Document:

Exhibit 10.1

 

NANOVIBRONIX,
INC.

 

January
21, 2021

 

Holder
of Existing Warrants

 

Re:Inducement
Offer to Exercise Warrants to Purchase Shares of Common Stock

 

Dear
Holder:

 

NanoVibronix,
Inc. (the “Company”) is pleased to offer to you the opportunity to exercise all of the warrants to purchase
shares of common stock (“Shares”) issued to you on various dates as set forth on the signature page hereto
(the “Existing Warrants”) currently held by you (the “Holder”). Certain of the Existing
Warrants (the “Registered Existing Warrants”) and the Shares underlying the Registered Existing Warrants (“Registered
Warrant Shares” and, together with the Shares underlying the non-registered Existing Warrants, the “Warrant
Shares”) have been registered pursuant to a registration statement on Form S-3 (File No. 333-251264) and a registration
statement on Form S-1 (File No. 333-218871 (the “Existing Registration Statements”)). The Existing Registration
Statements are currently effective and, upon exercise of the Registered Existing Warrants pursuant to this letter agreement, will
be effective for the issuance and sale of the Registered Warrant Shares. Capitalized terms not otherwise defined herein shall
have the meanings set forth in the Existing Warrants.

 

In
consideration for exercising in full all of the Existing Warrants held by you and set forth on the signature page hereto (the
“Warrant Exercise”) at the Exercise Price of $1.165, the Company hereby offers to issue you or your designee
a new warrant to purchase Shares (“New Warrant”) pursuant to Section 4(a)(2) of the Securities Act of 1933,
as amended (“Securities Act”), to purchase up to a number of Shares equal to 100% of the number of Warrant
Shares issued pursuant to the Warrant Exercise hereunder, which New Warrant shall be substantially in the form of the Existing
Warrants, as reflected in Exhibit A hereto, will be exercisable immediately, and have a term of exercise of seven (7) years,
and an exercise price equal to $1.04. The original New Warrant certificate(s) will be delivered within five (5) Trading Days following
the date hereof.

 

Notwithstanding
anything herein to the contrary, in the event the Warrant Exercise would otherwise cause the Holder to exceed the beneficial ownership
limitation of 9.99%, the Company shall only issue such number of Warrant Shares to the Holder that would not cause the Holder
to exceed the maximum number of Warrant Shares permitted thereunder with the balance to be held in abeyance until notice from
the Holder that the balance (or portion thereof) may be issued in compliance with such limitations, which abeyance shall be evidenced
through the Existing Warrants which shall be deemed prepaid thereafter, and exercised pursuant to a Notice of Exercise in the
Existing Warrant (provided no additional exercise price shall be due and payable).

 

Expressly
subject to the paragraph immediately following this paragraph, Holder may accept this offer by signing this letter below, with
such acceptance constituting Holder’s exercise in full of the Existing Warrants for an aggregate exercise price set forth
on the Holder’s signature page hereto (the “Warrant Exercise Price”) on or before 4:00 p.m., Eastern
Time, on January 21, 2021 (the “Execution Time”).

 

Holder
represents and warrants that it is an “accredited investor” as defined in Rule 501 of the Securities Act and agrees
that the New Warrants will contain restrictive legends when issued, and neither the New Warrants nor the Shares issuable upon
exercise of the New Warrants will be registered under the Securities Act, except in the discretion of the Company. Additionally,
the Company agrees to the representations, warranties and covenants set forth on Annex A attached hereto.

 

    	 

    	 

    

 

The
Holder understands that the New Warrants and the Shares underlying New Warrants are not, and may never be, registered under the
Securities Act, or the securities laws of any state and, accordingly, each certificate, if any, representing such securities shall
bear a legend substantially similar to the following:

 

“THIS
SECURITY HAS NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE
UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY,
MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE
EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH
APPLICABLE STATE SECURITIES LAWS.”

 

Certificates
evidencing the Shares underlying the New Warrants shall not contain any legend (including the legend set forth above), (i) while
a registration statement covering the resale of such Shares is effective under the Securities Act, (ii) following any sale of
such Shares pursuant to Rule 144 under the Securities Act, (iii) if such Shares are eligible for sale under Rule 144, without
the requirement for the Company to be in compliance with the current public information required under Rule 144 as to such Shares
and without volume or manner-of-sale restrictions, (iv) if such Shares may be sold under Rule 144 and the Company is then in compliance
with the current public information required under Rule 144 as to such Shares, or (v) if such legend is not required under applicable
requirements of the Securities Act (including judicial interpretations and pronouncements issued by the staff of the Commission
and the earliest of clauses (i) through (v), the “Delegend Date”)). The Company shall cause its counsel to
issue a legal opinion to the transfer agent promptly after the Delegend Date if required by the Company and/or the transfer agent
to effect the removal of the legend hereunder, which opinion shall be in form and substance reasonably acceptable to the Holder.
If such Shares may be sold under Rule 144 without the requirement for the Company to be in compliance with the current public
information required under Rule 144 or if such legend is not otherwise required under applicable requirements of the Securities
Act (including judicial interpretations and pronouncements issued by the staff of the Commission), then such Shares shall be issued
free of all legends. The Company agrees that following the Delegend Date or at such time as such legend is no longer required
under this Section, it will, no later than two (2) Trading Days following the delivery by the Holder to the Company or the transfer
agent of a certificate representing the Shares underlying the New Warrants issued with a restrictive legend (such second Trading
Day, the “Legend Removal Date”), deliver or cause to be delivered to the Holder a certificate representing
such Shares that is free from all restrictive and other legends or, at the request of the Holder, shall credit the account of
the Holder’s prime broker with the Depository Trust Company System as directed by the Holder.

 

In
addition to the Holder’s other available remedies, the Company shall pay to a Holder, in cash, (i) as partial liquidated
damages and not as a penalty, for each $1,000 of Shares issued upon any exercise of the New Warrants containing a legend (“Legended
Shares”) (based on the VWAP of the Shares on the date such Legended Shares are submitted to the transfer agent) delivered
for removal of the restrictive legend, $10 per Trading Day (increasing to $20 per Trading Day five (5) Trading Days after such
damages have begun to accrue) for each Trading Day after the Legend Removal Date until such certificate is delivered without a
legend and (ii) if the Company fails to (a) issue and deliver (or cause to be delivered) to the Holder by the Legend Removal Date
a certificate representing the securities so delivered to the Company by the Holder that is free from all restrictive and other
legends and (b) if, after the Legend Removal Date, the Holder purchases (in an open market transaction or otherwise) Shares to
deliver in satisfaction of a sale by the Holder of all or any portion of the number of Shares, or a sale of a number of Shares
equal to all or any portion of the number of Shares that the Holder anticipated receiving from the Company without any restrictive
legend, then, an amount equal to the excess of the Holder’s total purchase price (including brokerage commissions and other
out-of-pocket expenses, if any) for the Shares so purchased (including brokerage commissions and other out-of-pocket expenses,
if any) over the product of (A) such number of Legended Shares that the Company was required to deliver to the Holder by the Legend
Removal Date multiplied by (B) the lowest closing sale price of the Shares on any Trading Day during the period commencing on
the date of the delivery by the Holder to the Company of the applicable Legended Shares (as the case may be) and ending on the
date of such delivery and payment under this clause (ii).

 

    	 

    	 

    

 

If
this offer is accepted and the transaction documents are executed by the Execution Time, then on or before 8:30 a.m., Eastern
Time, on the Trading Day following the date hereof, the Company shall file a Report on Form 8-K with the Commission disclosing
all material terms of the transactions contemplated hereunder. From and after the issuance of such Report on Form 8-K, the Company
represents to you that it shall have publicly disclosed all material, non-public information delivered to you by the Company,
or any of its respective officers, directors, employees or agents in connection with the transactions contemplated hereunder.
In addition, effective upon the issuance of such Report on Form 8-K, the Company acknowledges and agrees that any and all confidentiality
or similar obligations under any agreement, whether written or oral, between the Company, any of its Subsidiaries or any of their
respective officers, directors, agents, employees or Affiliates on the one hand, and you and your Affiliates on the other hand,
shall terminate. The Company represents, warrants and covenants that, upon acceptance of this offer, the Registered Warrant Shares
underlying the Registered Existing Warrants shall be issued free of any legends or restrictions on resale by Holder.

 

No
later than the 2nd Trading Day following the date hereof, the closing shall occur virtually. Settlement of the Shares
underlying the Existing Warrants shall occur via “Delivery Versus Payment” (i.e., on the Closing Date, the Company
shall issue the Shares registered in the Holders’ names and addresses. The Registered Warrant Shares will be delivered via
DWAC to the accounts specified by the Holder and the Warrant Shares issued upon exercise of the non-registered Existing Warrants
shall be issued in book-entry form via DRS and shall bear a restrictive legend similar to the one set forth above. Upon receipt
of such Shares, payment therefor shall be made by the respective Holder (or its clearing firm) by wire transfer to the Company).
The date of the closing of the exercise of the Original Warrants shall be referred to as the “Closing Date.”

 

The
Company acknowledges and agrees that the obligations of the Holders under this letter agreement are several and not joint with
the obligations of any other holder or any other holders of warrants to purchase Shares of the Company (each, an “Other
Holder”) under any other agreement related to the exercise of such warrants (“Other Warrant Exercise Agreement”),
and the Holder shall not be responsible in any way for the performance of the obligations of any Other Holder or under any such
Other Warrant Exercise Agreement. Nothing contained in this letter agreement, and no action taken by the Holders pursuant hereto,
shall be deemed to constitute the Holder and the Other Holders as a partnership, an association, a joint venture or any other
kind of entity, or create a presumption that the Holder and the Other Holders are in any way acting in concert or as a group with
respect to such obligations or the transactions contemplated by this letter agreement and the Company acknowledges that the Holder
and the Other Holders are not acting in concert or as a group with respect to such obligations or the transactions contemplated
by this letter agreement or any Other Warrant Exercise Agreement. The Company and the Holder confirm that the Holder has independently
participated in the negotiation of the transactions contemplated hereby with the advice of its own counsel and advisors. The Holder
shall be entitled to independently protect and enforce its rights, including, without limitation, the rights arising out of this
letter agreement, and it shall not be necessary for any Other Holder to be joined as an additional party in any proceeding for
such purpose.

 

***************

 

    	 

    	 

    

 

	 	Sincerely
    yours,
	 	 	 
	 	NANOVIBRONIX,
    INC.
	 	 	 
	 	By:	                   
	 	Name:	 
	 	Title:	 

 

    	 

    	 

    

 

Accepted
and Agreed to:

 

Name
of Holder: ________________________________________________________

 

Signature
of Authorized Signatory of Holder: _________________________________

 

Name
of Authorized Signatory: _______________________________________________

 

Title
of Authorized Signatory: ________________________________________________

 

Existing
Warrants: ______________

 

Aggregate
Warrant Exercise Price: _____________

 

New
Warrants: (100% of total Existing Warrants being exercised): ___________

 

Beneficial
Ownership Blocker: 9.99%

 

DTC
Instructions:

 

    	 

    	 

    

 

Annex
A

 

Representations,
Warranties and Covenants of the Company. The Company hereby makes the following representations and warranties to the Holder:

 

	a)	Authorization;
    Enforcement.  The Company has the requisite corporate power and authority to enter into and to consummate the
    transactions contemplated by this letter agreement and otherwise to carry out its obligations hereunder and thereunder.  The
    execution and delivery of this letter agreement by the Company and the consummation by the Company of the transactions contemplated
    hereby have been duly authorized by all necessary action on the part of the Company and no further action is required by the
    Company, its board of directors or its stockholders in connection therewith.  This letter agreement has been duly
    executed by the Company and, when delivered in accordance with the terms hereof, will constitute the valid and binding obligation
    of the Company enforceable against the Company in accordance with its terms, except (i) as limited by general equitable principles
    and applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting enforcement
    of creditors’ rights generally, (ii) as limited by laws relating to the availability of specific performance, injunctive
    relief or other equitable remedies and (iii) insofar as indemnification and contribution provisions may be limited by applicable
    law.
	 	 
	b)	No
    Conflicts.  The execution, delivery and performance of this letter agreement by the Company and the consummation
    by the Company of the transactions contemplated hereby do not and will not: (i) conflict with or violate any provision of
    the Company’s certificate or articles of incorporation, bylaws or other organizational or charter documents; or (ii)
    conflict with, or constitute a default (or an event that with notice or lapse of time or both would become a default) under,
    result in the creation of any  liens, claims, security interests, other encumbrances or defects upon any of the properties
    or assets of the Company in connection with, or give to others any rights of termination, amendment, acceleration or cancellation
    (with or without notice, lapse of time or both) of, any material agreement, credit facility, debt or other material instrument
    (evidencing Company debt or otherwise) or other material understanding to which such Company is a party or by which any property
    or asset of the Company is bound or affected; or (iii) conflict with or result in a violation of any law, rule, regulation,
    order, judgment, injunction, decree or other restriction of any court or governmental authority to which the Company is subject
    (including federal and state securities laws and regulations), or by which any property or asset of the Company is bound or
    affected, except, in the case of each of clauses (ii) and (iii), such as could not have or reasonably be expected to result
    in a material adverse effect upon the business, prospects, properties, operations, condition (financial or otherwise) or results
    of operations of the Company, taken as a whole, or in its ability to perform its obligations under this letter agreement.
	 	 
	c)	Registration
    Obligations.  The Company shall prepare and file with the Commission a registration statement relating to the
    resale of the Shares underlying the New Warrants and the Shares underlying the non-registered Existing Warrants by the Holder
    under the Securities Act and use commercially reasonable best efforts to cause such registration statement to be declared
    effective by the Commission within ten (10) days of the date of this letter agreement.
	 	 
	d)	Trading
    Market.  The transactions contemplated under this letter agreement comply with all the rules and regulations
    of the Nasdaq Capital Market.renewalrightsagreementfi

Exhibit 10.1  1006368970v9     RENEWAL RIGHTS AGREEMENT  by and among  UNITED PROPERTY AND CASUALTY INSURANCE COMPANY,  UNITED INSURANCE HOLDINGS CORP.,  UNITED INSURANCE MANAGEMENT, L.C.,  HCI GROUP, INC.  and  HOMEOWNERS CHOICE PROPERTY & CASUALTY INSURANCE COMPANY, INC.  Dated January 18, 2021    

 

  i  1006368970v9  TABLE OF CONTENTS  Page  ARTICLE I. DEFINITIONS .......................................................................................................... 2  Section 1.1  Definitions ........................................................................................... 2  Section 1.2  Construction ........................................................................................ 9  ARTICLE II. Reinsurance; renewal rights ..................................................................................... 9  Section 2.1  Closing ................................................................................................ 9  Section 2.2  Closing Transactions ........................................................................... 9  Section 2.3  Closing Deliveries ............................................................................. 10  Section 2.4  Renewal Rights Commission ............................................................ 10  ARTICLE III. REPRESENTATIONS AND WARRANTIES OF SELLER PARTIES .............. 11  Section 3.1  Organization, Standing and Authority .............................................. 11  Section 3.2  Authorization ..................................................................................... 12  Section 3.3  Actions and Proceedings ................................................................... 12  Section 3.4  No Conflict or Violation ................................................................... 12  Section 3.5  Financial Statements; Permitted Accounting Practices ..................... 13  Section 3.6  Reserves ............................................................................................ 13  Section 3.7  Applicable Reinsurance Agreements ................................................ 14  Section 3.8  Books and Records ............................................................................ 14  Section 3.9  Compliance with Laws; Governmental Authorizations .................... 15  Section 3.10  Insurance Policies .............................................................................. 15  Section 3.11  Producers ........................................................................................... 15  Section 3.12  Employees ......................................................................................... 16  Section 3.13  Brokers and Financial Advisers ........................................................ 16  Section 3.14  Certain Investment Representations .................................................. 16  Section 3.15  Other Information .............................................................................. 17  Section 3.16  NO OTHER REPRESENTATIONS OR WARRANTIES ............... 17  ARTICLE IV. REPRESENTATIONS AND WARRANTIES OF PURCHASER ...................... 17  Section 4.1  Organization, Standing and Authority .............................................. 17  Section 4.2  Authorization ..................................................................................... 18  Section 4.3  Actions and Proceedings ................................................................... 18  Section 4.4  No Conflict or Violation ................................................................... 18  Section 4.5  Compliance with Laws; Governmental Authorizations. ................... 19  Section 4.6  No Inducement or Reliance; Due Investigation ................................ 19  Section 4.7  Financial Ability ................................................................................ 20  Section 4.8  Brokers and Financial Advisers ........................................................ 20  Section 4.9  Tax ..................................................................................................... 20  Section 4.10  NO OTHER REPRESENTATIONS OR WARRANTIES ............... 20  ARTICLE V. REPRESENTATIONS AND WARRANTIES OF PURCHASER PARENT ...... 20  Section 5.1  Organization, Standing and Authority .............................................. 20  Section 5.2  Authorization ..................................................................................... 21  Section 5.3  Actions and Proceedings ................................................................... 21  Section 5.4  No Conflict or Violation ................................................................... 21  

