, inquiries, claims, actions, suits, or proceedings pending
or, to the Company’s knowledge, threatened by any Governmental Entity or by any participant or beneficiary against (A) any
such Employee Benefit Plan, (B) the assets of any of the trusts under any such Employee Benefit Plan, (C) the sponsor or administrator
of any such Employee Benefit Plan, or (D) any fiduciary of any such Employee Benefit Plan with respect to the design or operation
of such Employee Benefit Plan, other than routine claims for benefits; and (vi) all reports and information required to be filed
with the U.S. Department of Labor, the Pension Benefit Guaranty Corporation, or any other Governmental Entity or to be furnished
to plan participants and their beneficiaries with respect to each such Employee Benefit Plan have been so filed and/or furnished.

 

    	- 11 -

    	 

    

 

(b)          Except
for the Option Plan and any other agreements listed on Schedule 3.16, neither the Company nor the Founder are parties
to or bound by any other currently effective employment contracts, arrangements, or commitments (including, without limitation,
those with respect to sick leave, vacation pay, severance pay, salary continuation for disability, consulting or similar compensation
arrangements, retirement plans, deferred compensation arrangements, bonus plan, incentive compensation plans, profit sharing plans,
medical, dental and vision plans, life insurance, educational assistance programs, and other employee compensation arrangements).
Except as otherwise specifically set forth on Schedule 3.16, all employees of the Company are “at will”
employees. No employee of the Company has been granted the right to continued employment by the Company or to any material compensation
following termination of employment with the Company. The execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby will not (i) entitle any employee, officer, or director of, or any consultant to, the Company
to severance pay, unemployment compensation, or any other payment; or (ii) accelerate the time of payment or vesting of, or increase
the amount of, any compensation due to any employee, officer, or director of, or any consultant to, the Company (including under
the Option Plan).

 

(c)          To
the Company’s and the Founder’s knowledge, (i) no employee, officer, or director of, nor any consultant to, the Company
is in violation of any term of any employment contract, proprietary information agreement, or any other agreement relating to the
right of any such individual to be employed by, or to contract with, the Company because of the nature of the business now conducted
or presently proposed to be conducted by the Company; and (ii) the Company has not received any notice alleging that any such violation
has occurred.

 

(d)          (i)
Neither the Company nor the Founder is aware that any officer or key employee intends to terminate his or her employment with the
Company; (ii) the Company does not have a present intention to terminate the employment of any officer or key employee; (iii) each
officer and key employee of the Company is currently devoting 100% of his or her business time to the conduct of the business of
the Company; and (iv) neither the Company nor the Founder is aware that any officer or key employee is planning to devote less
than 100% of his or her business time to the conduct of the business of the Company in the future.

 

    	- 12 -

    	 

    

 

(e)          The
Founder is not obligated under, and neither the Company nor the Founder are aware that any of the Company’s employees, officers,
directors, or consultants is obligated under, any contract, agreement, instrument, license, covenant, or other commitment of any
nature, or subject to any judgment, decree, order, writ, or injunction of any court or Governmental Entity, that would interfere
with any such person’s duties to the Company or that would conflict with the Company’s business as now conducted or
as presently proposed to be conducted. The execution and delivery of this Agreement, the consummation of the transactions contemplated
hereby, and the conduct of the Company’s business as now conducted and as presently proposed to be conducted, will not conflict
with or result in a breach of the terms, conditions or provisions of, or constitute a default under, any contract, agreement, instrument,
license, covenant, or other commitment under which any employee, officer, director, or consultant is now obligated.

 

(f)          The
execution and delivery of this Agreement, and entering into the transactions described herein, by the Founder does not and will
not violate, conflict with, or result in any breach of any terms, conditions or provisions or constitute a default under, any agreement
or arrangement to which the Founder is a party or by which he is bound (including, without limitation, any covenant against competition,
employment agreement, non-disclosure agreement, or any other agreement relating to past or present employment by, or consulting
services provided to, any person or entity). The Founder acknowledges and agrees that he was not induced to leave his prior employment
through any explicit or implied promises by any of the Investors or any affiliate thereof. The Founder has not utilized, nor is
not now necessary, nor will it become necessary, for the Company to utilize any confidential information of any prior employer
of the Founder.

 

(g)          The
Company has no collective bargaining agreements with any of its employees, and there is no labor union organizing activity pending
or, to the Company’s knowledge, threatened with respect to the Company.

 

Section 3.17         Insurance.
The Company maintains property, casualty, and liability insurance policies with coverage that is customary for companies similarly
situated to the Company. The Company and all such policies are in full force and effect and the Company has not received any notices
of cancellation or termination with respect thereto.

 

Section 3.18         Changes.
Except for the transactions contemplated by this Agreement and the Related Agreements, since the Company’s inception, the
Company has not conducted its business in any manner that has resulted in a Material Adverse Effect and the Company has not operated
its business in any manner whatsoever that is inconsistent in any material respect with the Business Plan.

 

Weather events in the State of Texas, including,
without limitation, the effect of the September 2005 storm designated by the National Weather Service as “Hurricane Rita”,
have not had a Material Adverse Effect and have not materially adversely affected the Company’s ability to operate its business
in accordance with the Business Plan.

 

    	- 13 -

    	 

    

 

Section 3.19         Environmental
and Safety Laws. Except as could not reasonably be expected to have a Material Adverse Effect (a) the Company is and has
been in compliance with all Environmental Laws; (b) there has been no release or threatened release of any pollutant, contaminant
or toxic or hazardous material, substance or waste, or petroleum or any fraction thereof, (each a “Hazardous Substance”)
on, upon, into or from any site currently or heretofore owned, leased or otherwise used by the Company; (c) there have been no
Hazardous Substances generated by the Company that have been disposed of or come to rest at any site that has been included in
any published U.S. federal, state or local “superfund” site list or any other similar list of hazardous or toxic waste
sites published by any governmental authority in the United States; and (d) there are no underground storage tanks located on,
no polychlorinated biphenyls (“PCBs”) or PCB-containing equipment used or stored on, and no hazardous
waste as defined by the Resource Conservation and Recovery Act, as amended, stored on, any site owned or operated by the Company,
except for the storage of hazardous waste in compliance with Environmental Laws. The Company has made available to the Investors
true and complete copies of all material environmental records, reports, notifications, certificates of need, permits, pending
permit applications, correspondence, engineering studies, and environmental studies or assessments.

 

For purposes of this Section 3.19,
“Environmental Laws” means any law, regulation, or other applicable requirement relating to (a) releases
or threatened release of Hazardous Substance; (b) pollution or protection of employee health or safety, public health or the environment;
or (c) the manufacture, handling, transport, use, treatment, storage, or disposal of Hazardous Substances.

 

Section 3.20         Offering
Valid. Assuming the accuracy of the representations and warranties of the Investors contained in Section 4.3 hereof and
of the Series B Investors in the Subscription Agreement, the offer, sale, and issuance of the shares of Series A Preferred Stock
and shares of Series B Preferred Stock and the shares to be issued upon conversion of such shares will be exempt from the registration
requirements of the Securities Act of 1933, as amended (the “Securities Act”) and will have been registered
or qualified (or are exempt from registration and qualification) under the registration, permit, or qualification requirements
of all other applicable securities laws. None of the Company, the Founder, or any agent on their behalf has solicited or will solicit
any offers to sell or has offered to sell or will offer to sell all or any part of such shares to any person or entity so as to
bring the sale of such securities by the Company within the registration provisions of the Securities Act or any other applicable
securities laws.

 

Section 3.21         Minute
Books; Board and Stockholder Materials. The Company has delivered or made available to the Investors true and complete
copies of the minute books of the Company, which minute books contain a complete summary of all meetings of directors and stockholders
of the Company since the Company’s formation.

 

Section 3.22         Investment
Company Act. The Company is not an “investment company,” or a company “controlled” by an “investment
company,” within the meaning of the Investment Company Act of 1940, as amended.

 

Section 3.23         Consulting
Fees. No agent, broker, investment banker, person, or firm acting on behalf of or under the authority of the Company is
or will be entitled to any broker’s or finder’s fee or any other commission directly or indirectly in connection with
the transactions contemplated hereby, except that the Company is obligated to pay to Inter-Atlantic Advisors, Ltd. a structuring
fee of $50,000 at the Closing (the “Structuring Fee”) and the Company is obligated to pay on behalf of
the Founder the Consulting Fees.

