S-1

As filed with the Securities and Exchange Commission on November 8, 2021.

Registration No. 333-                

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM S-1

REGISTRATION STATEMENT

UNDER

THE SECURITIES ACT OF 1933

TypTap Insurance Group, Inc.

(Exact name of registrant as specified in its charter)

Florida	6331	85-2578837
(State or other jurisdiction of incorporation or organization)	(Primary Standard Industrial Classification Code Number)	(I.R.S. Employer Identification No.)

5300 West Cypress Street, Suite 100

Tampa, Florida 33607

844-289-7968

(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)

Paresh Patel, President and Chief Executive Officer

Kevin Mitchell, Executive Vice President

TypTap Insurance Group, Inc.

5300 West Cypress Street, Suite 100

Tampa, Florida 33607

844-289-7968

(Name, address, including zip code, and telephone number including area code, of agent for service)

Copies of all communications, including communications sent to agent for service, should be sent to:

Curt P. Creely Russell E. Ryba Foley & Lardner LLP 100 North Tampa Street, Suite 2700 Tampa, Florida 33602 (813) 229-2300 Byron B. Rooney Shane Tintle Davis Polk & Wardwell LLP 450 Lexington Avenue New York, New York 10017 (212) 450-4000

Approximate date of commencement of proposed sale to the public: As soon as practicable after this Registration Statement becomes effective.

If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, as amended (the “Securities Act”), check the following box.  ☐

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  ☐

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  ☐

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☐
		Emerging growth company	☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act.  ☒

CALCULATION OF REGISTRATION FEE

Title of each class of securities to be registered	Proposed maximum aggregate offering price(1)(2)	Amount of registration fee
Common Stock, par value $0.001 per share	$100,000,000	$9,270

(1) Includes the aggregate offering price of additional shares that the underwriters have the right to purchase from the registrant.

(2) Estimated solely for the purpose of calculating the amount of the registration fee in accordance with Rule 457(o) under the Securities Act.

The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until this Registration Statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.

The information in this preliminary prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This preliminary prospectus is not an offer to sell, and it is not soliciting an offer to buy, these securities in any state where the offer or sale is not permitted.

Subject to completion, dated November 8, 2021

Preliminary Prospectus

            shares

Common Stock

This is an initial public offering of            shares of our common stock.

Prior to this offering, there has been no public market for our common stock. It is currently estimated that the initial public offering price will be between $        and $        per share. We intend to apply to list our common stock on the New York Stock Exchange (“NYSE”) under the symbol “TYTP”.

Immediately after this offering, HCI Group, Inc., or HCI, will own 75,000,000 shares of our common stock, which will represent approximately    % of our total outstanding shares of common stock and voting power. As long as HCI continues to control shares representing a majority of our voting power, it will generally be able to determine the outcome of all corporate actions requiring shareholder approval, including the election of directors. As a result, we believe we are eligible for, but do not intend to take advantage of, the “controlled company” exemptions to the corporate governance rules for NYSE-listed companies.

We are an “emerging growth company,” as defined in Section 2(a) of the Securities Act of 1933, as amended (the “Securities Act”), and, as such, are subject to reduced public company reporting requirements. See “Prospectus Summary —  Implications of Being an Emerging Growth Company.”

Investing in our common stock involves risks. See “Risk Factors” beginning on page 20 to read about factors you should consider before buying shares of our common stock.

Neither the Securities and Exchange Commission (“SEC”) nor any state securities commission or other regulatory body has approved or disapproved of these securities or passed upon the adequacy or accuracy of this prospectus. Any representation to the contrary is a criminal offense.

	Per share	Total
Initial Public Offering Price	$	$
Underwriting Discounts and Commissions(1)	$	$
Proceeds, Before Expenses, to TypTap Insurance Group, Inc.	$	$

(1) See “Underwriting” for a description of the compensation payable to the underwriters.

At our request, the underwriters have reserved for sale, at the initial public offering price, up to 5% of the shares offered by this prospectus for sale through a directed share program to some of our directors, officers, employees, business associates and related persons. See “Underwriting — Directed Share Program.”

The underwriters have options for a period of 30 days from the date of this prospectus to purchase up to a maximum of            additional shares of our common stock from us at the initial public offering price, less the underwriting discounts and commissions.

Delivery of the shares of common stock will be made on or about                    , 2021.

Book-Runners

JMP Securities Truist Securities

Oppenheimer & Co.

Co-Managers

Dowling and Partners Securities, LLC Fifth Third Securities TigerRisk Capital Markets & Advisory

The date of this prospectus is                    , 2021.

Table of Contents

	Page
Prospectus Summary		1
Risk Factors		20
Cautionary Note Regarding Forward-Looking Statements		61
Market and Industry Data		63
Use of Proceeds		64
Dividend Policy		65
Capitalization		66
Dilution		68
Management’s Discussion and Analysis of Financial Condition and Results of Operations		70
Business		98
Regulation		114
Management		121
Executive Compensation		130
Certain Relationships and Related Party Transactions		140
Principal Shareholders		146
Description of Capital Stock		148
Shares Eligible for Future Sale		156
Material U.S. Federal Income Tax Considerations for Non-U.S. Holders of Our Common Stock		159
Underwriting		163
Legal Matters		169
Experts		169
Where You Can Find More Information		169
Index to Consolidated and Combined Financial Statements		F-1

Neither we nor the underwriters have authorized anyone to provide you with any information other than that contained in this prospectus and any free writing prospectus prepared by or on behalf of us that we have referred to you. If anyone provides you with additional, different or inconsistent information, we and the underwriters take no responsibility for, and can provide no assurance as to the reliability of, such information. Offers to sell, and solicitations of offers to buy, shares of our common stock are being made only in jurisdictions where offers and sales are permitted. The information contained in this prospectus is accurate only as of the date of this prospectus, regardless of the time of delivery of this prospectus or of any sale of our common stock. Our business, financial condition, operating results and prospects may have changed since such date.

No action is being taken in any jurisdiction outside the United States to permit a public offering of our common stock. Persons who come into possession of this prospectus in jurisdictions outside the United States are required to inform themselves about and to observe any restriction as to this offering and the distribution of this prospectus applicable to those jurisdictions.

PROSPECTUS SUMMARY

The following summary highlights selected information about our company and this offering that is included elsewhere in this prospectus in greater detail. It does not contain all of the information that you should consider before investing in our common stock. Before investing in our common stock, you should read this entire prospectus carefully, including the information presented under the heading “Risk Factors” and in our consolidated and combined financial statements and notes thereto.

In this prospectus, unless we indicate otherwise or the context requires, “TypTap,” “the company,” “our company,” “we,” “our,” “ours” and “us” refer to TypTap Insurance Group, Inc. and its consolidated subsidiaries, including TypTap Insurance Company, TypTap Management Company, Exzeo USA, Inc. and Cypress Tech Development Company (including its subsidiary, Exzeo Software Private Limited). Also when used in this prospectus, “TypTap Insurance Group” refers to TypTap Insurance Group, Inc. on a stand-alone basis, and “TypTap Insurance Company” refers to TypTap Insurance Company on a stand-alone basis, unless otherwise indicated or the context requires otherwise.

Overview

TypTap is a rapidly growing technology-driven insurance company that leverages extensive data and AI-enabled analytics to better select and price homeowners insurance risk. We have a successful track record of profitable underwriting, with loss ratios better than the overall homeowners industry average, and offer our insurance agents a frictionless full-stack digital technology platform that provides policyholders with a better purchase and claims experience. We achieve this through a comprehensive suite of technology solutions to manage the end-to-end insurance process, from risk selection and underwriting to accelerated quoting to claims management.

The $110 billion U.S. homeowners insurance market is a large market with attractive industry dynamics and a strong growth outlook. We believe it is also a good candidate for technology-driven innovation. For decades, the insurance industry has underinvested in technology and is thus dependent on inefficient legacy systems. This has led to mispriced risk and high loss ratios, low policyholder satisfaction scores, and a frustrating agent experience. While many companies have attempted to take a more tech-forward approach to insurance in recent years, they typically lack sustainable unit economics and fail to address the biggest inefficiency in the industry—high claims costs, that comprise, on average, 73% of total costs for an insurance carrier.

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While many insurance companies have accepted current loss ratios as a relatively fixed component of the insurance company cost structure, we have developed technology that allows us to improve on this. Our strategy is simple—use our data-driven underwriting technology to identify and price the best risks that we determine have the lowest probability of a claim and achieve a desired level of underwriting profitability, leading to a sustainable loss ratio advantage over competitors. With the help of a better and more efficient experience for agents and policyholders, we achieve high retention and strong agent alignment, that enable us to rapidly scale up.

While the first wave of Insurtech companies focused primarily on customer experience and lowering distribution costs as opposed to improving underwriting, we are focused on the entire value chain—using technology to lower claims costs, creating a compelling agent value proposition to scale the business and a customer experience that creates high retention. We see our business model as the future of Insurtech, driving a positive flywheel and profitable underwriting results as it scales. Our data-driven underwriting platform gives us the ability to source and analyze up to 1,000 different home characteristics, allowing us to price and bind at the individual home level with lower claims probability—in less than 5 minutes. When losses do occur, our claims management software proactively helps us manage our claims adjustment costs. Our digitally enhanced user interfaces were also designed to keep our agents and policyholders happy, aligning incentives and driving increased efficiencies throughout the process.

TypTap’s business was incubated in 2016 as a subsidiary of HCI Group, Inc., or HCI (NYSE: HCI), a publicly-listed insurance holding company. We chose to develop and test our underwriting technology in Florida, a complex yet attractive homeowners insurance market with a total addressable homeowners insurance market of $11 billion. Since then, we have continued to refine our technology and improve our underwriting platform. After developing a market leading underwriting track record in Florida, we have begun to execute on a national growth strategy and are writing policies in seven states as of October 2021.

Our in-force premiums exceeded $100 million at the end of 2020, and by September of 2021, in-force premiums exceeded $214 million, which includes $59 million of premiums assumed via a quota share reinsurance agreement with United Property & Casualty Insurance Company (“United”) in June 2021, as part of our transaction to ultimately transfer United’s northeast region business to TypTap and its affiliates. We have also achieved a lower claims experience relative to the industry, leading to gross loss ratios below 50% in 2018-2020 compared to the U.S. homeowners industry average of 75% over those same years.

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TypTap’s competitive advantage is derived from our internally developed technology suite that provides advanced analytics, comprehensive end-to-end insurance lifecycle management, and an agent-facing user interface that prioritizes policyholder ease-of-use and empowers independent insurance agents:

• We use differentiated data and proprietary analytics to create better results:     Underwriting home insurance is complex, with many individual factors contributing to underwriting risk, including roof type, roof shape, home elevation, square footage, presence of a pool, geography, and building material, to name just a few. We spent four years developing, testing, and refining our AI-enabled data warehousing solution before writing our first residential flood insurance policy in 2016. We continued to improve the data engine and risk selection algorithm before launching our homeowners insurance offering in 2017, giving us the confidence that we had a solution that worked by the time we launched. Our data-driven and analytical approach provides us with a differentiated understanding of how to underwrite and price for unique risk characteristics on an individual home basis. This results in loss ratios that have been better than industry average by over 25 percentage points. As we collect more data, we will continue to refine our underwriting model and algorithms through an iterative analytic process.

• We empower independent insurance agents to create a better insurance purchasing experience:     Independent agents are a valuable component of our business model. We expect them to continue to control insurance distribution over the direct-to-consumer channel in the foreseeable future. We have designed our technology to empower agents to spend more time acquiring new customers and less time on the inefficiencies that cause friction in the insurance selling and management process. Our easy-to-use digital agent portal, instant quote technology, efficient binding and ongoing document management, competitive prices, consistent renewal decisions, user friendly claims management software, and competitive commissions all add value for our agents. Our platform drives increased agent adoption, with our current target agent cohort increasing their TypTap book of business by 151% between 2020 and 2021.

• We have designed our platform for a better policy-holder experience, with ease of use in mind:     Our online quoting platform is designed for ease of use and efficiency for both the agent and policyholder. We come to an underwriting decision in minutes without extensive and tedious data collection from the policyholder and price the policy accurately at inception to ensure stability of coverage and price. Our claims technology is also designed for a transparent and user-friendly experience and gives us the ability to be proactive in the claims process, including by engaging with our policyholders.

• We have developed fully integrated technology solutions and processes to better manage the end-to-end insurance lifecycle:     Our scalable, full-stack technology platform is internally developed and designed to be easily adapted to evolving agent and policyholder needs. Our technology improves risk selection, enables faster quoting and a better agent and policyholder experience, and efficiently manages the claims process, driving operating efficiencies and accelerating our growth as we scale.

• We use reinsurance as a tool to protect our balance sheet and for efficient capital management:     We purchase excess-of loss reinsurance and optimize for both frequency and severity as well as specific geography perils. Historically we have purchased reinsurance in excess of what is required by regulators to create the appropriate protection for our business. We enjoy support from a diverse panel of 49 highly rated reinsurance providers across the US, Europe and Asia. Our technology platform has helped create transparency and a favorable economic outcome for our reinsurance providers.

These key differentiated strengths—our high quality data and analytics to power our risk selection, our ability to empower and create strong alignment with independent agents, our policyholder experience, and our comprehensive technology platform —have allowed us to build a sustainable business model for profitable growth. We have a strong track record of achieving both high growth and underwriting profitability using this model and will continue to expand on these key competitive advantages as we expand geographically.

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We have also built our business with a capital-efficient strategy in mind. To date, we have only received $177 million of capital in our business (which includes the $100 million investment by Centerbridge Partners, L.P. in February 2021). TypTap’s rapid growth and strong value proposition are driven primarily by our intellectual property, technology platform, and operational excellence. Our track record of sourcing and retaining profitable business allows us to use reinsurance primarily to manage our balance sheet and earnings volatility.

The execution of our future expansion strategy into new states is key to going after our total addressable market opportunity. Our operational success to date and ability to identify unique localized risk characteristics, as evidenced by our success in current markets, has laid the foundation to expand nationwide, where we will leverage our institutional track record and superior technology to generate strong premium growth with attractive underwriting results.

We had gross premiums earned of $78.8 million and $30.9 million in the years ended December 31, 2020 and December 31, 2019, respectively, and gross premiums earned of $119.4 million for the nine months ended September 30, 2021. We incurred net losses of $12.4 million and $6.9 million in the years ended December 31, 2020 and December 31, 2019, respectively, and a net loss of $14.7 million for the nine months ended September 30, 2021. We may incur losses in the future for a number of reasons, including as a result of investments in the development and expansion of our business. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

An Attractive Market Opportunity—U.S. Homeowners Insurance

Our primary addressable market is the U.S. homeowners insurance industry—a $110 billion market in 2020 that has grown steadily at a 5% compound annual growth rate over the last ten years, consistent with underlying insured home values and the overall economy.

For the policyholder, homeowners insurance is both a necessary product and a highly considered purchase that is a key component of the overall home buying process. Insurance is required by most mortgage lenders and acts as a first line of defense for homeowners in the event of the unexpected.

The market is attractive due to its higher premiums (approximately $1,250 per policy on average) relative to auto and renters insurance policies and its recurring revenue, as we believe average policyholder tenure with their policies typically exceeds 10 years. Because retention is high in homeowners insurance, the profitability of each policyholder is determined at the time of acquisition. Profitable customers are very valuable and offer high recurring premiums with low losses for years, while unprofitable customers continue to elevate losses. At TypTap, our average premium was over $2,800 in 2020 and our retention rate was 87%.

The homeowners insurance industry is also highly fragmented, with only one carrier capturing more than 10% of the U.S. market. Unlike personal auto, which has seen the top 15 insurers increase market share at the expense of all others, the top 15 homeowners writers have held a relatively steady share (approximately 70% of the total market) over time. The market share has remained static because most carriers see homeowners as a breakeven business that is a necessary offering to also write other more profitable lines of insurance.

Due to this perception, the homeowners insurance industry does not attract the technology investment to improve the policyholder experience and drive better unit economics. For the top 15 carriers, homeowners insurance accounts for only 25% of their total portfolio, leading them to focus investments in other lines at the expense of investing in homeowners focused data analytics capabilities and technology infrastructure.

Though it is an attractive market for insurers, it is challenging for many policyholders, who are relatively unhappy with their homeowners insurance experience due to the difficulty of buying a policy, long time to bind, poor coverage and pricing options, and a frustrating claims experience. As a result, we believe insurance carriers that can improve on the policyholder experience have the opportunity to gain meaningful market share.

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Key Trends in the U.S. Homeowners Insurance Market

The role of technology in the insurance process is increasing due to wider access to data, new tech-driven solutions, and increased demand for digital options. In addition to easy-to-use and accessible interfaces for agents and consumers, the process of collecting data, pricing, underwriting policies, and managing claims is also transforming in a digital environment.

Availability and application of big data is increasing

We believe the availability of third party data and the increased speed to analyze that data to better price, underwrite, and process claims offers a tremendous opportunity. However, adoption of technology has been slow within the industry because of the time, cost, and risk associated with replacing legacy systems and redesigning data infrastructure, keeping many home insurers dependent on lower quality data to power their underwriting and pricing models.

Most homeowners insurance is still sold through agents

The overwhelming majority (over 90%) of homeowners insurance policies are sold through agents, based on a recent report from McKinsey & Company, with direct-to-consumer distribution still a relatively new channel representing a very small percentage of overall insurance sales.

Experience has taught us the importance of agents to the insurance value chain, particularly in homeowners insurance, where agents have embedded themselves in the home buying transaction. A home is often a policyholder’s largest individual asset, and agents’ guidance in fully understanding their risk profile and options can be invaluable when determining the proper coverage. Homeowners insurance is also a very localized product due to the widely varying risk profiles of homes in different geographies.

Local agents add value to insurers through their knowledge of the market and serve as the first source of risk selection. While many insurers have continued to increase their marketing spend to attract customers directly, given the limited size of the direct-to-consumer market, we think the more efficient way to acquire policyholders right now is by establishing strong relationships with agents and agency networks that appreciate the frictionless quoting and binding process and the stability we offer the customer by pricing the policy correctly upfront.

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Policyholders and agents increasingly expect an easy, efficient, and digital homeowners insurance buying and selling experience

Policyholders value a convenient and frictionless buying experience. They are frustrated by lengthy quoting processes where they have to fill out extensive upfront questionnaires and surveys (which they often don’t know the answer to) to complete the underwriting process before being told if they qualify for a policy or can get the coverage they need. For agents, time to quote and bind is a key driver of success, as it allows them to spend more time expanding their customer portfolios instead of focusing on the administrative burden of a lengthy sales process. Yet, insurance companies have struggled to improve their processes and offer better experiences for policyholders and agents.

Many agents often have to work with insurers that rely on difficult to navigate digital interfaces (or don’t have online quoting capabilities). While over 70% of agents say expectations of a digital experience have increased, legacy insurers have been slow to invest in technology to support their agents, leading 50% of agents to consider investing in digital solutions on their own.

Our Business Model

Our goal is to leverage our data analytics and technology to solve for the three key drivers of success in insurance —underwriting outcomes, agent alignment, and policyholder experience. We believe our technology advantage creates a proven and sustainable business model where high growth and profitability are not mutually exclusive.

TypTap has grown rapidly over the last five years, as agents and prospective policyholders discover the simplicity, ease of use, and speed of our platform. In-force premiums exceeded $100 million at the end of 2020, and by September of 2021, in-force premiums exceeded $214 million, which includes $59 million of United Property & Casualty Insurance Company’s premiums, with both growth milestones achieved ahead of our announced goals. We also achieved these growth objectives without having to sacrifice our underwriting standards or profitability targets. After testing our underwriting platform in the Florida market, a relatively difficult state to profitably write homeowners insurance, we have gained confidence that the technology, underwriting algorithms, and processes that we have built differentiate us from our peers and will help us as we scale and expand nationally.

Our success is defined by our key competitive strengths—data and analytics, agent relationships, policyholder experience, and technology solutions—that have helped us create a product, experience, and financial outcome that is truly differentiated from the industry.

We use differentiated data and proprietary analytics to create better results

Our ability to use differentiated, proprietary, and high-quality data to power our underwriting models and inform risk selection is a key driver of our business model. Technology has created the opportunity for us to evolve away from making underwriting decisions at the portfolio level and towards selecting risks at the individual property level. Some traditional insurance companies are making underwriting decisions by zip code, forcing them to follow a portfolio strategy where the goal is to earn an underwriting profit on the overall portfolio of homes, but with the expectation that some of the policies will not be profitable. We have a fundamentally different strategy.

We selectively underwrite at the individual home level based on expected policy-level profitability, which allows us to only write insurance for those homes that we expect to be profitable on a standalone basis over the life of the policy. This is the core philosophy that drives our differentiated underwriting strategy. Our ability to selectively underwrite is underpinned by predictive models that estimate and compare expected claims costs for each home with total premium to determine policy-level net margin.

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We systematically define houses as “green doors” (those that meet our minimum return thresholds based on the various data and risk criteria inputs run through our underwriting algorithm) or “red doors” (risks that we expect to be unprofitable and will not underwrite).

Graphic is for illustrative purposes only and does not reflect actual underwriting decisions or ratios

Thus, TypTap enters each insurance policy with an informed, data-driven view of how the house is expected to perform prior to offering the policy. Through this probabilistic risk selection approach, TypTap aims to reduce the number of policyholders filing claims, driving an increase in profitability per policy. We have a track record of executing this strategy, achieving a loss ratio over 25 percentage points better than the industry average of 75% in 2018-2020.

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We have invested heavily in the data engine that powers this underwriting model, viewing each additional variable in a home as an opportunity to create an underwriting advantage. While many insurers rely on third parties to pull all their data, we use a combination of our proprietary research and vetted third party data to build and use a more cost efficient and dependable data set.

Our software is a dynamic algorithm that is updated at least every quarter. We rely on extensive data fields, collecting up to 1,000 data points on a home, many of which are proprietary and not widely used by competitors. For example, we use satellite imaging to identify homes with pool cages, which is not a data point collected by most home insurers but can increase claim and replacement costs considerably. We believe our data is also more specific and higher quality. We use proprietary research to validate all third party data and vet data vendors, as well as track and flag missing property attributes for additional data sourcing.

While other insurers could potentially develop the data architecture to mine much of the same data we do, our advantage is in knowing how to use data to improve risk selection and pricing, as seen by the outperformance of our gross loss ratio relative to our closest peers. Through extensive testing and quarterly recalibrating of our models, we have determined which data points are predictive, how much weight to assign to each metric, and which characteristics are reliable—allowing us to use data in a differentiated way.

We also leverage our data sources to continuously improve our machine learning and AI-enabled underwriting algorithm through an iterative and real-time analytic process based on the flow of data from our policyholders and claims. We leverage claims data from each loss event to identify factors associated with higher risk homes and refine our data collection and risk selection algorithms to emphasize these factors. Our flexible architecture facilitates the introduction of these new data points. We also use longitudinal data to track the evolution of data fields over time, understand historical trends, and better train our underwriting and pricing models.

We empower independent insurance agents to create a better insurance purchasing experience

Insurance—and homeowners insurance in particular—is a nuanced and highly personal product, requiring extensive knowledge and experience. Agents have this industry expertise, making them an ideal partner to match customers with our underwriting standards. We recognize the key role that agent distribution plays in our business model and have designed our platform with this dynamic in mind, as we believe that creating strong alignment between us and our independent agents will drive better results and a stronger operating model over time. We believe that a timely quote and bind process also enables agents to get a higher “close” rate.

Our instant quote technology has streamlined the underwriting process, allowing agents to provide customers with a quote in minutes, which is highly valued by agents deciding which carrier to go to first with a new potential policy. Our easy-to-use digital agent portal generates quotes based on a few, simple questions and takes less than 1 minute to quote and 5 minutes to bind a policy. The technology is also able to quickly determine when a home does not qualify for our coverage, ensuring agents don’t spend time inputting information for customers who are not a good fit under our underwriting standards.

Our technology liberates agents, empowering them to focus on building and maintaining enduring client relationships without compromising quality coverage. This overall positive experience drives agent adoption, elevates agent retention rates, and increases sales of TypTap policies. The stability of our coverage and rates—because we carefully select and price policies right the first time—and our claims management also drive higher policy retention, decreasing the probability of agents losing business after they’ve placed it with us. It also limits the time agents spend helping policyholders that have an issue with their policy.

We also utilize competitive commissions as a key component of our agent distribution strategy. When combined with our easy-to-use digital interface and fast quote-to-bind capabilities, we view our commission structure as an effective tool to create an alignment of interest with our agents.

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We have designed our platform for a better policyholder experience, with ease of use in mind

Our online quoting platform is designed for an efficient insurance purchasing experience, prompting the agent to ask a prospective homeowners policyholder 4-8 questions before coming to a speedy underwriting and pricing decision. We pull data on an address and run it through our algorithm without asking the policyholder for home details that they may not know (and are potentially incentivized to misreport), keeping the process as easy as possible on their end.

Our advanced claims technology tracks claims data in real time, ensuring an efficient claims adjustment process that allows for accurate and timely payment of claims to the policyholder. Since inception, we have experienced five hurricane seasons in Florida and processed over 4,400 claims.

We have developed fully integrated technology solutions to better manage the end-to-end insurance process

Our integrated technology infrastructure allows us to efficiently manage various processes across our platform, improve real time visibility, lower costs, and accelerate our growth as we scale.

We have designed and developed our platform to cohesively integrate each of our technology solutions with one another, creating a proprietary full-stack insurance platform that allows us to manage the complete insurance process, from underwriting and quoting to claims management.

As highlighted above, the first key component of our technology advantage is our underwriting platform, which is differentiated by our big data architecture, AI and analytics, and risk selection and pricing models. Our data-driven analytical underwriting is supported by a fully integrated infrastructure strategy, from agent distribution on the front end to claims management at the back end.

Our quoting technology and tech-forward user interfaces improve the insurance buying experience for policyholders, drive frictionless agent enablement, offer real-time data-driven insights for reinsurers, and increase retention.

We are also heavily focused on claims management. Despite our best efforts to carefully select risks to minimize claims incidence, losses will still occur, and we have designed a scalable, responsive, and efficient claims system to handle them when they do.

We have a dedicated data team that monitors weather patterns to manage claims. Following a major weather event, the team preliminarily scores damage based on risk within twelve hours of impact and uses our claims visualization technology to preemptively open claims, even before the homeowner has the opportunity to evaluate their potential loss. We have also developed a routing map for field adjusters to ensure they can attend to claims efficiently. This allows us to allocate our resources effectively. All of this ensures a better claims experience for our customers and drives high retention. Our claims technology also provides real time claims visibility and is available to our reinsurers, resulting in transparent reinsurance relationships.

No component of the insurance process works in isolation, so developing a comprehensive platform that integrates each solution, including agent adoption, policy design, underwriting and pricing, claims management, and policy administration, has allowed us to achieve a sustainable competitive advantage that offers better outcomes for all parties and is difficult to copy.

The power of the flywheel

Each of our four key competitive strengths—data, agent empowerment, policyholder experience, and technology—work together to power a flywheel that differentiates us from competitors and drives the sustainable, profitable

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growth of our business. Our data advantage and AI-enabled analytical processes lead to better risk selection and more accurate pricing, and our real time claims technology leads to lower claims adjustment costs—all of which drive better underwriting results. This allows us to offer competitive commissions to our agents and invest more in digital tools and technology to enable a more efficient quoting experience. This combination of ease of use and an aligned economic model incentivizes agents to give us the “first look” when quoting a prospective policyholder.

Getting the first look at policies allows us to run the risk through our underwriting model, accelerating our flywheel. We have achieved this flywheel effect at scale with limited invested capital due to our capital efficient model—which is possible because of the underwriting profitability that the flywheel enables.

Our Growth Strategies

Expand nationally and increase our underwriting footprint

The $110 billion U.S. homeowners insurance market is a massive opportunity to expand our business by extending our underwriting footprint in the U.S. With a multi-year track record of refining our technology platform and underwriting capabilities, we think now is the time to embark on a nationwide expansion plan.

It was intentional that we wrote our first policies in one of the largest and most complex homeowners insurance markets. By initially launching our risk selection technology and data engine in Florida, we were able to use this complex market to improve our AI-enabled underwriting. Our successful track record in Florida adds credibility to our underwriting process and gives us high confidence that it will continue to work and be a source of competitive advantage as we expand into other states.

As of October 2021, we are writing policies in seven states (Florida, Georgia, South Carolina, Connecticut, Nevada, Utah and Rhode Island). Our plan is to be writing policies in 10 or more states by the end of 2021 and in

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20 states by the end of 2022. As of October 2021, we have licenses in 18 states, including Florida, and have a pending application in Illinois.

We have been strategic in selecting which states to expand to first, factoring multiple considerations into our expansion strategy, including market size, premium levels, average loss ratios, ease of securing licenses, and agent networks, with the goal of achieving profitability on a state-by-state basis. We have also chosen states that are spread across the U.S. to get access to diverse sets of data and attributes to continue refining our underwriting models.

The map below outlines our expansion strategy in different phases:

Continue to on-board new independent insurance agents to nationwide independent agent distribution network

As we enter into new geographical markets, on-boarding new independent agents and establishing distribution relationships will be key to supporting growth. We have experience building out our independent agent force from the ground up when we started in Florida and are confident in our ability to do the same as we enter new states. Since our expansion outside Florida, we have recruited 331 non-Florida independent agents as of October 31, 2021, compared to 170 non-Florida independent agents as of June 30, 2021.

We are leveraging our existing relationships with national independent insurance agencies such as Goosehead, Brightway, and WeInsure to gain access to agents in new states. In addition, in Connecticut, New Jersey, Massachusetts and Rhode Island, we gained access to approximately 1,100 independent agents from the transaction to ultimately transfer United’s northeast region business to TypTap and its affiliates.

We pay commissions to independent agents when they bind a new insurance policy and when the policy is renewed. The commissions are based on competitive elements that vary by geography and the time the policy is in force, and in some geographic regions we pay a commission on the binding of a new policy that may be higher than prevailing market rates.

We will leverage our attractive commissions and efficient, digital-driven experience to maintain our strong track record of successful independent agent engagement and acquisition.

Drive new business with high-quality existing agent network

We are selective not only in the risks we underwrite, but in the agents we choose to partner with to sell our policies. For example, we carefully selected approximately 525 agents to work with in Florida from an initial

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considered pool of over 1,000 agents. We continuously monitor our network of agents—by tracking system use, analyzing quoting activity and results, and evaluating agent buy-in metrics—to strengthen relationships with and direct more business to our best-performing agents while phasing out under-performing ones. The flywheel works best when our agents’ incentives are aligned with ours, and we carefully manage our agent network to ensure we work with those that are sending us quality policyholders to help us write profitable business.

Selectively pursue inorganic growth and partner to optimize third party books of business

While our focus will be on organic expansion, we will continue to look for selective opportunities to increase our scale and expand nationally through strategic transactions.

Existing insurance companies are actively evaluating their homeowners business, including exposure to specific markets and geographies, as a result of inefficient processes and difficulty effectively utilizing technology and data to profitably underwrite risk. This activity is resulting in re-evaluation of existing portfolios either via outright disposal or renewal rights opportunities. These market trends create opportunities for TypTap to evaluate underperforming books of business and use our technology to drive better loss ratios over time. This further accelerates our national expansion and provides us access to an established agent network and important underlying data.

Our scalable technology platform and independent underwriting profitability better position us to take advantage of these opportunities relative to competitors, as we can improve profitability by non-renewing undesired risks, re-pricing, and achieving lower loss ratios. Competitors without our same data-driven underwriting advantage don’t have this same opportunity.

Risk Factors

There are a number of risks that you should understand before making an investment decision regarding this offering. These risks are discussed more fully in the section entitled “Risk Factors” following this prospectus summary. If any of these risks actually occur, our business, financial condition, or results of operations would likely be materially and adversely affected. In such case, the trading price of our common stock would likely decline, and you may lose all or part of your investment. These risks include, but are not limited to:

• we may not become profitable or maintain profitability in the future;

• we may lose existing customers or fail to acquire new customers;

• our expansion within the United States will subject us to additional costs and risks, and our plans may not be successful;

• our brand may not become as widely known or accepted as existing insurance companies’ brands or the brand may become tarnished;

• our future growth and profitability depends in part on our ability to successfully operate in an insurance industry that is highly competitive;

• our ability to engage and retain independent insurance agents and independent insurance agency networks to sell our insurance policies;

• risks related to competition, competitive pressures, the cyclical nature of the homeowners and flood insurance industry, as well as insurance industry developments and market conditions;

• the impact of HCI’s control of the direction of our business and the inability of our other shareholders to influence significant decisions as a result of HCI’s control;

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• our ability to continuously develop and improve our proprietary platform, including developing and implementing new features and analytical models;

• risks related to our use of third-party data, including potential harm caused by loss, misappropriation or unauthorized disclosure of or access to our data, including personal data, and compromises in cybersecurity;

• we may not continue to grow at historical rates in the future;

• our ability to appropriately price the risks we underwrite;

• our ability to effectively utilize our risk mitigation strategies and loss limitation methods;

• risks related to emerging claim and coverage issues and insurance industry trends, such as increased litigation, expanded covered causes of loss, rising jury awards and the escalation of loss severity;

• reinsurance may be unavailable at current levels and prices, which may limit our ability to underwrite new policies;

• we are subject to extensive regulation and any failure to comply in full or part with regulatory requirements may result in fines, revocation or suspension of our license to operate in one or more jurisdictions or other penalties;

• risks that HCI’s interests may conflict with our interests and the interests of our other shareholders;

• risks associated with severe weather events and other catastrophes;

• our intellectual property and proprietary rights are valuable, and any inability to obtain, maintain, protect, defend and enforce them could reduce the value of our products and brand;

• an unauthorized disclosure or loss of policyholder or employee data or information or other sensitive, confidential or personal information, including by cyber-attack or other security breach, or a suspected or actual violation of applicable data privacy or protection laws, regulations or other obligations, could cause a loss of data or information giving rise to remediation or other expenses, and expose us to liability under such obligations, and subject us to litigation and investigations, which could have an adverse effect on our business, cash flows, financial condition and results of operations; and

• other risks and factors listed under “Risk Factors,” “Cautionary Note Regarding Forward-Looking Statements” and elsewhere in this prospectus.

Implications of Being an Emerging Growth Company

As a company with less than $1.07 billion in annual gross revenue during our last fiscal year, we qualify as an “emerging growth company” as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). An emerging growth company may take advantage of specified reduced reporting and other requirements that are otherwise applicable generally to public companies. These provisions include:

• we are required to present only two years of audited financial statements and related management’s discussion and analysis of financial condition and results of operations in the registration statement of which this prospectus is a part;

• we are exempt from compliance with the requirement that our independent registered public accounting firm provide an attestation report on the effectiveness of our internal control over financial reporting;

• we are exempt from compliance with any requirement that the Public Company Accounting Oversight Board (the “PCAOB”) has adopted regarding communication of critical accounting matters and may adopt regarding mandatory audit firm rotation or a supplement to the auditor’s report providing additional information about the audit and the financial statements;

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• we are exempt from the “say on pay,” “say when on pay,” and “say on golden parachute” non-binding advisory vote requirements; and

• we can provide reduced disclosures about our executive compensation arrangements.

We currently intend to take advantage of each of the exemptions described above. It is possible, therefore, that some investors will find our common stock less attractive, which may result in a less active trading market for our common stock and higher volatility in our stock price.

We may take advantage of these provisions until the last day of our fiscal year following the fifth anniversary of the completion of this offering or such earlier time that we are no longer an emerging growth company. We would cease to be an emerging growth company upon the earliest of: (i) the last day of the first fiscal year in which our annual gross revenues are $1.07 billion or more; (ii) the date on which we have, during the previous three-year period, issued more than $1 billion in non-convertible debt securities; or (iii) the date on which we are deemed to be a “large accelerated filer,” which will occur as of the end of any fiscal year in which we (x) have an aggregate market value of our common stock held by non-affiliates of $700 million or more as of the last business day of our most recently completed second fiscal quarter, (y) have been required to file annual and quarterly reports under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), for a period of at least 12 months and (z) have filed at least one annual report pursuant to the Exchange Act.

We have elected not to take advantage of the emerging growth company extended transition period under Section 107 of the JOBS Act for complying with new or revised accounting standards.

For risks related to our status as an emerging growth company, see “Risk Factors—Risks Relating to Ownership of Our Common Stock—Taking advantage of the reduced disclosure requirements applicable to “emerging growth companies” may make our common stock less attractive to investors.”

Corporate Information

TypTap Insurance Group, Inc. is the registrant and the issuer of the common stock being sold in this offering. Our corporate headquarters is located at 5300 West Cypress Street, Suite 100, Tampa, Florida 33607. Our telephone number is 844-289-7968.

TypTap Insurance Group is a majority owned subsidiary of HCI Group, Inc., or HCI (NYSE: HCI). HCI is a Florida corporation and publicly traded company with operations in homeowners insurance, reinsurance, real estate, and information technology. After an incubation process started in 2016 that formed TypTap Insurance Company, TypTap Insurance Group was organized in Florida by HCI in July 2020 as a wholly owned subsidiary of HCI for the purpose of serving as a holding company for HCI’s interests in TypTap Insurance Company and other related HCI subsidiaries. In October 2020, HCI contributed its stock in TypTap Insurance Company and the following HCI subsidiaries to TypTap Insurance Group: (i) TypTap Management Company, a Florida corporation that supports TypTap Insurance Company by managing, among other things, claims processing, policyholder service and marketing; (ii) Exzeo USA, Inc., a Florida corporation focused on developing software products to modernize the insurance industry; and (iii) Cypress Tech Development Company, Inc., a Florida corporation which also owns Exzeo Software Private Limited, a subsidiary domiciled in India. Following this offering, TypTap Insurance Group will continue to be majority owned by HCI but will be managed and operated primarily as an independent public company.

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The chart below displays the structure described above and the ownership of outstanding common stock of TypTap as of October 31, 2021 after giving effect to the offering:

Our principal website address is www.typtap.com. The information contained on, or that can be accessed through, our website is deemed not to be incorporated in this prospectus or to be part of this prospectus. You should not consider information contained on our website to be part of this prospectus.

Other Information

This prospectus includes trademarks, trade names and service marks owned by us. This prospectus also contains trademarks, trade names and service marks of other companies, which are the property of their respective owners. Solely for convenience, trademarks, trade names and service marks referred to in this prospectus may appear without the ^®, TM, or SM symbols, but such references are not intended to indicate, in any way, that we will not assert, to the fullest extent under applicable law, our rights to these trademarks, trade names, and service marks. We do not intend our use or display of other parties’ trademarks, trade names, or service marks to imply, and such use or display should not be construed to imply, a relationship with, or endorsement or sponsorship of us by, these other parties.

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The Offering

Common stock offered by us             shares (or                 shares if the underwriters exercise in full their option to purchase additional shares).

Underwriters’ option to purchase additional shares of common stock The underwriters have an option to purchase up to                 additional shares of common stock from us at the initial public offering price, less underwriting discounts and commissions. The underwriters can exercise this option at any time within 30 days from the date of this prospectus.

Common stock to be outstanding after this offering             shares (or                 shares if the underwriters exercise their option to purchase additional shares from us in full).

Use of proceeds We estimate that we will receive net proceeds from the sale of shares of our common stock in this offering of approximately $ million, assuming an initial public offering price of $ per share (the midpoint of the range set forth on the cover of this prospectus), and after deducting underwriting discounts and commissions and estimated offering expenses payable by us. We intend to use the net proceeds from this offering for general corporate purposes, including working capital, software development, operating expenses and capital expenditures. Additionally, we may use a portion of the net proceeds to acquire or invest in businesses or technologies. However, currently we do not have agreements or commitments for any material acquisitions or investments. Pending the use of proceeds from this offering as described above, we plan to invest the net proceeds that we receive in this offering in short-term and intermediate-term interest-bearing obligations, investment-grade investments, certificates of deposit, or direct or guaranteed obligations of the U.S. government. Our management will have broad discretion in the application of the net proceeds from this offering and investors will be relying on the judgment of our management regarding the application of the proceeds. See “Use of Proceeds.”

Dividend policy We do not expect to pay any dividends on our common stock for the foreseeable future. See “Dividend Policy.”

Directed share program At our request, the underwriters have reserved for sale, at the initial public offering price, up to 5% of the shares of our common stock offered by this prospectus for sale through a directed share program to some of our directors, officers, employees, business associates and related persons. Any shares sold under the directed share program will not be subject to the terms of any lock-up agreement, except in the case of shares purchased by our executive officers, directors or key employees. The number of shares of our common stock available for sale to the general public will be reduced by the number of

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reserved shares sold to these individuals. Any reserved shares not purchased by these individuals will be offered by the underwriters to the general public on the same basis as the other shares of common stock offered under this prospectus. See “Underwriting — Directed Share Program.”

Trading symbol We intend to apply to list our common stock on the NYSE under the symbol “TYTP”.

Risk factors Investing in our common stock involves a high degree of risk. See “Risk Factors” beginning on page 20 of this prospectus for a discussion of factors you should carefully consider before investing in our common stock.

The number of shares of our common stock that will be outstanding immediately after this offering is based on 91,263,210 shares of our common stock outstanding as of October 31, 2021, which includes 5,945,443 shares of restricted common stock outstanding under our 2021 Equity Incentive Plan (the “2021 Equity Plan”) that are unvested as of October 31, 2021, and reflects 10,000,000 shares of our preferred stock that will convert into shares of our common stock in connection with the completion of this offering (the “Preferred Stock Conversion”).

The number of shares of our common stock to be outstanding after this offering excludes:

• 6,450,000 shares of our common stock issuable upon the exercise of options granted on October 1, 2021 under our 2021 Omnibus Incentive Plan (the “2021 Omnibus Plan”) at an exercise price of $23.00 per share; and

• 1,250,000 shares of common stock reserved for future issuance under the 2021 Omnibus Plan, as well as any automatic increases in the number of shares of common stock reserved for future issuance under the plan.

Unless the context otherwise requires, the information in this prospectus:

• assumes the Preferred Stock Conversion occurs;

• assumes that the shares of our common stock to be sold in this offering are sold at $     per share (the midpoint of the range set forth on the cover of this prospectus);

• assumes that all shares of our common stock offered hereby are sold;

• assumes no exercise by the underwriters of their option to purchase additional shares; and

• gives effect to the filing and effectiveness of our amended and restated articles of incorporation and the adoption of our amended bylaws, each of which will occur immediately prior to the completion of this offering.

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Summary Consolidated and Combined Financial Data

The following tables summarize our consolidated and combined financial and other data. We have derived the summary consolidated and combined statements of operations data for the years ended December 31, 2019 and 2020, and the consolidated balance sheet data as of December 31, 2019 and 2020, from our audited consolidated and combined financial statements included elsewhere in this prospectus. We have derived the summary consolidated and combined statements of operations data for the nine months ended September 30, 2020 and 2021, and the consolidated balance sheet data as of September 30, 2021, from our unaudited consolidated and combined financial statements included elsewhere in this prospectus. The unaudited consolidated and combined financial statements have been prepared on the same basis as the audited consolidated and combined financial statements and, in the opinion of management, reflect all normal recurring adjustments necessary to present fairly our financial position and results of operation. Our historical results are not necessarily indicative of the results that may be expected in the future, and our results for the nine months ended September 30, 2021 are not necessarily indicative of the results that may be expected for the full fiscal year or any other period.

The following summary consolidated and combined financial and other data should be read in conjunction with the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our consolidated and combined financial statements and related notes included elsewhere in this prospectus.

	Nine months ended September 30,						Year ended December 31,
	2021			2020			2020			2019
(dollars in thousands)	(unaudited)			(unaudited)
Statement of Operations Data:
Gross premiums earned	$	119,364		$	54,829		$	78,836		$	30,904
Premiums ceded		(42,229	)		(19,078	)		(28,822	)		(11,076	)
Net premiums earned		77,135			35,751			50,014			19,828
Total revenue		80,054			36,805			51,727			21,829
Losses and loss adjustment expenses		52,976			22,043			34,059			8,505
Policy acquisition and other underwriting expenses		23,612			10,641			15,579			6,897
General and administrative personnel expenses		11,368			7,891			10,782			8,158
Total expenses		98,628			46,749			68,188			30,320
Net loss	$	(18,574	)	$	(9,944	)	$	(12,424	)	$	(6,911	)

	As of September 30,		As of December 31,
	2021		2020		2019
(dollars in thousands)	(unaudited)
Balance Sheet Data:
Cash and cash equivalents	$	180,840	$	99,725	$	51,562
Total investments		19,539		20,973		19,727
Premiums receivable, net		17,522		7,734		5,372
Prepaid reinsurance premiums		12,502		7,386		1,691
Total assets		294,931		157,581		94,232
Unearned premiums		105,942		63,704		37,684
Total liabilities		173,097		151,030		77,268
Total stockholders’ equity		34,103		6,551		16,964

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	Nine months ended September 30,						Year ended December 31,
(dollars in thousands, except Premiums per policy)	2021			2020			2020			2019
Key Performance Indicators(1):
Gross written premium	$	161,602		$	62,708		$	104,855		$	60,272
Gross premiums earned	$	119,364		$	54,829		$	78,836		$	30,904
Policies in force		48,897			33,825			37,196			25,540
In-force premiums	$	155,406		$	87,095		$	105,420		$	59,591
Premiums per policy	$	3,178		$	2,575		$	2,834		$	2,333
Gross loss ratio		45.0	%		41.0	%		43.8	%		28.0	%
Adjusted gross profit(2)	$	20,797		$	12,334		$	13,703		$	9,498
Adjusted gross profit margin(2)		17.4	%		22.5	%		17.4	%		30.7	%
Adjusted EBITDA(2)	$	(16,036	)	$	(8,193	)	$	(14,345	)	$	(8,390	)
Adjusted EBITDA margin(2)		(13.4	)%		(14.9	)%		(18.2	)%		(27.1	)%

(1) See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Key Financial Terms” and “—Results of Operations—Non-GAAP Financial Measures” for information on how we define and calculate these metrics.

