Document:

Exhibit
10.7

 

OPTION
AGREEMENT

 by
and between

DOUGLAS
N. RAUCY

 and

 1347
PROPERTY INSURANCE HOLDINGS, INC.

 

Dated
as of February 28, 2014

 

OPTION
AGREEMENT dated as of February 28, 2014 (this “Agreement”) between Douglas N. Raucy (“Raucy”)
and 1347 Property Insurance Holdings, Inc., a Delaware corporation (“PIH” or the “Company”).

 

RECITALS

 

Whereas,
PIH has filed with the U.S. Securities and Exchange Commission a registration statement on Form S-1 with respect to an initial
public offering of its common stock (“IPO”);

 

Whereas,
Raucy is the President and CEO of PIH and the Board of Directors of PIH wishes to incentivize Raucy to act in the long-term best
interest of PIH and its shareholders;

 

Whereas,
in furtherance thereto, the Company desires to issue an option to Raucy to purchase a certain number shares of common stock of
PIH, subject to the conditions set forth herein (the “Option”);

 

Whereas,
as further incentive, the Company desires to match the Option Shares (as defined below) one-for one with restricted shares of the
Company’s common stock (the “Matched Shares” and together with the Option Shares, the “Shares”).

 

Now,
therefore, in consideration of the mutual covenants and agreements contained in this Agreement, the receipt and sufficiency
of which are hereby acknowledged, and intending to be legally bound, the parties hereby agree as follows:

 

ARTICLE I

 THE
GRANT OF OPTION

 

Section 1.1 Grant
of Option. PIH hereby grants to Raucy the Option to purchase up to that number of shares of the Company’s common stock
equal to (a) TWO HUNDRED SIXTY-FOUR THOUSAND TWO HUNDRED SIXTY-NINE DOLLARS ($264,269), payable in immediately available funds
by Raucy to PIH upon the Closing (as defined below) (b) divided by the price per share paid by the public stockholders
in the IPO (the “IPO Price”), upon the terms and conditions set forth herein for a purchase price per share
equal to the IPO Price (the “Exercise Price”).

 

ARTICLE II

EXERCISE
OF THE OPTION

 

Section 2.1 Exercise.
Raucy may exercise this Option at any time for a period commencing on the date of pricing
of the IPO and ending at the close of business on the date that is three months thereafter (the “Expiration Date”)
upon payment of the aggregate Exercise Price with respect to which the Option is being exercised and compliance with terms of this
Agreement. Raucy shall exercise the Option by giving irrevocable written notice to PIH of Raucy’s intent to exercise the
Option (the date of such notice, the “Exercise Date”). If the Option is not exercised by Raucy in the manner
provided herein on or before the Expiration Date, then this Agreement shall, without further action of any party, automatically
terminate and thereafter be null and void and of no further force or effect, and neither party shall have any further rights or
obligations with respect to the Option or the Matched Shares. The Option may be exercised in part (but only on one occasion) and
in such case the aggregate Exercise Price to be paid by Raucy shall equal the number of shares as to which the Option is being
exercised multiplied by the Exercise Price. The Option may not be exercised for fractional shares.

 

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ARTICLE III

CLOSING

 

Section 3.1 Closing.

 

(a)
The closing of the purchase of the shares of common stock issuable upon exercise of the Option contemplated by this Agreement (the
“Option Shares”) shall occur ten (10) business days after the Exercise Date or at such other time as Raucy and
the Company shall agree (the “Closing”).

 

(b)
At the Closing, Raucy shall deliver to the Company the aggregate Exercise Price in respect of the shares as to which the Option
is being exercised, by wire transfer of immediately available funds or other means acceptable to PIH, together
with any and all other documents or instruments as reasonably requested by PIH.

 

(c)
At the Closing, the Company shall issue and deliver to Raucy duly executed stock certificates of the Company registered in Raucy’s
name representing the Option Shares.

 

ARTICLE IV

 REPRESENTATIONS
AND WARRANTIES 

  

Section 4.1 Company
Representations and Warranties. Company represents and warrants to Raucy as of the date hereof that:

 

(a)
Company is duly organized and validly existing under the laws of the state of its organization and has all requisite power and
authority to enter into and perform its obligations under this Agreement.

 

(b)
Company has good and marketable title to the Shares free and clear of all liens and encumbrances, except for such liens and encumbrances
that will and/or can be eliminated at or prior to Closing.

 

(c) Company
has the full right and authority and has obtained any and all consents required therefor to enter into this Agreement and to consummate
or cause to be consummated the transfers and assignments contemplated herein.

 

Section 4.2 Raucy
Acknowledgment. Raucy agrees that neither PIH, nor its agents or representatives, have made, and that Raucy has not relied
upon, any representation or warranty of any kind which is not herein expressly set forth or provided for, in connection with the
sale of the Option Shares or Raucy’s actual purchase thereof pursuant hereto. Raucy acknowledges and agrees that it has relied
on its independent due diligence investigation of the Company and advice of its counsel, representatives and advisors in electing
to exercise the Option and purchase the Option Shares. 

  

ARTICLE V

MATCHED
SHARES

 

Section 5.1 Granting
of Matched Shares. As soon as practicable after the Closing, and in no event later than thirty days after the date thereof
(the “Award Date”), the Option Shares shall be matched one-for-one with shares of restricted common stock of
the Company.

