Document:

Exhibit 10.10

 

Credit Suisse Capital LLC

c/o Credit Suisse Securities (USA) LLC

Eleven Madison Avenue

New York, NY 10010-3629

 

	DATE:	August 7, 2019
	 	 
	TO:	Ironwood Pharmaceuticals, Inc.
	 	301 Binney Street
	 	Cambridge, MA 02142
	 	Attn: Chief Legal Officer
	 	 
	FROM:	Credit Suisse Capital LLC
	 	 
	SUBJECT:	Partial Terminations of Relevant Transactions Listed on Attached Schedule A and Related Amendments

 

The purpose of this communication (this “Confirmation”)
is to set forth the terms and conditions of the partial termination (the “Transaction”) of the rights and obligations
under and in respect of the following transactions (each such transaction, a “Relevant Transaction” and collectively
the “Relevant Transactions” and the terminated portion of each such Relevant Transaction, the “Terminated
Portion”) and to modify the Relevant Transactions as described herein: Base call option transaction confirmation, dated
as of June 10, 2015, by and between Credit Suisse Capital LLC (“Dealer”), represented by Credit Suisse
Securities (USA) LLC (“Agent”) and Ironwood Pharmaceuticals, Inc. (“Counterparty”), (the
“Call Options”); and the base warrant transaction confirmation, dated as of June 10, 2015, by and between Dealer,
represented by Agent and Counterparty (the “Warrants”). The Terminated Portion of each of the above Relevant
Transactions shall be as set forth on Schedule A in the column labeled “Number of Options or Warrants, As Applicable, of
such Relevant Transaction Subject to Termination”. The Terminated Portion of each Relevant Transaction shall be terminated
as of the date that is one Settlement Cycle following the last day of the Unwind Period (the “Termination Effective Date”).

 

1.       The
definitions and provisions of the 2002 ISDA Equity Derivatives Definitions, as published by the International Swaps and Derivatives
Association, Inc. (“ISDA”) are incorporated into this Confirmation. Any capitalized term not otherwise defined
herein shall have the meaning set forth for such term in the confirmation for the relevant Call Options or Warrants, as applicable.

 

2.       In
consideration for the termination of the Terminated Portion of each Relevant Transaction, a “Termination Payment”
with respect to the Terminated Portion of each Relevant Transaction shall be made in the amount set forth in Section 5, such
Termination Payments to be made as further specified in Section 4 below. Each of Dealer and Counterparty hereby agrees that,
upon receipt of the Termination Payments (as aggregated into a Net Termination Payment as provided in Section 3 below), with
respect to the Terminated Portion of each Relevant Transaction: (i) such Terminated Portion of the Relevant Transaction and
all of the respective rights and obligations of Dealer and Counterparty thereunder are cancelled and terminated as of the
Termination Effective Date; (ii) Dealer releases and discharges Counterparty from and agrees not to make any claim against
Counterparty with respect to any obligations of Counterparty arising out of, and to be performed in connection with, any
Terminated Portion of a Relevant Transaction after the Termination Effective Date, including, but not limited to, any rights
or obligations said to survive the termination of a Relevant Transaction in such Relevant Transaction’s confirmation in
respect of the Terminated Portion of such Relevant Transaction and; (iii) Counterparty releases and discharges Dealer from
and agrees not to make any claim against Dealer with respect to any obligations of Dealer arising out of, and to be performed
in connection with, any Terminated Portion of a Relevant Transaction after the Termination Effective Date, including, but not
limited to, any rights or obligations said to survive the termination of a Relevant Transaction in such Relevant
Transaction’s confirmation in respect of the Terminated Portion of such Relevant Transaction. Each of the parties
hereby represents and acknowledges to the other that, upon receipt of the Termination Payments (as aggregated into a Net Termination Payment as provided in
Section 3 below), no further amounts are owed by Dealer or Counterparty to any other party with respect to the Terminated Portion
of each Relevant Transaction.

 

3.       The
parties hereby agree to net the Termination Payments with respect to the Terminated Portion of each of the Relevant Transactions
such that a single payment shall be made with respect to the Terminated Portion of each of the Relevant Transactions (such net
payment, the “Net Termination Payment”), such Net Termination Payment satisfying each party’s obligations
to make payments to the other. On the Termination Effective Date, Dealer shall deliver to Counterparty the Net Termination Payment
in accordance with the Ironwood Payment Instructions below.

 

     

     

    

 

4.       Ironwood
Payment Instructions:

  

5.       The
Termination Payment with respect to the Terminated Portion of each Relevant Transaction shall be equal to the amount determined
by referencing the VWAP Price for the Relevant Transaction as set forth in the table below.