(2) Adjusted gross profit, adjusted gross profit margin, adjusted EBITDA and adjusted EBITDA margin are not financial measures prepared in accordance with U.S. generally accepted accounting principles (“GAAP”). See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Results of Operations—Non-GAAP Financial Measures” for additional information on non-GAAP financial measures and a reconciliation to the most comparable GAAP measures.

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RISK FACTORS

Investing in our common stock involves a high degree of risk. You should carefully consider the following risks and uncertainties, together with all of the other information contained in this prospectus, before deciding to invest in our common stock. Our business, financial condition, results of operations or prospects could be materially and adversely affected by any of these risks or uncertainties, as well as by risks or uncertainties not currently known to us, or that we do not currently believe are material. In that case, the trading price of our common stock could decline, and you may lose all or part of your investment.

Risks Relating to Our Business

We may not become profitable or maintain profitability in the future.

We incurred net losses of $12.4 million and $6.9 million in the years ended December 31, 2020 and December 31, 2019, respectively, and a net loss of $14.7 million for the nine months ended September 30, 2021. We may incur significant losses in the future for a number of reasons, including insufficient growth in the number of customers, a failure to retain our existing customers, a failure to obtain or retain our independent agents and independent agency networks, and increasing competition, as well as other risks described in this “Risk Factors” section, and we may encounter unforeseen expenses, difficulties, complications and delays and other unknown factors. We expect to continue to make investments in the development and expansion of our business, which may not result in increased or sufficient revenue or growth, as a result of which we may not be able to achieve profitability or maintain profitability in the future.

We may lose existing customers or fail to acquire new customers.

We believe that growth of our business and revenue depends upon our ability to continue to grow our business in the geographic markets that we currently serve by retaining our existing customers and adding new customers in our current as well as new geographic markets. Expanding into new geographic markets takes time, requires us to navigate and comply with extensive regulations and may occur more slowly than we expect or than it has occurred in the past. If we lose customers, our value will diminish. In particular, while loss performance has improved over time as more customers renew their policies and remain policyholders for longer, a future loss of customers could lead to higher loss ratios or loss ratios that cease to decline, which would adversely impact our profitability. If we fail to remain competitive on customer experience, pricing, and insurance coverage options, our ability to grow our business may also be adversely affected. In addition, we may fail to accurately predict risk segmentation of new customers or potential customers, which could also reduce our profitability.

While a key part of our business strategy is to retain and add customers in our existing markets, we also intend to expand our operations into new markets nationwide. In doing so, we may incur losses or otherwise fail to enter new markets successfully. Our expansion into new markets may place us in unfamiliar competitive environments and involve various risks, including competition, government regulation, the need to invest significant resources and the possibility that returns on such investments will not be achieved for several years or at all.

There are many factors that could negatively affect our ability to grow our customer base, including if:

• we lose customers to new market entrants and/or existing competitors;

• we do not obtain regulatory approvals necessary for expansion into new markets nationwide;

• we fail to effectively use digital marketing and advertising;

• we suffer reputational harm to our brand including from negative publicity, whether accurate or inaccurate;

• we fail to provide effective updates to our existing products or to keep pace with technological improvements in our industry;

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• technical or other problems frustrate the independent agent or policyholder experience, particularly if those problems prevent us from generating quotes for our independent agents or paying claims to our policyholders in a fast and reliable manner; or

• we fail to obtain, maintain, protect, defend and enforce our intellectual property and proprietary rights.

Our inability to overcome these challenges could impair our ability to attract new customers and retain existing customers, and could have a material adverse effect on our business, operating results and financial condition.

Our expansion within the United States will subject us to additional costs and risks, and our plans may not be successful.

Our success depends in significant part on our ability to expand into additional markets in the United States. As of October 2021, we are licensed in 18 states, including Florida, and are writing policies in Florida, Georgia, South Carolina, Connecticut, Nevada, Utah, and Rhode Island. We plan to have a presence in almost all states by the end of 2024 but cannot guarantee that we will be able to provide nationwide coverage on that timeline or at all. Moreover, one or more states could revoke our license to operate, or implement additional regulatory hurdles that could preclude or inhibit our ability to obtain or maintain our license in such states. As we seek to expand in the United States, we may incur significant operating expenses, although our expansion may not be successful for a variety of reasons, including because of:

• our lack of significant experience operating outside Florida;

• barriers to obtaining the required government approvals, licenses or other authorizations;

• failures in identifying independent agents and potential strategic partnerships with independent agency networks;

• challenges in, and the cost of, complying with various laws and regulatory standards, including with respect to the insurance business and insurance distribution, capital and outsourcing requirements, data privacy and protection, tax, claims handling, and local regulatory restrictions;

• difficulty in recruiting and retaining talented and capable employees;

• competition from existing insurance companies that already own market share, better understand the local market, may market and operate more effectively and may enjoy greater local affinity or awareness; or

• differing demand dynamics, which may make our product offerings less successful.

Expansion into new markets in the United States will also require additional investments by us both in marketing and with respect to securing applicable regulatory approvals. These incremental costs may result from hiring additional personnel, from engaging third-party service providers and from incurring other research and development costs. If we invest substantial time and resources to expand our operations while our revenues from those additional operations do not exceed the expense of establishing and maintaining them, or if we are unable to manage these risks effectively, our business, results of operations and financial condition could be adversely affected.

If we fail to grow our geographic footprint or geographic growth occurs at a slower rate than expected, our business, results of operations and financial condition could be materially and adversely affected.

Our brand may not become as widely known or accepted as existing insurance companies’ brands or the brand may become tarnished.

Many of our competitors have brands that are well-recognized. As a relatively newer entrant into the insurance market, we have spent, and expect that we will for the foreseeable future continue to spend, considerable amounts of money and other resources on creating brand awareness and building our reputation with independent

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agents and customers. We may not be able to build brand awareness to levels matching our competitors, and our efforts at building, maintaining and enhancing our reputation with independent agents and customers could fail and/or may not be cost-effective. Complaints or negative publicity about our business practices, our marketing and advertising campaigns (including marketing affiliations or partnerships), our compliance with applicable laws, data privacy or security issues, and other aspects of our business, whether real or perceived, could diminish confidence in our brand, which could adversely affect our reputation and business. As we enter new markets, we will need to establish our reputation with new independent agents, independent agency networks and customers, and to the extent we are not successful in creating positive impressions, our business in these newer markets could be adversely affected. While we may choose to engage in a broader marketing campaign to further promote our brand, this effort may not be successful or cost effective. If we are unable to maintain or enhance our reputation or enhance independent agent and consumer awareness of our brand in a cost-effective manner, our business, results of operations and financial condition could be materially adversely affected.

Our future growth and profitability depends in part on our ability to successfully operate in an insurance industry that is highly competitive.

We currently compete against a variety of regional and digital-based homeowners insurance carriers. Based on our expansion plan, we will begin to compete against well-established national brands such as State Farm, Allstate, Farmers, Liberty Mutual and Travelers. Several of these established national insurance companies are larger than we are and have significant competitive advantages, including better name recognition, strong financial ratings, greater resources, easier access to capital, and the ability to offer more types of insurance than we do, which are often bundled together to help attract and retain customers. In addition, the insurance industry consistently attracts well-capitalized new entrants to the market. Our future growth will depend in large part on our ability to grow our insurance business in which traditional insurance companies retain certain advantages. In particular, unlike us, many of these competitors offer customers the ability to purchase multiple other types of insurance coverage and “bundle” them together into one policy and, in certain circumstances, include an umbrella liability policy for additional coverage at competitive prices. In the flood insurance market, the National Flood Insurance Program, a government-backed organization, continues to be the dominant underwriter of flood policies. Given its mandate and pricing strategy, the National Flood Insurance Program could limit our growth potential in the flood insurance market for the foreseeable future. Because of the competitive nature of the insurance industry, there can be no assurance that we will continue to compete effectively within our industry, or that competitive pressures will not have a material effect on our business, results of operations or financial condition.

We rely on independent agents and independent agency networks to write our insurance policies, and if we are not able to engage and retain independent agents and independent agency networks, our revenues would be negatively affected.

We primarily sell our products through independent insurance agents, and our relationships with these agents are generally non-exclusive and terminable on short notice. We must compete with other insurers for independent agents’ business. Our competitors may offer a greater variety of insurance products, lower premiums for insurance coverage, or higher commissions to their agents, in which case our agents may reduce or terminate the sale of our products. In addition, if our products, pricing and commissions do not remain competitive, we may find it more difficult to attract new business from independent agents to sell our products. A material reduction in the amount of our products that independent agents sell could negatively affect our business, results of operations and financial condition. Finally, the failure of independent agents to comply with applicable laws and regulations could have an adverse effect on our business, and we may from time to time terminate independent agents for noncompliance with laws or policies or for problematic business practices.

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Increased competition, competitive pressures, industry developments, and market conditions could affect the growth of our business and adversely impact our financial results.

The homeowners and flood insurance industry in Florida and nationwide is cyclical and highly competitive. We compete not only with other stock and mutual companies but also with the U.S. government, other underwriting organizations and alternative risk sharing mechanisms. Our principal lines of business are also written by numerous other insurance companies. Competition now and in the future for any one account may come from very large, well-established national companies, smaller regional companies, other specialty insurers in our field, and new entrants to the relevant market. Many of these competitors have greater financial resources, larger agency networks and greater name recognition than our company. Additionally, our competitors may merge or acquire one another and further increase their combined financial resources and agency networks. We compete for business not only on the basis of price, but also on the basis of financial strength, types of coverage offered, availability of coverage desired by customers, commission structure, and quality of service. We may have difficulty continuing to compete successfully on any of these bases in the future. Competitive pressures coupled with market conditions may affect our rate of premium growth and financial results.

We obtained a Demotech rating of “A Exceptional,” which is accepted by major mortgage companies operating in Florida and many other states. Mortgage companies may require homeowners to obtain property insurance from an insurance company with an acceptable A.M. Best rating, which we do not currently have and may never try to obtain. Such a requirement could prevent us from expanding our business unless we obtain such rating, which may in turn limit our ability to compete with large, national insurance companies and certain regional insurance companies. A downgrade or loss of our Demotech rating could result in a substantial loss of business in the event insureds move their business to insurers with a sufficient financial strength rating.

There are inherent limitations and risks related to our estimates of claims and loss reserves. If our actual losses exceed our loss reserves, our financial results, our ability to expand our business, and our ability to compete in the homeowners and flood insurance industry may be negatively affected. In addition, industry developments could further increase competition in our industry. These developments could include:

• an influx of new capital in the marketplace as existing companies attempt to expand their businesses and new companies attempt to enter the insurance business because of better pricing and/or terms;

• new programs or changes to existing programs in which federally or state-sponsored entities provide homeowners and/or flood insurance in catastrophe-prone areas or other alternative markets;

• changes in the regulatory climate in Florida and the other states where we operate; and

• the enactment of federal proposals for an optional federal charter that would allow some competing insurers to operate under regulations different or less stringent than those applicable to our insurance subsidiaries.

These developments and others could make the homeowners and flood insurance marketplace more competitive by increasing the supply of insurance available.

If competition limits our ability to write new business at adequate rates, our future business, results of operations and financial condition could be materially adversely affected.

Our success will depend on the continuous development and improvement of the company’s proprietary platform, including the development and implementation of new features and analytical models.

We utilize our technology platform to gather and analyze data in order to determine whether or not to write and how to price our homeowners and flood insurance products. Our future success will depend on the continuous development and improvement of our proprietary technology platform, including further refinements and enhancements to our data engine, analytical models, AI-enabled underwriting algorithms, and agent and consumer interfaces. The success of our efforts to further develop and refine our technology platform depends on several factors, including the timely completion, introduction and effectiveness of such refinements and

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enhancements. We may not be successful in either developing these refinements and enhancements or in bringing them into use in a timely fashion. Our technology platform is expensive and complex, and its continuous development, maintenance and operation may entail unforeseen difficulties, including performance problems or undetected defects, errors, failures, bugs or vulnerabilities. We may encounter technical obstacles, and it is possible that we may discover additional problems that prevent our technology from operating properly. Additionally, technology platform errors may lead to unintentional bias and discrimination in the underwriting process, which could subject us to legal or regulatory liability and harm our brand and reputation. Any of these possibilities could result in a material adverse effect on our business, results of operations and financial condition.

Our business and platform make extensive use of third-party data.

We utilize third-party data to support and develop our technology platform. We anticipate that we will continue to rely on this third-party data in the future. We cannot ensure that this third-party data will continue to be available to us on commercially reasonable terms, if at all. Any defects or errors in the third-party data could adversely affect the operation of our technology platform. Many of the risks associated with the use of third-party data cannot be eliminated, and these risks could negatively affect our brand and business.

We may not continue to grow at historical rates in the future.

Our limited operating history may make it difficult to evaluate our current business and our future prospects. While our revenue has grown in recent periods, this growth rate may not be sustainable and should not be considered indicative of future performance, and we may not realize sufficient revenue to become profitable, or maintain profitability, in the future. As we grow our business, we expect our revenue growth rates may slow in future periods due to a number of reasons, which may include slowing demand for our products, increasing competition, a decrease in the growth of our overall market, and our failure to capitalize on growth opportunities or the maturation of our business.

Our success will depend on our ability to appropriately price the risks we underwrite.

Our results of operations and financial condition will depend on our ability to underwrite and set premium rates appropriately for a wide variety of risks, including risks associated with homeowners insurance and flood insurance. Rate adequacy is necessary to generate sufficient premiums to pay losses, loss adjustment expenses, and underwriting expenses and to earn a profit. To price our products and select policies to underwrite appropriately, we must collect and properly analyze a substantial amount of data; develop, test and apply appropriate rating formulas and weighting measures; closely monitor and timely recognize changes in trends; and project both severity and frequency of losses with reasonable accuracy. Our ability to undertake these efforts successfully, and thus, price our products and select the policies to underwrite appropriately, is subject to several risks and uncertainties, some of which are outside our control, including:

• the availability of sufficient and reliable data;

• the uncertainties that inherently characterize estimates and assumptions;

• our selection and application of appropriate rating and pricing techniques;

• changes in legal standards, claim settlement practices, and restoration costs; and

• new legal or regulatory restrictions on underwriting, rating and pricing activities.

In addition, we could underprice risks, which would negatively affect our profit margins. We could also overprice risks, which could reduce our retention, sales volume and competitiveness. The foregoing factors could materially and adversely affect our profitability.

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The failure of the risk mitigation strategies we utilize could have a material adverse effect on our financial condition or results of operations.

We utilize a number of strategies to mitigate risk exposure within our insurance business, which include:

• engaging in vigorous underwriting;

• carefully evaluating terms and conditions of our policies;

• focusing on our risk aggregations by geographic zones and other bases; and

• ceding insurance risk to reinsurance companies.

However, there are inherent limitations in these tactics. We cannot provide assurance that an unanticipated event or series of events will not result in loss levels which could have a material adverse effect on our financial condition or results of operations.

The failure of any of the loss limitation methods we employ could have a material adverse effect on our financial condition or our results of operations.

Our insurance underwriting process is generally designed to limit our exposure to known and manageable risks. Various provisions of our policies, such as limitations or exclusions from coverage, which have been negotiated to limit our risks, may not be enforceable in the manner we intend.

In addition, the policies we issue contain conditions requiring the prompt reporting of claims to us and our right to deny coverage in the event of a violation of those conditions. While our insurance product exclusions and limitations reduce the loss exposure to us and help eliminate known exposures to certain risks, it is possible that a court or regulatory authority could nullify or void an exclusion or legislation could be enacted modifying or barring the use of such endorsements and limitations in a way that would adversely affect our loss experience, which changes could have a material adverse effect on our financial condition or results of operations.

We may require additional capital to support business growth or to satisfy our regulatory capital and surplus requirements, and this capital might not be available on acceptable terms, if at all.

We intend to continue to make investments to support our business growth and may require additional funds to respond to business challenges, including the need to develop new features and products or enhance our existing products, satisfy our regulatory capital and surplus requirements, cover losses, improve our operating infrastructure or acquire complementary businesses and technologies. Many factors will affect our capital needs as well as their amount and timing, including our growth and profitability, regulatory requirements, market disruptions and other developments. If our present capital and surplus is insufficient to meet our current or future operating requirements, including regulatory capital and surplus requirements, or to cover losses, we may need to raise additional funds through financings or curtail our growth. We evaluate financing opportunities from time to time, and our ability to obtain financing will depend, among other things, on our development efforts, business plans and operating performance, as well as the condition of the capital markets at the time we seek financing. We cannot be certain that additional financing will be available to us on favorable terms, or at all.

If we raise additional funds through future issuances of equity or convertible debt securities, our existing shareholders could suffer significant dilution, and any new equity securities we issue could have rights, preferences and privileges superior to those of holders of common stock. As an insurance holding company that owns TypTap Insurance Company, a Florida-domestic stock insurer, we are subject to extensive laws and regulations in Florida administered by the Florida Office of Insurance Regulation, and any such issuances of equity or convertible debt securities to secure additional funds may be impeded by regulatory approvals or requirements imposed by Florida Office of Insurance Regulation if such issuances were deemed to result in a person acquiring “control” of our company under applicable insurance laws and regulations. Such regulatory

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requirements may require potential investors in 10% or more of our voting securities to disclose their organizational structure and detailed financial statements, as well as require managing partners, directors, senior officers and/or certain owners to submit biographical affidavits and fingerprints, which may deter funds from investing in our company. Similar requirements may be imposed by insurance regulatory authorities in states where TypTap Insurance Company has applied or will apply for authority to transact insurance. Moreover, any debt financing that we secure in the future could subject us to restrictive covenants relating to our capital raising activities, our ability to make certain types of investments or payments, and other financial and operational matters, which may increase our difficulty to obtain additional capital or to pursue business opportunities, including new product offerings and potential acquisitions. We may not be able to obtain additional financing on terms favorable to us, if at all. If we are unable to obtain adequate financing or financing on terms satisfactory to us when we require it, our ability to continue to support our business growth and to respond to business challenges could be impaired, and our business, revenue, results of operations and financial condition may be materially harmed.

We expect a number of factors to cause our results of operations to fluctuate on a quarterly and annual basis, which may make it difficult to predict our future performance.

Our revenue and results of operations could vary significantly from quarter to quarter and year to year, and may fail to match periodic expectations as a result of a variety of factors, many of which are outside of our control. Our results may vary from period to period as a result of fluctuations in the number of customers purchasing our insurance products and renewing their agreements with us as well as fluctuations in the timing and amount of our expenses. In addition, the insurance industry is subject to its own cyclical trends and uncertainties, including periods of intense pricing competition due to excessive underwriting capacity, periods when shortages of writing capacity permit more favorable underwriting profits as well as extreme weather which is often seasonal and may result in volatility in claims reporting and payment patterns. Fluctuations and variability across the industry may also affect our revenue. As a result, comparing our results of operations on a period-to-period basis may not be meaningful, and the results of any one period should not be relied on as an indication of future performance. Our results of operations may not meet the expectations of investors or public market analysts who follow us, which may adversely affect our stock price. In addition to other risk factors discussed in this “Risk Factors” section and elsewhere in this prospectus, factors that may contribute to the variability of our quarterly and annual results include:

• our ability to attract new customers and retain existing customers, including in a cost-effective manner;

• our ability to accurately forecast revenue and losses and appropriately plan our expenses;

• the effects of increased competition on our business;

• our ability to successfully maintain our position in and expand in existing markets as well as successfully enter new markets;

• our ability to obtain, maintain, protect, defend or enforce our existing intellectual property and to create or otherwise acquire new intellectual property;

• our ability to maintain an adequate rate of growth and effectively manage that growth;

• our ability to keep pace with technology changes in the insurance industry;

• the success of our sales and marketing efforts;

• costs associated with defending claims, including coverage claims, intellectual property infringement, misappropriation or other claims, misclassifications and related judgments or settlements;

• the impact of, and changes in, governmental or other regulation affecting our business;

• the attraction and retention of qualified employees and key personnel;

• our ability to identify and engage independent agents and independent agency networks as we continue to enter new markets nationwide;

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• the effects of natural or man-made catastrophic events;

• the effectiveness of our internal controls; and

• changes in our tax rates or exposure to additional tax liabilities.

Severe weather events and other catastrophes, including the effects of climate change, are inherently unpredictable and may have a material adverse effect on our financial results and financial condition.

Our business may be exposed to catastrophic events such as hurricanes, tropical storms, tornadoes, sinkholes, tsunamis, earthquakes, windstorms, hailstorms, severe thunderstorms, floods, wildfires and other fires, as well as non-natural events such as explosions, riots, terrorism, or war, which could cause operating results to vary significantly from one period to the next. We may incur catastrophe losses in our business in excess of: (1) those experienced in prior years, (2) the average expected level used in pricing, (3) current reinsurance coverage limits, or (4) loss estimates from external hurricane, tornado, hail and earthquake models at various levels of probability. In addition, we are subject to customer insurance claims arising from weather events such as winter storms, rain, hail and high winds. The incidence and severity of weather conditions are largely unpredictable. There is generally an increase in the frequency and severity of customer insurance claims when severe weather conditions occur.

The incidence and severity of severe weather conditions and catastrophes are inherently unpredictable and the occurrence of one catastrophe does not render the possibility of another catastrophe greater or lower. The extent of losses from a catastrophe is a function of both the total amount of insured exposure in the area affected by the event and the severity of the event. In particular, severe weather and other catastrophes could significantly increase our costs due to a surge in claims following such events and/or legal and regulatory changes in response to catastrophes that may impair our ability to limit our liability under our policies. Severe weather conditions and catastrophes can cause greater losses for us, which can cause our liquidity and financial condition to deteriorate.

As we currently have sold the majority of our policies in Florida, any catastrophic event, destructive weather pattern, general economic trend, regulatory developments or other conditions specifically affecting the state of Florida could have a disproportionately adverse impact on our business, financial condition, and results of operations until we have significantly expanded across the United States. While we actively manage our exposure to catastrophic events through our underwriting process and the purchase of reinsurance, the fact that our business is currently concentrated in the state of Florida subjects it to increased exposure to certain catastrophic events and destructive weather patterns such as hurricanes, tropical storms, and tornados. Changes in the prevailing regulatory, legal, economic, political, demographic and competitive environment, and other conditions in the state of Florida could also make it less attractive for us to do business in Florida and would have a more pronounced effect on our business than it would on other insurance companies that are more geographically diversified. Since our business is currently concentrated in this manner, the occurrence of one or more catastrophic events or other conditions affecting losses in the state of Florida could have an adverse effect on our business, financial condition, and results of operations.

Climate change may affect the occurrence of certain natural events, such as an increase in the frequency or severity of wind and thunderstorm events, eruptions of volcanoes, and tornado or hailstorm events due to increased convection in the atmosphere; more frequent wildfires and subsequent landslides in certain geographies; higher incidence of deluge flooding and the potential for an increase in severity of the hurricane events due to higher sea surface temperatures. Additionally, climate change may cause an impact on the demand, price and availability of insurance, as well as the value of our investment portfolio. Due to significant variability associated with future changing climate conditions, we are unable to predict the impact climate change will have on our business.

Non-natural events such as power disruptions, computer viruses or data security breaches may also prevent us from continuing our operations and may result in system interruptions, reputational harm, delays in our

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development activities and lengthy interruptions in service, any of which could have an adverse effect on our business, financial condition, and results of operations.

Our results of operations and financial condition may be adversely affected due to limitations in the analytical models used to assess and predict our exposure to catastrophe losses.

Like others in the insurance industry, we use models developed both internally and by third party vendors along with our own historical data in assessing our reserves and capital levels as they relate to homeowners and flood insurance exposure to catastrophe losses. These models assume various conditions and probability scenarios; however, they do not necessarily accurately predict future losses or measure losses currently incurred. Further, the accuracy of such models may be negatively impacted by changing climate conditions, including increased weather severity patterns. Catastrophe models use historical information and scientific research about natural events, such as hurricanes and earthquakes, as well as detailed information about our policies in-force. However, since actual catastrophic events vary considerably, there are limitations with respect to catastrophe models’ usefulness in predicting losses in any reporting period. Other limitations are evident in significant variations in estimates between models, material increases and decreases in results due to model changes and refinements of the underlying data elements and actual conditions that are not yet well understood or may not be properly incorporated into the models.

Our intellectual property and proprietary rights are valuable, and any inability to obtain, maintain, protect, defend and enforce them could reduce the value of our products and brand.

Our trade secrets, trademarks, copyrights, and other intellectual property rights are important assets for us. Our ability to compete effectively is dependent in part on our ability to obtain, maintain, protect, defend and enforce our intellectual property and other proprietary rights, including our proprietary technology. We rely on, and expect to continue to rely on, various agreements with our employees, independent contractors, consultants and other third parties with whom we have relationships, as well as trademark, trade dress, domain name, copyright and trade secret laws and regulations, to protect our brand and other intellectual property rights. Such agreements, laws and regulations may not effectively prevent unauthorized use or disclosure of our confidential information, intellectual property or technology and may not provide an adequate remedy in the event of unauthorized use or disclosure of our confidential information, intellectual property or technology, and we may fail to consistently obtain, police and enforce such agreements. Additionally, various factors outside our control pose a threat to our intellectual property rights, as well as to our products and technologies. For example, we may fail to obtain effective intellectual property protection. Also, the efforts we have taken to protect our intellectual property rights may not be sufficient or effective in all cases. For example, governmental entities that grant intellectual property rights may deny our applications for such rights despite our best efforts. Additionally, granted intellectual property rights are subject to challenge. Successful challenges may result in such rights being narrowed in scope or declared invalid or unenforceable. Despite our efforts to obtain and protect broad intellectual property rights, there can be no assurance our intellectual property rights will be sufficient to protect against others offering products that are substantially similar to ours and compete with our business, and unauthorized parties may attempt to copy aspects of our technology and use information that we consider proprietary. Competitors or other third parties may also attempt to circumvent or design around our intellectual property rights. In each case, our ability to compete could be significantly impaired. To the extent we expand our activities internationally, our exposure to unauthorized copying or use of our technology and proprietary information may increase.

We have filed, and may continue in the future to file, applications to protect certain of our innovations and intellectual property. We have not applied for any patents and cannot give assurances that any patent applications will be made by us or that, if they are made, they will be granted. We do not know whether any of our applications will result in the issuance of a trademark or copyright, as applicable, or whether the examination process will require us to narrow our claims or otherwise limit the scope of such intellectual property. In addition, we may not receive competitive advantages from the rights granted under our intellectual property. Our

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existing intellectual property, and any intellectual property granted to us or that we otherwise acquire in the future, may be contested, circumvented or invalidated, and we may not be able to prevent third parties from infringing our intellectual property rights. Therefore, the exact effect of the protection of this intellectual property cannot be predicted with certainty. Because obtaining patent protection requires disclosing our inventions to the public, such disclosure may facilitate our competitors developing improvements to our innovations. Given this risk, we have chosen not to, and in the future may sometimes choose not to seek patent protection for certain innovations and instead rely on trade secret protection. Any failure to adequately obtain such patent protection, or other intellectual property protection, could later prove to adversely impact our business.

We currently hold various domain names relating to our brand, including TypTap.com. Failure to protect our domain names could adversely affect our reputation and brand and make it more difficult for users to find our website. We may be unable, without significant cost or at all, to prevent third parties from acquiring domain names that are similar to, infringe upon or otherwise decrease the value of our trademarks and other proprietary rights.

In addition to registered intellectual property rights such as trademark and domain name registrations, we rely on non-registered proprietary information and technology, such as trade secrets, confidential information, know-how and technical information. Certain information or technology that we endeavor to protect as trade secrets may not be eligible for trade secret protection in all jurisdictions, or the measures we undertake to establish and maintain such trade secret protection may be inadequate. In order to protect our proprietary information and technology, we rely in part on agreements with our employees, independent contractors, consultants and other third parties that place restrictions on the use and disclosure of this intellectual property and confidential information. In some cases, these agreements may not adequately protect our trade secrets or confidential information, these agreements may be breached, or this intellectual property, including trade secrets, may otherwise be disclosed or become known to our competitors, which could cause us to lose a competitive advantage resulting from this intellectual property. However, our employees, independent contractors, consultants or other third parties with whom we do business may nonetheless use intellectual property owned by others in their work for us, and disputes may arise as to the rights in related or resulting know-how and inventions. Current or future legal requirements may require us to disclose certain proprietary information or technology, such as our proprietary algorithms, to regulators or other third parties, including our competitors, which could impair or result in the loss of trade secret protection for such information or technology. In addition, any changes in, or unexpected interpretations of, intellectual property laws may compromise our ability to enforce our trade secret and intellectual property rights. Costly and time-consuming litigation could be necessary to enforce and determine the scope of our proprietary rights, and failure to obtain or maintain protection of our trade secrets or other proprietary information could harm our business, results of operations and competitive position.

We may be required to spend significant resources in order to monitor and protect our intellectual property rights, and some violations may be difficult or impossible to detect. To prevent substantial unauthorized use of our intellectual property and proprietary rights, it may be necessary to prosecute actions for infringement, misappropriation or other violations of our intellectual property and proprietary rights against third parties. In addition, third parties may seek to challenge, invalidate or circumvent our trademarks, copyrights, trade secrets or other intellectual property and proprietary rights, or any applications for any of the foregoing, including through administrative processes such as re-examination or interference, or litigation. The legal standards relating to the validity, enforceability and scope of protection of intellectual property and proprietary rights are uncertain and still evolving. The value of our intellectual property and proprietary rights could also diminish if others assert rights therein or ownership thereof, and we may be unable to successfully resolve any such conflicts in our favor or to our satisfaction. Litigation to protect and enforce our intellectual property rights could be costly, time-consuming and distracting to management and could result in the impairment or loss of portions of our intellectual property. There can be no assurance that we will be successful in such action, even when our rights have been infringed, misappropriated or otherwise violated. Our efforts to enforce our intellectual property rights may be met with defenses, counterclaims and countersuits attacking the validity and enforceability of our intellectual property rights or asserting that we infringe third-party intellectual property rights and if such

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defenses, counterclaims or countersuits are successful, we could lose valuable intellectual property and proprietary rights. The unauthorized copying or use of our proprietary technology, as well as any costly litigation or diversion of our management’s attention and resources, could impair the functionality of our platform, delay introductions of enhancements to our platform, result in our substituting inferior or more costly technologies into our platform or harm our reputation or brand. In addition, we may be required to license additional technology from third parties to develop and market new offerings or platform features, which may not be on commercially reasonable terms or at all and could adversely affect our ability to compete.

While we take precautions designed to protect our intellectual property, it may still be possible for competitors and other unauthorized third parties to copy our technology and use our proprietary brand, content and information to create or enhance competing products, which could adversely affect our competitive position in our rapidly evolving and highly competitive industry. Some license provisions that protect against unauthorized use, copying, transfer and disclosure of our technology may be unenforceable under the laws of certain jurisdictions and foreign countries. While we enter into confidentiality and invention assignment agreements with our employees and consultants and enter into confidentiality agreements with our third-party providers and strategic partners, we cannot guarantee that we have entered into such agreements with each party that has or may have had access to our proprietary information, know-how and trade secrets or that has developed intellectual property on our behalf and these agreements may be insufficient tor breaches. Further, no assurance can be given that these agreements will be effective in controlling access to, and use, distribution, misuse, misappropriation, reverse engineering or disclosure of, our products and proprietary information. Further, these agreements do not prevent our competitors from independently developing technologies that are substantially equivalent or superior to our offerings. Moreover, these agreements may not provide an adequate remedy for breaches or in the event of unauthorized use or disclosure of our confidential information or technology, or infringement of our intellectual property. Enforcing a claim that a party illegally disclosed or misappropriated a trade secret or know-how is difficult, expensive, and time-consuming, and the outcome is unpredictable. In addition, trade secrets and know-how can be difficult to protect and some courts inside and outside the U.S. are less willing or unwilling to protect trade secrets and know-how. If any of our trade secrets were to be lawfully obtained or independently developed by a competitor or other third party, we would have no right to prevent them from using that technology or information to compete with us, and our competitive position would be materially and adversely harmed. Additionally, individuals not subject to invention assignment agreements may make adverse ownership claims to our current and future intellectual property, and, to the extent that our employees, independent contractors, consultants or other third parties with whom we do business use intellectual property owned by others as to the rights in related or resulting know-how and inventions.

Changes to existing laws or regulations or new laws or regulations could impede our use of our confidential information, intellectual property or technology, or require that we disclose our confidential information, intellectual property or technology to our competitors, which could impair our competitive position and could have a material adverse effect on our business, operating results and financial condition.

We use open source software in our proprietary underwriting technology, which may pose particular risks in a manner that could have a negative effect on our business.

We use open source software in our proprietary underwriting technology and anticipate continuing to use open source software in the future. Some open source software licenses require those who distribute open source software as part of their own software product to publicly disclose all or part of the source code of such software product or to make available any derivative works of the open source code on unfavorable terms or at no cost, and we may be subject to such terms. The terms of certain open source licenses to which we are subject have not been interpreted by U.S. or foreign courts, and there is a risk that open source software licenses could be construed in a manner that imposes unanticipated conditions or restrictions on our ability to provide or distribute our products. Additionally, we could face claims from third parties claiming ownership of, or demanding release of, the open source software or derivative works that we develop using such software, which could include our proprietary source code, or otherwise seeking to enforce the terms of the applicable open source license. These

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claims could result in litigation and could require us to make our software source code freely available, purchase a costly license or cease offering the implicated products unless and until we can re-engineer such source code to eliminate use of such open source software. This re-engineering process could require us to expend significant additional research and development resources, and we may not be able to complete the re-engineering process successfully. We may also incur significant legal expenses defending such allegations or be subject to significant damages. If we are required by the terms of any open source license to release our proprietary source code, it could allow our competitors to create similar software with lower development effort and time and ultimately could result in a loss of sales for us.

In addition to risks related to license requirements, use of certain open source software can lead to greater risks than use of third-party commercial software, as open source licensors generally do not provide warranties, assurance of title or controls on the origin or operation of the open source software, which are risks that cannot be eliminated, and could, if not properly addressed, negatively affect our business. There is typically no support available for open source software, and we cannot ensure that the authors of open source software will implement or push updates to address security risks or will not abandon further development and maintenance. We have established processes to help alleviate these risks, including a review process for screening requests from our development teams for the use of open source software, but we cannot be sure that all of our use of open source software is in a manner that is consistent with our current policies and procedures, or will not subject us to liability. Any of these risks could be difficult to eliminate or manage, and, if not addressed, could have a negative effect on our business, financial condition and operating results.

Claims by others that we infringe, misappropriate or otherwise violate, or have infringed, misappropriated or otherwise violated, their proprietary technology or other intellectual property rights could harm our business.

From time to time, third parties may assert claims of infringement, misappropriation or other violations of intellectual property rights against us. As we face increasing competition and become increasingly high profile, the possibility of receiving a larger number of intellectual property claims against us grows. In addition, various “nonpracticing entities” and other intellectual property rights holders may attempt to assert intellectual property claims against us or seek to monetize intellectual property rights they own to extract value through licensing or other settlements. Although we may have meritorious defenses, there can be no assurance that we will be successful in defending against these allegations or in reaching a business resolution that is satisfactory to us. Many potential litigants, including some of our competitors, have the ability to dedicate substantial resources to the assertion of their intellectual property rights. Any claim of infringement by a third party, even those without merit, could cause us to incur substantial costs defending against the claim, could distract our management from our business and could require us to cease use of such intellectual property.

Furthermore, because of the substantial amount of discovery required in connection with intellectual property litigation, we risk compromising our confidential and proprietary information during this type of litigation. We may be required to pay substantial damages, royalties or other fees in connection with a claimant securing a judgment against us, we may be subject to an injunction or other restrictions that prevent us from using or distributing our intellectual property, or from operating under our brand, or we may agree to a settlement that prevents us from distributing our offerings or a portion thereof, which could adversely affect our business, results of operations and financial condition. In addition, we could be found liable for significant monetary damages, including treble damages and attorneys’ fees, if we are found to have willfully infringed a patent or other intellectual property right. Our use of third-party software, data and other intellectual property rights also may be subject to claims of infringement or misappropriation. In addition, to the extent we hire personnel from competitors, we may be subject to allegations that such personnel have divulged proprietary or other confidentiality information to us. Further, we may be unaware of intellectual property rights or proprietary rights of others that may cover some or all of our products.

With respect to any intellectual property rights claim, we may have to seek out a license to continue operations found or alleged to violate such rights, which may not be available, or if available, may not be available on

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favorable or commercially reasonable terms and may significantly increase our operating expenses. Some licenses may be non-exclusive, and therefore our competitors may have access to the same technology licensed to us. If a third party does not offer us a license to its intellectual property on reasonable terms, or at all, we may be required to develop alternative, non-infringing technology, which could require significant time (during which we would be unable to continue to offer our affected offerings), effort and expense and may ultimately not be successful. Any of these events could adversely affect our business, results of operations and financial condition.

An overall decline in economic activity could have a material adverse effect on the financial condition and results of operations of our business.

The demand for homeowners insurance generally rises as the overall level of household income increases and generally falls as household income decreases, affecting premiums, commissions and fees generated by our business. Some new polices may be sourced by referral sources tied to home closing transactions, and major slowdowns in the various housing markets we serve could impact our ability to generate new business. The economic activity that impacts homeowners insurance is most closely correlated with employment levels, corporate revenue and asset values.

We rely on highly skilled and experienced personnel and if we are unable to attract, retain or motivate key personnel or hire qualified personnel, our business may be seriously harmed. In addition, the loss of our president and chief executive officer or other key senior management personnel could harm our business and future prospects.

Our performance largely depends on the talents and efforts of highly-skilled and experienced individuals. Our future success depends on our continuing ability to identify, hire, develop, motivate and retain highly skilled and experienced personnel and, if we are unable to hire and train a sufficient number of qualified employees for any reason, we may not be able to maintain or implement our current initiatives or grow, or our business may contract and we may lose market share. Moreover, certain of our competitors or other insurance or technology businesses may seek to hire our employees. We cannot assure you that we will provide adequate incentives to attract, retain and motivate employees in the future. If we do not succeed in attracting, retaining and motivating highly qualified personnel, our business may be seriously harmed.

Our operations are highly dependent on the efforts of our senior executive officers, particularly our president and chief executive officer, Paresh Patel, our executive vice president, Kevin Mitchell, and our chief financial officer, Ankur Bhandari. The loss of Paresh Patel, architect of our proprietary underwriting technology, Kevin Mitchell, the president of TypTap Insurance Company, our subsidiary, or Ankur Bhandari could materially adversely impact our business, results of operations and financial condition. Further, to the extent that our business grows, we will need to attract and retain additional qualified management personnel in a timely manner, and we may not be able to do so. Our future success depends on our continuing ability to identify, hire, develop, motivate, retain and integrate highly skilled personnel in all areas of our organization.

New legislation or legal requirements may affect how we communicate with our customers, which could have a material adverse effect on our business, financial condition, and results of operations.

State and federal lawmakers, insurance regulators, and advisory groups such as the National Association of Insurance Commissioners, or NAIC, are focusing upon the use of artificial intelligence broadly, including concerns about transparency, deception, and fairness in particular. Changes in laws or regulations, or changes in the interpretation of laws or regulations by a regulatory authority specific to the use of artificial intelligence in the insurance industry may decrease our revenues and earnings and may require us to change the manner in which we conduct some aspects of our business. We may also be required to disclose our proprietary software to regulators, putting our intellectual property and proprietary rights at risk, in order to receive regulatory approval to use such artificial intelligence in the underwriting of insurance and/or the payment of claims. To the extent that any changes in law or regulation restrict the ways in which we communicate with current customers during

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customer care or claims management, these restrictions could result in a material reduction in our customer acquisition and retention, reducing the growth prospects of our business, and adversely affecting our financial condition and future cash flows.

Our failure to pay claims accurately could have a material adverse effect on our business, operating results and financial condition.

We rely on claims personnel to accurately evaluate and pay claims made under our policies. Many factors could affect our ability to accurately evaluate and pay claims, including the accuracy of our adjusters (who are claims personnel of our parent company, HCI, currently) as they make their assessments and submit their estimates of damages; the training, background, and experience of our claims representatives; the ability of our claims personnel to ensure consistent claims handling given the input by the adjusters; the ability of the claims department to translate the information provided by the adjusters into acceptable claims settlements; and the ability of our claims personnel to maintain and update our claims handling procedures and systems as they evolve over time based on claims and geographical trends in claims reporting. Any failure to pay claims accurately could lead to material litigation and/or could have a material adverse effect on our business, operating results and financial condition.

Unexpected increases in the frequency or severity of claims may adversely affect our results of operations and financial condition.

Our business may experience volatility in claim frequency from time to time, and short-term trends may not continue over the longer term. Changes in claim frequency may result from changes in mix of business, macroeconomic or other factors. A significant increase in claim frequency could have an adverse effect on our results of operations and financial condition.

Although we pursue various loss management initiatives to mitigate future increases in claim severity, there can be no assurances that these initiatives will successfully identify or reduce the effect of future increases in claim severity.

Failure to maintain our risk-based capital at the required levels could adversely affect our ability to maintain regulatory authority to conduct our business.

We are required to have sufficient capital and surplus in order to comply with insurance regulatory requirements, support our business operations and minimize our risk of insolvency. The NAIC has developed a system to test the adequacy of statutory capital and surplus of U.S.-based insurers, known as risk-based capital, that all states have adopted. This system establishes the minimum amount of capital and surplus necessary for an insurance company to support its overall business operations in consideration of its size and risk profile. It identifies insurers that may be inadequately capitalized by looking at certain risk factors, including asset risk, credit risk and underwriting risk with respect to the insurer’s business in order to determine an insurer’s authorized control level risk-based capital. An insurer’s risk-based capital ratio measures the relationship between its total adjusted capital and its authorized control level risk-based capital.

Insurers with a ratio falling below certain calculated thresholds may be subject to varying degrees of regulatory action, including suspension of their authority to write new or renewal business, heightened supervision, examination, rehabilitation or liquidation. An insurance company with total adjusted capital that is less than 200% of its authorized control level risk-based capital is at a company action level, which would require the insurance company to file a risk-based capital plan that, among other things, contains proposals of corrective actions the company intends to take that are reasonably expected to result in the elimination of the company action level event. Additional action level events occur when the insurer’s total adjusted capital falls below 150%, 100% and 70% of its authorized control level risk-based capital. Lower percentages trigger increasingly

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severe regulatory responses. In the event of a mandatory control level event (triggered when an insurer’s total adjusted capital falls below 70% of its authorized control level risk-based capital), an insurer’s primary regulator is required to take steps to place the insurer into receivership.

In addition, the NAIC Insurance Regulatory Information System, or the IRIS, is a collection of analytical tools designed to provide state insurance regulators with an integrated approach to screening and analyzing the financial condition of insurance companies operating in their respective states. If our ratios fall outside of the usual range for one or more ratios set forth by the IRIS for any number of reasons, it could subject us to heightened regulatory scrutiny or measures, or create investor uncertainty around the stability of our financial condition, which could harm our business.

Further, the NAIC has promulgated a Model Regulation to Define Standards and Commissioner’s Authority for Companies Deemed to be in Hazardous Financial Condition, or the Hazardous Financial Condition Standards, which has been adopted by many states in whole or part. If our financial condition is deemed by state insurance regulators to meet the Hazardous Financial Conditions Standards, it could subject us to heightened regulatory scrutiny or measures, or create uncertainty around the stability of our financial condition, which could harm our business.

As a relatively new entrant to the insurance industry, we may face additional capital and surplus requirements as compared to those of our larger and more established competitors. Failure to maintain adequate risk-based capital at the required levels could result in increasingly onerous reporting and examination requirements and could adversely affect our ability to maintain regulatory authority to conduct our business.

Our actual incurred losses may be greater than our loss and loss adjustment expense reserves, which could have a material adverse effect on our financial condition and results of operations.

Our financial condition and results of operations depend on our ability to appropriately price risk and assess potential losses and loss adjustment expenses under the terms of the policies we underwrite. Reserves do not represent an exact calculation of liability. Rather, reserves represent an estimate of what the expected ultimate settlement and administration of claims will cost, and the ultimate liability may be greater than or less than the current estimate. In our industry, there is always the risk that reserves may prove inadequate since we may underestimate the cost of claims and claims administration.

We base our estimates on our assessment of known facts and circumstances, as well as estimates of future trends in claim severity, claim frequency, judicial theories of liability, and other factors. These variables are affected by both internal and external events that could increase our exposure to losses, including changes in actuarial projections, claims handling procedures, inflation, volatility in construction costs, severe weather, climate change, the cost of claims litigation and defense, economic and judicial trends and legislative and regulatory changes. We regularly monitor reserves using new information on reported claims and a variety of statistical techniques to update our current estimate. Our estimates could prove to be inadequate, and this underestimation could have a material adverse effect on our financial condition.

Recorded claim reserves, including case reserves and incurred but not reported, or IBNR, claims reserves, are based on our estimates of losses after considering known facts and interpretations of the circumstances, including settlement agreements. Additionally, models that rely on the assumption that past loss development patterns will persist into the future are used. Internal factors are considered including our experience with similar cases, actual claims paid, historical trends involving claim payment patterns, pending levels of unpaid claims, loss management programs, product mix, state mix, contractual terms, industry payment and reporting patterns, and changes in claim reporting and settlement practices. External factors are also considered, such as court decisions, changes in law and litigation imposing unintended coverage. We also consider benefits, such as the availability of multiple limits for a single loss occurrence. Regulatory requirements and economic conditions are also considered.