 

Section
5.2 Tax Withholding. The Company shall have the right to require, prior to the issuance or delivery of any Matched
Shares, payment by Raucy of any federal, state, local or other taxes which may be required to be withheld or paid in connection
with such award. In furtherance thereof, at the Company’s option (i) (a) the Company may withhold whole Matched Shares which
would otherwise be delivered to Raucy, having an aggregate Fair Market Value determined as of the date the obligation to withhold
or pay taxes arises in connection with an award (the “Tax Date”), or (b) withhold an amount of cash which would
otherwise be payable to Raucy, in the amount necessary to satisfy any such obligation or (ii) Raucy may satisfy any such obligation
by any of the following means: (A) a cash payment to the Company in the amount necessary to satisfy such obligation; (B) delivery
(either actual delivery or by attestation procedures established by the Company) to the Company of previously owned whole Matched
Shares having an aggregate Fair Market Value, determined as of the Tax Date, equal to the amount necessary to satisfy any such
obligation; (C) authorizing the Company to withhold whole Matched Shares which would otherwise be delivered having an aggregate
Fair Market Value, determined as of the Tax Date, or withhold an amount of cash which would otherwise be payable to Raucy, equal
to the amount necessary to satisfy any such obligation; (D) or any combination of (A), (B) and (C), in each case to the extent
permitted by the Company. Matched Shares to be delivered or withheld may not have an aggregate Fair Market Value in excess of the
amount determined by applying the minimum statutory withholding rate. Any fraction of a Matched Share which would be required to
satisfy such an obligation shall be disregarded and the remaining amount due shall be paid in cash by Raucy to the Company.

 

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ARTICLE VI

VESTING

 

Section
6.1 Vesting. Subject to Raucy’s continued service from the Award Date through the vesting date, the Matched Shares
will not vest until the five year anniversary of the Award Date (the “Vesting Date”). In the event that Raucy
sells, transfers or otherwise disposes of any of the Option Shares prior to the Vesting Date, Raucy shall forfeit to the Company
an amount of Matched Shares equal to the Option Shares sold, transferred or otherwise disposed of. Raucy will automatically forfeit
to the Company all of the unvested Matched Shares made hereunder on the date of his termination of service to the extent such termination
occurs during the vesting period. Notwithstanding the foregoing vesting schedule, the Matched Shares will become 100% vested upon
Raucy’s death.

 

ARTICLE VII

TERMINATION

 

Section 7.1 Injunction;
Illegality. This Agreement may be terminated at any time prior to the Closing by the Company if (a) an order, injunction
or decree shall have been issued by any court or agency of competent jurisdiction and shall be non-appealable, or other law shall
have been issued preventing or making the completion of the transactions contemplated by this Agreement illegal or (b) the
IPO fails to close prior to June 30, 2014.

 

ARTICLE VIII

MISCELLANEOUS

 

Section 8.1 Notices.
All notices and other communications required or permitted to be given under this Agreement shall be in writing and shall be deemed
to have been given if delivered personally or by facsimile or seven days after having been sent by certified mail, return receipt
requested, postage prepaid, to the parties to this Agreement at the following address or to such other address either party to
this Agreement shall specify by notice to the other party:

 

(a) if to Raucy, to:

 

Douglas N. Raucy

16404 Brieva DE Avila

Tampa, FL 33613

 

(b) if to Company, to:

 

1347 Property Insurance Holdings, Inc.

9100 Bluebonnet Centre Blvd., Suite 502

Baton Rouge, LA 70809

ATTN:  _________

 

Section 8.2 Further
Assurances. Each party hereto shall do and perform or cause to be done and performed all further acts and shall execute and
deliver all other agreements, certificates, instruments and documents as any other party hereto reasonably may request in order
to carry out the intent and accomplish the purposes of this Agreement and the consummation of the transactions contemplated hereby.

 

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Section 8.3 Amendments
and Waivers. Any provision of this Agreement may be amended or waived if, but only if, such amendment or waiver is in writing
and is duly executed and delivered by the Company and Raucy. No failure or delay by any party in exercising any right, power or
privilege hereunder shall operate as a waiver thereof nor shall any single or partial exercise thereof preclude any other or further
exercise thereof or the exercise of any other right, power or privilege. The rights and remedies herein provided shall be cumulative
and not exclusive of any rights or remedies provided by law.

 

Section 8.4 Fees
and Expenses. Each party hereto shall pay all of its own fees and expenses (including attorneys’ fees) incurred in connection
with this Agreement and the transactions contemplated hereby.

 

Section 8.5 Successors
and Assigns. The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns, provided that neither party may assign, delegate or otherwise transfer any
of its rights or obligations under this Agreement without the consent of the other party hereto.

 

Section 8.6 Governing
Law. This Agreement shall be governed and construed in accordance with the internal laws of the State of Delaware applicable
to contracts made and wholly performed within such state, without regard to any applicable conflicts of law principles. The parties
hereto agree that any suit, action or proceeding brought by either party to enforce any provision of, or based on any matter arising
out of or in connection with, this Agreement or the transactions contemplated hereby shall be brought in any federal or state court
located in the State of Delaware. Each of the parties hereto submits to the jurisdiction of any such court in any suit, action
or proceeding seeking to enforce any provision of, or based on any matter arising out of, or in connection with, this Agreement
or the transactions contemplated hereby and hereby irrevocably waives the benefit of jurisdiction derived from present or future
domicile or otherwise in such action or proceeding. Each party hereto irrevocably waives, to the fullest extent permitted by law,
any objection that it may now or hereafter have to the laying of venue of any such suit, action or proceeding in any such court
or that any such suit, action or proceeding brought in any such court has been brought in an inconvenient forum.