 

		 	Termination Payment in respect of the	 	 	Termination Payment in respect of the	 
	VWAP Price	 	Terminated Portion of the Call Options	 	 	Terminated Portion of the Warrants	 
	$	 	$	 	 	$	 
	9.00	 	$	16,802,702.91	 	 	$	15,024,639.11	 
	9.10	 	$	17,158,315.67	 	 	$	15,291,348.68	 
	9.20	 	$	17,602,831.62	 	 	$	15,646,961.44	 
	9.30	 	$	18,047,347.57	 	 	$	16,091,477.39	 
	9.40	 	$	18,491,863.52	 	 	$	16,447,090.15	 
	9.50	 	$	18,936,379.47	 	 	$	16,802,702.91	 
	9.60	 	$	19,380,895.42	 	 	$	17,247,218.86	 
	9.70	 	$	19,914,314.56	 	 	$	17,691,734.81	 
	9.80	 	$	20,358,830.51	 	 	$	18,047,347.57	 
	9.90	 	$	20,803,346.46	 	 	$	18,491,863.52	 
	10.00	 	$	21,247,862.41	 	 	$	18,847,476.28	 
	10.10	 	$	21,781,281.55	 	 	$	19,291,992.23	 
	10.20	 	$	22,225,797.50	 	 	$	19,647,604.99	 
	10.30	 	$	22,670,313.45	 	 	$	20,092,120.94	 
	10.40	 	$	23,203,732.59	 	 	$	20,536,636.89	 
	10.50	 	$	23,648,248.54	 	 	$	20,892,249.65	 
	10.60	 	$	24,181,667.68	 	 	$	21,425,668.79	 
	10.70	 	$	24,626,183.63	 	 	$	21,781,281.55	 
	10.80	 	$	25,159,602.77	 	 	$	22,225,797.50	 
	10.90	 	$	25,693,021.91	 	 	$	22,670,313.45	 
	11.00	 	$	26,137,537.86	 	 	$	23,114,829.40	 

 

If the VWAP Price is between two VWAP Prices in the table above,
the amount of the Termination Payment with respect to the Terminated Portion of the Relevant Transaction shall be determined by
a straight-line interpolation between the amount of the Termination Payment set forth for the higher and lower VWAP Prices. If
the VWAP Price exceeds the highest or is below the lowest VWAP Price
in the table above, the amount of the Termination Payment with respect to the Terminated Portion of the Relevant Transaction shall
be extrapolated from the table in a commercially reasonable manner.

 

    2

     

    

 

The parties acknowledge and agree that the Termination Payments
set forth in the table above shall remain subject to adjustment pursuant to the terms of the applicable Relevant Transaction during
the term of this Confirmation and that any such adjustment will be made in good faith and in a commercially reasonable manner by
the Calculation Agent subject to the applicable requirements set forth opposite the caption “Calculation Agent” in
the applicable Relevant Transaction.

 

“VWAP Price” shall mean the arithmetic average
of the per-Share volume-weighted average price as displayed under the heading “Bloomberg VWAP” on Bloomberg page IRWD
<equity> AQR in respect of the period from the scheduled opening time of the Exchange to the Scheduled Closing Time of the
Exchange on each Scheduled Trading Day that is not a Disrupted Day during the Unwind Period (or if such volume-weighted average
price is unavailable at such time, the market value of one Share on such Valid Day, as determined by the Calculation Agent using,
if practicable, a volume-weighted average method).

 

“Unwind Period” shall mean the four Scheduled
Trading Days beginning on and including the earlier of (1) the Scheduled Trading Day following the date that J.P. Morgan Securities
LLC (the “Initial Purchaser”) exercises its option to purchase additional Notes (as defined herein) pursuant
to Section 2 of the Purchase Agreement between Counterparty and the Initial Purchaser, as notified by Counterparty to Dealer on
such day in a written notice containing a repetition of the representation and warranty contained in Section 8(f) herein, and
(2) August 26, 2019; provided, however, that (a) if any such Scheduled Trading Day is a Disrupted Day, the Unwind Period
shall be extended by one Scheduled Trading Day for each such Disrupted Day (which provision shall be applied successively until
four Scheduled Trading Days that are not Disrupted Days occur, in which case the Termination Effective Date shall be postponed
by one Scheduled Trading Day for each such Disrupted Day) and (b) Dealer may (x) postpone the Unwind Period or (y) add, in whole
or in part, Scheduled Trading Days to the Unwind Period, in either case, if Dealer reasonably and in good faith, (i) determines
that such action is reasonably necessary or appropriate to preserve Dealer’s commercially reasonable hedging or hedge unwind
activity hereunder in light of existing liquidity conditions or (ii) determines, based on the advice of counsel, that such action
is reasonably necessary or appropriate to enable Dealer to effect transactions with respect to Shares in connection with its commercially
reasonable hedging, hedge unwind or settlement activity hereunder in a manner that would, if Dealer were Issuer or an affiliated
purchaser of Issuer, be in compliance with applicable legal, regulatory or self-regulatory requirements, or with related policies
and procedures applicable to Dealer.

 

6.       The
parties agree that from and after the Termination Effective Date, each of the Relevant Transactions shall be amended and restated
in its entirety but with the adjustments shown in the column labeled “Revisions to the Terms of the Relevant Transaction”
in Schedule A beside each Relevant Transaction. The parties further agree that each of the following side letters to the Relevant
Transactions shall continue in full force and effect:

 

		·	The letter agreement by and between Dealer and Counterparty dated as of June 10, 2015, specifying certain additional terms
and conditions of the Warrants issued by Counterparty to Dealer;

 

		·	The letter agreement by and between Dealer and Counterparty dated as of June 10, 2015, specifying certain additional terms
and conditions of the Call Options issued by Dealer to Counterparty; and

 

7.       10b5-l
Plan. Counterparty represents, warrants and covenants to Dealer that:

 

		a.	it is entering into this Confirmation and the Transaction in good faith and not as part of a plan or scheme to evade the
                                                                prohibitions of Rule 10b5-l under the Exchange Act (“Rule 10b5-1”) or any other antifraud or
                                                                anti-manipulation provisions of the federal or applicable state securities laws and that it has not entered into or altered
                                                                and will not enter into or alter any corresponding or hedging transaction
or position with respect to the Shares. Counterparty acknowledges that it is the intent of the parties that transactions in the
Shares effected by Dealer in connection with this Transaction during the Unwind Period comply with the requirements of paragraphs
(c)(l)(i)(A) and (B) of Rule 10b5-l and this Transaction shall be interpreted to comply with the requirements of Rule 10b5-1(c).