 

  ii  1006368970v9  Section 5.5  Brokers and Financial Advisers ........................................................ 21  Section 5.6  Capital Structure; Shares ................................................................... 22  Section 5.7  SEC Documents ................................................................................ 22  Section 5.8  NO OTHER REPRESENTATIONS OR WARRANTIES ............... 23  ARTICLE VI. COVENANTS ...................................................................................................... 23  Section 6.1  Operation of the Northeast Homeowners Lines ................................ 23  Section 6.2  General Cooperation ......................................................................... 24  Section 6.3  Regulatory Filings ............................................................................. 25  Section 6.4  No Provision of Services and Systems .............................................. 26  Section 6.5  Reinsurance Agreement .................................................................... 26  Section 6.6  Confidentiality ................................................................................... 26  Section 6.7  Further Assurances ............................................................................ 27  Section 6.8  Public Announcement ....................................................................... 28  Section 6.9  Employee Matters ............................................................................. 28  ARTICLE VII. RENEWAL RIGHTS .......................................................................................... 28  Section 7.1  General .............................................................................................. 28  Section 7.2  Withdrawal Plan ................................................................................ 29  Section 7.3  Information Concerning the Insurance Policies ................................ 29  Section 7.4  Non-Renewals ................................................................................... 30  Section 7.5  Purchaser Replacement Policies........................................................ 31  Section 7.6  No Representation on Market Reaction ............................................ 32  Section 7.7  No Infringement of Producer Rights ................................................. 32  Section 7.8  No Limitations on Seller Parties’ Operations ................................... 33  Section 7.9  Noncompetition ................................................................................. 33  Section 7.10  Audit and Inspection Rights .............................................................. 33  ARTICLE VIII. CONDITIONS PRECEDENT ........................................................................... 34  Section 8.1  Conditions to Seller Parties’ Obligations .......................................... 34  Section 8.2  Conditions to Purchaser’s and Purchaser Parent’s Obligations ........ 35  ARTICLE IX. INDEMNIFICATION .......................................................................................... 36  Section 9.1  Indemnification of Purchaser by Seller Parties ................................. 36  Section 9.2  Indemnification of Seller Parties’ by Purchaser and Purchaser  Parent ................................................................................................. 36  Section 9.3  Indemnification Procedures............................................................... 37  Section 9.4  Certain Limitations ............................................................................ 38  Section 9.5  Exclusive Remedy ............................................................................. 38  Section 9.6  Additional Indemnification Provisions ............................................. 38  Section 9.7  Tax Treatment of Indemnity Payments ............................................. 40  Section 9.8  Survival ............................................................................................. 40  ARTICLE X. TERMINATION PRIOR TO CLOSING ............................................................... 41  Section 10.1  Termination of Agreement ................................................................ 41  ARTICLE XI. GENERAL PROVISIONS ................................................................................... 41  Section 11.1  Fees and Expenses ............................................................................. 41  Section 11.2  Notices ............................................................................................... 41  

 

  iii  1006368970v9  Section 11.3  Amendment; Waivers, Etc ................................................................ 43  Section 11.4  Entire Agreement; Third-Party Beneficiaries ................................... 43  Section 11.5  Assignment ........................................................................................ 43  Section 11.6  Governing Law; Jurisdiction; Enforcement ...................................... 44  Section 11.7  Severability........................................................................................ 45  Section 11.8  Counterparts ...................................................................................... 45  Section 11.9  Specific Performance ........................................................................ 45  Section 11.10  Reserves ............................................................................................ 45    INDEX OF SCHEDULES  Seller Disclosure Schedule  Purchaser Disclosure Schedule    INDEX OF EXHIBITS  Exhibit A  Form of Registration Rights Agreement  Exhibit B  Form of Reinsurance Agreement  Exhibit C  Form of Reinsurance Trust Agreement      

 

  1  1006368970v9  RENEWAL RIGHTS AGREEMENT  This Renewal Rights Agreement, dated as of January 18, 2021 (this  “Agreement”), by and among United Property and Casualty Insurance Company, an insurance  company organized under the laws of the State of Florida (“Seller”), United Insurance Holdings  Corp., a Delaware corporation (“Seller Parent”), United Insurance Management, L.C., a Florida  limited liability company (“UIM”), Homeowners Choice Property & Casualty Insurance  Company, Inc., an insurance company organized under the laws of the State of Florida  (“Purchaser”), and HCI Group, Inc., a Florida corporation (“Purchaser Parent”).  WHEREAS, Seller conducts the Northeast Homeowners Lines business  throughout the states of Connecticut, Massachusetts, New Jersey and Rhode Island (the  “Territory”);  WHEREAS, each of Seller and UIM is an indirect, wholly owned subsidiary of  Seller Parent;  WHEREAS, Purchaser is a, direct, wholly owned subsidiary of Purchaser Parent;  WHEREAS, Seller desires to sell to Purchaser, and Purchaser desires to acquire  from Seller, on behalf of Purchaser or an Affiliate of Purchaser, any and all rights of Seller to  renew and/or replace the Insurance Policies at the end of their respective policy periods or such  earlier period to the extent permitted by Applicable Law and, in connection therewith, Purchaser  Parent desires to issue to Seller, and Seller desires to acquire from Purchaser Parent, 100,000  duly authorized validly issued, fully paid and nonassessable shares of common stock, no par  value, of Purchaser Parent (the “Shares”);  WHEREAS, in connection with this Agreement and upon the terms and subject to  the conditions set forth herein, Seller and Purchaser will enter into a registration rights agreement  in substantially the form attached hereto as Exhibit A (the “Registration Rights Agreement”), by  which Purchaser has agreed to grant Seller certain rights to have the Shares registered for resale  to the public; and  WHEREAS, in connection with this Agreement and upon the terms and subject to  the conditions set forth herein, Seller and Purchaser will enter into a quota share reinsurance  agreement in substantially the form attached hereto as Exhibit B (the “Reinsurance Agreement”),  by which Seller shall cede, and Purchaser shall reinsure, sixty nine and one half percent (69.5%)  of all Reinsured Liabilities (as such term is defined in the Reinsurance Agreement, the  “Reinsured Liabilities”) on the terms and subject to the conditions set forth therein; and  WHEREAS, in connection with this Agreement and upon the terms and subject to  the conditions set forth herein, concurrently with the execution of the Reinsurance Agreement,  Purchaser, as grantor, Seller, as the beneficiary, and Trustee, as trustee, will enter into a trust  agreement in substantially the form attached hereto as Exhibit C (the “Trust Agreement”), by  which Purchaser has agreed to establish and maintain a trust account to secure Purchaser’s  obligations to Seller under the Reinsurance Agreement.  

 

  2  1006368970v9  NOW, THEREFORE, in consideration of the representations, warranties,  covenants and agreements contained in this Agreement, the parties agree as follows:  ARTICLE I.  DEFINITIONS  SECTION 1.1 Definitions.  For purposes of this Agreement, the following terms  shall have the respective meanings set forth below:  “Action” means (a) any civil, criminal or administrative action, suit, claim,  litigation or similar proceeding, in each case before a Governmental Entity or (b) any  investigation or written inquiry by a Governmental Entity other than any examination, audit or  claim by a taxing authority, in each case other than complaint activity by or on behalf of  policyholders unless and until any such policyholder complaint activity results in any civil,  criminal or administrative action, suit, claim, litigation or similar proceeding before a  Governmental Entity, in which case it shall, without duplication, be treated as an Action  hereunder.  “Affiliate” of any Person means another Person that directly or indirectly, through  one or more intermediaries, Controls, is Controlled by or is under common Control with, such  first Person.  “Agreement” has the meaning specified in the preamble hereto.  “Annual Statutory Financial Statements” has the meaning specified in  Section 3.5(a).  “Applicable Law” means any United States federal, state, local or foreign law,  statute, regulation, rule, ordinance, order, injunction, judgment, decree, principle of common  law, constitution or treaty enacted, promulgated, issued, enforced or entered by any  Governmental Entity applicable to a party hereto, or any of its respective businesses, properties  or assets, as may be amended from time to time.  “Applicable Reinsurance Agreements” has the meaning specified in Section 3.7.  “Business Day” means any day other than a Saturday, a Sunday or any other day  on which banking institutions in New York, New York or St. Petersburg, Florida are required or  authorized by Applicable Law to be closed.  “Books and Records” means the books, records and documents that exclusively  pertain to or are exclusively used by Seller or its Affiliates to administer, reflect, monitor,  evidence or record information exclusively relating to the Northeast Homeowners Lines,  including customer lists, Producer information, policy information, insurance policy forms, rate  filing information, rating plans, all filings and correspondence with Governmental Entities  relating to the operation of the Northeast Homeowners Lines, claim records, sales records,  underwriting records, advertising and promotional materials; provided, however, that Books and  Records excludes (a) Tax returns and Tax records and all other data and information with respect  to Taxes, (b) any materials prepared for the boards of directors of Seller or its Affiliates, (c) any  

 

  3  1006368970v9  corporate minute books, stock records or similar corporate records of Seller or its Affiliates,  (e) any materials that are privileged and/or confidential for which Seller or its Affiliates do not  have a common interest with Purchaser, (e) any internal drafts, opinions, valuations,  correspondence or other materials produced by, or provided between or among, Seller and its  Affiliates or Representatives with respect to the negotiation, valuation and consummation of the  specific transactions contemplated under this Agreement and the other Transaction Documents  or the terms of engagement of such Representatives with respect thereto and (f) consolidated  financial records (including general ledgers) of Seller or its Affiliates, consolidated regulatory  filings made by Seller or its Affiliates and any related correspondence with Governmental  Entities, except to the extent the information contained therein specifically or separately  identifies the Northeast Homeowners Lines and is not otherwise included in a Book and Record.  “Closing” has the meaning specified in Section 2.1.  “Closing Date” has the meaning specified in Section 2.1.  “Code” means the Internal Revenue Code of 1986.  “Confidential Information” has the meaning specified in Section 6.6(d).  “Confidentiality Agreement” has the meaning specified in Section 6.6(a).  “Contagion Event” means the outbreak and ongoing effects of contagious disease,  epidemic or pandemic (including COVID-19).  “Contagion Event Measures” means any reasonable action or inaction by Seller  taken (or not taken) to the extent reasonably necessary to address a Contagion Event or address  or comply with any workforce reduction, quarantine, “shelter in place,” “stay at home,” social  distancing, shut down, closure, sequester, safety or similar Law, directive, guidelines or  recommendations promulgated by any industry group or any Governmental Entity, including the  Centers for Disease Control and Prevention and the World Health Organization, in each case in  connection with or in response to a Contagion Event, including the CARES Act and Families  First Act.  “Contract” means any agreement, contract, instrument, guarantee, undertaking,  lease, note, mortgage, indenture, license or other legally binding commitment or obligation,  whether written or oral.  “Control” or “Controlled” means the possession, directly or indirectly, of the  power to direct or cause the direction of the management and policies of a Person, whether  through the ownership of voting securities or partnership or other interests, by contract or  otherwise.  “Covered Employees” means the individuals identified in Section 3.12 of the  Seller Disclosure Schedule, and who are employed by Seller, UIM or such other Affiliate of  Seller, as applicable, as of immediately prior to the Closing.  “Cut-Off Date” means March 31, 2021.  

 

  4  1006368970v9  “Deductible” has the meaning specified in Section 9.4.  “Disclosing Party” has the meaning specified in Section 6.6(b).  “Eligible Insurance Proceeds” has the meaning specified in Section 9.6(d).  “Employment Transfer Date” has the meaning specified in Section 6.9(a).  “Enforceability Exceptions” has the meaning specified in Section 3.2(b).  “GAAP” means generally accepted accounting principles in the United States.  “Governmental Authorizations” has the meaning specified in Section 6.3(a).  “Governmental Entity” means any foreign, federal, state, local or other  governmental, legislative, judicial, administrative or regulatory authority, agency, commission,  board, body, court or entity or any instrumentality thereof or any self-regulatory body or arbitral  body or arbitrator.  “Indemnified Party” has the meaning specified in Section 9.3(a).   “Indemnifying Party” has the meaning specified in Section 9.3(a).  “Insurance Policies” means any and all insurance contracts, policies, certificates,  binders, slips, covers or other agreements of insurance, including all supplements, riders and  endorsements issued or written in connection therewith and extensions thereto, as to the  Northeast Homeowners Lines, and issued, renewed, assumed, reinsured or written by or on  behalf of Seller. For the avoidance of doubt, the Insurance Policies shall not include any  insurance contracts, policies, certificates, binders, slips, covers or other agreements of insurance  (a) as to commercial lines, (b) written outside the Territory or (c) not identified as constituting  Northeast Homeowners Lines as defined herein.  “Knowledge” means the actual knowledge, after reasonable inquiry, of those  individuals listed (a) with respect to Seller, Seller Parent or UIM, on Section 1.1(a) of the Seller  Disclosure Schedule, and (b) with respect to Purchaser and Purchaser Parent, on Section 1.1(a)  of the Purchaser Disclosure Schedule.   “Liability” or “Liabilities” means a liability, obligation, commitment, expense,  claim or cause of action (of any kind or nature whatsoever, whether absolute, accrued, contingent  or other, and whether known or unknown).  “Liens” has the meaning set forth in Section 5.6(a).  “Losses” means any damages, claims, losses, Liabilities, charges, Actions, suits,  proceedings, deficiencies, Taxes, fees, assessments, interest, penalties and reasonable costs and  expenses (including reasonable out-of-pocket attorneys’ fees and expenses), but excluding  consequential, special, incidental, indirect or punitive damages, lost profits, diminution in value  or similar items.  

 

  5  1006368970v9  “Material Adverse Effect” means (a) a material adverse effect on the business,  operations, results of operations or financial condition of Seller, solely with respect to the  Northeast Homeowners Lines, taken as a whole; provided, however, that no fact, circumstance,  change or effect arising out of or resulting from any of the following, either alone or in  combination, shall constitute or be taken into account in determining whether a Material Adverse  Effect has occurred or would be reasonably likely to occur: (i) the effects of changes affecting  the economy or securities markets generally; (ii) the effects of changes affecting the insurance,  reinsurance and financial services industries generally, including the general competitive forces  in the insurance and reinsurance markets; (iii) political conditions generally and any natural  disasters, hostilities, acts of war, sabotage, terrorism or military actions; (iv) any Contagion  Event, Contagion Event Measures or other force majeure event, or any worsening of such  matters existing as of the date hereof, or any declaration of martial law, quarantine or similar  directive, policy or guidance or other action by any Governmental Entity in response thereto;  (v) any occurrence or condition generally affecting participants in the Territory in any segment  of the industries or markets in which the Northeast Homeowners Lines business is operated;  (vi) any downgrade or potential downgrade of the financial strength, claims paying ability,  insurance or other ratings of any of Seller or any of its Affiliates; (vii) any changes in the  financial condition or business plans of Seller or its Affiliates; (viii) any changes in Applicable  Law, accounting or actuarial principles, or regulations or policies of general applicability; (ix)  any changes in the customer, client, vendor, Policyholder, or Producer relationships of Seller or  its Affiliates as a result of or related to, the transactions contemplated by this Agreement; (x) any  changes resulting from actions or omissions of Seller or its Affiliates taken with the prior written  consent of Purchaser or Purchaser Parent with respect to this Agreement or the other Transaction  Documents or the transactions contemplated hereby or thereby; and (xi) any adverse changes  resulting from this Agreement or the other Transaction Documents or the transactions  contemplated hereby or thereby or from the announcement of the transactions contemplated by  this Agreement or the other Transaction Documents or the identity of Purchaser or Purchaser  Parent as a party to such transactions, or (b) a material impairment or delay of the ability of  Seller to perform its material obligations under this Agreement or to consummate the  transactions contemplated hereby.  “Non-Renewal Date” has the meaning specified in Section 7.4(a).  “Northeast Homeowners Lines” means the following lines of property and  casualty insurance written by Seller within the Territory: (a) personal homeowners, (b) renters,  (c) landlord and condominium / co-op insurance, (d) dwelling fire, (e) allied lines, (f) federal  flood, (g) inland marine, (h) earthquake, (i) group accident and health and (j) general liability.  “Organizational Documents” has the meaning specified in Section 3.4.  “Permitted Exceptions” means the inability of Seller to non-renew or otherwise  cease renewing or issuing any Insurance Policies (i) to the extent prohibited by Applicable Law;  (ii) to the extent such Insurance Policies are renewed or issued to honor quotes outstanding as of  the Closing Date; or (iii) to the extent otherwise contemplated in the Withdrawal Plan.  “Person” means an individual, corporation, partnership, joint venture, limited  liability company, association, trust, unincorporated organization or other entity.  

 

  6  1006368970v9  “Policies” has the meaning specified in the Reinsurance Agreement.  “Policyholders” means policyholders and named insureds of the Insurance  Policies.  “Policy Replacement Date” means June 1, 2021 or such other date mutually  agreed by the parties.  “Producer” means any agent, reinsurance intermediary, producer, broker or sales  representative involved in the placement or marketing of the Insurance Policies since December  31, 2018.  “Purchase Price” means, collectively, the Shares and the Renewal Rights  Commission.  “Purchaser” has the meaning specified in the preamble hereto.  “Purchaser Disclosure Schedule” has the meaning specified in Article IV.  “Purchaser Fundamental Representations” has the meaning specified in  Section 8.1(f).  “Purchaser Indemnified Parties” has the meaning specified in Section 9.1.  “Purchaser Material Adverse Effect” means a material impairment or delay of the  ability of Purchaser or Purchaser Parent, as applicable, to perform its material obligations under  this Agreement or to consummate the transactions contemplated hereby.  “Purchaser Parent” has the meaning specified in the preamble hereto.  “Purchaser Parent Existing Shares” has the meaning set forth in Section 5.6(a).  “Purchaser Parent Fundamental Representations” has the meaning specified in  Section 8.1(f).  “Purchaser Replacement Premium” means the full amount of annual gross written  premium with respect to the Purchaser Replacement Policies collected or collectable by  Purchaser, which, in respect of Purchaser Replacement Stub Policies, shall mean the full amount  of annual gross written premium with respect to such Purchaser Replacement Stub Policies as  though such Purchaser Replacement Stub Policies were issued for a full annual term.  “Purchaser Replacement Policies” means the policies or other evidences of  insurance coverage on Purchaser’s or Purchaser’s Affiliate’s forms and rates approved and/or  authorized by the appropriate Governmental Entity, solicited, quoted, bound, written and/or  issued to any Policyholder prior to or upon the expiration, cancellation or renewal date of such  Policyholder’s Insurance Policy(ies) for coverage of substantially the same subject business as  covered under an Insurance Policy, as provided herein, subject in each case to Applicable Law  and the rights of the Producers and Policyholders; provided, however, that Purchaser  

 

  7  1006368970v9  Replacement Policies shall not include any policy or other evidence of insurance coverage issued  by Purchaser that is a renewal or replacement of an in-force policy that was issued by Purchaser  or an Affiliate of Purchaser prior to the Closing Date.  “Purchaser Replacement Stub Policies” means Purchaser Replacement Policies, to  the extent permitted by Applicable Law, commencing on the Policy Replacement Date, (x)  unless a Policyholder notifies Seller or Purchaser that such Policyholder opts out from receiving  a Purchaser Replacement Policy or otherwise cancels an Insurance Policy, or (y) to the extent a  Policyholder notifies Seller or Purchaser that such Policyholder opts in to receive a Purchaser  Replacement Policy prior to such date, in each case as contemplated by the Withdrawal Plan, and  expiring on the same dates that the Insurance Polic(ies) would have expired or renewed but for  Seller’s cancellation of the Insurance Polic(ies).  “Purchaser SEC Documents” has the meaning specified in Section 5.7(a).  “Qualifying Loss” means any individual indemnifiable Loss or series of related  Losses in excess of $25,000.  “Quarterly Statutory Financial Statements” has the meaning specified in  Section 3.5(a).  “Receiving Party” has the meaning specified in Section 6.6(a).  “Registration Rights Agreement” has the meaning specified in the recitals hereto.  “Reinsurance Agreement” has the meaning specified in the recitals hereto.  “Reinsured Liabilities” has the meaning specified in the recitals hereto.  “Renewal Rights” means Seller’s existing rights to (a) renew the Insurance  Policies upon the expiration or cancellation thereof, and (b) offer, quote and solicit renewals of  and replacement coverages for the Insurance Policies, subject in each case to all rights of  Producers and Policyholders and Applicable Law.  “Renewal Rights Commission” has the meaning specified in Section 2.4(a).  “Representatives” means, with respect to any Person, the directors, officers,  employees, partners, agents, contractors or advisors (including attorneys, accountants,  consultants, bankers and financial advisors) of such Person.  “Reserves” has the meaning specified in Section 3.6.  “Restricted Person” has the meaning specified in Section 7.9.  “SEC” means the Securities and Exchange Commission.  