 

    	- 14 -

    	 

    

 

Section 3.24         Full
Disclosure. To the Company’s and Founder’s knowledge, this Agreement and the Schedules and Exhibits hereto,
the Related Agreements, and all other documents delivered by the Company and the Founder to the Investors or their respective attorneys
or agents in connection herewith or therewith or with the transactions contemplated hereby or thereby do not contain any untrue
statement of a material fact or omit to state any material fact necessary to make the statements contained herein or therein not
misleading. To the Company’s and Founder’s knowledge, there are no facts that, either individually or in the aggregate,
could have a Material Adverse Effect that have not been set forth in this Agreement and the Schedules and Exhibits hereto, the
Related Agreements, or in other documents delivered to the Investors in connection with the transactions contemplated hereby.

 

ARTICLE IV

REPRESENTATIONS AND WARRANTIES OF THE INVESTORS

 

Each Investor hereby represents and warrants
to the Company as of the date of this Agreement as follows:

 

Section 4.1           Organization;
Requisite Power. With respect to Inter-Atlantic Fund, L.P. (“Inter-Atlantic”), such Investor
is a limited partnership duly organized and validly existing under the laws of Bermuda. With respect to Sequel Homeowners Investment,
L.P. (“Sequel”), such Investor is a limited partnership, duly organized and validly existing under the
laws of Texas. Inter-Atlantic was not organized for the purpose of making an investment in the Company. The Investor has all requisite
corporate, partnership, or limited liability company, as the case may be, power and authority to execute and deliver this Agreement,
the Related Agreements, and any other agreements, documents, and instruments to be delivered by the Investor that are contemplated
herein or delivered pursuant hereto and to carry out their respective provisions.

 

Section 4.2           Authorization;
Binding Obligations. All action on the part of the Investor necessary for the authorization of this Agreement and the Related
Agreements and the performance of all obligations of the Investor hereunder and thereunder has been taken. This Agreement and the
Related Agreements, when executed and delivered, will be legal, valid, and binding obligations of the Investor enforceable against
the Investor in accordance with their respective terms.

 

Section 4.3           Investment
Representations. The Investor understands that the Securities are being offered and sold pursuant to an exemption from
registration contained in the Securities Act based in part upon the following representations of the Investor:

 

(a)          The
Investor has substantial experience in evaluating and investing in private placement transactions of securities in companies similar
to the Company so that it is capable of evaluating the merits and risks of its investment in the Company. The Investor must bear
the economic risk of this investment indefinitely unless the Securities are registered pursuant to the Securities Act and applicable
state securities laws, or an exemption from registration is available.

 

    	- 15 -

    	 

    

 

(b)          The
Investor is acquiring the Securities for the Investor’s own account for investment only, and not with a view towards their
distribution other than in compliance with all applicable securities laws.

 

(c)          The
Investor has had an opportunity to ask questions and receive answers from the Founder and representatives of the Company concerning
the terms and conditions of the investment, the properties, assets, liabilities, business, operations, financial condition, and
prospects of the Company and all other matters deemed relevant to the Investor. The Investor has independently evaluated the transactions
contemplated by this Agreement and has reached its own decision to enter into this Agreement and the Related Agreements. However,
notwithstanding the Investor’s investigation, the Investor is relying on the representations, warranties, and covenants of
the Company and the Founder set forth herein and in the Related Agreements in making this investment.

 

(d)          The
Investor is an “accredited investor” within the meaning of Regulation D promulgated under the Securities Act.

 

Section 4.4           Transfer
Restrictions. Each Investor hereby understands that the securities such Investor is purchasing are subject to certain transfer
restrictions as follows:

 

(a)          The
Investor understands that none of the Securities have been registered under the Securities Act or the laws of any state and may
not be sold, transferred, or otherwise disposed of without registration under the Securities Act and applicable state securities
laws or pursuant to an exemption therefrom. The Investor understands that the Securities are “restricted securities”
under U.S. federal and state securities laws and that the Investor must hold the Securities indefinitely unless the Securities
are registered with the Securities and Exchange Commission and qualified by state authorities, or an exemption from such registration
and qualification requirements is available. The Investor acknowledges that the Company has no obligation to register or qualify
the Securities for resale, except as set forth in the Investor Rights Agreement. The Investor further understands and acknowledges
that the Securities are subject to restrictions on transfer as set forth in the Stockholders’ Agreement and in the Investor
Rights Agreement.

 

(b)          The
Investor acknowledges and understands that the transfer of any of the Securities is subject to the Investor’s compliance
with the provisions of the Securities Act and any applicable state securities laws in respect of any such transfer and that even
if an exemption from registration or qualification is available, it may be conditioned on various requirements including, but not
limited to, the time and manner of sale, the holding period for the Securities, and on requirements relating to the Company that
are outside the Company’s control and that the Company is under no obligation to, and they may be unable to, satisfy. The
Investor further acknowledges and understands that any Securities issued hereunder may bear a legend as set forth in Section
5.2(a) below or any other legend as may be required by the Stockholders’ Agreement, the Investor Rights Agreement, and
any other Related Agreements or the securities laws of any state applicable to the Securities represented by such legended certificate.
The Investor understands that any transfer of the Securities is subject to the Investor’s and the Company’s compliance
with the covenants set forth in Section 5.2 below.

 

    	- 16 -

    	 

    

 

ARTICLE V

COVENANTS

 

Section 5.1           Breach
of Representation and Warranty Concerning Capitalization. In the event of a breach at any time of the representation and
warranty concerning the capitalization of the Company in Section 3.6 hereof, the number of Shares purchasable by each Investor
pursuant hereto (and the number of Conversion Shares issuable upon the conversion thereof) shall automatically, with no further
action on the part of any party hereto, be adjusted upward, if appropriate, without the payment of any additional consideration
by such Investor, to that amount of Shares (and corresponding Conversion Shares) that should have been issued had such representation
and warranty been true and correct at the time made so that the Investor’s percentage interest in the Company is not less
than that which it was intended to be based upon the incorrect representation and warranty.

 

Section 5.2           Compliance
with Securities Laws.

 

(a)          The
certificate or certificates representing the Shares purchased by the Investors hereunder, any Conversion Shares acquired by an
Investor upon conversion of such Investor’s Shares and any other securities issued in respect of any of the Securities upon
any stock split, stock dividend, recapitalization, merger, consolidation, or similar event, shall be stamped or otherwise imprinted
with the following legend (unless such a legend is no longer required under the Securities Act):

 

THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY STATE SECURITIES LAW,
AND MAY NOT BE OFFERED, SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT OR PURSUANT
TO AN EXEMPTION FROM, OR IN A TRANSACTION THAT IS NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND APPLICABLE
STATE SECURITIES LAWS.

 

(b)          The
Company shall not be required to register the transfer of any of the Securities on the books of the Company unless the Company
shall have been provided with an opinion of counsel in form and substance reasonably satisfactory to the Company that such Securities
sought to be transferred are eligible for transfer without registration under the Securities Act. Notwithstanding the foregoing,
no such opinion of counsel shall be necessary to effectuate a transfer of any of the Securities (i) in accordance with the provisions
of Rule 144(k) promulgated under the Securities Act; (ii) in accordance with the intended method of disposition set forth in any
registration statement covering such Securities; or (iii) from an Investor to its partners or former partners in accordance with
their partnership interests.

 

    	- 17 -

    	 

    

 

(c)          The
restrictions upon the transferability of the Securities described in this Section 5.2 shall cease and terminate as to any
of the Securities upon the earliest to occur of the following: (i) such Securities shall have been registered under the Securities
Act and sold or otherwise disposed of in accordance with the intended method of disposition by the seller or sellers thereof set
forth in the registration statement covering such Securities; (ii) the Company shall have been provided with an opinion of counsel
in form and substance reasonably satisfactory to the Company to the effect that the restrictive legend on such Securities is no
longer required to establish compliance with the provisions of the Securities Act; or (iii) such Securities are transferred pursuant
to Rule 144 or become transferable in accordance with the provisions of Rule 144(k) promulgated under the Securities Act. Whenever
these restrictions shall terminate as provided above with respect to any of the Shares or Conversion Shares, the holder of any
such Securities bearing the legend set forth in Section 5.2(a) shall be entitled to receive from the Company, at the Company’s
expense (except for the payment of any applicable transfer taxes) and as expeditiously as possible, new stock certificates not
bearing such legend.