 

		b.	it will not seek to control or influence Dealer’s decision to make any “purchases or sales” (within the meaning
of Rule 10b5-l(c)(l)(i)(B)(3)) in connection with this Transaction, including, without limitation, Dealer’s decision to enter
into any hedging transactions. Counterparty represents and warrants that it has consulted with its own advisors as to the legal
aspects of its adoption and implementation of this Confirmation under Rule 10b5-l.

 

		c.	it acknowledges and agrees that any amendment, modification, waiver or termination of this Transaction must be effected in
accordance with the requirements for the amendment or termination of a “plan” as defined in Rule 10b5-l(c). Without
limiting the generality of the foregoing, any such amendment, modification, waiver or termination shall be made in good faith and
not as part of a plan or scheme to evade the prohibitions of Rule 10b-5, and no such amendment, modification, waiver or termination
shall be made at any time at which Counterparty or any officer, director, manager or similar person of Counterparty is aware of
any material non-public information regarding Issuer or the Shares.

 

    3

     

    

 

8.       Counterparty
represents and warrants to Dealer on the date hereof and, with respect to all representations below other than the representation
in subsection 8(f), on the Termination Effective Date that:

 

		a.	Counterparty has all necessary corporate power and authority to execute, deliver and perform its obligations in respect of
this Confirmation; such execution, delivery and performance have been duly authorized by all necessary corporate action on Counterparty’s
part; and this Confirmation has been duly and validly executed and delivered by Counterparty and constitutes its valid and binding
obligation, enforceable against Counterparty in accordance with its terms, subject to applicable bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and similar laws affecting creditors’ rights and remedies generally, and subject,
as to enforceability, to general principles of equity, including principles of commercial reasonableness, good faith and fair dealing
(regardless of whether enforcement is sought in a proceeding at law or in equity) and except that rights to indemnification and
contribution hereunder may be limited by federal or state securities laws or public policy relating thereto.

 

		b.	Neither the execution and delivery of this Confirmation nor the incurrence or performance of obligations of Counterparty hereunder
will conflict with or result in a breach of the certificate of incorporation or by-laws (or any equivalent documents) of Counterparty,
or any applicable law or regulation, or any order, writ, injunction or decree of any court or governmental authority or agency,
or any agreement or instrument to which Counterparty or any of its subsidiaries is a party or by which Counterparty or any of its
subsidiaries is bound or to which Counterparty or any of its subsidiaries is subject, or constitute a default under, or result
in the creation of any lien under, any such agreement or instrument.

 

		c.	No consent, approval, authorization, or order of, or filing with, any governmental agency or body or any court is required
in connection with the execution, delivery or performance by Counterparty of this Confirmation, except such as have been obtained
or made and such as may be required under the Securities Act of 1933, as amended, or state securities laws.

 

		d.	Counterparty is not and, after consummation of the transactions contemplated hereby, will not be required to register as an
“investment company” as such term is defined in the Investment Company Act of 1940, as amended.

 

		e.	Counterparty is an “eligible contract participant” (as such term is defined in Section 1a(18) of the Commodity
Exchange Act, as amended, other than a person that is an eligible contract participant under Section 1a(18)(C) of the Commodity
Exchange Act).

 

		f.	Counterparty and each of its affiliates are not, on the date hereof, in possession of any material non-public information with
respect to the Issuer or the Shares.

 

		g.	No state or local (including any non-U.S. jurisdiction’s) law, rule, regulation or regulatory order applicable to the
Shares would give rise to any reporting, consent, registration or other requirement (including without limitation a requirement
to obtain prior approval from any person or entity), except for the reporting requirements of the Exchange Act and rules promulgated
thereunder as a result of Dealer or its affiliates owning or holding (however defined) Shares.

 

		h.	Counterparty (A) is capable of evaluating investment risks independently, both in general and with regard to all transactions
and investment strategies involving a security or securities; (B) will exercise independent judgment in evaluating the recommendations
of any broker-dealer or its associated persons, unless it has otherwise notified the broker-dealer in writing; and (C) has total
assets of at least $50 million.

 

		i.	Counterparty is not entering into this Confirmation to create actual or apparent trading activity in the Shares (or any security
convertible into or exchangeable for the Shares) or to raise or depress or otherwise manipulate the price of the Shares (or any
security convertible into or exchangeable for the Shares) or otherwise in violation of the Exchange Act.

 

9.       Dealer
hereby repeats the representations made to Counterparty in Section 3 of the 2002 ISDA Master Agreement on the date hereof and on
the Termination Effective Date.

 

10.     Governing
Law. This Confirmation and any dispute arising hereunder shall be governed by and construed in accordance with the laws of the
State of New York (without reference to choice of law doctrine).