 

Section 8.7 Waiver
Of Jury Trial. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING
ARISING OUT OF OR RELATED TO THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED HEREBY.

 

Section 8.8 Entire
Agreement. This Agreement constitutes the entire agreement between the parties with respect to the subject matter of this Agreement
and supersedes all prior agreements and understandings, both oral and written, between the parties and/or their affiliates with
respect to the subject matter of this Agreement.

 

Section 8.9 Effect
of Headings. The Article and Section headings herein are for convenience only and shall not affect the construction hereof.

 

Section 8.10 Severability.
If one or more provisions of this Agreement are held to be unenforceable under applicable law, such provision shall be deemed to
be excluded from this Agreement and the balance of this Agreement shall be interpreted as if such provision were so excluded and
shall be enforced in accordance with its terms to the maximum extent permitted by law.

 

Section 8.11 Counterparts;
Third Party Beneficiaries. This Agreement may be signed in any number of counterparts, each of which shall be an original,
with the same effect as if the signatures were upon the same instrument. No provision of this Agreement shall confer upon any person
other than the parties hereto any rights or remedies hereunder.

 

 Section
8.12 No Rights or Liabilities as Stockholder. Nothing contained in this Agreement shall be construed as conferring upon
the Raucy any rights or liabilities as a stockholder of the Company.

 

[Signature Page Follows]

 

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IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their respective authorized officers as of
the day and year first above written.

 

	DOUGLAS N. RAUCY	1347 PROPERTY INSURANCE HOLDINGS, INC.
	 	 	 
	 	By:	/s/ Hassan R. Baqar 
	 	Name: 	Hassan R. Baqar 
	 	Title:	Director 
	 	 	 
	 	By:	/s/ Larry G. Swets, Jr. 
	 	Name: 	Larry G. Swets, Jr. 
	 	Title:	President and CEOExhibit 10.10

 

REGISTRATION RIGHTS AGREEMENT

 

This Registration
Rights Agreement (this “Agreement”), is made and entered into as of February 28, 2014, by and among 1347
PROPERTY INSURANCE HOLDINGS, INC., a Delaware corporation (the “Company”), and Kingsway America Inc., an Ontario
and wholly owned subsidiary of Kingsway Financial Services Inc. (the “Investor”).

 

WHEREAS, the Investor owns one million (1,000,000)
shares of Common Stock (as defined below) of the Company pursuant to the issuance, upon the Company’s formation, of one thousand
(1,000) shares of Common Stock by the Company to the Investor and the subsequent stock split in connection with such shares, whereby
each share of Common Stock issued and outstanding immediately prior to the filing of the Third Amended and Restated Certificate
of Incorporation of the Company (the “Third Amended and Restated Charter”) was reclassified, subdivided and
changed to one thousand (1,000) shares of Common Stock effective upon the filing of the Third Amended and Restated Charter and;
and

 

WHEREAS, the Company intends to consummate
an IPO (as defined below) of the Company’s Common Stock and in connection therewith, the parties desire to enter into this
Agreement in order to grant certain registration rights to the Investor as set forth below.

 

NOW, THEREFORE, in consideration of the
foregoing and the mutual and dependent covenants hereinafter set forth, the parties agree as follows:

 

1.            Defined
Terms. As used in this Agreement, the following terms shall have the following meanings:

 

“Affiliate” of a
Person means any other Person that directly or indirectly, through one or more intermediaries, controls, is controlled by, or is
under common control with, such Person. The term “control” (including the terms “controlled by” and “under
common control with”) 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, by contract or otherwise.

 

“Agreement” has
the meaning set forth in the preamble.

 

“Board” means the
board of directors of the Company (and any successor governing body of the Company or any successor of the Company).

 

“Commission” means
the Securities and Exchange Commission or any other federal agency administering the Securities Act and the Exchange Act at the
time.

 

    	 

    	 

    

 

“Common Stock” means
the common stock, par value $0.001 per share, of the Company and any other common equity securities issued by the Company, and
any other shares of stock issued or issuable with respect thereto (whether by way of a stock dividend or stock split or in exchange
for or upon conversion of such shares or otherwise in connection with a combination of shares, distribution, recapitalization,
merger, consolidation or other corporate reorganization).

 

“Company” has the
meaning set forth in the preamble.

 

“Demand Registration” has
the meaning set forth in Section 2(a).

 

“Exchange Act” means
the Securities Exchange Act of 1934, as amended, or any successor federal statute, and the rules and regulations thereunder, which
shall be in effect from time to time.

 

“Governmental Authority” means
any federal, state, local or foreign government or political subdivision thereof, or any agency or instrumentality of such government
or political subdivision, or any self-regulated organization or other non-governmental regulatory authority or quasi-governmental
authority (to the extent that the rules, regulations or orders of such organization or authority have the force of law), or any
arbitrator, court or tribunal of competent jurisdiction.

 

“Investor” has the
meaning set forth in the preamble.

 

“IPO” means an initial
underwritten public offering of the Company’s Common Stock pursuant to an effective Registration Statement filed under the
Securities Act, other than pursuant to a Registration Statement on Form S-4, Form S-8 or any similar or successor form.

 

“Lock-Up Agreement” means
that certain Lock-Up Agreement, dated as of February 18, 2014, between Aegis Capital Corp and the Investor.

 

“Person” means an
individual, corporation, partnership, joint venture, limited liability company, Governmental Authority, unincorporated organization,
trust, association or other entity.

 

“Piggyback Registration” has
the meaning set forth in Section 3(a).