 

Section 5.3           Future
and Current Investments and Activities; Exculpation.

 

(a)          Each
Investor and its affiliates (i) shall be permitted to: (A) engage in a wide variety of activities and have investments in many
other companies; (B) continue to develop its current and future business and investment activities not involving the Company without
any restriction arising from the investment in the Company by the Investor or its affiliates, the right of the Investor or its
affiliates to designate directors of the Company, or any other relationship, contractual or otherwise, between the Investor and
any of its affiliates, on the one hand, and the Company or any of its affiliates, on the other hand; (C) pursue any of the foregoing
activities (collectively, the “Activities”) without the Company interfering with or imposing conditions
or restrictions on any of the Activities; and (D) engage in the Activities in any capacity, whether active or passive, without
any obligation or liability to the Company, the Founder, or to any of its other stockholders (including, without limitation, any
obligation to offer the Company, the Founder, or any of the other stockholders of the Company a right to acquire, participate,
or have any interest of any nature whatsoever in any of such Activities), and no director designated by the Investor shall have
any liability solely by reason of any such Activities (it being understood that no action by any director so designated in connection
with any such Activities shall be deemed to constitute as such a breach by such director of any duty owed to the Company); and
(ii) may, from time to time, in connection with the foregoing Activities, have information that may be useful to the Company, the
Founder, or its other stockholders (which information may or may not be known by any director designated by the Investor), and
the Investor and its affiliates and any director so designated shall not have any duty to disclose any information known to such
person or entity to the Company, the Founder, or any of its other stockholders; provided, however, that this Section
5.3 shall not relieve the Investor, its affiliates, or any director designated by the Investor of its, his, or her duty of
confidentiality with respect to confidential information of the Company.

 

(b)          The
Company hereby waives, to the full extent that it may do so under applicable law, any claim against the Investor arising under
the corporate opportunity doctrine. In this connection, the Company represents that the Charter includes, in conformance with Section
122(17) of the Delaware General Corporation Law, a provision renouncing any interest or expectancy of the Company in, or being
offered an opportunity to participate in, any business opportunities presented to the Investor or any of their respective affiliates
from whatever source other than the Company.

 

    	- 18 -

    	 

    

 

(c)          The
Investor acknowledges that it is not relying upon any other Investor or such other Investor’s affiliates in making its investment
or decision to invest in the Company.

 

Section 5.4           Reservation
of Common Stock. The Company will at all times reserve and keep available out of its authorized but unissued shares of
Common Stock, solely for the purpose of effecting the conversion of the Shares and issuing the Conversion Shares, such number of
shares of Common Stock as shall be necessary from time to time to effect such conversion. If at any time, the number of authorized
but unissued shares of Common Stock shall be insufficient to effect the conversion of the Shares, the Company shall take such corporate
action as may be necessary to increase its authorized but unissued shares of Common Stock to such number of shares as shall be
sufficient to authorize the issuance of the Conversion Shares.

 

Section 5.5           Formation
of Insurance Subsidiary.

 

(a)          The
Company shall promptly file with the Department an application for a permit to organize a wholly-owned Subsidiary, to be named
Homeowners of America Insurance Company, to operate as an insurance company and an application for a Certificate of Authority to
operate it as an insurance company. The Company shall use its commercially reasonable efforts to cause the permit and the Certificate
of Authority to be issued and to cause the Company’s insurance products to be approved by the Department, in each case within
180 days following the date hereof.

 

(b)          Until
the covenants in Section 5.5(a) have been fully and satisfactorily fulfilled, the Company shall segregate $4,000,000 of
cash and/or securities from its other assets and shall not use such funds for any of its operations.

 

ARTICLE VI

EXPENSES; INDEMNIFICATION

 

Section 6.1           Expenses.
If the sale of Series A Preferred Stock to the Investors is consummated and subject to approval by the Company’s board of
directors, the Company shall reimburse (to the extent approved by the Company’s board of directors) out-of-pocket and due
diligence expenses incurred by Inter-Atlantic and Sequel (capped at $10,000 with respect to Sequel) in connection with the transactions
contemplated by this Agreement and due diligence related thereto (including without limitation the legal fees and charges for disbursements
of Lowenstein Sandler PC, the fees and charges for disbursements of due diligence experts, the reference, background, and credit
checks performed by Corporate Resolutions, Inc., and the travel and out-of-pocket expenses of the representatives of the Investors),
as approved by the Company’s Board of Directors, which approval shall not be unreasonably withheld, delayed or conditioned
(the “Transaction Expenses”); and (ii) in connection with any amendments, joinders, or waivers (whether
or not the same become effective) of this Agreement, the Related Agreements, or any documents referred to herein or delivered to
the Investor pursuant hereto from time to time. The costs and expenses to be reimbursed under this Section 6.1 include,
without limitation, (a) the cost and expenses of preparing and duplicating this Agreement and the Securities; (b) the cost of delivering
to each of the Investors’ principal offices, insured to each of the Investors’ satisfaction, the Securities sold to
each of the Investors hereunder and any Securities delivered to the Investors in exchange therefor or upon any conversion, exercise,
exchange, or substitution thereof; and (c) all taxes (other than taxes determined with respect to the income of any Investor),
including any recording fees and filing fees and documentary stamp and similar taxes at any time payable in respect of this Agreement
or the issuance of any of the Securities. The Company hereby authorizes Inter-Atlantic and Sequel (subject to the foregoing cap
for Sequel) to deduct the amount of the Transaction Expenses and the Structuring Fee from the purchase price of the Shares otherwise
payable hereunder upon the Closing, as applicable.

 

    	- 19 -

    	 

    

 

Section 6.2           Damages.
The Company and the Founder, jointly and severally, will indemnify, defend, and hold harmless each of the Investors, and any such
Investor’s limited and general partners, officers, directors, employees, agents, and representatives (the “Investor
Indemnified Parties”) , from and against any and all damages, losses, claims, demands, actions, causes of action,
suits, litigations, arbitrations, liabilities, costs, and expenses, including without limitation court costs and the fees and expenses
of counsel and experts (collectively, “Damages”) incurred or suffered by any of them in any capacity
and resulting from or relating to a breach by the Company or the Founder of any of their representations or warranties contained
in this Agreement or in the case of any of the covenants contained in this Agreement to the extent such covenants are to be performed
at or before the Closing. The Company will indemnify, defend, and hold harmless the Investors, and each of the Investors’
limited and general partners, officers, directors, employees, agents, and representatives, from and against any and all Damages
incurred or suffered by any of them in any capacity and resulting from or relating to the breach by the Company of any of its covenants
or agreements contained in this Agreement that are to be performed after the Closing. Following the Closing, the sole and exclusive
remedy for each of the Investor Indemnified Parties with respect to any and all claims relating to a breach of this Agreement by
the Founder shall be pursuant to the indemnification provisions set forth in this Section 6.2.

 

Section 6.3           Survival.
The obligations of the Company under this Article VI will survive transfer of the Securities and the termination of this Agreement.

 

ARTICLE VII

MISCELLANEOUS

 

Section 7.1           Governing
Law; Consent to Jurisdiction. This Agreement and all matters arising directly and indirectly herefrom, shall be governed
by, and construed in accordance with, the internal laws of the State of New York, without reference to the choice of law principles
thereof. Any legal action, suit or proceeding arising out of or relating to this Agreement, any of the other Related Agreement
or the transactions contemplated hereby or thereby shall only be instituted, heard and adjudicated (excluding appeals) in a state
or federal court located in the Southern District of New York, and each party hereto knowingly, voluntarily and intentionally waives
any objection which such party may now or hereafter have to the laying of the venue of any such action, suit or proceeding, and
irrevocably submits to the exclusive personal jurisdiction of any such court in any such action, suit or proceeding. Service of
process in connection with any such action, suit or proceeding may be served on each party hereto anywhere in the world by the
same methods as are specified for the giving of notices under this Agreement.

 

    	- 20 -

    	 

    

 

Section 7.2           Waiver
of Punitive and Other Damages and Jury Trial.