 

    4

     

    

 

11.     If
on or prior to August 12, 2019 (or such later date as agreed upon by the parties) (such date, the “Termination Transaction
Contingency Date”), the issuance by Counterparty of its Convertible Senior Notes due 2024 and its Convertible Senior Notes
due 2026 has not been completed for any reason, subject to the proviso below, this Transaction shall automatically be cancelled
without the payment of any settlement amount, breakage costs or other amounts representing the future value of this Transaction
and all of the respective rights and obligations of Dealer and Counterparty under this Confirmation shall be cancelled and terminated;
provided that, if Dealer determines that as a result of any hedge unwind activity by Dealer in good faith in connection
with the transactions contemplated hereby the cancellation of the Transaction would result in Dealer not maintaining Hedge Positions
in the amount it deems appropriate with respect to any Relevant Transaction, this Transaction shall remain in effect but the Terminated
Portions for each Relevant Transaction shall be determined by Dealer in good faith to correspond to such hedge unwind activity
and the relevant Termination Payments shall be adjusted pro rata and the Calculation Agent shall make corresponding adjustments
to the respective amounts set forth in Schedule A. For the avoidance of doubt, upon such cancellation and termination of this Confirmation,
except as set forth in the immediately preceding proviso, the respective rights and obligations of Dealer and Counterparty under
each Relevant Transaction, any indenture or otherwise shall not be cancelled or terminated. Following such cancellation and termination
of this Confirmation, except in the case set forth in the proviso above, each party shall be released and discharged by the other
party from, and agrees not to make any claim against the other party with respect to, any obligations or liabilities of either
party arising out of and to be performed in connection with this Transaction either prior to or after the Termination Transaction
Contingency Date.

 

12.     Except
as expressly set forth herein, all of the terms and conditions of the Call Options and the Warrants shall remain in full force
and effect and are hereby confirmed in all respects.

 

13.     U.S.
Stay Regulations. The parties agree that (i) to the extent that prior to the date hereof both parties have adhered to the 2018
ISDA U.S. Resolution Stay Protocol (the “Protocol”), the terms of the Protocol are incorporated into and form
a part of this Confirmation, and for such purposes this Confirmation shall be deemed a Protocol Covered Agreement and each party
shall be deemed to have the same status as “Regulated Entity” and/or “Adhering Party” as applicable to
it under the Protocol; (ii) to the extent that prior to the date hereof the parties have executed a separate agreement the effect
of which is to amend the qualified financial contracts between them to conform with the requirements of the QFC Stay Rules (the
“Bilateral Agreement”), the terms of the Bilateral Agreement are incorporated into and form a part of this Confirmation
and each party shall be deemed to have the status of “Covered Entity” or “Counterparty Entity” (or other
similar term) as applicable to it under the Bilateral Agreement; or (iii) if clause (i) and clause (ii) do not apply, the terms
of Section 1 and Section 2 and the related defined terms (together, the “Bilateral Terms”) of the form of bilateral
template entitled “Full-Length Omnibus (for use between U.S. G-SIBs and Corporate Groups)” published by ISDA on November
2, 2018 (currently available on the 2018 ISDA U.S. Resolution Stay Protocol page at www.isda.org and, a copy of which is available
upon request), the effect of which is to amend the qualified financial contracts between the parties thereto to conform with the
requirements of the QFC Stay Rules, are hereby incorporated into and form a part of this Confirmation, and for such purposes this
Confirmation shall be deemed a “Covered Agreement,” Dealer shall be deemed a “Covered Entity” and Counterparty
shall be deemed a “Counterparty Entity.” In the event that, after the date of this Confirmation, both parties hereto
become adhering parties to the Protocol, the terms of the Protocol will replace the terms of this paragraph. In the event of any
inconsistencies between this Confirmation and the terms of the Protocol, the Bilateral Agreement or the Bilateral Terms (each,
the “QFC Stay Terms”), as applicable, the QFC Stay Terms will govern. Terms used in this paragraph without definition
shall have the meanings assigned to them under the QFC Stay Rules. For purposes of this paragraph, references to “this Confirmation”
include any related credit enhancements entered into between the parties or provided by one to the other. In addition, the parties
agree that the terms of this paragraph shall be incorporated into any related covered affiliate credit enhancements, with all references
to Dealer replaced by references to the covered affiliate support provider.

 

“QFC Stay Rules” means
the regulations codified at 12 C.F.R. 252.2, 252.81–8, 12 C.F.R. 382.1-7 and 12 C.F.R. 47.1-8, which, subject to limited
exceptions, require an express recognition of the stay-and-transfer powers of the FDIC under the Federal Deposit Insurance Act
and the Orderly Liquidation Authority under Title II of the Dodd Frank Wall Street Reform and Consumer Protection Act and the override
of default rights related directly or indirectly to the entry of an affiliate into certain insolvency proceedings and any restrictions
on the transfer of any covered affiliate credit enhancements.

 

14.     Role
of Agent. Agent has no obligation hereunder, by guaranty, endorsement or otherwise, with respect to performance of Dealer’s
obligations hereunder or under the Relevant Transactions.

 

[The remainder of page intentionally
left blank]

 

    5

    

 

This Confirmation may be executed in several counterparts, each
of which shall be deemed an original but all of which together shall constitute one and the same instrument. Facsimile or portable
document format (.pdf) copies of this Confirmation shall have the same force and effect as an original.

 

Please confirm that the foregoing correctly sets forth the terms
of the agreement between Dealer and Counterparty with respect to the Transaction, by manually signing this Confirmation as evidence
of agreement to such terms and returning an executed copy to us.

