SEC Contract Filing

Filing Date: 2022-09-12

Document Content:
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<TYPE>EX-10.1
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<DIV><FONT size="1" style="font-size:1pt;color:white"> 1 EXECUTION VERSION STOCK PURCHASE AGREEMENT THIS STOCK PURCHASE AGREEMENT is entered into effective as of the 8th day of September, 2022 (&#8220;Effective Date&#8221;), by and among FedNat Holding Company, a Florida corporation (&#8220;Seller&#8221;), and the purchasers identified on Schedule A hereto (collectively, the &#8220;Hale Investors&#8221;). W I T N E S S E T H : WHEREAS, Seller and the Hale Investors are party to that certain Stock Investment and Subscription Agreement dated as of May 13, 2022 (the &#8220;Subscription Agreement&#8221;) by and among the Hale Investors, FedNat Insurance Company (&#8220;FNIC&#8221;), Seller and Monarch National Insurance Company (the &#8220;Issuer&#8221;), as amended by that certain Omnibus Amendment Agreement dated as of June 30, 2022 among the Issuer, FNIC, Seller, Hale Partnership Capital Management, LLC, and the Hale Investors, pursuant to which Seller acquired 120,000 shares of the common stock, $10 par value per share (the &#8220;Common Stock&#8221;), of the Issuer evidenced by stock certificate no. 10 (the &#8220;Seller Certificate&#8221;) and the Hale Investors acquired in the aggregate 180,000 shares of the Common Stock of the Issuer; and WHEREAS, pursuant to that certain Term Sheet &#8211; Monarch National Insurance Company Stock dated June 30, 2022 executed by Seller and Hale Partnership Capital Management, LLC, Seller has delivered to the Hale Investors notice of its intention to exercise its right to put to the Hale Investors an aggregate of 30,000 shares of the Issuer&#8217;s Common Stock owned by Seller (the &#8220;Put Shares&#8221;) at an aggregate price of $2,500,000.00 (the &#8220;Exercise Notice&#8221;); and WHEREAS, Seller shall sell, assign and transfer to the Hale Investors, and the Hale Investors shall purchase, accept and receive from Seller, the Put Shares on the terms and subject to the conditions hereinafter set forth. NOW, THEREFORE, in consideration of the foregoing premises and further in consideration of the mutual covenants herein contained, the parties hereto hereby agree as follows: ARTICLE 1. PURCHASE AND SALE OF PUT SHARES On the terms and subject to the conditions herein set forth, Seller hereby agrees to sell, transfer and deliver to the Hale Investors the Put Shares, and the Hale Investors hereby agree to purchase the Put Shares from Seller, each Hale Investor to purchase that number of Put Shares indicated on Schedule A attached hereto. For the avoidance of doubt, the sale and purchase pursuant to this Agreement is for the entire amount of Put Shares and, should any Hale Investor be unable or unwilling to fund its pro rata portion of such purchase, then the remaining Hale Investors collectively hereby covenant and agree to make up such difference (the &#8220;Shortfall Covenant&#8221;). ARTICLE 2. PURCHASE PRICE AND PAYMENT TERMS 2.1 Purchase Price. The aggregate purchase price for the Put Shares is $2,500,000.00 (the &#8220;Purchase Price&#8221;), and unless required to act upon the Shortfall Covenant, each Hale Investor shall pay that portion of the Purchase Price set forth on Schedule A attached hereto. For avoidance of doubt and </FONT></DIV>
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<DIV><FONT size="1" style="font-size:1pt;color:white"> 2 per the Shortfall Covenant, in no event will the aggregate amount paid by the Hale Investors to Seller hereunder be less than the Purchase Price. 2.2 Payment Terms. At the closing of the purchase and sale of the Put Shares (the &#8220;Closing&#8221;), the Hale Investors shall make an aggregate cash payment to Seller in the amount of the Purchase Price by wire transfer of immediately available funds to the account designated in writing by Seller on the Exercise Notice. ARTICLE 3. CLOSING Subject to the satisfaction of the conditions set forth in this Agreement (or the waiver thereof by the party entitled to waive such condition), the Closing will take place at the offices of Nelson Mullins Broad and Cassel, 2 South Biscayne Boulevard, Suite 2100, Miami, Florida 33131, or virtually via teleconference or video conference and email, at 10:00 a.m. on a date mutually agreeable to the parties. The date on which the Closing occurs is referred to in this Agreement as the &#8220;Closing Date.&#8221; ARTICLE 4. REPRESENTATIONS AND WARRANTIES OF SELLER In connection with, and as an inducement to the Hale Investors to enter into this Agreement and for the Hale Investors to be bound by the terms of this Agreement, Seller hereby represents and warrants to the Hale Investors that, as of the Closing Date: 4.1 Authority. Seller has all requisite power and authority to execute and deliver this Agreement and the other instruments described in Section 6.2 hereof (together with this Agreement, the &#8220;Transaction Documents&#8221;), to perform its obligations hereunder and thereunder, and to consummate the transaction contemplated hereby. The execution and delivery by Seller of the Transaction Documents and the performance by it of the transactions contemplated hereby have been duly and validly authorized and approved by all requisite corporate action on its part, and no other proceeding on the part of Seller is necessary to authorize the Transaction Documents. Each Transaction Document, as applicable, constitutes its legal, valid and binding obligation, enforceable against it in acco