 

(a)          Each
party to this Agreement expressly waives and foregoes any right to recover consequential, special, punitive, exemplary or similar
damages or lost profits, whether or not such party had notice thereof or the occurrence thereof was foreseeable, in any arbitration,
lawsuit, litigation or proceeding arising out of or resulting from any controversy or claim arising out of or relating to this
agreement or the transactions contemplated hereby.

 

(b)          Each
party acknowledges and agrees that any controversy which may arise under this Agreement is likely to involve complicated and difficult
issues. ACCORDINGLY, EACH SUCH PARTY HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY IRREVOCABLY AND UNCONDITIONALLY WAIVES
ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN RESPECT TO 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 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 such party understands and has considered the implications of this waiver, and (iii) each such party
has been induced to enter into this Agreement by, among other things, the waivers and certifications in this Section 7.2.

 

Section 7.3           Prevailing
Party’s Costs and Expenses. The prevailing party in any action or proceeding to enforce or interpret this Agreement
shall be entitled to recover from the non-prevailing party all costs and expenses, including reasonable attorneys’ fees and
disbursements, incurred in such action or proceeding.

 

Section 7.4           Cumulative
Remedies; Failure to Pursue Remedies. The rights and remedies provided by this Agreement are cumulative and the use of
any one right or remedy by any party shall not preclude or waive its right to use any or all other remedies. These rights and remedies
are given in addition to any other rights the parties may have by law, statute, ordinance, or otherwise. Except where a time period
is specified, no delay on the part of any party in the exercise of any right, power, privilege, or remedy under this Agreement
shall operate as a waiver thereof, nor shall any exercise or partial exercise of any such right, power, privilege, or remedy preclude
any further exercise thereof or the exercise of any other right, power, privilege, or remedy.

 

Section 7.5           Equitable
Remedies. The parties hereto understand that irreparable harm would occur if any of the agreements and provisions of this
Agreement were not performed fully by the parties hereto in accordance with their specific terms or conditions or were otherwise
breached and that money damages are an inadequate remedy for breach of this Agreement or the because of the difficulty of ascertaining
and quantifying the amount of damage that will be suffered by the parties hereto if this Agreement is not performed in accordance
with its terms or conditions or is otherwise breached. The parties hereto shall be entitled to an injunction or injunctions to
restrain, enjoin, and prevent breaches of this Agreement by the other parties and to enforce specifically such terms and provisions
of this Agreement such remedy being in addition to and not in lieu of, any other rights and remedies to which the other parties
are entitled to at law or in equity.

 

    	- 21 -

    	 

    

 

Section 7.6           Amendment
and Waiver. This Agreement may be amended or modified and the observance of any term hereof may be waived (either generally
or in a particular instance and either retroactively or prospectively) only by a written instrument executed by the Company and
the Founder, on the one hand, and Investors holding at least a majority of the then outstanding shares of Series A Preferred Stock,
on the other hand, and for matters concerning the Founder in his individual capacity, the Founder. Any amendment or waiver so effected
shall be binding upon the Company, the Investor, the Founder and all of their respective successors and permitted assigns, whether
or not such party, assignee, or other shareholder has entered into, executed, or approved such amendment or waiver. The Company
shall give prompt written notice of any amendment or termination of this Agreement or waiver hereunder to any party that did not
consent in writing to such amendment, termination, or waiver. No waivers of or exceptions to any term, condition or provision of
this Agreement, in any one or more instances, shall be deemed to be, or construed as, a further or continuing waiver of any such
term, condition, or provision.

 

Section 7.7           Assignment;
Binding Effect. The rights and obligations set forth in this Agreement may not be assigned or delegated by the Company
or the Investors without the prior written consent of the other, except that prior to the Closing, the Investors may assign, in
whole or in part, their rights and delegate their obligations hereunder (including, without limitation, the right to purchase any
or all of the Shares and the obligation to pay all or any portion of the purchase price in respect thereto) to any affiliate of
the Investors without obtaining the prior written consent of the Company, and after the Closing, the Investors may assign their
rights hereunder to any person or entity who acquires any Securities from the Investors. This Agreement shall be binding upon and
inure to the benefit of all of the parties and, to the extent permitted by this Agreement, their successors, legal representatives,
and permitted assigns.

 

Section 7.8           Notices.
All notices and other communications given or made pursuant to this Agreement shall be in writing and shall be deemed effectively
given: (a) upon personal delivery to the party to be notified, (b) when sent by confirmed electronic mail or facsimile if sent
during normal business hours of the recipient, and if not so confirmed, then on the next business day, (c) five days after having
been sent by registered or certified mail, return receipt requested, postage prepaid, or (d) one business day after deposit with
a nationally recognized overnight courier, specifying next day delivery, with written verification of receipt. All communications
shall be sent to the respective parties at their address as set forth below, or to such address or facsimile number as subsequently
modified by written notice given in accordance with this Section 7.8.

 

All notices to the Company shall be sent to:

 

Homeowners of America Holding Corporation

5021 Briar Tree Drive

Dallas, Texas 75248

Attention: Spencer W. Tucker

Fax: 972.267.0315

 

with a copy (which shall not constitute notice) sent
at the same time and by the same means to:

 

    	- 22 -

    	 

    

 

Jones Day

2727 North Harwood Street

Dallas, Texas 75201-1515

Attention: Mark T. Goglia, Esq.

Tel: 214.959.5043

Fax: 214.969.5100

 

All notices to the Investors shall be sent to:

 

Inter-Atlantic Fund, L.P.

do Inter-Atlantic Advisors, Ltd.

400 Madison Avenue

New York, New York 10017

Attn: Brett G. Buis

Tel: 212.581.2188

Fax: 212.581.2433

E-mail: brett@interatlanticgroup.com

 

with a copy (which shall not constitute notice) sent
at the same time and by the same means to:

 

Lowenstein Sandler LP

65 Livingston Avenue

Roseland, New Jersey 07068

Attn: Anthony 0. Pergola, Esq.

Tel: 973.597.2444

Fax: 973.597.2445

E-mail: apergola@lowenstein.com

 

Sequel Homeowners Investment, L.P.

8080 N. Central Expressway

Suite 1490

Dallas, Texas 75206

Attn: John Madden

Tel: 214.292.4150

Fax: 214.292.4155

Email: jmadden@sequelholdings.com

 

with a copy (which shall not constitute notice) sent
at the same time and by the same means to:

 

    	- 23 -

    	 

    

 

Hallett & Perrin, P.C.

2001 Bryan Street

Suite 3900

Dallas, Texas 75201

Attn: Scot W. O’Brien

Tel: 214.922-4101

Fax: 214.922-4144 

Email: sobrien@hallettperrin.com

 

Section 7.9          Severability.
If any term or provision of this Agreement, or the application thereof to any person or circumstance, shall, to any extent, be
invalid or unenforceable, the remainder of this Agreement, or application to other persons or circumstances, shall not be affected
thereby, and each term and provision of this Agreement shall be enforced to the fullest extent permitted by law.

 

Section 7.10        Survival.
The representations, warranties, covenants, and agreements made in this Agreement and in the certificates, Schedules, and other
documents delivered pursuant to this Agreement shall survive the Closing for a period of five (5) years with respect to the Company
and for two (2) years with respect to the Founder. Anything in this Agreement to the contrary notwithstanding, the representations
and warranties of the Company and the Founder hereunder shall not be affected by any investigation of the Company or the Founder
made by the Investors or their respective agents or representatives.

 

Section 7.11        Construction.
Whenever the context requires, the gender of any word used in this Agreement includes the masculine, feminine, or neuter, and the
number of any word includes the singular or plural. Unless the context otherwise requires, all references to articles and sections
refer to articles and sections of this Agreement, and all references to exhibits and schedules are to schedules attached hereto,
each of which is made a part hereof for all purposes.

 

Section 7.12        Headings.
The headings and subheadings in this Agreement are included for convenience and identification only and are in no way intended
to describe, interpret, define, or limit the scope, extent, or intent of this Agreement or any provision hereof.

 

Section 7.13        Counterparts.
This Agreement may be executed in any number of counterparts with the same effect as if all parties hereto had signed the same
document, and all counterparts shall be construed together and shall constitute one instrument. A facsimile or photocopied signature
shall be deemed to be the functional equivalent of an original for all purposes.