 

  8  1006368970v9  “Securities Act” means the Securities Act of 1933, as amended, or any successor  federal Law, and the rules and regulations promulgated thereunder, all as the same may from  time to time be in effect.  “Seller” has the meaning specified in the preamble hereto.  “Seller Disclosure Schedule” has the meaning specified in Article III.  “Seller Fundamental Representations” has the meaning specified in Section  8.2(e).  “Seller Indemnified Parties” has the meaning specified in Section 9.2.  “Seller Parent” has the meaning specified in the preamble hereto.  “Seller Privacy Policies” means the privacy policies of Seller, a copy of which has  been made available to Purchaser.  “Statutory Financial Statements” has the meaning specified in Section 3.5(a).  “Taxes” means any and all federal, state, local, or foreign income, premium,  property (real or personal), sales, excise, employment, payroll, withholding, gross receipts,  license, severance, stamp, occupation, windfall profits, environmental, customs duties, capital  stock, franchise, profits, social security (or similar, including FICA), unemployment, disability,  use, transfer, registration, value-added, alternative or add-on minimum, estimated, or other tax of  any kind or any charge of any kind in the nature of (or similar to) taxes whatsoever, including  any interest, penalty, or addition imposed in connection with the payment, reporting or disclosure  thereof; provided, that, for the avoidance of doubt, “Taxes” shall not include any guaranty fund  assessment, or escheatment or similar Liabilities.  “Territory” has the meaning specified in the recitals hereto.  “Third-Party Claim” has the meaning specified in Section 9.3(a).  “Transaction Documents” means this Agreement, the Registration Rights  Agreement, the Reinsurance Agreement and the Trust Agreement.  “Transaction Expenses” means, without duplication, all Liabilities incurred by  any party hereto as a result of the contemplation, negotiation, efforts to consummate or  consummation of the transactions contemplated by this Agreement, including any fees and  expenses of investment bankers, attorneys, accountants or other advisors, and any fees payable  by such parties to Governmental Entities or other third parties, in each case, in connection with  the consummation of the transactions contemplated by this Agreement.  “Trust Account” means has the meaning specified in the Trust Agreement.  “Trust Agreement” has the meaning specified in the recitals hereto.  

 

  9  1006368970v9  “Trustee” means the trustee or custodian named under the Trust Agreement and  any successor trustee or custodian appointed as such pursuant to the terms of such Trust  Agreement.  “UIM” has the meaning specified in the preamble hereto.  “Withdrawal Plan” has the meaning specified in Section 7.2(a).  SECTION 1.2 Construction.  The words “hereof”, “herein” and “hereunder”  and words of like import used in this Agreement shall refer to this Agreement as a whole and not  to any particular provision of this Agreement.  The captions herein are included for convenience  of reference only and shall be ignored in the construction or interpretation hereof.  References to  Articles, Sections and Exhibits are to Articles, Sections and Exhibits of this Agreement unless  otherwise specified.  All Exhibits and Disclosure Schedules annexed hereto or referred to herein  are hereby incorporated in and made a part of this Agreement as if set forth in full herein.  Any  capitalized term used in any Exhibit or Disclosure Schedules but not otherwise defined therein  shall have the meaning given to such term in this Agreement.  Any singular term in this  Agreement shall be deemed to include the plural, and any plural term the singular.  Whenever the  words “include”, “includes” or “including” are used in this Agreement, they shall be deemed to  be followed by the words “without limitation”, whether or not they are in fact followed by those  words or words of like import.  “Writing”, “written” and comparable terms refer to printing,  typing and other means of reproducing words (including electronic media) in a visible form.   References to any agreement or contract are to that agreement or contract as amended, modified  or supplemented from time to time in accordance with the terms hereof and thereof.  References  to any Contract are to that Contract as amended, modified or supplemented from time to time in  accordance with the terms hereof and thereof. References to any Person include the successors  and permitted assigns of that Person.  References from or through any date mean, unless  otherwise specified, from and including or through and including, respectively.  Any reference to  “days” means calendar days unless Business Days are expressly specified.  If any action under  this Agreement is required to be done or taken on a day that is not a Business Day, then such  action shall be required to be done or taken not on such day but on the first succeeding Business  Day thereafter.  ARTICLE II.  REINSURANCE; RENEWAL RIGHTS  SECTION 2.1 Closing.  The closing of the transactions contemplated by this  Agreement shall take place on such date on which the conditions set forth in Article VIII have  been satisfied or waived in accordance with the terms of this Agreement (the “Closing”).  The  Closing shall take place at the offices of Debevoise & Plimpton LLP, 919 Third Avenue, New  York, New York 10022, at 10:00 a.m. Eastern Time on such date, or at such other time and place  as may be agreed upon in writing by each of the parties hereto (such date, the “Closing Date”).   The Closing shall be deemed effective as of 12:00:01 a.m. Eastern Time on the Closing Date.  SECTION 2.2 Closing Transactions.  Upon the terms, conditions, and  limitations of this Agreement, and for the consideration stated herein, on the Closing Date (a)  Seller will sell, assign and transfer to Purchaser, and Purchaser will accept and acquire, all of  

 

  10  1006368970v9  Seller’s rights, title and interest in the Renewal Rights, which will be assignable by Purchaser to  an Affiliate, (b) Seller and Purchaser will enter into the Reinsurance Agreement, pursuant to  which, and upon the terms, conditions, and limitations set forth therein, Seller will cede to  Purchaser, and Purchaser will reinsure, sixty nine and one half percent (69.5%) of the Reinsured  Liabilities, (c) Seller will transfer to Purchaser the information concerning the Insurance Policies  upon the terms, conditions, and limitations set forth in Section 7.3, and (d) in partial  consideration for the Renewal Rights, Purchaser Parent shall issue, convey, assign, transfer and  deliver to Seller, the Shares free and clear of any and all Liens, and such Shares shall be duly  authorized, validly issued, fully paid and nonassessable when so issued, and Seller agrees to  acquire and accept the Shares from Purchaser Parent.  SECTION 2.3 Closing Deliveries.    (a) At the Closing, Seller shall deliver or cause to be delivered to Purchaser:  (i) counterparts of each Transaction Document, other than this  Agreement, to which Seller is a party, each duly executed by Seller;  (ii) a certificate of Seller duly executed by an authorized officer of  Seller, dated as of the Closing Date, certifying as to Seller’s compliance with the  conditions set forth in Section 8.2(e) and Section 8.2(f); and  (iii) a payment by Seller in cash in an amount due by Seller in  accordance with Article 11, Section A of the Reinsurance Agreement, and, in satisfaction  of the net amount due, Seller shall deposit such amount into the Trust Account on the  Closing Date, on behalf of Purchaser as grantor of the Trust Account.  (b) At the Closing, Purchaser Parent or Purchaser, as applicable, shall deliver  or cause to be delivered:  (i) counterparts of each Transaction Document, other than this  Agreement, to which Purchaser is a party, each duly executed by Purchaser;  (ii) a certificate of Purchaser duly executed by an authorized officer of  Purchaser, dated as of the Closing Date, certifying as to Purchaser’s compliance with the  conditions set forth in Section 8.1(f) and Section 8.1(g); and  (iii) evidence that Purchaser Parent has directed its transfer agent to  issue the Shares to Seller, which issuance at Seller’s election may be represented by one  or more certificates or a transaction statement indicating the Shares have been recorded in  Seller’s name by book entry.  SECTION 2.4 Renewal Rights Commission.  (a) In partial consideration for the Renewal Rights, following the collection  by Purchaser of $80,000,000 of the Purchaser Replacement Premium, Purchaser shall pay to  Seller in accordance with Section 2.4(c), a renewal rights commission (the “Renewal Rights  Commission”) in an amount equal to six percent (6%) of Purchaser Replacement Premium for  

 

  11  1006368970v9  each Purchaser Replacement Policy issued by Purchaser after such time as required by Section  7.5; provided, that the aggregate amount payable by Purchaser to Seller under this Section 2.4(a)  shall not exceed $3,100,000. For clarity, the Renewal Rights Commission will be based on the  aggregate Purchaser Replacement Premium in excess of $80,000,000.  (b) Within forty-five (45) calendar days after the end of each calendar month  following the Policy Replacement Date (each such calendar month, a “Renewal Rights  Commission Settlement Period”), Purchaser shall report to Seller (each a “Renewal Rights  Commission Report”), which shall set forth the following:  (i) the Purchaser Replacement Policies issued during the Renewal  Rights Commission Settlement Period;  (ii) the Purchaser Replacement Premium for the Renewal Rights  Commission Settlement Period; and  (iii) the Renewal Rights Commission for the Renewal Rights  Commission Settlement Period.  (c) The Renewal Rights Commission due Seller with respect to each Renewal  Rights Commission Settlement Period ending after the Policy Replacement Date as reflected on  a Renewal Rights Commission Report shall be paid in cash by Purchaser by wire transfer in  immediately available funds to an account or accounts designated by Seller no later than five (5)  Business Days following the date of the delivery of the applicable Renewal Rights Commission  Report.  ARTICLE III.  REPRESENTATIONS AND WARRANTIES OF SELLER PARTIES  Except as set forth in the disclosure schedule supplied by Seller to Purchaser  dated as of the date hereof (the “Seller Disclosure Schedule”), Seller and, for the purposes of  Section 3.1 through Section 3.4 and Section 3.16, each of Seller Parent and UIM, hereby  represents and warrants to Purchaser and Purchaser Parent, in each case as of the date hereof and  as of the Closing Date (except, in all cases, to the extent any such representations and warranties  address matters only as of a particular date, in which case such representations and warranties  shall speak only as of such date), on a joint and several basis, as follows:  SECTION 3.1 Organization, Standing and Authority.  Seller is a corporation  duly organized and validly existing under the laws of the State of Florida.  Seller Parent is a  corporation duly organized and validly existing under the laws of the State of Delaware.  UIM is  a limited liability company duly organized and validly existing under the laws of the State of  Florida.  Each of Seller, Seller Parent and UIM has all requisite power and authority to own,  lease and operate its assets, properties and business and to carry on the operations of its business  as they are now being conducted, except where the failure to have such authority would not,  individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.  Each  of Seller, Seller Parent and UIM is duly qualified to do business as a foreign corporation and is  in good standing in each jurisdiction where such qualification is necessary, except for those  

 

  12  1006368970v9  jurisdictions where the failure to be so qualified would not, individually or in the aggregate,  reasonably be expected to have a Material Adverse Effect.  SECTION 3.2 Authorization.  (a) Each of Seller, Seller Parent and UIM has all requisite corporate power  and authority to execute, deliver and perform its obligations under this Agreement and each other  Transaction Document to which it will be a party.  (b) This Agreement and each other Transaction Document to which Each of  Seller, Seller Parent or UIM will be a party has been or will be duly executed and delivered by  Seller, Seller Parent or UIM, as applicable, and, subject to the due execution and delivery by  Purchaser and Purchaser Parent, as applicable, this Agreement and each other Transaction  Document to which Seller, Seller Parent or UIM will be a party is or will be a valid and binding  obligation of Seller, Seller Parent or UIM, as applicable, enforceable against Seller, Seller Parent  or UIM in accordance with their terms, subject to (i) bankruptcy, insolvency, reorganization,  fraudulent transfer, moratorium and other similar laws now or hereafter in effect relating to or  affecting the rights of creditors of insurance companies or creditor’s rights generally and (ii)  general principles of equity (regardless of whether considered in a proceeding at law or in  equity) (such exceptions in clause (i) and (ii) above, as applicable to any Person, the  “Enforceability Exceptions”).  SECTION 3.3 Actions and Proceedings.  As of the date hereof, there are no  outstanding orders, decrees or judgments by or with any Governmental Entity applicable to  Seller, Seller Parent or UIM, or Seller’s, Seller Parent’s or UIM’s properties or assets that,  individually or in the aggregate, have a Material Adverse Effect.  As of the date hereof, there are  no Actions pending or, to the Knowledge of Seller, threatened against, Seller, Seller Parent or  UIM at law or in equity, or before or by any Governmental Entity or before any arbitrator of any  kind which would, individually or in the aggregate, reasonably be expected to have a Material  Adverse Effect.  SECTION 3.4 No Conflict or Violation.  The execution, delivery and  performance by Seller, Seller Parent or UIM of this Agreement or of any other Transaction  Document to which Seller, Seller Parent or UIM will be a party, and the consummation of the  transactions contemplated hereby and thereby in accordance with the terms and conditions hereof  and thereof will not: (a) violate any provision of its charter, bylaws or other organizational  document (collectively, the “Organizational Documents”); (b) subject to the matters referred to  in the next sentence, violate, conflict with or result in the breach of any of the terms of, result in  any modification of the effect of, otherwise give any other contracting party the right to  terminate or constitute (or with notice or lapse of time or both, constitute) a default under, any  Contract to which Seller, Seller Parent or UIM is a party or by or to which its properties may be  bound or subject; (c) subject to the matters referred to in the next sentence, violate any order,  judgment, injunction, award or decree of any arbitrator or Governmental Entity, or any  agreement with, or condition imposed by, any arbitrator or Governmental Entity, binding upon  Seller, Seller Parent or UIM; (d) subject to the matters referred to in the next sentence, violate  any Applicable Law; or (e) result in a breach or violation of any of the terms or conditions of,  constitute a default under, or otherwise cause an impairment of, any license or authorization  

 

  13  1006368970v9  related to its business or necessary to enable it to perform its obligations under this Agreement or  any other Transaction Document to which Seller, Seller Parent or UIM will be a party, except for  any such violations, conflicts or breaches which would not individually or in the aggregate  reasonably be expected to have a Material Adverse Effect.  No consent, approval or authorization  of, or declaration or filing with, or notice to, any Governmental Entity is required by or with  respect to Seller, Seller Parent or UIM in connection with the execution and delivery of this  Agreement or any other Transaction Document by Seller, Seller Parent or UIM, or the  consummation by Seller, Seller Parent or UIM of the transactions contemplated hereby and  thereby, except for (x) any consents or approvals set forth in Section 3.4 of the Seller Disclosure  Schedule, and (y) any other consents, approvals or authorizations which would not individually  or in the aggregate reasonably be expected to have a Material Adverse Effect.  SECTION 3.5 Financial Statements; Permitted Accounting Practices.  (a) Seller has made available to Purchaser true and complete copies of (i) the  audited annual statutory financial statements of Seller as of and for the year ended December 31,  2019, including any actuarial opinions, affirmations or certifications, in each case, as filed with  the insurance regulatory authority in the jurisdiction of domicile of Seller (collectively, the  “Annual Statutory Financial Statements”) and (ii) the unaudited quarterly statutory financial  statements of Seller as of and for the quarterly periods ended March 31, 2020, June 30, 2020 and  September 30, 2020 (the statements described in (ii), the “Quarterly Statutory Financial  Statements”, and together with the Annual Statutory Financial Statements, the “Statutory  Financial Statements”).  Except as expressly set forth in the notes thereto, the Statutory Financial  Statements (A) were prepared in accordance with SAP consistently applied during the periods  involved and (B) present fairly in all material respects, in accordance with SAP, the admitted  assets, liabilities, capital and surplus and cash flows of Seller with respect to the Northeast  Homeowners Lines as of the respective dates and for the respective periods referred to in the  Statutory Financial Statements, subject to, in the case of the Quarterly Statutory Financial  Statements, normal year-end adjustments and the absence of full footnote disclosures and other  presentation items.  No material deficiency has been asserted with respect to any Statutory  Financial Statement by any Governmental Entity that remains unresolved prior to the date  hereof.  (b) There are no accounting practices used by Seller in connection with the  Statutory Financial Statements that depart from the National Association of Insurance  Commissioners’ Accounting Practices and Procedures Manual applicable to Seller with respect  to the Northeast Homeowners Lines.  SECTION 3.6 Reserves.  The reserves and other actuarial amounts held in  respect of the Policies (the “Reserves”), as established or reflected in the applicable Annual  Statutory Financial Statements (a) were determined in accordance with generally accepted  actuarial principles and practices applicable to Seller, consistently applied under the Applicable  Laws in the jurisdiction of domicile of Seller, and were fairly stated, in all material respects, in  accordance with SAP; (b) were based on actuarial assumptions which produce reserves at least as  great as those called for in any Policy as to reserve basis and method, and are in accordance with  all other Policy provisions; and (c) include provision for all actuarial reserves and related  statement items which ought to be established by Seller pursuant to SAP.  