 

“Prospectus” means
the prospectus or prospectuses included in any Registration Statement, as amended or supplemented by any prospectus supplement
with respect to the terms of the offering of any portion of the Registrable Securities covered by such Registration Statement and
by all other amendments and supplements to the prospectus, including post-effective amendments and all material incorporated by
reference in such prospectus or prospectuses.

 

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“Registrable Securities” means
(a) any shares of Common Stock held by the Investor or issuable upon conversion, exercise or exchange of any securities of the
Company owned by the Investor at any time, and (b) any shares of Common Stock issued or issuable with respect to any shares described
in subsection (a) above by way of a stock dividend or stock split or in connection with a combination of shares, recapitalization,
merger, consolidation or other reorganization (it being understood that for purposes of this Agreement, a Person shall be deemed
to be a holder of Registrable Securities whenever such Person has the right to then acquire or obtain from the Company any Registrable
Securities, whether or not such acquisition has actually been effected). As to any particular Registrable Securities, such securities
shall cease to be Registrable Securities when (i) a Registration Statement covering such securities has been declared effective
by the Commission and such securities have been disposed of pursuant to such effective Registration Statement, (ii) such securities
are otherwise transferred and such securities may be resold without subsequent registration under the Securities Act, or (iii)
such securities shall have ceased to be outstanding.

 

“Registration Statement” means
any registration statement of the Company which covers any of the Registrable Securities pursuant to the provisions of this Agreement,
including the Prospectus, amendments and supplements to such Registration Statement, including post-effective amendments, all exhibits
and all materials incorporated by reference in such Registration Statement.

 

“Rule 144” means
Rule 144 promulgated under the Securities Act or any successor rule thereto or any complementary rule thereto (such as Rule 144A).

 

“Securities Act” means
the Securities Act of 1933, as amended, or any successor federal statute, and the rules and regulations thereunder, which shall
be in effect from time to time.

 

“Selling Expenses” means
all underwriting discounts, selling commissions and stock transfer taxes applicable to the sale of Registrable Securities, and
fees and disbursements of counsel for the Investor.

 

“Third Amended and Restated Charter” has
the meaning set forth in the recitals.

 

2.            Demand
Registration.

 

(a)          After
an IPO, the Company shall use its best efforts to qualify and remain qualified to register securities under the Securities Act
pursuant to a Registration Statement on Form S-3 or any successor form thereto. Following the twelve (12) month anniversary of
the consummation of an IPO, at such time as the Company shall have qualified for the use of a Registration Statement on Form S-3,
the Investor shall have the right to request a one-time registration under the Securities Act of all or any portion of its Registrable
Securities on Form S-3 or any similar short-form registration (a “Demand Registration”). The Investor’s
request for a Demand Registration shall specify the approximate number of Registrable Securities requested to be registered. Upon
receipt of such request, the Company shall cause a Registration Statement on Form S-3 (or any successor form) to be filed as soon
as practicable after the date on which the initial request is given and shall use its reasonable best efforts to cause such Registration
Statement to be declared effective by the Commission as soon as practicable thereafter.

 

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(b)          The
Company shall not be obligated to effect any Demand Registration within one hundred eighty (180) days after the effective date
of a previous Demand Registration or a previous Piggyback Registration in which holders of Registrable Securities were permitted
to register, and actually sold, a portion of the shares of Registrable Securities requested to be included therein, pursuant to
this or any other registration rights agreements pertaining to the Company.

 

(c)          The
Company may postpone for up to ninety (90) days the filing or effectiveness of a Registration Statement for a Demand Registration
if the Company’s Board determines in its reasonable good faith judgment that such Demand Registration would (i) materially
interfere with a significant acquisition, corporate organization or other similar transaction involving the Company; (ii) require
premature disclosure of material information that the Company has a bona fide business purpose for preserving as confidential;
or (iii) render the Company unable to comply with requirements under the Securities Act or Exchange Act; provided, that
in such event the Investor shall be entitled to withdraw such request and, if such request is withdrawn, such Demand Registration
shall not count as the permitted one-time Demand Registration hereunder and the Company shall pay all registration expenses in
connection with such registration.

 

(d)          If
the Investor initially requesting a Demand Registration elects to distribute the Registrable Securities covered by its request
in an underwritten offering, they shall so advise the Company as a part of their request made pursuant to Section 2(a).
The Company shall select an investment banking firm or firms reasonably acceptable to the Investor to act as the managing underwriter
or underwriters in connection with such offering.

 

3.            Piggyback
Registration.

 

(a)          Following
the IPO, subject to the one hundred eighty (180) day lock-up period under the Lock-Up Agreement, whenever the Company proposes
to register any shares of its Common Stock under the Securities Act (other than a registration effected solely to implement an
employee benefit plan or a transaction to which Rule 145 of the Securities Act is applicable, or a Registration Statement on Form
S-4, S-8 or any successor form thereto or another form not available for registering the Registrable Securities for sale to the
public), whether for its own account or for the account of one or more stockholders of the Company and the form of Registration
Statement to be used may be used for any registration of Registrable Securities (a “Piggyback Registration”),
the Company shall give prompt written notice to the Investor of its intention to effect such a registration and, subject to Section
3(b) and Section 3(c), shall include in such registration all Registrable Securities with respect to which the Company
has received a written request for inclusion from the Investor within ten (10) days after the Company’s notice has been given
to the Investor. The Company may postpone or withdraw the filing or the effectiveness of a Piggyback Registration at any time prior
to the effective date of such registration. A Piggyback Registration shall not be considered a Demand Registration for purposes
of Section 2 of this Agreement.