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Because reserves are estimates of the unpaid portion of losses and expenses for events that have occurred, including IBNR losses, the establishment of appropriate reserves, including reserves for catastrophes, is an inherently uncertain and complex process that is regularly refined to reflect current estimation processes and practices. The ultimate cost of losses may vary materially from recorded reserves and such variance may adversely affect our results of operations and financial condition as the reserves and reinsurance recoverables are re-estimated.

If any of our insurance reserves should prove to be inadequate for the reasons discussed above, or for any other reason, we will be required to increase reserves, resulting in a reduction in our net income and stockholders’ equity in the period in which the deficiency is identified. Future loss experience substantially in excess of established reserves could also have a material adverse effect on future earnings and liquidity and financial rating, which would affect our ability to attract new business or to retain existing customers.

An unauthorized disclosure or loss of policyholder or employee data or information or other sensitive, confidential or personal information, including by cyber-attack or other security breach, or a suspected or actual violation of federal or state data privacy or protection laws, regulations or other obligations, could cause a loss of data or information, give rise to remediation or other expenses, expose us to liability under federal and state laws, and subject us to litigation and investigations, which could have an adverse effect on our business, cash flows, financial condition and results of operations.

As part of our normal operations, we collect, retain, use, store, transmit and otherwise process certain sensitive and confidential information, including personal information. We are subject to various federal and state privacy laws, rules and regulations and contractual obligations regarding the use, storage, sharing, disclosure, protection and other processing of certain sensitive or confidential information, including the Gramm-Leach-Bliley Act and its state-law progeny. For example, we may currently be, or may become, subject to certain state and federal privacy laws that require enhanced protection of certain types of data or new obligations with regard to data retention, transfer, disclosure, or other processing, all of which may significantly impact our business. Given the rapid development of data protection, privacy and security laws and regulations, we expect to encounter inconsistent interpretation and enforcement of these laws and regulations.

Despite the security measures and privacy policies and procedures we have implemented to help ensure data security and compliance with applicable laws, rules and regulations, which include firewalls, regular penetration testing and other measures, our facilities and systems, and those of our third-party service providers and vendors, may be vulnerable to cyber-attacks, security breaches, ransomware, unauthorized activity and access, malicious code, acts of vandalism, computer viruses, theft of data, misplaced or lost data, fraud, misconduct or misuse, social engineering attacks and denial of service attacks, phishing attacks, programming or human errors, physical break-ins, or other disruptions, any of which could result in the loss or disclosure of confidential or personal policyholder or employee information or our own proprietary information, software, methodologies and business secrets. Our information security risks have increased recently in part because of new technologies, the use of the internet and telecommunications technologies (including mobile and other connected devices) to conduct financial and other business transactions and the increased sophistication and activities of organized crime, perpetrators of fraud, hackers, terrorists and others. In addition to cyber-attacks or other security breaches involving the theft of sensitive, confidential or personal information, we and our third-party service providers now also face threats from sophisticated hackers who engage in attacks against organizations that are designed to disrupt key business services.

We rely on service providers and vendors to provide certain technology, systems and services that we use in connection with various functions of our business, including PCI DSS (Payment Card Industry Data Security Standard) compliant credit card processing, and we may entrust them with confidential or personal information. The information systems of our third-party service providers and vendors are also vulnerable to an increasing threat of continually evolving cybersecurity risks. Unauthorized parties may attempt to gain access to these systems or our information through fraud or other means of deceiving our associates, third-party service

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providers or vendors. Hardware, software or applications we obtain from third parties may contain defects in design or manufacture or other problems that could unexpectedly compromise information security. The methods used to obtain unauthorized access, disable or degrade service or sabotage systems are also constantly changing and evolving and may be difficult to anticipate or detect for long periods of time. Ever-evolving threats mean our third-party service providers and vendors must continually evaluate and adapt their own respective systems and processes, and there is no assurance that they will be adequate to safeguard against all data security breaches or misuses of data. Any future significant compromise or breach of our data security via a third-party service provider or vendor could result in additional significant costs, lost revenues, fines, lawsuits, and damage to our reputation.

Notwithstanding our efforts to create security barriers to such threats, it is virtually impossible for us to entirely mitigate these risks, and we cannot ensure that we will be able to identify, prevent or contain the effects of possible cyber-attacks or other cybersecurity risks in the future that may bypass our security measures or disrupt our information technology systems or business. While we have implemented safeguards and processes to thwart unwanted intrusions and to protect the data in our platform and computer systems, whether housed internally or externally by third parties, such safeguards and the cybersecurity measures taken by our third-party service providers may be unable to anticipate, or detect these techniques or implement adequate preventative measures quickly enough to prevent all attempts to compromise our platform. Additionally, our remediation efforts may not be successful or timely. Further, notwithstanding any contractual rights or remedies we may have, because we do not control our third-party service providers, including their security measures and the processing of data by our third-party service providers, we cannot ensure the integrity or security of measures they take to protect customer information and prevent data loss.

Noncompliance or perceived noncompliance with any privacy or security laws, rules, regulations, or contractual obligations, or our privacy policies, or any security breach, cyber-attack or cybersecurity breach, and any incident involving the misappropriation, loss or other unauthorized disclosure or use of, or access to, sensitive, confidential of personal information, could require us to expend significant capital and other resources to continue to modify or enhance our protective measures and to remediate any damage caused by such breaches or violations. In addition, this could result in interruptions to our operations and damage to our reputation, misappropriation of confidential or personal information, or regulatory enforcement actions or investigations, material fines and penalties, litigation, or other liability or actions which could have a material adverse effect on our business, cash flows, financial condition and results of operations. As the regulatory environment related to information security, data collection and use, and privacy becomes increasingly rigorous, with new and constantly changing requirements applicable to our business, compliance with those requirements could also result in additional costs.

We make public statements about our use and disclosure of personal information through our privacy policies, information provide on our website and press statements. Although we endeavor to comply with our public statements and documentation, we may at times fail to do so or be alleged to have failed to do so. The publication of our privacy policies and other statements that provide promises and assurances about data privacy and security can subject us to potential government or legal action if they are found to be deceptive, unfair or misrepresentative of our actual practices. Moreover, from time to time, concerns may be expressed about whether our products and services compromise the privacy of patients and others. Any concerns about our data privacy and security practices, even if unfounded, could damage the reputation of our businesses, discourage potential customers from using our products and services and have a material adverse effect on our business.

In addition, our insurance coverage may not be adequate to cover costs, expenses and losses associated with such events, and in any case, such insurance may not cover all of the types of costs, expenses and losses we could incur to respond to and remediate a security breach. Any incidents may result in loss of, or increased costs of, our cybersecurity insurance. We also cannot ensure that our existing insurance coverage will continue to be available on acceptable terms or will be available in sufficient amounts to cover one or more large claims related to a security incident or breach, or that the insurer will not deny coverage as to any future claim. The successful

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assertion of one or more large claims against us that exceed available insurance coverage, or the occurrence of changes in our insurance policies, including premium increases or the imposition of large deductible or coinsurance requirements, could adversely affect our reputation and our business, financial condition and results of operations. In addition to costs associated with investigating and fully disclosing a data breach, we could be subject to regulatory proceedings or private claims by affected in substantial monetary fines or damages, and our reputation would likely be harmed.

We may be unable to prevent, monitor or detect fraudulent activity, including payments of claims that are fraudulent in nature.

If we fail to maintain adequate systems and processes to prevent, monitor and detect fraud, including fraudulent claims activity, or if inadvertent errors occur with such prevention, monitoring and detection systems due to human or computer error, our business could be materially adversely impacted. While we believe past incidents of fraudulent activity have been relatively isolated, we cannot be certain that our systems and processes will always be adequate in the face of increasingly sophisticated and ever-changing fraud schemes. We use a variety of tools to protect against fraud, but these tools may not always be successful at preventing such fraud.

Instances of fraud may result in increased costs, including possible settlement and litigation expenses, and could have a material adverse effect on our business and reputation. In addition, failure to monitor and detect fraud and otherwise comply with state Special Investigation Unit requirements can result in regulatory fines or penalties.

Misconduct or fraudulent acts by employees or third parties may expose us to financial loss, disruption of business, regulatory assessments and reputational harm.

Our company and the insurance industry are inherently susceptible to past and future misconduct or fraudulent activities by employees, independent agents, vendors, customers or other third parties. These activities could include fraud against the company, its employees and its customers through illegal or prohibited activities, or unauthorized acts or representations, unauthorized use or disclosure of personal or proprietary information.

Our information technology systems may fail or be disrupted or subject to errors, bugs, vulnerabilities or defects, which could adversely affect our business.

Our insurance business is highly dependent upon the successful and uninterrupted functioning of our computer and data processing systems. We rely on these systems to perform underwriting and other modeling functions necessary for writing business, as well as to handle our policy administration process (i.e., the printing and mailing of our policies, endorsements, renewal notices, etc.). Our information technology systems are complex, and therefore undetected errors, failures, bugs, vulnerabilities or defects may be present in our products or occur in the future in our products, our technology or software, or technology or software we license in from third parties, including open source software, especially when updates or new products are released. The failure or disruption of these systems could interrupt our operations and result in a material adverse effect on our business.

The growth of our insurance business is dependent upon the successful development and implementation of advanced computer and data processing systems as well as the development and deployment of new information technologies to streamline our operations, including policy underwriting, production and administration and claim handling. The failure of these systems to function as planned could slow our growth and adversely affect our future business volume and results of operations. Real or perceived errors, failures, bugs, vulnerabilities or defects in our information technology systems could result in negative publicity, loss of or delay in market acceptance of our products and harm to our brand and weakening of our competitive position. In such an event, we may be required, or may choose, for customer relations or other reasons, to expend significant additional resources in order to help correct the problem. Any real or perceived errors, failures, bugs, vulnerabilities or defects in our information, technology systems could also impair our ability to attract new customers, retain existing customers or expand their use of our products, which would adversely affect our business, results of

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operations and financial condition. Additionally, our computer and data processing systems could become obsolete or could cease to provide a competitive advantage in policy underwriting, production and administration and claim handling which could negatively affect our future results of operations. We may also be subject to liability claims for damages related to real or perceived errors, failures, bugs, vulnerabilities or defects in our information technology systems. A material liability claim may harm our business and results of operations.

We conduct our business primarily from offices located in Tampa, Florida where tropical storms could damage our facilities or interrupt our power supply. The loss or significant impairment of functionality in these facilities for any reason could have a material adverse effect on our business although we believe we have sufficient redundancies to replace our facilities if functionality is impaired. In the event of a disaster causing a complete loss of functionality at our Tampa location, we plan to temporarily use our secondary office in Ocala, Florida to continue our operations.

If our customers were to claim that the policies they purchased failed to provide adequate or appropriate coverage, we could face claims that could harm our business, results of operations and financial condition.

Although we aim to provide adequate and appropriate coverage under each of our policies, customers could purchase policies that prove to be inadequate or inappropriate. If such customers were to bring a claim or claims alleging that we failed in our responsibilities to provide them with the type or amount of coverage that they sought to purchase, we could be found liable for amounts significantly in excess of the policy limit, resulting in an adverse effect on our business, results of operations and financial condition. While we maintain errors and omissions insurance coverage to protect us against such liability, such coverage may be insufficient or inadequate.

Performance of our investment portfolio is subject to a variety of investment risks that may adversely affect our financial results.

Our results of operations depend, in part, on the performance of our investment portfolio. We seek to hold a diversified portfolio of investments in accordance with our investment policy, which is routinely reviewed by the investment committee of our board of directors. However, our investments are subject to general economic and market risks as well as risks inherent to particular securities.

Our primary market risk exposures are interest rate risk, credit risk and equity price risk. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Quantitative and Qualitative Disclosures about Market Risk.” In recent years, interest rates have been at or near historic lows. A protracted low interest rate environment would continue to place pressure on our net investment income, particularly as it relates to fixed income securities and short-term investments, which, in turn, may adversely affect our operating results. Future increases in interest rates could cause the values of our fixed income securities portfolio to decline, with the magnitude of the decline depending on the maturity of the securities included in our portfolio and the amount by which interest rates increase. Some fixed income securities have call or prepayment options, which create possible reinvestment risk in declining rate environments. Other fixed income securities, such as asset-backed securities, carry prepayment risk or, in a rising interest rate environment, may not prepay as quickly as expected.

The value of our investment portfolio is subject to the risk that certain investments may default or become impaired due to deterioration in the financial condition of one or more issuers of the securities we hold, or due to deterioration in the financial condition of an insurer that guarantees an issuer’s payments on such investments. Downgrades in the credit ratings of fixed maturities also have a significant negative effect on the market valuation of such securities. In addition, our investment portfolio may incur losses as a result of adverse changes in equity securities prices, and is subject to the volatility of the equity markets in general.

Such factors could reduce our net investment income and result in realized and/or unrealized investment losses. Our investment portfolio is subject to increased valuation uncertainties when investment markets are illiquid. The

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valuation of investments is more subjective when markets are illiquid, thereby increasing the risk that the estimated fair value (i.e., the carrying amount) of the securities we hold in our portfolio does not reflect prices at which actual transactions would occur.

Risks for all types of securities are managed through the application of our investment policy, which establishes investment parameters that include, but are not limited to, maximum percentages of investment in certain types of securities and minimum levels of credit quality, which we believe are within applicable guidelines established by the NAIC as it relates to the portfolio. The maximum percentage and types of securities we may invest in are subject to the insurance laws regulations, which may change. Failure to comply with these laws and regulations would cause non-conforming investments to be treated as non-admitted assets for purposes of measuring statutory surplus and, in certain circumstances, we would be required to dispose of such investments.

Although we seek to preserve our capital, we cannot be certain that our investment objectives will be achieved, and results may vary substantially over time. In addition, although we seek to employ investment strategies that are not correlated with our insurance and reinsurance exposures, losses in our investment portfolio may occur at the same time as underwriting losses and, therefore, exacerbate the adverse effect of the losses on us.

Litigation and legal proceedings filed by or against us and our subsidiaries could have a material adverse effect on our business, results of operations and financial condition.

From time to time, we are subject to allegations, and may be party to litigation and legal proceedings relating to our business operations. Litigation and other proceedings may include complaints from or litigation by customers or reinsurers, related to alleged breaches of contract or otherwise.

As is typical in the insurance industry, we continually face risks associated with litigation of various types arising in the normal course of our business operations, including disputes relating to insurance claims under our policies as well as other general commercial and corporate litigation. Although we are not currently involved in any material litigation with our customers, members of the insurance industry are periodically the target of class action lawsuits and other types of litigation, some of which involve claims for substantial or indeterminate amounts, and the outcomes of which are unpredictable. This litigation is based on a variety of issues, including sale of insurance and claim settlement practices. In addition, because we employ a technology platform to collect and analyze data in our underwriting decisions, including customer data, it is possible that customers or consumer groups could bring individual or class action claims alleging that our methods of collecting data and pricing risk are impermissibly discriminatory. We cannot predict with any certainty whether we will be involved in such litigation in the future or what impact such litigation would have on our business. If we were to be involved in litigation and it was determined adversely, it could require us to pay significant damages or to change aspects of our operations, either of which could have a material adverse effect on our financial results. Even claims without merit can be time-consuming and costly to defend, and may divert management’s attention and resources away from our business and adversely affect our business, results of operations and financial condition. Additionally, routine lawsuits over claims that are not individually material could in the future become material if aggregated with a substantial number of similar lawsuits. In addition to increasing costs, a significant volume of customer complaints or litigation could also adversely affect our brand and reputation, regardless of whether such allegations have merit or whether we are liable. We cannot predict with certainty the costs of defense, the costs of prosecution, insurance coverage or the ultimate outcome of litigation or other proceedings filed by or against us, including remedies or damage awards, and adverse results in such litigation, and other proceedings may harm our business and financial condition.

The COVID-19 pandemic may negatively impact our employees, business, results of operations and financial condition.

We continue to monitor the COVID-19 pandemic closely. Due to the global breadth of its spread (including in India, where we have approximately 100 employees), and the range of governmental and community reactions

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thereto, there is still considerable uncertainty around its ultimate impact. The impact of the pandemic may also exacerbate the other risks described in this “Risk Factors” section, and additional impacts may arise that we are not currently aware of, any of which could have a material effect on us. If there is a future resurgence of COVID-19, these negative impacts on our business may be further exacerbated. The extent of COVID-19’s effect on our operational and financial performance will depend on future developments, including the duration and intensity of the pandemic, including new variants like the Delta variant, all of which are uncertain and difficult to predict. As a result, the full extent of the impact of the pandemic on our overall financial and operating results, whether in the near or long term, cannot be reasonably estimated at this time.

Risks Related to Our Industry

The insurance business, including the market for homeowners and flood insurance, is historically cyclical in nature, and we may experience periods with excess underwriting capacity and unfavorable premium rates, which could adversely affect our business.

Historically, insurers have experienced significant fluctuations in operating results due to competition, frequency and severity of catastrophic events, levels of capacity, adverse litigation trends, regulatory constraints, general economic conditions, and other factors. The supply of insurance is related to prevailing prices, the level of insured losses and the level of capital available to the industry that, in turn, may fluctuate in response to changes in rates of return on investments being earned in the insurance industry. As a result, the insurance business historically has been a cyclical industry characterized by periods of intense price competition due to excessive underwriting capacity as well as periods when shortages of capacity increased premium levels. Demand for insurance depends on numerous factors, including the frequency and severity of catastrophic events, levels of capacity, the introduction of new capital providers and general economic conditions. All of these factors fluctuate and may contribute to price declines generally in the insurance industry.

We cannot predict with certainty whether market conditions will improve, remain constant or deteriorate. Negative market conditions may impair our ability to underwrite insurance at rates we consider appropriate and commensurate relative to the risk assumed. Additionally, negative market conditions could result in a decline in policies sold, an increase in the frequency of claims and premium defaults, and an uptick in the frequency of falsification of claims. If we cannot underwrite insurance at appropriate rates, our ability to transact business will be materially and adversely affected. Any of these factors could lead to an adverse effect on our business, results of operations and financial condition.

The effects of emerging claim and coverage issues on our business are uncertain.

As industry practices and legal, judicial, social and other environmental conditions change, unexpected and unintended issues related to claims and coverage may emerge. These issues may adversely affect our business by either extending coverage beyond our underwriting intent or by increasing the number or size of claims. In some instances, these changes may not become apparent until sometime after we have issued insurance contracts that are affected by the changes. As a result, the full extent of liability under our insurance contracts may not be known for many years after a contract is issued and renewed, and our financial position and results of operations may be adversely affected as a result of any such unforeseen changes.

Industry trends, such as increased litigation against the insurance industry and individual insurers (including as a result of assignments of benefits), the willingness of courts to expand covered causes of loss, rising jury awards and the escalation of loss severity may contribute to increased costs and to the deterioration of the reserves of our insurance subsidiary.

Loss severity in the homeowners insurance industry may increase and may be driven by larger court judgments. In the event legal actions and proceedings are brought on behalf of classes of complainants, this trend may increase the size of judgments. The propensity of policyholders and third party claimants to litigate and the willingness of courts to expand causes of loss and the size of awards may render our loss reserves inadequate for current and future losses.

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Reinsurance may be unavailable at current levels and prices, which may limit our ability to underwrite new policies. Furthermore, reinsurance subjects us to counterparty risk and may not be adequate to protect us against losses, which could have a material effect on our results of operations and financial condition.

Reinsurance is a contract by which an insurer, which may be referred to as the ceding insurer, agrees with a second insurer, called a reinsurer, that the reinsurer will cover a portion of the losses incurred by the ceding insurer in the event a claim is made under one or more policies issued by the ceding insurer, in exchange for a premium. We obtain reinsurance to help manage our exposure to homeowner and flood insurance risks. Although our reinsurance counterparties are liable to us according to the terms of the reinsurance policies, we remain primarily liable to our policyholders as the direct insurer on all risks reinsured. As a result, reinsurance does not eliminate our obligation to pay all claims, and we are subject to the risk that one or more of our reinsurers will be unable or unwilling to honor its obligations, that the reinsurers will not pay in a timely fashion, or that our losses are so large that they exceed the limits inherent in our reinsurance contracts, limiting recovery. In addition, the reinsurance agreements we share with the other insurance subsidiary of our parent company, HCI, could be exhausted by that insurance affiliate, thereby limiting our coverage availability. We are also subject to the risk that under applicable insurance laws and regulations we may not be able to take credit for the reinsurance on our financial statements and instead would be required to hold separate admitted assets as reserves to cover claims on the risks that we have ceded to the reinsurer. Reinsurers may become financially unsound by the time they are called upon to pay amounts due, which may not occur for many years, in which case we may have no legal ability to recover what is due to us under our agreement with such reinsurer. Any disputes with reinsurers regarding coverage under reinsurance contracts could be time consuming, costly, and uncertain of success. We attempt to select financially strong reinsurers with an A.M. Best rating of “A-” or better or we require the reinsurer to fully collateralize its exposure. While we monitor from time to time the financial condition of our reinsurers, we rely principally on A.M. Best, our reinsurance broker, and other rating agencies in determining reinsurers’ ability to meet their obligations to us. Any failure on the part of one or more reinsurers to meet their obligations to us could have a material adverse effect on our financial condition or results of operations.

Market conditions beyond our control impact the availability and cost of the reinsurance we purchase. No assurances can be made that reinsurance will remain continuously available to us to the same extent and on the same terms and rates as is currently available, as such availability depends in part on factors outside of our control. A new contract may not provide sufficient reinsurance protection. Market forces and external factors, such as significant losses from weather and seismic events (like hurricanes or earthquakes) or terrorist attacks or an increase in capital and surplus requirements, impact the availability and cost of the reinsurance we purchase. If we were unable to maintain our current level of reinsurance or purchase new reinsurance protection in amounts that we consider sufficient at acceptable prices, we would have to either accept an increase in our catastrophe exposure, reduce our insurance underwritings, or develop or seek other alternatives.

The unavailability of reinsurance protection on acceptable terms would have a materially adverse impact on our business, which depends on reinsurance companies to potentially absorb unfavorable variance from the level of losses anticipated at underwriting. If we are unable to obtain adequate reinsurance at reasonable rates, we would have to increase our risk exposure or reduce the level of our underwriting commitments, either of which could have a material adverse effect upon our business volume and profitability. Alternatively, we could elect to pay higher than anticipated rates for reinsurance coverage, which could have a material adverse effect upon our profitability unless policy premium rates could also be raised, in most cases subject to approval by state regulators, to offset this additional cost.

We are subject to extensive regulation, which may reduce our profitability or limit our growth. Moreover, if we fail to comply with these regulations, we may be subject to penalties, including fines and revocation or suspension of our licenses to operate, which may adversely affect our financial condition and results of operations.

The insurance industry is highly regulated and supervised. We are subject to supervision and regulation in Florida and the states in which we transact insurance business. In addition, as we seek to expand in the

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United States, we will be subject to the laws and regulatory standards with respect to the insurance business of the states in which we expand and operate. Such supervision and regulation is primarily designed to protect our policyholders rather than our shareholders. These regulations are generally administered by a department of insurance in each state and relate to, among other things:

• the content and timing of required notices and other policyholder information;

• the amount of premiums the insurer may write in relation to its surplus;

• the amount and nature of reinsurance a company is required or permitted to purchase;

• participation in guaranty funds and other statutorily created markets or organizations;

• business operations and claims practices;

• approval of policy forms and premium rates;

• standards of solvency, including risk-based capital measurements;

• licensing of insurers and their products;

• restrictions on the nature, quality and concentration of investments;

• restrictions on the ability of insurance company subsidiaries to pay dividends to their holding companies;

• restrictions on transactions between insurance companies and their affiliates;

• restrictions on the size of risks insurable under a single policy;

• requiring deposits for the benefit of policyholders;

• requiring certain methods of accounting;

• periodic examinations of our operations and finances;

• the form and content of records of financial condition required to be filed; and

• the level of loss and loss adjustment expense reserves that must be maintained by insurers.

The Florida Office of Insurance Regulation and regulators in other jurisdictions where we may become licensed and offer insurance products conduct periodic and targeted examinations of the affairs of insurance companies and require the filing of annual and other reports relating to financial condition, holding company issues and other matters. These regulatory requirements may adversely affect or inhibit our ability to achieve some or all of our business objectives. These regulatory authorities also conduct periodic examinations into insurers’ financial condition and business practices. These reviews may reveal deficiencies in our insurance operations or non-compliance with regulatory requirements.

In certain states, including Florida, insurance companies are subject to assessments levied by the states where they conduct their business. While we can recover these assessments from Florida policyholders through policy surcharges, our payment of the assessments and our recoveries may not offset each other in the same reporting period in our financial statements and may cause a material adverse effect on our cash flows and results of operations in a particular reporting period.

In addition, regulatory authorities have relatively broad discretion to restrict, deny, suspend or revoke licenses for various reasons, including the violation of regulations. In some instances, we follow practices based on our interpretations of regulations or practices that we believe may be generally followed by the industry. These practices may turn out to be different from the interpretations of regulatory authorities. If we do not have the requisite licenses and approvals or do not comply with applicable regulatory requirements, insurance regulatory authorities could preclude or temporarily suspend us from carrying on some or all of our activities or otherwise penalize us. This could adversely affect our ability to operate our business.

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Finally, changes in the level of regulation of the insurance industry or changes in laws or regulations themselves or interpretations by regulatory authorities could adversely affect our ability to operate our business, reduce our profitability and limit our growth. For example, Florida Senate Bill 76, which took effect on July 1, 2021, reforms the Florida property insurance market and provides, among other things, (i) that any claim or reopened claim under a property insurance policy is barred unless notice of claim is given to the insurer within two years of the date of loss and further provides that a supplemental claim is barred unless notice is provided to the insurer within three years of the date of loss; (ii) that as a condition to filing suit under a property insurance policy, a claimant must provide written notice of intent to initiate litigation at least ten business days before filing suit, but such notice may not be given before the insurer has made a determination of coverage pursuant to applicable law; (iii) that the pre-suit notice must include a pre-suit settlement demand, which itemizes the damages, attorney’s fees and costs, and lists the amount in dispute; and (iv) that a prevailing party insured can recover attorney’s fees based on a statutory formula tied to the difference between the amount obtained and the pre-suit settlement offer. The impact of this legislation on our results of operations cannot be estimated at this time.

Our insurance company subsidiary is subject to assessments and other surcharges from state guaranty funds, and mandatory state insurance facilities, which may reduce our profitability.

The insurance laws of many states subject homeowners insurers doing business in those states to statutory guaranty fund assessments. The purpose of a guaranty fund is to protect customers by requiring that solvent homeowners insurers pay the insurance claims of insolvent insurers. These guaranty associations generally pay these claims by assessing solvent insurers proportionately based on each insurer’s share of voluntary premiums written in the state. While most guaranty associations provide for recovery of assessments through subsequent rate increases, surcharges or premium tax credits, there is no assurance that insurers will ultimately recover these assessments, which could be material, particularly following a large catastrophe or in markets which become disrupted.

Maximum contributions required by law in any one year vary by state. We cannot predict with certainty the amount of future assessments because they depend on factors outside our control, such as insolvencies of other insurance companies. Significant assessments could have a material adverse effect on our financial condition and results of operations.

A regulatory environment that requires rate increases to be approved and that can dictate underwriting practices and mandate participation in loss sharing arrangements may adversely affect our results of operations and financial condition.

From time to time, political events and positions affect the insurance market, including efforts to suppress rates to a level that may not allow us to reach targeted levels of profitability. For example, if our loss ratio compares favorably to that of the industry, state or provincial regulatory authorities may impose rate rollbacks, require us to pay premium refunds to policyholders, or challenge or otherwise delay our efforts to raise rates even if the homeowners industry generally is not experiencing regulatory challenges to rate increases. Such challenges affect our ability to obtain approval for rate changes that may be required to achieve targeted levels of profitability and returns on equity. In particular due to the COVID-19 pandemic, state regulators and legislators are under increased political pressure to provide financial relief to policyholders through premium rebates or requiring insurers to pay claims arising from COVID-19 related losses, regardless of the applicable policy’s exclusions.

In addition, certain states have enacted laws that require an insurer conducting business in that state to participate in assigned risk plans, reinsurance facilities and joint underwriting associations. Certain states also require insurers to offer coverage to all consumers, often restricting an insurer’s ability to charge the price it might otherwise charge. In these markets, we may be compelled to underwrite significant amounts of business at lower-than-desired rates, possibly leading to an unacceptable return on equity. Laws and regulations of many states also limit an insurer’s ability to discontinue writing some or all of its business or to withdraw from one or more lines of insurance, except pursuant to a plan that is approved by the state insurance department. Additionally, as

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addressed above, certain states require insurers to participate in guaranty funds for impaired or insolvent insurance companies. These funds periodically assess losses against all insurance companies doing business in the state. Our results of operations and financial condition could be adversely affected by any of these factors.

State insurance regulators impose additional reporting requirements regarding enterprise risk on insurance holding company systems, with which we must comply as an insurance holding company.

In the past decade, various state insurance regulators have increased their focus on risks within an insurer’s holding company system that may pose enterprise risk to the insurer. In 2012, the NAIC adopted significant amendments to the Insurance Holding Company Act and related regulations, or the NAIC Amendments. The NAIC Amendments are designed to respond to perceived gaps in the regulation of insurance holding company systems in the United States. One of the major changes is a requirement that an insurance holding company system’s ultimate controlling person submit annually to its lead state insurance regulator an “enterprise risk report” that identifies activities, circumstances or events involving one or more affiliates of an insurer that, if not remedied properly, are likely to have a material adverse effect upon the financial condition or liquidity of the insurer or its insurance holding company system as a whole. Other changes include the requirement that a controlling person submit prior notice to its domiciliary insurance regulator of a divestiture of control, detailed minimum requirements for cost sharing and management agreements between an insurer and its affiliates and expanding of the agreements between an insurer and its affiliates to be filed with its domiciliary insurance regulator, including states (if any) in which the insurer is commercially domiciled. The NAIC Amendments must be adopted by the individual state legislatures and insurance regulators in order to be effective, and many states have already done so.

In 2012, the NAIC also adopted the Risk Management and Own Risk and Solvency Assessment Model Act, or the ORSA Model Act. The ORSA Model Act, as adopted by the various states, requires an insurance holding company system’s Chief Risk Officer to submit annually to its lead state insurance regulator an Own Risk and Solvency Assessment Summary Report, or ORSA. The ORSA is a confidential internal assessment appropriate to the nature, scale and complexity of an insurer, conducted by that insurer of the material and relevant risks identified by the insurer associated with an insurer’s current business plan and the sufficiency of capital resources to support those risks. The ORSA Model Act must be adopted by the individual state legislature and insurance regulators in order to be effective. We cannot predict the impact, if any, that any other regulatory requirements may have on our business, financial condition or results of operations.

There is also risk that insurance holding company systems may become subject to group capital requirements at the holding company level. In December 2020, the NAIC adopted additional amendments to the Insurance Holding Company System Regulatory Act and the Insurance Holding Company System Model Regulation to provide a framework intended to complement the current holding company analytics framework by providing additional information to the lead state regulator for use in assessing group risks and capital adequacy. The amendments to the Model Act and Model Regulation adopt a group capital calculation and liquidity stress test. We cannot predict whether or when these amendments may be adopted by Florida or the impact, if any, that the new regulatory requirements may have on our business, financial condition or results of operation.

The increasing adoption by states of cybersecurity regulations could impose additional compliance burdens on us and expose us to additional liability.

In response to the growing threat of cyber-attacks in the insurance industry, certain jurisdictions have begun to consider new cybersecurity measures, including the adoption of cybersecurity regulations. On October 24, 2017, the NAIC adopted its Insurance Data Security Model Law, intended to serve as model legislation for states to enact in order to govern cybersecurity and data protection practices of insurers, insurance agents, and other licensed entities registered under state insurance laws. Alabama, Connecticut, Delaware, Indiana, Louisiana, Michigan, Mississippi, New Hampshire, Ohio, South Carolina and Virginia have adopted versions of the Insurance Data Security Model Law, each with a different effective date, and other states may adopt versions of

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the Insurance Data Security Model Law in the future. The New York Department of Financial Services has promulgated its own Cybersecurity Requirements for Financial Services Companies that is not based upon the Insurance Data Security Model Law and requires insurance companies to establish and maintain a cybersecurity program and implement and maintain cybersecurity policies and procedures with specific requirements. In addition, some jurisdictions, such as California, Massachusetts, and Nevada have enacted more generalized data privacy and security laws, rules and regulations that apply to certain data that we process. Although we take steps to comply with financial industry cybersecurity regulations and other data privacy and security laws and believe we are materially compliant with their requirements, our failure to comply with new or existing cybersecurity laws, rules and regulations could result in material regulatory actions, litigation, fines, reputational harm and other penalties. In addition, efforts to comply with new or existing cybersecurity or privacy laws, rules and regulations could impose significant costs on our business, which could materially and adversely affect our business, financial condition or results of operations.

We are subject to payment processing risk.

We currently rely exclusively on one third-party vendor to provide credit and debit card payment processing services, and our business would be disrupted if this vendor refuses to provide these services to us and we are unable to find a suitable replacement on a timely basis or at all. If we or our processing vendor fail to maintain adequate systems for the authorization and processing of credit card transactions, it could cause one or more of the major credit card companies to disallow our continued use of their payment products. In addition, if these systems fail to work properly and, as a result, we do not charge our customers’ credit cards on a timely basis or at all, our business, revenue, results of operations and financial condition could be harmed.

The payment methods that we offer also subject us to potential fraud and theft by criminals, who are becoming increasingly more sophisticated, seeking to obtain unauthorized access to or exploit weaknesses that may exist in the payment systems. If we fail to comply with applicable rules or requirements for the payment methods we accept, or if payment-related data are compromised due to a breach of data, we may be liable for significant costs incurred by payment card issuing banks and other third parties or subject to fines and higher transaction fees, or our ability to accept or facilitate certain types of payments may be impaired. In addition, our customers could lose confidence in certain payment types, which may result in a shift to other payment types or potential changes to our payment systems that may result in higher costs. If we fail to adequately control fraudulent credit card transactions, we may face civil liability, diminished public perception of our security measures, and significantly higher credit card-related costs, each of which could harm our business, results of operations and financial condition.

Unexpected changes in the interpretation of our coverage or provisions, including loss limitations and exclusions, in our policies could have a material adverse effect on our financial condition and results of operations.

There can be no assurances that specifically negotiated loss limitations or exclusions in our policies will be enforceable in the manner we intend, or at all. As industry practices and legal, judicial, social, and other conditions change, unexpected and unintended issues related to claims and coverage may emerge. For example, many of our policies limit the period during which a customer may bring a claim, which may be shorter than the statutory period under which such claims can be brought against our customers. While these limitations and exclusions help us assess and mitigate our loss exposure, it is possible that a court or regulatory authority could nullify or void a limitation or exclusion, or legislation could be enacted modifying or barring the use of such limitations or exclusions. These types of governmental actions could result in higher than anticipated losses and loss adjustment expenses, which could have a material adverse effect on our financial condition or results of operations. In addition, court decisions could read policy exclusions narrowly so as to expand coverage, thereby requiring insurers to create and write new exclusions. Under the insurance laws, the insurer typically has the burden of proving an exclusion applies and any ambiguities in the terms of a loss limitation or exclusion provision are typically construed against the insurer. These issues may adversely affect our business by either

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broadening coverage beyond our underwriting intent or by increasing the frequency or severity of claims. In some instances, these changes may not become apparent until sometime after we have issued insurance contracts that are affected by the changes. As a result, the full extent of liability under our insurance contracts may not be known for many years after a contract is issued.

Risks Related to Our Relationship with HCI

HCI controls the direction of our business, and the concentrated ownership of our common stock will prevent you and other shareholders from influencing significant decisions.

Following the completion of this offering, our parent company, HCI, will continue to control shares representing a majority of the voting power of all of our issued and outstanding shares of common stock. Immediately after this offering, HCI will own 75,000,000 shares of our common stock, which will represent approximately        % of our total outstanding shares of common stock and voting power (assuming no exercise of the underwriters’ option to purchase additional shares of common stock from us). As long as HCI continues to control shares representing a majority of our voting power, it will generally be able to determine the outcome of all corporate actions requiring shareholder approval (unless supermajority approval of such matter is required), including the election of directors. Even if HCI were to control less than a majority of our voting power, HCI may be able to influence the outcome of corporate actions so long as it owns a significant portion of our voting power. If HCI does not dispose of its shares of our common stock, HCI could retain control over us for an extended period of time or indefinitely.

Investors in this offering will not be able to affect the outcome of any shareholder vote while HCI controls the majority of our voting power. Due to its ownership and rights under our amended and restated articles of incorporation and bylaws that will be in effect immediately prior to the completion of this offering, HCI will be able to control, subject to applicable law, the composition of our board of directors, which in turn will be able to control all matters affecting us, including, among other things:

• any determination with respect to our business direction and policies, including the appointment and removal of officers and, in the event of a vacancy on our board of directors, additional or replacement directors;

• any determinations with respect to mergers, business combinations or dispositions of assets;

• determination of our management policies;

• determination of the composition of the committees on our board of directors;

• our financing policy;

• our compensation and benefit programs and other human resources policy decisions;

• termination of, changes to or determinations under our agreements with HCI;

• changes to any other agreements that may adversely affect us;

• our dividend policy; and

• determinations with respect to our tax returns.

See “Description of Capital Stock.”

Because HCI’s interests may differ from ours or from those of our other shareholders, actions that HCI takes with respect to us, as our controlling shareholder, may not be favorable to us or our other shareholders.

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If HCI sells a controlling interest in us to a third party in a private transaction, you may not realize any change-of-control premium on shares of our common stock, and we may become subject to the control of a currently unknown third party.

Following the completion of this offering, HCI will continue to hold approximately        % of our voting power (assuming no exercise of the underwriters’ option to purchase additional shares of common stock from us). HCI will have the ability, should it choose to do so, to sell some or all of its shares of our common stock in a privately negotiated transaction, which, if sufficient in size, could result in a change of control of us.

The ability of HCI to privately sell its shares of our common stock, with no requirement for a concurrent offer to be made to acquire all of our shares that will be publicly traded hereafter, could prevent you from realizing any change-of-control premium on your shares of our common stock that may otherwise accrue to HCI on its private sale of our common stock it holds. Additionally, if HCI privately sells shares representing a significant portion of our common stock, we may become subject to the control of a presently unknown third party. Such third party may have conflicts of interest with other shareholders.

HCI’s interests may conflict with our interests and the interests of our other shareholders. Conflicts of interest between HCI and us could be resolved in a manner unfavorable to us and our other shareholders.

Various conflicts of interest between us and HCI could arise. Ownership interests of directors or officers of HCI in our common stock and ownership interests of our directors and officers in the stock of HCI, or a person’s service either as a director or officer of both companies, could create or appear to create potential conflicts of interest when those directors and officers are faced with decisions relating to us. These decisions could include:

• corporate opportunities;

• the impact that operating decisions for our business may have on HCI’s consolidated financial statements;

• differences in tax positions between HCI and us, particularly in light of the tax allocation agreement among HCI and its subsidiaries, including us;

• the impact that operating or capital decisions (including the incurrence of indebtedness) for our business may have on HCI’s current or future indebtedness or the covenants under that indebtedness;

• future, potential commercial arrangements between HCI and us or between HCI and third parties;

• business combinations involving us;

• our dividend policy;

• management stock ownership; and

• the intercompany agreements between HCI and us.

See “Certain Relationships and Related Party Transactions.”

Furthermore, disputes may arise between HCI and us relating to our past and ongoing relationship and these potential conflicts of interest may make it more difficult for us to favorably resolve such disputes, including those related to:

• tax, employee benefits, indemnification and other matters arising from this offering;

• the nature, quality and pricing of services HCI agrees to provide to us;

• sales or other disposals by HCI of all or a portion of its ownership interest in us; and

• business combinations involving us.

We may not be able to resolve any potential conflicts, and even if we do, the resolution may be less favorable to us than if we were dealing with an unaffiliated party. While we are controlled by HCI, we may not have the leverage to negotiate amendments to our agreements with HCI, if required, on terms as favorable to us as those we would negotiate with an unaffiliated third party.

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Certain of our directors and officers may have actual or potential conflicts of interest because of their positions with HCI.

Following this offering, Paresh Patel, our president, chief executive officer and chairman of our board of directors, will continue to serve as chairman of the board of directors of HCI and as HCI’s chief executive officer. In addition, Eric Hoffman will continue to serve on our board of directors and on the board of directors of HCI following this offering. Such individuals may also own HCI common stock, options to purchase HCI common stock or other HCI equity awards. Their positions at HCI and the ownership of any HCI equity or equity awards creates, or may create the appearance of, conflicts of interest when these individuals are faced with decisions that could have different implications for HCI than the decisions have for us.

Our amended and restated articles of incorporation that will be in effect immediately prior to the completion of this offering limit HCI’s and its directors’ and officers’ liability to us or you for breach of fiduciary duty and could also prevent us from benefiting from corporate opportunities that might otherwise have been available to us.

Our amended and restated articles of incorporation that will be in effect immediately prior to the completion of this offering provide that, subject to any contractual provision to the contrary, HCI has no obligation to refrain from:

• engaging in the same or similar business activities or lines of business as we do;

• doing business with any of our customers or vendors; or

• employing or otherwise engaging any of our officers or employees.

Under our amended and restated articles of incorporation that will be in effect immediately prior to the completion of this offering, neither HCI nor any officer or director of HCI, except as provided in our amended and restated articles of incorporation, will be liable to us or to our shareholders for breach of any fiduciary duty by reason of any of these activities.

Additionally, our amended and restated articles of incorporation that will be in effect immediately prior to the completion of this offering include a “corporate opportunity” provision in which we renounce any interests or expectancy in corporate opportunities which become known to (i) any of our directors or officers who are also directors, officers, employees or other affiliates of HCI or its affiliates (except that we and our subsidiaries shall not be deemed affiliates of HCI or its affiliates for the purposes of the provision), which we refer to in this paragraph as “dual persons”, or (ii) HCI itself, and which relate to the business of HCI or may constitute a corporate opportunity for both HCI and us. Generally, neither HCI nor our directors or officers who are also dual persons will be liable to us or our shareholders for breach of any fiduciary duty by reason of the fact that any such person pursues or acquires any corporate opportunity for the account of HCI or its affiliates, directs, recommends, sells, assigns or otherwise transfers such corporate opportunity to HCI or its affiliates, or does not communicate information regarding such corporate opportunity to us. The corporate opportunity provision may exacerbate conflicts of interest between HCI and us because the provision effectively permits one of our directors or officers who also serves as a director, officer, employee or other affiliate of HCI to choose to direct a corporate opportunity to HCI instead of us.

HCI will not be restricted from competing with us in the insurance business, including as a result of HCI acquiring a company that operates an insurance business. Due to the significant resources of HCI, including its financial resources, name recognition and know-how resulting from the previous management of our business, HCI could have a significant competitive advantage over us should it decide to utilize these resources to engage in the type of business we conduct, which may cause our operating results and financial condition to be materially adversely affected.

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We may not achieve some or all of the anticipated benefits of being a standalone public company.

We may not be able to achieve all of the anticipated strategic and financial benefits expected as a result of being a standalone public company, or such benefits may be delayed or not occur at all. These anticipated benefits include the following:

• allowing investors to evaluate the distinct merits, performance and future prospects of our business, independent of HCI and HCI’s other businesses;

• improving our strategic and operational flexibility and increasing management focus as we continue to implement our strategic plan and allowing us to respond more effectively to different customer needs and the competitive environment for our business;

• allowing us to adopt a capital structure better suited to our financial profile and business needs, without competing for capital with HCI’s other businesses;

• creating an independent equity structure that will facilitate our ability to effect future acquisitions utilizing our capital stock; and

• enhancing employee hiring and retention by, among other things, improving the alignment of management and employee incentives with performance and growth objectives of our business.

We may not achieve the anticipated benefits of being a standalone public company for a variety of reasons, and it could adversely affect our operating results and financial condition.

The services that we receive from HCI may not be sufficient for us to operate our business, and we would likely incur material incremental costs if we lost access to HCI’s services.

Because we have not operated as an independent company, we have obtained, and will need to continue to obtain, services from HCI relating to many important corporate functions under a cost allocation agreement among HCI and its subsidiaries, including us (the “HCI Cost Allocation Agreement”). Following this offering, many of these services will continue to be governed by that agreement, under which we will be able to continue to use these HCI services for a fixed term established on a service-by-service basis. We generally will have the right to terminate a service before its stated termination date if we give notice to HCI. Partial reduction in the provision of any service will require HCI’s consent. In addition, either party will be able to terminate the HCI Cost Allocation Agreement due to a material breach of the other party, upon prior written notice, subject to limited cure periods. We will pay HCI mutually agreed-upon fees for these services, which will be based on HCI’s costs of providing the services.

If we lost access to the services provided to us by HCI under the HCI Cost Allocation Agreement, we would need to replicate or replace certain functions, systems and infrastructure. We may also need to make investments or hire additional employees to operate without the same access to HCI’s existing operational and administrative infrastructure. These initiatives may be costly to implement. Due to the scope and complexity of the underlying projects relative to these efforts, the amount of total costs could be materially higher than our estimate, and the timing of the incurrence of these costs could be subject to change.