 

  14  1006368970v9  SECTION 3.7 Applicable Reinsurance Agreements.  (a) Section 3.7(a) of the Seller Disclosure Schedule sets forth a true and  complete list, as of the date of this Agreement, of (i) all treaties and agreements of assumed and  ceded reinsurance of Seller related to the Insurance Policies, under which there remains any  ceded reserves (calculated in accordance with SAP) or reinsurance recoverable (such treaties and  agreements, and any amendments, extensions, renewals, guaranties, modifications, waivers or  supplements thereto, the “Applicable Reinsurance Agreements”) and (ii) all pending or, to the  Knowledge of Seller, threatened material Actions related to any Applicable Reinsurance  Agreement.  True and complete copies of each Applicable Reinsurance Agreement (including  any amendments thereof) have been made available by Seller to Purchaser.  The Applicable  Reinsurance Agreements are legal, valid and binding obligations of Seller and, to the Knowledge  of Seller, each other party thereto and are enforceable against the parties thereto, in each case in  accordance with their respective terms, subject to the Enforceability Exceptions, and are in full  force and effect.  Seller has not breached or defaulted under (with or without the giving of notice  or lapse of time, or both) any material provision of any Applicable Reinsurance Agreement or  any provision of any Applicable Reinsurance Agreement that would permit the termination,  modification, cancellation or acceleration of the performance, observance or fulfillment of such  Applicable Reinsurance Agreement that would, individually or in the aggregate, reasonably be  expected to have a Material Adverse Effect.  No party to any Applicable Reinsurance Agreement  has provided any notice of any intention to terminate such Applicable Reinsurance Agreement or  has repudiated any material provision of such Applicable Reinsurance Agreement.  All  reinsurance premiums due under each of the Applicable Reinsurance Agreements have been paid  in full or were adequately accrued or reserved for by Seller.  To the Knowledge of Seller, no  other party to any Applicable Reinsurance Agreement has materially breached or is in material  default thereunder, and no other party to any Applicable Reinsurance Agreement is the subject of  a rehabilitation, liquidation, conservatorship, receivership, bankruptcy or similar proceeding.   Seller has not received or given notice of early termination or recapture of any Applicable  Reinsurance Agreement.  Since December 31, 2018, (x) there has not been any dispute with  respect to any material amounts recoverable or payable pursuant to any Applicable Reinsurance  Agreement, and (y) no reinsurer party to an Applicable Reinsurance Agreement has denied  coverage with respect to any current or prospective material claim.  All amounts owed under any  Applicable Reinsurance Agreement have been timely paid in accordance with their terms, except  as set forth in Section 3.7(a) of the Seller Disclosure Schedule.   (b) Except for the approvals, consents and notices required for the Applicable  Reinsurance Agreements listed in Section 3.7(b) of the Seller Disclosure Schedule, no approval  or consent is required to be obtained from, and no notice is required to be provided to, any  Person that is a party to an Applicable Reinsurance Agreement in order to consummate the  transactions contemplated by this Agreement and the other Transaction Documents.  None of the  Applicable Reinsurance Agreements contains any provision providing that the other party thereto  may terminate, recapture, amend or alter the pricing or other terms thereof by reason of the  transactions contemplated hereby or by the other Transaction Documents.  SECTION 3.8 Books and Records.  The Books and Records (a) are true and  complete in all material respects and (b) have been maintained in accordance with industry  customary business practices and in accordance in all material respects with Applicable Law.  

 

  15  1006368970v9  SECTION 3.9 Compliance with Laws; Governmental Authorizations.    (a) Seller is, and at all times since December 31, 2018 has been, in  compliance in all material respects with all Applicable Laws and Governmental Authorizations  with respect to the Northeast Homeowners Lines.  Seller has not received, since December 31,  2018, any notice or other communication from any Governmental Entity regarding any actual or  alleged material violation of, or material failure on the part of, Seller to comply with any  Applicable Laws or Governmental Authorizations with respect to the Northeast Homeowners  Lines.  (b) Seller has made available to Purchaser, as of the date hereof, true and  complete copies of all reports (or the most recent drafts thereof, to the extent any final reports are  not available) reflecting the results of any financial examinations or market conduct  examinations related to the Northeast Homeowners Lines conducted by any insurance regulatory  authority since December 31, 2018 and, in any event, the most recent financial examination and  market conduct examination reports related to the Northeast Homeowners Lines from the  applicable insurance regulatory authority.  SECTION 3.10 Insurance Policies.   Except as set forth in Section 3.10 of the  Seller Disclosure Schedule:  (a) since December 31, 2018, all Insurance Policy benefits due and payable  by or on behalf of Seller have in all material respects been paid in accordance with the terms of  the Insurance Policies under which they arose, except for such benefits for which Seller believes  there is a reasonable basis to contest payment;  (b) all policy forms for Insurance Policies currently in use by Seller, and all  amendments, applications, and certificates pertaining thereto, where required by Applicable Law,  have been approved by all applicable Government Entities or filed with and not objected to by  such Governmental Entities within the period provided by Applicable Law for objection, subject  to such exceptions that, individually or in the aggregate, would not be reasonably expected to  have a Material Adverse Effect;  (c) any rates currently in use by Seller, solely with respect to the Northeast  Homeowners Lines, that are required to be filed with or approved by any Governmental Entity  have been so filed or approved, and the rates currently in use by Seller, solely with respect to the  Northeast Homeowners Lines, conform to such filed or approved rates subject to such exceptions  that, individually or in the aggregate, would not be reasonably expected to have a Material  Adverse Effect with respect to the Northeast Homeowners Lines; and  (d) as of the date hereof, there are no material unpaid claims or assessments  made against Seller by any state insurance guaranty associations or similar organizations in  connection with such association’s insurance guarantee fund relating to the Northeast  Homeowners Lines.  SECTION 3.11 Producers.  Except as set forth in Section 3.11 of the Seller  Disclosure Schedule, to the Knowledge of Seller, since December 31, 2018, (a) each Producer, at  any time that it wrote, sold or produced Insurance Policies for Seller, was duly licensed,  

 

  16  1006368970v9  authorized and appointed (for the type of business written, sold or produced by such Producer) in  the particular jurisdiction in which such Producer wrote, sold or produced such Insurance  Policies, and (b) no such Producer is in violation of any term or provision of applicable Law  relating to the writing, sale or production of such Insurance Policies for Seller, in each case  except as would not, individually or in the aggregate, reasonably be expected to have a Material  Adverse Effect.  SECTION 3.12 Employees.  Seller, for itself and on behalf of UIM, has disclosed  to Purchaser the: (a) salary information, (b) target compensation opportunity for the current fiscal  year, (c) severance benefits, (d) pension and welfare elections for the current calendar year, (e)  job description; and (f) job title for each of the Covered Employees, as of the date hereof, to the  extent permitted by Applicable Law.  SECTION 3.13 Brokers and Financial Advisers.  Except for Raymond James &  Associates, Inc., no broker, finder or financial adviser has acted directly or indirectly as such for,  or is entitled to any compensation from, Seller in connection with this Agreement, any of the  other Transaction Documents to which Seller will be a party or the transactions contemplated  hereby or thereby.  SECTION 3.14 Certain Investment Representations.  Seller is an “accredited  investor” within the meaning of Rule 501 of Regulation D promulgated under the Securities Act.  The Shares acquired by Seller pursuant to this Agreement are being acquired in the ordinary  course of business for investment only for its own account and not with a view to, or for sale in  connection with, the distribution thereof, in whole or in part, except pursuant to sales registered  or exempted under the Securities Act, and Seller does not have a present arrangement or  agreement to effect any distribution of the Shares to or through any Person.  Seller (either alone  or together with its advisors) has sufficient knowledge and experience in financial and business  matters so as to be capable of evaluating the merits and risks of its investment in the Shares and  is capable of bearing the economic risks of such investment.  Seller understands that an  investment in the Shares involves a high degree of risk and that it is able to afford a complete  loss of such investment.  Seller has independently evaluated the merits of a decision to acquire  the Shares pursuant to this Agreement, and Seller confirms that it has not relied on the advice of  any other Person and/or such Person’s legal counsel in making such decision. Seller has had access  to and has received, read and understands all materials that have been requested by Seller and has had a  reasonable opportunity to ask questions of and receive answers from Purchaser Parent and its  Representatives.  Seller understands that the Shares have not been registered under the Securities Act, that  the Shares will be issued on the basis of the exemption provided by Section 4(a)(2) of the Securities Act  and Regulation D promulgated thereunder and under exemptions under certain state securities laws, that  this transaction has not been reviewed by, passed on or submitted to any federal or state agency or self- regulatory organization where an exemption is being relied upon, and that Purchaser Parent’s reliance  thereon is based in part upon the representations made by Seller in this Agreement. Seller understands  that a restrictive legend stating substantially the following will be included on any certificate representing  the Shares:  THE SECURITIES EVIDENCED BY THIS CERTIFICATE  HAVE NOT BEEN REGISTERED UNDER THE SECURITIES  ACT OF 1933, AS AMENDED (THE “ACT”), OR THE  SECURITIES LAWS OF ANY STATE, AND HAVE BEEN  

 

  17  1006368970v9  ISSUED IN RELIANCE ON EXEMPTIONS FROM  REGISTRATION THEREUNDER. THE SECURITIES  EVIDENCED BY THIS CERTIFICATE MAY NOT BE  OFFERED, SOLD, PLEDGED OR OTHERWISE  TRANSFERRED WITHOUT REGISTRATION UNDER THE  ACT OR UNDER ANY APPLICABLE STATE SECURITIES  LAWS OR PURSUANT TO RULE 144 PROMULGATED  UNDER SUCH ACT OR UNLESS THE CORPORATION  RECEIVES AN OPINION OF COUNSEL SATISFACTORY  TO THE CORPORATION THAT AN EXEMPTION FROM  SUCH REGISTRATION IS AVAILABLE.  SECTION 3.15 Other Information.  To the best of Seller’s Knowledge,  information and belief, the information made available to Purchaser in the “Venue” electronic  data room and information contained in the confidential information memorandum made  available to Purchaser are true and correct in all material respects and fairly present, in all  material respects, the business comprised by Northeast Homeowners Lines. To the best of  Seller’s Knowledge, information and belief, the data delivered to Purchaser pursuant to Section  7.3(a) is accurate in all material respects.  SECTION 3.16 NO OTHER REPRESENTATIONS OR WARRANTIES.   EXCEPT FOR THE REPRESENTATIONS AND WARRANTIES CONTAINED IN THIS  ARTICLE III (AS MODIFIED BY THE SELLER DISCLOSURE SCHEDULE) AND IN THE  OTHER TRANSACTION DOCUMENTS, NEITHER SELLER, SELLER PARENT NOR UIM  NOR ANY OTHER PERSON MAKES ANY OTHER EXPRESS OR IMPLIED  REPRESENTATION OR WARRANTY WITH RESPECT TO SELLER, SELLER PARENT  OR UIM, THE NORTHEAST HOMEOWNERS LINES, THE PROBABLE SUCCESS OR  PROFITABILITY OF THE NORTHEAST HOMEOWNERS LINES OR THE  TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT, AND EACH OF SELLER,  SELLER PARENT AND UIM DISCLAIMS ANY OTHER REPRESENTATIONS,  WARRANTIES, FORECASTS, PROJECTIONS, STATEMENTS OR INFORMATION,  WHETHER MADE BY SELLER, SELLER PARENT OR UIM OR ANY OF THEIR  AFFILIATES, OFFICERS, DIRECTORS, EMPLOYEES, AGENTS OR REPRESENTATIVES.  ARTICLE IV.  REPRESENTATIONS AND WARRANTIES OF PURCHASER  Except as set forth in the disclosure schedule supplied by Purchaser and Purchaser  Parent to Seller dated as of the date hereof (the “Purchaser Disclosure Schedule”), Purchaser  hereby represents and warrants to Seller as of the date hereof and as of the Closing Date (except  to the extent any such representations and warranties address matters only as of a particular date,  in which case such representations and warranties shall speak only as of such date) as follows:  SECTION 4.1 Organization, Standing and Authority.  Purchaser is a  corporation duly organized and validly existing under the laws of the State of Florida and has all  requisite power and authority to own, lease and operate its assets, properties and business and to  carry on the operations of its business as they are now being conducted, except where the failure  to have such authority would not, individually or in the aggregate, reasonably be expected to  

 

  18  1006368970v9  have a Purchaser Material Adverse Effect.  Purchaser is duly qualified to do business as a foreign  corporation and is in good standing in each jurisdiction where such qualification is necessary,  except for those jurisdictions where the failure to be so qualified would not, individually or in the  aggregate, reasonably be expected to have a material adverse effect on Purchaser’s ability to  perform its obligations under this Agreement and each other Transaction Document.  SECTION 4.2 Authorization.  Purchaser has all requisite corporate power and  authority to execute, deliver and perform its obligations under this Agreement and each other  Transaction Document.  This Agreement and each other Transaction Document has been or will  be duly executed and delivered by Purchaser, and, subject to the due execution and delivery by  Seller, this Agreement and each other Transaction Document is or will be a valid and binding  obligation of Purchaser, enforceable against Purchaser in accordance with their terms, subject to  the Enforceability Exceptions.  SECTION 4.3 Actions and Proceedings.  As of the date hereof, there are no  outstanding orders, decrees or judgments by or with any Governmental Entity applicable to  Purchaser or its properties or assets that, individually or in the aggregate, have a Purchaser  Material Adverse Effect.  As of the date hereof, there are no Actions pending or, to the  Knowledge of Purchaser, threatened against, at law or in equity, or before or by any  Governmental Entity or before any arbitrator of any kind which would, individually or in the  aggregate, reasonably be expected to have a Purchaser Material Adverse Effect.  SECTION 4.4 No Conflict or Violation.  The execution, delivery and  performance by Purchaser of this Agreement or of any other Transaction Document and the  consummation of the transactions contemplated hereby and thereby in accordance with the terms  and conditions hereof and thereof will not: (a) violate any provision of the Organizational  Documents of Purchaser; (b) violate, conflict with or result in the breach of any of the terms of,  result in any modification of the effect of, otherwise give any other contracting party the right to  terminate or constitute (or with notice or lapse of time or both, constitute) a default under, any  Contract to which Purchaser is a party or by or to which its properties may be bound or subject;  (c) violate any order, judgment, injunction, award or decree of any arbitrator or Governmental  Entity, or any agreement with, or condition imposed by, any arbitrator or Governmental Entity,  binding upon, Purchaser; (d) violate any Applicable Law; or (e) result in a breach or violation of  any of the terms or conditions of, constitute a default under, or otherwise cause an impairment  of, any license or authorization related to Purchaser’s business or necessary to enable Purchaser  to perform its obligations under this Agreement or any other Transaction Document, except for  any such violations, conflicts or breaches which would not individually or in the aggregate  reasonably be expected to have a material adverse effect on Purchaser’s ability to perform its  obligations under this Agreement or any other Transaction Document.  No consent, approval or  authorization of, or declaration or filing with, or notice to, any Governmental Entity is required  by or with respect to Purchaser in connection with the execution and delivery of this Agreement  or of any other Transaction Document by Purchaser, or the consummation by Purchaser of the  transactions contemplated hereby and thereby, except for (x) the consents, approvals, filings and  notices set forth in Section 4.4 of the Purchaser Disclosure Schedule, and (y) any other consents,  approvals or authorizations which would not individually or in the aggregate reasonably be  expected to have a Purchaser Material Adverse Effect.  

 

  19  1006368970v9  SECTION 4.5 Compliance with Laws; Governmental Authorizations.  (a) Purchaser is, and at all times since December 31, 2018 has been, in  compliance in all material respects with all Applicable Laws and Governmental Authorizations  with respect to the Purchaser or its assets, properties or businesses.  Purchaser has not received,  since December 31, 2018, any notice or other communication from any Governmental Entity  regarding any actual or alleged material violation of, or material failure on the part of, Purchaser  to comply with any Applicable Laws or Governmental Authorizations with respect to the  Purchaser or its assets, properties or businesses.  (b) Except as set forth in Section 4.5(b) of the Purchaser Disclosure Schedule,  Purchaser has all material licenses, authorizations and permits necessary to perform its  obligations under the Reinsurance Agreement.  (c) Except as set forth in Section 4.5 of the Purchaser Disclosure Schedule,  Purchaser, all material deficiencies or violations with respect to its insurance businesses in all  reports of examinations related to Purchaser and such businesses (including financial, market  conduct and similar examinations) conducted by any insurance regulatory authority since  December 31, 2018, and, in any event, with respect to the most recent financial examination and  market conduct examination reports related to Purchaser and such businesses, has been resolved.  SECTION 4.6 No Inducement or Reliance; Due Investigation.    (a) Purchaser has not been induced by and has not relied upon any  representations, warranties or statements, whether express or implied, made by Seller or its  Affiliates or Representatives that are not expressly set forth in Article III (including the Seller  Disclosure Schedule), whether or not any such representations, warranties or statements were  made in writing or orally.  (b) Without limiting the foregoing, except as expressly set forth in Article III  (i) none of Seller or its Affiliates or Representatives makes, will make or has made any  representation or warranty, express or implied, as to the prospects of the Northeast Homeowners  Lines or their profitability for Purchaser, or with respect to any forecasts, projections, statements  or information made available to Purchaser or any other Person (including Purchaser’s Affiliates  or Representatives) in connection with Purchaser’s review of the Northeast Homeowners Lines;  and (ii) any estimates, assumptions, projections and predictions contained or referred to in the  materials that have been provided or made available to Purchaser by or on behalf of Seller,  including any confidential information memorandum, the electronic data room and all  management presentations established or provided in connection with the transactions  contemplated by this Agreement or the other Transaction Documents, (A) are not and shall not  be deemed to be representations or warranties of any of Seller or any of its Affiliates and  (B) shall not form the basis, in whole or in part, for any claim against any of the Seller or any of  their respective Affiliates.  (c) Purchaser (i) has performed its own independent investigation, analysis  and assessment of the Renewal Rights, and that, during the course of conducting such  investigation, analysis and assessment, Purchaser has asked such questions, examined such  

 