 

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(b)          If
a Piggyback Registration is initiated as an underwritten offering on behalf of the Company and the managing underwriter advises
the Company and the Investor and any other applicable holders of securities in writing that in its opinion the number of shares
of Common Stock proposed to be included in such registration, exceeds the number of shares of Common Stock which can be sold in
such offering and/or that the number of shares of Common Stock proposed to be included in any such registration would adversely
affect the price per share of the Common Stock to be sold in such offering, the Company shall include in such registration only
that number of shares of Common Stock which the underwriters and the Company in their sole discretion determine will not jeopardize
the success of the offering; provided, that in any event the Investor shall be entitled to register at least thirty percent
(30%) of the shares of Common Stock to be included in any such registration.

 

(c)          If
a Piggyback Registration is initiated as an underwritten offering on behalf of a holder of Common Stock other than Registrable
Securities, and the managing underwriter advises the Company in writing that in its opinion the number of shares of Common Stock
proposed to be included in such registration, including all Registrable Securities and all other shares of Common Stock proposed
to be included in such underwritten offering, exceeds the number of shares of Common Stock which can be sold in such offering and/or
that the number of shares of Common Stock proposed to be included in any such registration would adversely affect the price per
share of the Common Stock to be sold in such offering, the Company shall include in such registration (i) first, the number of
shares of Common Stock requested to be included therein by the holder(s) requesting such registration and by the holders of Registrable
Securities, allocated pro rata among such holders on the basis of the number of shares of Common Stock (on a fully diluted, as
converted basis) and the number of Registrable Securities, as applicable, owned by all such holders or in such manner as they may
otherwise agree; and (ii) second, the number of shares of Common Stock requested to be included therein by other holders of Common
Stock, allocated among such holders in such manner as they may agree, provided, that in any event only that number of shares
of Common Stock which the underwriters and the Company in their sole discretion determine will not jeopardize the success of the
offering shall be included in any such registration.

 

(d)          If
any Piggyback Registration is initiated as a primary underwritten offering on behalf of the Company, the Company shall select the
investment banking firm or firms to act as the managing underwriter or underwriters in connection with such offering; provided,
that such selection shall be subject to the consent of the Investor, which consent shall not be unreasonably withheld or delayed.

 

4.            Registration
Procedures. If and whenever the holders of Registrable Securities request that any Registrable Securities be registered pursuant
to the provisions of this Agreement, the Company shall use its reasonable best efforts to effect the registration and the sale
of such Registrable Securities in accordance with the intended method of disposition thereof, and pursuant thereto the Company
shall as soon as reasonably practicable:

 

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(a)          subject
to Section Error! Reference source not found. and Section 2(a), prepare and file with the Commission a Registration
Statement with respect to such Registrable Securities and use its reasonable best efforts to cause such Registration Statement
to become effective;

 

(b)          prepare
and file with the Commission such amendments, post-effective amendments and supplements to such Registration Statement and the
Prospectus used in connection therewith as may be necessary to keep such Registration Statement effective for a period of not less
than one hundred eighty (180) days, or if earlier, until all of such Registrable Securities have been disposed of and to comply
with the provisions of the Securities Act with respect to the disposition of such Registrable Securities in accordance with the
intended methods of disposition set forth in such Registration Statement;

 

(c)          within
a reasonable time before filing such Registration Statement, Prospectus or amendments or supplements thereto, furnish to counsel
selected by the Investor copies of such documents proposed to be filed, which documents shall be subject to the review, comment
and approval of such counsel;

 

(d)          notify
the Investor promptly after the Company receives notice thereof, of the time when such Registration Statement has been declared
effective or a supplement to any Prospectus forming a part of such Registration Statement has been filed;

 

(e)          furnish
to the Investor such number of copies of the Prospectus included in such Registration Statement (including each preliminary Prospectus)
and any supplement thereto (in each case including all exhibits and documents incorporated by reference therein) and such other
documents as the Investor may request in order to facilitate the disposition of the Registrable Securities owned by the Investor;

 

(f)          notify
the Investor, at any time when a Prospectus relating thereto is required to be delivered under the Securities Act, of the happening
of any event as a result of which the Prospectus included in such Registration Statement contains an untrue statement of a material
fact or omits any fact necessary to make the statements therein not misleading, and, at the request of the Investor, the Company
shall prepare a supplement or amendment to such Prospectus so that, as thereafter delivered to the Investor, such Prospectus shall
not contain an untrue statement of a material fact or omit to state any fact necessary to make the statements therein not misleading;

 

(g)          make
available for inspection by the Investor, any underwriter participating in any disposition pursuant to such Registration Statement
and any attorney, accountant or other agent retained by any such holder or underwriter (collectively, the “Inspectors”),
all financial and other records, pertinent corporate documents and properties of the Company (collectively, the “Records”),
and cause the Company’s officers, directors and employees to supply all information reasonably requested by any such Inspector
in connection with such Registration Statement;

 

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(h)          provide
a transfer agent and registrar (which may be the same entity) for all such Registrable Securities not later than the effective
date of such registration;

 

(i)          in
connection with an underwritten offering, enter into such customary agreements (including underwriting agreements in customary
form) and take all such other customary actions as the Investor or the managing underwriter of such offering reasonably request
in order to expedite or facilitate the disposition of such Registrable Securities (including, without limitation, making appropriate
officers of the Company available to participate in “road show” and other customary marketing activities;

 

(j)          use
its reasonable best efforts to cause such Registrable Securities to be listed on each securities exchange on which the Common Stock
is then listed;

 