 

	Very Truly Yours,	 
	 	 
	Credit Suisse Capital LLC	 
	 	 
	By:	/s/ Barry Dixon	 
	Name:	Barry Dixon	 
	Title:	Authorized Signatory	 
	 	 
	By:	/s/ Carole Villoresi	 
	Name:	Carole Villoresi	 
	Title:	Authorized Signatory	 
	 	 
	Credit Suisse Securities (USA) LLC,	 
	acting solely as Agent in connection with the Relevant Transactions	 
	 	 
	By:	/s/ Barry Dixon	 
	Name:	Barry Dixon	 
	Title:	Director	 

 

[Signature Page to Unwind Agreement]

 

     

     

    

 

Counterparty hereby agrees to, accepts and confirms
the terms of the foregoing as of the Termination Effective Date.

 

	IRONWOOD PHARMACEUTICALS, INC.	 
	 	 	 
	By:	/s/ Gina Consylman	 
	Name:	Gina Consylman	 
	Title:	SVP and CFO, Finance	 

 

[Signature Page to Unwind Agreement]

 

     

     

    

 

Schedule A

 

	 	 	Number of Options or	 	 
	 	 	Warrants, As Applicable, of	 	 
	 	 	such Relevant Transaction	 	Revisions to the Terms of the
	Relevant Transaction	 	Subject to Termination	 	Relevant Transaction
	 	 	 	 	 
	Base call option transaction confirmation, dated as of June
    10, 2015, by and between Dealer, represented by Agent, and Counterparty	 	215,000 Options 	 	Number of Options shall be revised to equal 85,000 
	 	 	 	 	 
	Base warrant transaction confirmation, dated as of June
    10, 2015, by and between Dealer, represented by Agent, and Counterparty	 	8,890,319 Warrants 	 	Number of Warrants shall be revised to equal
    3,514,777 

 

    A-1exhibit101maisoninsuranc

                                                                                                                                                                                                                                                                                                                                                                                                      OFFICE OF INSURANCE REGULATION                                                                                    DAVID ALTMAIER  COMMISSIONER                IN THE MATTER OF:                                              CASE NO.:  246427-19-CO                       Application for the Direct Acquisition   of MAISON INSURANCE COMPANY   by FEDNAT HOLDING COMPANY                                     /                                              CONSENT ORDER          THIS  CAUSE  came  on for  consideration upon  the  filing by FEDNAT  HOLDING   COMPANY   (“APPLICANT”)  with  the FLORIDA OFFICE OF  INSURANCE REGULATION   (“OFFICE”) of an application for the approval of the direct acquisition of 100% of the issued and   outstanding voting securities of MAISON INSURANCE COMPANY (“MAISON”), pursuant to   Section 628.461, Florida Statutes (“Application”).   Following a complete review of the entire   record, and upon consideration thereof, and being otherwise fully advised in the premises, the   OFFICE hereby finds as follows:         1.    The OFFICE has jurisdiction over the subject matter and the parties herein.         2.    APPLICANT has applied for and, subject to the present and continuing satisfaction   of the requirements, terms, and conditions established herein, has satisfactorily met all conditions   precedent to the granting of approval by the OFFICE of the proposed acquisition of 100% of the   issued and outstanding shares of MAISON’s stock.                                     Page 1 of 13    

 

      3.    APPLICANT is a Florida holding company that is publicly traded on the National   Association  of Securities  Dealers Automated Quotations system (“Nasdaq”) under the symbol   “FNHC”, with no 10% or greater shareholders.           4.    MAISON is a Louisiana-domiciled and licensed property and casualty insurer that   is authorized to transact property and casualty insurance in Florida through a subsisting Certificate   of Authority issued by the OFFICE.  MAISON has agreed to be treated as commercially domiciled   in Florida and, as such, is subject to filings required by Section 628.461, Florida Statutes.           5.    MAISON is owned 100% by 1347 PROPERTY INSURANCE HOLDINGS, INC.   (“1347 PROPERTY”), a Delaware holding company that is publicly traded on Nasdaq under the   symbol “PIH”. 1347 PROPERTY is beneficially owned 45% by Fundamental Global Investors,   LLC, a North Carolina limited liability company; 20% by Kingsway Financial Services, Inc., a   Delaware corporation; and 10% by Gordon G. Pratt; with no other 10% or greater shareholders.         6.    The Application represents that on or about February 25, 2019, APPLICANT and   MAISON  entered  into  an “Equity Purchase  Agreement”  (“Equity Agreement”) whereby   APPLICANT agreed to purchase all issued and outstanding shares of MAISON’s stock for a total   cash consideration of $25,500,000 United States Dollars (“USD”) and a stock consideration as   determined in the Equity Agreement.         7.    APPLICANT and 1347 PROPERTY have   submitted, as Exhibit C to the Equity   Agreement referenced in paragraph 6 above, a draft “Standstill Agreement” that APPLICANT and   1347  PROPERTY  have agreed to execute  after  the  closing  of  the  transaction  described  in   paragraph 6 above.  Within 10 days after the closing of the transaction, APPLICANT and 1347   PROPERTY agree to submit an executed copy of the Standstill Agreement to the OFFICE.                                         Page 2 of 13                                           

 