  20  1006368970v9  documents, materials, and information, and performed such other investigations, as it deemed  appropriate in its own discretion, (ii) acknowledges that Seller has made no representation or  warranty (express or implied) as to the accuracy or completeness of any information (whether  written or oral) transmitted or made available to Purchaser or any of its Representatives, except  as expressly set forth in this Agreement, (iii) acknowledges that it has not relied on Seller’s or its  Representatives’ opinions or underwriting and actuarial criteria and analyses, and (iv) has  reached its own independent judgments to enter into and close this Agreement and the other  Transaction Documents based upon its own independent judgments and underwriting and  actuarial criteria and analyses.  SECTION 4.7 Financial Ability.  Purchaser has, and will have at the Closing,  all funds necessary to consummate the transactions contemplated by this Agreement and the  other Transaction Documents, and to pay all amounts contemplated to be paid on the Closing  Date pursuant to this Agreement and the Other Transaction Documents.  SECTION 4.8 Brokers and Financial Advisers.  No broker, finder or financial  adviser has acted directly or indirectly as such for, or is entitled to any compensation from,  Purchaser in connection with this Agreement, any of the other Transaction Documents or the  transactions contemplated hereby or thereby.  SECTION 4.9 Tax.  Purchaser is a “United States person” as defined in Section  7701(a)(30) of Code.  SECTION 4.10 NO OTHER REPRESENTATIONS OR WARRANTIES.   EXCEPT FOR THE REPRESENTATIONS AND WARRANTIES CONTAINED IN THIS  ARTICLE IV (AS MODIFIED BY THE PURCHASER DISCLOSURE SCHEDULE) AND IN  THE OTHER TRANSACTION DOCUMENTS, NEITHER PURCHASER NOR ANY OTHER  PERSON MAKES ANY OTHER EXPRESS OR IMPLIED REPRESENTATION OR  WARRANTY WITH RESPECT TO PURCHASER, AND PURCHASER DISCLAIMS ANY  OTHER REPRESENTATIONS OR WARRANTIES WHETHER MADE BY PURCHASER  OR ANY OF ITS AFFILIATES, OFFICERS, DIRECTORS, EMPLOYEES, AGENTS OR  REPRESENTATIVES.  ARTICLE V.  REPRESENTATIONS AND WARRANTIES OF PURCHASER PARENT  Except as set forth in the Purchaser Disclosure Schedule, Purchaser Parent hereby  represents and warrants to Seller as of the date hereof and as of the Closing Date (except to the  extent any such representations and warranties address matters only as of a particular date, in  which case such representations and warranties shall speak only as of such date) as follows:  SECTION 5.1 Organization, Standing and Authority.  Purchaser Parent is a  corporation duly organized and validly existing under the laws of Florida and has all requisite  power and authority to own, lease and operate its assets, properties and business and to carry on  the operations of its business as they are now being conducted, except where the failure to have  such authority would not, individually or in the aggregate, reasonably be expected to have a  Purchaser Material Adverse Effect.  Purchaser Parent is duly qualified to do business as a foreign  

 

  21  1006368970v9  corporation and is in good standing in each jurisdiction where such qualification is necessary,  except for those jurisdictions where the failure to be so qualified would not, individually or in the  aggregate, reasonably be expected to have a material adverse effect on Purchaser Parent’s ability  to perform its obligations under this Agreement.  SECTION 5.2 Authorization.  Purchaser Parent has all requisite corporate  power and authority to execute, deliver and perform its obligations under this Agreement.  This  Agreement has been duly executed and delivered by Purchaser Parent, and, subject to the due  execution and delivery by Seller, this Agreement is a valid and binding obligation of Purchaser  Parent, enforceable against Purchaser Parent in accordance with its terms, subject to the  Enforceability Exceptions.  SECTION 5.3 Actions and Proceedings.  As of the date hereof, there are no  outstanding orders, decrees or judgments by or with any Governmental Entity applicable to  Purchaser Parent or its properties or assets that, individually or in the aggregate, have a  Purchaser Material Adverse Effect.  As of the date hereof, there are no Actions pending or, to the  Knowledge of Purchaser, threatened against, at law or in equity, or before or by any  Governmental Entity or before any arbitrator of any kind which would, individually or in the  aggregate, reasonably be expected to have a Purchaser Material Adverse Effect.  SECTION 5.4 No Conflict or Violation.  The execution, delivery and  performance by Purchaser Parent of this Agreement and the consummation of the transactions  contemplated hereby in accordance with the terms and conditions hereof and thereof will not: (a)  violate any provision of the Organizational Documents of Purchaser Parent; (b) violate, conflict  with or result in the breach of any of the terms of, result in any modification of the effect of,  otherwise give any other contracting party the right to terminate or constitute (or with notice or  lapse of time or both, constitute) a default under, any Contract to which Purchaser Parent is a  party or by or to which its properties may be bound or subject; (c) violate any order, judgment,  injunction, award or decree of any arbitrator or Governmental Entity, or any agreement with, or  condition imposed by, any arbitrator or Governmental Entity, binding upon, Purchaser Parent;  (d) violate any Applicable Law; or (e) result in a breach or violation of any of the terms or  conditions of, constitute a default under, or otherwise cause an impairment of, any license or  authorization related to Purchaser Parent’s business or necessary to enable Purchaser Parent to  perform its obligations under this Agreement, except for any such violations, conflicts or  breaches which would not individually or in the aggregate reasonably be expected to have a  material adverse effect on Purchaser Parent’s ability to perform its obligations under this  Agreement.  No consent, approval or authorization of, or declaration or filing with, or notice to,  any Governmental Entity is required by or with respect to Purchaser Parent in connection with  the execution and delivery of this Agreement by Purchaser Parent, or the consummation by  Purchaser Parent of the transactions contemplated hereby, except for (x) the consents, approvals,  filings and notices set forth in Section 5.4 of the Purchaser Disclosure Schedule, and (y) any  other consents, approvals or authorizations which would not individually or in the aggregate  reasonably be expected to have a Purchaser Material Adverse Effect.  SECTION 5.5 Brokers and Financial Advisers.  No broker, finder or financial  adviser has acted directly or indirectly as such for, or is entitled to any compensation from,  

 

  22  1006368970v9  Purchaser Parent in connection with this Agreement, any of the other Transaction Documents or  the transactions contemplated hereby or thereby.  SECTION 5.6 Capital Structure; Shares.  (a) The authorized capital stock of Purchaser Parent as of the date hereof  consists of (i) 40,000,000 shares of common stock, no par value, of which, as of the date hereof,  7,976,717 shares are issued and outstanding, (ii) 1,500,000 shares of 7% Series A cumulative  convertible preferred stock, no par value, of which, as of the date hereof, no shares are issued  and outstanding, (iii) 400,000 shares of Series B junior participating preferred stock, no par  value, of which, as of the date hereof, no shares are issued and outstanding, and (iv) 18,100,000  shares of preferred stock, no par value, of which, as of the date hereof, no shares are issued and  outstanding, and which together constitute all of the equity interests of Purchaser Parent (the  “Purchaser Parent Existing Shares”).  Except for the Purchaser Parent Existing Shares, the senior  convertible notes disclosed in the Purchaser SEC Documents, shares reserved and stock options  issued to employees pursuant to Purchaser Parent’s 2012 Omnibus Incentive Plan, no shares of  capital stock or other equity interests of Purchaser Parent are issued, reserved for issuance or  outstanding.  All outstanding shares of capital stock of Purchaser Parent were duly authorized  and validly issued and are fully paid and non-assessable, and are not subject to any preemptive  rights.  Except as set forth on Section 5.6(a) of the Purchaser Disclosure Schedule, there are no  restrictions upon the voting or transfer of the Purchaser Parent Existing Shares pursuant to the  Organizational Documents of Purchaser Parent or any agreement to which Purchaser Parent is a  party.  Upon consummation of the transactions contemplated by this Agreement in the manner  contemplated hereby, the Shares will be duly authorized and validly issued, fully paid and non- assessable, not subject to any preemptive rights, and shall be free and clear of all pledges, liens,  charges, encumbrances and security interests of any kind (collectively, “Liens”) (other than  transfer restrictions under securities Laws) and with no restrictions on the voting rights or  transfer thereof and other incidents of beneficial ownership pertaining thereto.  There are no  securities, options, warrants, rights, or other commitments or agreements (other than this  Agreement) of any kind to which Purchaser Parent is a party or by which it is bound obligating it  to issue, sell or deliver shares of capital stock or other equity interests of Purchaser Parent.  (b) Purchaser Parent has, and at the Closing will have, an adequate amount of  authorized shares of common stock to effect the issuance of the Shares in accordance with this  Agreement. At the Closing, the Seller will be vested with good and marketable title in and to all  of the Shares, free and clear of all Liens (other than transfer restrictions under securities Laws).  (c) Except as set forth in the Purchaser SEC Documents, as of the date hereof,  Purchaser Parent has no material outstanding indebtedness for borrowed money and there are no  material outstanding guarantees by Purchaser Parent of indebtedness for borrowed money of any  other Person.  SECTION 5.7 SEC Documents.  (a) Since December 31, 2018, Purchaser Parent has timely filed all  registration statements and other material reports and documents (including any amendments  thereto) required to be filed with the SEC under the Securities Act and the Exchange Act and the  

 

  23  1006368970v9  rules and regulations of the SEC (the “Purchaser SEC Documents”), and all such Purchaser SEC  Documents have complied in all material respects, as of their respective filing dates and effective  dates, and the date of the most recent amendment thereto, as the case may be, with all applicable  requirements of the Securities Act and the Exchange Act.  As of their respective filing and  effective dates, and the date of the most recent amendment thereto, none of the Purchaser SEC  Documents contained an untrue statement of a material fact or omitted to state a material fact  required to be stated therein or necessary in order to make the statements therein, in light of the  circumstances under which they were made, not misleading.  (b) The audited consolidated financial statements contained or incorporated  by reference in Purchaser Parent’s Annual Report on Form 10-K for the year ended December  31, 2019 and the unaudited interim financial statements included in Purchaser Parent’s most  recent Quarterly Reports on Form 10-Q have been prepared in conformity with GAAP applied  on a consistent basis, and, together with the notes thereto, present fairly the consolidated  financial position of Purchaser Parent and its subsidiaries at the dates shown and the consolidated  results of their operations, changes in shareholders’ equity and cash flows for the periods then  ended.  Each interim financial statement as of, and for, periods ending after December 31, 2019  included in Purchaser Parent’s Quarterly Reports on Form 10-Q, as may be filed with the SEC  from time to time, shall include all adjustments necessary for a fair presentation of the financial  position of Purchaser Parent and its subsidiaries and the results of their operations for the interim  periods presented, subject to normal, recurring year-end adjustments and the omission of  footnote disclosure.  SECTION 5.8 NO OTHER REPRESENTATIONS OR WARRANTIES.   EXCEPT FOR THE REPRESENTATIONS AND WARRANTIES CONTAINED IN THIS  ARTICLE V (AS MODIFIED BY THE PURCHASER DISCLOSURE SCHEDULE) AND IN  THE OTHER TRANSACTION DOCUMENTS, NEITHER PURCHASER PARENT NOR  ANY OTHER PERSON MAKES ANY OTHER EXPRESS OR IMPLIED  REPRESENTATION OR WARRANTY WITH RESPECT TO PURCHASER PARENT, AND  PURCHASER PARENT DISCLAIMS ANY OTHER REPRESENTATIONS OR  WARRANTIES WHETHER MADE BY PURCHASER PARENT OR ANY OF ITS  AFFILIATES, OFFICERS, DIRECTORS, EMPLOYEES, AGENTS OR REPRESENTATIVES.  ARTICLE VI.  COVENANTS  SECTION 6.1 Operation of the Northeast Homeowners Lines.  During the  period from the date of this Agreement until the Closing Date, except (a) as required by  Applicable Law or expressly contemplated by the terms and conditions of this Agreement or any  other Transaction Document, (b) as set forth on Section 6.1 of the Seller Disclosure Schedule, (c)  to the extent Purchaser otherwise consents in advance, (d) for actions taken in the ordinary  course of business or (e) any Contagion Event Measures or any change in Applicable Law or  policy as a result of or related to any Contagion Event, Seller Parent, Seller and UIM (x) shall  generally operate the Northeast Homeowners Lines business in the ordinary course of business  consistent with its past practices; and (y) shall not do any of the following:   

 

  24  1006368970v9  (i) fail to pay or satisfy when due any material liability with respect to  the Insurance Policies;   (ii) modify or amend in any material respect or extend or terminate  any Applicable Reinsurance Agreement or waive, release or assign any material rights or  claims thereunder or enter into any Contract which would, if entered into prior to the date  hereof, have been an Applicable Reinsurance Agreement;   (iii) make any material changes in claims administration, reinsurance,  reserving, actuarial, underwriting, claims or accounting practices or policies applicable to  the Insurance Policies, except as required by SAP or any insurance regulatory authority  with jurisdiction over Seller;   (iv) increase the base salary (or wages) or target incentive  compensation opportunity paid or payable to any Covered Employee, except for increases  in the ordinary course of business; or  (v) enter into any Contract or make any commitment with respect to  any of the foregoing.  SECTION 6.2 General Cooperation.    (a) Upon the terms and subject to the conditions and other agreements set  forth in this Agreement, each of the parties (i) shall use commercially reasonable efforts to take,  or cause to be taken, all actions, and to do, or cause to be done, all things necessary, proper or  advisable to consummate and make effective, as soon as practicable after the date of this  Agreement, the transactions contemplated by this Agreement and the other Transaction  Documents to which it is a party and (ii) (A) shall refrain from taking any actions that would  reasonably be expected to impair, delay or impede the Closing and (B) not in limitation of any  other provision of this Agreement, shall use commercially reasonable efforts to cause all the  conditions to the obligations of the parties to consummate the transactions contemplated by this  Agreement to be met as soon as reasonably practicable.  (b) Each party shall, in connection with the efforts referenced in  Section 6.2(a), keep the other party reasonably apprised of the status of the matters relating to the  completion of the transactions contemplated by this Agreement and the other Transaction  Documents to which it is a party, including by providing the other party with copies of any  orders or authorizations necessary in order to consummate the transactions contemplated by the  Transaction Documents to which it is a party.  (c) Each of Seller, Seller Parent and UIM shall cause its Affiliates to  cooperate with Purchaser and its Affiliates in connection with fulfilling its obligations and duties  arising under this Agreement, and each of Seller, Seller Parent and UIM will enter into and  execute amendments to any contracts with such Affiliates as may be necessary or appropriate to  fulfill the terms of this Agreement. At a minimum, such amendments shall cause such Affiliates  to assign any right, title, or interest they may have to Renewal Rights, except as set forth in this  Agreement.  

 

  25  1006368970v9  (d) UIM agrees to be bound by any covenant, duty or obligation applicable to  the Seller under this Agreement to the extent such covenant, duty or obligation requires consent,  cooperation or performance by UIM in order for Seller to comply with such covenant, duty or  obligation. If any provision of this Agreement conflicts with any provision of that certain  agreement, dated March 12, 1999, as amended from time to time, between Seller and the UIM,  Seller and UIM hereby agree that the UIM Agreement shall be deemed to be waived to avoid any  such conflict with the provisions of this Agreement.  SECTION 6.3 Regulatory Filings.  (a) Seller and Purchaser shall each use their respective commercially  reasonable efforts, and shall cooperate fully (i) to comply as promptly as practicable with all  governmental requirements applicable to the transactions contemplated by this Agreement or any  other Transaction Document to which it is a party and (ii) to obtain as promptly as practicable all  necessary permits, orders or other consents, approvals or authorizations of Governmental Entities  necessary in connection with the consummation of the transactions contemplated by this  Agreement or any other Transaction Document to which it is a party (each, a “Governmental  Authorization”).  In connection therewith, Seller and Purchaser shall make or cause to be made  all legally required filings as promptly as practicable in order to facilitate prompt consummation  of the transactions contemplated by this Agreement or any other Transaction Document to which  it is a party, shall provide such information and communications to Governmental Entities as  such Governmental Entities may request, shall take all steps that are necessary, proper or  advisable to avoid any Action by any Governmental Entity with respect to the transactions  contemplated by this Agreement or any other Transaction Document to which it is a party, shall  defend or contest in good faith any Action by any third party (excluding any Governmental  Entity) challenging this Agreement, any of the other Transaction Documents to which it is a  party or the transactions contemplated hereby or thereby, or that could otherwise prevent,  impede, interfere with, hinder or delay in any material respect the consummation of the  transactions contemplated hereby or thereby, including by using commercially reasonable efforts  to have vacated or reversed any stay or temporary restraining order entered with respect to the  transactions contemplated by this Agreement or any other Transaction Document to which it is a  party in connection with any Action brought by any third party (excluding any Governmental  Entity).  Each of Seller and Purchaser shall not take or cause to be taken any action that, to its  Knowledge, would be reasonably likely to materially delay or impair the receipt of any such  permits, orders or other consents from a Governmental Entity.  (b) Without limiting the generality of the foregoing, within twenty (20)  Business Days following the date hereof, Seller shall make all required filings and notifications  set forth on Section 6.3 of the Seller Disclosure Schedule.  (c) Subject to Applicable Laws relating to the sharing of information, each of  the parties shall promptly advise each other upon receiving any communication from any  Governmental Entity whose consent, approval, waiver or authorization is required to  consummate the transactions contemplated by this Agreement and the other Transaction  Documents, including promptly furnishing each other copies of any written or electronic  communication, and shall promptly advise each other when any such communication causes  such party to believe that there is a reasonable likelihood that any such consent, approval, waiver  

 