We may not be able to replace these services or enter into appropriate third-party agreements on terms and conditions, including cost, comparable to those that we have received in the past and will continue to receive from HCI under the HCI Cost Allocation Agreement. Additionally, if the HCI Cost Allocation Agreement is terminated, we may be unable to sustain the services at the same levels or obtain the same benefits as when we were receiving such services and benefits from HCI. If we have to operate these functions separately, if we do not have our own adequate systems and business functions in place or if we are unable to obtain them from other providers, we may not be able to operate our business effectively or at comparable costs, and our profitability may decline. In addition, we have historically received informal support from HCI, which may not be addressed in the HCI Cost Allocation Agreement. The level of this informal support could diminish or be eliminated following this offering.

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While we are controlled by HCI, we may not have the leverage to negotiate amendments to our agreements with HCI, if required, on terms as favorable to us as those we would negotiate with an unaffiliated third party.

Our historical financial results are not necessarily representative of the results we would have achieved as a standalone company and may not be a reliable indicator of our future results.

Our historical financial results included in this prospectus do not reflect the financial condition, results of operations or cash flows we would have achieved as a standalone company during the periods presented or those we will achieve in the future, which is primarily the result of the following factors:

• our historical financial results reflect charges for certain support functions that are provided on a centralized basis within HCI, such as corporate administrative expenses, salaries, benefits, bonus and other expenses related to human resources services, accounting and legal services and other indirect operational costs under the HCI Cost Allocation Agreement;

• our cost of potential future debt and our capital structure will be different from that reflected in our historical financial statements;

• we will incur additional ongoing costs as a result of this offering, including costs related to public company reporting, investor relations and compliance with the Sarbanes-Oxley Act of 2002; and

• this offering may have a material effect on our relationship with our customers and our other business relationships, including vendor relationships.

Our financial condition and future results of operations could be materially different from amounts reflected in our historical financial statements included elsewhere in this prospectus, so it may be difficult for investors to compare our future results to historical results or to evaluate our relative performance or trends in our business.

Third parties may seek to hold us responsible for liabilities of HCI, which could result in a decrease in our income.

Third parties may seek to hold us responsible for HCI’s liabilities. If those liabilities are significant and we are ultimately held liable for them, we cannot assure that we will be able to recover the full amount of our losses from HCI.

We may be required to make cash payments to HCI for prior tax years under the Tax Allocation Agreement with HCI.

We are a party to a tax allocation agreement with HCI (the “Tax Allocation Agreement”) that requires that we pay to HCI the amount of U.S. federal income tax we would owe for each taxable year if we had filed a U.S. federal income tax return for such year as a separate company. If we incur a loss (or have unused tax credits) for a taxable year that can be carried back to prior years, HCI is required to pay us the amount of U.S. federal income tax refund we would be entitled to receive, computed on a separate company basis. If no carryback is allowed, however, HCI is obligated to pay us the amount of the reduction in the consolidated U.S. federal income taxes of HCI’s affiliated group that results from such group’s use of our losses or credits. The Tax Allocation Agreement will automatically terminate with respect to us when our membership in HCI’s affiliated group terminates following the completion of this offering, but certain rights and obligations arising under the Tax Allocation Agreement will survive termination. Following the completion of this offering, we may be required to make cash payments to HCI in respect of taxes for prior years under the Tax Allocation Agreement, which payments could harm our results of operations and financial condition.

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Risks Relating to Ownership of Our Common Stock

There is no existing market for our common stock and an active, liquid trading market for our common stock may not develop following this offering.

Prior to this offering, there has been no public market for our common stock. We cannot predict the extent to which investor interest in us will lead to the development of an active trading market or how liquid that market may become. If an active trading market does not develop, you may have difficulty selling any of our common stock that you purchase. The initial public offering price of our common stock will be determined by negotiation between us and the underwriters. This price will not necessarily reflect the price at which investors in the market will be willing to buy and sell shares of our common stock following this offering. In addition, the market price of our common stock may decline below the initial public offering price, and you may not be able to resell your shares at, or above, the initial public offering price.

The market price of our common stock may be highly volatile, and you may not be able to resell your shares at or above the initial public offering price.

Prior to this offering, there has been no public market for shares of our common stock. In addition, the market price of our common stock following this offering is likely to be highly volatile, may be higher or lower than the initial public offering price and could be subject to wide fluctuations in response to various factors, some of which are beyond our control. These fluctuations could cause you to lose all or part of your investment in our common stock since you might be unable to sell your shares at or above the price you paid in this offering. The following factors, in addition to other factors described in this “Risk Factors” section and included elsewhere in this prospectus, may have a significant impact on the market price of our common stock:

• the occurrence of severe weather conditions and other catastrophes;

• our operating and financial performance, quarterly or annual earnings relative to similar companies;

• publication of research reports or news stories about us, our competitors or our industry, or positive or negative recommendations or withdrawal of research coverage by securities analysts;

• the public’s reaction to our press releases, our other public announcements and our filings with the SEC;

• announcements by us or our competitors of acquisitions, business plans or commercial relationships;

• any major change in our board of directors or senior management;

• additional sales of our common stock by us, our directors, executive officers or principal shareholders;

• adverse market reaction to any indebtedness we may incur or securities we may issue in the future;

• short sales, hedging and other derivative transactions in our common stock;

• exposure to capital market risks related to changes in interest rates, realized investment losses, credit spreads, equity prices, foreign exchange rates and performance of insurance-linked investments;

• our creditworthiness, financial condition, performance, and prospects;

• our dividend policy and whether dividends on our common stock have been, and are likely to be, declared and paid from time to time;

• perceptions of the investment opportunity associated with our common stock relative to other investment alternatives;

• regulatory or legal developments;

• changes in general market, economic, and political conditions;

• conditions or trends in our industry, geographies or customers;

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• changes in accounting standards, policies, guidance, interpretations or principles; and

• threatened or actual litigation or government investigations.

In addition, broad market and industry factors may negatively affect the market price of our common stock, regardless of our actual operating performance, and factors beyond our control may cause our stock price to decline rapidly and unexpectedly. In addition, in the past, companies that have experienced volatility in the market price of their stock have been subject to securities class action litigation. We may be the target of this type of litigation in the future. Litigation of this type could result in substantial costs and diversion of management’s attention and resources, which could have a material adverse effect on our business, financial condition, results of operations or prospects. Any adverse determination in litigation could also subject us to significant liabilities.

Additionally, if our common stock is not listed on, or becomes delisted from, the New York Stock Exchange, or the NYSE, for any reason, and is quoted on the OTC Bulletin Board, an inter-dealer automated quotation system for equity securities that is not a national securities exchange, the liquidity and price of our securities may be more limited than if we were quoted or listed on the NYSE or another national securities exchange. You may be unable to sell your securities unless a market can be established or sustained.

Investors purchasing common stock in this offering will experience immediate and substantial dilution as a result of this offering and any future equity issuances.

The initial public offering price of our common stock will be substantially higher than the pro forma net tangible book value per share of our outstanding common stock prior to completion of this offering. Accordingly, if you purchase our common stock in this offering, you will pay substantially more for your shares than the amounts paid by our existing shareholders for their shares and you will suffer immediate dilution of approximately $                per share in pro forma net tangible book value of our common stock. In addition, if the underwriters exercise their option to purchase additional shares from us, or if we issue additional equity securities in the future, investors purchasing shares of common stock in this offering will experience additional dilution. See “Dilution.”

We have broad discretion over the use of the net proceeds from this offering and it is possible that we will not use them effectively.

We cannot specify with any certainty the particular uses of the net proceeds that we will receive from this offering. Our management will have broad discretion in the application of the net proceeds from this offering, including for any of the purposes described in the section titled “Use of Proceeds,” and you will not have the opportunity as part of your investment decision to assess whether the net proceeds are being used appropriately. Because of the number and variability of factors that will determine our use of the net proceeds from this offering, their ultimate use may vary substantially from their currently intended use. The failure by our management to apply these proceeds effectively could adversely affect our business, results of operations and financial condition. Pending their use, we may invest our proceeds in a manner that does not produce income or that loses value. Our investments may not yield a favorable return to our investors and may negatively impact the price of our common stock.

A substantial portion of the outstanding shares of our common stock after this offering will be restricted from immediate resale, but may be sold on a stock exchange in the near future. The large number of shares eligible for public sale could depress the market price of our common stock.

The market price of our common stock could decline as a result of sales of a large number of shares of our common stock in the market after this offering, and the perception that these sales could occur may also depress the market price of our common stock. Based on 91,263,210 shares of our common stock outstanding (after

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giving effect to the Preferred Stock Conversion) as of October 31, 2021, we will have                shares of our common stock outstanding after this offering, assuming no exercise of the underwriters’ option to purchase additional shares from us. Our executive officers, directors and key employees, as well as substantially all holders of our currently outstanding shares, have entered into lock-up agreements with the underwriters under which they have agreed, or will agree, subject to specific exceptions, not to sell any of our stock for 180 days following the date of this prospectus. We refer to such period as the lock-up period. The underwriters may release certain shareholders from the lock-up agreements prior to the end of the lock-up period.

As a result of these agreements, and subject to the provisions of Rule 144, as promulgated under the Securities Act (“Rule 144”) or Rule 701, as promulgated under the Securities Act (“Rule 701”), shares of our common stock will be available for sale in the public market as follows:

• beginning on the date of this prospectus, all shares of our common stock sold in this offering will be immediately available for sale in the public market; and

• beginning 181 days after the date of this prospectus, the remainder of the shares of our common stock will be eligible for sale in the public market from time to time thereafter, subject in some cases to the volume and other restrictions of Rule 144, including the availability of current public information about us.

Sales of our common stock as restrictions end may make it more difficult for us to sell equity securities in the future at a time and at a price that we deem appropriate. These sales could also cause the trading price of our common stock to fall and make it more difficult for you to sell shares of our common stock. See “Shares Eligible for Future Sale.”

Some provisions of Florida law and our amended and restated articles of incorporation and bylaws that will be in effect immediately prior to the completion of this offering may have anti-takeover effects that could discourage an acquisition of us by others, even if an acquisition would be beneficial to our shareholders, and may prevent attempts by our shareholders to replace or remove our current management.

Upon the closing of this offering, our status as a Florida corporation and the anti-takeover provisions of the Florida Business Corporation Act, which we sometimes refer to as the FBCA, may discourage, delay or prevent a change in control even if a change in control would be beneficial to our shareholders.

The control share acquisition statute, Section 607.0902 of the FBCA, generally provides that in the event a person acquires voting shares of the company in excess of 20% of the voting power of all of our issued and outstanding shares, such acquired shares will not have any voting rights unless such rights are restored by the holders of a majority of the votes of each class or series entitled to vote separately, excluding shares held by the person acquiring the control shares or any of our officers or employees who are also directors of the company. Certain acquisitions of shares are exempt from these rules, such as shares acquired pursuant to the laws of intestate succession or pursuant to a gift or testamentary transfer, pursuant to a merger or share exchange effected in compliance with the FBCA if we are a party to the agreement, or pursuant to an acquisition of our shares if the acquisition has been approved by our board of directors before the acquisition. The control share acquisition statute generally applies to any “issuing public corporation,” which means a Florida corporation which has:

• One hundred or more shareholders;

• Its principal place of business, its principal office, or substantial assets within Florida; and

• Either (i) more than 10% of its shareholders are resident in Florida; (ii) more than 10% of its shares are owned by residents of Florida; or (iii) one thousand shareholders are resident in Florida.

The affiliated transaction (or so-called “business combination”) statute, Section 607.0901 of the FBCA, provides that we may not engage in certain mergers, consolidations, sales of assets, issuances of stock, reclassifications,

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recapitalizations, and other affiliated transactions with any “interested shareholder” for a period of three years following the time that such shareholder became an interested shareholder, unless:

• Prior to the time that such shareholder became an interested shareholder, our board of directors approved either the affiliated transaction or the transaction which resulted in the shareholder becoming an interested shareholder; or

• Upon consummation of the transaction that resulted in the shareholder becoming an interested shareholder, the interested shareholder owned at least 85% of our voting shares outstanding at the time the transaction commenced; or

• At or subsequent to the time that such shareholder became an interested shareholder, the affiliated transaction is approved by our board of directors and authorized at an annual or special meeting of shareholders, and not by written consent, by the affirmative vote of at least two-thirds of the outstanding voting shares which are not owned by the interested shareholder.

An “interested shareholder” is generally defined as any person who is the beneficial owner of more than 15% of our outstanding voting shares.

The voting requirements set forth above do not apply to a particular affiliated transaction if one or more conditions are met, including, but not limited to, the following: if the affiliated transaction has been approved by a majority of our disinterested directors; if we have not had more than 300 shareholders of record at any time during the three years preceding the date the affiliated transaction is announced; if the interested shareholder has been the beneficial owner of at least 80% of our outstanding voting shares for at least three years preceding the date the affiliated transaction is announced; or if the consideration to be paid to the holders of each class or series of voting shares in the affiliated transaction meets certain requirements of the statute with respect to form and amount, among other things.

Both the control share acquisition statute and the affiliated transactions statute may have the effect of discouraging or preventing certain change of control or takeover transactions involving us.

In addition, our amended and restated articles of incorporation and bylaws that will be in effect immediately prior to the completion of this offering contain provisions that may make it more difficult for a third party to acquire us or increase the cost of acquiring us, even if doing so would benefit our shareholders, including transactions in which shareholders might otherwise receive a premium for their shares. These provisions include:

• our board of directors is classified into three classes of directors with staggered three-year terms;

• nothing in our amended and restated articles of incorporation precludes future issuances without shareholder approval of the authorized but unissued shares of our common stock;

• advance notice procedures apply for shareholders to nominate candidates for election as directors or to bring matters before an annual meeting of shareholders;

• our shareholders will only be able to take action at a meeting of shareholders and not by written consent;

• a special meeting of shareholders can only be called by our chairman of the board of directors, our chief executive officer, our president (in the absence of a chief executive officer), a majority of our board of directors or the holders of 10% or more of all of our votes entitled to be cast on any issue proposed to be considered at the special meeting of shareholders;

• no provision in our amended and restated articles of incorporation or bylaws provides for cumulative voting, which limits the ability of minority shareholders to elect director candidates;

• directors will only be able to be removed for cause;

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• our amended and restated articles of incorporation authorizes undesignated preferred stock, the terms of which may be established and shares of which may be issued, without the approval of the holders of our capital stock; and

• certain litigation against us can only be brought in Florida.

These provisions could discourage, delay or prevent a transaction involving a change in control of our company. These provisions could also discourage proxy contests and make it more difficult for you and other shareholders to elect directors of your choosing and cause us to take corporate actions other than those you desire. See “Description of Capital Stock.”

Applicable insurance laws may make it difficult to effect a change of control.

TypTap Insurance Company is domiciled in Florida, and, pursuant to Section 628.461 of the Florida Statutes, generally no person may acquire a controlling interest, whether by purchase of 10% or more of TypTap Insurance Company’s or our (as its parent company) voting securities or otherwise, unless the acquiring person gives prior notice to the insurer and has received prior approval from the Florida Office of Insurance Regulation. Under Florida insurance law, an entity is presumed to have control of an insurance company if it owns, directly or indirectly, 10% or more of the voting stock of that insurance company or its parent company. This requirement may discourage potential acquisition proposals and may delay, deter, or prevent a change of control of us, including through transactions that some or all of the shareholders might consider to be desirable. See also “Regulation—Changes of Control.”

Our bylaws that will be in effect immediately prior to the completion of this offering designates the state courts located within the state of Florida as the exclusive forum for substantially all disputes between us and our shareholders and the federal district courts as the exclusive forum for Securities Act claims, which could limit our shareholders’ ability to obtain a favorable judicial forum for disputes with us.

Our bylaws that will be in effect immediately prior to the completion of this offering provide that, unless we consent in writing to the selection of an alternative forum, the sole and exclusive forum for (i) any derivative action or proceeding brought on our behalf, (ii) any action asserting a claim of breach of a fiduciary duty owed by any of our current or former directors, officers or other employees to us or our shareholders, (iii) any action arising pursuant to any provision of the FBCA, our amended and restated articles of incorporation or our bylaws, or (iv) any other action asserting a claim that is governed by the internal affairs doctrine shall be a state court located within the state of Florida (or, if a state court located within the state of Florida does not have jurisdiction, the federal district court for the Middle District of Florida); provided that, the exclusive forum provision will not apply to suits brought to enforce any liability or duty created by the Exchange Act, or to any claim for which the federal courts have exclusive jurisdiction. Our bylaws that will be in effect immediately prior to the completion of this offering also provide that, unless we consent in writing to the selection of an alternative forum, the U.S. federal district courts shall be the exclusive forum for the resolution of any claims arising under the Securities Act. Under the Securities Act, federal and state courts have concurrent jurisdiction over all suits brought to enforce any duty or liability created by the Securities Act, and investors cannot waive compliance with the federal securities laws and the rules and regulations thereunder. Accordingly, there is uncertainty as to whether a court would enforce such a forum selection provision as written in connection with claims arising under the Securities Act.

By becoming a shareholder in our company, you will be deemed to have notice of and have consented to the provisions of our bylaws related to choice of forum. The choice of forum provisions in our bylaws may limit our shareholders’ ability to obtain a favorable judicial forum for disputes with us. Additionally, the enforceability of choice of forum provisions in other companies’ governing documents has been challenged in legal proceedings, and it is possible that, in connection with any applicable action brought against us, a court could find the choice of forum provisions contained in our bylaws to be inapplicable or unenforceable in such action. If so, we may incur additional costs associated with resolving such action in other jurisdictions, which could harm our business, results of operations, and financial condition.

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Taking advantage of the reduced disclosure requirements applicable to “emerging growth companies” may make our common stock less attractive to investors.

The JOBS Act provides that, so long as a company qualifies as an “emerging growth company,” it will, among other things:

• be required to present only two years of audited financial statements and related management’s discussion and analysis of financial condition and results of operations in a registration statement for its initial public offering;

• be exempt from compliance with the requirement that its independent registered public accounting firm provide an attestation report on the effectiveness of its internal control over financial reporting;

• be exempt from compliance with any requirement that the PCAOB may adopt regarding mandatory audit firm rotation or a supplement to the auditor’s report providing additional information about the audit and the financial statements;

• be exempt from the “say on pay,” “say when on pay,” and “say on golden parachute” non-binding advisory vote requirements; and

• be exempt from certain disclosure requirements of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”) relating to compensation of its executive officers and be permitted to omit the detailed compensation discussion and analysis from proxy statements and reports filed under the Exchange Act.

We currently intend to take advantage of each of the exemptions described above. We could be an emerging growth company for up to five years after this offering. We cannot predict if investors will find our common stock less attractive if we elect to rely on these exemptions, or if taking advantage of these exemptions would result in less active trading or more volatility in the price of our common stock.

Failure to establish and maintain effective internal controls in accordance with Section 404 of the Sarbanes-Oxley Act could have a material adverse effect on our business and stock price.

We are not currently required to comply with the rules of the SEC implementing Section 404 of the Sarbanes-Oxley Act of 2002 and are, therefore, not required to make a formal assessment of the effectiveness of our internal control over financial reporting for that purpose. Upon becoming a public company, we will be required to comply with the SEC’s rules implementing Sections 302 and 404 of the Sarbanes-Oxley Act, which will require management to certify financial and other information in our quarterly and annual reports and provide an annual management report on the effectiveness of controls over financial reporting. Although we will be required to disclose changes made in our internal controls and procedures on a quarterly basis, we will not be required to make our first annual assessment of our internal control over financial reporting pursuant to Section 404 until the year following our first annual report required to be filed with the SEC. As an emerging growth company, our independent registered public accounting firm will not be required to attest to the effectiveness of our internal control over financial reporting pursuant to Section 404 until the later of (i) the year following our first annual report required to be filed with the SEC or (ii) the date we are no longer an emerging growth company. At such time, our independent registered public accounting firm may issue a report that is adverse in the event it is not satisfied with the level at which our controls are documented, designed or operating.

As a private company, we do not currently have any internal audit function. To comply with the requirements of being a public company, we have undertaken various actions, and will need to take additional actions, such as implementing numerous internal controls and procedures and hiring additional accounting or internal audit staff or consultants. Testing and maintaining internal control can divert our management’s attention from other matters that are important to the operation of our business. Additionally, when evaluating our internal control over financial reporting, we may identify material weaknesses that we may not be able to remediate in time to meet the applicable deadline imposed upon us for compliance with the requirements of Section 404. If we

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identify any material weaknesses in our internal control over financial reporting or are unable to comply with the requirements of Section 404 in a timely manner or assert that our internal control over financial reporting is effective, or if our independent registered public accounting firm is unable to express an opinion as to the effectiveness of our internal control over financial reporting once we are no longer an emerging growth company, investors may lose confidence in the accuracy and completeness of our financial reports and the market price of our common stock could be negatively affected. We could also become subject to investigations by the SEC, the stock exchange on which our securities are listed or other regulatory authorities, which could require additional financial and management resources. In addition, if we fail to remedy any material weakness, our financial statements could be inaccurate and we could face restricted access to capital markets.

We depend on the ability of our subsidiaries to transfer funds to us to meet our obligations, and our insurance subsidiary’s ability to pay dividends to us is restricted by law.

We are a holding company that transacts all of our business through operating subsidiaries. Our ability to meet our operating and financing cash needs depends on the surplus and earnings of our subsidiaries, and upon the ability of our insurance subsidiary to pay dividends to us.

Payments of dividends by our insurance subsidiary are restricted by state insurance laws, including laws establishing minimum solvency and liquidity thresholds. The limitations are based on income and surplus determined in accordance with statutory accounting principles, not U.S. generally accepted accounting principles. In addition, our insurance subsidiary could be subject to contractual restrictions in the future, including those imposed by indebtedness we may incur in the future. Our insurance subsidiary may also face competitive pressures in the future to maintain insurance financial stability or strength ratings. These restrictions and other regulatory requirements would affect the ability of our insurance subsidiary to make dividend payments and we may not receive dividends in the amounts necessary to meet our obligations. See “Regulation—Restrictions on Paying Dividends.”

We do not currently expect to pay any cash dividends on our common stock.

We do not currently expect to pay any cash dividends on our common stock for the foreseeable future. Instead, we intend to retain future earnings, if any, for the future operation and expansion of our business. Any determination to pay dividends in the future will be at the discretion of our board of directors and will depend on our results of operations (including our ability to generate cash flow in excess of expenses and our expected or actual net income), liquidity, cash requirements, financial condition, retained earnings and collateral and capital requirements, general business conditions, contractual restrictions, legal, tax and regulatory limitations, the effect of a dividend or dividends upon our financial strength ratings, and other factors that our board of directors deems relevant. See “Dividend Policy.”

Because we are a holding company and all of our business is conducted through our subsidiaries, dividends, distributions and other payments from, and cash generated by, our subsidiaries will be our principal sources of cash to fund operations and pay dividends. Accordingly, our ability to pay dividends to our shareholders is dependent on the earnings and distributions of funds from our subsidiaries. Our ability to pay dividends may also be restricted by the terms of any future credit agreement or any of our future debt or preferred equity securities or our subsidiaries. Accordingly, if you purchase shares of our common stock in this offering, realization of a gain on your investment will depend on the appreciation of the price of shares of our common stock, which may never occur. Investors seeking cash dividends in the foreseeable future should not purchase our common stock.

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The requirements of being a public company, including compliance with the reporting requirements of the Exchange Act, the requirements of the Sarbanes-Oxley Act of 2002 and the listing standards of the NYSE, may strain our resources, increase our costs, and divert management’s attention, and we may be unable to comply with these requirements in a timely or cost-effective manner. In addition, certain members of our management team have limited experience managing a public company.

As a public company, we will be subject to the reporting requirements of the Exchange Act, the requirements of the Sarbanes-Oxley Act of 2002, and the listing standards of the NYSE. These requirements will place a strain on our management, systems and resources and we will incur significant legal, accounting, insurance and other expenses that we have not incurred as a private company. The Exchange Act will require us to file annual, quarterly and current reports with respect to our business and financial condition within specified time periods and to prepare a proxy statement with respect to our annual meeting of shareholders. The Sarbanes-Oxley Act will require that we maintain effective disclosure controls and procedures, and internal controls over financial reporting. The NYSE will require that we comply with various corporate governance requirements. To maintain and improve the effectiveness of our disclosure controls and procedures and internal controls over financial reporting, and comply with the Exchange Act and the NYSE requirements, significant resources and management oversight will be required. This may divert management’s attention from other business concerns and lead to significant costs associated with compliance, which could have a material adverse effect on us and the price of our common stock.

We expect these reporting and corporate governance rules and regulations to increase our legal and financial compliance costs and to make some activities more time-consuming and costly, although we are currently unable to estimate these costs with any degree of certainty. These laws and regulations could also make it more difficult or costly for us to obtain certain types of insurance, including director and officer liability insurance, and we may be forced to accept reduced policy limits and coverage or incur substantially higher costs to obtain the same or similar coverage. These laws and regulations could also make it more difficult for us to attract and retain qualified persons to serve on our board of directors or its committees or as our executive officers. Advocacy efforts by shareholders and third parties may also prompt even more changes in governance and reporting requirements. We cannot predict or estimate the amount of additional costs we may incur or the timing of these costs. Furthermore, if we are unable to satisfy our obligations as a public company, we could be subject to delisting of our common stock, fines, sanctions and other regulatory action, and potentially civil litigation.

Certain members of our management team have limited experience managing a publicly traded company, interacting with public company investors and complying with the increasingly complex laws pertaining to public companies. Our management team may not successfully or efficiently manage our transition to being a public company subject to significant regulatory oversight and reporting obligations under the federal securities laws and the continuous scrutiny of securities analysts and investors. These new obligations and constituents will require significant attention from our senior management and could divert their attention away from the day-to-day management of our business, which could adversely affect our business, results of operations and financial condition.

General Risks

Future acquisitions of other insurance companies’ books of business or other investments could disrupt our business and harm our financial condition.

In the future we may selectively pursue acquisitions of other insurance carriers’ books of business or other investments that we believe will help us increase our scale and expand nationally. There is no assurance that such acquisitions or investments will perform as expected or will be successfully integrated into our business or generate substantial revenue, and we may overestimate cash flow, underestimate costs or fail to understand the risks of or related to the acquired book of business or investment. The process of acquiring a book of business

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can also cause us to incur various expenses and create unforeseen operating difficulties, expenditures and other challenges, whether or not those acquisitions are consummated, such as:

• intense competition for suitable targets, which could increase prices and adversely affect our ability to consummate deals on favorable or acceptable terms;

• inadequacy of reserves for losses and loss adjustment expenses;

• failure or material delay in closing a transaction, including as a result of regulatory review and approvals;

• regulatory conditions attached to the approval of the acquisition or investment and other regulatory hurdles;

• a need for additional capital that was not anticipated at the time of the acquisition;

• anticipated benefits not materializing or being lower than anticipated;

• diversion of management time and focus from operating our business to addressing integration challenges;

• transition of the acquired customers;

• difficulties in integrating the technologies, operations, existing contracts and personnel;

• retention of employees or business partners;

• cultural challenges associated with integrating employees into our organization;

• integration of accounting, management information, human resources and other administrative systems;

• the need to implement or improve controls, procedures and policies at a business that prior to the acquisition may have lacked effective controls, procedures and policies;

• coordination of product development and sales and marketing functions;

• theft of our trade secrets or confidential information that we share with potential candidates;

• risk that an acquired business or investment cannibalizes a portion of our existing business;

• adverse market reaction to an acquisition; and

• liability for activities of the acquired business before the acquisition, including intellectual property infringement, misappropriation and other claims, violations of laws and regulations, commercial disputes, tax liabilities and other known and unknown liabilities.

If we are unable to address these difficulties and challenges or other problems encountered in connection with any future acquisition or investment, we might not realize the anticipated benefits of that acquisition or investment and we might incur unanticipated liabilities or otherwise suffer harm to our business generally.

To the extent that we pay the consideration for any future acquisitions or investments in cash, it would reduce the amount of cash available to us for other purposes. Future acquisitions or investments could also result in dilutive issuances of our equity securities or the incurrence of debt, contingent liabilities, amortization expenses, increased interest expenses or impairment charges against goodwill on our consolidated and combined balance sheet, any of which could seriously harm our business.

If securities or industry analysts cease publishing research or reports about us, our business or our markets, or if they adversely change their recommendations or publish negative reports regarding our business or our stock, our stock price and trading volume could materially decline.

The trading market for our common stock will be influenced by the research and reports that industry or securities analysts may publish about us, our business, our markets, or our competitors. We cannot provide any assurance that analysts will continue to cover us or provide favorable coverage. If any of the analysts who may cover us adversely change their recommendation regarding our stock, or provide more favorable relative

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recommendations about our competitors, our stock price could materially decline. If any analyst who may cover us were to cease coverage of our company or fail to regularly publish reports on us, we could lose visibility in the financial markets, which in turn could cause our stock price or trading volume to materially decline.

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CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This prospectus contains forward-looking statements. In some cases, you can identify forward-looking statements by terms such as “may,” “will,” “should,” “expect,” “plan,” “anticipate,” “could,” “intend,” “target,” “project,” “contemplate,” “believe,” “estimate,” “predict,” “potential”, or “continue” or the negative of these terms or other similar expressions. In particular, statements about the markets in which we operate, including growth of our various markets, and our expectations, beliefs, plans, strategies, objectives, prospects, assumptions, or future events or performance contained in this prospectus under the headings “Prospectus Summary,” “Risk Factors,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Business” are forward-looking statements.

We have based these forward-looking statements on our current expectations, assumptions, estimates and projections. While we believe these expectations, assumptions, estimates and projections are reasonable, such forward-looking statements are only predictions and involve known and unknown risks and uncertainties, many of which are beyond our control. These and other important factors, including those discussed in this prospectus under the headings “Prospectus Summary,” “Risk Factors,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Business,” may cause our actual results, performance or achievements to differ materially from any future results, performance or achievements expressed or implied by these forward-looking statements, or could affect our share price. Important factors that could cause actual results or events to differ materially from those expressed in forward-looking statements include, but are not limited to, the following:

• we may not become profitable or maintain profitability in the future;

• we may lose existing customers or fail to acquire new customers;

• our expansion within the United States will subject us to additional costs and risks, and our plans may not be successful;

• our brand may not become as widely known or accepted as existing insurance companies’ brands or the brand may become tarnished;

• our future growth and profitability depends in part on our ability to successfully operate in an insurance industry that is highly competitive;

• our ability to engage and retain independent insurance agents and independent insurance agency networks to sell our insurance policies;

• risks related to competition, competitive pressures, the cyclical nature of the homeowners and flood insurance industry, as well as insurance industry developments and market conditions;

• the impact of HCI’s control of the direction of our business and the inability of our other shareholders to influence significant decisions as a result of HCI’s control;

• our ability to continuously develop and improve our proprietary platform, including developing and implementing new features and analytical models;

• risks related to our use of third-party data, including potential harm caused by loss, misappropriation or unauthorized disclosure of or access to our data, including personal data, and compromises in cybersecurity;

• we may not continue to grow at historical rates in the future;

• our ability to appropriately price the risks we underwrite;

• our ability to effectively utilize our risk mitigation strategies and loss limitation methods;

• risks related to emerging claim and coverage issues and insurance industry trends, such as increased litigation, expanded covered causes of loss, rising jury awards and the escalation of loss severity;

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• reinsurance may be unavailable at current levels and prices, which may limit our ability to underwrite new policies;

• we are subject to extensive regulation and any failure to comply in full or part with regulatory requirements may result in fines, revocation or suspension of our license to operate in one or more jurisdictions or other penalties;

• risks that HCI’s interests may conflict with our interests and the interests of our other shareholders;

• risks associated with severe weather events and other catastrophes;

• our intellectual property and proprietary rights are valuable, and any inability to obtain, maintain, protect, defend and enforce them could reduce the value of our products and brand;

• an unauthorized disclosure or loss of policyholder or employee data or information or other sensitive, confidential or personal information, including by cyber-attack or other security breach, or a suspected or actual violation of applicable data privacy or protection laws, regulations or other obligations, could cause a loss of data or information giving rise to remediation or other expenses, and expose us to liability under such obligations, and subject us to litigation and investigations, which could have an adverse effect on our business, cash flows, financial condition and results of operations; and

• other risks and factors listed under “Risk Factors” and elsewhere in this prospectus.

Given the risks and uncertainties set forth in this prospectus, you are cautioned not to place undue reliance on such forward-looking statements. The forward-looking statements contained in this prospectus are not guarantees of future performance and our actual results of operations, financial condition, and liquidity, and the development of the industry in which we operate, may differ materially from the forward-looking statements contained in this prospectus. In addition, even if our results of operations, financial condition and liquidity, and events in the industry in which we operate, are consistent with the forward-looking statements contained in this prospectus, they may not be predictive of results or developments in future periods.

Any forward-looking statement that we make in this prospectus speaks only as of the date of such statement. Except as required by federal securities laws, we do not undertake any obligation to update or revise, or to publicly announce any update or revision to, any of the forward-looking statements, whether as a result of new information, future events or otherwise, after the date of this prospectus.

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MARKET AND INDUSTRY DATA

This prospectus includes estimates regarding market and industry data. Unless otherwise indicated, information concerning our industry and the markets in which we operate, including our general expectations, market position, market opportunity and market size, are based on our management’s knowledge and experience in the markets in which we operate, together with currently available information obtained from various sources, including publicly available information, industry reports and publications, surveys, our customers, trade and business organizations, and other contacts in the markets in which we operate. Certain information is based on management estimates, which have been derived from third-party sources, as well as data from our internal research, and are based on certain assumptions that we believe to be reasonable.

In presenting this information, we have made certain assumptions that we believe to be reasonable based on such data and other similar sources and on our knowledge of, and our experience to date in, the markets in which we operate. While we believe the estimated market and industry data included in this prospectus are generally reliable, such information, which is derived in part from management’s estimates and beliefs, is inherently uncertain and imprecise, and you are cautioned not to give undue weight to such estimates. Market and industry data are subject to change and may be limited by the availability of raw data, the voluntary nature of the data gathering process and other limitations inherent in any statistical survey of such data. In addition, projections, assumptions and estimates of the future performance of the markets in which we operate are necessarily subject to uncertainty and risk due to a variety of factors, including those described in “Risk Factors” and “Cautionary Note Regarding Forward-Looking Statements.” These and other factors could cause results to differ materially from those expressed in the estimates made by third parties and by us. Accordingly, you are cautioned not to place undue reliance on such market and industry data or any other such estimates. The content of, or accessibility through, the sources and websites identified herein, except to the extent specifically set forth in this prospectus, does not constitute a portion of this prospectus and is not incorporated herein and any websites are an inactive textual reference only.

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USE OF PROCEEDS

The net proceeds to us from the sale of shares of common stock by us in this offering will be approximately $                million, assuming an initial public offering price of $                per share (the midpoint of the range set forth on the cover of this prospectus), and after deducting underwriting discounts and commissions and estimated offering expenses.

We intend to use the net proceeds from this offering for general corporate purposes, including working capital, software development, operating expenses and capital expenditures. Additionally, we may use a portion of the net proceeds to acquire or invest in businesses or technologies. However, currently we do not have agreements or commitments for any material acquisitions or investments.

We cannot specify with certainty the particular uses of the net proceeds that we will receive from this offering or the amounts we actually spend on the uses set forth above. Pending the use of proceeds from this offering as described above, we plan to invest the net proceeds that we receive in this offering in short-term and intermediate-term interest-bearing obligations, investment-grade investments, certificates of deposit or direct or guaranteed obligations of the U.S. government. Our management will have broad discretion in the application of the net proceeds from this offering and investors will be relying on the judgment of our management regarding the application of the proceeds.

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DIVIDEND POLICY

We have never declared or paid any cash dividends on our common stock. We currently intend to retain any future earnings and do not expect to pay any dividends on our common stock in the foreseeable future. Any future determination to declare cash dividends will be made at the discretion of our board of directors, subject to applicable laws, and will depend on a number of factors, including our financial condition, results of operations, capital requirements, contractual restrictions, general business conditions, and other factors that our board of directors may deem relevant.

Additionally, we are a holding company that transacts all of our business through operating subsidiaries. Consequently, our ability to pay dividends to shareholders is largely dependent on receipt of dividends and other distributions from our subsidiaries. Applicable insurance laws restrict the ability of our insurance subsidiary to declare shareholder dividends and require insurance companies to maintain specified levels of statutory capital and surplus. Insurance regulators have broad powers to prevent reduction of statutory surplus to inadequate levels, and there is no assurance that dividends of the maximum amounts calculated under any applicable formula would be permitted. State insurance regulatory authorities that have jurisdiction over the payment of dividends by our insurance subsidiary may in the future adopt statutory provisions more restrictive than those currently in effect. See “Regulation—Restrictions on Paying Dividends.”

Our ability to pay dividends may also be restricted by the terms of any future credit agreement or any future debt or preferred equity securities of us or our subsidiaries. See “Risk Factors—Risks Relating to Ownership of Our Common Stock—We depend on the ability of our subsidiaries to transfer funds to us to meet our obligations, and our insurance subsidiary’s ability to pay dividends to us is restricted by law” and—“We do not currently expect to pay any cash dividends on our common stock.”

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CAPITALIZATION

The following table sets forth our cash, cash equivalents and restricted cash, as well as our total capitalization, as of September 30, 2021:

• on an actual basis;

• on a pro forma basis, giving effect to (i) the filing and effectiveness of our amended and restated articles of incorporation, which will occur immediately prior to the completion of this offering, and (ii) the Preferred Stock Conversion, as if it had occurred on September 30, 2021; and

• on a pro forma as adjusted basis, giving effect to the pro forma adjustments set forth above and the receipt of the estimated net proceeds from the sale and issuance by us of            shares of our common stock in this offering (assuming no exercise of the underwriters’ option to purchase additional shares of common stock from us) at an assumed initial public offering price of $            per share (the midpoint of the range set forth on the cover of this prospectus), and after deducting underwriting discounts and commissions and estimated offering expenses payable by us.

You should read this table together with our consolidated and combined financial statements and related notes and the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” that are included elsewhere in this prospectus.

	As of September 30, 2021
	Actual			Pro forma		Pro forma as adjusted(1)
(in thousands)	(unaudited)			(unaudited)		(unaudited)
Cash and cash equivalents	$	180,840		$		$
Restricted cash(2)	$	2,000
Redeemable Series A preferred stock, par value $0.001; 37,502,000 shares authorized and 10,000,000 shares issued and outstanding, actual; no shares authorized, issued and outstanding, pro forma and pro forma as adjusted		87,731			—		—
Stockholders’ equity:
Preferred stock, par value $0.001; no shares authorized, issued and outstanding, actual;                     shares authorized and no shares issued and outstanding, pro forma and pro forma as adjusted		—			—		—
Common stock, par value $0.001; 183,000,000 shares authorized and 81,278,175 shares issued and outstanding, actual;                     shares authorized and                     shares issued and outstanding, pro forma; and                     shares authorized and                     shares issued and outstanding, pro forma as adjusted		81
Additional paid-in capital		58,650
Retained deficits		(24,753	)
Accumulated other comprehensive income, net of taxes		125
Total stockholders’ equity		34,103
Total capitalization	$	121,834				$

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(1) A $1.00 increase or decrease in the assumed initial public offering price per share of our common stock would increase or decrease each of cash, additional paid-in-capital and total capitalization on a pro forma as adjusted basis by approximately $ million, assuming the number of shares of our common stock offered by us remains the same and after deducting the estimated underwriting discounts and commissions and offering expenses payable by us.

(2) Represents funds held to meet regulatory requirements of certain states in which the Company’s insurance subsidiary conducts business.

The number of shares of our common stock to be outstanding immediately after this offering is based on shares of our common stock outstanding as of October 31, 2021, and reflects 10,000,000 shares of our preferred stock that will convert into shares of our common stock pursuant to the Preferred Stock Conversion. The number of shares of our common stock to be outstanding after this offering excludes:

• 6,450,000 shares of our common stock issuable upon the exercise of options granted on October 1, 2021 under our 2021 Omnibus Plan at an exercise price of $23.00 per share; and

• 1,250,000 shares of common stock reserved for future issuance under the 2021 Omnibus Plan, as well as any automatic increases in the number of shares of common stock reserved for future issuance under the plan.

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DILUTION

If you invest in our common stock in this offering, your ownership interest will be immediately diluted to the extent of the difference between the public offering price per share of our common stock and the pro forma net tangible book value per share of our common stock immediately after this offering. Dilution in pro forma net tangible book value per share to new investors represents the difference between the amount per share paid by purchasers of shares of our common stock in this offering and the pro forma net tangible book value per share of our common stock immediately after completion of this offering.

Net tangible book value per share is determined by dividing our total tangible assets less our total liabilities and redeemable preferred stock by the number of shares of our common stock outstanding. Our historical net tangible book value as of September 30, 2021, was approximately $27.8 million, or $0.34 per share. Our pro forma net tangible book value as of September 30, 2021 was approximately $115.6 million, or $1.27 per share, based on the total number of shares of our common stock outstanding as of September 30, 2021, after giving effect to the Preferred Stock Conversion.

After giving effect to the sale by us of                  shares of our common stock in this offering at an assumed initial public offering price of $                 per share, which is the midpoint of the range set forth on the cover of this prospectus and after deducting underwriting discounts and commissions, and estimated offering expenses payable by us, our pro forma net tangible book value as of September 30, 2021, would have been $                 million, or $                 per share. This represents an immediate increase in pro forma net tangible book value of $                 per share to our existing shareholders and an immediate dilution in pro forma net tangible book value of $                 per share to investors purchasing shares of our common stock in this offering. The following table illustrates this dilution:

Public offering price per share of common stock			$
Pro Forma net tangible book value per share as of September 30, 2021 before this offering	$	1.27
Increase per share attributable to new investors purchasing shares of common stock in this offering
Pro forma net tangible book value per share immediately after this offering
Dilution in pro forma net tangible book value per share to new common stock investors in this offering			$

The following table presents, on a pro forma basis as of September 30, 2021, after giving effect to the Preferred Stock Conversion and the sale by us of shares of our common stock in this offering, the differences between the existing shareholders and the new investors purchasing shares of our common stock in this offering with respect to the number of shares of our common stock purchased from us, the total consideration paid or to be paid to us, and the average price per share paid or to be paid. The calculation below is based on an initial public offering price of $                 per share, before deducting underwriting discounts and commissions and estimated offering expenses payable by us:

	Shares purchased			Total consideration			Average price per share
	Number	Percent		Amount	Percent
							($ in millions)
Existing shareholders			%	$		%	$
New investors			%			%
Total			%	$		%

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If the underwriters exercise in full their option to purchase                  additional shares of our common stock from us in this offering, the pro forma net tangible book value (deficit) per share after this offering would be $                 per share and the dilution to new investors in this offering would be $                 per share. If the underwriters exercise such option in full, the number of shares held by new investors will increase to approximately                  shares of our common stock, or approximately     % of the total number of shares of our common stock outstanding after this offering.

In addition, we may choose to raise additional capital due to market conditions or strategic considerations, even if we believe we have sufficient funds for our current or future operating plans. To the extent that we raise additional capital through the sale of equity, as common stock, or other securities that are convertible into our common stock, such as convertible debt securities, the issuance of these securities could result in further dilution to our shareholders.

The number of shares of our common stock to be outstanding immediately after this offering is based on shares of our common stock outstanding as of October 31, 2021, and reflects 10,000,000 shares of our preferred stock that will convert into shares of our common stock pursuant to the Preferred Stock Conversion. The number of shares of our common stock to be outstanding after this offering excludes:

• 6,450,000 shares of our common stock issuable upon the exercise of options granted on October 1, 2021 under the 2021 Omnibus Plan at an exercise price of $23.00 per share; and

• 1,250,000 shares of common stock reserved for future issuance under the 2021 Omnibus Plan, as well as any automatic increases in the number of shares of common stock reserved for future issuance under the plan.

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis provides information which TypTap’s management believes is relevant to an assessment and understanding of TypTap’s consolidated and combined results of operations and financial condition. You should read the following discussion and analysis of TypTap’s consolidated and combined results of operations and financial condition together with TypTap’s consolidated and combined financial statements and related notes and other information included elsewhere in this prospectus.

In addition to historical financial information, this discussion contains forward-looking statements based upon TypTap’s current expectations that involve risks and uncertainties. TypTap’s actual results could differ materially from such forward-looking statements as a result of various factors, including those set forth under “Risk Factors” and “Cautionary Note Regarding Forward-Looking Statements” included elsewhere in this prospectus. Additionally, our historical results are not necessarily indicative of the results that may be expected for any period in the future.

All dollar balances presented in this section are in US thousands, unless otherwise noted.

Overview

TypTap is a rapidly growing technology-driven insurance company that leverages extensive data and AI-enabled analytics to better select and price homeowners insurance risk. We have a successful track record of profitable underwriting, with loss ratios better than the overall homeowners industry average, and offer our insurance agents a frictionless full-stack digital technology platform that provides policyholders with a better purchase and claims experience. We achieve this through a comprehensive suite of technology solutions to manage the end-to-end insurance process, from risk selection and underwriting to accelerated quoting to claims management.

The $110 billion U.S. homeowners insurance market is a large market with attractive industry dynamics and a strong growth outlook. We believe it is also a good candidate for technology-driven innovation. For decades, the insurance industry has underinvested in technology and is thus dependent on inefficient legacy systems. This has led to mispriced risk and high loss ratios, low policyholder satisfaction scores, and a frustrating agent experience. While many companies have attempted to take a more tech-forward approach to insurance in recent years, they typically lack sustainable unit economics and fail to address the biggest inefficiency in the industry – high claims costs, that comprise, on average, 73% of total costs for an insurance carrier.