      8.    If,  as  a  result  of  the transaction  contemplated  in  this  Consent  Order,  1347   PROPERTY acquires 10% or more of APPLICANT, 1347 PROPERTY acknowledges that it must   comply with the requirements of Section 628.461, Florida Statutes.         9.    APPLICANT has  made  material  representations  that, except  as  disclosed in  the   Application, none of its officers or directors, and none of the post-acquisition officers and directors   of MAISON, have been found guilty of, or have pleaded guilty or nolo contendere to, a felony or   misdemeanor,  other  than  a  minor  traffic  violation,  without  regard  to  whether  a  judgment  or   conviction was entered by the court.          10.   APPLICANT has further represented that it has submitted complete background   information on all the individuals referenced in paragraph 9 above.  If said information has not   been provided to the OFFICE, or if the sources utilized by the OFFICE in its investigation process   reveal that the representations made in paragraph 9 above are inaccurate, any such individual shall   be removed as officer or director of said company within 30 days of receipt of notification from   the OFFICE and replaced with a person or persons acceptable to the OFFICE.          11.   If, upon receipt of notification from the OFFICE pursuant to paragraph 10 above,   APPLICANT does not timely take the required corrective action, APPLICANT agrees that such   failure to act would constitute an immediate serious danger to the public and the OFFICE may   immediately suspend, revoke, or take other administrative action as it deems appropriate upon the   Certificate  of  Authority  of  MAISON  without  further  proceedings,  pursuant  to  Sections   120.569(2)(n) and 120.60(6), Florida Statutes.         12.   APPLICANT represents that, except as disclosed in the Application, there are no   present plans or proposals to make any substantive changes to MAISON, including liquidating it,   selling any of its assets (except for transactions such as investment portfolio transactions in the                                      Page 3 of 13                                           

 

ordinary course of business), merging or consolidating it with any person or persons, or making   any other major change in its business operations.         13.   APPLICANT acknowledges and represents that if the transactions contemplated in   the  Application  are  consummated, MAISON  will  be  an  affiliated  person  of  FedNat Insurance   Company and Monarch National Insurance Company, pursuant to Section 624.10(2)(e), Florida   Statutes.           14.   APPLICANT, MAISON, and 1347 PROPERTY shall ensure that any agreement   MAISON  is  party  to  or  governed  by,  with  respect  to  any  and  all  pro  rata  and  excess  of  loss   reinsurance coverage, shall provide for terms and pricing to be procured at open market terms.    APPLICANT, MAISON, or 1347 PROPERTY shall conduct sufficient due diligence, through a   broker or otherwise, and shall solicit legitimate written quotes from potential third-party reinsurers   through a firm order prior to entering into a quota share or excess of loss agreement.         15.   MAISON shall not enter into any reinsurance or brokerage agreement, whether or   not affiliated, that requires approval from the reinsurer or broker regarding any potential sale of   MAISON.         16.   Until such time as MAISON is no longer subject to the commercially domiciled   conditions  stipulated  in  Consent  Order  No.: 203693-17-CO, and  pursuant  to  Sections   628.461(3)(f)-(g), Florida Statutes, APPLICANT shall file or cause to be filed with the OFFICE   the  Enterprise  Risk  Report  required  by  Section  628.801(2),  Florida  Statutes,  and  any  and  all   additional information necessary to evaluate the enterprise risk of MAISON.         17.   Until such time as MAISON is no longer subject to the commercially domiciled   conditions stipulated in Consent Order No.: 203693-17-CO, and pursuant to Section 624.10(3),   Florida  Statutes,  APPLICANT  is  a  controlling  entity  and,  as  such,  shall  comply  with  Section                                      Page 4 of 13                                           

 

628.461(12)(b), Florida Statutes, should APPLICANT choose to divest its controlling interest in   MAISON.         18.   All  parties  to  this  Consent  Order  agree  that  this  Consent  Order  regarding  the   acquisition  of  MAISON  shall  be  deemed  null  and  void  if  the  transaction  contemplated  in  the   Application does not close within 180 days of execution of this Consent Order.          19.   Within 10 business days after the transactions contemplated in the Application are   completed, APPLICANT shall submit, or cause to be submitted, to the OFFICE all documents   evidencing completion of said transactions. Further, APPLICANT or MAISON shall notify the   OFFICE within 3 days of determining that the transaction will not occur.         20.   Any material changes to the information submitted in the Application filing shall   be  reported  to  the  OFFICE  for  its  review  prior  to  the  closing.   APPLICANT  and  MAISON   acknowledge that if the  OFFICE determines  that any of these reported  changes  would have a   material negative impact to the financial condition or operation of APPLICANT or MAISON, the   OFFICE  may  rescind  its  approval  as  granted  in  this  Consent  Order  by  written  notice  to   APPLICANT.         21.   The Application represents that APPLICANT, 1347 PROPERTY, and MAISON   requested approval of the  transactions  contemplated  in  this  Application from MAISON’s   domiciliary regulator, the Louisiana Department of Insurance, which issued its approval by order   dated August 7, 2019.         22.   APPLICANT, 1347 PROPERTY, and MAISON acknowledge that any repayment   of  surplus  notes issued  by  MAISON  are  subject  to approval by  the Louisiana Department  of   Insurance and shall not be construed as being approved by issuance of this Consent Order.                                      Page 5 of 13                                           

 