 

Section 7.14        Entire
Agreement. This Agreement and the attached Schedules and Exhibits, the Related Agreements, and the other documents delivered
pursuant to this Agreement constitute the full and entire understanding and agreement among the parties hereto pertaining to the
subject matter of this Agreement and supersede all prior understandings and agreements pertaining to such subject matter, whether
oral or written, including the Letter Agreement, dated March 15, 2005, by and between Inter-Atlantic Fund, L.P. and Spencer W.
Tucker.

 

    	- 24 -

    	 

    

 

Section 7.15         Further
Assurances. Each party hereto shall use its reasonable best efforts to comply with all requirements imposed hereby on such
party and to cause the transactions contemplated hereby and by the other agreements contemplated herein to be consummated as contemplated
hereby or thereby and shall, from time to time and without further consideration, either before or after the Closing, execute such
further instruments and take such other actions as any other party hereto shall reasonably request in order to fulfill its obligations
under this Agreement and such other agreements, to effectuate the purposes of this Agreement and such other agreements.

 

[The remainder of this
page is intentionally left blank.]

 

    	- 25 -

    	 

    

 

IN WITNESS WHEREOF, the parties hereto
have executed this Agreement as of the date first above stated.

 

	 	COMPANY:
	 	 
	 	HOMEOWNERS OF AMERICA HOLDING CORPORATION
	 	 
	 	By:	 
	 	Name: Spencer W. Tucker
	 	Title: Chief Executive Officer
	 	 	 
	 	SERIES A INVESTORS:
	 	 
	 	INTER-ATLANTIC FUND, L.P.
	 	 
	 	By:	   Inter-Atlantic Advisors, Ltd., its general partner
	 	 	 
	 	By: 	 
	 		Its	 
	 	 	 
	 	By:	 
	 	Name:	 
	 	Title:	 
	 	 	 
	 	FOUNDER:
	 	 	 
	 	 
	 	Spencer W. Tucker

 

[SIGNATURE PAGE TO
SECURITIES PURCHASE AGREEMENT]

 

    	- 26 -EMPLOYMENT AGREEMENT

 

This EMPLOYMENT AGREEMENT
(the “Agreement”) is entered into as of this 11th day of November, 2005, by and among Homeowners of America
Holding Corporation, a Delaware corporation (the “Company”) and Spencer W. Tucker (the “Executive”).

 

WHEREAS, the Company
desires to continue to employ Executive as its Chief Executive Officer on the terms and conditions set forth herein;

 

WHEREAS, Executive
desires to accept such continued employment on the terms and conditions set forth herein; and

 

WHEREAS, (a) in the
course of his employment with the Company, Executive has obtained and will obtain confidential and proprietary information and
trade secrets concerning the business and operations of the Company and its Affiliates (as defined below); and (b) the covenants
and restrictions contained in Sections 8 through Section 14, inclusive, are intended to protect the legitimate interests
of the Company and its Affiliates in their respective goodwill, trade secrets and other confidential and proprietary information.

 

NOW, THEREFORE, in
consideration of the premises and the mutual covenants and promises contained herein and for other good and valuable consideration,
the Company and Executive hereby agree as follows:

 

Section
1.            Agreement to Employ; No Conflicts

 

Upon the terms and
subject to the conditions of this Agreement, the Company hereby employs Executive, and Executive hereby accepts employment by the
Company. Executive represents that (a) he is entering into this Agreement voluntarily, (b) he has not, and in connection with his
employment with the Company will not, violate any non-compete, non-solicitation or other similar covenant, agreement or duty by
which he is or may be bound or subject and (c) he has the legal capacity to enter into this agreement.

 

Section
2.            Term; Position and Responsibilities

 

(a)          Term
of Employment. Unless Executive’s employment shall sooner terminate pursuant to Section 7, the Company shall employ
Executive for a term commencing on the date hereof (the “Commencement Date”) and ending on the first anniversary
of the Commencement Date (the “Initial Term”). Effective upon the expiration of the Initial Term and of each
Additional Term (as defined below), Executive’s employment hereunder shall be deemed to be automatically extended, upon the
same terms and conditions, for an additional period of one year (.each, an “Additional Term”), in each such
case, commencing upon the expiration of the Initial Term or the then current Additional Term, as the case may be, unless the Company,
at least thirty days prior to the expiration of the Initial Term or such Additional Term, shall give written notice (a “Non-Extension
Notice”) to Executive of its intention not to extend this Agreement. The period during which Executive is employed pursuant
to this Agreement, including any extension thereof in accordance with the preceding sentence, shall be referred to as the “Employment
Period”.

 

    	 

    	 

    

 

(b)          Position
and Responsibilities. During the Employment Period, Executive shall serve as Chief Executive Officer of the Company and shall
have such duties and responsibilities (including, without limitation, such positions, roles, duties and responsibilities with Subsidiaries
and Affiliates of the Company) as are assigned to him by the Board of Directors of the Company (the “Board”)
from time to time. Executive shall devote his skill, knowledge and full working time to the conscientious performance of the duties
and responsibilities of such positions.

 

(c)          Resignation
upon termination. Upon termination of Executive’s employment for any reason, Executive shall immediately resign from
any other office or offices within the Company and any Subsidiary of the Company that Executive may then hold, and from the Board
and the board of any Subsidiary.

 

Section
3.            Base Salary

 

As compensation for
the services to be performed by Executive in any capacity, for the Company, any Subsidiary and any Affiliate, the Company shall
pay Executive an aggregate base salary at an annualized rate of $100,000.00, payable in installments on the Company’s regular
payroll dates; provided, however, that until the Company’s to-be-formed Texas insurance subsidiary has received
all necessary licenses and approvals from the Texas Department of Insurance to operate in accordance with the business plan of
such subsidiary as approved by the Board, the Executive’s base salary shall be at an annualized rate of $60,000.00. The Board
shall review Executive’s base salary annually during the period of his employment hereunder and, in its sole discretion,
may increase such base salary from time to time based upon such factors as the Board shall consider relevant, provided that such
increase shall be affirmatively approved by at least one of the directors designated by Inter-Atlantic Fund, L.P. (the “IA
Director”) to serve on the Board. (The annual base salary payable to Executive under this Section 3, as the same
may be increased from time to time, shall hereinafter be referred to as the “Base Salary”.)

 

Section
4.            Discretionary Bonus

 

During the Employment
Period, the Executive shall be eligible to receive an annual bonus from the Company, in such amount, if any, as may be determined
by the Board in its sole discretion

 

Section
5.            Employee Benefits

 

During the Employment
Period, Executive shall be entitled to participate in the stock option, pension, retirement, deferred compensation, savings, life,
medical, dental, disability and other welfare benefit plans maintained by the Company for its employees in accordance with the
terms thereof, as the same may be amended and in effect from time to time.

 

Section
6.            Perquisites and Expenses

 

(a)          General.
During the Employment Period, Executive shall be entitled to participate in all perquisite programs as adopted by the Board and
maintained by Company for its employees, as the same may be amended and in effect from time to time. The Company may amend, modify
or rescind any employee benefit plan or program and change employee contribution amounts to benefit costs without notice in its
discretion.

 

    	- 2 -

    	 

    

 

(b)          Business
Travel, Lodging, etc. The Company shall reimburse Executive for reasonable travel, lodging, meal and other reasonable expenses
incurred by him in connection with his performance of services hereunder upon submission of evidence, satisfactory to the Company,
of the incurrence and purpose of each such expense and otherwise in accordance with the Company’s business travel and expense
reimbursement policy applicable to its senior executives as adopted by the Board and in effect from time to time.

 

(c)          Vacation.
During the Employment Period, Executive shall be entitled to paid vacation in accordance with the Company’s vacation policy
as in effect from time to time.

 

(d)          Insurance.
The Company may at its discretion and at any time apply for and procure as owner and for its own benefit and at its own expense,
insurance on the life of Executive in such amounts and in such form or forms as the Company may choose. Executive shall cooperate
with the Company in procuring such insurance and shall, at the request of the Company, submit to such medical examinations, supply
such information and execute such documents as may be required by the insurance company or companies to whom the Company has applied
for such insurance. Executive shall have no interest whatsoever in any such policy or policies.