While many insurance companies have accepted current loss ratios as a relatively fixed component of the insurance company cost structure, we have developed technology that allows us to improve on this. Our strategy is simple – use our data-driven underwriting technology to identify and price the best risks that we determine have the lowest probability of a claim and achieve a desired level of underwriting profitability, leading to a sustainable loss ratio advantage over competitors. With the help of a better and more efficient experience for agents and policyholders, we achieve high retention and strong agent alignment, that enable us to rapidly scale up.

While the first wave of Insurtech companies focused primarily on customer experience and lowering distribution costs as opposed to improving underwriting, we are focused on the entire value chain – using technology to lower claims costs, creating a compelling agent value proposition to scale the business and a customer experience that creates high retention. We see our business model as the future of Insurtech, driving a positive flywheel and profitable underwriting results as it scales. Our data-driven underwriting platform gives us the ability to source and analyze up to 1,000 different home characteristics, allowing us to price and bind at the individual home level with lower claims probability – in less than 5 minutes. When losses do occur, our claims management software proactively helps us manage our claims adjustment costs. Our digitally enhanced user interfaces were also designed to keep our agents and policyholders happy, aligning incentives and driving increased efficiencies throughout the process.

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TypTap’s business was incubated in 2016 as a subsidiary of HCI Group, Inc., or HCI (NYSE: HCI), a publicly-listed insurance holding company. We chose to develop and test our underwriting technology in Florida, a complex yet attractive homeowners insurance market with a total addressable homeowners insurance market of $11 billion. Since then, we have continued to refine our technology and improve our underwriting platform. After developing a market leading underwriting track record in Florida, we have begun to execute on a national growth strategy and are writing policies in seven states as of October 2021.

TypTap’s competitive advantage is derived from our internally developed technology suite that provides advanced analytics, comprehensive end-to-end insurance lifecycle management, and an agent-facing user interface that prioritizes policyholder ease-of-use and empowers independent insurance agents:

• We use differentiated data and proprietary analytics to create better results:    Underwriting home insurance is complex, with many individual data factors contributing to underwriting risk, including roof type, roof shape, home elevation, square footage, presence of a pool, geography, and building material, to name just a few. We spent four years developing, testing, and refining our AI-enabled data warehousing solution before writing our first residential flood insurance policy in 2016. We continued to improve the data engine and risk selection algorithm before launching our homeowners insurance offering in 2017, giving us the confidence that we had a solution that worked by the time we launched. Our data-driven and analytical approach provides us with a differentiated understanding of how to underwrite and price for unique risk characteristics on an individual home basis. This results in loss ratios that have been better than industry average by over 25 percentage points. As we collect more data, we will continue to refine our underwriting model and algorithms through an iterative analytic process.

• We empower independent insurance agents to create a better insurance purchasing experience:    Independent agents are a valuable component of our business model. We expect them to continue to control insurance distribution over the direct-to-consumer channel in the foreseeable future. We have designed our technology to empower agents to spend more time acquiring new customers and less time on the inefficiencies that cause friction in the insurance selling and management process. Our easy-to-use digital agent portal, instant quote technology, efficient binding and ongoing document management, competitive prices, consistent renewal decisions, user friendly claims management software, and competitive commissions all add value for our agents. Our platform drives increased agent adoption, with our current target agent cohort increasing their TypTap book of business by 151% between 2020 and 2021.

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• We have designed our platform for a better policy-holder experience, with ease of use in mind:    Our online quoting platform is designed for ease of use and efficiency for both the agent and policyholder. We come to an underwriting decision in minutes without extensive and tedious data collection from the policyholder and price the policy accurately at inception to ensure stability of coverage and price. Our claims technology is also designed for a transparent and user-friendly experience and gives us the ability to be proactive in the claims process, including by engaging with our policyholders.

• We have developed fully integrated technology solutions and processes to better manage the end-to-end insurance lifecycle:    Our scalable, full-stack technology platform is internally developed and designed to be easily adapted to evolving agent and policyholder needs. Our technology improves risk selection, enables faster quoting and a better agent and policyholder experience, and efficiently manages the claims process, driving operating efficiencies and accelerating our growth as we scale

• We use reinsurance as a tool to protect our balance sheet and for efficient capital management:    We purchase excess-of loss reinsurance and optimize for both frequency and severity as well as specific geography perils. Historically we have purchased reinsurance in excess of what is required by regulators to create the appropriate protection for our business. We enjoy support from a diverse panel of 49 highly rated reinsurance providers across the US, Europe and Asia. Our technology platform has helped create transparency and a favorable economic outcome for our reinsurance providers.

These key differentiated strengths – our high quality data and analytics to power our risk selection, our ability to empower and create strong alignment with independent agents, our policyholder experience, and our comprehensive technology platform – have allowed us to build a sustainable business model for profitable growth. We have a strong track record of achieving both high growth and underwriting profitability using this model and will continue to expand on these key competitive advantages as we expand geographically.

We have also built our business with a capital-efficient strategy in mind. To date, we have only received $177 million of capital in our business (which includes the $100 million investment by Centerbridge Partners, L. P. in the February 2021). TypTap’s rapid growth and strong value proposition are driven primarily by our intellectual property, technology platform, and operational excellence. Our track record of sourcing and retaining profitable business allows us to use reinsurance primarily to manage our balance sheet and earnings volatility.

The execution of our future expansion strategy into new states is key to going after our total addressable market opportunity. Our operational success to date and ability to identify unique localized risk characteristics, as evidenced by our success in current markets, has laid the foundation to expand nationwide, where we will leverage our institutional track record and superior technology to generate strong premium growth with attractive underwriting results.

We had gross premiums earned of $78.8 million and $30.9 million in the years ended December 31, 2020 and December 31, 2019, respectively, and gross premiums earned of $119.4 million for the nine months ended September 30, 2021. We incurred net losses of $12.4 million and $6.9 million in the years ended December 31, 2020 and December 31, 2019, respectively, and a net loss of $14.7 million for the nine months ended September 30, 2021. We may incur losses in the future for a number of reasons, including as a result of investments in the development and expansion of our business.

Our Business Model

Our goal is to leverage our data analytics and technology to solve for the three key drivers of success in insurance – underwriting outcomes, agent alignment, and policyholder experience. We believe our technology advantage creates a proven and sustainable business model where high growth and profitability are not mutually exclusive.

TypTap has grown rapidly over the last five years, as agents and prospective policyholders discover the simplicity, ease of use, and speed of our platform. In-force premiums exceeded $100 million at the end of 2020,

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and by September of 2021, in-force premiums exceeded $214 million, which includes $59 million of United Property & Casualty Insurance Company’s premiums (see “Results of Operations — Comparison of the Three and Nine Months Ended September 30, 2021 and 2020” below), with both growth milestones achieved ahead of our announced goals. We also achieved these growth objectives without having to sacrifice our underwriting standards or profitability targets. After testing our underwriting platform in the Florida market, a relatively difficult state to profitably write homeowners insurance, we have gained confidence that the technology, underwriting algorithms, and processes that we have built differentiate us from our peers and will help us as we scale and expand nationally.

Our success is defined by our key competitive strengths – data and analytics, agent relationships, policyholder experience, and technology solutions – that have helped us create a product, experience, and financial outcome that is truly differentiated from the industry.

Key Factors and Trends Affecting Our Operating Performance

Our financial condition and results of operations have been, and will continue to be, affected by a number of factors.

• Underwriting performance and continued investments in our technology.    We leverage data, technology, and artificial intelligence to help manage risk. For instance, we leverage dynamic data sources obtained through various sources, and we use advanced statistical methods to model that data into our pricing algorithm. We expect to improve our ability to manage risk and price risk accurately over time as we incorporate new external data sources and utilize the experience gained over time with our own customer base. We expect this to lead to better underwriting, lower loss frequency, and, adjusting for weather-related events, lower loss ratios over time. Our success in this area depends on our ability to incorporate new data sources as they become available and to use them to improve our ability to accurately and competitively price risk.

• Continued interaction with our agent network.    We are selective not only in the risks we underwrite, but in the agents we choose to sell our policies. We continuously monitor our network of agents – by tracking system use, analyzing quoting activity and results, and evaluating agent buy-in metrics – to strengthen relationships with and direct more business to our best-performing agents while phasing out under-performing ones. The AI-enabled technology works best when our agents’ incentives are aligned with ours, and we carefully manage our agent force to ensure we only work with those that are sending us quality policyholders to help us write profitable business.

• National expansion strategy.    We believe that national expansion will be a key driver of the long-term growth and success of our business. As of December 31, 2020, we were authorized to provide property and casualty insurance in the states of Florida, Indiana, Mississippi, Montana, Nevada, South Carolina, South Dakota, and Utah. Since December 31, 2020, we have expanded our ability to sell property and casualty insurance to Arkansas, Connecticut, Georgia, Iowa, Massachusetts, Michigan, New Jersey, New Mexico, Rhode Island, and West Virginia. We expect to apply our highly scalable model nationally, with a tailored approach to each state that is driven by the regulatory environment and local market dynamics. We hope to expand rapidly and efficiently across different geographies while maintaining a high level of control over the specific strategy within each state. State expansion should create a broader base from which to grow premiums while increasing the geographic diversity in our customer base and related insured risks. We believe that increased geographic diversity will also improve our ability to secure attractive terms from reinsurers, which would improve our overall cost structure and profitability.

Seasonality

Our insurance business is seasonal. Hurricanes and tropical storms affecting Florida, our primary market, typically occur during the period from June 1^st through November 30^th of each year. Winter storms in the

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Northeast usually occur during the period between December 1^st and March 31^st of each year. Also, with our reinsurance agreements typically effective as of June 1^st of each year, any variation in the cost of our reinsurance, whether due to changes in reinsurance rates or changes in the total insured value of our policy base, will occur and be reflected in our financial results beginning on June 1^st of each year.

Reinsurance

We seek to reduce our exposure to losses that may arise from catastrophes or other events by reinsuring certain levels of risk with other insurance enterprises or reinsurers. Under this strategy, we purchase reinsurance annually or as deemed appropriate, taking into consideration probable loss scenarios and reinsurance market conditions. We contract with a number of reinsurers to secure our annual reinsurance coverage, which generally becomes effective June 1^st each year.

Currently, TypTap cedes a portion of its homeowners and flood insurance exposure to other entities under catastrophe excess of loss reinsurance contracts and currently one quota share reinsurance agreement. Ceded premiums under most catastrophe excess of loss reinsurance agreements, which is the primary form of reinsurance used by us, are subject to revision resulting from subsequent adjustment to total insured value. Under the terms of the quota share reinsurance agreement, we are entitled to a 30% ceding commission on ceded premiums written.

TypTap also participates in reinsurance contracts with affiliates. The reinsurance allocation method is governed by HCI’s reinsurance allocation agreement, which states that each cedant’s retention and reinsurer’s limit of liability for a loss occurrence is apportioned based on the amount of loss contributed to that occurrence. The reinsurance allocation agreement also states that the reinsurance premium shall be apportioned to each company in the same proportion that the company’s premium subject to the reinsurance agreement bears to the total premium subject to the reinsurance agreement. See Note 22—“Related Party Transactions.” to TypTap’s audited consolidated and combined financial statements for the years ended December 31, 2020 and 2019 included elsewhere in this prospectus.

Under all reinsurance agreements, TypTap ceded 37% and 36% of its gross premiums earned to reinsurers for the years ended December 31, 2020, and 2019, respectively. For the nine months ended September 30, 2021 and 2020, TypTap ceded 35% and 35%, respectively, of its gross premiums earned to reinsurers. Our actual ceded loss was only 1.7% and 1.3% of ceded premium for the years ended December 31, 2020 and 2019, respectively – a result of our robust underwriting performance.

This reinsurance strategy also helps support our growth, as third-party reinsurance helps decrease the statutory capital required to support new business growth. As a result, we expect to be able to grow at an accelerated pace with lower capital investments upfront than we would otherwise require. We have a successful track record of securing such reinsurance, providing a solid foundation for what we believe to be a long-term, sustainable model. As our business scales, we expect to have the flexibility to reduce our quota share levels to retain more of our gross business for our shareholders.

Impact of COVID-19

On March 11, 2020, the World Health Organization declared the outbreak of COVID-19 a pandemic. As a provider of homeowners insurance, TypTap continually prepares for disasters and catastrophic events, including events that could disrupt business continuity. As a result, we were able to quickly adjust our technologies and infrastructure to support a remote workforce and maintain business continuity. TypTap has not experienced and, at present, does not foresee a direct material impact from the outbreak of COVID-19 in terms of increased claims, losses, or uncollectability of premiums. As the COVID-19 pandemic continues to persist, and new variants emerge, like the Delta Variant, there is still uncertainty as to whether the pandemic will have a future material impact on our business, financial condition, liquidity, or results of operations.

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Basis of Presentation

The accompanying consolidated and combined financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) as determined by the Financial Accounting Standards Board Accounting Standards Codification and pursuant to the regulations of the SEC.

Key Performance Indicators

As we make strategic decisions, measure our performance, evaluate our business, and identify trends in our business, we review a number of metrics, including the following key operating and financial performance indicators.

	Three months ended September 30,						Nine months ended September 30,
(dollars in thousands, except Premiums per policy)	2021			2020			2021			2020
Gross written premium	$	55,987		$	27,349		$	161,602		$	62,708
Gross premiums earned	$	51,553		$	19,854		$	119,364		$	54,829
Policies in force		48,897			33,825			48,897			33,825
In-force premiums	$	155,406		$	87,095		$	155,406		$	87,095
Premiums per policy	$	3,178		$	2,575		$	3,178		$	2,575
Gross loss ratio		48.3	%		37.5	%		45.0	%		41.0	%
Adjusted gross profit	$	6,085		$	1,781		$	20,797		$	12,334
Adjusted gross profit margin		11.8	%		9.0	%		17.4	%		22.5	%
Adjusted EBITDA	$	(9,592	)	$	(5,662	)	$	(16,036	)	$	(8,193	)
Adjusted EBITDA margin		(18.6	)%		(28.5	)%		(13.4	)%		(14.9	)%

	Year ended December 31,
(dollars in thousands, except Premiums per policy)	2020			2019
Gross written premium	$	104,855		$	60,272
Gross premiums earned	$	78,836		$	30,904
Policies in force		37,196			25,540
In-force premiums	$	105,420		$	59,591
Premiums per policy	$	2,834		$	2,333
Gross loss ratio		43.8	%		28.0	%
Adjusted gross profit	$	13,703		$	9,498
Adjusted gross profit margin		17.4	%		30.7	%
Adjusted EBITDA	$	(14,345	)	$	(8,390	)
Adjusted EBITDA margin		(18.2	)%		(27.1	)%

Key Financial Terms

Gross written premium

Gross written premium is the amount received or to be received for insurance policies written or assumed by us as an insurance company, without reduction for policy acquisition costs, reinsurance costs, or other deductions. In addition, gross written premium includes amounts received from reinsurance we provide to others. The volume of our gross written premium in any given period is generally influenced by:

• New business submissions;

• Binding of new business submissions into policies;

• Bound policies going effective;

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• Renewals of existing policies; and

• Average size and premium rate of bound policies.

We use gross written premium to manage our business because we believe that it reflects the business volume and economic benefit generated by our customer acquisition activities, which along with our underlying underwriting and claims operations are the key drivers of our future profit opportunities.

Gross premiums earned

Gross premiums earned represents the earned portion of our gross written premium. Our insurance policies generally have a term of one year, and premium is earned pro rata over the term of the policy. We view this as an important metric as it allows us to evaluate our growth prior to the impacts of ceded reinsurance.

Policies in force

Policies in force is defined as the number of currently active policies written by us as of the period end date. We view policies in force as an important metric to assess our financial performance because policy growth drives revenue growth, expands brand awareness, and deepens market penetration.

In-force premiums

In-force premiums is defined as gross written premium per policy multiplied by policies in force as of the period end date. We view in-force premiums as an estimate of annualized run rate of gross written premium as of a given period. We view this as an important metric because it is an indicator of the size of our portfolio of policies, as well as an indicator of the expected earned premium over the coming 12 months given our historical retention rates. In-force premiums is not, however, necessarily an accurate metric to forecast of future revenue nor is it a reliable indicator of revenue expected to be earned in any given period in light of our historically high-growth rates that can yield much higher revenues and the possibility of higher than expected policy cancellation. We believe that our calculation of in-force premiums is useful to investors because it captures the impact of growth in customers and premiums per policy at the end of each reported period, without adjusting for known or projected policy updates, cancellations, and non-renewals.

Premiums per policy

Premiums per policy is in-force premiums divided by policies in force. We view gross written premium per policy as an important metric which provides information as to the average size of our insured relationships. Growth in the metric can be indicative of increased coverages offered to our customers.

Gross loss ratio

We define gross loss ratio as the ratio of gross losses and loss adjustment expenses to gross premiums earned during the period. We view gross loss ratio as an important metric because it is a commonly used ratio in the insurance industry regarding the loss experience, which can be compared to our peers.

Adjusted gross profit

We define adjusted gross profit, a non-GAAP financial measure, as follows:

• Total revenue, minus;

• Loss and loss adjustment expenses, minus;

• Other insurance related expenses, minus;

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• Net investment income, minus;

• Net realized gains and losses, minus;

• Unrealized gains and losses, minus;

• Income associated with license fee.

Other insurance related expenses include amortized premium taxes, credit card processing fees, and home inspection costs. All policy acquisition commission costs are included in policy acquisition and other underwriting expenses and are excluded from adjusted gross profit. After these adjustments, we believe the resulting calculation is inclusive of all costs of revenue incurred to successfully service a policy, irrespective of how it was sourced or acquired.

See “—Non-GAAP Financial Measures” for a reconciliation of total revenue to adjusted gross profit.

Adjusted gross profit margin

We define adjusted gross profit margin, a non-GAAP financial measure, expressed as a percentage, as the ratio of adjusted gross profit to gross premiums earned. See “—Non-GAAP Financial Measures.”

Adjusted EBITDA

We define adjusted EBITDA, a non-GAAP financial measure, as net loss excluding interest expense, income tax expense, depreciation, amortization, stock-based compensation, net investment income, and other transactions that we would consider to be unique in nature. See “—Non-GAAP Financial Measures” for a reconciliation of net loss to adjusted EBITDA in accordance with GAAP.

Adjusted EBITDA margin

We define adjusted EBITDA margin, a non-GAAP financial measure, expressed a percentage, as the ratio of adjusted EBITDA to gross premiums earned. See “—Non-GAAP Financial Measures.”

Components of Results of Operations

Revenue

Gross premiums earned

Gross premiums earned represents the earned portion of our gross written premium. Our insurance policies generally have a term of one year, and premium is earned pro rata over the term of the policy.

Premiums ceded

Premiums ceded represents the amount of gross premiums earned that are ceded to reinsurers. We enter into reinsurance contracts to attempt to limit our exposure to potential losses as well as to provide additional capacity for growth. Premiums ceded are treated as a reduction of gross premiums earned during a specific period of time over the reinsurance contract period in proportion to the period of risk covered. The volume of our premiums ceded is impacted by policy exposures reflected in gross premiums earned, pricing and availability of reinsurance, and decisions we make to increase or decrease retention levels.

Net premiums earned

Net premiums earned represents the earned portion of our gross written premium for insurance policies written or assumed by us, less premiums ceded (any portion of our gross written premium that is ceded to third-party reinsurers under our reinsurance agreements). We earn written premiums on a pro-rata basis over the term of the policies.

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Net investment income

Net investment income represents interest earned from fixed maturity securities and short-term investments, and dividends received on investments in equity securities. Our invested assets primarily consist of cash, fixed-maturity securities, and equity securities. The principal factors that influence net investment income are the size of our investment portfolio and the yield on that portfolio.

Net realized investment gains or losses

Net realized investment gains or losses are a function of the difference between the amount received by us upon the sale of a security and the security’s amortized cost, as well as any allowances for credit losses recognized in earnings, if any.

Net unrealized investment gains or losses

Net unrealized investment gains or losses represent the net change in the fair value of equity securities during a period.

Policy fee income

Policy fee income represents income from nonrefundable fees for insurance coverage, which is intended to reimburse a portion of the costs incurred to underwrite the policy. Policy fee income is recognized ratably over the policy coverage period.

Other

Other income represents income from fees charged to policyholders for the use of installment payment options and from software license fees.

Expenses

Loss and loss adjustment expenses

Loss and loss adjustment expenses represent the costs incurred for losses net of amounts ceded to reinsurers and include management’s best estimate of the total cost of (i) claims that have been incurred, but not yet paid in full, and (ii) claims that have been incurred but not yet reported to us, which are based on actuarial assumptions and management judgement.

Policy acquisition and other underwriting expenses

Policy acquisition and other underwriting expenses primarily consist of amortization of direct acquisition commission costs and premium taxes incurred upon the successful acquisition of business written on a direct basis.

General and administrative personnel expenses

General and administrative personnel expenses primarily consist of employee compensation, including stock-based compensation and benefits for our finance, human resources, legal, and general management functions, as well as facilities and professional services. We expect our general and administrative expenses to increase for the foreseeable future as we scale headcount with the growth of our business, and as a result of operating as a public company, including compliance with the rules and regulations of the SEC and other regulatory bodies, legal, audit, additional insurance expenses, investor relations activities, and other administrative and professional services.

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Interest expense

Interest expense primarily relates to interest expense attributable to two loans from our parent company, HCI Group, Inc.

Other operating expenses

Other operating expenses primarily consist of professional fees, bank fees, costs of information technology support services, overhead allocated from our parent company, and fees for services received from affiliated companies. We expect to incur incremental operating expenses to support our plans to expand our operations nationwide.

Results of Operations

The company identifies its segments based on managerial emphasis, organizational structure and revenue source. The company identifies three reportable segments: insurance operations, information technology, and corporate. The insurance operations segment represents the homeowners and flood insurance operations of TypTap Insurance Company, together with TypTap Management Company, its managing general agent. The information technology segment represents the operations of technology companies Exzeo USA, Inc. and Cypress Tech Development Company, which owns Exzeo Software Private Limited. The corporate segment represents the activities of holding company TypTap Insurance Group. The determination of segments may change over time due to changes in operational emphasis, revenues, and results of operations.

Comparison of the Three and Nine Months Ended September 30, 2021 and 2020

The company and its affiliate, Homeowners Choice Property & Casualty Insurance Company, Inc., entered into a quota share reinsurance agreement in June 2021 to provide 100% reinsurance on all in-force, new and renewal policies of United Property & Casualty Insurance Company (“United”) in the states of Connecticut, Massachusetts, New Jersey and Rhode Island. The agreement is effective June 1, 2021 and continues through May 31, 2022. Under the agreement, TypTap and Homeowners Choice each assume 50% of the business and pay United a ceding commission of 24% of premium.

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The following table presents our unaudited consolidated and combined statement of operations for the three months ended September 30, 2021 and 2020, and the dollar and percentage change between the two periods. Note that all amounts presented are in US thousands, unless otherwise noted:

	Three months ended September 30,						Change			% Change
(in thousands, except per share amount)	2021			2020
Revenue
Gross premiums earned	$	51,553		$	19,854		$	31,699			160	%
Premiums ceded		(20,135	)		(10,171	)		(9,964	)		98	%
Net premiums earned		31,418			9,683			21,735			224	%
Net investment income		85			153			(68	)		-44	%
Net realized investment gains (losses)		77			53			24			N.M.
Net unrealized investment gains (losses) on equity securities		(59	)		160			(219	)		N.M.
Policy fee income		307			211			96			45	%
Other		480			21			459			2186	%
Total revenue		32,308			10,281			22,027			214	%
Expenses
Losses and loss adjustment expenses		24,225			7,405			16,820			227	%
Policy acquisition and other underwriting expenses		10,360			4,067			6,293			155	%
General and administrative personnel expenses		4,256			2,544			1,712			67	%
Interest expense		1			—			1			N.M.
Other operating expenses		3,771			2,262			1,509			67	%
Total expenses		42,613			16,278			26,335			162	%
Loss before income taxes		(10,305	)		(5,997	)		(4,308	)		72	%
Income tax benefit		(2,432	)		(1,490	)		(942	)		63	%
Net loss		(7,873	)		(4,507	)		(3,366	)		75	%
Redeemable preferred stock dividends		(2,202	)		—			(2,202	)		N.M.
Net loss attributable to common shareholders	$	(10,075	)	$	(4,507	)	$	(5,568	)		124	%
Basic loss per share	$	(0.12	)	$	(0.06	)	$	(0.06	)		100	%

N.M.—Percentage change not qualitatively meaningful

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The following table presents our unaudited consolidated and combined statement of operations for the nine months ended September 30, 2021 and 2020, and the dollar and percentage change between the two periods. Note that all amounts presented are in US thousands, unless otherwise noted:

	Nine months ended September 30,						Change			% Change
(in thousands, except per share amount)	2021			2020
Revenue
Gross premiums earned	$	119,364		$	54,829		$	64,535			118	%
Premiums ceded		(42,229	)		(19,078	)		(23,151	)		121	%
Net premiums earned		77,135			35,751			41,384			116	%
Net investment income		317			673			(356	)		-53	%
Net realized investment gains (losses)		582			(216	)		798			N.M.
Net unrealized investment gains (losses) on equity securities		34			(71	)		105			N.M.
Policy fee income		856			584			272			47	%
Other		1,130			84			1,046			1245	%
Total revenue		80,054			36,805			43,249			118	%
Expenses
Losses and loss adjustment expenses		52,976			22,043			30,933			140	%
Policy acquisition and other underwriting expenses		23,612			10,641			12,971			122	%
General and administrative personnel expenses		11,368			7,891			3,477			44	%
Interest expense		91			1			90			N.M.
Other operating expenses		10,581			6,173			4,408			71	%
Total expenses		98,628			46,749			51,879			111	%
Loss before income taxes		(18,574	)		(9,944	)		(8,630	)		87	%
Income tax benefit		(3,905	)		(2,429	)		(1,476	)		61	%
Net loss		(14,669	)		(7,515	)		(7,154	)		95	%
Redeemable preferred stock dividends		(5,175	)		—			(5,175	)		N.M.
Net loss attributable to common shareholders	$	(19,844	)	$	(7,515	)	$	(12,329	)		164	%
Basic loss per share	$	(0.25	)	$	(0.10	)	$	(0.15	)		150	%

N.M.—Percentage change not qualitatively meaningful

Revenue

Gross premiums earned

Gross premiums earned increased $64,535, or 118%, from $54,829 for the nine months ended September 30, 2020 to $119,364 for the nine months ended September 30, 2021, and increased $31,699, or 160%, from $19,854 for the three months ended September 30, 2020 to $51,553 for the three months ended September 30, 2021. The increases in both periods were primarily attributable to the new business assumed from United and increased policies in force from growth in the company’s business.

Premiums ceded

Premiums ceded for the nine-months periods September 30, 2021 and 2020 were $42,229 and $19,078, respectively, representing 35% and 35%, respectively, of gross premiums earned. Premiums ceded, excluding Florida Hurricane Catastrophe Fund and Claddaugh Casualty Insurance Company Ltd., an affiliated reinsurance company, were $31,414 and $14,970 for the nine-months periods September 30, 2021 and 2020, respectively. Premiums ceded for the three-months periods September 30, 2021 and 2020 were $20,135 and $10,171,

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respectively, representing 39% and 51%, respectively, of gross premiums earned. Our premiums ceded represent costs of reinsurance to cover potential losses from catastrophes that exceed the retention levels defined by our catastrophe excess of loss reinsurance agreements or to assume a proportional share of losses defined in a quota share arrangement. The rates we pay for reinsurance are based primarily on policy exposures reflected in gross premiums earned. The nine-months period increase of $23,151 and the three-months period increase of $9,964 were primarily attributable to higher reinsurance costs for the 2021 contract year due to increased total insured value as a result of premium growth and expansion.

Net premiums earned

Net premiums earned for the nine months ended September 30, 2021 and 2020 were $77,135 and $35,751, respectively, and for the three months ended September 30, 2021 and 2020 were $31,418 and $9,683, respectively, which reflect gross premiums earned less reinsurance costs as described above.

Net investment income

Net investment income decreased $356, or 53%, from $673 for the nine months ended September 30, 2020 to $317 for the nine months ended September 30, 2021. The decrease was primarily attributable to lower interest rates on cash and fixed maturity securities during 2021.

Policy fee income

Policy fee income increased $272, or 47%, from $584 for the nine months ended September 30, 2020 to $856 for the nine months ended September 30, 2021, which was primarily attributable to increased policies in force from growth in the company’s business.

Other

Other income increased $1,046, or 1245%, from $84 for the nine months ended September 30, 2020 to $1,130 for the nine months ended September 30, 2021. The increase was primarily attributable to software license revenue charged to affiliates starting in March 2021.

Expenses

Losses and loss adjustment expenses

Losses and loss adjustment expenses for the nine months ended September 30, 2021 and 2020 were $52,976 and $22,043, respectively, and for the three months ended September 30, 2021 and 2020 were $24,225 and $7,405, respectively. The increases in both periods were attributable to the growth of our policies in force and losses from the reinsurance of the United policies starting June 1, 2021.

Policy acquisition and other underwriting expenses

Total amortized policy acquisition expenses increased $11,319 from $9,222 for the nine months ended September 30, 2020 to $20,541 for the nine months ended September 30, 2021 reflecting the organic growth of our policies in force. Policy acquisition and other underwriting expenses, which includes amortized agent commissions, increased $12,971, or 122%, from $10,641 for the nine months ended September 30, 2020 to $23,612 for the nine months ended September 30, 2021.

Total amortized policy acquisition expenses increased $5,714 from $3,536 for the three months ended September 30, 2020 to $9,250 for the three months ended September 30, 2021. Policy acquisition and other underwriting expenses increased $6,293, or 155%, from $4,067 for the three months ended September 30, 2020 to $10,360 for the three

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months ended September 30, 2021. The increase was primarily attributable to higher agent commissions and property inspection costs associated with the organic growth in the quantity of policies in force, and $3.5 million and $4.7 million for the three and nine months ended September 30 2021 pertaining to ceding commissions related to the reinsured United policies.

General and administrative personnel expenses

General and administrative personnel expenses increased $3,477, or 44%, from $7,891 for the nine months ended September 30, 2020 to $11,368 for the nine months ended September 30, 2021. The change is primarily attributable to increases in salaries and benefit as staff is added to permit the company to operate on a standalone basis. The increase is further attributable to greater restricted stock expense but was offset by higher compensation expense capitalized as the cost of software developed for internal use.

Other operating expenses

Other operating expenses increased $4,408, or 71%, from $6,173 for the nine months ended September 30, 2020 to $10,581 for the nine months ended September 30, 2021. The change was primarily attributable to the $1,586 increase in cost of claims department personnel services received from an affiliate as part of an intercompany services arrangement that began in March 2021, $650 higher professional fees, $428 of greater corporate overhead allocated and $375 of higher bank fees.

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Comparison of the Years Ended December 31, 2020 and 2019

The following table presents our consolidated and combined statement of operations for the years ended December 31, 2020 and 2019, and the dollar and percentage change between the two periods. Note that all amounts presented are in US thousands, unless otherwise noted:

	Years ended December 31,						Change			% Change
(in thousands, except per share amount)	2020			2019
Revenue
Gross premiums earned	$	78,836		$	30,904		$	47,932			155	%
Premiums ceded		(28,822	)		(11,076	)		(17,746	)		160	%
Net premiums earned		50,014			19,828			30,186			152	%
Net investment income		814			1,056			(242	)		-23	%
Net realized investment gains (losses)		(43	)		(8	)		(35	)		N.M.
Net unrealized investment gains (losses) on equity securities		26			489			(463	)		-95	%
Policy fee income		819			424			395			93	%
Other		97			40			57			143	%
Total revenue		51,727			21,829			29,898			137	%
Expenses
Losses and loss adjustment expenses		34,059			8,505			25,554			300	%
Policy acquisition and other underwriting expenses		15,579			6,897			8,682			126	%
General and administrative personnel expenses		10,782			8,158			2,624			32	%
Interest expense		2			2			—			N.M.
Other operating expenses		7,766			6,758			1,008			15	%
Total expenses		68,188			30,320			37,868			125	%
Loss before income taxes		(16,461	)		(8,491	)		(7,970	)		94	%
Income tax benefit		(4,037	)		(1,580	)		(2,457	)		156	%
Net loss		(12,424	)		(6,911	)		(5,513	)		80	%
Redeemable preferred stock dividends		—			—			—			N.M.
Net loss attributable to common shareholders	$	(12,424	)	$	(6,911	)	$	(5,513	)		80	%
Basic loss per share	$	(0.17	)	$	(0.09	)	$	(0.08	)		89	%

N.M.—Percentage change not qualitatively meaningful

Revenue

Gross premiums earned

Gross premiums earned increased $47,932, or 155%, from $30,904 for the year ended December 31, 2019 to $78,836 for the year ended December 31, 2020, which was primarily attributable to growth in policies in force, partially offset by normal policy attrition.

Premiums ceded

Premiums ceded for the years ended December 31, 2020 and 2019 were $28,822 and $11,076, respectively, representing 37% and 36%, respectively, of gross premiums earned. Premiums ceded, excluding Florida Hurricane Catastrophe Fund and Claddaugh Casualty Insurance Company Ltd., an affiliated reinsurance

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company, were $22,014 and $10,319 for the years ended December 31, 2020 and December 31, 2019, respectively. Our premiums ceded represent costs of reinsurance to cover potential losses from catastrophes that exceed the retention levels defined by our catastrophe excess of loss reinsurance. The rates we pay for reinsurance are based primarily on policy exposures reflected in gross premiums earned. The $17,746 increase was primarily attributable to increased reinsurance premium costs effective June 1, 2020 and a higher level of reinsurance coverage. See “Economic Impact of Reinsurance Contract with Retrospective Provisions” under “Critical Accounting Policies and Estimates” below.

Net premiums earned

Net premiums earned for the years ended December 31, 2020 and 2019 were $50,014 and $19,828, respectively, and reflect gross premiums earned less reinsurance costs as described above.

Net investment income

Net investment income decreased $242, or 23%, from $1,056 for the year ended December 31, 2019 to $814 for the year ended December 31, 2020. The decrease was primarily attributable to lower interest rates on cash and fixed maturity securities during 2020.

Net unrealized investment gains or losses

Net unrealized investment gains decreased $463, or 95%, from $489 for the year ended December 31, 2019 to $26 for the year ended December 31, 2020. A net unrealized investment gain or loss represents the net change in the fair value of equity securities and is affected by securities market trends and changes in the composition of our investment portfolio.

Policy fee income

Policy fee income increased $395, or 93%, from $424 for the year ended December 31, 2019 to $819 for the year ended December 31, 2020, which was primarily attributable to the growth of our in-force policies.

Other

Other income increased $57, or 143%, from $40 for the year ended December 31, 2019 to $97 for the year ended December 31, 2020. Other income primarily resulted from fees charged to policyholders for the use of installment payment options. The period over period increase was attributable to growth of our policies in force.

Expenses

Losses and loss adjustment expenses

Losses and loss adjustment expenses for the years ended December 31, 2020 and 2019 were $34,059 and $8,505, respectively. The increase was primarily attributable to the growth in our policies in-force and additionally to losses incurred from Tropical Storm Eta in November of 2020. The increase in losses and loss adjustment expenses for the year ended December 31, 2020 relative to previous years was also driven by the shift in total premium mix towards homeowners insurance and away from flood insurance, as our flood business has historically had lower losses but was a smaller percentage of our overall business in 2020.

Policy acquisition and other underwriting expenses

For the years ended December 31, 2020 and 2019, total amortized policy acquisition expenses were $12,501 and $4,863, respectively. Policy acquisition and other underwriting expense increased $8,682, or 126%, from $6,897 for the year ended December 31, 2019 to $15,579 for the year ended December 31, 2020. The increase was primarily attributable to higher agent commissions and property inspection costs associated with the organic growth in the quantity of policies in force.

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General and administrative personnel expenses

General and administrative personnel expenses increased $2,624, or 32%, from $8,158 for the year ended December 31, 2019 to $10,782 for the year ended December 31, 2020. Factors such as merit increases, changes in headcount, and periodic restricted stock grants, among others, cause fluctuations in this expense. In addition, our personnel expenses are decreased by the capitalization of payroll costs related to projects to develop software for internal use. The year-over-year increase was primarily attributable to an increase in the headcount of temporary and full-time employees, merit increases for non-executive employees, higher stock-based compensation expense, and lower capitalized and recoverable payroll costs, partially offset by a decrease in employee incentive bonus.

Other operating expenses

Other operating expenses increased $1,008, or 15%, from $6,758 for the year ended December 31, 2019 to $7,766 for the year ended December 31, 2020. The change was primarily attributable to $427 of depreciation of software developed internally and placed into production during 2020, increases in bank fees of $245 and corporate overhead allocated of $236.

Non-GAAP Financial Measures

The non-GAAP financial measures set forth below have not been calculated in accordance with generally accepted accounting principles in the United States, or GAAP, and should be considered in addition to results prepared in accordance with GAAP and should not be considered as a substitute for, or superior to, GAAP results. In addition, adjusted gross profit should not be construed as an indicator of our operating performance, liquidity, or cash flows generated by operating, investing, and financing activities, as there may be significant factors or trends that it fails to address. We caution investors that non-GAAP financial information, by its nature, departs from traditional accounting conventions. Therefore, its use can make it difficult to compare our current results with our results from other reporting periods and with the results of other companies.

Our management uses these non-GAAP financial measure, in conjunction with GAAP financial measures, as an integral part of managing our business and to, among other things: (1) monitor and evaluate the performance of our business operations and financial performance; (2) facilitate internal comparisons of the historical operating performance of our business operations; (3) facilitate external comparisons of the results of our overall business to the historical operating performance of other companies that may have different capital structures and debt levels and different go-to-market models; (4) review and assess the operating performance of our management team; (5) analyze and evaluate financial and strategic planning decisions regarding future operating investments; and (6) plan for and prepare future annual operating budgets and determine appropriate levels of operating investments.

Adjusted gross profit

We define adjusted gross profit, a non-GAAP financial measure, as total revenue, less loss and loss adjustment expenses and other insurance related expenses, and excluding net investment income, net realized (gains) and losses, unrealized (gains) and losses, and income associated with license fee. Insurance related expenses include amortized premium taxes, credit card processing fees, and home inspection costs. All policy acquisition commission costs are included in Policy Acquisition and Other underwriting expenses and are excluded from adjusted gross profit. After these adjustments, we believe the resulting calculation is inclusive of all costs of revenue incurred to successfully service a policy, irrespective of how it was sourced or acquired. Adjusted gross profit should not be viewed as a substitute for total revenue calculated in accordance with GAAP, and other companies may define adjusted gross profit differently.

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The following table provides a reconciliation of total revenue to adjusted gross profit and the related adjusted gross profit margin for the periods presented:

	Three months ended September 30,						Nine months ended September 30,
(in thousands)	2021			2020			2021			2020
Total Revenue	$	32,308		$	10,281		$	80,054		$	36,805
Adjustments:
Losses and loss adjustment expenses		(24,225	)		(7,405	)		(52,976	)		(22,043	)
Other insurance related expenses		(1,452	)		(729	)		(4,318	)		(2,042	)
Net investment income		(85	)		(153	)		(317	)		(673	)
Net realized (gains) and losses		(77	)		(53	)		(582	)		216
Unrealized (gains) and losses		59			(160	)		(34	)		71
Income associated with license fee		(443	)		—			(1,030	)		—
Adjusted gross profit	$	6,085		$	1,781		$	20,797		$	12,334

	Year ended December 31,
(in thousands)	2020			2019
Total Revenue	$	51,727		$	21,829
Adjustments:
Losses and loss adjustment expenses		(34,059	)		(8,505	)
Other insurance related expenses		(3,168	)		(2,289	)
Net investment income		(814	)		(1,056	)
Net realized (gains) and losses		43			8
Unrealized (gains) and losses		(26	)		(489	)
Income associated with license fee		—			—
Adjusted gross profit	$	13,703		$	9,498

Adjusted gross profit margin

We define adjusted gross profit margin, a non-GAAP financial measure, expressed as a percentage, as the ratio of adjusted gross profit to gross premiums earned. This ratio measures the relationship between the underlying business volume and gross economic benefit generated by our underwriting operations, in addition to our underlying profitability trends.

The following table provides our calculation of adjusted gross profit margin for the periods presented:

	Three months ended September 30,						Nine months ended September 30,
(in thousands)	2021			2020			2021			2020
Numerator: Adjusted Gross Profit	$	6,085		$	1,781		$	20,797		$	12,334
Denominator: Gross Premiums Earned		51,553			19,854			119,364			54,829
Adjusted Gross Profit Margin		11.8	%		9.0	%		17.4	%		22.5	%

	Year ended December 31,
(in thousands)	2020			2019
Numerator: Adjusted Gross Profit	$	13,703		$	9,498
Denominator: Gross Premiums Earned		78,836			30,904
Adjusted Gross Profit Margin		17.4	%		30.7	%

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Adjusted EBITDA

We define adjusted EBITDA, a non-GAAP financial measure, as net loss excluding interest expense, income tax expense, depreciation, amortization, stock-based compensation, net investment income, net realized (gains) losses, unrealized (gains) losses, and other transactions that we would consider to be unique in nature. We exclude these items from adjusted EBITDA because we do not consider them to be directly attributable to our underlying operating performance. We use adjusted EBITDA as an internal performance measure in the management of our operations because we believe it gives our management and other users of our financial information useful insight into our results of operations and our underlying business performance. Adjusted EBITDA should not be viewed as a substitute for net loss attributable to common shareholders calculated in accordance with GAAP, and other companies may define adjusted EBITDA differently.

The following table provides a reconciliation of adjusted EBITDA to net loss for the periods presented:

	Three months ended September 30,						Nine months ended September 30,
(in thousands)	2021			2020			2021			2020
Net loss	$	(7,873	)	$	(4,507	)	$	(14,669	)	$	(7,515	)
Adjustments:
Income tax benefits		(2,432	)		(1,490	)		(3,905	)		(2,429	)
Interest expense		1			—			91			1
Depreciation and amortization		343			280			942			820
Stock based compensation		472			421			2,438			1,316
Net investment income		(85	)		(153	)		(317	)		(673	)
Net realized (gains) losses		(77	)		(53	)		(582	)		216
Unrealized (gains) losses		59			(160	)		(34	)		71
Adjusted EBITDA	$	(9,592	)	$	(5,662	)	$	(16,036	)	$	(8,193	)

	Year ended December 31,
(in thousands)	2020			2019
Net loss	$	(12,424	)	$	(6,911	)
Adjustments:
Income tax benefits		(4,037	)		(1,580	)
Interest expense		2			2
Depreciation and amortization		1,103			676
Stock based compensation		1,808			960
Net investment income		(814	)		(1,056	)
Net realized (gains) losses		43			8
Unrealized (gains) losses		(26	)		(489	)
Adjusted EBITDA	$	(14,345	)	$	(8,390	)

Adjusted EBITDA margin

We define the adjusted EBITDA margin, a non-GAAP financial measure, expressed as a percentage, as the ratio of adjusted EBITDA to gross premiums earned. Our ratio of adjusted EBITDA to gross premiums earned provides management with useful insight into our operating performance as it measures our path to long term profitability.

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The following table provides our calculation of adjusted EBITDA margin for the periods presented:

	Three months ended September 30,						Nine months ended September 30,
(in thousands)	2021			2020			2021			2020
Numerator: Adjusted EBITDA	$	(9,592	)	$	(5,662	)	$	(16,036	)	$	(8,193	)
Denominator: Gross Premiums Earned		51,553			19,854			119,364			54,829
Adjusted EBITDA Margin		(18.6	)%		(28.5	)%		(13.4	)%		(14.9	)%

	Year ended December 31,
(in thousands)	2020			2019
Numerator: Adjusted EBITDA	$	(14,345	)	$	(8,390	)
Denominator: Gross Premiums Earned		78,836			30,904
Adjusted EBITDA Margin		(18.2	)%		(27.1	)%

Liquidity and Capital Resources

Sources of liquidity

Our capital requirements will depend on many factors, including the volume of issuance of insurance policies, the need to pay claims and operating expenses, investments in information technology systems, and the expansion of sales and marketing activities. Until we can generate sufficient revenue and other income to cover operating expenses, working capital, and capital expenditures, we expect to rely on funds provided by our February 2021 preferred stock placement. Refer to Note 14 – “Redeemable Series A Preferred Stock” to TypTap’s unaudited consolidated and combined financial statements for the three and nine months ended September 30, 2021 and 2020 included elsewhere in this prospectus for more information regarding the terms and features of the preferred stock.

In the future, we may raise additional funds through the issuance of debt or equity securities or the borrowing of money. We cannot assure that such funds will be available on favorable terms, or at all.

Our insurance operations require liquidity and adequate capital to meet ongoing obligations to policyholders and claimants and to fund operating expenses. In addition, we attempt to maintain adequate levels of liquidity and surplus to manage any differences between the duration of our liabilities and invested assets. In the insurance industry, cash collected for premiums from policies written is invested, interest and dividends are earned thereon, and losses and loss adjustment expenses are paid out over a period of years. This period of time varies by the circumstances surrounding each claim. Substantially all of our losses and loss adjustment expenses, excluding litigated claims, are fully settled and paid within approximately 100 days of the claim receipt date. Additional cash outflow occurs through payments of underwriting costs such as commissions, taxes, payroll, and general overhead expenses.

We believe that we maintain sufficient liquidity to pay claims and expenses, as well as to satisfy commitments in the event of unforeseen events such as reinsurer insolvencies, inadequate premium rates, or reserve deficiencies. We maintain a comprehensive reinsurance program at levels management considers adequate to diversify risk and safeguard our financial position.