      23.   Any  prior  orders,  consent  orders,  or  corrective  action  plans  that  MAISON  has   entered into with the OFFICE prior to the execution of this Consent Order shall apply and remain   in full force and effect for MAISON, except where provisions of such orders, consent orders, or   corrective action plans have expired; have been superseded by subsequent orders, consent orders,   or corrective action plans; or are inconsistent with this Consent Order.         24.   MAISON shall, no later than 15 days after the  month in  which all transactions   contemplated in the Application are completed, file an update to its Holding Company Registration   Statement,  as  required  by  Section  628.801,  Florida  Statutes,  and  Rule  69O-143.046,  Florida   Administrative Code.         25.   APPLICANT,  1347  PROPERTY,  and  MAISON  affirm  that  all  explanations,   representations,  statements,  and  documents  provided  to  the  OFFICE  in  connection  with  this   Application,  including  all  attachments  and  supplements  thereto,  are  true  and  correct  and  fully   describe all  transactions,  agreements,  ownership  structures,  understandings,  and  control  with   regard to the acquisition and future operations of MAISON. APPLICANT, 1347 PROPERTY, and   MAISON  further  agree  and  affirm  that  said  explanations,  representations,  statements,  and   documents, including all attachments and supplements thereto, are material to the issuance of this   Consent Order and have been relied upon by the OFFICE in its determination to enter into this   Consent Order.         26.   APPLICANT  or  MAISON  shall  report  to  the  OFFICE,  Property  &  Casualty   Financial Oversight, any time that one or more of them is named as a party defendant in a class   action lawsuit within 15 days after the class is certified.  APPLICANT or MAISON shall include   a copy of the complaint at the time the class action lawsuit is reported to the OFFICE.                                      Page 6 of 13                                           

 

      27.   MAISON  shall  maintain  an  information  security  program  for  the  security  and   protection  of  confidential  and  proprietary  information  under  its  control  that  complies  with  all   applicable  laws  and  regulations  regarding  information  security.   MAISON  agrees  that  it  shall   continually  monitor  and  enhance  its  information  security  programs  in  order  to  mitigate  data   security breaches. MAISON further agrees that it shall notify the OFFICE within 5 business days   of identifying a data breach.          28.   Executive Order 13224 prohibits any transactions by U.S. persons involving the   blocked assets and interests of terrorists and terrorist support organizations.  APPLICANT and   MAISON  shall  maintain  and  adhere  to  procedures  necessary  to  detect  and  prevent  prohibited   transactions  with  those  individuals  and  entities,  which  have  been  identified  at  the  Treasury   Department’s Office of Foreign Assets Control website, http://www.treas.gov/ofac.         29.   Within 60 days of the execution of this Consent Order, APPLICANT shall submit,   or  cause  to  be  submitted,  to  the  OFFICE  a  certification  evidencing  compliance  with  all  the   requirements  of  this  Consent  Order.  Any  exceptions  shall  be  so  noted  and  contained  in  the   certification.  Exceptions noted in the certification shall also include a timeline defining when the   outstanding  requirements  of  the  Consent  Order  will  be  completed.   Said  certification  shall  be   submitted to the OFFICE via electronic mail and directed to the attention of the Assistant General   Counsel representing the OFFICE in this matter and as named in this Consent Order.         30.   Any deadlines, reporting requirements, other provisions, or requirements set forth   in this Consent Order may be altered or terminated by written approval of the OFFICE.  Such   written approval by the OFFICE is subject to statutory or administrative regulation limitations.         31.   APPLICANT, 1347 PROPERTY, and MAISON expressly waive a hearing in this   matter, the making of findings of fact and conclusions of law by the OFFICE, and all further and                                      Page 7 of 13                                           

 

other  proceedings  herein  to  which  they  may  be  entitled  by  law  or  rules  of  the  OFFICE.    APPLICANT, 1347 PROPERTY, and MAISON also hereby knowingly and voluntarily waive all   rights to challenge or to contest this Consent Order in any forum available to them, now or in the   future, including the right to any administrative proceeding, state or federal court action, or any   appeal.         32.   APPLICANT,  1347 PROPERTY, and MAISON   affirm that all requirements set   forth herein are material to the issuance of this Consent Order.         33.   APPLICANT, 1347 PROPERTY, and MAISON agree that, upon execution of this   Consent Order, failure to adhere to one or more of the terms and conditions contained herein may   result,  without  further  proceedings,  in  the  OFFICE  suspending,  revoking,  or  taking  other   administrative action as it deems appropriate upon the Certificate of Authority of MAISON in this   state in accordance with Sections 120.569(2)(n) and 120.60(6), Florida Statutes.         34.   Each party to this action shall bear its own costs and fees.         35.   The parties agree that this Consent Order shall be deemed to be executed when the   OFFICE  has  signed  and  docketed  a  copy  of  this  Consent  Order  bearing  the  signatures  of  the   authorized representatives of APPLICANT, 1347 PROPERTY, and MAISON, notwithstanding   the  fact  that  the  copy  may  have  been  transmitted  to  the  OFFICE  electronically.  Further,   APPLICANT,  1347  PROPERTY,  and  MAISON agree  that  the  signatures  of  their  authorized   representatives as affixed to this Consent Order shall be under the seal of a Notary Public.                                      Page 8 of 13                                           

 

      WHEREFORE, subject to the terms and conditions set forth above, the Application for the   direct acquisition  of 100% of  the  issued  and  outstanding  voting  securities of MAISON   INSURANCE COMPANY     by FEDNAT HOLDING COMPANY,      pursuant to Section 628.461,   Florida Statutes, is APPROVED.         FURTHER, all terms and conditions contained herein are hereby ORDERED.         DONE and ORDERED this 7th day of August, 2019.                                                     /s/ David Altmaier                                                        David Altmaier, Commissioner                                            Office of Insurance Regulation                                      Page 9 of 13                                           