  26  1006368970v9  or authorization will not be obtained or that the receipt of any such consent, approval, waiver or  authorization will be materially delayed or conditioned.  Prior to the Closing, Seller and  Purchaser shall not, and shall not permit any of their respective Representatives to participate in  any live or telephonic meeting with any Governmental Entity in respect of any consent, approval,  waiver or authorization or investigation or other inquiry (other than for routine or ministerial  matters or a telephone call initiated by such Governmental Entity and not scheduled in advance)  relating to the transactions contemplated by this Agreement and the other Transaction  Documents, unless it consults with the other party in advance and, to the extent permitted by  Applicable Law and by such Governmental Entity, gives the other party the opportunity to attend  and participate in such meeting.  (d) Notwithstanding anything to the contrary in this Agreement, neither party  nor any of their respective Affiliates shall be required to disclose pursuant to this Section 6.3  (i) any information that in the reasonable judgment of such party would result in the disclosure of  any trade secrets of such party or Third Parties, (ii) any privileged information or confidential  competitive information or (iii) any information to the other party or any of its Affiliates that in  the reasonable judgment of such non-disclosing party would violate any of its contractual  obligations with respect to confidentiality.  Neither party shall be required to comply with any of  the foregoing provisions of this Section 6.3(d) or Section 6.3(c) to the extent that such  compliance would be prohibited by Applicable Law.  SECTION 6.4 No Provision of Services and Systems. Except in respect of the  services provided by Seller in accordance with Article 17 of the Reinsurance Agreement,  Purchaser shall be solely responsible for obtaining, and shall use commercially reasonable efforts  to obtain, at Purchaser’s sole cost and expense, any licenses, services and systems required to  perform Purchaser’s obligations following the Closing in connection with the transactions  contemplated by this Agreement.   SECTION 6.5 Reinsurance Agreement.  Prior to the Closing Date, the parties  shall cooperate and use commercially reasonable efforts to take all actions which the  Reinsurance Agreement states that the parties shall take or shall have taken prior to the Closing  Date.  SECTION 6.6 Confidentiality.    (a) The terms of the confidentiality agreement, dated October 14, 2020 (the  “Confidentiality Agreement”), between the Raymond James & Associates, Inc., on behalf of  Seller, and Purchaser Parent are incorporated into this Agreement by reference and shall continue  in full force and effect until the Closing, at which time the confidentiality obligations under the  Confidentiality Agreement shall terminate; provided, however, to the extent of any conflict  between the provisions of the Confidentiality Agreement and the provisions of this Section 6.6,  the provisions of this Section 6.6 shall govern. If, for any reason, the transactions contemplated  by this Agreement are not consummated, the Confidentiality Agreement shall nonetheless  continue in full force and effect in accordance with its terms.  (b) Each of Seller, Seller Parent and UIM, on the one hand, and Purchaser and  Purchaser Parent, on the other hand (each, the “Receiving Party”), hereby covenants and agrees,  

 

  27  1006368970v9  each on behalf of itself and on behalf of their respective Affiliates, that from and after the  Closing Date, the Receiving Party and its Affiliates will not disclose, give, sell, use or otherwise  divulge any Confidential Information (defined below) of the other party (the “Disclosing Party”)  or permit their respective Representatives to do the same, except that each Receiving Party may  disclose such Confidential Information or portions thereof (i) if legally compelled to do so, (ii) to  the extent necessary for the performance of such Receiving Party’s obligations under this  Agreement or the other Transaction Documents, (iii) to the extent necessary for the enforcement  of the rights of such Receiving Party and its Affiliates under this Agreement or the other  Transaction Documents, (iv) to those of such Receiving Party’s Affiliates, and to their respective  Representatives in each case who need to know such information for the foregoing purposes or  (v) as required under any Applicable Law. If the Receiving Party or its Affiliates, or any of their  respective Representatives become legally compelled to disclose any Confidential Information,  the Receiving Party shall provide the Disclosing Party with prompt written notice of such  requirement so that the Disclosing Party may seek a protective order or other remedy or waive  compliance with this Section 6.6. In the event that such protective order or other remedy is not  obtained, or the Disclosing Party waives compliance with this Section 6.6, the Receiving Party or  its Affiliates, as applicable, shall furnish only that portion of Confidential Information which is  legally required to be provided and exercise its commercially reasonable efforts to obtain  assurances that appropriate confidential treatment will be accorded the Confidential Information.  (c) The Receiving Party, on behalf of itself and on behalf of its Affiliates and  their respective Representatives, acknowledges that a breach of its obligations under this Section  6.6 may result in irreparable injury to the Disclosing Party. In the event of the breach by the  Receiving Party or any of its Affiliates or their respective Representatives of any of the terms  and conditions of this Section 6.6 to be performed, the Disclosing Party shall be entitled to the  remedies provided in Section 11.9.  (d) For the purposes of this Agreement, “Confidential Information” means all  information of any kind concerning the Disclosing Party or any of its Affiliates obtained directly  or indirectly from the Disclosing Party or any of its Affiliates or Representatives in connection  with the transactions contemplated by this Agreement and the other Transaction Documents,  except information (i) ascertainable or obtained from public or published sources, (ii) received  from a third party who is under no obligation to keep such information confidential, (iii) which is  or becomes known to the public (other than through a breach of this Agreement or any other  confidentiality or non-disclosure obligation of any Person), (iv) which was in the Receiving  Party’s possession prior to disclosure thereof to the Receiving Party and which was not subject to  any obligation to keep such information confidential; or (v) which is independently developed by  the Receiving Party or its Affiliates without the use or benefit of any information that would  otherwise be Confidential Information.  SECTION 6.7 Further Assurances.  At any time after the Closing Date, each  party shall or shall cause its Affiliates to promptly execute, acknowledge and deliver any  assurances or documents reasonably requested by the other party and necessary for each party as  to satisfy its obligations hereunder or to give effect to the provisions of this Agreement and the  other Transaction Documents to which it is a party and the transactions contemplated hereby and  thereby.  

 

  28  1006368970v9  SECTION 6.8 Public Announcement.  The parties shall consult with each other  before issuing any press release or other public statement or communication with respect to this  Agreement, the Transaction Documents or the transactions contemplated hereby or thereby, and  each party will accept reasonable comments it deems appropriate or desirable to any such  release, statement or communication; provided, that the parties hereto may, without the prior  consent of the other parties (but after prior consultation, to the extent practicable in the  circumstances), issue such communication or make such public statement as may be required by  Applicable Law or stock exchange rules.  The parties shall cooperate in good faith to jointly  develop all public communications.  SECTION 6.9 Employee Matters.  (a) No later than sixty (60) calendar days after the Closing, Purchaser or its  Affiliate may offer employment to any Covered Employees that Purchaser or its Affiliate wishes  to employ as of the Closing, and any such Covered Employees who accept those offers shall be  transferred to Purchaser or its Affiliate as of a date to be mutually agreed between Seller, UIM  and the Purchaser or Purchaser’s Affiliate (the “Employment Transfer Date”). Any other  Covered Employees who do not receive an offer from Purchaser or do not accept an offer of  employment as of the Employment Transfer Date shall not transfer to Purchaser (or its Affiliate)  and shall remain employed by Seller, UIM or such other Affiliate of Seller as of the Employment  Transfer Date, and Seller, UIM or such other Affiliate of Seller, as applicable, shall be  responsible for all costs, including severance (if applicable) relating to those non-transferred  Covered Employees.  (b) Nothing herein expressed or implied in this Section 6.9 shall confer upon  any Covered Employee or legal representatives thereof, any rights or remedies, including,  without limitation, right to employment or continued employment for any specified period, under  or by reason of this Agreement.  The parties hereto acknowledge and agree that all provisions  contained in this Section 6.9 are included for the sole benefit of the parties hereto, and that  nothing in this Agreement, whether express or implied, shall create any third-party beneficiary or  other rights in any other Person, including any Covered Employee or any dependent or  beneficiary thereof.  ARTICLE VII.  RENEWAL RIGHTS  SECTION 7.1 General.  (a) The parties hereto agree that the purpose of this Agreement is to transfer  the Renewal Rights to the Purchaser and to effectuate the issuance or renewal by Purchaser or its  Affiliate of Insurance Policies as promptly following the Closing Date as is reasonably  practicable, subject in all cases to Applicable Law and the terms of this Agreement and the other  Transaction Documents.  Purchaser will be entitled to assign portions of the Renewal Rights to  an Affiliate.  (b) The parties hereto intend that (i) to the extent a Purchaser Replacement  Stub Policy is permitted by Applicable Law, Seller Parent shall, and shall cause Seller and UIM  

 

  29  1006368970v9  to, cancel or otherwise cease renewing Insurance Policies effective as of the Policy Replacement  Date, and Purchaser or its Affiliate will issue Purchaser Replacement Stub Policies for such  Insurance Policies, and (ii) in all other cases to the extent permitted by Applicable Law, Seller  Parent shall, and shall cause Seller and UIM to cease renewing Insurance Policies no later than  the applicable Non-Renewal Date of each Insurance Policy, and Purchaser or its Affiliate will  offer to issue a Purchaser Replacement Policy for such Insurance Policies no later than the  applicable Non-Renewal Date of each such Insurance Policy.  (c) The parties hereto agree to cooperate and consult in good faith with one  another to the extent necessary or desirable to effectuate the foregoing.  SECTION 7.2 Withdrawal Plan.  (a) Notwithstanding anything to the contrary in this Agreement, each of Seller  Parent, Seller, UIM and Purchaser shall, as soon as reasonably practicable following the date of  this Agreement, consult and reasonably cooperate and collaborate with one another in connection  with the implementation of a withdrawal plan (the “Withdrawal Plan”) to obtain any approvals or  non-disapprovals from Governmental Entities set forth on Section 7.2 of the Seller Disclosure  Schedule in order to achieve the successful and prompt withdrawal of Seller from the Northeast  Homeowners Lines in the Territory, and in a manner designed to minimize any disruption to the  conduct of the Northeast Homeowners Lines by the parties and any delay or impairment in the  ability of the parties to consummate the transactions contemplated under this Agreement and the  other Transaction Documents.  The terms and conditions of Section 6.3(c) and Section 6.3(d)  hereof shall apply to this Section 7.2.  (b) For the avoidance of doubt, the parties acknowledge and agree that each  shall (i) in the first instance, use their commercially reasonable efforts to obtain the approval of  each applicable Governmental Entity to allow Seller to cancel or otherwise cease renewing  Insurance Policies and for Purchaser or its Affiliate to issue Purchaser Replacement Stub Policies  as contemplated by Section 7.1(b)(i) and (ii) to the extent that a Governmental Entity  disapproves or it becomes reasonably likely that a Governmental Entity will disapprove or  otherwise not approve the use of Purchaser Replacement Stub Policies as contemplated by  Section 7.1(b)(i), then the parties shall use their commercially reasonable efforts to implement  the Withdrawal Plan to allow Seller to cease renewing Insurance Policies no later than the  applicable Non-Renewal Date of each Insurance Policy, and Purchaser or its Affiliate to offer to  issue a Purchaser Replacement Policy (excluding Purchaser Replacement Stub Policies) as  contemplated by Section 7.1(b)(ii).  SECTION 7.3 Information Concerning the Insurance Policies.  (a) Seller Parent, Seller and UIM shall provide Purchaser no more than one  (1) Business Day prior to the Closing Date (i) a list, which is true and complete in all material  respects, of the Insurance Policies that are either (x) in force on such date or (y) lapsed as of such  date but subject to reinstatement, as well as (ii) a list of all still in-force policies that were not  renewed during the 90 days preceding such date but that would have been Insurance Policies had  they been in effect on the Closing Date. In addition, on the Closing Date subject to Applicable  Law, Seller Parent, Seller and UIM will deliver to Purchaser via electronic media substantially  

 

  30  1006368970v9  all of Seller Parent’s, Seller’s and UIM’s data and information in their possession that has been  collected or produced by them primarily in connection with Insurance Policies since January 1,  2016, including, without limitation, data and information primarily relating to claims,  policyholder applications, underwriting, policy administration and property inspections with  respect to the Insurance Policies.  (b) Subject to Applicable Law and the Seller Privacy Policies, Seller Parent,  Seller and UIM shall furnish any additional information as may be reasonably requested by  Purchaser to exercise its Renewal Rights, including claims files that are complete in all material  respects, the name and address of the policyholder, the policy number, the coverage provided by  the policy, the total premium for the policy, the amount of premium paid by the policyholder, the  amount of unpaid premium, the terms of any payment plan applicable to the policy, the amount  of unearned premium reserves attributed to the policy, and name and contact information for the  policyholder’s agent of record.   (c) In cooperation with Purchaser, each of Seller Parent, Seller and UIM shall  use commercially reasonable efforts to ensure that the reinsurers, reinsurance intermediaries and  other Persons relating to the Insurance Policies are notified concerning the transactions  contemplated hereby to the extent reasonably requested by the Purchaser to facilitate the  Purchaser’s exercise of the Renewal Rights.  (d) Purchaser shall not, and will not permit any of its Affiliates or any of their  respective Representatives, to use any of the information referred to in this Section 7.3, including  any information relating to Policyholders, Producers, and/or the Insurance Policies, in a manner  that would (i) cause Seller Parent, Seller or UIM or their Affiliates to be in breach of any  Contract with any Person or Applicable Law, and (ii) be in violation of any Applicable Law  including any applicable state or federal privacy laws. Except as expressly set forth in Article III  of this Agreement, Seller Parent, Seller and UIM shall have no Liability for the accuracy of the  data provided to Purchaser under this Section 7.3.  (e) Nothing herein shall require Seller Parent, Seller or UIM or their Affiliates  to disclose any information to Purchaser, its Affiliates or any of their respective Representatives  if such information is not primarily related to the Insurance Policies or to the extent any such  information related to the Insurance Policies cannot in the exercise of good faith by Seller Parent,  Seller and UIM and their Affiliates be segregated or separated, without material cost or effort,  from information that they believe in good faith is not permitted to be disclosed or transferred to  Purchaser or its Affiliates pursuant to applicable Law or that would otherwise reveal sensitive  competitive information concerning the business of Seller Parent, Seller and UIM and hteir  Affiliates (other than the Insurance Policies).  SECTION 7.4 Non-Renewals.    (a) As soon as practicable following the Closing Date and in any event no  later than (i) to the extent the applicable Governmental Entity with jurisdiction over Insurance  Policies issued or written within the Territory has approved the cancellation of an Insurance  Policy and issuance of a Purchaser Replacement Stub Policy prior to the first renewal date of  such Insurance Policy, as soon as practicable following the approval of such Governmental  

 

  31  1006368970v9  Entity or such other date as mutually agreed by the parties, (ii) to the extent the applicable  Governmental Entity with jurisdiction over Insurance Policies issued or written within the  Territory, the first renewal date of each Insurance Policy occurring after the Closing Date or (iii)  with respect to such Insurance Policies as remain in effect with Seller subsequent to such  renewal date on account of any Permitted Exception, the next such policy renewal date or, if that  is not permitted on account of a Permitted Exception, the earliest following policy renewal date  on which the Insurance Policy may be non-renewed in accordance with Applicable Law and the  terms of this Agreement and the other Transaction Documents (as applicable, the “Non-Renewal  Date”), Seller, Seller Parent, UIM and Purchaser shall cooperate, as permitted or required by  Applicable Law, to send to each Policyholder selected by the Purchaser a written notice, the  forms of which shall be agreed among the parties, notifying such Policyholder of the non- renewal or cancellation of such Insurance Policy by Seller. The parties shall cooperate, as  permitted or required by Applicable Law, to send a copy of such non-renewal or cancellation  notice to the Producer of such Insurance Policy and, subject to Applicable Law, shall also send a  notice, the forms of which shall be agreed among the parties following the date hereof, to such  Producer, informing such Producer of the availability of replacement insurance from Purchaser   or its Affiliate and encouraging such Producer to place such insurance with Purchaser or its  Affiliate. For the avoidance of doubt, Seller, Seller Parent or UIM will produce and send the  notices contemplated by this Section 7.4(a) at its own expense, and all postage costs and other  expenses relating to the delivery of such notices shall be borne by Seller, Seller Parent or UIM.  (b) Notwithstanding anything in this Agreement to the contrary: (i) except to  the extent required by Applicable Law, in no event shall Seller be obligated under this  Agreement to renew any Insurance Policy subsequent to the applicable Non-Renewal Date, or to  send any notices to Policyholders or their appointed Producers or otherwise attempt to encourage  Policyholders to obtain coverage with Purchaser after such date; and (ii) with respect to  Insurance Policies covering risks located in a Territory in which approvals or non-disapprovals  from Governmental Entities set forth on Section 7.2 of the Seller Disclosure Schedule are  received, Seller shall renew or non-renew, as the case may be, such Insurance Policies in  accordance with Applicable Law.  SECTION 7.5 Purchaser Replacement Policies.  In connection with the transfer  hereunder of the Renewal Rights to Purchaser, Purchaser agrees, from and after the Closing  Date, that:  (a) Purchaser or its Affiliate shall quote, write and issue, and/or cause to be  quoted, written or issued, the Purchaser Replacement Policies to every Policyholder, as provided  herein, and effect the orderly transition of the Insurance Policies to Purchaser Replacement  Policies on (i) with respect to Purchaser Replacement Stub Policies, approved or authorized  policy forms and rates of Purchaser or its Affiliate that reflect substantially the same terms,  forms, coverages and rates as those applicable to the Insurance Policies as of the Closing Date  and (ii) with respect to other Purchaser Replacement Policies, approved or authorized policy  forms and rates of Purchaser or its Affiliate in each case subject to exceptions for material  misstatement, nonpayment of premium, substantial change in the risk or fraud, in each case in  accordance with Applicable Law, the Withdrawal Plan and the terms of the Insurance Policies,  this Agreement and the other Transaction Documents.  