In the future, we anticipate our primary use of funds will be to pay claims, reinsurance premiums, interest, and dividends, and to fund investments in information technology systems, the expansion of sales and marketing activities, and operating expenses.

We are a holding company that transacts all our business through operating subsidiaries. Consequently, our ability to meet our operating and financing cash needs, pay taxes, and pay dividends to shareholders is largely dependent on dividends or other distributions from our subsidiaries and affiliates, whose ability to pay us is highly regulated.

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At December 31, 2020 and 2019, restricted net assets represented by the company’s insurance subsidiary amounted to $38,518 and $27,283, respectively.

Regulatory requirements and restrictions

Consistent with other insurance carriers, we are bound to certain regulatory requirements and restrictions imposed by the state or jurisdiction in which we are incorporated relating to the payment of dividends and maintaining minimum capital and surplus amounts. See Note 21 – “Regulatory Requirements and Restrictions” to our audited consolidated and combined financial statements for the years ended December 31, 2020 and 2019 included elsewhere in this prospectus.

Cash flow summary

($ in thousands)	Year ended December 31,						Nine months ended September 30,
	2020			2019			2021		2020
Net cash provided by (used in):
Operating activities	$	30,383		$	33,094		$	11,911	$	12,238
Investing activities		(2,509	)		(735	)		118		(1,296	)
Financing activities		21,987			4,988			69,128		(19	)

Operating activities

Net cash provided by operating activities for the nine months ended September 30, 2021 was $11,911, which was an decrease in net cash provided of $327 from $12,238 for the nine months ended September 30, 2020. Cash used during this period included $12,513 from net loss for the nine months ended September 30, 2021, excluding the non-cash impacts from stock-based compensation, depreciation, and other non-cash items. Net cash provided by changes in our operating assets and liabilities was $24,424, which was primarily attributable to deferred policy acquisition costs, reserves for losses and loss adjustment expenses, unearned premiums, accrued expenses, and amounts due to related parties, offset by an increase in prepaid reinsurance premiums.

Net cash provided by operating activities for the nine months ended September 30, 2020 was $12,238. Cash provided this period included $4,538 from net loss for the nine months ended September 30, 2020, excluding the non-cash impacts from stock-based compensation, depreciation, and other non-cash items. Net cash provided by changes in operating assets and liabilities was $16,776 and primarily consisted of increases in loss and loss adjustment expense reserves, amounts due to related parties, and unearned premium reserves.

Net cash provided by operating activities for the year ended December 31, 2020 was $30,383, a decrease of $2,711 from $33,094 for the year ended December 31, 2019. Cash used during this period included the $9,571 net loss for the year ended December 31, 2020, excluding the impacts from stock-based compensation, depreciation, and other non-cash items. This was offset by net cash provided by changes in our operating assets and liabilities, which was primarily attributable to unearned premiums, loss and loss adjustment expense reserves, deferred policy acquisition costs, amounts due to related parties, accrued expenses and other liabilities, prepaid reinsurance premiums, and premiums receivable.

Investing activities

Net cash provided by investing activities for the nine months ended September 30, 2021 was $118, which was primarily driven by sales of equity securities and maturities of marketable securities offset by our continued purchase of investments. Net cash used in investing activities was $1,296 for the nine months ended September 30, 2020, which was primarily driven by increased purchases of marketable securities.

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Net cash used in investing activities for the year ended December 31, 2020 was $2,509 compared to $735 of net cash used in investing activities in 2019. The increase was primarily due to an increase in the purchases of marketable securities.

Financing activities

Net cash provided by financing activities was $69,128 for the nine months ended September 30, 2021, which consisted of $93,738 of proceeds from the issuance of preferred stock, net of issuance costs. The preferred stock proceeds were offset by $22,000 in funds used to repay a loan to our parent company, HCI Group, Inc. and by $2,542 dividends paid to preferred stock. Cash used by financing activities for the nine months ended September 30, 2020 was negligible.

Cash provided by financing activities was $21,987 for the year ended December 31, 2020, which consisted almost exclusively of proceeds from the issuance of a note payable to our parent company, HCI Group, Inc. For the year ended December 31, 2019, cash provided by financing activities was $4,988 for the year ended December 31, 2019, which consisted almost exclusively of proceeds from a capital contribution from our parent company.

Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements that have, or are reasonably likely to have, a current or future material effect on our financial condition, results of operations, liquidity, or cash flows.

Contractual Obligations and Commitments

As of December 31, 2020, the present value of future payment obligations under operating and finance leases was $352.

As of September 30, 2021, and subsequent to December 31, 2020, we issued Redeemable Series A Preferred Stock with $416 of accrued dividends after making the dividends payments of $2,542 in September. Refer to Note 14 – “Redeemable Series A Preferred Stock” to TypTap’s unaudited consolidated and combined financial statements for the three and nine months ended September 30, 2021 and 2020 included elsewhere in this prospectus. Additionally, the present value of future payment obligations under operating and finance leases was $485.

Critical Accounting Policies and Estimates

We have prepared our consolidated and combined financial statements in accordance with GAAP. The preparation of these consolidated and combined financial statements requires us to make estimates and judgments to develop amounts reflected and disclosed in our consolidated and combined financial statements. Material estimates that are particularly susceptible to significant change in the near term are related to our losses and loss adjustment expenses, which include amounts estimated for claims incurred but not yet reported. We base our estimates on various assumptions and actuarial data we believe to be reasonable under the circumstances. Actual results may differ materially from these estimates.

We believe that the accounting policies described below involve a significant degree of judgment and complexity. Accordingly, we believe these are the most critical to aid in fully understanding and evaluating our consolidated and combined financial condition and results of operations. For further information, see Note 2 — “Summary of Significant Accounting Policies” to the audited consolidated and combined financial statements for the years ended December 31, 2020 and 2019 included elsewhere in this prospectus.

Reserves for losses and loss adjustment expenses

We establish reserves for the estimated total unpaid costs of losses including loss adjustment expenses (“LAE”). Loss and LAE reserves reflect management’s best estimate of the total cost of (i) claims that have been incurred,

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but not yet paid in full, and (ii) claims that have been incurred but not yet reported to us (“IBNR”). Reserves established by us represent an estimate of the outcome of future events and, as such, cannot be considered an exact calculation of our liability. Rather, loss and LAE reserves represent management’s best estimate of our liability based on the application of actuarial techniques and other projection methodologies and taking into consideration other facts and circumstances known at the balance sheet dates. The process of establishing loss and LAE reserves is complex and inherently imprecise, as it involves the estimation of the outcome of future uncertain events. The impact of both internal and external variables on ultimate losses and LAE costs is difficult to estimate. In determining loss and LAE reserves, we give careful consideration to all available data and actuarial analyses.

Currently, our estimated ultimate liability is calculated using the principles and procedures described in Note 12 — “Losses and Loss Adjustment Expenses” to our audited consolidated and combined financial statements for the years ended December 31, 2020 and 2019 included elsewhere in this prospectus, which are applied to the lines of business written. However, because the establishment of loss and LAE reserves is an inherently uncertain process, we cannot be certain that ultimate losses will not exceed the established loss and LAE reserves and have a material adverse effect on our results of operations and financial condition. Changes in estimates, or differences between estimates and amounts ultimately paid, are reflected in the operating results of the period during which such adjustments are made.

Our reported results, financial position, and liquidity would be affected by likely changes in key assumptions that determine our loss reserves. Management does not believe that any reasonably likely changes in the frequency of claims would affect our loss and LAE reserves. However, management believes that a reasonably likely increase or decrease in the severity of claims could impact our loss and LAE reserves. The table below summarizes the effect on loss and LAE reserves and equity in the event of reasonably likely changes in the severity of claims considered in establishing loss and LAE reserves. The range of reasonably likely changes in the severity of our claims was established based on a review of changes in loss year development and applied to loss and LAE reserves as a whole. The selected range of changes does not indicate what could be the potential best or worst case or likely scenarios as of September 30, 2021 and December 31, 2020:

Nine months ended September 30, 2021
($ in thousands)
Change in reserves	Reserves		Percentage change in equity, net of tax
-20.0%	$	31,961		17.68	%
-15.0%		33,958		13.26	%
-10.0%		35,956		8.84	%
-5.0%		37,953		4.42	%
Base		39,951		—
5.0%		41,949		(4.42	)%
10.0%		43,946		(8.84	)%
15.0%		45,944		(13.26	)%
20.0%		47,941		(17.68	)%

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Year ended December 31, 2020
($ in thousands)
Change in reserves	Reserves		Percentage change in equity, net of tax
-20.0%	$	15,478		44.58	%
-15.0%		16,446		33.44	%
-10.0%		17,413		22.29	%
-5.0%		18,381		11.15	%
Base		19,348		—
5.0%		20,315		(11.15	)%
10.0%		21,283		(22.29	)%
15.0%		22,250		(33.44	)%
20.0%		23,218		(44.58	)%

Reinsurance recoverable

Our reinsurance recoverable balance represents an estimate of the amount of paid and unpaid losses and LAE that is recoverable from reinsurers. This estimate is determined in a manner consistent with the terms of the applicable reinsurance contracts and based on the ultimate losses and LAE we expect to incur. Given the uncertainty of the ultimate amounts of losses and LAE, the estimate may vary significantly from the eventual outcome.

Economic impact of reinsurance contract with retrospective provisions

One of our reinsurance contracts includes retrospective provisions that adjust premiums in the event losses are minimal or zero. In accordance with GAAP, we will recognize an asset in the period in which the absence of loss experience obligates the reinsurer to pay cash or other consideration under the contract. In the event that a loss arises, we will derecognize such asset in the period in which a loss arises. Such adjustments to the asset, which accrue throughout the contract term, will negatively impact our operating results when a catastrophic loss event occurs during the contract term.

Income taxes

We account for income taxes in accordance with GAAP, resulting in two components of income tax expense: current and deferred. Current income tax expense reflects taxes to be paid or refunded for the current period by applying the provisions of the enacted tax law to the taxable income or excess of deductions over revenues. We determine deferred income taxes using the liability (or balance sheet) method. Under this method, the net deferred tax asset or liability is based on the tax effects of the differences between the book and tax bases of assets and liabilities, and enacted changes in tax rates and laws are recognized in the period in which they occur. Valuation allowances are provided against assets that are not likely to be realized, if any. We have elected to classify the related interest and penalties, if any, as income tax expense as permitted by current accounting standards.

Stock-based compensation

We account for stock-based compensation using a recognition method based on fair value. Stock-based compensation cost is estimated at the grant date based on the fair value of the award, and compensation expense is recognized ratably over the requisite or derived service period of the award. Determining the appropriate fair value model and calculating the fair value of stock-based awards at the grant date requires considerable judgment, including estimating stock price volatility or derived service periods. We develop our estimates based on historical data, market information, and third-party specialist valuation, which can change significantly over time.

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We use the Black-Scholes option-pricing model to estimate the fair value of stock option grants. For stock based compensation awards with service conditions, we recognize compensation expense using the straight-line amortization method over the requisite service period. For stock-based compensation awards with market conditions, we use a Monte Carlo simulation model with assistance from a third-party valuation specialist to estimate the fair value and derived service periods of the awards, and we recognize compensation expense ratably over the derived service periods.

Quantitative and Qualitative Disclosures About Market Risk

Our investment portfolios includes fixed-maturity and equity securities, the purposes of which are not for speculation. Our main objective is to maximize after-tax investment income and maintain sufficient liquidity to meet our obligations while minimizing market risk, which is the potential economic loss from adverse fluctuations in securities prices. We consider many factors including credit ratings, investment concentrations, regulatory requirements, anticipated fluctuation of interest rates, durations, and market conditions in developing investment strategies. Our investment securities are managed primarily by outside investment advisors and are overseen by the investment committee of our board of directors. From time to time, our investment committee may decide to invest in low risk assets such as U.S. government bonds.

Our investment portfolios are exposed to interest rate risk, credit risk, and equity price risk. Fiscal and economic uncertainties caused by any government action or inaction may exacerbate these risks and potentially have adverse impacts on the value of our investment portfolios.

We classify our fixed-maturity securities as available-for-sale and report any unrealized gains or losses, net of deferred income taxes, as a component of other comprehensive income within our stockholders’ equity. As such, any material temporary changes in their fair value can adversely impact the carrying value of our stockholders’ equity. In addition, we recognize any unrealized gains and losses related to our equity securities in our statement of income. As a result, our results of operations can be materially affected by the volatility in the equity market.

Interest rate risk

Our fixed-maturity securities are sensitive to potential losses resulting from unfavorable changes in interest rates. We manage the risk by analyzing anticipated movement in interest rates and considering our future capital needs.

The following table illustrates the impact of hypothetical changes in interest rates to the fair value of our fixed-maturity securities at September 30, 2021 and December 31, 2020:

September 30, 2021

Hypothetical change in interest rates	Estimated fair value		Change in estimated fair value			Percentage increase (decrease) in estimated fair value
300 basis point increase	$	15,340	$	(1,159	)		(7.03	)%
200 basis point increase		15,727		(773	)		(4.68	)%
100 basis point increase		16,113		(386	)		(2.34	)%
100 basis point decrease		16,769		269			1.63	%
200 basis point decrease		16,873		374			2.27	%
300 basis point decrease		16,879		380			2.30	%

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December 31, 2020

Hypothetical change in interest rates	Estimated fair value		Change in estimated fair value			Percentage increase (decrease) in estimated fair value
300 basis point increase	$	15,512	$	(1,007	)		(6.10	)%
200 basis point increase		15,848		(671	)		(4.07	)%
100 basis point increase		16,184		(335	)		(2.03	)%
100 basis point decrease		16,640		121			0.73	%
200 basis point decrease		16,657		138			0.83	%
300 basis point decrease		16,675		156			0.94	%

Credit risk

Credit risk can expose us to potential losses arising principally from adverse changes in the financial condition of the issuers of our fixed-maturity securities. We mitigate the risk by investing in fixed-maturity securities that are generally investment grade, by diversifying our investment portfolio to avoid concentrations in any single issuer or business sector, and by continually monitoring each individual security for declines in credit quality. While we emphasize credit quality in our investment selection process, significant downturns in the markets or general economy may impact the credit quality of our portfolio.

The following table presents the composition of our fixed-maturity securities, by rating, at September 30, 2021 and December 31, 2020:

September 30, 2021

Comparable rating	Cost or amortized cost		% of Total amortized cost		Estimated fair value		% of total estimated fair value
AAA	$	319		2	$	319		2
AA+, AA, AA-		9,784		60		9,868		60
A+, A, A-		4,265		26		4,325		26
BBB+, BBB, BBB-		1,965		12		1,987		12
BB+, BB, BB-		—		—		—		—
CCC+, CC and Not rated		—		—		—		—
Total	$	16,333		100	$	16,499		100

December 31, 2020

Comparable rating	Cost or amortized cost		% of Total amortized cost		Estimated fair value		% of Total estimated fair value
AAA	$	—		—	$	—		—
AA+, AA, AA-		9,690		60		9,887		60
A+, A, A-		4,089		26		4,223		25
BBB+, BBB, BBB-		1,271		8		1,308		8
BB+, BB, BB-		—		—		—		—
CCC+, CC and Not rated		963		6		1,101		7
Total	$	16,013		100	$	16,519		100

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Equity price risk

Our equity investment portfolio includes common stocks, perpetual preferred stocks, mutual funds, and exchange traded funds. We may incur potential losses due to adverse changes in equity security prices. We manage the risk primarily through industry and issuer diversification and asset mix.

The following table illustrates the composition of our equity securities at September 30, 2021 and December 31, 2020:

September 30, 2021

	Estimated fair value		% of Total estimated fair value
Stocks by sector:
Financial	$	988		32
Technology		512		17
Consumer		507		17
Other(1)		660		22
		2,667		88
Mutual funds and Exchange traded funds by type:
Debt		194		6
Equity		179		6
Total	$	3,040		100

December 31, 2020

	Estimated fair value		% of Total estimated fair value
Stocks by sector:
Financial	$	757		17
Technology		383		9
Consumer		820		18
Other(1)		744		17
		2,704		61
Mutual funds and Exchange traded funds by type:
Debt		1,517		34
Equity		233		5
Total	$	4,454		100

(1) Represents an aggregate of less than 5% sectors.

Foreign currency exchange risk

We do not have any material exposure to foreign currency related risk.

New Accounting Pronouncements

See Note 2—“Summary of Significant Accounting Policies” to TypTap’s audited consolidated and combined financial statements for years ended December 31, 2020 and 2019 included elsewhere in this prospectus.

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Election Under the Jumpstart Our Business Startups Act of 2012

We currently qualify as an “emerging growth company” under the Jumpstart Our Business Startups Act of 2012, or JOBS Act. One provision of the JOBS Act applicable to emerging growth companies is the option to adopt new or revised accounting guidance on an extended timeline. We have elected not to use this option and instead will adopt new accounting pronouncements on the same timeline as our parent company, a non-emerging growth company.

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BUSINESS

Overview

TypTap is a rapidly growing technology-driven insurance company that leverages extensive data and AI-enabled analytics to better select and price homeowners insurance risk. We have a successful track record of profitable underwriting, with loss ratios better than the overall homeowners industry average, and offer our insurance agents a frictionless full-stack digital technology platform that provides policyholders with a better purchase and claims experience. We achieve this through a comprehensive suite of technology solutions to manage the end-to-end insurance process, from risk selection and underwriting to accelerated quoting to claims management.

The $110 billion U.S. homeowners insurance market is a large market with attractive industry dynamics and a strong growth outlook. We believe it is also a good candidate for technology-driven innovation. For decades, the insurance industry has underinvested in technology and is thus dependent on inefficient legacy systems. This has led to mispriced risk and high loss ratios, low policyholder satisfaction scores, and a frustrating agent experience. While many companies have attempted to take a more tech-forward approach to insurance in recent years, they typically lack sustainable unit economics and fail to address the biggest inefficiency in the industry—high claims costs, that comprise, on average, 73% of the total costs for an insurance carrier.

While many insurance companies have accepted current loss ratios as a relatively fixed component of the insurance company cost structure, we have developed technology that allows us to improve on this. Our strategy is simple—use our data-driven underwriting technology to identify and price the best risks that we determine have the lowest probability of a claim and achieve a desired level of underwriting profitability, leading to a sustainable loss ratio advantage over competitors. With the help of a better and more efficient experience for agents and policyholders, we achieve high retention and strong agent alignment, that enable us to rapidly scale up.

While the first wave of Insurtech companies focused primarily on customer experience and lowering distribution costs as opposed to improving underwriting, we are focused on the entire value chain—using technology to lower claims costs, creating a compelling agent value proposition to scale the business and a customer experience that creates high retention. We see our business model as the future of Insurtech, driving a positive flywheel and profitable underwriting results as it scales. Our data-driven underwriting platform gives us the ability to source and analyze up to 1,000 different home characteristics, allowing us to price and bind at the individual home level with lower claims probability—in less than 5 minutes. When losses do occur, our claims management software

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proactively helps us manage our claims adjustment costs. Our digitally enhanced user interfaces were also designed to keep our agents and policyholders happy, aligning incentives and driving increased efficiencies throughout the process.

TypTap’s business was incubated in 2016 as a subsidiary of HCI Group, Inc., or HCI (NYSE: HCI), a publicly-listed insurance holding company. We chose to develop and test our underwriting technology in Florida, a complex yet attractive homeowners insurance market with a total addressable homeowners insurance market of $11 billion. Since then, we have continued to refine our technology and improve our underwriting platform. After developing a market leading underwriting track record in Florida, we have begun to execute on a national growth strategy and are writing policies in seven states as of October 2021.

Our in-force premiums exceeded $100 million at the end of 2020, and by September of 2021, in-force premiums exceeded $214 million, which includes $59 million of premiums assumed via a quota share reinsurance agreement with United in June 2021, as part of our transaction to ultimately transfer United’s northeast region business to TypTap and its affiliates. We have also achieved a lower claims experience relative to the industry, leading to gross loss ratios below 50% in 2018-2020 compared to the U.S. homeowners industry average of 75% over those same years.

TypTap’s competitive advantage is derived from our internally developed technology suite that provides advanced analytics, comprehensive end-to-end insurance lifecycle management, and an agent-facing user interface that prioritizes policyholder ease-of-use and empowers independent insurance agents:

• We use differentiated data and proprietary analytics to create better results:    Underwriting home insurance is complex, with many individual factors contributing to underwriting risk, including roof type, roof shape, home elevation, square footage, presence of a pool, geography, and building material, to name just a few. We spent four years developing, testing, and refining our AI-enabled data warehousing solution before writing our first residential flood insurance policy in 2016. We continued to improve the data engine and risk selection algorithm before launching our homeowners insurance offering in 2017, giving us the confidence that we had a solution that worked by the time we launched. Our data-driven and analytical approach provides us with a differentiated understanding of how to underwrite and price for unique risk characteristics on an individual home basis. This results in loss ratios that have been better than industry average by over 25 percentage points. As we collect more data, we will continue to refine our underwriting model and algorithms through an iterative analytic process.

• We empower independent insurance agents to create a better insurance purchasing experience:    Independent agents are a valuable component of our business model. We expect them to continue to control insurance distribution over the direct-to-consumer channel in the foreseeable future. We have designed our technology to empower agents to spend more time acquiring new customers and less time on the inefficiencies that cause friction in the insurance selling and management process. Our easy-to-use

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digital agent portal, instant quote technology, efficient binding and ongoing document management, competitive prices, consistent renewal decisions, user friendly claims management software, and competitive commissions all add value for our agents. Our platform drives increased agent adoption, with our current target agent cohort increasing their TypTap book of business by 151% between 2020 and 2021.

• We have designed our platform for a better policy-holder experience, with ease of use in mind:    Our online quoting platform is designed for ease of use and efficiency for both the agent and policyholder. We come to an underwriting decision in minutes without extensive and tedious data collection from the policyholder and price the policy accurately at inception to ensure stability of coverage and price. Our claims technology is also designed for a transparent and user-friendly experience and gives us the ability to be proactive in the claims process, including by engaging with our policyholders.

• We have developed fully integrated technology solutions and processes to better manage the end-to-end insurance lifecycle:    Our scalable, full-stack technology platform is internally developed and designed to be easily adapted to evolving agent and policyholder needs. Our technology improves risk selection, enables faster quoting and a better agent and policyholder experience, and efficiently manages the claims process, driving operating efficiencies and accelerating our growth as we scale.

• We use reinsurance as a tool to protect our balance sheet and for efficient capital management:    We purchase excess-of loss reinsurance and optimize for both frequency and severity as well as specific geography perils. Historically we have purchased reinsurance in excess of what is required by regulators to create the appropriate protection for our business. We enjoy support from a diverse panel of 49 highly rated reinsurance providers across the US, Europe and Asia. Our technology platform has helped create transparency and a favorable economic outcome for our reinsurance providers.

These key differentiated strengths—our high quality data and analytics to power our risk selection, our ability to empower and create strong alignment with independent agents, our policyholder experience, and our comprehensive technology platform—have allowed us to build a sustainable business model for profitable growth. We have a strong track record of achieving both high growth and underwriting profitability using this model and will continue to expand on these key competitive advantages as we expand geographically.

We have also built our business with a capital-efficient strategy in mind. To date, we have only received $177 million of capital in our business (which includes the $100 million investment by Centerbridge Partners, L.P. in February 2021). TypTap’s rapid growth and strong value proposition are driven primarily by our intellectual property, technology platform, and operational excellence. Our track record of sourcing and retaining profitable business allows us to use reinsurance primarily to manage our balance sheet and earnings volatility.

The execution of our future expansion strategy into new states is key to going after our total addressable market opportunity. Our operational success to date and ability to identify unique localized risk characteristics, as evidenced by our success in current markets, has laid the foundation to expand nationwide, where we will leverage our institutional track record and superior technology to generate strong premium growth with attractive underwriting results.

We had gross premiums earned of $78.8 million and $30.9 million in the years ended December 31, 2020 and December 31, 2019, respectively, and gross premiums earned of $119.4 million for the nine months ended September 30, 2021. We incurred net losses of $12.4 million and $6.9 million in the years ended December 31, 2020 and December 31, 2019, respectively, and a net loss of $14.7 million for the nine months ended September 30, 2021. We may incur losses in the future for a number of reasons, including as a result of investments in the development and expansion of our business. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

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An Attractive Market Opportunity—U.S. Homeowners Insurance

Our primary addressable market is the U.S. homeowners insurance industry—a $110 billion market in 2020 that has grown steadily at a 5% compound annual growth rate over the last ten years, consistent with underlying insured home values and the overall economy.

For the policyholder, homeowners insurance is both a necessary product and a highly considered purchase that is a key component of the overall home buying process. Insurance is required by most mortgage lenders and acts as a first line of defense for homeowners in the event of the unexpected.

The market is attractive due to its higher premiums (approximately $1,250 per policy on average) relative to auto and renters insurance policies and its recurring revenue, as we believe average policyholder tenure with their policies typically exceeds 10 years. Because retention is high in homeowners insurance, the profitability of each policyholder is determined at the time of acquisition. Profitable customers are very valuable and offer high recurring premiums with low losses for years, while unprofitable customers continue to elevate losses. At TypTap, our average premium was over $2,800 in 2020 and our retention rate was 87%.

The homeowners insurance industry is also highly fragmented, with only one carrier capturing more than 10% of the U.S. market. Unlike personal auto, which has seen the top 15 insurers increase market share at the expense of all others, the top 15 homeowners writers have held a relatively steady share (approximately 70% of the total market) over time. The market share has remained static because most carriers see homeowners as a breakeven business that is a necessary offering to also write other more profitable lines of insurance.

Due to this perception, the homeowners insurance industry does not attract the technology investment to improve the policyholder experience and drive better unit economics. For the top 15 carriers, homeowners insurance accounts for only 25% of their total portfolio, leading them to focus investments in other lines at the expense of investing in homeowners focused data analytics capabilities and technology infrastructure.

Though it is an attractive market for insurers, it is challenging for many policyholders, who are relatively unhappy with their homeowners insurance experience due to the difficulty of buying a policy, long time to bind, poor coverage and pricing options, and a frustrating claims experience. As a result, we believe insurance carriers that can improve on the policyholder experience have the opportunity to gain meaningful market share.

Key Trends in the U.S. Homeowners Insurance Market

The role of technology in the insurance process is increasing due to wider access to data, new tech-driven solutions, and increased demand for digital options. In addition to easy-to-use and accessible interfaces for agents and consumers, the process of collecting data, pricing, underwriting policies, and managing claims is also transforming in a digital environment.

Availability and application of big data is increasing

We believe the availability of third party data and the increased speed to analyze that data to better price, underwrite, and process claims offers a tremendous opportunity. However, adoption of technology has been slow within the industry because of the time, cost, and risk associated with replacing legacy systems and redesigning data infrastructure, keeping many home insurers dependent on lower quality data to power their underwriting and pricing models.

Most homeowners insurance is still sold through agents

The overwhelming majority (over 90%) of homeowners insurance policies are sold through agents, based on a recent report from McKinsey & Company, with direct-to-consumer distribution still a relatively new channel representing a very small percentage of overall insurance sales.

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Experience has taught us the importance of agents to the insurance value chain, particularly in homeowners insurance, where agents have embedded themselves in the home buying transaction. A home is often a policyholder’s largest individual asset, and agents’ guidance in fully understanding their risk profile and options can be invaluable when determining the proper coverage. Homeowners insurance is also a very localized product due to the widely varying risk profiles of homes in different geographies.

Local agents add value to insurers through their knowledge of the market and serve as the first source of risk selection. While many insurers have continued to increase their marketing spend to attract customers directly, given the limited size of the direct-to-consumer market, we think the more efficient way to acquire policyholders right now is by establishing strong relationships with agents and agency networks that appreciate the frictionless quoting and binding process and the stability we offer the customer by pricing the policy correctly upfront.

Policyholders and agents increasingly expect an easy, efficient, and digital homeowners insurance buying and selling experience

Policyholders value a convenient and frictionless buying experience. They are frustrated by lengthy quoting processes where they have to fill out extensive upfront questionnaires and surveys (which they often don’t know the answer to) to complete the underwriting process before being told if they qualify for a policy or can get the coverage they need. For agents, time to quote and bind is a key driver of success, as it allows them to spend more time expanding their customer portfolios instead of focusing on the administrative burden of a lengthy sales process. Yet, insurance companies have struggled to improve their processes and offer better experiences for policyholders and agents.

Many agents often have to work with insurers that rely on difficult to navigate digital interfaces (or don’t have online quoting capabilities). While over 70% of agents say expectations of a digital experience have increased, legacy insurers have been slow to invest in technology to support their agents, leading 50% of agents to consider investing in digital solutions on their own.

Our Business Model

Our goal is to leverage our data analytics and technology to solve for the three key drivers of success in insurance—underwriting outcomes, agent alignment, and policyholder experience. We believe our technology advantage creates a proven and sustainable business model where high growth and profitability are not mutually exclusive.

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TypTap has grown rapidly over the last five years, as agents and prospective policyholders discover the simplicity, ease of use, and speed of our platform. In-force premiums exceeded $100 million at the end of 2020, and by September of 2021, in-force premiums exceeded $214 million, which includes $59 million of United Property & Casualty Insurance Company’s premiums, with both growth milestones achieved ahead of our announced goals. We also achieved these growth objectives without having to sacrifice our underwriting standards or profitability targets. After testing our underwriting platform in the Florida market, a relatively difficult state to profitably write homeowners insurance, we have gained confidence that the technology, underwriting algorithms, and processes that we have built differentiate us from our peers and will help us as we scale and expand nationally.

Our success is defined by our key competitive strengths—data and analytics, agent relationships, policyholder experience, and technology solutions—that have helped us create a product, experience, and financial outcome that is truly differentiated from the industry.

We use differentiated data and proprietary analytics to create better results

Our ability to use differentiated, proprietary, and high-quality data to power our underwriting models and inform risk selection is a key driver of our business model. Technology has created the opportunity for us to evolve away from making underwriting decisions at the portfolio level and towards selecting risks at the individual property level. Some traditional insurance companies are making underwriting decisions by zip code, forcing them to follow a portfolio strategy where the goal is to earn an underwriting profit on the overall portfolio of homes, but with the expectation that some of the policies will not be profitable. We have a fundamentally different strategy.

We selectively underwrite at the individual home level based on expected policy-level profitability, which allows us to only write insurance for those homes that we expect to be profitable on a standalone basis over the life of the policy. This is the core philosophy that drives our differentiated underwriting strategy. Our ability to selectively underwrite is underpinned by predictive models that estimate and compare expected claims costs for each home with total premium to determine policy-level net margin.

We systematically define houses as “green doors” (those that meet our minimum return thresholds based on the various data and risk criteria inputs run through our underwriting algorithm) or “red doors” (risks that we expect to be unprofitable and will not underwrite).

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Graphic is for illustrative purposes only and does not reflect actual underwriting decisions or ratios

Thus, TypTap enters each insurance policy with an informed, data-driven view of how the house is expected to perform prior to offering the policy. Through this probabilistic risk selection approach, TypTap aims to reduce the number of policyholders filing claims, driving an increase in profitability per policy. We have a track record of executing this strategy, achieving a loss ratio over 25 percentage points better than the industry average of 75% in 2018-2020.

We have invested heavily in the data engine that powers this underwriting model, viewing each additional variable in a home as an opportunity to create an underwriting advantage. While many insurers rely on third parties to pull all their data, we use a combination of our proprietary research and vetted third party data to build and use a more cost efficient and dependable data set.

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Our software is a dynamic algorithm that is updated at least every quarter. We rely on extensive data fields, collecting up to 1,000 data points on a home, many of which are proprietary and not widely used by competitors. For example, we use satellite imaging to identify homes with pool cages, which is not a data point collected by most home insurers but can increase claim and replacement costs considerably. We believe our data is also more specific and higher quality. We use proprietary research to validate all third party data and vet data vendors, as well as track and flag missing property attributes for additional data sourcing.

While other insurers could potentially develop the data architecture to mine much of the same data we do, our advantage is in knowing how to use data to improve risk selection and pricing, as seen by the outperformance of our gross loss ratio relative to our closest peers. Through extensive testing and quarterly recalibrating of our models, we have determined which data points are predictive, how much weight to assign to each metric, and which characteristics are reliable—allowing us to use data in a differentiated way.

We also leverage our data sources to continuously improve our machine learning and AI-enabled underwriting algorithm through an iterative and real-time analytic process based on the flow of data from our policyholders and claims. We leverage claims data from each loss event to identify factors associated with higher risk homes and refine our data collection and risk selection algorithms to emphasize these factors. Our flexible architecture facilitates the introduction of these new data points. We also use longitudinal data to track the evolution of data fields over time, understand historical trends, and better train our underwriting and pricing models.

We empower independent insurance agents to create a better insurance purchasing experience

Insurance—and homeowners insurance in particular—is a nuanced and highly personal product, requiring extensive knowledge and experience. Agents have this industry expertise, making them an ideal partner to match customers with our underwriting standards. We recognize the key role that agent distribution plays in our business model and have designed our platform with this dynamic in mind, as we believe that creating strong alignment between us and our independent agents will drive better results and a stronger operating model over time. We believe that a timely quote and bind process also enables agents to get a higher “close” rate.

Our instant quote technology has streamlined the underwriting process, allowing agents to provide customers with a quote in minutes, which is highly valued by agents deciding which carrier to go to first with a new potential policy. Our easy-to-use digital agent portal generates quotes based on a few, simple questions and takes less than 1 minute to quote and 5 minutes to bind a policy. The technology is also able to quickly determine when a home does not qualify for our coverage, ensuring agents don’t spend time inputting information for customers who are not a good fit under our underwriting standards.

Our technology liberates agents, empowering them to focus on building and maintaining enduring client relationships without compromising quality coverage. This overall positive experience drives agent adoption, elevates agent retention rates, and increases sales of TypTap policies. The stability of our coverage and rates—because we carefully select and price policies right the first time—and our claims management also drive higher policy retention, decreasing the probability of agents losing business after they’ve placed it with us. It also limits the time agents spend helping policyholders that have an issue with their policy.

We also utilize competitive commissions as a key component of our agent distribution strategy. When combined with our easy-to-use digital interface and fast quote-to-bind capabilities, we view our commission structure as an effective tool to create an alignment of interest with our agents.

We have designed our platform for a better policy-holder experience, with ease of use in mind

Our online quoting platform is designed for an efficient insurance purchasing experience, prompting the agent to ask a prospective homeowners policyholder 4-8 questions before coming to a speedy underwriting and pricing decision. We pull data on an address and run it through our algorithm without asking the policyholder for home details that they may not know (and are potentially incentivized to misreport), keeping the process as easy as possible on their end.

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Our advanced claims technology tracks claims data in real time, ensuring an efficient claims adjustment process that allows for accurate and timely payment of claims to the policyholder. Since inception, we have experienced five hurricane seasons in Florida and processed over 4,400 claims.

We have developed fully integrated technology solutions to better manage the end-to-end insurance process

Our integrated technology infrastructure allows us to efficiently manage various processes across our platform, improve real time visibility, lower costs, and accelerate our growth as we scale.

We have designed and developed our platform to cohesively integrate each of our technology solutions with one another, creating a proprietary full-stack insurance platform that allows us to manage the complete insurance process, from underwriting and quoting to claims management.

As highlighted above, the first key component of our technology advantage is our underwriting platform, which is differentiated by our big data architecture, AI and analytics, and risk selection and pricing models. Our data-driven analytical underwriting is supported by a fully integrated infrastructure strategy, from agent distribution on the front end to claims management at the back end.

Our quoting technology and tech-forward user interfaces improve the insurance buying experience for policyholders, drive frictionless agent enablement, offer real-time data-driven insights for reinsurers, and increase retention.

We are also heavily focused on claims management. Despite our best efforts to carefully select risks to minimize claims incidence, losses will still occur, and we have designed a scalable, responsive, and efficient claims system to handle them when they do.

We have a dedicated data team that monitors weather patterns to manage claims. Following a major weather event, the team preliminarily scores damage based on risk within twelve hours of impact and uses our claims visualization technology to preemptively open claims, even before the homeowner has the opportunity to evaluate their potential loss. We have also developed a routing map for field adjusters to ensure they can attend to claims efficiently. This allows us to allocate our resources effectively. All of this ensures a better claims experience for our customers and drives high retention. Our claims technology also provides real time claims visibility and is available to our reinsurers, resulting in transparent reinsurance relationships.

No component of the insurance process works in isolation, so developing a comprehensive platform that integrates each solution, including agent adoption, policy design, underwriting and pricing, claims management, and policy administration, has allowed us to achieve a sustainable competitive advantage that offers better outcomes for all parties and is difficult to copy.

The power of the flywheel

Each of our four key competitive strengths—data, agent empowerment, policyholder experience, and technology—work together to power a flywheel that differentiates us from competitors and drives the sustainable, profitable growth of our business. Our data advantage and AI-enabled analytical processes lead to better risk selection and more accurate pricing, and our real time claims technology leads to lower claims adjustment costs—all of which drive better underwriting results. This allows us to offer competitive commissions to our agents and invest more in digital tools and technology to enable a more efficient quoting experience. This combination of ease of use and an aligned economic model incentivizes agents to give us the “first look” when quoting a prospective policyholder.

Getting the first look at policies allows us to run the risk through our underwriting model, accelerating our flywheel. We have achieved this flywheel effect at scale with limited invested capital due to our capital efficient model—which is possible because of the underwriting profitability that the flywheel enables.

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Our Growth Strategies

Expand nationally and increase our underwriting footprint

The $110 billion U.S. homeowners insurance market is a massive opportunity to expand our business by extending our underwriting footprint in the U.S. With a multi-year track record of refining our technology platform and underwriting capabilities, we think now is the time to embark on a nationwide expansion plan.

It was intentional that we wrote our first policies in one of the largest and most complex homeowners insurance markets. By initially launching our risk selection technology and data engine in Florida, we were able to use this complex market to improve our AI-enabled underwriting. Our successful track record in Florida adds credibility to our underwriting process and gives us high confidence that it will continue to work and be a source of competitive advantage as we expand into other states.

As of October 2021, we are writing policies in seven states (Florida, Georgia, South Carolina, Connecticut, Nevada, Utah, and Rhode Island). Our plan is to be writing policies in 10 or more states by the end of 2021 and in 20 states by the end of 2022. As of October 2021, we have licenses in 18 states, including Florida, and have a pending application in Illinois.

We have been strategic in selecting which states to expand to first, factoring multiple considerations into our expansion strategy, including market size, premium levels, average loss ratios, ease of securing licenses, and agent networks, with the goal of achieving profitability on a state-by-state basis. We have also chosen states that are spread across the U.S. to get access to diverse sets of data and attributes to continue refining our underwriting models.

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The map below outlines our expansion strategy in different phases:

Continue to on-board new independent insurance agents to nationwide independent agent distribution network

As we enter into new geographical markets, on-boarding new independent agents and establishing distribution relationships will be key to supporting growth. We have experience building out our independent agent force from the ground up when we started in Florida and are confident in our ability to do the same as we enter new states. Since our expansion outside Florida, we have recruited 331 non-Florida independent agents as of October 31, 2021, compared to 170 non-Florida independent agents as of June 30, 2021.

We are leveraging our existing relationships with national independent insurance agencies such as Goosehead, Brightway, and WeInsure to gain access to agents in new states. In addition, in Connecticut, New Jersey, Massachusetts and Rhode Island, we gained access to approximately 1,100 independent agents from the transaction to ultimately transfer United’s northeast region business to TypTap and its affiliates.

We pay commissions to independent agents when they bind a new insurance policy and when the policy is renewed. The commissions are based on competitive elements that vary by geography and the time the policy is in force, and in some geographic regions we pay a commission on the binding of a new policy that may be higher than prevailing market rates.

We will leverage our attractive commissions and efficient, digital-driven experience to maintain our strong track record of successful independent agent engagement and acquisition.

Drive new business with high-quality existing agent network

We are selective not only in the risks we underwrite, but in the agents we choose to partner with to sell our policies. For example, we carefully selected approximately 525 agents to work with in Florida from an initial considered pool of over 1,000 agents. We continuously monitor our network of agents—by tracking system use, analyzing quoting activity and results, and evaluating agent buy-in metrics—to strengthen relationships with and direct more business to our best-performing agents while phasing out under-performing ones. The flywheel works best when our agents’ incentives are aligned with ours, and we carefully manage our agent network to ensure we work with those that are sending us quality policyholders to help us write profitable business.

Selectively pursue inorganic growth and partner to optimize third party books of business

While our focus will be on organic expansion, we will continue to look for selective opportunities to increase our scale and expand nationally through strategic transactions.

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Existing insurance companies are actively evaluating their homeowners business, including exposure to specific markets and geographies, as a result of inefficient processes and difficulty effectively utilizing technology and data to profitably underwrite risk. This activity is resulting in re-evaluation of existing portfolios either via outright disposal or renewal rights opportunities. These market trends create opportunities for TypTap to evaluate underperforming books of business and use our technology to drive better loss ratios over time. This further accelerates our national expansion and provides us access to an established agent network and important underlying data.

Our scalable technology platform and independent underwriting profitability better position us to take advantage of these opportunities relative to competitors, as we can improve profitability by non-renewing undesired risks, re-pricing, and achieving lower loss ratios. Competitors without our same data-driven underwriting advantage don’t have this same opportunity.

Our Technology-Led Solution

TypTap’s full-stack technology platforms were built with profitable underwriting and the experience of our agents and policyholders in mind.

Our technology systems were 100% internally developed, by a team of over 150 experienced IT professionals at Exzeo, TypTap’s wholly-owned technology subsidiary. The Exzeo team is split between our Tampa, Florida headquarters and our office in Noida, India.

Launched in 2012, Exzeo became the backbone to TypTap’s operations, building fully vertically integrated technology platforms that power the company’s day-to-day operations, including TypTap’s policy administration system and claims technology. Key components of TypTap’s technology platform are as follows:

• Harmony—policy administration

Harmony is the next generation policy administration platform for TypTap. This platform includes our proprietary advanced underwriting technology coupled with the efficient user experience for quoting and binding. In addition, the system provides standard policy management functionality to agents and internal TypTap users.

• AtlasViewer—mapping and data visualization

AtlasViewer is a mapping and data visualization platform. AtlasViewer allows users to map location-based data from multiple sources for a customized view of their data. The unique multilayered analysis improves decision making by providing unique insights into the data. Users can also securely share their maps and data with others, making the information instantly available to all invited users.

• CasaClue—property information database

CasaClue is our property information database system containing residential property data points important to underwriting residential homeowners and flood insurance. The property data is sourced and aggregated from internal and third-party sources. CasaClue is the provider of data to our policy administration system.

• ClaimColony—claims management

ClaimColony is an end-to-end claims management platform used by our teams, third-party administrators, independent adjusters, and insurance litigation services. Its unique capabilities include customizable workflows, real-time reporting, vendor management, and the ability to efficiently handle high claim volume. ClaimColony supports the entire claim lifecycle and also provides accounting and bookkeeping support as well as rich integration capabilities with policy administration systems such as Harmony.

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• JustEZ—field adjuster management

JustEZ is a field adjuster management application, which was developed with the purpose of helping our adjusters complete claim inspections faster and more efficiently. JustEZ enables adjusters to sync claims and appointments to their devices, schedule appointments with policyholders, build final scoping reports, use our AI-based photo captioning technology, and seamlessly import photos and video from their device to our app.

Each of these technology solutions is interconnected and vertically integrated, creating a seamless experience for agents and policyholders and profitable risk selection.

Sales and Marketing

We currently acquire a majority of our policyholders through the independent agency channel and have partnerships with both national franchises, such as Goosehead, Brightway, and WeInsure, and regional agency networks. As we expand into new states, our strategy focuses on leveraging our existing independent agent network, as well as establishing new relationships through partnership opportunities (such as independent agent associations) and through our dedicated marketing team with a presence in our expansion states.

Capital Management and Reinsurance

TypTap was built to be capital efficient rather than capital light. To manage our risk exposure and capital requirements, we primarily buy excess of loss reinsurance to transfer balance sheet and income volatility that may arise due to large catastrophe events to our reinsurance partners. In exchange for this reduction of volatility our reinsurance partners earn a profit over a multi-year time horizon. We have never lost money for our reinsurers—meaning that we have given away some of our profit in exchange for reducing the overall volatility and capital requirements of our portfolio. We see reinsurance as a symbiotic relationship in which both parties need to prosper in order for the relationship to be successful over time.

TypTap’s Florida reinsurance program provides coverage up to approximately $450 million per single catastrophic event, excluding flood losses, and total coverage up to approximately $640 million. Outside of Florida, TypTap’s reinsurance program provides coverage up to $575 million for catastrophic losses in a single event, excluding flood losses, with total coverage of $1.14 billion.

TypTap has received capital support from HCI Group and Centerbridge Partners, L.P. (“Centerbridge”) to fund its operations. In the aggregate, the company has received total capital contributions of $177 million. In February 2021, a fund affiliated with Centerbridge Partners, L.P. invested $100 million in TypTap Insurance Group. In exchange for its investment, Centerbridge received from TypTap preferred shares with liquidation, dividend, redemption, and other rights and received from HCI Group a four-year warrant to purchase 750,000 HCI common shares at a price of $54.40 per share. Under a Shareholders Agreement among Centerbridge, TypTap, and HCI that will terminate upon the completion of our initial public offering, Centerbridge is also entitled to appoint one director to both HCI’s and TypTap’s board of directors.

Competitive Environment

The homeowners insurance industry in which we operate is highly competitive. We currently compete against a variety of regional and digital-based homeowners insurance carriers in our current markets. Based on our on-going expansion efforts, we will begin to compete against well-established national brands such as State Farm, Allstate, Farmers, Liberty Mutual, and Travelers. Further, we expect to also compete with new technology-led insurance companies that operate in our markets and are utilizing technology to differentiate themselves from larger well-established national insurers such as Lemonade, Hippo, Kin, and Openly.