 

      By execution hereof, FEDNAT HOLDING COMPANY consents to entry of this Consent  Order, agrees without reservation to all of the above terms and conditions, and shall be bound by  all provisions herein.  The undersigned represents that he or she has the authority to bind FEDNAT  HOLDING COMPANY to the terms and conditions of this Consent Order.                                         FEDNAT HOLDING COMPANY                                                                            By: /s/ Michael Braun                                                             Print Name: Michael Braun                                                         Title:  CEO                                   [Corporate Seal]                    Date:  8/7/19                                    STATE OF FLORIDA    COUNTY OF BROWARD        The foregoing instrument was acknowledged before me this 7th day of August, 2019     by Michael Braun                 as             CEO                                    (name of person)                                                 (type of authority, e.g. officer, trustee, attorney in fact)      for FedNat Holding Company            (Company Name)                                       /s/ James Gordon Jennings III                                                   (Signature of the Notary)                                      James Gordon Jennings III                                                       (Print, Type or Stamp Commissioned Name of Notary)        Personally Known            OR Produced Identification      Type of Identification Produced                            My Commission Expires    12/16/2021                                                          Page 10 of 13                                           

 

      By  execution  hereof, 1347  PROPERTY  INSURANCE  HOLDINGS,  INC., consents  to  entry of this Consent Order, agrees without reservation to all of the above terms and conditions,  and shall be bound by all provisions herein.  The undersigned represents that he or she has the  authority to bind 1347 PROPERTY INSURANCE HOLDINGS, INC., to the terms and conditions  of this Consent Order.                                                                          1347 PROPERTY INSURANCE HOLDINGS, INC.                                                                            By: /s/ John S. Hill                                                               Print Name: John S. Hill                                                          Title: VP, CFO and Secretary                  [Corporate Seal]                    Date: August 7, 2019                             STATE OF FLORIDA    COUNTY OF HILLSBOROUGH        The foregoing instrument was acknowledged before me this 7th day of August, 2019     by John S. Hill                  as             CFO                                    (name of person)                                              (type of authority, e.g. officer, trustee, attorney in fact)      for 1347 Property Ins. Holding                          (Company Name)                                       /s/ Carla D. Barber                                                             (Signature of the Notary)                                      Carla D. Barber                                                                 (Print, Type or Stamp Commissioned Name of Notary)        Personally Known            OR Produced Identification      Type of Identification Produced                            My Commission Expires May 16, 2023                                                                                     Page 11 of 13                                           

 

      By  execution  hereof, MAISON INSURANCE  COMPANY  consents  to  entry  of  this  Consent Order, agrees without reservation to all of the above terms and conditions, and shall be  bound by all provisions herein.  The undersigned represents that he or she has the authority to bind  MAISON INSURANCE COMPANY to the terms and conditions of this Consent Order.                                        MAISON INSURANCE COMPANY                                                                            By: /s/ Douglas N. Raucy                                                           Print Name:  Douglas N. Raucy                                                     Title: President                              [Corporate Seal]                    Date: 8/7/19                                     STATE OF FLORIDA    COUNTY OF HILLSBOROUGH        The foregoing instrument was acknowledged before me this 7th day of August, 2019     by Douglas N. Raucy              as             CEO and President                      (name of person)                                              (type of authority, e.g. officer, trustee, attorney in fact)      for Maison Insurance                                    (Company Name)                                       /s/ Carla D. Barber                                                             (Signature of the Notary)                                      Carla D. Barber                                                                 (Print, Type or Stamp Commissioned Name of Notary)        Personally Known            OR Produced Identification      Type of Identification Produced                            My Commission Expires May 16, 2023                                                                                     Page 12 of 13                                           

 

COPIES FURNISHED TO:     DOUGLAS RAUCY, PRESIDENT                  RYAN SHAFFER, FINANCIAL  Maison Insurance Company                  SPECIALIST  1511 N. Westshore Boulevard               Property & Casualty Financial Oversight –  Tampa, Florida 33607                      Company Admissions  Telephone: (813) 579-6210                 Florida Office of Insurance Regulation  Email: draucy@maisonins.com               200 East Gaines Street                                            Tallahassee, Florida 32399  MICHAEL H. BRAUN, PRESIDENT                 FedNat Holding Company                    MICHAEL KLINER, ASSISTANT  14050 NW 14 Street, Suite 180             GENERAL COUNSEL  Sunrise, Florida 33323                    Florida Office of Insurance Regulation  Telephone: (954) 308-1322                 200 East Gaines Street  Email: mbraun@fednat.com                  Tallahassee, Florida 32399                                            Telephone: (850) 413-4108  SANDY FAY, ATTORNEY                       Email: michael.kliner@floir.com  Colodny Fass, P.L.L.C.                      1401 NW 136th Avenue, Suite 200             Sunrise, Florida 33323                      Telephone: (954) 492-4010                   Email: sfay@colodnyfass.com                                                             ALISON STERETT, FINANCIAL                    ADMINISTRATOR  Property & Casualty Financial Oversight -  Company Admissions   Florida Office of Insurance Regulation  200 East Gaines Street  Tallahassee, Florida 32399     COREY HUBBARD, FINANCIAL  EXAMINER/ANALYST SUPERVISOR  Property & Casualty Financial Oversight -  Company Admissions   Florida Office of Insurance Regulation  200 East Gaines Street  Tallahassee, Florida 32399                                                       Page 13 of 13

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