 

Section
7.            Termination of Employment

 

(a)          Termination
by the Company for Cause. Executive may be terminated for Cause (as defined below) by the Company. “Cause”
shall mean (i) the willful, deliberate, or reckless failure of Executive to substantially perform his duties hereunder, (ii) the
commission by the Executive of an act of fraud against the Company, any Subsidiary or Affiliate, or any customer, client, vendor
or business partner of the Company, any Subsidiary or Affiliate; (iii) the Executive knowingly or recklessly providing materially
false information concerning the Company to the Board, the board or equivalent body of any Subsidiary or Affiliate, any governmental
body, any regulatory agency, any lender or other financing source, or any shareholder of the Company; (iv) substantial underperformance
by the Executive as evidenced by the Company and its Subsidiaries and Affiliates (on a consolidated basis) falling more than 50%
below performance parameters established in good faith by the Board, provided, the initial parameters for performance shall
be set by the Board within the first nine months from the date of this Agreement, and, reviewed and updated on a yearly basis by
January 31 of each year thereafter; provided, further, in setting performance parameters the Board shall take into
consideration, among other matters, the capitalization of the Company, the performance of similarly sized insurance companies,
and the performance of the Company’s industry as a whole; (v) Executive’s engaging in willful and serious misconduct
that has caused, or could reasonably be expected to result, in material injury to the business, prospects, operations or reputation
of the Company or any of its Subsidiaries or Affiliates; (vi) Executive’s conviction of, or entering a plea of guilty or
nolo contendere to, a crime that constitutes a felony; or (vii) failure to in any material respect perform Executive’s duties
as assigned to Executive by the Board from time to time (after a written warning and a 10 day opportunity to cure) or any other
material breach of this Agreement or any other Agreement between the Executive, on the one hand, and the Company or any of its
Subsidiaries or Affiliates on the other.

 

    	- 3 -

    	 

    

 

(b)          Termination
by Company Without Cause. Executive’s employment hereunder may be terminated by the Company for any or no reason. A termination
“Without Cause” shall mean a termination of Executive’s employment by the Company other than due to (i) Disability
as described in Section 7(d) or (ii) for Cause as described in Section 7(a).

 

(c)          Termination
by Executive. Executive may terminate his employment for any or no reason upon prior written notice delivered to the Company
of not less than 30 days. A termination of employment by Executive for “Good Reason” shall mean a termination
by Executive of his- employment with the Company, by written notice to the Company specifying in reasonable detail the circumstances
claimed to provide the basis for such termination, within 20 days following the occurrence, without Executive’s consent,
of any of the following events and the failure of the Company to correct the circumstances set forth in Executive’s notice
of termination within 20 days of receipt of such notice: (i) the assignment to Executive of duties that are significantly different
from, and that result in a substantial diminution of, the duties that he is to assume on the Commencement Date, (ii) the failure
of the Company to obtain the assumption of this Agreement by any successor to the Company (including any purchaser of more than
eighty (80%) of the assets of the Company), (up a relocation of the place of business at which the Executive must regularly report,
from the current location in Dallas, Texas, to a location located more than 50 miles from such current location, or (iv) a material
and sustained reduction in the rate of Executive’s Base Salary, other than in connection with a reduction in salary to all
executive officers of the Company due to the Company’s financial condition. Notwithstanding anything herein to the contrary,
placing Executive on paid leave for up to 90 days in any given 12 month period, pending a determination of whether there is a basis
to terminate Executive for “Cause”, shall not constitute a “Good Reason.”

 

(d)          Termination
Due to Death or Disability. Executive’s employment hereunder terminates due to his death or is terminated by the Company
due to Executive’s Disability (as defined below) no termination benefits shall be payable to or in respect of Executive except
as provided in Section 7(f)(ii) purposes of this Agreement, “Disability” shall mean a physical or mental
disability that prevents or is reasonably expected to prevent the performance by Executive of his duties hereunder for a continuous
period of 90 days or longer or for 180 days or more in any 12-month period. The determination of Executive’s Disability shall
(i) be made by an independent physician who is reasonably acceptable to the Company and Executive (or his representative), (ii)
be final and binding on the parties hereto and (1) be made taking into account such competent medical evidence as shall be presented
to such independent physician by Executive and/or the Company or by any physician or group of physicians or other competent medical
experts employed by Executive and/or the Company to advise such independent physician.

 

(e)          Notice
of Termination. Any termination of Executive’s employment by Company pursuant to Section 7(a), 7(b) or
7(d), or by Executive pursuant to Section 7(c), shall be communicated by a written Notice of Termination addressed
to the other party to this Agreement. A “Notice of Termination” shall mean a notice stating that Executive’s
employment with Company has been or will be terminated and the specific provisions of this Section 7 under which such termination
is being effected. A Non-Renewal Notice shall also be deemed “Notice of Termination.”

 

    	- 4 -

    	 

    

 

(f)          Payments
Upon Certain Terminations.

 

(i)          In
the event of Executive’s employment termination by Company Without Cause (a “Qualifying Termination”),
Company shall pay to Executive his full Base Salary through the Date of Termination and, as liquidated damages in respect of claims
based on provisions of this Agreement, his Base Salary, at the rate in effect hereunder immediately prior to the Qualifying Termination,
which shall be payable in installments on Company’s regular payroll dates, for an eighteen (18) month period (the “Severance
Period”); provided, however, that if the event of termination of Executive’s employment occurs on
or after September 30, 2010, and such event of termination is related to, occurs simultaneously with, or follows a liquidation
of the Company or a Deemed Liquidation Event (as defined in the Company’s Certificate of Incorporation), there shall be no
Severance Period and the Executive shall not be entitled to any severance payments.

 

If Executive’s
employment shall terminate and he is entitled to receive continued payments of his Base Salary under this Section 7(f)(i),
the Company shall continue to provide to Executive during the Severance Period the life, medical, dental, accidental death and
dismemberment and prescription drug benefits referred to in Section 5 (the “Continued Benefits”).

 

Notwithstanding anything
to the contrary contained in this Agreement, the Executive (or his estate) shall not be entitled to receive the payments and Continued
Benefits set forth in this Section 7(f)(i) (other than Base Salary through the Date of Termination) prior to (1) the execution
and delivery by the Executive to the Company of a valid and fully effective general release and nondisparagement agreement (in
form and substance reasonably satisfactory to the Company) of all claims, including but not limited to the Age Discrimination in
Employment Act, Title VII of the Civil Rights Act of 1964, which the Executive might have at such time against the Company and
(2) the resignation of the Executive from all positions of any nature which the Executive may then have held with the Company and
any subsidiary of the Company.

 

(ii)         If
this Agreement is not renewed by the Company (other than as a result of the Executive’s death, Disability, termination by
the Company for Cause, or a Qualifying Termination) or if Executive terminates his employment for Good Reason, Company shall pay
to Executive his full Base Salary through the Date of Termination and, as liquidated damages in respect of claims based on provisions
of this Agreement, his Base Salary, at the rate in effect hereunder immediately prior to such non-renewal or termination by Executive,
which shall be payable in installments on Company’s regular payroll dates, for a one (1) year period, provided, however,
that if the event of termination of Executive’s employment occurs on or after September
30, 2010, and such event of termination is related to, occurs simultaneously with, or follows a liquidation of the Company or a
Deemed Liquidation Event (as defined in the Company’s Certificate of Incorporation), there shall be no severance period and
the Executive shall not be entitled to any severance payments.

 

    	- 5 -

    	 

    

 

(iii)        If
Executive’s employment shall terminate due to his death or Disability, or if Executive terminates his employment without
Good Reason, or if the Company shall terminate Executive’s employment for Cause, Company shall pay Executive (or, in the
event of his death, his beneficiaries), his full Base Salary through the Date of Termination, and the Executive shall not be entitled
to any severance payments.

 

(g)          Date
of Termination. As used in this Agreement, the term “Date of Termination” shall mean (i) if Executive’s
employment is terminated by his death, the date of his death, if Executive’s employment is terminated by the Company, the
later of the date on which Notice of Termination is given as contemplated by Section 7(e), the date of termination specified
in such notice and the date any applicable correction period ends, and (iii) if Executive’s employment is terminated due
to Executive’s Disability or by Executive for any reason, the later of the date that is 30 days after the date on which Notice
of Termination is given as contemplated by Section 7(e) and the date any applicable notice or correction period ends; and
(iv) the expiration of the Initial Term or any Additional Term.