We believe we compete favorably because of our comprehensive, all-in-one technology platform, our data-driven approach to underwriting, and our independent agent flywheel model.

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Human Capital Management

As of September 30, 2021, we employed a total of 276 full-time individuals, including 167 employees in the U.S. None of our employees are represented by a labor union. We believe we maintain strong relations with our employees.

Work Environment

We adhere to a harassment prevention policy which details how to report and respond to harassment issues and prohibits any form of retaliation. This includes mandatory harassment prevention training for all employees.

We are committed to paying a living wage to all of our full-time employees. We offer competitive benefits to our employees including alternative plans for health coverage and short-term and long-term disability insurance at no cost to the employee. We also award restricted stock to certain of our employees to align their interests with shareholder interests.

Additionally, our Bravo program allows employees to earn paid time off as well as cash bonuses for engaging in charitable causes, continued education, and professional development activities.

Diversity

We value a diverse and inclusive work environment. Our workforce comprises individuals of many races, religions, and national origins, and our policies forbid any form of discrimination based upon race, color, religion, sex, national origin, age, disability, or any other characteristic protected by federal, state, or local law.

Our board of directors is highly diverse in terms of gender, ethnicity, culture, education, and business backgrounds, and our U.S.-based workforce is approximately 56% female and 27% non-white.

Geographic Scope of Business

As of October 2021, we are writing policies in seven states (Florida, Georgia, South Carolina, Connecticut, Nevada, Utah and Rhode Island). Our plan is to be writing policies in 10 or more states by the end of 2021 and in 20 states by the end of 2022. As of October 2021, we have licenses in 18 states, including Florida, and have a pending application in Illinois.

Legal Proceedings

We are subject to routine legal proceedings in the normal course of operating our insurance business. We are currently not involved in any legal proceedings which reasonably could be expected to have a material adverse effect on our business, results of operations or financial condition.

Corporate History and Structure

TypTap Insurance Group, Inc. is a majority owned subsidiary of HCI (NYSE: HCI). HCI is a Florida corporation and publicly traded company with operations in homeowners insurance, reinsurance, real estate, and information technology. After an incubation process started in 2016 that formed TypTap Insurance Company, TypTap Insurance Group was organized in Florida by HCI in July 2020 as a wholly owned subsidiary of HCI for the purpose of serving as a holding company for HCI’s interests in TypTap Insurance Company and other related HCI subsidiaries. In October 2020, HCI contributed its stock in TypTap Insurance Company and the following HCI subsidiaries to TypTap Insurance Group: (i) TypTap Management Company, a Florida corporation that supports TypTap Insurance Company by managing, among other things, claims processing, policyholder service, and marketing; (ii) Exzeo USA, Inc., a Florida corporation focused on developing software products to modernize the insurance industry; and (iii) Cypress Tech Development Company, Inc., a Florida corporation

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which also owns Exzeo Software Private Limited, a subsidiary domiciled in India. Following this offering, TypTap Insurance Group will continue to be majority owned by HCI but will be managed and operated primarily as an independent public company.

The chart below displays the structure described above and the ownership of outstanding common stock of TypTap as of October 31, 2021 after giving effect to the offering:

Overview of HCI Group, Inc.

HCI Group Inc. is a Florida-based company that was incorporated in 2006 and went public through an initial public offering in 2008. HCI Group owns subsidiaries engaged in diverse yet complementary business activities, including homeowners insurance, reinsurance, real estate, and information technology services. The company sells its property and casualty insurance products through two insurance subsidiaries: Homeowners Choice Property & Casualty Insurance Company, Inc. (“Homeowners Choice”) and TypTap Insurance Company. Homeowners Choice was incorporated and began operation in 2007, and TypTap Insurance Company was incorporated and began operations in 2016.

Planned separation from HCI

Prior to this offering, HCI Group began the process of reorganizing its insurance operations, Homeowners Choice and TypTap Insurance Company, as separate business units with independent management teams. TypTap Insurance Group, Inc. was organized in mid-2020 as a holding company for the TypTap insurance and Exzeo technology subsidiaries. In order to create separate entities, separate management teams and separate board of directors were also created for HCI Group and TypTap.

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Subsequent to the business unit separation, TypTap staffed its own roles in underwriting, finance, human resources, and other corporate functions with select HCI employees who transferred to dedicated TypTap positions, as well as a number of new hires. All Exzeo employees are housed within the TypTap organization. TypTap and Homeowners Choice operate in separate office buildings in Tampa, Florida. As such, TypTap has operated as a separate standalone business since March 2021.

Following this offering, TypTap will continue to license its underwriting and claims technology to Homeowners Choice and utilize and leverage HCI’s existing claims infrastructure. Both of these arrangements are governed by contracts between the appropriate parties. If, in the future, TypTap decides to build its own claims organization, TypTap has the option to end its contract with HCI Group’s claims management subsidiary. Otherwise, all commercial contracts with third-parties were restructured to treat TypTap and HCI Group as separate entities.

Due to the reorganization, TypTap Insurance Company and Homeowners Choice secured separate reinsurance coverage related to business in Florida for the 2021-2022 reinsurance year. For business outside of Florida, TypTap Insurance Company and Homeowners Choice secured combined coverage, which will remain intact following this offering.

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REGULATION

Insurance Regulation

We are regulated by insurance regulatory authorities in the states in which we operate. State insurance laws and regulations generally are designed to protect the interests of customers, consumers, and claimants rather than shareholders or other investors. The nature and extent of state regulation varies by jurisdiction, and state insurance regulators generally have broad administrative power with respect to all aspects of the insurance business. The regulatory requirements and restrictions include, among others, the following:

• the content and timing of required notices and other policyholder information;

• the amount of premiums the insurer may write in relation to its surplus;

• the amount and nature of reinsurance a company is required or permitted to purchase;

• participation in guaranty funds and other statutorily created markets or organizations;

• business operations and claims practices;

• approval of policy forms and premium rates;

• standards of solvency, including risk-based capital measurements;

• licensing of insurers and their products;

• restrictions on the nature, quality and concentration of investments;

• restrictions on the ability of insurance company subsidiaries to pay dividends to their holding companies;

• restrictions on transactions between insurance companies and their affiliates;

• restrictions on the size of risks insurable under a single policy;

• requiring deposits for the benefit of policyholders;

• requiring certain methods of accounting;

• periodic examinations of our operations and finances;

• the form and content of records of financial condition required to be filed; and

• the level of loss and loss adjustment expense reserves that must be maintained by insurers.

Regulation of insurance companies constantly changes as governmental agencies and legislatures react to real or perceived issues. In recent years, the state insurance regulatory framework has come under increased federal scrutiny, and some state legislatures have considered or enacted laws that alter and, in many cases, increase, state authority to regulate insurance companies and insurance holding company systems. Further, the National Association of Insurance Commissioners (the “NAIC”) (and some state insurance regulators) continue to re-examine existing laws and regulations specifically focusing on issues relating to the solvency of insurance companies, interpretations of existing laws and the development of new laws. Although the federal government is not the primary regulator of the business of insurance, federal initiatives often affect the insurance industry in a variety of ways. In addition, the Federal Insurance Office (the “FIO”) was established within the U.S. Department of the Treasury by the Dodd-Frank Act in July 2010 to monitor all aspects of the insurance industry. Although the FIO has no express regulatory authority over insurance companies or other insurance industry participants, it has the ability to recommend to the Financial Stability Oversight Council the designation of an insurer as “systemically significant” and therefore subject to regulation by the Board of Governors of the Federal Reserve System (the “Federal Reserve”) as a bank holding company.

Required Licensing

Our regulated subsidiary is domiciled and admitted in the state of Florida to transact certain lines of property insurance. TypTap Insurance Company’s Florida license is in good standing, and, pursuant to applicable Florida laws and regulations, will continue in force unless otherwise suspended, revoked, or otherwise terminated, subject to certain conditions.

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TypTap Insurance Company must apply for and maintain a license to sell insurance in those jurisdictions in which it transacts its insurance business, including Florida (its domiciliary state), Connecticut, Nevada, Georgia, Rhode Island, South Carolina and Utah. TypTap Insurance Company is additionally licensed in Arkansas, Indiana, Iowa, New Jersey, Massachusetts, Michigan, Mississippi, Montana, South Dakota, New Mexico and West Virginia, although it does not currently sell insurance in these states.

The Florida Office of Insurance Regulation conducts on-site visits and examinations of the financial affairs and market conduct condition of TypTap Insurance Company, including its financial condition, its relationships and transactions with affiliates, and its dealings with customers, generally every five years. Insurance regulatory authorities have broad administrative powers to restrict or revoke licenses to transact business against insurers and insurance agents and brokers found to be in violation of applicable laws and regulations.

Insurance Holding Company Regulation

Many states, including the state of Florida (where our regulated insurance subsidiary is domiciled), have enacted legislation or adopted regulations regarding insurance holding company systems. These laws require registration of and periodic reporting by insurance companies domiciled within the jurisdiction which control or are controlled by other corporations or persons so as to constitute an insurance holding company system. Because TypTap Insurance Company is a Florida insurance company, we are subject to Florida law governing insurance holding companies, which requires that each insurance company in the system register with the insurance department of its state of domicile and furnish information concerning the operations of companies within the holding company system that may materially affect the operations, management, or financial condition of the insurers within the system and domiciled in that state. The statute also provides that all transactions among members of a holding company system must meet the following: (i) the terms must be fair and reasonable; (ii) charges or fees must be reasonable; and (iii) expenses incurred and payments received must be allocated on an equitable basis in conformity with customary insurance accounting practices consistently applied. Transactions between insurance subsidiaries and their parents and affiliates generally must be disclosed to the state regulators, and notice to or prior approval of the applicable state insurance regulator generally is required for any material or extraordinary transaction.

Changes of Control

Before a person can acquire control of a U.S. domestic insurer, prior written approval must be obtained from the insurance commissioner of the state where the insurer is domiciled, or the acquiror must make a disclaimer of control filing with the insurance department of such state, which filing must be accepted by such insurance department. Generally, state insurance statutes provide that control over a domestic insurer is presumed to exist if any person, directly or indirectly, owns, controls, holds with the power to vote, or holds proxies representing, 10% or more of the outstanding voting securities of the domestic insurer. This statutory presumption of control may be rebutted by a showing that control does not exist in fact. The state regulators, however, may find that “control” exists in circumstances in which a person owns or controls less than 10% of the voting securities of the domestic insurer.

As TypTap Insurance Company is domiciled in Florida, the insurance laws and regulations of Florida would be applicable to any proposed direct or indirect acquisition of control of TypTap Insurance Company. Under Florida law, generally no person may acquire a controlling interest, whether by purchase of 10% or more of TypTap Insurance Company’s or our (as its parent company) voting securities or otherwise, unless the acquiring person gives prior notice to the insurer and has received prior approval from the Florida Office of Insurance Regulation. Under Florida insurance law, an entity is presumed to have control of an insurance company if it owns, directly or indirectly, 10% or more of the voting stock of that insurance company or its parent company.

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These requirements pertaining to an acquisition of control of an insurance company may discourage potential acquisition proposals and may delay, deter, or prevent a change of control of us, including through transactions that some or all of our shareholders might consider to be desirable. Such regulations may also inhibit our ability to acquire an insurance company should we wish to do so in the future.

Restrictions on Paying Dividends

We are a holding company that transacts all of our business through operating subsidiaries. Consequently, our ability to pay dividends to shareholders is largely dependent on dividends and other distributions from our subsidiaries. Applicable insurance laws restrict the ability of our regulated insurance subsidiary to declare shareholder dividends. Applicable insurance regulators require insurance companies to maintain specified levels of statutory capital and surplus. Under Florida law, TypTap Insurance Company may not declare or distribute any dividend to shareholders except out of earned surplus (as defined under Florida law). Additionally, without obtaining prior written approval of Florida Office of Insurance Regulation, TypTap Insurance Company may not declare or distribute any dividend to shareholders which exceeds the larger of: (a) the lesser of ten percent of surplus or net income, not including realized capital gains, plus a 2-year carryforward; (b) ten percent of surplus, with dividends payable constrained to unassigned funds minus 25 percent of unrealized capital gains; or (c) the lesser of ten percent of surplus or net investment income plus a 3-year carryforward with dividends payable constrained to unassigned funds minus 25 percent of unrealized capital gains.

Insurance regulators have broad powers to prevent reduction of statutory surplus to inadequate levels, and there is no assurance that dividends of the maximum amounts calculated under any applicable formula would be permitted. State insurance regulatory authorities that have jurisdiction over the payment of dividends by our regulated insurance subsidiary may in the future adopt statutory provisions more restrictive than those currently in effect.

Investment Regulation

TypTap Insurance Company is subject to Florida insurance laws which generally require diversification of our investment portfolios and limits on the amount of our investments in certain categories. Failure to comply with these laws and regulations would cause non-conforming investments to be treated as non-admitted assets for purposes of measuring statutory surplus and, in some instances, would require us to sell those investments.

Licensing of our Employees and Adjusters

In certain states in which we operate, insurance claims adjusters are required to be licensed and some must fulfill annual continuing education requirements. In most instances, our employees who are negotiating coverage terms are underwriters and are not required to be licensed agents. As of September 30, 2021, 51 employees of TypTap Management Company were required to maintain and did maintain requisite licenses for these activities in the applicable states in which we operate.

Enterprise Risk, Cybersecurity, and Other Recent Developments

The NAIC has engaged in a concerted effort to strengthen the ability of U.S. state insurance regulators to monitor U.S. insurance holding company groups. Among other things, the NAIC’s model, when adopted, requires the ultimate controlling person of an insurance company to submit an annual enterprise risk management report that describes the risk that an activity, circumstance, event, or series of events involving one or more affiliates of an insurer will, if not remedied promptly, be likely to have a material adverse effect upon the financial condition or liquidity of the insurer or its insurance holding company system as a whole. In addition, in some states, including New York, any person divesting control over an insurer must provide 30 days’ notice to the regulator and the insurer. The amendments direct the domestic state insurance regulator to determine those instances in which a divesting person will be required to file for and obtain approval of the transaction. More recently, the NAIC has developed model laws requiring annual reports concerning the nature of corporate governance within an insurance holding company.

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In 2012, the NAIC adopted the Risk Management and Own Risk and Solvency Assessment (“ORSA”) Model Act to require domestic insurers to maintain a risk management framework and establishes a legal requirement for domestic insurers to conduct an ORSA in accordance with the NAIC’s ORSA Guidance Manual. The ORSA Model Act provides that domestic insurers, or their insurance group, must regularly conduct an ORSA consistent with a process comparable to the ORSA Guidance Manual process. The ORSA Model Act also provides that, no more than once a year, an insurer’s domiciliary regulator may request that an insurer submit an ORSA summary report, or any combination of reports that together contain the information described in the ORSA Guidance Manual, with respect to the insurer and the insurance group of which it is a member.

Additionally, in response to the growing threat of cyber-attacks in the insurance industry, certain jurisdictions have begun to consider new cybersecurity measures, including the adoption of cybersecurity regulations. On October 24, 2017, the NAIC adopted its Insurance Data Security Model Law, intended to serve as model legislation for states to enact in order to govern cybersecurity and data protection practices of insurers, insurance agents, and other licensed entities registered under state insurance laws. Alabama, Connecticut, Delaware, Indiana, Louisiana, Maryland, Michigan, Mississippi, New Hampshire, Ohio, South Carolina, and Virginia have adopted versions of the NAIC Insurance Data Security Model Law, each with a different effective date. TypTap Insurance Company takes steps to comply with financial industry cybersecurity regulations and believes it is materially compliant with their requirements.

See “Risk Factors—Risks Relating to Our Business—New legislation or legal requirements may affect how we communicate with our customers, which could have a material adverse effect on our business, financial condition, and results of operations.”

Federal and State Legislative and Regulatory Changes

The U.S. federal government’s oversight of the insurance industry was expanded under the Dodd-Frank Act with the establishment of the FIO in the U.S. Department of the Treasury. Although FIO has little actual regulatory power, it has the authority to monitor all aspects of the insurance sector and to represent the United States on prudential aspects of international insurance matters, including at the International Association of Insurance Supervisors (the “IAIS”). In addition, the FIO serves as an advisory member of the Financial Stability Oversight Council, assists the secretary of the U.S. Department of the Treasury with administration of the Terrorism Risk Insurance Program, and advises the secretary of the U.S. Department of the Treasury on important national and international insurance matters. In addition, the FIO has the ability to recommend to the Financial Stability Oversight Council the designation of an insurer as “systemically significant” and therefore subject to regulation by the Federal Reserve as a bank holding company.

In addition, a number of federal laws affect and apply to the insurance industry, including various privacy and data protection laws, the Fair Credit Reporting Act (“FCRA”), and the economic and trade sanctions implemented by the Office of Foreign Assets Control (“OFAC”) of the U.S. Department of the Treasury. OFAC maintains and enforces economic sanctions against certain foreign countries and groups and prohibits U.S. persons from engaging in certain transactions with certain persons or entities. OFAC has imposed civil penalties on persons, including insurance and reinsurance companies, arising from violations of its economic sanctions program.

Federal and state laws and regulations require insurers and other financial institutions to protect the security and confidentiality of non-public personal information and to notify customers and other individuals about their policies and practices relating to their collection and disclosure of customer information and their practices relating to protecting the security and confidentiality of that information. In addition, the NAIC has promulgated a model law on insurance data security in 2017, and many states have adopted their own insurance data security laws that reflect, in whole or in part, this model law. Some other states have adopted, and additional states might adopt, data security regulations that differ from the NAIC’s model law or from laws that have been enacted to date in other states. Federal and state lawmakers and regulators may consider or impose additional or more

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detailed regulation regarding data security and cybersecurity applicable to businesses in general, to financial institutions, or to the insurance industry specifically, each of which could impact our business and customers.

Trade Practices

The manner in which insurance companies and insurance agents and brokers conduct the business of insurance is regulated by state statutes in an effort to prohibit practices that constitute unfair methods of competition or unfair or deceptive acts or practices. Prohibited practices include, but are not limited to, disseminating false information or advertising, unfair discrimination, rebating and false statements. Our regulated insurance subsidiary sets business conduct policies and provide training to make our employee-agents and other sales personnel aware of these prohibitions, and requires them to conduct their activities in compliance with these statutes.

Unfair Claims Practices

Generally, insurance companies, adjusting companies, and individual claims adjusters are prohibited by state statutes from engaging in unfair claims practices. Unfair claims practices include, but are not limited to, misrepresenting pertinent facts or insurance policy provisions; failing to acknowledge and act reasonably promptly upon communications with respect to claims arising under insurance policies; and attempting to settle a claim for less than the amount to which a reasonable person would have believed such person was entitled. Our regulated insurance subsidiary sets business conduct policies to make claims adjusters aware of these prohibitions, and requires them to conduct their activities in compliance with these statutes.

Credit for Reinsurance

State insurance laws permit U.S. insurance companies, as ceding insurers, to take financial statement credit for reinsurance that is ceded, so long as the assuming reinsurer satisfies the state’s credit for reinsurance laws. There are several different ways in which the credit for reinsurance laws may be satisfied by an assuming reinsurer, including being licensed in the state, being accredited in the state, or maintaining certain types of qualifying collateral. We ensure that all of TypTap Insurance Company’s reinsurers qualify for TypTap Insurance Company to be able to take full financial statement credit for its reinsurance.

Periodic Financial and Market Conduct Examinations

The insurance regulatory authority in the state of Florida, TypTap Insurance Company’s state of domicile, conducts on-site visits and examinations of the financial affairs and market conduct condition of TypTap Insurance Company, including its financial condition, its relationships and transactions with affiliates, and its dealings with customers, generally every five years, and may conduct special or targeted examinations to address particular concerns or issues at any time. Insurance regulators of other states in which TypTap Insurance Company is licensed may also conduct examinations. The results of these examinations can give rise to regulatory orders requiring remedial, injunctive, or other corrective action. Insurance regulatory authorities have broad administrative powers to regulate trade practices, and to restrict or revoke licenses to transact business and to levy fines and monetary penalties against insurers and insurance agents, and brokers found to be in violation of applicable laws and regulations.

Insolvency Funds and Associations, Mandatory Pools, and Insurance Facilities

Most states require admitted property and casualty insurance companies to become members of insolvency funds or associations which generally protect customers against the insolvency of the admitted insurance companies. Members of the fund or association must contribute to the payment of certain claims made against insolvent insurance companies through annual assessments. The annual assessments required in any one year will vary from state to state, and are subject to various maximum assessments per line of insurance.

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Risk-based Capital

Risk-based capital laws are designed to assess the minimum amount of capital that an insurance company needs to support its overall business operations and to ensure that it has an acceptably low expectation of becoming financially impaired. State insurance regulators use risk-based capital to set capital requirements, considering the size and degree of risk taken by the insurer and taking into account various risk factors including asset risk, credit risk, underwriting risk, and interest rate risk. As the ratio of an insurer’s total adjusted capital and surplus decreases relative to its risk-based capital, the risk-based capital laws provide for increasing levels of regulatory intervention culminating with mandatory control of the operations of the insurer by the domiciliary insurance department at the so-called mandatory control level. Florida has adopted the model legislation promulgated by the NAIC pertaining to risk-based capital, and requires annual reporting by Florida-domiciled insurers to confirm that the minimum amount of risk-based capital necessary for an insurer to support its overall business operations has been met. Florida-domiciled insurers falling below a calculated threshold may be subject to varying degrees of regulatory action. Failure to maintain risk-based capital at the required levels could adversely affect the ability of TypTap Insurance Company to maintain the regulatory approvals necessary to conduct its business. As of December 31, 2020, TypTap Insurance Company maintained a risk-based capital level of 346%.

Iris Ratios

The NAIC Insurance Regulatory Information System (“IRIS”) is a collection of analytical tools designed to provide state insurance regulators with an integrated approach to screening and analyzing the financial condition of insurance companies operating in their respective states. IRIS consists of two phases: statistical and analytical. In the statistical phase, the NAIC database generates key financial ratio results based on financial information obtained from insurers’ annual statutory statements. The statistical phase highlights those insurers that merit the highest priority in the allocation of the state insurance regulators’ resources. The ratios are not, in themselves, indicative of adverse financial condition. The analytical phase is a review of the annual statements, financial ratios, and other automated solvency tools. An insurance company may fall out of the usual range for one or more ratios for any number of reasons. The primary goal of the analytical phase is to identify companies that appear to require immediate regulatory attention. Our insurance company, TypTap Insurance Company, had three unusual IRIS financial ratio results in 2019 and four in 2020; however, we have received no inquiries from its domestic insurance regulator regarding these results. Unusual IRIS ratios could adversely affect TypTap Insurance Company’s ability to be licensed in other states.

Statutory Accounting Principles

Statutory accounting principles (“SAP”) are a basis of accounting developed by U.S. insurance regulators to monitor and regulate the solvency of insurance companies. In developing SAP, insurance regulators were primarily concerned with evaluating an insurer’s ability to pay all its current and future obligations to customers. As a result, statutory accounting focuses on conservatively valuing the assets and liabilities of insurers, generally in accordance with standards specified by the insurer’s domiciliary jurisdiction. Uniform statutory accounting practices are established by the NAIC and generally adopted by regulators in the various U.S. jurisdictions. These accounting principles and related regulations determine, among other things, the amounts our regulated insurance subsidiary may pay to us as dividends and differ somewhat from GAAP principles, which are designed to measure a business on a going-concern basis. GAAP gives consideration to matching of revenue and expenses and, as a result, certain expenses are capitalized when incurred and then amortized over the life of the associated policies. The valuation of assets and liabilities under GAAP is based in part on best estimate assumptions made by the insurer. Stockholders’ equity represents both amounts currently available and amounts expected to emerge over the life of the business. As a result, the values for assets, liabilities, and equity reflected in financial statements prepared in accordance with GAAP may be different from those reflected in financial statements prepared under SAP. We cannot predict whether or when regulatory actions may be taken that could adversely affect us or the operations of our regulated insurance subsidiary. Interpretations of regulations by regulators may change and statutes, regulations and interpretations may be applied with retroactive effect, particularly in areas such as accounting or reserve requirements.

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Rate and Form Regulation

Nearly all states have insurance laws requiring personal property and casualty insurers to file rating plans, policy or coverage forms, and other information with the state’s regulatory authority. In many cases, such rating plans, policy forms, or both must be approved prior to use.

The speed with which an insurer can change rates in response to competition or increasing costs depends, in part, on whether the rating laws are (i) prior approval, (ii) file-and-use, or (iii) use-and-file laws. In states having prior approval laws, the regulator must approve a rate before the insurer may use it. In states having file-and-use laws, the insurer does not have to wait for the regulator’s approval to use a rate, but the rate must be filed with the regulatory authority prior to being used. A use-and-file law requires an insurer to file rates within a certain period of time after the insurer begins using them. Eighteen states, including California and New York, have prior approval laws. Under all three types of rating laws, the regulator has the authority to disapprove a rate filing.

An insurer’s ability to adjust its rates in response to competition or to changing costs is dependent on an insurer’s ability to demonstrate to the regulator that its rates or proposed rating plan meets the requirements of the rating laws. In those states that significantly restrict an insurer’s discretion in selecting the business that it wants to underwrite, an insurer can manage its risk of loss by charging a rate that reflects the cost and expense of providing the insurance. In those states that significantly restrict an insurer’s ability to charge a rate that reflects the cost and expense of providing the insurance, the insurer can manage its risk of loss by being more selective in the type of business it underwrites. When a state significantly restricts both underwriting and pricing, it becomes more difficult for an insurer to maintain its profitability.

From time to time, the personal lines insurance industry comes under pressure from state regulators, legislators, and special-interest groups to reduce, freeze, or set rates at levels that do not correspond with our analysis of underlying costs and expenses. We expect this kind of pressure to persist. State regulators may interpret existing law or rely on future legislation or regulations to impose new restrictions that adversely affect profitability or growth. We cannot predict the impact on our business of possible future legislative and regulatory measures regarding insurance rates.

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MANAGEMENT

Executive Officers, Directors and Key Employees

The following table sets forth information about our executive officers and directors, including their ages as of October 31, 2021. With respect to our directors, each biography includes information regarding the experience, qualifications, attributes, or skills that caused our board of directors to determine that such person should serve as a director of our company.

Name	Age	Position
Paresh Patel	59	President, Chief Executive Officer and Chairman of the Board of Directors
Kevin Mitchell	42	Executive Vice President and Director, and President of TypTap Insurance Company
Ankur Bhandari	51	Chief Financial Officer
Eric Hoffman(2)	35	Director
Irene Hurst(3)	62	Director
Robert Lopes(1)(2)	57	Director
James Macchiarola(1)(3)	72	Director
Steve Shafran(3)	63	Director
Loreen Spencer(1)(2)	56	Director

(1) Member of our audit committee.

(2) Member of our compensation committee.

(3) Member of our nominating and corporate governance committee.

The following is a brief biography of each of our executive officers, directors and key employees:

Executive officers

Paresh Patel has served as our President, Chief Executive Officer and Chairman of our board of directors since our founding in July 2020. He also currently serves as Chairman of the Board of Directors and Chief Executive Officer of HCI, our parent company. He has been a director of HCI since its inception and has served as the Chairman of its Board of Directors since May 2007. He has served as Chief Executive Officer of HCI since 2011. From 2015 to 2019, he served as President of HCI’s insurance subsidiary, Homeowners Choice Property & Casualty Insurance Company, Inc., a position he also held from 2011 to 2012. In addition, Mr. Patel is Chairman of the Board of TypTap Insurance Company, our insurance subsidiary. Mr. Patel has broad experience in technology and finance. He developed and continues to oversee development of HCI’s policy administration systems. From 2011 to 2015, he served as Chairman of the Board of First Home Bancorp, Inc., a bank holding company in Seminole, Florida, and from 2014 to December 2017 he served as Chairman of the Board of Directors of Oxbridge Re Holdings Limited, a Nasdaq-listed Cayman Islands reinsurance holding company. He was a founder of NorthStar Bank in Tampa, Florida and from 2006 to 2010 served on the Board of Directors of its parent company, NorthStar Banking Corporation. From 1998 to 2000, he was Director of Customer Care and Billing with Global Crossing. In that position, Mr. Patel defined business processes and systems, hired and trained department staff and led the integration of the customer care and billing systems with the systems of companies that Global Crossing acquired. As an independent software and systems consultant from 1991 to 1998, Mr. Patel worked with large international telephone companies. Mr. Patel holds a Bachelor’s and a Master’s degree in Electronic Engineering from the University of Cambridge in the United Kingdom.

Mr. Patel brings to our board of directors considerable experience in business, insurance, management, systems and technology, and because of those experiences and his education, he possesses knowledge and analytical and technology skills that are important to the operations of our company, the oversight of our performance and the

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evaluation of our future growth opportunities. Furthermore, his performance as our President and Chief Executive Officer and as the Chief Executive Officer of HCI has demonstrated an in-depth understanding of our insurance business.

Kevin Mitchell has served as our Executive Vice President since March 2021, as a member of our board of directors since February 2021 and as President of TypTap Insurance Company since October 2019. He has also served as a Senior Vice President of HCI since April 2018, during which time has managed HCI’s investor relations and reinsurance placement and sales & marketing, and as a Vice President of HCI since September 2013. Prior to joining HCI, Mr. Mitchell was employed by Arthur J. Gallagher & Co., a global insurance brokerage and consulting firm, for 5 years from October 2008 to September 2013, where he served in various capacities, including as Area Director and serving as Producer prior to that. Prior to being with Arthur J. Gallagher & Co., he was a Producer with Oswald Companies, an insurance brokerage firm, where he sold commercial lines. Mr. Mitchell is a 2001 graduate from Bowling Green State University, having earned a Bachelor of Science degree in Communication and a minor in Marketing.

Mr. Mitchell brings to our board of directors significant knowledge and experience regarding the insurance industry, including from his central role and responsibilities at HCI. His understanding of the industry will aid our board in overseeing the execution of our company’s growth strategy.

Ankur Bhandari has served as our Chief Financial Officer since July 2021. Prior to that, since 2018 Mr. Bhandari served as the Chief Financial Officer of Bolt Solutions, which owns and operates the world’s largest property & casualty insurance exchange, where he led Bolt’s finance function and led a finance restructuring and sale of the company. From 2017 to 2018, Mr. Bhandari served as Chief Financial Officer of AppianRX (formerly Southside Pharmacy), a Frazier Healthcare portfolio company, where he was responsible for finance, corporate development, and procurement. During 2015 to 2016, Mr. Bhandari was a consultant to CIBER Inc. and Pharmacord, LLC, and from 2014 to 2015, he was Treasurer of Omnicare Inc., a Fortune 500 company that was sold to CVS in 2015. At Omnicare, Mr. Bhandari executed a large capital restructuring. Prior to joining Omnicare, Mr. Bhandari served as Assistant Treasurer at AIG, Inc. and as Treasurer at BearingPoint Inc., a global management and technology consulting company. Mr. Bhandari has a Post Graduate Diploma in Management from the Indian Institute of Management (Lucknow) and a Bachelor of Commerce (Honors) from Shri Ram College of Commerce, Delhi University.

Mr. Bhandari brings considerable knowledge in capital markets, mergers and acquisitions, corporate strategy, operations re-engineering and finance restructuring. He has extensive experience in insurtech, fintech and financial services across public and private companies.

Non-employee directors

Eric Hoffman has been a member of our board of directors and a member of the Board of Directors of HCI since February 26, 2021. Mr. Hoffman was appointed to our board of directors and the HCI board pursuant a 2021 agreement with Centerbridge Partners, L.P., a New York City-based private investment firm. Under that agreement, among other things, Centerbridge made a substantial investment in us. Since 2010, Mr. Hoffman has served in various capacities at Centerbridge, including currently as a Managing Director. From 2008 to 2010, he served as an Analyst for The Blackstone Group, a New York Stock Exchange listed investment firm. Mr. Hoffman serves on the boards of several other organizations unaffiliated with us or HCI, including, since 2021, as a director of Forbright, Inc., a bank holding company based in Maryland and, since 2014, as a director of Beginning with Children Foundation, an education-focused not-for-profit organization. Previously, from 2019 to 2020, Mr. Hoffman served as a board observer at Root Inc., a mobile-app based auto insurance company from 2018 to 2021, as a director of Amedeo Capital Limited, a private worldwide financier and manager of aircraft leasing transactions from 2015 to 2017, as a board member of Pocahontas Parkway, LLC, a transportation concession company in Virginia, and, from 2013 to 2021, as a director for Voyager Aviation Holdings, LLC, a privately held, Ireland-based global aviation investment firm. Mr. Hoffman graduated summa cum laude with a Bachelor of Science in Economics (concentration in finance and insurance) from the Wharton School at the University of Pennsylvania.

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Mr. Hoffman brings considerable experience, knowledge and education to our board of directors. In his current position at Centerbridge, he focuses primarily on investments in the financial services sector. His investment experience encompasses financial institutions, insurance and specialty finance companies. In earning his degree from the Wharton School, he concentrated in finance and insurance. His skills in analyzing financial information and his knowledge of insurance and finance will enhance board oversight of our performance and monitoring of our financial disclosure and be particularly valuable if we consider financial transactions and business acquisitions.

Irene Hurst has been a member of our board of directors since April 2021. Ms. Hurst has served as the Director of Operations for the Center of Analytics and Creativity at the University of South Florida (USF) since January 2020, where she manages the Citizen Data Science Certificate program for the USF Muma College of Business and certificate programs in leadership and data science for healthcare providers. Prior to that, Ms. Hurst served 10 years as the Director for MBA and Executive MBA programs in the USF Muma College of Business. Under her direction, the USF MBA program reached its first ranking in Business Week’s Best MBA national ranking. She previously served for more than 11 years as the director of USF’s Small Business Development Center. In addition to managing federal, state, municipal, and private grants while at the Small Business Development Center, Ms. Hurst counseled thousands of small business owners in financing, getting certified as minority-owned businesses, buying and selling their businesses, and other aspects of their business operations. Ms. Hurst earned an MBA from the University of South Florida and a Bachelor’s degree in Psychology from the University of Indonesia.

Ms. Hurst’s extensive experience in the field of business education, leadership development, and data science will be significant value to our board of directors in connection with overseeing and advising management on its human capital and recruiting strategy, and she brings a deep understanding of the advance use of data analytics in making important organizational decisions.

Robert Lopes has been a member of our board of directors since April 2021. Mr. Lopes has served as the Chief Human Resources Officer of Randstad North America since October 2020, where he leads Randstad North America’s internal human resources practice and oversees all aspects of human capital, including recruitment, talent management, employee engagement, and organizational development. Randstad North America is a wholly owned subsidiary of Randstad N.V., a global provider of flexible work and human resources services. Prior to October 2020, Mr. Lopes served as North American group president at Randstad Sourceright, a Randstad sister company, for six years. Mr. Lopes has more than 35 years of global experience leading private, mid-stage and public technology and services businesses in outsourcing, consulting and HR-related services, including serving as CEO at Acclaris, a staffing firm acquired by Willis Towers Watson in 2015, and serving as CEO of Veritude, a Fidelity Capital Company. Mr. Lopes holds a business administration degree from the University of Notre Dame.

Mr. Lopes will bring invaluable insight and experience to our board of directors as a result of his extensive experience in managing and development human capital.

James Macchiarola has been a member of our board of directors since our formation in July 2020. From 1999 until his retirement in 2015, Mr. Macchiarola served in various positions for the Clearwater, Florida office of Orange Business Services (formerly Equant), a global information technology and communications services provider and subsidiary of Orange S.A. (formerly France Telecom S.A.). From 2009 to 2015, he served as its Vice President and Head of North American Equipment Resales and Integration Services. From 2007 to 2009, he was that company’s Area Sales Vice President for the U.S. East Coast and Canada. From 2003 to 2007, he was Head of its Integration Services Sales. From 2002 to 2003, he served as Head of Service Operations for the Americas. From 1999 to 2003, he served as Head of Managed Services. From 1994 to 1999, Mr. Macchiarola served as Chief Operating Officer for Techforce, a U.S.-based systems integrator. Before that, he also held various positions for Racal Datacom and Syncordia (1990 to 1994), AT&T Paradyne (1984 to 1990) and IBM Corp. (1969 to 1984). Mr. Macchiarola served as a director of HCI from November 2013 until February 26, 2021.

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Mr. Macchiarola brings considerable business, management, marketing, and systems experience to our board of directors. Information technology and systems knowledge is increasingly important to our company as the growth of technology in the insurance market becomes more sophisticated. In addition, we expect that Mr. Macchiarola will provide guidance and oversight to our information technology division. Additionally, the marketing and sales experience gained by Mr. Macchiarola at Orange Business Services will prove valuable as we continue to grow and expand into new territories.

Steve Shafran has been a member of our board of directors since March 26, 2021. Mr. Shafran has been a Senior Advisor for Centerbridge Partners, L.P., a New York City-based private investment firm, since 2018. Prior to that, Previously, Mr. Shafran was a partner at Goldman Sachs, where he worked from 1986 to 2001, including an eight-year period where he lived in Hong Kong and Singapore and was co-head of the firm’s Asian Principal Investment Area. After leaving Goldman Sachs, he stayed in Hong Kong and was founder of the first S&P rated debt servicing company in Mainland China. From January 2008 to June 2009, Mr. Shafran was a Senior Advisor to U.S. Treasury Secretaries Henry Paulson and Timothy Geithner, advising the Treasury Department throughout the financial crisis. From 2009 to 2011, Mr. Shafran was a professor at Georgetown University’s McDonough School of Business, teaching courses on the banking system and financial crises. Mr. Shafran currently is the Chairman of two of Centerbridge’s portfolio companies, IPC Corp. and Cascade Financial Holdings, and he also serves on the Board of Directors of Congressional Bancshares. Mr. Shafran is currently the Chairman of the Sun Valley Community School in Sun Valley Idaho, is on the Board of the US Ski and Snowboard Team, and is an Advisory Director of Vison to Learn, a Los Angeles based non-profit organization that is working to ensure every school child in the country has access to free glasses. Mr. Shafran received a B.A from the University of California, Berkeley, Phi Beta Kappa and an MBA from the Harvard Business School.

Mr. Shafran brings considerable experience and knowledge to our board of directors regarding the investment markets and economic matters and policy. His knowledge of the capital markets and economics will contribute to the board’s oversight of our strategy and performance and monitoring of our financial disclosures.

Loreen Spencer has been a member of our board of directors since February 26, 2021. She is a Certified Public Accountant, and from 1987 until her retirement in 2016, she was an Audit Partner for Deloitte & Touche LLP, where her audit clients included Florida-based insurance companies. Since 2017, Ms. Spencer has served on the Board of Directors and the Audit & Risk Committee of Raymond James Bank, a St. Petersburg-based banking subsidiary of Raymond James Financial, Inc., which is a New York Stock Exchange-listed financial services company. Ms. Spencer is a founding board member and since 2002 has been Board Chair of the Gift of Adoption Florida Chapter. In 2015, she was recognized by the U.S. Congress as a Congressional Coalition on Adoption Institute “Angel in Adoption.” Also in 2015, she was recognized by the Tampa Lightning Foundation as a Tampa Bay Lightning Community Hero. Ms. Spencer served as a director of HCI from April 2019 until February 26, 2021. From 1998 to 2016, she served on the Goodwill Industries Suncoast Inc. Board (two years as Chair), from 2011 to 2016 served on the St. John’s Episcopal Parish Day School Board of Trustees, and from 2000 to 2014 served on the University of Florida Fisher School of Accounting Advisory Board. Ms. Spencer earned both her Bachelor of Science, with a major in Accounting, and Master of Accounting from the University of Florida.

Ms. Spencer brings considerable business, accounting and financial experience to our board of directors. Her education, knowledge and experience as an auditor and her ability to analyze financial information enhances the board’s oversight of our business operations, financial disclosure, external auditors and the effectiveness of our internal controls.

Key employees

Shawn McVeigh has served as the Chief Operating Officer of our technology and software division, Exzeo USA, since February 2021. Prior thereto, Mr. McVeigh was the Senior Vice President of Information Technologies with HCI, where he was responsible for technology infrastructure and oversight of software development activities from August 2010 until February 2021. Prior to his role with HCI, Mr. McVeigh served from March

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1998 until March 2010 as the Vice President of Information Technology for Liberty American Insurance Group, the personal lines subsidiary of Philadelphia Insurance Companies, where he implemented technology for several different companies into the Florida homeowners insurance market. Mr. McVeigh earned a Bachelor of Science degree from the University of South Florida in Management Information Systems.

Suela Bulku has served as the Senior Financial Officer and Controller of TypTap Insurance Group since February 2021. Prior thereto, Ms. Bulku served as the controller of the Property & Casualty Division of HCI from June 2014 until February 2021. Prior to her position as controller of the Property & Casualty Division of HCI, Ms. Bulku served as manager of statutory reporting of HCI from September 2011 until June 2014. From December 2005 to September 2011, she served in various financial roles at United Insurance Holdings Corp. Ms. Bulku holds a Bachelor of Science degree in Finance and Economics as well as a Master of Business Administration in Finance and Management from the University of South Florida.

Brook Baker has served as General Counsel for TypTap Insurance Group since February 2021. Prior to his role at TypTap Insurance Group, Mr. Baker served as corporate counsel for HCI from April 2015 until February 2021. Prior to HCI, Mr. Baker served in various legal roles, including compliance, intellectual property and commercial litigation, and corporate law at the firms of Holland & Knight LLP, Johnson Pope Bokor Ruppel Burns, LLP and the Steele Law Group, P.A. from July 2011 until April 2015. Mr. Baker received a Juris Doctor degree from the University of Florida College of Law and earned a Bachelor of Science in Physics at the University of Florida.

William Broomall has served as the Vice President of Investor Relations of TypTap Insurance Group since April 2021. Prior to joining TypTap, Mr. Broomall served as an analyst at Dowling & Partners, a sell-side equity research firm focused on the insurance industry from March 2016 until April 2021. Prior to Dowling, Mr. Broomall served as a member of the insurance industry research team of Conning & Company from March 2012 until March 2016. Mr. Broomall earned a Bachelor of Arts in Economics from Lafayette College and holds the Chartered Financial Analyst (CFA) designation.

Board Composition

Our directors are divided into three classes serving staggered three-year terms. Class A, Class B and Class C directors will serve until our annual meetings of shareholder in 2024, 2022, and 2023, respectively. Upon expiration of the term of a class of directors, directors in that class will be eligible to be elected for a new three-year term at the annual meeting of shareholder in the year in which their term expires. As a result of this classification of directors, it generally takes at least two annual meetings of shareholders to effect a change in a majority of the members of our board of directors.

Our board of directors currently consists of eight members. Messrs. Mitchell, Hoffman, and Lopes are Class A directors and will serve until our annual meeting of shareholders in 2024. Ms. Hurst, Mr. Patel, and Mr. Macchiarola are Class B directors and will serve until our annual meeting of shareholders in 2022. Ms. Spencer, and Mr. Shafran are Class C directors and will serve until our annual meeting of shareholders in 2023.

Family Relationships

There are no family relationships among any of our directors or executive officers.

Leadership Structure of the Board of Directors

We do not have a policy regarding whether the role of the Chairman of the Board and Chief Executive Officer should be separate or combined and believe that we should maintain the flexibility to select the Chairman and Chief Executive Officer and reorganize the leadership structure, from time to time, based on criteria that are in our best interests and the best interests of our shareholders at such times. Currently, Paresh Patel is the Chairman

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of the Board and Chief Executive Officer. We believe that Mr. Patel’s familiarity with our company and extensive knowledge of our industry qualify him to serve as the Chairman of our Board.

Director Independence

Our board of directors has undertaken a review of the independence of each director. Based on information provided by each director concerning his or her background, employment, and affiliations, our board of directors has determined that Eric Hoffman, Irene Hurst, Robert Lopes, James Macchiarola, Steve Shafran and Loreen Spencer do not have any relationship that would interfere with the exercise of independent judgment in carrying out the responsibilities of a director and are independent directors under the rules of the NYSE.

In making these determinations, our board of directors considered the current and prior relationships that each non-employee director has with our company and all other facts and circumstances our board of directors deemed relevant in determining their independence, including Mr. Macchiarola’s and Ms. Spencer’s position as a non-executive director of our board of directors and HCI’s board of directors from July 2020 until February 2021 and from April 2019 until February 2021, respectively, and Mr. Macchiarola’s position as chair of the compensation committee of HCI’s board of directors during such time and Ms. Spencer’s position on the compensation committee of HCI’s board of directors during such time, as well as the transactions involving certain of them described in the section titled “Certain Relationships and Related Party Transactions.”

Committees of the Board of Directors

Our board of directors has an audit committee, a compensation committee and a nominating and corporate governance committee. The composition and functions of these committees are described below. Members serve on these committees until their resignation or until otherwise determined by our board of directors. Our board of directors may establish other committees as it deems necessary or appropriate from time to time.

We believe we are eligible for, but do not intend to take advantage of, the “controlled company” exemptions to the corporate governance rules for NYSE-listed companies.

Audit committee

The members of the audit committee are Ms. Spencer (committee chair), Mr. Lopes and Mr. Macchiarola, each of whom meets the requirements for independence under the listing standards of the NYSE and SEC rules and regulations, including Rule 10A-3(b)(1) under the Exchange Act. Each member of our audit committee also meets the financial literacy requirements of the listing standards of the NYSE. In addition, our board of directors has determined that Ms. Spencer is an audit committee financial expert within the meaning of Item 407(d) of Regulation S-K under the Securities Act.