(k)          use
its reasonable best efforts to cause such Registrable Securities to be registered with or approved by such other governmental agencies
or authorities as may be necessary by virtue of the business and operations of the Company to enable the Investor to consummate
the disposition of such Registrable Securities in accordance with their intended method of distribution thereof;

 

(l)          notify
the Investor promptly of any request by the Commission for the amending or supplementing of such Registration Statement or Prospectus
or for additional information;

 

(m)          advise
the Investor, promptly after it shall receive notice or obtain knowledge thereof, of the issuance of any stop order by the Commission
suspending the effectiveness of such Registration Statement or the initiation or threatening of any proceeding for such purpose
and promptly use its reasonable best efforts to prevent the issuance of any stop order or to obtain its withdrawal at the earliest
possible moment if such stop order should be issued;

 

(n)          permit
the Investor to participate in the preparation of such Registration Statement and to require the insertion therein of language,
furnished to the Company in writing, which in the reasonable judgment of the Investor and its counsel should be included; and

 

(o)          otherwise
use its reasonable best efforts to take all other steps necessary to effect the registration of such Registrable Securities contemplated
hereby.

 

5.            Expenses.
All expenses (other than Selling Expenses) incurred by the Company in complying with its obligations pursuant to this Agreement
and in connection with the registration and disposition of Registrable Securities, including, without limitation, all registration
and filing fees, underwriting expenses (other than fees, commissions or discounts), expenses of any audits incident to or required
by any such registration, fees and expenses of complying with securities and “blue sky” laws, printing expenses, fees
and expenses of the Company’s counsel and accountants shall be paid by the Company. All Selling Expenses relating to Registrable
Securities registered pursuant to this Agreement shall be borne and paid by the Investor.

 

    	7

    	 

    

 

6.            Indemnification.

 

(a)          The
Company shall indemnify and hold harmless, to the fullest extent permitted by law, the Investor, the Investor’s officers,
directors, managers, members, partners, stockholders and Affiliates, each underwriter, broker or any other Person acting on behalf
of the Investor and each other Person, if any, who controls any of the foregoing Persons within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act, against all losses, claims, actions, damages, liabilities and expenses, joint
or several, to which any of the foregoing Persons may become subject under the Securities Act or otherwise, insofar as such losses,
claims, actions, damages, liabilities or expenses arise out of or are based upon any untrue or alleged untrue statement of a material
fact contained in any Registration Statement, Prospectus, preliminary Prospectus, free writing prospectus (as defined in Rule 405
promulgated under the Securities Act) or any amendment thereof or supplement thereto or any omission or alleged omission of a material
fact required to be stated therein or necessary to make the statements therein not misleading, or any violation or alleged violation
by the Company of the Securities Act or any other similar federal or state securities laws or any rule or regulation promulgated
thereunder applicable to the Company and relating to action or inaction required of the Company in connection with any such registration,
qualification or compliance; and shall reimburse such Persons for any legal or other expenses reasonably incurred by any of them
in connection with investigating or defending any such loss, claim, action, damage or liability, except insofar as the same are
caused by or contained in any information furnished in writing to the Company by the Investor expressly for use therein or by the
Investor’s failure to deliver a copy of the Registration Statement, Prospectus, free-writing prospectus (as defined in Rule
405 promulgated under the Securities Act) or any amendments or supplements thereto (if the same was required by applicable law
to be so delivered) after the Company has furnished the Investor with a sufficient number of copies of the same prior to any written
confirmation of the sale of Registrable Securities.

 

(b)          In
connection with any registration in which the Investor is participating, the Investor shall furnish to the Company in writing such
information and affidavits as the Company reasonably requests for use in connection with any such Registration Statement or Prospectus
and, to the extent permitted by law, shall indemnify and hold harmless, the Company, each director of the Company, each officer
of the Company who shall sign such Registration Statement, each underwriter, broker or other Person acting on behalf of the Investor
and each Person who controls any of the foregoing Persons within the meaning of Section 15 of the Securities Act or Section 20
of the Exchange Act against any losses, claims, actions, damages, liabilities or expenses resulting from any untrue or alleged
untrue statement of material fact contained in the Registration Statement, Prospectus, preliminary Prospectus, free writing prospectus
(as defined in Rule 405 promulgated under the Securities Act) or any amendment thereof or supplement thereto or any omission or
alleged omission of a material fact required to be stated therein or necessary to make the statements therein not misleading, but
only to the extent that such untrue statement or omission is contained in any information or affidavit so furnished in writing
by the Investor; provided, that the obligation to indemnify shall be limited to the net proceeds (after underwriting fees,
commissions or discounts) actually received by the Investor from the sale of Registrable Securities pursuant to such Registration
Statement.

 

    	8

    	 

    

 