 

  32  1006368970v9  (b) Purchaser and its Affiliate (as applicable) shall use commercially  reasonable efforts to possess, secure, and maintain, in full force and effect, (i) all material  licenses, authorizations and permits, and (ii) all approved insurance forms and rates, in both the  case of (x) and (y), necessary for Purchaser or its Affiliate as applicable to write, issue, renew  and service the Purchaser Replacement Policies, as contemplated herein, in each jurisdiction in  the Territory in which Purchaser or its Affiliate is required by Applicable Law to possess such  license, authorization, permit, forms and rates in order to write, issue, renew and service the  Purchaser Replacement Policies, as provided herein.  (c) Promptly after the issuance of a Purchaser Replacement Policy by the  Purchaser or its Affiliates, the Seller will pay to the Purchaser or its Affiliates the unearned  premium, less the unearned agent commission attributable to the Insurance Policy canceled and  replaced by such Purchaser Replacement Policy, and following such payment the Seller shall  have no liability for any return premium or agent commission obligation due to or from the  Producer of such Insurance Policy.  It  is the intent of the parties to make the replacement policy  process seamless to the policyholder and the agent by having the Seller transfer to the Purchaser  or its Affiliates the rights and obligations with respect to return premium and agent commission  payments typically due to or from a Producer in partial consideration for the Renewal Rights and  the issuance of a Purchaser Replacement Policy, including a Purchaser Replacement Stub  Policy.  This Section 7.5(c) shall not be applicable with respect to any Insurance Policy that is  cancelled or non-renewed with no Purchaser Replacement Policy issued in respect thereof.  SECTION 7.6 No Representations on Market Reaction.  Notwithstanding  anything contained herein to the contrary, Purchaser acknowledges and agrees that, except as  expressly set forth in Article III hereof, no representation or warranty (express or implied) or  covenant, or except as expressly set forth in Article IX hereof, no indemnity, is made herein, or  has been made, by Seller, Seller Parent or UIM or their Affiliates, or their Representatives, that,  regardless of whether the public becomes aware of the proposed transactions contemplated by  this Agreement prior to, on or after the Closing Date:  (a) any Producer, Policyholder, customer, client, or vendor relationships of  Seller, Seller Parent or UIM or any of their Affiliates, or any other business relationships of  Seller, Seller Parent or UIM or any of their Affiliates or other service providers, will or are likely  to continue to do business with Purchaser and/or its Affiliates in the same manner as such  business has been conducted historically with Seller, Seller Parent and UIM and their Affiliates,  whether as a result of the transactions contemplated by this Agreement or otherwise;  (b) the general reaction in the marketplace of third parties (including  Producers, Policyholders, customers, clients and business prospects) to the sale of the Renewal  Rights to Purchaser hereunder will be favorable; and  (c) any Covered Employee will accept or continue in employment with  Purchaser or its Affiliates at or after the Employment Transfer Date.  SECTION 7.7 No Infringement of Producer Rights.  Notwithstanding anything  contained herein to the contrary, Purchaser acknowledges and agrees that neither Seller, Seller  Parent nor UIM nor any of their Affiliates has the power or ability to require any Policyholder or  

 

  33  1006368970v9  Producer to renew, cancel or rewrite any Insurance Policy(ies) or offer to renew, cancel or  rewrite any Insurance Policy(ies) with Purchaser or its Affiliates upon expiration or otherwise or  to cause any Producer to place or offer to place any Purchaser Replacement Policies with  Purchaser or its Affiliates.  Nothing contained in this Agreement shall impair any rights that the  Producers have to renewal rights or expirations with respect to the Insurance Policies or the  Purchaser Replacement Policies by Applicable Law or contract.  SECTION 7.8 No Limitations on Seller Parties’ Operations.  Nothing in this  Agreement shall limit in any way Seller’s, Seller Parent’s, UIM’s and/or their Affiliates’ ability  to reinsure, merge, sell, acquire, consolidate, restructure, or reorganize, or take any actions  similar to or in furtherance of the foregoing.  SECTION 7.9 Noncompetition.  For a period from the Closing Date to July 1,  2024, each of Seller, Seller Parent, and UIM on behalf of itself and each of its controlled  subsidiaries (each, a “Restricted Person”), shall not, directly or indirectly, including without  limitation through a joint venture, participation as a shareholder, as an owner of equity interest in  any Person, or by contract with or management of any person, engage in marketing, selling,   writing, renewing, or servicing (other than the servicing of those Insurance Policies existing as of  the Closing Date or renewals of such Insurance Policies required by Applicable Law or as  otherwise provided by the Transaction Documents) any insurance contracts, policies, certificates,  binders, slips, covers or other agreements of insurance in the Northeast Homeowners Lines.  A  “Restricted Person” shall not include any Person once such Person is no longer a controlled  subsidiary of Seller, Seller Parent or UIM.  For the avoidance of doubt, nothing contained in this  Section 7.9 shall be construed to restrict: (i) Seller Parent’s, Seller’s, UIM’s or their Affiliates’  commercial lines business within the Territory either in the present or in the future; (ii) Seller,  Seller Parent, UIM and/or their Affiliates from owning (in the aggregate), either in the present or  in the future, less than twenty percent (20%) of a Person which, either in the present or in the  future, writes, renews, or services any insurance contracts, policies, certificates, binders, slips,  covers or other agreements of insurance in the Northeast Homeowners Lines; provided that such  Person shall not be permitted to sell, market or service any such insurance contracts, policies,  certificates, binders, slips, covers or other agreements of insurance in the Northeast Homeowners  Lines in the name of Seller Parent, Seller, UIM or their current or future Affiliates; and provided  further that none of Seller Parent, Seller, UIM or their current or future Affiliates perform  marketing, sales or servicing on behalf of such Person; or (iii) Seller, Seller Parent, UIM and/or  their Affiliates from seeking and obtaining excess and surplus lines authority to write, renew, or  service any insurance contracts, policies, certificates, binders, slips, covers or other agreements  of insurance in any line of business, other than the Northeast Homeowners Lines.  SECTION 7.10 Audit and Inspection Rights.  Seller, Seller Parent, UIM and their  Affiliates or their authorized Representatives shall have access to the books and records of  Purchaser on matters relating to the Replacement Insurance Policies and Purchaser Replacement  Premium upon reasonable advance written notice to Purchaser and at reasonable times during the  regular business hours of Purchaser, at the location where such books and records are maintained  in the ordinary course of business, for the purpose of obtaining information concerning this  Agreement or the subject matter thereof. Likewise Purchaser, its Affiliates and Representatives  shall have access to the books and records of Seller, Seller Parent and UIM upon reasonable  advance written notice to such party and at reasonable times during the regular business hours of  

 

  34  1006368970v9  such party, at the location where such books and records are maintained in the ordinary course of  business, for the purpose of, subject to Section 7.3(e), obtaining information concerning this  Agreement or the subject matter thereof. With respect to the audit and inspection rights  hereunder granted to Seller, Seller Parent, UIM and Purchaser, as applicable, such access shall  not unreasonably interfere with the conduct of business of the other party, and be given in a  manner to ensure the health and safety of any employee of such party in light of any Contagion  Event or applicable Contagion Event Measures (provided, further, that Seller, Seller Parent, UIM  and Purchaser, as applicable, shall use commercially reasonable efforts to allow for such access  or disclosure in a manner that does not jeopardize such health and safety). It is understood that  reasonable advance written notice shall not be less than five (5) business days. Seller, Seller  Parent, UIM and Purchaser and their Affiliates or their authorized Representatives may make  copies of records related to this Agreement, but at their sole expense. The audit and inspection  rights provided by this Section 7.10 will expire January 1, 2023.  ARTICLE VIII.  CONDITIONS PRECEDENT  SECTION 8.1 Conditions to Seller Parties’ Obligations.  The obligations of  Seller, Seller Parent and UIM to consummate the transactions contemplated hereby and the other  actions to be taken by Seller, Seller Parent or UIM at the Closing are subject to the satisfaction or  waiver by Seller, Seller Parent and UIM, on or prior to the Closing Date, of the following  conditions:  (a) All Governmental Authorizations required in connection with the  transactions contemplated hereby set forth in Section 6.3 of the Seller Disclosure Schedule, shall  have been obtained or made and shall be in full force and effect and all waiting periods required  by Applicable Law shall have expired or been terminated.  (b) No temporary restraining order, preliminary or permanent injunction or  other order issued by any court of competent jurisdiction and no statute, rule or regulation of any  Governmental Entity preventing the consummation of the purchase and sale of the Shares or any  other transaction contemplated hereby or by any other Transaction Document shall be in effect;  provided, however, that the party invoking this condition shall have used commercially  reasonable efforts to have any such order or injunction vacated.  (c) No Action brought by any Governmental Entity shall be pending before  any Governmental Entity that has the effect, or would be reasonably likely to have the effect if  determined adversely, of preventing the consummation of any transaction contemplated hereby  or by the other Transaction Documents; and no Action brought by any third party that is  reasonably likely to result in one of the foregoing effects shall be pending before any  Governmental Entity.  (d) Purchaser and Purchaser Parent shall have delivered or caused to be  delivered each of the documents required to be delivered by it pursuant to Section 2.3(b).  

 

  35  1006368970v9  (e) All third-party consents, waivers or approvals set forth on Section 3.4(a)  of the Seller Disclosure Schedule shall have been obtained or made and shall be in full force and  effect.  (f) (i) All of the representations and warranties that Purchaser has made in  Sections 4.1, 4.2 and 4.8 (the “Purchaser Fundamental Representations”) and that Purchaser  Parent has made in Sections 5.1, 5.2, 5.5 and 5.6 (the “Purchaser Parent Fundamental  Representations”) shall be true and correct in all respects and (ii) all of the other representations  and warranties that Purchaser has made in Article IV and Purchaser Parent has made in Article V  shall be true and correct in all material respects (without regard to any qualifications or  references to “Purchaser Material Adverse Effect”, “material” or any other materiality  qualifications or references contained in any specific representation or warranty), in each case, as  of the date hereof and at and as of the Closing Date (other than any representation or warranty  expressly made as of another date, which representation or warranty shall have been true and  correct as of such date).  (g) Purchaser and Purchaser Parent shall have performed and complied in all  material respects with all agreements, obligations, undertakings and covenants required to be  performed or complied with by it under this Agreement on or prior to the Closing Date.  (h) The Shares to be issued to Seller pursuant to this Agreement shall have  been authorized for listing on the New York Stock Exchange subject to official notice of  issuance.  SECTION 8.2 Conditions to Purchaser’s and Purchaser Parent’s Obligations.   The obligations of Purchaser and Purchaser Parent to consummate the transactions contemplated  hereby and the other actions to be taken by Purchaser at the Closing are subject to the  satisfaction or waiver by Purchaser and Purchaser Parent, on or prior to the Closing Date, of the  following conditions:  (a) All Governmental Authorizations required in connection with the  transactions contemplated hereby set forth in Section 6.3 of the Seller Disclosure Schedule, shall  have been obtained or made and shall be in full force and effect and all waiting periods required  by Applicable Law shall have expired or been terminated.  (b) No temporary restraining order, preliminary or permanent injunction or  other order issued by any court of competent jurisdiction and no statute, rule or regulation of any  Governmental Entity preventing the consummation of any transaction contemplated hereby or by  any other Transaction Document shall be in effect; provided, however, that the party invoking  this condition shall have used commercially reasonable efforts to have any such order or  injunction vacated.  (c) No Action brought by any Governmental Entity shall be pending before  any Governmental Entity that has the effect, or would be reasonably likely to have the effect if  determined adversely, of preventing the consummation of any transaction contemplated hereby  or by the other Transaction Documents; and no Action brought by any third party that is  

 

  36  1006368970v9  reasonably likely to result in one of the foregoing effects shall be pending before any  Governmental Entity.  (d) Seller shall have delivered or caused to be delivered each of the  documents required to be delivered by it pursuant to Section 2.3(a).  (e) (i) All of the representations and warranties that each of Seller, Seller  Parent and UIM, as applicable, has made in Sections 3.1, 3.2 and 3.13 (the “Seller Fundamental  Representations”) shall be true and correct in all respects and (ii) all of the other representations  and warranties that each of Seller, Seller Parent and UIM, as applicable, has made in Article III  shall be true and correct in all material respects (without regard to any qualifications or  references to “Material Adverse Effect”, “material” or any other materiality qualifications or  references contained in any specific representation or warranty), in each case, as of the date  hereof and at and as of the Closing Date (other than any representation or warranty expressly  made as of another date, which representation or warranty shall have been true and correct as of  such date).  (f) Each of Seller, Seller Parent and UIM, as applicable, shall have performed  and complied in all material respects with all agreements, obligations, undertakings and  covenants required to be performed or complied with by it under this Agreement on or prior to  the Closing Date.  ARTICLE IX.  INDEMNIFICATION  SECTION 9.1 Indemnification of Purchaser and Purchaser Parent by Seller  Parties.  Each of Seller, Seller Parent and UIM shall, jointly and severally, indemnify, defend and  hold harmless Purchaser, Purchaser Parent and their Affiliates, and their respective officers,  directors and employees (the “Purchaser Indemnified Parties”) from and against, and pay and  reimburse the Purchaser Indemnified Parties for, all Losses imposed on, sustained, incurred or  suffered by, or asserted against, the Purchaser Indemnified Parties to the extent such Losses arise  out of:  (a) any breach of any representation or warranty made by Seller, Seller Parent  or UIM in Article III of this Agreement (without regard to any qualifications or references to  “Material Adverse Effect”, “material” or any other materiality qualifications or references  contained in any specific representation or warranty);   (b) any breach or nonfulfillment by Seller, Seller Parent or UIM of, or any  failure by Seller, Seller Parent or UIM to perform, any of the covenants, terms or conditions of or  any of its duties or obligations under this Agreement; and  (c) any liabilities under Insurance Policies arising prior to the Effective Date  of this Agreement and the Reinsurance Agreement.  SECTION 9.2 Indemnification of Seller Parties’ by Purchaser and Purchaser  Parent.  Purchaser and Purchaser Parent shall indemnify, defend and hold harmless Seller, Seller  Parent, UIM and their Affiliates, and their respective officers, directors and employees (the  

 

  37  1006368970v9  “Seller Indemnified Parties”) from and against, and pay and reimburse the Seller Indemnified  Parties for, all Losses imposed on, sustained or incurred or suffered by, or asserted against, the  Seller Indemnified Parties to the extent such Losses arise out of:  (a) any breach of any representation or warranty made by Purchaser in Article  IV or by Purchaser Parent in Article V of this Agreement (without regard to any qualifications or  references to “Purchaser Material Adverse Effect”, “material” or any other materiality  qualifications or references contained in any specific representation or warranty);  (b) any breach or nonfulfillment by Purchaser or Purchaser Parent of, or any  failure by Purchaser or Purchaser Parent to perform, any of the covenants, terms or conditions of  or any of its duties or obligations under this Agreement; and  (c) any liabilities under Insurance Policies arising after the issuance of a  Purchaser Replacement Policy.  SECTION 9.3 Indemnification Procedures.    (a) Any Purchaser Indemnified Party or Seller Indemnified Party who may be  entitled to be indemnified and held harmless under Section 9.1 or Section 9.2 (the “Indemnified  Party”), shall promptly notify the party obligated to indemnify such Indemnified Party (the  “Indemnifying Party”) in writing of any pending or threatened claim, demand or allegation by a  third party that the Indemnified Party has determined has given or could reasonably give rise to  such a right under this Agreement (including a pending or threatened claim, demand or  allegation asserted by a third party against the Indemnified Party, such claim, demand or  allegation, a “Third-Party Claim”), describing in reasonable detail the facts and circumstances  with respect to the subject matter of such claim or demand and the specific allegations thereof;  provided, that the failure to provide such notice shall not release the Indemnifying Party from  any of its obligations under this Article IX except to the extent the Indemnifying Party is  prejudiced by such failure. Following delivery of a notice of a Third-Party Claim, the  Indemnified Party shall deliver to the Indemnifying Party, promptly (and in any event within two  (2) Business Days) after the Indemnified Party’s receipt thereof, copies of all notices and  documents (including court papers) received by the Indemnified Party relating to such Third- Party Claim.  (b) Following receipt of a notice of a Third-Party Claim from the Indemnified  Party pursuant to Section 9.3(a), the Indemnifying Party may assume the defense and control of  such Third-Party Claim by delivery of written notice to the Indemnified Party. The assumption  of the defense by the Indemnifying Party of any Third-Party Claim shall not require the  Indemnifying Party to agree to be liable for any Losses in respect of such Third-Party Claim and  shall be without prejudice to any rights or defenses of the Indemnifying Party in respect of  whether the Indemnified Party is entitled to indemnification under this Article IX for any  particular Loss or Losses.  (c) If the Indemnifying Party assumes the defense of any Third-Party Claim,  the Indemnifying Party shall allow the Indemnified Party a reasonable opportunity to participate  in the defense of such Third-Party Claim with its own counsel and at its own expense, and the  

 

  38  1006368970v9  Indemnifying Party shall not be liable to the Indemnified Party for legal expenses subsequently  incurred by the Indemnified Party in connection with the defense thereof.  The Indemnified Party  shall, and shall cause each of its Affiliates and Representatives to, cooperate fully with the  Indemnifying Party in the defense of any Third-Party Claim.  The Indemnifying Party shall be  authorized to consent to a settlement of, or the entry of any judgment arising from, any Third- Party Claim, with the prior written consent of the Indemnified Party (such consent not to be  unreasonably withheld, conditioned or delayed); provided, that the Indemnifying Party may  consent to a settlement of, or the entry of any judgment arising from, any Third-Party Claim,  without the prior written consent of the Indemnified Party if (i) such settlement provides only for  the payment of monetary damages (and does not impose any injunctive relief or otherwise  impose any conditions or restrictions on the Indemnified Party or its Affiliates) and does not  involve any finding or admission of any violation of Law on the part of the Indemnified Party or  its Affiliates, (ii) the Indemnifying Party pays or causes to be paid all amounts arising out of such  settlement or judgment concurrently with the effectiveness of such settlement and (iii) the  Indemnifying Party obtains, as a condition of any settlement or other resolution, a complete and  unconditional release of the Indemnified Party and its Affiliates from any and all liability in  respect of such Third-Party Claim.  (d) The Indemnifying Party shall not have any liability under this Article IX  for any Losses arising out of or in connection with any Third-Party Claim that is settled or  compromised by the Indemnified Party without the prior written consent of the Indemnifying  Party.  SECTION 9.4 Certain Limitations.  No Indemnifying Party shall be obligated to  indemnify and hold harmless its respective Indemnified Party under Section 9.1(a) or  Section 9.2(a) (other than in respect of any Seller Fundamental Representations, Purchaser  Fundamental Representations or Purchaser Parent Fundamental Representations) (a) in respect of  any Loss incurred or suffered by any Indemnified Party that is not a Qualifying Loss and (b)  unless and until the aggregate amount of all Qualifying Losses of the Indemnified Parties under  Section 9.1(a) or Section 9.2(a), as the case may be, exceeds $100,000 (the “Deductible”), at  which point such Indemnifying Party shall be liable to its respective Indemnified Parties for the  full amount of Qualifying Losses in excess of the Deductible, under Section 9.1(a) or Section  9.2(a), as the case may be, subject to the limitations set forth in this Article IX.  The maximum  aggregate liability of Seller, Seller Parent and UIM, on the one hand, and Purchaser and  Purchaser Parent on the other hand, to their respective Indemnified Parties for any and all Losses  under Section 9.1(a), in the case of Seller, Seller Parent and UIM, or Section 9.2(a), in the case  of Purchaser and Purchaser Parent, shall be $1,000,000.  SECTION 9.5 Exclusive Remedy.  Following the Closing, and except as  otherwise provided in Section 11.9, the indemnification provisions of Article IX and as  otherwise provided in the other Transaction Documents shall be the sole and exclusive remedies  of the Indemnified Party for any claim related to the transactions contemplated by this  Agreement.  SECTION 9.6 Additional Indemnification Provisions.   