 

(h)          Resignation
upon Termination. If the Executive’s employment is terminated for any reason, then the Executive shall resign, in writing,
from the Board and from the board of directors or similar body of each Subsidiary and Affiliate, if applicable, effective as of
the Date of Termination.

 

Section
8.            Unauthorized Disclosure

 

Executive shall not,
either during or after the termination of Executive’s employment with the Company, without the prior written consent of the
Board or its authorized representative, except to the extent required by an order of a court having jurisdiction or under subpoena
from an appropriate government agency, in which event, Executive shall use his best efforts to consult with the Board prior to
responding to any such order or subpoena, and except as required in the performance of his duties hereunder, directly or indirectly
disclose any confidential or proprietary information (in any medium) and whether acquired by him before, during or after his employment
by the Company, including but not limited to trade secrets, customer lists, sales agents, referral sources, providers and provider
networks, information regarding product development, marketing plans, sales plans, manufacturing plans, management organization
information (including but not limited to data and other information relating to members of the Board, the Company or any of their
respective Affiliates or to management of the Company or any of their respective Affiliates), operating policies or manuals, business
plans, financial records, packaging design or other financial, commercial, business or technical information (a) relating to the
Company or any of its Affiliates or (12) that the Company or any of its Affiliates may receive belonging to suppliers, customers
or others who do business with the Company or any of their respective Affiliates to any third person unless such information has
been previously disclosed to the public or is in the public domain, other than by reason of Executive’s breach of this Section
8 (collectively, “Confidential Information”).

 

    	- 6 -

    	 

    

 

Section
9.            Non-Disparagement

 

Executive shall not,
either during Executive’s employment with the Company or after the termination of his employment, directly or indirectly,
engage in any conduct or make any statement, whether in commercial or noncommercial speech, disparaging or criticizing in any way
the Company, any Subsidiary, or any Affiliate of any of these, or any products or services offered by any of these, nor shall he
engage in any other conduct or make any other statement that could be reasonably expected to impair the goodwill of the Company,
any Subsidiary, or any Affiliate of these, the reputation of Company products or services or the marketing of Company products
or services, in each case except to the extent required by law, and then only after consultation with the Company to the extent
possible

 

Section
10.          Non-Solicitation of Employees

 

During the period commencing
on the date hereof and ending on the second anniversary of the Date of Termination, Executive shall not, directly or indirectly,
for his own account or for the account of any other Person, solicit for employment, employ or otherwise interfere with the relationship
of the Company or any of its Affiliates with any natural person who is or was employed by, or served as an agent of or consultant
to, the Company or any of its Affiliates at any time during the two-year period preceding such solicitation, employment or interference.

 

Section
11.          Non-Competition

 

(a)          During
the Restriction Period (as defined below), Executive shall not directly or indirectly, own, manage, operate, control, invest in,
be employed by, participate in or be connected in any manner with the ownership, management, operation, finance or control of a
Competitive Business (as defined below), including without limitation (i) accepting employment or engagement with or providing
advisory services or financial assistance to any Competitive Business, (ii) soliciting (or assisting in the solicitation of), any
person or business who was a customer or supplier of Company or its subsidiaries, or (iii) contacting any persons or businesses
who were customers of Company or its subsidiaries for the purpose of soliciting orders or establishing relationships for any Competitive
Business.

 

(b)          The
“Restriction Period” shall commence on the date hereof and end on the date that is eighteen (18) months following
the Date of Termination.

 

(c)          For
purposes of this Agreement, “Competitive Business” means, whether acting as an agent, an insurance company,
or otherwise, the sale or distribution of residential property and/or homeowner’s insurance within the State of Texas or
any other states in which, on or prior to the Date of Termination, the Company either operates its business or has proposed to
operate its business.

 

Section
12.          Return of Documents

 

In the event of the
termination of Executive’s employment for any reason, Executive shall deliver to the Company all of (a) the property of each
of the Company and its Affiliates and the documents and data of any nature and in whatever medium of each of the Company and its
Affiliates, and he shall not take with him any such property, documents or data or any reproduction thereof, or any documents containing
or pertaining to any Confidential Information.

 

    	- 7 -

    	 

    

 

Section
13.          Inventions and Improvements

 

Until the Date of Termination,
Executive shall promptly communicate to the Company all ideas, discoveries, and inventions that are or may be useful to the Company
or its business. Executive acknowledges that all ideas, discoveries, inventions and improvements that have ever been or are made,
conceived or reduced to practice by him relating to the Company’s business interests are the property of the Company, and
Executive irrevocably assigns all such ideas, discoveries, inventions, and improvements to the Company for its sole use and benefit,
without additional compensation. The provisions of this Section 13 shall apply whether such ideas, discoveries, inventions,
and improvements are conceived, made or gained by him alone or with others, whether during or after usual working hours, whether
on or off the job, whether applicable to matters directly or indirectly related to the Company’s business interests (including
potential business interests), whether or not within the specific realm of his duties, and whether or not they were conceived,
made or gained before or after the commencement of the Employment Period. Executive shall, upon request of the Company, at any
time during or after his employment with the Company, sign all instruments and documents requested by the Company and otherwise
cooperate with the Company to protect its right to such ideas, discoveries, inventions, and improvements, including applying for,
obtaining and enforcing patents and copyrights thereon in any and all countries.

 

Section
14.          Injunctive Relief with Respect to Covenants

 

(a)          The
Executive acknowledges that the restrictions contained in Sections 8, 9, 10, 11, 12 and 13
hereof are reasonable and necessary to protect the legitimate interests of the Company, that the Company would not have entered
into this Agreement in the absence of such restrictions, and that any violation of any provision of those Sections will result
in irreparable injury to the Company. The Executive represents that his experience and capabilities are such that the restrictions
contained in Section 11 hereof will not prevent the Executive from obtaining employment or otherwise earning a living at
the same general level of economic benefit as is anticipated by this Agreement. THE EXECUTIVE FURTHER REPRESENTS AND ACKNOWLEDGES
THAT (i) HE HAS BEEN ADVISED BY THE COMPANY TO CONSULT HIS OWN LEGAL COUNSEL IN RESPECT OF THIS AGREEMENT, (ii) THAT HE HAS HAD
FULL OPPORTUNITY, PRIOR TO EXECUTION OF THIS AGREEMENT, TO REVIEW THOROUGHLY THIS AGREEMENT WITH HIS COUNSEL, AND (iii) HE HAS
READ AND FULLY UNDERSTANDS THE TERMS AND PROVISIONS OF THIS AGREEMENT.

 

(b)          The
Executive agrees that the Company shall be entitled to preliminary and permanent injunctive relief, without the necessity of proving
actual damages, as well as an equitable accounting of all earnings, profits and other benefits arising from any violation of Sections
8, 9, 10, 11, 12 or 13 hereof, which rights shall be cumulative and in addition to any other
rights or remedies to which the Company may be entitled.

 

(c)          The
Executive agrees that he will provide a copy of Sections 8, 9, 10, 11, 12, 13 and 14
of this Agreement to any for-profit business or enterprise (i) which he may directly or indirectly own, manage, operate, finance,
join, participate in the ownership, management, operation, financing, control or control of, or (ii) with which he may be connected
with as an officer, director, employee, partner, principal, agent, representative, or consultant, or in connection-with which he
may use or expressly permit his name to be used; provided, however, that this provision shall not apply in respect
of Section 10 or 11 of this Agreement after expiration of the time periods set forth therein

 

    	- 8 -

    	 

    

 

Section
15.          Entire Agreement

 

This Agreement constitutes
the entire agreement among the parties hereto with respect to the subject matter hereof. All prior correspondence and proposals
(including but not limited to summaries of proposed terms) and all prior promises, representations, understandings, arrangements
and agreements relating to such subject matter (including but not limited to those made to or with Executive by any other Person)
are merged herein and superseded hereby. Notwithstanding the foregoing, Employee has executed a Confidentiality, Proprietary Information
and Inventions Agreement effective as of May 12, 2005 (the “CPIIA”), and to extent this Agreement and the CPIIA
conflict, this Agreement shall control.