(c)          Promptly
after receipt by an indemnified party of notice of the commencement of any action involving a claim referred to in this Section
6, such indemnified party shall, if a claim in respect thereof is made against an indemnifying party, give written notice to
the latter of the commencement of such action. The failure of any indemnified party to notify an indemnifying party of any such
action shall not (unless such failure shall have a material adverse effect on the indemnifying party) relieve the indemnifying
party from any liability in respect of such action that it may have to such indemnified party hereunder. In case any such action
is brought against an indemnified party, the indemnifying party shall be entitled to participate in and to assume the defense of
the claims in any such action that are subject or potentially subject to indemnification hereunder, jointly with any other indemnifying
party similarly notified to the extent that it may wish, with counsel reasonably satisfactory to such indemnified party, and after
written notice from the indemnifying party to such indemnified party of its election so to assume the defense thereof, the indemnifying
party shall not be responsible for any legal or other expenses subsequently incurred by the indemnified party in connection with
the defense thereof; provided, that if (i) any indemnified party shall have reasonably concluded that there may be one or
more legal or equitable defenses available to such indemnified party which are additional to or conflict with those available to
the indemnifying party, or that such claim or litigation involves or could have an effect upon matters beyond the scope of the
indemnity provided hereunder, or (ii) such action seeks an injunction or equitable relief against any indemnified party or involves
actual or alleged criminal activity, the indemnifying party shall not have the right to assume the defense of such action on behalf
of such indemnified party without such indemnified party’s prior written consent (but, without such consent, shall have the
right to participate therein with counsel of its choice) and such indemnifying party shall reimburse such indemnified party and
any Person controlling such indemnified party for that portion of the fees and expenses of any counsel retained by the indemnified
party which is reasonably related to the matters covered by the indemnity provided hereunder.

 

(d)          If
the indemnification provided for hereunder is held by a court of competent jurisdiction to be unavailable to an indemnified party
with respect to any loss, claim, damage, liability or action referred to herein, then the indemnifying party, in lieu of indemnifying
such indemnified party hereunder, shall contribute to the amounts paid or payable by such indemnified party as a result of such
loss, claim, damage, liability or action in such proportion as is appropriate to reflect the relative fault of the indemnifying
party on the one hand and of the indemnified party on the other in connection with the statements or omissions which resulted in
such loss, claim, damage, liability or action as well as any other relevant equitable considerations; provided, that the
maximum amount of liability in respect of such contribution shall be limited, in the case of the Investor, to an amount equal to
the net proceeds (after underwriting fees, commissions or discounts) actually received by the Investor from the sale of Registrable
Securities effected pursuant to such registration. The relative fault of the indemnifying party and of the indemnified party shall
be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission
or alleged omission to state a material fact relates to information supplied by the indemnifying party or by the indemnified party
and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or
omission. The parties agree that it would not be just and equitable if contribution pursuant hereto were determined by pro rata
allocation or by any other method or allocation which does not take account of the equitable considerations referred to herein.
No Person guilty or liable of fraudulent misrepresentation shall be entitled to contribution from any Person.

 

    	9

    	 

    

 

7.            Participation
in Underwritten Registrations. No Person may participate in any registration hereunder which is underwritten unless such Person
(a) agrees to sell such Person’s securities on the basis provided in any underwriting arrangements approved by the Person
or Persons entitled hereunder to approve such arrangements and (b) completes and executes all questionnaires, powers of attorney,
indemnities, underwriting agreements and other documents required under the terms of such underwriting arrangements; provided,
that the Investor shall not be required to make any representations or warranties to the Company or the underwriters (other than
representations and warranties regarding the Investor, the Investor’s ownership of its shares of Common Stock to be sold
in the offering and the Investor’s intended method of distribution) or to undertake any indemnification obligations to the
Company or the underwriters with respect thereto, except as otherwise provided in Section 6.

 

8.            Rule
144 Compliance. With a view to making available to the Investor the benefits of Rule 144 under the Securities Act and any other
rule or regulation of the Commission that may at any time permit the Investor to sell securities of the Company to the public without
registration or pursuant to a registration on Form S-3 (or any successor form), the Company shall:

 

(a)          make
and keep public information available, as those terms are understood and defined in Rule 144 under the Securities Act, at all times
after the Registration Date;

 

(b)          use
reasonable best efforts to file with the Commission in a timely manner all reports and other documents required of the Company
under the Securities Act and the Exchange Act, at any time after the Company has become subject to such reporting requirements;
and

 

(c)          furnish
to the Investor so long as the Investor owns Registrable Securities, promptly upon request, a written statement by the Company
as to its compliance with the reporting requirements of Rule 144 under the Securities Act and of the Securities Act and the Exchange
Act, a copy of the most recent annual or quarterly report of the Company, and such other reports and documents so filed or furnished
by the Company as the Investor may reasonably request in connection with the sale of Registrable Securities without registration.

 

9.             Preservation
of Rights. The Company shall not (a) grant any registration rights to third parties which are more favorable than or inconsistent
with the rights granted hereunder, or (b) enter into any agreement, take any action, or permit any change to occur, with respect
to its securities that violates or subordinates the rights expressly granted to the Investor in this Agreement.

 

    	10

    	 

    

 

10.           Termination.
This Agreement shall terminate and be of no further force or effect when there shall no longer be any Registrable Securities outstanding;
provided, that the provisions of Section 5 and Section 6 shall survive any such termination.

 

11.           Notices.
All notices, requests, consents, claims, demands, waivers and other communications hereunder shall be in writing and shall be deemed
to have been given (a) when delivered by hand (with written confirmation of receipt); (b) when received by the addressee if sent
by a nationally recognized overnight courier (receipt requested); (c) on the date sent by facsimile or e-mail of a PDF document
(with confirmation of transmission) if sent during normal business hours of the recipient, and on the next Business Day if sent
after normal business hours of the recipient or (d) on the third day after the date mailed, by certified or registered mail, return
receipt requested, postage prepaid. Such communications must be sent to the respective parties at the addresses indicated below
(or at such other address for a party as shall be specified in a notice given in accordance with this Section 11).