 

  39  1006368970v9  (a) With respect to each indemnification obligation in this Article IX, all  Losses shall be net of any related Eligible Insurance Proceeds (as defined below).  (b) In any case where the Indemnified Party or its Affiliates recovers from a  third party any amount in respect of any Loss paid by the Indemnifying Party pursuant to this  Article IX, the Indemnified Party shall promptly pay over to the Indemnifying Party the amount  so recovered (after deducting therefrom the amount of reasonable costs incurred by it or its  Affiliates in procuring such recovery, which costs shall not exceed the amount so recovered) but  not in excess of the sum of (i) any amount previously paid by the Indemnifying Party to or on  behalf of the Indemnified Party in respect of such claim and (ii) any amount expended by the  Indemnifying Party in pursuing or defending any claim arising out of such Loss.  (c) If any portion of Losses to be paid by the Indemnifying Party pursuant to  this Article IX could be recovered from a third party not affiliated with the Indemnified Party  based on the underlying claim or demand asserted against the Indemnifying Party, then the  Indemnified Party shall promptly give notice thereof to the Indemnifying Party and, upon the  request of the Indemnifying Party, shall use commercially reasonable efforts to collect the  maximum amount recoverable from such third party, in which event the Indemnifying Party shall  reimburse the Indemnified Party for all reasonable costs and expenses incurred in connection  with such collection (which costs and expenses of collection shall not exceed the amount  recoverable from such third party).  If any portion of Losses actually paid by the Indemnifying  Party pursuant to this Article IX could have been recovered from a third party not affiliated with  the Indemnified Party based on the underlying claim or demand asserted against the  Indemnifying Party, then the Indemnified Party shall transfer, to the extent transferable, such of  its rights to proceed against such third party as are necessary to permit the Indemnifying Party to  recover from such third party any amount actually paid by the Indemnifying Party pursuant to  this Article IX.  (d) If any portion of Losses to be paid by the Indemnifying Party pursuant to  this Article IX may be covered, in whole or in part, by third-party insurance coverage, the  Indemnified Party shall promptly give notice thereof to the Indemnifying Party; provided, that  the failure to provide such notice shall not release the Indemnifying Party from any of its  obligations under this Article IX except to the extent the Indemnifying Party is prejudiced by  such failure.  The Indemnified Party shall, and shall cause its Affiliates to, use commercially  reasonable efforts to collect the maximum amount of insurance proceeds thereunder, and all such  proceeds actually collected in respect of any Loss (net of (i) the amount of reasonable costs  incurred by the Indemnified Party or its Affiliates in collecting such proceeds and (ii) the present  value of any increase in insurance premiums or other charges paid or reasonably expected to be  paid by the Indemnified Party or its Affiliates arising out of such Loss) shall be considered  “Eligible Insurance Proceeds.”  (e) The Indemnifying Party shall not be liable under this Article IX in respect  of any Loss which is contingent unless and until such contingent Loss becomes an actual liability  and is due and payable.  (f) The Indemnified Party shall, and shall cause its Affiliates to, procure that  all commercially reasonable steps are taken, and all commercially reasonable assistance is given  

 

  40  1006368970v9  to avoid or mitigate any Losses, which in the absence of mitigation might give rise to or increase  a Loss in respect of any claim under this Article IX.  In the event the Indemnified Party or its  Affiliates fails to so mitigate an indemnifiable Loss, the Indemnifying Party shall have no  liability for any portion of such Loss that could reasonably have been avoided had the  Indemnified Party or its Affiliates made such efforts.  (g) The parties hereto acknowledge and agree that the same Loss may be  subject to indemnification under more than one subsection of Section 9.1(a) or Section 9.2(a),  respectively; provided, however, that in no event shall the Seller Indemnified Parties, on the one  hand, or the Purchaser Indemnified Parties, on the other hand, be entitled to duplicative  recoveries for the same underlying Loss; and, provided, further, that there shall be no  indemnification pursuant to Section 9.1 or Section 9.2 with respect to any Losses which are  expressly subject to indemnification under any of the other Transaction Documents, the sole  remedy for which shall be as set forth in such other Transaction Documents.  (h) If, prior to the Closing, Purchaser or Purchaser Parent has knowledge of  any breach by any of Seller, Seller Parent or UIM, as applicable, of any representation, warranty,  covenant or agreement contained in this Agreement, Purchaser and Purchaser Parent shall be  deemed to have waived such breach, and Purchaser, Purchaser Parent and the other Purchaser  Indemnified Parties shall not be entitled to indemnification pursuant to Section 9.1 to sue for  Losses or to assert any other right or remedy arising from any matters relating to such breach,  notwithstanding anything to the contrary contained herein.  SECTION 9.7 Tax Treatment of Indemnity Payments.  Seller, Purchaser and  Purchaser Parent agree to report each indemnification payment made in respect of a Loss as an  adjustment to the Purchase Price for federal income Tax purposes unless otherwise required by  Law.  SECTION 9.8 Survival.    (a) The representations and warranties of Seller, Seller Parent, UIM,  Purchaser and Purchaser Parent contained in this Agreement shall survive the Closing solely for  purposes of this Article IX and shall terminate and expire on the twelve (12) month anniversary  of the Closing Date; provided, that the Seller Fundamental Representations, the Purchaser  Fundamental Representations and Purchaser Parent Fundamental Representations shall survive  indefinitely, or until the latest date permitted by Applicable Law.  Any claim for indemnification  in respect of any representation or warranty that is not asserted by notice given as required herein  prior to the expiration of the specified period of survival shall not be valid, and any right to  indemnification is hereby irrevocably waived after the expiration of such period of survival.   Any claim properly made for a Loss in respect of such a breach asserted within such period of  survival as herein provided will be timely made for purposes hereof.  (b) To the extent that it is to be performed after the Closing, each covenant in  this Agreement will survive and remain in effect in accordance with its terms plus a period of six  (6) months thereafter, after which no claim for indemnification with respect thereto may be  brought hereunder.  All covenants in this Agreement that by their terms are required to be fully  

 

  41  1006368970v9  performed prior to the Closing will not survive the Closing, after which time no claim for  indemnification with respect thereto may be brought hereunder.  ARTICLE X.  TERMINATION PRIOR TO CLOSING  SECTION 10.1 Termination of Agreement.  (a) This Agreement may be terminated prior to the Closing:  (i) by the written agreement of each of the parties hereto;  (ii) by any party hereto in writing, if there shall be any order,  injunction or decree of any Governmental Entity that prohibits or restrains any party from  consummating the transactions contemplated hereby, and such order, injunction or decree  shall have become final and non-appealable with respect to such party; provided, that the  party seeking to terminate this Agreement pursuant to this Section 10.1(a)(ii) shall have  performed in all material respects its obligations under this Agreement;  (iii) by any party hereto in writing, if a breach of any provision of this  Agreement that has been committed by the other party would cause the failure of any  mutual condition to the Closing or any condition to the Closing for the benefit of the non- breaching party and such breach is not capable of being cured or is not cured within thirty  (30) calendar days after the breaching party receives written notice from the non- breaching party that the non-breaching party intends to terminate this Agreement  pursuant to this Section 10.1(a)(iii); or  (iv) by any of the parties hereto on or after the Cut-Off Date.  (b) If this Agreement is terminated pursuant to this Section 10.1, this  Agreement shall become null and void and of no further force and effect without liability of  either party (or any Representative of such party) to the other party to this Agreement, except for  (i) the provisions of this Article X, Article XI and Section 6.6, and (ii) rights and obligations  arising from any fraud or intentional breach by a party of its obligations under this Agreement  prior to such termination.  ARTICLE XI.  GENERAL PROVISIONS  SECTION 11.1 Fees and Expenses.  Whether or not the Closing is consummated,  each party hereto shall, except as otherwise provided in this Agreement, pay its own Transaction  Expenses incident to preparing for, entering into and carrying out this Agreement, the other  Transaction Documents to which it is a party and the consummation of the transactions  contemplated hereby and thereby.  SECTION 11.2 Notices.  All notices or other communications hereunder shall be  deemed to have been duly given and made if in writing and if served by personal delivery upon  the party for whom it is intended, if delivered by registered or certified mail, return receipt  

 

  42  1006368970v9  requested, or by a national courier service, or if sent by e-mail; provided, that the e-mail is  promptly confirmed, to the Person at the address set forth below, or such other address as may be  designated in writing hereafter, in the same manner, by such Person.  Any such notice shall be  deemed given when so delivered personally by courier or by overnight delivery service or sent  by e-mail (and immediately after transmission, receipt of which has been confirmed by telephone  by the sender) or, if mailed, four (4) Business Days after the mailing as follows:  (a) if to Seller, Seller Parent or UIM:  United Insurance Holdings Corp.  800 2nd Avenue S.  St. Petersburg, Florida 33701  Telephone:  (727) 471-1479  E-mail:   bkalter@upcinsurance.com  Attn: Brad S. Kalter  with a copy (which shall not constitute notice) to:  Debevoise & Plimpton LLP  919 Third Avenue  New York, New York 10022  Telephone:   (212) 909 6870   (212) 909-7235  Email:   ggooding@debevoise.com   mddevins@debevoise.com  Attn:   Gregory V. Gooding   Michael D. Devins  (b) if to Purchaser:  Homeowners Choice Property & Casualty Insurance  Company, Inc.  5300 West Cypress Street  Suite 100  Tampa, FL 33607  Telephone:   (727) 560-4207  E-mail:   kcoleman@HCIgroup.com  Attn: Karin Coleman, President  with a copy (which shall not constitute notice) to:  Foley & Lardner LLP  100 North Tampa Street  Suite 2700  Tampa, FL 33602   Telephone:   (813) 225-4122  E-mail:   ccreely@foley.com  Attn: Curt Creely, Esq.  

 

  43  1006368970v9  (c) if to Purchaser Parent:  HCI Group, Inc.  5300 West Cypress Street  Suite 100  Tampa, FL 33607  Telephone:   (813) 484-7331  E-mail:   agraham@HCIgroup.com  Attn: Andrew L. Graham, General Counsel  with a copy (which shall not constitute notice) to:  Foley & Lardner LLP  100 North Tampa Street  Suite 2700  Tampa, FL 33602   Telephone:   (813) 225-4122  E-mail:   ccreely@foley.com  Attn: Curt Creely, Esq.  SECTION 11.3 Amendment; Waivers, Etc.  No amendment or modification of  this Agreement shall be valid or binding unless set forth in writing and duly executed by all of  the parties hereto.  No waiver hereunder shall be valid or binding unless set forth in writing and  duly executed by the party against whom enforcement of the waiver is sought.  Any such waiver  shall constitute a waiver only with respect to the specific matter described in such writing and  shall in no way impair the rights of the party granting such waiver in any other respect or at any  other time.  Neither the waiver by any of the parties hereto of a breach of or a default under any  of the provisions of this Agreement, nor the failure by any of the parties, on one or more  occasions, to enforce any of the provisions of this Agreement or to exercise any right or privilege  hereunder, shall be construed as a waiver of any other breach or default of a similar nature, or as  a waiver of any of such provisions, rights or privileges hereunder.  The rights and remedies  herein provided are cumulative and none is exclusive of any other, or of any rights or remedies  that any party may otherwise have at law or in equity.  SECTION 11.4 Entire Agreement; Third-Party Beneficiaries.  This Agreement  and the other Transaction Documents contain the entire agreement between the parties hereto  with respect to the subject matter of this Agreement and the other Transaction Documents and  supersede all prior agreements and understandings, oral or written, with respect to such matters.   Except as provided in Article IX, this Agreement is for the sole benefit of the parties and their  permitted successors and assigns and nothing expressed or implied in this Agreement is intended  to or shall confer any rights, remedies, obligations or liabilities upon any Person other than the  parties hereto and their respective heirs, executors, administrators, successors, legal  representatives and permitted assigns.  SECTION 11.5 Assignment.  Neither this Agreement nor any of the rights,  interests or obligations under it may be assigned or delegated, in whole or in part, by any of the  parties without the prior written consent of the other parties, and any attempted or purported  

 

  44  1006368970v9  assignment or delegation in violation of this Section 11.5 shall be null and void.  Subject to the  preceding sentence, this Agreement will be binding upon, inure to the benefit of, and be  enforceable by the parties hereto and their respective heirs, executors, administrators, successors,  legal representatives and permitted assigns.  SECTION 11.6 Governing Law; Jurisdiction; Enforcement.    (a) This Agreement and its enforcement will be governed by, and interpreted  in accordance with, the laws of the State of Florida applicable to agreements made and to be  performed entirely within such State, without regard to any principles of conflicts of laws  principles of such State that would provide for the application of the laws of any other  jurisdiction.  (b) Each party hereby irrevocably and unconditionally submits to the  exclusive jurisdiction of the United States District Court for the Middle District of Florida,  Tampa Division, and of any Florida state court sitting in Hillsborough County, for purposes of  all legal proceedings arising out of or relating to this Agreement and the other Transaction  Documents, or the transactions contemplated by this Agreement and the other Transaction  Documents, or for recognition and enforcement of any judgment in respect thereof.  In any such  action, suit or other proceeding, each party hereby irrevocably waives, to the fullest extent  permitted by Applicable Law, any objection that it may now or hereafter have to the laying of the  venue of any such proceedings brought in such court and any claim that any such proceeding  brought in such a court has been brought in an inconvenient forum.  Each party also agrees that  any final and unappealable judgment against a party in connection with any action, suit or other  proceeding shall be conclusive and binding on such party and that such award or judgment may  be enforced in any court of competent jurisdiction, either within or outside of the United States.   A certified or exemplified copy of such award or judgment shall be conclusive evidence of the  fact and amount of such award or judgment.  Each party agrees that any process or other paper to  be served in connection with any action or proceeding under this Agreement shall, if delivered,  sent or mailed in accordance with Section 11.2, constitutes good, proper and sufficient service  thereof.   (c) EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY  CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO  INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE EACH SUCH  PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT  SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION,  ACTION, PROCEEDING, OR COUNTERCLAIM (WHETHER BASED IN CONTRACT,  TORT OR OTHERWISE) DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING  TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.  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, (B) EACH PARTY  UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (C)  EACH PARTY MAKES THIS WAIVER VOLUNTARILY, AND (D) EACH PARTY HAS  

 

  45  1006368970v9  BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS,  THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 11.6.  SECTION 11.7 Severability.  The provisions of this Agreement shall be deemed  severable, and the invalidity or unenforceability of any provision shall not affect the validity or  enforceability of the other provisions hereof.  If any provision of this Agreement, or the  application thereof to any Person or entity or any circumstance, is found by a court or other  Governmental Entity of competent jurisdiction to be invalid or unenforceable, (a) a suitable and  equitable provision shall be substituted therefor in order to carry out, so far as may be valid and  enforceable, the intent and purpose of such invalid or unenforceable provision, and (b) the  remainder of this Agreement and the application of such provision to other Persons or  circumstances shall not be affected by such invalidity or unenforceability, nor shall such  invalidity or unenforceability affect the validity or enforceability of such provision, or the  application thereof, in any other jurisdiction.  SECTION 11.8 Counterparts.  This Agreement may be executed in one or more  counterparts, each of which will be deemed to constitute an original, and may be delivered by  facsimile or other electronic means intended to preserve the original graphic or pictorial  appearance of a document.  SECTION 11.9 Specific Performance.  The parties agree that irreparable damage  would occur if any provision of this Agreement were not performed in accordance with the terms  hereof and that the parties shall be entitled to an injunction or injunctions to prevent breaches of  this Agreement or to enforce specifically the performance of the terms and provisions hereof in  any court specified in Section 11.6(b) in addition to any other remedy to which they are entitled  at law or in equity. The parties hereby waive, in any action for specific performance, the defense  of adequacy of a remedy at law and the posting of any bond or other security in connection  therewith.  SECTION 11.10 Reserves.  Notwithstanding anything to the contrary in this  Agreement, neither Seller, Seller Parent nor UIM nor any of their Affiliates makes any  representation or warranty with respect to, and nothing contained in this Agreement, the other  Transaction Documents, or in any other agreement, document or instrument to be delivered in  connection with the transactions contemplated hereby, is intended or shall be construed to be a  representation or warranty (express or implied) of Seller, Seller Parent or UIM or any of their  Affiliates, for any purpose of this Agreement, the other Transaction Documents or any other  agreement, document or instrument to be delivered in connection with the transactions  contemplated hereby or thereby, with respect to (a) the adequacy or sufficiency of the Reserves,  (b) the future profitability of the Northeast Homeowners Lines, (c) the effect of the adequacy or  sufficiency of the Reserves on any “line item” or asset, Liability or equity amount or (d) that  reinsurance recoverables taken into account in determining the amount of such Reserves will be  collectible.  [Remainder of page intentionally left blank] 

 

  [Signature Page to Renewal Rights Agreement]  IN WITNESS WHEREOF, the parties have caused this Agreement to be signed  by their respective duly authorized officers, all on the date first written above.  UNITED PROPERTY AND CASUALTY  INSURANCE COMPANY  By:     Name: Bennett Bradford Martz  Title: President & Chief Financial Officer  UNITED INSURANCE HOLDINGS CORP.  By:     Name: Bennett Bradford Martz  Title: President & Chief Financial Officer  UNITED INSURANCE MANAGEMENT, L.C.  By:     Name: Bennett Bradford Martz  Title: President & Chief Financial Officr  HOMEOWNERS CHOICE PROPERTY &  CASUALTY INSURANCE COMPANY, INC.  By:     Name: Karin Coleman  Title: President  HCI GROUP, INC.  By:     Name: Paresh Patel  Title: Chief Executive Officer  

 

    Exhibit A  Form of Registration Rights Agreement  [see attached.]  

 

    Exhibit B  Form of Reinsurance Agreement  [see attached.]  

 

    Exhibit C  Form of Reinsurance Trust Agreement  [see attached.]

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00319-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00319-of-00352.parquet"}]]