 

Section
16.          Miscellaneous

 

(a)          Binding
Effect; Assignment. This Agreement shall be binding on and inure to the benefit of the Company, and their respective successors
and permitted assigns. This Agreement shall not be assignable by any party hereto without the prior written consent of the other
parties hereto, except as provided pursuant to this Section 16(a). The Company may effect such an assignment without prior
written approval of Executive upon the transfer of all or substantially all of its business and/or assets (by whatever means),
provided that the successor to the Company shall expressly assume and agree to perform this Agreement.

 

(b)          Governing
Law, etc. 

 

(i)          THIS
AGREEMENT AND ALL MATTERS ARISING DIRECTLY OR INDIRECTLY HEREFROM SHALL BE GOVERNED IN ALL RESPECTS, INCLUDING AS TO VALIDITY,
INTERPRETATION AND EFFECT, BY THE INTERNAL LAWS OF THE STATE OF TEXAS WITHOUT GIVING EFFECT TO THE CONFLICT OF LAWS RULES THEREOF
TO THE EXTENT THAT THE APPLICATION OF THE LAW OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY. EACH PARTY HEREBY IRREVOCABLY
SUBMITS TO THE JURISDICTION OF THE COURTS OF THE STATE OF TEXAS AND THE FEDERAL COURTS OF THE UNITED STATES OF AMERICA LOCATED
IN THE COUNTY OF DALLAS SOLELY IN RESPECT OF THE INTERPRETATION AND ENFORCEMENT OF THE PROVISIONS OF THIS AGREEMENT AND OF THE
DOCUMENTS REFERRED TO IN THIS AGREEMENT, AND IN RESPECT OF THE TRANSACTIONS CONTEMPLATED HEREBY AND THEREBY. EACH PARTY HEREBY
WAIVES AND AGREES NOT TO ASSERT, AS A DEFENSE IN ANY ACTION, SUIT OR PROCEEDING FOR THE INTERPRETATION AND ENFORCEMENT HEREOF,
OR ANY SUCH DOCUMENT OR IN RESPECT OF ANY SUCH TRANSACTION, THAT SUCH ACTION, SUIT OR PROCEEDING MAY NOT BE BROUGHT OR IS NOT MAINTAINABLE
IN SUCH COURTS OR THAT THE VENUE THEREOF MAY NOT BE APPROPRIATE OR THAT THIS AGREEMENT OR ANY SUCH DOCUMENT MAY NOT BE ENFORCED
IN OR BY SUCH COURTS. EACH PARTY HEREBY CONSENTS TO AND GRANTS ANY SUCH COURT JURISDICTION OVER THE PERSON OF SUCH PARTIES AND
OVER THE SUBJECT MATTER OF ANY SUCH DISPUTE AND AGREE THAT THE MAILING OF PROCESS OR OTHER PAPERS IN CONNECTION WITH ANY SUCH ACTION
OR PROCEEDING IN THE MANNER PROVIDED IN SECTION 16(g) OR IN SUCH OTHER MANNER AS MAY BE PERMITTED BY LAW, SHALL BE VALID
AND SUFFICIENT SERVICE THEREOF.

 

    	- 9 -

    	 

    

 

(ii)         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 PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY
IN RESPECT OR ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT, OR THE BREACH, TERMINATION OR
VALIDITY OF THIS AGREEMENT, OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT. EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT a) 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, (2) EACH SUCH PARTY UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS
OF THIS WAIVER, (3) EACH SUCH PARTY MAKES THIS WAIVER VOLUNTARILY, AND (4) EACH SUCH PARTY HAS BEEN INDUCED TO ENTER INTO THIS
AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 16(b).

 

(c)          Taxes.
The Company may withhold from any payments made under this Agreement all applicable taxes, including but not limited to income,
employment and social insurance taxes, as shall be required by law.

 

(d)          Amendments.
No provision of this Agreement may be modified, waived or discharged unless such modification, waiver or discharge is approved
by the Board or a Person authorized thereby and is agreed to in writing by Executive and, in the case of any such modification,
waiver or discharge affecting the rights or obligations the Company, is approved by the Board or a Person authorized thereby. No
waiver by any party hereto at any time of any breach by any other party hereto of, or compliance with, any condition or provision
of this Agreement to be performed by such other party shall be deemed a waiver of similar or dissimilar provisions or conditions
at the same or at any prior or subsequent time. No waiver of any provision of this Agreement shall be implied from any course of
dealing between or among the parties hereto or from any failure by any party hereto to assert its rights hereunder on any occasion
or series of occasions.

 

(e)          Severability;
Blue Pencil. In the event that any one or more of the provisions of this Agreement shall be or become invalid, illegal or unenforceable
in any respect, the validity, legality and enforceability of the remaining provisions contained herein shall not be affected thereby.
If any court of competent jurisdiction shall at any time deem any provision of Sections 8, 9, 10 or 11
relating to the time period or the geographic area of the restrictive covenants contained therein to exceed the maximum time period
or geographic area that such court deems reasonable and enforceable, the other provisions of Sections 8, 9, 10
and 11 shall nevertheless stand and such time period or geographic area shall be deemed to be the longest period or largest
geographic area permissible by law under the circumstances. The court shall reduce the time period or geographic area to permissible
duration or size.

 

    	- 10 -

    	 

    

 

(f)          Counterparts;
Headings. This Agreement may be executed in counterparts, each of which shall be deemed an original and all of which together
shall constitute one and the same instrument. The section and other headings contained in this Agreement are for the convenience
of the parties only and are not intended to be a part hereof or to affect the meaning or interpretation hereof.

 

(g)          Notices.
Any notice or other communication required or permitted to be delivered under this Agreement shall be (i) in writing, (ii) delivered
personally, by courier service or by certified or registered mail, first-class postage prepaid and return receipt requested, (iii)
deemed to have been received on the date of delivery or, if so mailed, on the third business day after the mailing thereof, and
(iv ) addressed as follows (or to such other address as the party entitled to notice shall hereafter designate in accordance with
the terms hereof):

 

(A)         If
to the Company:

 

Homeowners of
America Holding Corporation

5021 Briar Tree
Drive

Dallas, Texas
75248

 

(B)         if
to Executive, to him at his residential address as currently on file with the Company.

 

(h)          Certain
Definitions.

 

“Affiliate”:
with respect to any Person, means any other Person that, directly or indirectly through one or more intermediaries, Controls, is
Controlled by, or is under common Control with the first Person, including but not limited to a Subsidiary of the first Person,
a Person of which the first Person is a Subsidiary, or another Subsidiary of a Person of which the first Person is also a Subsidiary.

 

“Control”:
with respect to any Person, means the possession, directly or indirectly, severally or jointly, of the power to direct or cause
the direction of the management policies of such Person, whether through the ownership of voting securities, by contract or credit
arrangement, as trustee or executor, or otherwise.

 

“Person”:
any natural person, firm, partnership, limited liability company, association, corporation, company, trust, business trust, governmental
authority or other entity.

 

“Subsidiary”:
with respect to any Person, each corporation or other Person in which the first Person owns or Controls, directly or indirectly,
capital stock or other ownership interests representing 50% or more of the combined voting power of the outstanding voting stock
or other ownership interests of such corporation or other Person.

 

[REMAINDER OF PAGE
INTENTIONALLY LEFT BLANK]

 

    	- 11 -

    	 

    

 

IN WITNESS WHEREOF,
the Company has duly executed this Agreement by its authorized representative, and Executive has hereunto set his hand, in each
case effective as of the date first above written.

 

	 	HOMEOWNERS OF AMERICA HOLDING CORPORATION
	 	 
	 	By:	 
	 	 	Name:
	 	 	Title:
	 	 
	 	Executive:
	 	 
	 	 
	 	Spencer W. Tucker

 

    	- 12 -

    	 

    

 

IN WITNESS WHEREOF,
the Company has duly executed this Agreement by its authorized representative, and Executive has hereunto set his hand, in each
case effective as of the date first above written.

 

	 	HOMEOWNERS OF AMERICA HOLDING CORPORATION
	 	 	 
	 	By:	 
	 	 	Name:	 
	 	 	Title:	 
	 	 
	 	Executive:
	 	 
	 	 
	 	Spencer W. Tucker

  

[Signature Page to
Employment Agreement – Tucker]

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