 

	If to the Company:	9100 Bluebonnet Centre Blvd., Suite 502
	 	Baton Rouge, LA 70809
	 	Facsimile:	(225) 361-8720
	 	E-mail:	draucy@maisonins.com
	 	Attention:	Douglas N. Raucy
	with a copy to:	McDermott Will & Emery LLP
	 	340 Madison Avenue
	 	New York, NY 10173
	 	Facsimile:	(646) 390-1209 
	 	E-mail:	jrubinstein@mwe.com
	 	Attention:	Joel L. Rubinstein, Esq.
	If to the Investor:	150 Pierce Road, 6th Floor
	 	Itasca, IL 60143
	 	Facsimile:	(847) 952-7079
	 	E-mail:	abrook@kingswayfinancial.com
	 	Attention:	Ann Brooks, VP

 

12.          Entire
Agreement. This Agreement constitutes the sole and entire agreement of the parties to this Agreement with respect to the subject
matter contained herein, and supersedes all prior and contemporaneous understandings and agreements, both written and oral, with
respect to such subject matter.

 

13.          No
Inconsistent Agreements. The Company shall not hereafter enter into any agreement with respect to the Registrable Securities
which is inconsistent with or violates the rights granted to the Investor in this Agreement.

 

    	11

    	 

    

 

14.          Successor
and Assigns. This Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective
successors and permitted assigns. The Investor may assign its rights hereunder to any purchaser or transferee of Registrable Securities;
provided, that such purchaser or transferee shall, as a condition to the effectiveness of such assignment, be required to
execute a counterpart to this Agreement agreeing to be treated as an Investor whereupon such purchaser or transferee shall have
the benefits of, and shall be subject to the restrictions contained in, this Agreement as if such purchaser or transferee was originally
included in the definition of an Investor herein and had originally been a party hereto.

 

15.          No
Third-Party Beneficiaries. This Agreement is for the sole benefit of the parties hereto and their respective successors and
permitted assigns and nothing herein, express or implied, is intended to or shall confer upon any other Person any legal or equitable
right, benefit or remedy of any nature whatsoever, under or by reason of this Agreement.

 

16.          Headings.
The headings in this Agreement are for reference only and shall not affect the interpretation of this Agreement.

 

17.          Amendment,
Modification and Waiver. Except as otherwise provided herein, the provisions of this Agreement may only be amended, modified,
supplemented or waived with the prior written consent of the Company and the Investor. No waiver by any party or parties shall
operate or be construed as a waiver in respect of any failure, breach or default not expressly identified by such written waiver,
whether of a similar or different character, and whether occurring before or after that waiver. Except as otherwise set forth in
this Agreement, no failure to exercise, or delay in exercising, any right, remedy, power or privilege arising from this Agreement
shall operate or be construed as a waiver thereof; nor shall any single or partial exercise of any right, remedy, power or privilege
hereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege.

 

18.          Severability.
If any term or provision of this Agreement is invalid, illegal or unenforceable in any jurisdiction, such invalidity, illegality
or unenforceability shall not affect any other term or provision of this Agreement or invalidate or render unenforceable such term
or provision in any other jurisdiction. Upon such determination that any term or other provision is invalid, illegal or unenforceable,
the parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as
closely as possible in a mutually acceptable manner in order that the transactions contemplated hereby be consummated as originally
contemplated to the greatest extent possible.

 

19.          Remedies.
The Investor, in addition to being entitled to exercise all rights granted by law, including recovery of damages, shall be entitled
to specific performance of its rights under this Agreement. The Company acknowledges that monetary damages would not be adequate
compensation for any loss incurred by reason of a breach by it of the provisions of this Agreement and the Company hereby agrees
to waive the defense in any action for specific performance that a remedy at law would be adequate.

 

    	12

    	 

    

 

20.          Governing
Law; Submission to Jurisdiction. This Agreement shall be governed by and construed in accordance with the internal laws of
the State of Delaware without giving effect to any choice or conflict of law provision or rule (whether of the State of Delaware
or any other jurisdiction).

 

21.          Waiver
of Jury Trial. Each party acknowledges and agrees that any controversy which may arise under this Agreement is likely to involve
complicated and difficult issues and, therefore, each such party irrevocably and unconditionally waives any right it may have to
a trial by jury in respect of any legal action arising out of or relating to this Agreement or the transactions contemplated hereby.
Each party to this Agreement certifies and acknowledges that (a) no representative of any other party has represented, expressly
or otherwise, that such other party would not seek to enforce the foregoing waiver in the event of a legal action, (b) such party
has considered the implications of this waiver, (c) such party makes this waiver voluntarily, and (d) such party has been induced
to enter into this Agreement by, among other things, the mutual waivers and certifications in this Section 21.

 

22.          Counterparts.
This Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which together shall be deemed
to be one and the same agreement. A signed copy of this Agreement delivered by facsimile, e-mail or other means of electronic transmission
shall be deemed to have the same legal effect as delivery of an original signed copy of this Agreement.

 

[SIGNATURE PAGE FOLLOWS]

 

    	13

    	 

    

 

IN WITNESS WHEREOF, the parties hereto have
executed this Registration Rights Agreement on the date first written above.

 

	 	1347 PROPERTY INSURANCE HOLDINGS, INC.
	 	 	 
	 	By	/s/ Douglas N. Raucy
	 	 	Name: Douglas N. Raucy
	 	 	Title:   President
	 	 	 
	 	KINGSWAY AMERICA INC.
	 	 	 
	 	By	/s/  Larry G. Swets, Jr
	 	 	Name: Larry G. Swets, Jr.
	 	 	Title: President and CEO
	 	 	 
	 	By	/s/ William A. Hickey, Jr
	 	 	Name: William A. Hickey, Jr.
	 	 	Title: Vice President

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