The audit committee’s main purpose is to oversee our corporate accounting and financial reporting process. Our audit committee is responsible for, among other things:

• selecting a qualified firm to serve as the independent registered public accounting firm to audit our financial statements;

• helping to ensure the independence and performance of the independent registered public accounting firm;

• discussing the scope and results of the audit with the independent registered public accounting firm, and reviewing, with management and the independent registered public accounting firm, our interim and year-end results of operations;

• developing procedures for employees to submit concerns anonymously about questionable accounting or audit matters;

• reviewing our policies on risk assessment and risk management;

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• reviewing related party transactions;

• reviewing and pre-approving, as required, all audit and all permissible non-audit services to be performed by the independent registered public accounting firm; and

• assisting our board of directors in monitoring the performance of our internal audit function.

Our audit committee operates under a written charter that satisfies the applicable rules and regulations of the SEC and the listing standards of the NYSE, a copy of which will be available on our website at www.typtap.com.

Compensation committee

The members of the compensation committee are Mr. Hoffman (committee chair), Mr. Lopes and Ms. Spencer, each of whom meets the requirements for independence under the listing standards of the NYSE and SEC rules and regulations. Each member of our compensation committee is also a non-employee director, as defined pursuant to Rule 16b-3 promulgated under the Exchange Act, or Rule 16b-3. In arriving at these determinations, our board of directors has examined all factors relevant to determining whether any compensation committee member has a relationship to us that is material to that member’s ability to be independent from management in connection with carrying out such member’s duties as a compensation committee member.

The compensation committee’s main purpose is to review and recommend policies relating to compensation and benefits of our officers and employees. Our compensation committee is responsible for, among other things:

• reviewing, approving, and determining, or making recommendations to our board of directors regarding, the compensation and compensation arrangements of our executive officers;

• administering our equity compensation plans;

• reviewing and approving, or making recommendations to our board of directors regarding, incentive compensation and equity compensation plans; and

• establishing and reviewing general policies relating to compensation and benefits of our employees.

Our compensation committee operates under a written charter that satisfies the applicable rules and regulations of the SEC and the listing standards of the NYSE, a copy of which will be available on our website.

Nominating and corporate governance committee

The members of the nominating and corporate governance committee are Mr. Macchiarola (committee chair), Ms. Hurst and Mr. Shafran, each of whom meets the requirements for independence under the listing standards of the NYSE and SEC rules and regulations.

Our nominating and corporate governance committee is responsible for, among other things:

• identifying, evaluating, and selecting, or making recommendations to our board of directors regarding, nominees for election to our board of directors and its committees;

• developing and overseeing the annual evaluation of our board of directors and of its committees;

• considering and making recommendations to our board of directors regarding the composition of our board of directors and its committees;

• overseeing our corporate governance practices; and

• making recommendations to our board of directors regarding corporate governance guidelines.

Our nominating and corporate governance committee operates under a written charter that satisfies the applicable listing standards of the NYSE, a copy of which will be available on our website.

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Compensation Committee Interlocks and Insider Participation

None of the members of our compensation committee is a current or former executive officer or employee of our company. None of our executive officers serves as a member of the compensation committee of any entity that has one or more executive officers serving on our compensation committee.

Risk Oversight

One of the key functions of our board of directors is informed oversight of our risk management process. Our board of directors administers this oversight function directly through our board of directors as a whole, and through various standing committees of our board of directors that address risks inherent in their respective areas of oversight. In particular, our board of directors is responsible for monitoring and assessing strategic risk exposure, including risks associated with cybersecurity and data protection, and our audit committee has the responsibility to consider our major financial risk exposures and the steps our management has taken to monitor and control these exposures, including guidelines and policies to govern the process by which risk assessment and management is undertaken. Our audit committee reviews legal, regulatory, and compliance matters that could have a significant impact on our financial statements. Our nominating and corporate governance committee monitors the effectiveness of our corporate governance practices, including whether they are successful in preventing illegal or improper liability-creating conduct. Our compensation committee assesses and monitors whether any of our compensation policies and programs has the potential to encourage excessive risk taking. While each committee is responsible for evaluating certain risks and overseeing the management of such risks, our entire board of directors will be regularly informed through committee reports about such risks.

Board Diversity

Our nominating and corporate governance committee is responsible for reviewing with the board of directors, on an annual basis, the appropriate characteristics, skills and experience required for the board of directors as a whole and its individual members. Although our board of directors does not have a formal written diversity policy with respect to the evaluation of director candidates, in its evaluation of director candidates, our nominating and corporate governance committee will consider factors including, without limitation, issues of character, integrity, judgment, potential conflicts of interest, other commitments, and diversity, and with respect to diversity, such factors as gender, race, ethnicity, experience, and area of expertise, as well as other individual qualities and attributes that contribute to the total diversity of viewpoints and experience represented on the board of directors.

Code of Business Conduct and Ethics

Prior to the completion of this offering, our board of directors will adopt a code of business conduct and ethics applicable to all of our directors, officers (including our principal executive officer, principal financial officer, and principal accounting officer) and all global employees in accordance with applicable federal securities laws and corporate governance rules of the NYSE. Our code of business conduct and ethics will be available on our website. Any amendments to the code of business conduct and ethics, or waivers of its requirements, will, if required, be disclosed on our website.

Corporate Governance Guidelines

Prior to the completion of this offering, our board of directors will adopt corporate governance guidelines, a copy will be available on our website.

Director Compensation

We did not pay any director compensation in 2020. For 2021, our non-employee directors are paid a cash fee of $50,000 (payable quarterly) and each received a grant of 10,000 restricted shares of our common stock at the

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time of joining our board. The restricted shares vest in equal installments of 2,500 shares each on each of the first four anniversaries of grant, provided that the director remains on our board at the time of vesting, subject to accelerated vesting upon a change of control of our company. Mr. Hoffman, who also serves on HCI’s board of directors, has waived his director compensation for 2021.

Our employee directors (currently Mr. Patel and Mr. Mitchell) do not receive separate compensation for their service as a director.

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EXECUTIVE COMPENSATION

This section discusses the material components of the executive compensation program for the following persons: (i) all persons serving as our principal executive officer during 2020 and (ii) the two most highly compensated of our other executive officers who received compensation during 2020 of at least $100,000 and who were executive officers on December 31, 2020. We refer to these persons as our “named executive officers” elsewhere in this prospectus. Our “named executive officers” and their positions were as follows:

• Paresh Patel, President and Chief Executive Officer;

• Kevin Mitchell, Executive Vice President; and

• Mark Harmsworth, our Chief Financial Officer (as of December 31, 2020).

On July 14, 2021, Mr. Ankur Bhandari became our Chief Financial Officer, replacing Mr. Harmsworth (who will continue to serve as Chief Financial Officer of HCI). Because Mr. Bhandari did not join TypTap until July 2021, he is not identified as a named executive officer in this prospectus.

Summary Compensation Table

The following table shows the compensation paid by HCI and its subsidiaries during the 2020 fiscal year to our named executive officers to the extent attributable to the applicable individual’s services on behalf of TypTap’s business.

Name and principal position	Year		Salary		Bonus		Stock awards(1)		All other compensation(2)		Total
Paresh Patel		2020	$	247,917	$	251,300	$	—	$	42,779	$	541,996
President and Chief Executive Officer
Kevin Mitchell		2020	$	207,692	$	93,750	$	136,590	$	19,908	$	457,940
Executive Vice President
Mark Harmsworth*		2020	$	83,509	$	23,559	$	—	$	8,594	$	115,662
Chief Financial Officer

(1) Represents grant of shares of HCI restricted common stock. This amount was calculated in accordance with Accounting Standards Codification Topic 718.

(2) With respect to Mr. Patel, this represents $40,208 in cash dividends on unvested HCI restricted stock and $2,571 in HCI contributions to HCI’s 401(k) plan.    With respect to Mr. Mitchell, this represents $11,600 in cash dividends on unvested HCI restricted stock and $8,308 in HCI contributions to HCI’s 401(k) plan. With respect to Mr. Harmsworth, this represents $6,986 in cash dividends on unvested HCI restricted stock and $1,608 in HCI contributions to HCI’s 401(k) plan.

* Mr. Harmsworth ceased to serve as our Chief Financial Officer as of July 2021, although he will continue to serve as the Chief Financial Officer of HCI.

Executive Compensation Arrangements

Below is a more detailed summary of the elements of our current executive compensation program as it relates to our named executive officers.

Employment agreements

During 2020, our named executive officers did not have employment agreements with TypTap, although Mr. Patel and Mr. Harmsworth each had (and continue to have) an employment agreement with HCI, and a portion of their compensation under such employment agreement was attributable to TypTap’s business, as reflected in the Summary Compensation Table above.

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On June 14, 2021, we entered into an employment agreement with Mr. Bhandari under which Mr. Bhandari will serve as our Chief Financial Officer for a 4-year term beginning on July 14, 2021. Upon the expiration of the 4-year term, the employment agreement will automatically renew for successive one-year terms unless notice of non-renewal is delivered by either party at least 90-days before the end of the initial term or any renewal term. Mr. Bhandari’s current annual base salary is $400,000, which may be adjusted upward. In additional to receiving a signing bonus of $75,000, Mr. Bhandari will be entitled to additional compensation and/or bonus plan participation as determined by the TypTap board of directors or a committee thereof. Mr. Bhandari was also granted an award of 300,000 restricted shares that will vest as follows: (i) 40% of the restricted shares will vest in 25% increments over a period of 4 years, (ii) 30% will vest on the first anniversary of the date on which TypTap’s stock value reaches $15.00 per share (subject to adjustment for stock splits, stock dividends, reverse stock splits, and the like), and (iii) the remaining 30% will vest on the first anniversary of the date on which TypTap’s stock value reaches $20.00 per share (subject to adjustment for stock splits, stock dividends, reverse stock splits, and the like); provided, however, that Mr. Bhandari remains continuously employed by our company or its subsidiaries as of the applicable vesting date. Any restricted shares that do not vest by the sixth anniversary of the grant date will be forfeited by the employee, and any unvested shares will be forfeited upon termination of employment. Upon a change in control of TypTap (as defined in the company’s applicable equity plan), any unvested restricted shares shall immediately vest. If Mr. Bhandari is terminated by us without good cause (as defined in the employment agreement) or he terminates his own employment upon the occurrence of certain events (such as a change in his job duties or a movement of his principal place of employment by more than 50 miles), then he will be entitled to severance compensation equal to 12-months of salary continuation and to any accrued bonus for the year of termination, and his non-compete and non-solicitation restrictions will immediately terminate. Subject to the foregoing, Mr. Bhandari is subject to non-competition and non-solicitation restrictions during the one-year period following a termination of employment.

Base salaries

The base salary payable to each named executive officer is intended to provide a fixed component of compensation reflecting the executive’s skill set, experience, role, and responsibilities. For the year ended December 2020, the salary attributable to Mr. Patel’s and Mr. Harmsworth’s services to TypTap was included in their base salary paid by HCI. However, beginning February 26, 2021, the base salary for Mr. Patel was bifurcated, with Mr. Patel receiving a base salary from both HCI and TypTap. Mr. Patel’s base salary from TypTap for the 2021 fiscal year was previously set at $350,000 by our board of directors and was increased on September 27, 2021 to $475,000 (with such increase being effective on October 1, 2021). Mr. Mitchell’s base salary for 2020 was paid directly by TypTap, and his salary for the 2021 fiscal year was previously set at $250,000 by our board of directors and was increased on September 27, 2021 to $425,000 (with such increase being effective on October 1, 2021). Mr. Bhandari’s employment agreement provides for a base salary from TypTap of $400,000 for 2021.

Bonuses

The named executive officers received the bonuses indicated in the Summary Compensation table above from HCI attributable to services to TypTap’s business. TypTap’s board of directors has not established an executive bonus program for 2021 as of the date of this prospectus.

Equity compensation

In 2020, the named executive officers did not receive any equity compensation from TypTap or from HCI attributable to services to TypTap, except for Mr. Mitchell, who received a restricted stock award comprised of shares of HCI common stock with a grant date fair value of $136,590 (all of which was attributable to services to TypTap).

On February 26, 2021, Mr. Patel was granted 1,480,935 restricted shares of our common stock under the TypTap Insurance Group, Inc. 2021 Equity Incentive Plan (the “2021 Equity Plan”), which is described below. Also on

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February 26, 2021, Mr. Mitchell was granted 551,625 restricted shares of our common stock under the 2021 Equity Plan. Under Mr.  Bhandari’s employment agreement and as described above, Mr.  Bhandari was granted 300,000 restricted shares under the 2021 Equity Plan on July 21, 2021.

The foregoing restricted share grant to Mr. Patel has the following terms: 206,215 restricted shares vest in four equal installments on the first four anniversaries of the grant date, 642,060 shares will vest on the first anniversary of the date on which our common stock reaches a value of $15.00 per share (subject to adjustment for stock splits, stock dividends, reverse stock splits, and the like), and an additional 632,660 shares will vest on the first anniversary of the date on which our company’s common stock reaches a value of $20.00 per share (subject to adjustment for stock splits, stock dividends, reverse stock splits, and the like); provided, however, that Mr. Patel remains continuously employed by our company or its subsidiaries as of the applicable vesting date. Any restricted shares that do not vest by the sixth anniversary of the grant date will be forfeited by the employee, and any unvested shares will be forfeited upon termination of employment. Notwithstanding the foregoing, all unvested restricted shares will vest upon a “change of control” (as defined in the 2021 Equity Plan).

The foregoing restricted share grant to Mr. Mitchell has the following terms: 152,625 restricted shares will vest over a four year period, 211,000 shares will vest on the first anniversary of the date on which our common stock reaches a value of $15.00 per share (subject to adjustment for stock splits, stock dividends, reverse stock splits, and the like), and an additional 188,000 shares will vest on the first anniversary of the date on which our common stock reaches a value of $20.00 per share (subject to adjustment for stock splits, stock dividends, reverse stock splits, and the like); provided, however, that Mr. Mitchell remains continuously employed by our company or its subsidiaries as of the applicable vesting date. Any restricted shares that do not vest by the sixth anniversary of the grant date will be forfeited by the employee, and any unvested shares will be forfeited upon termination of employment. Notwithstanding the foregoing, all unvested restricted shares will vest upon a “change of control” (as defined in the 2021 Equity Plan).

In addition to the above-described restricted share grants, on October 1, 2021, Mr. Patel, Mr. Mitchell, and Mr. Bhandari were granted options to purchase up to 5,000,000, 1,000,000, and 100,000 shares, respectively, of our common stock under the 2021 Omnibus Plan. Each of the options has an exercise price of $23.00 per share and a term of 10 years. Each option will vest as to 25% of the option shares on the first anniversary of the date of grant, with the balance vesting in one-sixteenth quarterly increments over the following three years. Upon a change of control (as defined in the 2021 Omnibus Plan) while the executive is still in the employ or service of our company, any unvested portion of the option will vest in full. Upon a termination of the executive’s employment or service, unvested options will terminate, and vested options will terminate 90 days after termination of employment or service (or will terminate immediately upon a termination for “cause” within the meaning of the 2021 Omnibus Plan).

Employee benefits and perquisites

Our named executive officers receive medical, dental, life insurance, and disability benefits that are substantially the same as the benefits received by all of our executive officers, as well as 20 days paid time off.

Other elements of compensation

Our named executive officers receive dividends on unvested HCI shares of common stock held by them, and they also receive 401(k) matching contributions under HCI’s 401(k) plan.

Retirement plans

Except for HCI’s 401(k) Safe Harbor Profit Sharing Plan, we have not had and currently do not have a pension or other retirement plan or a nonqualified deferred compensation plan.

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Outstanding Equity Awards at Fiscal Year-End

TypTap had no outstanding equity awards as of December 31, 2020.

2021 Omnibus Incentive Plan

On September 27, 2021, our board of directors adopted and our stockholders approved the TypTap Insurance Group, Inc. 2021 Omnibus Incentive Plan, or the 2021 Omnibus Plan. The 2021 Omnibus Plan authorizes the grant of incentive stock options, within the meaning of Section 422 of the Internal Revenue Code, to our employees and any of our parent and subsidiary corporations’ employees, and the grant of nonstatutory stock options, restricted stock, restricted stock units, stock appreciation rights, performance units and performance shares to our employees, directors and consultants and any of our future subsidiary corporations’ employees and consultants. The following is a summary of certain terms and conditions of the 2021 Omnibus Plan. This summary is qualified in its entirety by reference to the 2021 Omnibus Plan attached as an exhibit to the registration statement of which this prospectus forms a part. You are encouraged to read the full text of the 2021 Omnibus Plan.

Administration

The 2021 Omnibus Plan is administered by our board of directors or our compensation committee, or any other committee or subcommittee or one or more of our officers to whom authority has been delegated (collectively, the “Administrator”). The Administrator has the authority to interpret the 2021 Omnibus Plan and award agreements entered into with respect to the 2021 Omnibus Plan; to make, change and rescind rules and regulations relating to the 2021 Omnibus Plan; to make changes to, or reconcile any inconsistency in, the 2021 Omnibus Plan or any award agreement covering an award; and to take any other actions needed to administer the 2021 Omnibus Plan.

Eligibility

The Administrator may designate any of the following as a participant under the 2021 Omnibus Plan: any officer or employee, or individuals engaged to become an officer or employee, of our company or our affiliates; and consultants of our Company or our affiliates, and our directors, including our non-employee directors.

Types of awards

The 2021 Omnibus Plan permits the Administrator to grant stock options, stock appreciation rights (“SARs”), performance shares, performance units, shares of common stock, restricted stock, restricted stock units (“RSUs”), cash incentive awards, dividend equivalent units, or any other type of award permitted under the 2021 Omnibus Plan. The Administrator may grant any type of award to any participant it selects, but only our employees or our subsidiaries’ employees may receive grants of incentive stock options within the meaning of Section 422 of the Internal Revenue Code. Awards may be granted alone or in addition to, in tandem with, or (subject to the repricing prohibition described below) in substitution for any other award (or any other award granted under another plan of our company or any affiliate, including the plan of an acquired entity).

Shares reserved under the 2021 omnibus plan

The 2021 Omnibus Plan provides that 7,700,000 shares of our common stock are reserved for issuance under the 2021 Omnibus Plan, all of which may be issued pursuant to the exercise of incentive stock options. In addition, the shares reserved for issuance under our 2021 Omnibus Plan will also include a number of shares of our common stock equal to the number of shares subject to awards granted under the 2021 Equity Plan that, after the effectiveness of this offering, expire or otherwise terminate without having been exercised in full or are forfeited to or repurchased by us (provided that the maximum number of shares that may be added to the 2021 Plan

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pursuant to this sentence is 5,904,783 shares). The number of shares available for issuance under our 2021 Omnibus Plan will also include an annual increase on the first day of each fiscal year beginning with our 2023 fiscal year, equal to the lesser of:

• 4,000,000 shares;

• 2% of the outstanding shares of all class of our common stock as of the last day of the immediately preceding fiscal year; or

• such other amount as our board of directors may determine.

The number of shares reserved for issuance under the 2021 Omnibus Plan will be reduced on the date of the grant of any award by the maximum number of shares, if any, with respect to which such award is granted. However, an award that may be settled solely in cash will not deplete the 2021 Omnibus Plan’s share reserve at the time the award is granted. If (a) an award expires, is canceled, or terminates without issuance of shares or is settled in cash, (b) the Administrator determines that the shares granted under an award will not be issuable because the conditions for issuance will not be satisfied, (c) shares are forfeited under an award, (d) shares are issued under any award and we reacquire them pursuant to our reserved rights upon the issuance of the shares, (e) shares are tendered or withheld in payment of the exercise price of an option or as a result of the net settlement of outstanding stock appreciation rights or (f) shares are tendered or withheld to satisfy federal, state or local tax withholding obligations, then those shares are added back to the reserve and may again be used for new awards under the 2021 Omnibus Plan. However, shares added back to the reserve pursuant to clauses (d), (e) or (f) in the preceding sentence may not be issued pursuant to incentive stock options.

Options

The Administrator may grant stock options and determine all terms and conditions of each stock option, which include the number of stock options granted, whether a stock option is to be an incentive stock option or non-qualified stock option, and the grant date for the stock option. However, the exercise price per share of common stock may never be less than the fair market value of a share of common stock on the date of grant and the expiration date may not be later than 10 years after the date of grant. Stock options will be exercisable and vest at such times and be subject to such restrictions and conditions as are determined by the Administrator, including with respect to the manner of payment of the exercise price of such stock options.

Stock appreciation rights

The Administrator may grant SARs, which represent the right of a participant to receive cash in an amount, or common stock with a fair market value, equal to the appreciation of the fair market value of a share of common stock during a specified period of time. The 2021 Omnibus Plan provides that the Administrator will determine all terms and conditions of each SAR, including, among other things: (a) whether the SAR is granted independently of a stock option or relates to a stock option, (b) the grant price, which may never be less than the fair market value of our common stock as determined on the date of grant, (c) a term that must be no later than 10 years after the date of grant, and (d) whether the SAR will settle in cash, common stock or a combination of the two.

Performance and stock awards

The Administrator may grant awards of shares of common stock, restricted stock, RSUs, performance shares or performance units. Restricted stock means shares of common stock that are subject to a risk of forfeiture or restrictions on transfer, which may lapse upon the achievement or partial achievement of performance goals (as described below) or upon the completion of a period of service. An RSU grants the participant the right to receive cash or shares of common stock the value of which is equal to the fair market value of one share of common stock, to the extent performance goals are achieved or upon the completion of a period of service.

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Performance shares give the participant the right to receive shares of common stock to the extent performance goals are achieved. Performance units give the participant the right to receive cash or shares of common stock valued in relation to a unit that has a designated dollar value or the value of which is equal to the fair market value of one or more shares of common stock, to the extent performance goals are achieved.

The Administrator will determine all terms and conditions of the awards including (a) whether performance goals must be achieved for the participant to realize any portion of the benefit provided under the award, (b) the length of the vesting or performance period and, if different, the date that payment of the benefit will be made, (c) with respect to performance units, whether to measure the value of each unit in relation to a designated dollar value or the fair market value of one or more shares of common stock, and (d) with respect to performance shares, performance units, and RSUs, whether the awards will settle in cash, in shares of common stock (including restricted stock), or in a combination of the two.

Cash incentive awards

The Administrator may grant cash incentive awards. An incentive award is the right to receive a cash payment to the extent one or more performance goals are achieved. The Administrator will determine all terms and conditions of a cash incentive award, including, but not limited to, the performance goals (described below), the performance period, the potential amount payable, and the timing of payment. While the 2021 Omnibus Plan permits cash incentive awards to be granted under the 2021 Omnibus Plan, we may also make cash incentive awards outside of the 2021 Omnibus Plan.

Performance goals

For purposes of the 2021 Omnibus Plan, the Administrator may establish objective or subjective performance goals which may apply to any performance award. Such performance goals may include, but are not limited to, one or more of the following measures with respect to our company or any one or more of our subsidiaries, affiliates, or other business units: basic earnings per common share for our company on a consolidated basis; diluted earnings per common share for our company on a consolidated basis; total shareholder return; fair market value of shares; net sales; cost of sales; gross profit; selling, general and administrative expenses; operating income; earnings before interest and the provision for income taxes (EBIT); earnings before interest, the provision for income taxes, depreciation, and amortization (EBITDA); net income; accounts receivable; return on equity; return on assets; return on invested capital; return on sales; non-catastrophic claims incurred; reinsurance costs; gross premiums earned; economic value added, or other measure of profitability that considers the cost of capital employed; free cash flow; net cash provided by operating activities; net increase (decrease) in cash and cash equivalents; customer satisfaction; market share; and/or quality. Performance goals may also relate to a participant’s individual performance. The Administrator reserves the right to adjust any performance goals or modify the manner of measuring or evaluating a performance goal.

Dividend equivalent units

The Administrator may grant dividend equivalent units. A dividend equivalent unit gives the participant the right to receive a payment, in cash or shares of common stock, equal to the cash dividends or other distributions that we pay with respect to a share of common stock. We determine all terms and conditions of a dividend equivalent unit award, except that dividend equivalent units may not be granted in connection with a stock option or SAR, and dividend equivalent unit awards granted in connection with another award cannot provide for payment until the date such award vests or is earned, as applicable.

Other stock-based awards

The Administrator may grant to any participant shares of unrestricted stock as a replacement for other compensation to which such participant is entitled, such as in payment of director fees, in lieu of cash compensation, in exchange for cancellation of a compensation right or as a bonus.

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Transferability

Awards are not transferable, including to any financial institution, other than by will or the laws of descent and distribution, unless the Administrator allows a participant to (a) designate in writing a beneficiary to exercise the award or receive payment under the award after the participant’s death, (b) transfer an award to a former spouse as required by a domestic relations order incident to a divorce, or (c) transfer an award without receiving any consideration.

Adjustments

If (a) we are involved in a merger or other transaction in which our shares of common stock are changed or exchanged; (b) we subdivide or combine shares of common stock or declare a dividend payable in shares of common stock, other securities, or other property (other than stock purchase rights issued pursuant to a stockholder rights agreement); (c) we effect a cash dividend that exceeds 10% of the fair market value of a share of common stock or any other dividend or distribution in the form of cash or a repurchase of shares of common stock that our board of directors determines is special or extraordinary, or that is in connection with a recapitalization or reorganization; or (d) any other event occurs that in the Administrator’s judgment requires an adjustment to prevent dilution or enlargement of the benefits intended to be made available under the 2021 Omnibus Plan, then the Administrator will, in a manner it deems equitable, adjust any or all of (1) the number and type of shares subject to the 2021 Omnibus Plan and which may, after the event, be made the subject of awards; (2) the number and type of shares of common stock subject to outstanding awards; (3) the grant, purchase, or exercise price with respect to any award; and (4) the performance goals of an award. In any such case, the Administrator may also provide for a cash payment to the holder of an outstanding award in exchange for the cancellation of all or a portion of the award, subject to the terms of the 2021 Omnibus Plan.

The Administrator may, in connection with any merger, consolidation, acquisition of property or stock, or reorganization, authorize the issuance or assumption of awards upon terms and conditions we deem appropriate without affecting the number of shares of common stock otherwise reserved or available under the 2021 Omnibus Plan.

Change of control

Upon a change of control (as defined in the 2021 Omnibus Plan), in order to preserve a participant’s rights under an award, the Administrator in its discretion may, at the time an award is made or at any time thereafter, take one or more of the following actions: (a) provide for the acceleration of any time period, or the deemed achievement of any performance Goals, relating to the exercise or realization of the award; (b) provide for the purchase or cancellation of the award for an amount of cash or other property that could have been received upon the exercise or realization of the award had the award been currently exercisable or payable (or the cancellation of awards in exchange for no payment to the extent that no cash or other property would be received upon the exercise or realization of the award in such circumstances); (c) adjust the terms of the award in the manner determined by the Administrator to reflect the change of control; (d) cause the award to be assumed, or new right substituted therefor, by another entity; or (e) make such other provision as the Administrator may consider equitable and in the best interests of our company.

Non-employee directors

Non-employee directors will be eligible to receive all types of awards (except for incentive stock options) under our 2021 Omnibus Plan. To provide a maximum limit on the cash compensation and equity awards that can be made to our non-employee directors, the 2021 Omnibus Plan provides that in any given fiscal year, an outside director may not be granted shares under our 2021 Omnibus Plan with an aggregate grant date fair value, when added to any cash compensation received by the non-employee directors, of greater than $300,000.

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Term of plan

Unless earlier terminated by our board of directors, the 2021 Omnibus Plan will terminate on, and no further awards may be granted, after the 10^th anniversary of its effective date.

Termination and amendment of plan

Our board of directors or the Administrator may amend, alter, suspend, discontinue or terminate the 2021 Omnibus Plan at any time, subject to the following limitations:

• Our board of directors must approve any amendment to the 2021 Omnibus Plan if we determine such approval is required by prior action of our board of directors, applicable corporate law, or any other applicable law;

• Stockholders must approve any amendment to the 2021 Omnibus Plan, which may include an amendment to materially increase the number of shares reserved under the 2021 Omnibus Plan, if we determine that such approval is required by Section 16 of the Exchange Act, the Code, the listing requirements of any principal securities exchange or market on which the shares are then traded, or any other applicable law; and

• Stockholders must approve any amendment to the 2021 Omnibus Plan that would diminish the protections afforded by the participant award limits or repricing and backdating prohibitions.

Amendment, modification, cancellation and disgorgement of awards

Subject to the requirements of the 2021 Omnibus Plan, the Administrator may modify or amend any award or waive any restrictions or conditions applicable to any award or the exercise of the award, or amend, modify, or cancel any terms and conditions applicable to any award, in each case, by mutual agreement of the Administrator and the participant or any other person that may have an interest in the award, so long as any such action does not increase the number of shares of common stock issuable under the 2021 Omnibus Plan.

We do not need to obtain participant (or other interested party) consent for any such action (a) that is permitted pursuant to the adjustment provisions of the 2021 Omnibus Plan; (b) to the extent we deem the action necessary to comply with any applicable law or the listing requirements of any principal securities exchange or market on which our common stock is then traded; (c) to the extent we deem the action is necessary to preserve favorable accounting or tax treatment of any award for us; or (d) to the extent we determine that such action does not materially and adversely affect the value of an award or that such action is in the best interest of the affected participant or any other person as may then have an interest in the award.

The Administrator can cause a participant to forfeit any award, and require the participant to disgorge any gains attributable to the award, if the participant engages in any action constituting, as determined by the Administrator in its discretion, cause for termination, or a breach of a material company policy, any award agreement or any other agreement between the participant and us or one of our affiliates concerning noncompetition, nonsolicitation, confidentiality, trade secrets, intellectual property, nondisparagement or similar obligations.

Any awards granted under the 2021 Omnibus Plan, and any shares of common stock issued or cash paid under an award, will be subject to any recoupment or clawback policy that we adopt, or any recoupment or similar requirement otherwise made applicable by law, regulation or listing standards to us.

Repricing and backdating prohibited

Except for the adjustments provided for in the 2021 Omnibus Plan, neither the Administrator nor any other person may amend the terms of outstanding stock options or SARs to reduce their exercise or grant price, cancel outstanding stock options or SARs in exchange for stock options or SARs with an exercise or grant price that is less than the exercise or grant price of the awards being cancelled, or cancel outstanding stock options or SARs

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with an exercise or grant price above the current fair market value of a share in exchange for cash or other securities. In addition, the Administrator may not grant a stock option or SAR with a grant date that is effective prior to the date the Administrator takes action to approve such award.

2021 Equity Incentive Plan

In February 2021, our board of directors and our stockholders adopted the 2021 Equity Incentive Plan, or the 2021 Equity Plan. The 2021 Equity Plan was terminated upon the adoption of the 2021 Omnibus Plan on September 27, 2021, and therefore no further awards will be made under the 2021 Equity Plan (although the 2021 Equity Plan will continue to govern all equity awards made under the 2021 Equity Plan prior to such termination). The following is a summary of certain terms and conditions of the 2021 Equity Plan. This summary is qualified in its entirety by reference to the 2021 Equity Plan attached as an exhibit to the registration statement of which this prospectus forms a part. You are encouraged to read the full text of the 2021 Equity Plan.

Administration

The 2021 Equity Plan is administered by the Administrator, which has the authority to interpret the 2021 Equity Plan and award agreements entered into with respect to the 2021 Equity Plan; to make, change and rescind rules and regulations relating to the 2021 Equity Plan; to make changes to, or reconcile any inconsistency in, the 2021 Equity Plan or any award agreement covering an award; and to take any other actions needed to administer the 2021 Equity Plan.

Eligibility

The Administrator may designate any of the following as a participant under the 2021 Equity Plan: any officer or employee, or individuals engaged to become an officer or employee, of our company or our affiliates; and consultants of our company or our affiliates, and our directors, including our non-employee directors.

Types of awards

The 2021 Equity Plan permitted the Administrator to grant stock options, SARs, performance shares, performance units, shares of common stock, restricted stock, RSUs, cash incentive awards, dividend equivalent units, or any other type of award permitted under the 2021 Equity Plan. However, only restricted stock awards were granted and are outstanding under the 2021 Equity Plan.

Shares reserved under the 2021 equity plan

The 2021 Equity Plan provided that 7,000,000 shares of our common stock were originally reserved for issuance under the 2021 Equity Plan. Upon the termination of the 2021 Equity Plan, restricted stock awards with respect to 6,330,190 shares had been granted and not forfeited under the plan.

Transferability

Awards are not transferable, including to any financial institution, other than by will or the laws of descent and distribution, unless the Administrator allows a participant to (a) designate in writing a beneficiary to exercise the award or receive payment under the award after the participant’s death, (b) transfer an award to a former spouse as required by a domestic relations order incident to a divorce, or (c) transfer an award without receiving any consideration.

Adjustments

If (a) we are involved in a merger or other transaction in which our shares of common stock are changed or exchanged; (b) we subdivide or combine shares of common stock or declare a dividend payable in shares of

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common stock, other securities, or other property (other than stock purchase rights issued pursuant to a stockholder rights agreement); (c) we effect a cash dividend that exceeds 10% of the fair market value of a share of common stock or any other dividend or distribution in the form of cash or a repurchase of shares of common stock that our board of directors determines is special or extraordinary, or that is in connection with a recapitalization or reorganization; or (d) any other event occurs that in the Administrator’s judgment requires an adjustment to prevent dilution or enlargement of the benefits intended to be made available under the 2021 Equity Plan, then the Administrator will, in a manner it deems equitable, adjust any or all of (1) the number and type of shares subject to the 2021 Equity Plan and which may, after the event, be made the subject of awards; (2) the number and type of shares of common stock subject to outstanding awards; (3) the grant, purchase, or exercise price with respect to any award; and (4) the performance goals of an award. In any such case, the Administrator may also provide for a cash payment to the holder of an outstanding award in exchange for the cancellation of all or a portion of the award, subject to the terms of the 2021 Equity Plan.

The Administrator may, in connection with any merger, consolidation, acquisition of property or stock, or reorganization, authorize the issuance or assumption of awards upon terms and conditions we deem appropriate without affecting the number of shares of common stock otherwise reserved or available under the 2021 Equity Plan.

Change of control

Upon a change of control (as defined in the 2021 Equity Plan), the successor or surviving corporation may agree to assume some or all outstanding awards or replace them with the same type of award with similar terms and conditions, without the consent of any participant, subject substantially the same requirements as the 2021 Omnibus Plan.

Amendment, modification, cancellation and disgorgement of awards

Subject to the requirements of the 2021 Equity Plan, the Administrator may modify or amend any award or waive any restrictions or conditions applicable to any award or the exercise of the award, or amend, modify, or cancel any terms and conditions applicable to any award, in each case, by mutual agreement of the Administrator and the participant or any other person that may have an interest in the award, so long as any such action does not increase the number of shares of common stock issuable under the 2021 Equity Plan.

We do not need to obtain participant (or other interested party) consent for any such action (a) that is permitted pursuant to the adjustment provisions of the 2021 Equity Plan; (b) to the extent we deem the action necessary to comply with any applicable law or the listing requirements of any principal securities exchange or market on which our common stock is then traded; (c) to the extent we deem the action is necessary to preserve favorable accounting or tax treatment of any award for us; or (d) to the extent we determine that such action does not materially and adversely affect the value of an award or that such action is in the best interest of the affected participant or any other person as may then have an interest in the award.

The Administrator can cause a participant to forfeit any award, and require the participant to disgorge any gains attributable to the award, if the participant engages in any action constituting, as determined by the Administrator in its discretion, cause for termination, or a breach of a material company policy, any award agreement or any other agreement between the participant and us or one of our affiliates concerning noncompetition, nonsolicitation, confidentiality, trade secrets, intellectual property, nondisparagement or similar obligations.

Any awards granted under the 2021 Equity Plan, and any shares of common stock issued or cash paid under an award, will be subject to any recoupment or clawback policy that we adopt, or any recoupment or similar requirement otherwise made applicable by law, regulation or listing standards to us.

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CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS

The following is a description of transactions within the last three years to which we have been a party, in which the amount involved exceeded or will exceed $120,000, and in which any of our executive officers, directors or holders of more than 5% of our voting securities, or an immediate family member thereof, had or will have a direct or indirect material interest. We believe the terms obtained or consideration that we paid or received, as applicable, in connection with the transactions described below were comparable to terms available or amounts that would be paid or received, as applicable, in arm’s-length transactions with unrelated third parties.

Preferred Stock Financing Transaction

On February 26, 2021, we, HCI and CB Snowbird Holdings, L.P., a Delaware limited partnership and an affiliate of Centerbridge Partners, L.P. (“Centerbridge”), entered into various agreements and instruments relating to a financing transaction (the “Financing Transaction”) in which Centerbridge purchased from us an aggregate of $100 million in newly issued shares of our Series A preferred stock, including the following:

• A Preferred Stock Purchase Agreement (the “Purchase Agreement”) that provided for the purchase by Centerbridge, at a purchase price of $10.00 per share, of 9,000,000 shares of our Series A-1 preferred stock and 1,000,000 shares of our Series A-2 preferred stock (collectively, the “Series A preferred stock”). The Series A-1 preferred stock represented approximately 9.9% of our voting securities as of February 26, 2021 (after giving effect to the grants of approximately 6,000,000 restricted shares of our common stock to our employees under the 2021 Equity Plan on that date), and Centerbridge holds approximately 10.96% of our outstanding common stock as of October 31, 2021, after giving effect to the Preferred Stock Conversion. Approximately $22 million of the proceeds from the Financing Transaction were used to repay indebtedness owed by us to HCI (see “—HCI Loans” below).

• We amended our articles of incorporation to set forth, among other things, the rights and preferences of the Series A preferred stock.

• We, HCI and Centerbridge entered into a Shareholders Agreement (the “Shareholders Agreement”) setting forth certain rights and obligations of our current shareholders, as further described below.

• Our board of directors adopted the 2021 Equity Plan and granted to our employees an aggregate of 6,000,000 restricted shares of our common stock. For a description of the 2021 Equity Plan and the terms of the restricted share grants, see “Executive Compensation—Executive Compensation Arrangements—Equity Compensation” and “Executive Compensation—2021 Equity Incentive Plan.”

• In connection with the Financing Transaction, HCI and Centerbridge entered into a Parent Guaranty Agreement pursuant to which HCI agreed to fully guarantee all of our payment obligations to the holders of our Series A preferred stock as long as those shares are outstanding.

• In connection with the Financing Transaction, HCI issued warrants to purchase 750,000 shares of HCI’s common stock, with an exercise price of $54.40 per share, to Centerbridge. These HCI warrants are immediately exercisable and will expire on the fourth anniversary of the date of issuance. HCI simultaneously transferred these warrants to us as a non-cash capital contribution. The estimated fair value of the warrants was approximately $9.2 million (the net amount, after allocated issuance costs of approximately $0.6 million, was approximately $8.6 million).

• In connection with the Financing Transaction, HCI also (i) made a capital contribution to us of approximately $3.5 million (which previously was an amount payable related to issuance costs paid by HCI on our behalf); (ii) contributed to us the $33 million of principal amount and approximately $23,000 of unpaid interest under a promissory note as a capital contribution (see “—HCI Loans” below); and (iii) returned to us 15 million shares of our common stock (from the 90 million shares of our common stock issued to HCI in October 2020 in exchange for contributed ownership interests in TypTap Insurance Company, TypTap Management Company, Exzeo USA, Inc., Cypress Tech Development Company, Inc. and Exzeo Software Private Limited).

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Preferred Stock Conversion

Pursuant to the terms of our existing articles of incorporation or the Shareholders Agreement (as amended prior to the offering), all 10,000,000 shares of our Series A preferred stock will convert into 10,000,000 shares of our common stock in connection with the completion of this offering.

Shareholders Agreement

In connection with the Financing Transaction, HCI, Centerbridge, and TypTap entered into a Shareholders Agreement setting forth certain rights and obligations relating to, among other matters, their ownership interest in our company and governance of our company. The Shareholders Agreement provides, among other matters:

• As long as Centerbridge continues to hold at least 3,300,000 shares of our capital stock, our board of directors will consist of 8 members, of which one member is designated by Centerbridge, one member is our Chief Executive Officer, one member is jointly designated by HCI and Centerbridge, and the balance will be elected by HCI. The agreement further provides that Centerbridge’s board designee will also serve on any committee of our board of directors if Centerbridge so elects. Centerbridge has designated Mr. Hoffman as its initial designee on our board of directors, and HCI and Centerbridge jointly designated Mr. Shafran.

• We cannot take the following actions unless our board of directors, including the director designated by Centerbridge, approve the actions:    (a) repurchase shares from our Chief Executive Officer or from any other employee or former employee if the aggregate repurchase amount would exceed $5.0 million in a single year, (b) amend any compensation arrangement of our Chief Executive Officer, (c) adopt any incentive compensation plans that would be expected to increase our costs by more than $10.0 million relative to existing compensation plans, or (d) increase the number of equity securities issuable under the 2021 Equity Plan or grant equity compensation in excess of more than $10.0 million in any year (other than pursuant to the 2021 Equity Plan).

• If we issue new equity securities (subject to customary exceptions such as shares issued under the 2021 Equity Plan), HCI and Centerbridge have a preemptive right to purchase a pro rata portion of the new securities to maintain their equity ownership percentage in our company.

• After the 4th anniversary of the closing of the Financing Transaction, Centerbridge has the right to require us to register Centerbridge’s shares with the SEC for sale in a public offering (a “demand registration”) and unlimited rights to request that Centerbridge’s shares be included in any registration of shares by us (“piggyback registration rights”), each subject to customary cutbacks, deferrals and exclusions. The Shareholders Agreement also provides that Centerbridge and HCI are subject to market standstill restrictions whereby they agree not to sell shares for a 6 month period after the registration of an initial public offering is effective, subject to customary exceptions and limitations.

Prior to the completion of this offering, HCI, Centerbridge, and TypTap will enter into an amendment to the Shareholders Agreement providing that the Shareholders Agreement will automatically terminate upon the completion of this offering, and Centerbridge and TypTap will enter into a new registration rights agreement providing that, from and after the completion of this offering, Centerbridge will have specified registration rights with respect to the shares of TypTap common stock held by it. See “Description of Capital Stock—Registration Rights”. The amendment to the Shareholders Agreement will also provide that all of Centerbridge’s preferred shares will automatically convert into 10,000,000 shares of our common stock upon the completion of this offering regardless of whether our existing articles of incorporation provide for conversion.

Additional Anticipated Agreements between HCI and Centerbridge

We anticipate that, prior to the completion of this offering, HCI and Centerbridge will enter into a stock restriction agreement under which HCI will agree not to, without the approval of a majority of the independent

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directors of TypTap, sell to any third party or group of related third-parties, in a single transaction or series of related transactions, a number shares of TypTap common stock that would require the filing of a “Form A” notification (or equivalent form) with any state insurance regulatory authority. A “Form A” (or equivalent form) is generally be required for any direct or indirect change of ownership of 10% or more of a regulated insurance company. We further anticipate that, in replacement of the preferred stock redemption rights currently held by Centerbridge that will terminate upon the conversion of the preferred stock held by Centerbridge, HCI and Centerbridge may enter into a share liquidity agreement under which HCI will grant Centerbridge a right to sell its shares of TypTap common stock to HCI after the completion of this offering under agreed-upon terms.

Reinsurance Contracts

We participate in reinsurance contracts with two of our affiliates, Homeowner’s Choice Property & Casualty Insurance Company, Inc. and Claddaugh Casualty Insurance Company Ltd., two other subsidiaries of our parent company, HCI. The reinsurance allocation method is governed by HCI’s reinsurance allocation agreement, which states that each cedant’s retention and reinsurer’s limit of liability for a loss occurrence is apportioned based on the amount of loss contributed to that occurrence. The reinsurance allocation agreement also states that the reinsurance premium shall be apportioned to each company in the same proportion that the companies’ premium subject to the reinsurance agreement bears to the total premium subject to the reinsurance agreement. Our reinsurance premiums during the years ended December 31, 2020, 2019 and 2018 were $28.8 million, $11.1 million and $4.2 million, respectively.

Cost Allocation Agreement

We receive cost allocations from HCI under a corporate overhead cost allocation agreement between HCI and its subsidiaries, including us (the “HCI Cost Allocation Agreement”), for certain overhead costs incurred by HCI that are related to operating the business as a group. Such costs may include, but are not limited to, corporate administrative expenses, salaries, benefits, bonus and other expenses related to human resources services, accounting and legal services and other indirect operational costs. On a monthly basis, these costs are allocated to us on a predetermined overhead rate which is annually determined by considering headcounts, revenues and activities that can influence costs. The expenses allocated to us under the HCI Cost Allocation Agreement during the years ended December 31, 2020, 2019 and 2018 were approximately $3,625,000, $3,389,000 and $2,261,000, respectively, and during the nine months ended September 30, 2021 and 2020 were approximately $3,523,000 and $3,095,000, respectively. We anticipate that the HCI Cost Allocation Agreement will terminate upon the completion of this offering.

Agent Commission Agreement

Under an agent commission agreement with Omega Insurance Agency, Inc., a subsidiary of HCI, we pay commissions on premiums received in cash for policies issued during the term of the agreement. For the years ended December 31, 2020, 2019 and 2018, commission expenses were approximately $108,000, $84,000 and $44,000, respectively, and for the nine months ended September 30, 2021 and 2020, commission expenses were approximately $88,000 and $78,000, respectively.

Real Property Leases

During 2020 and 2019, we leased office space in Tampa from HCI, and in February 2021, we entered into a sublease agreement with HCI for such office space. For the years ended December 31, 2020, 2019 and 2018, lease expenses related to these leases were $225,000, $222,000 and $219,000, respectively, and for the nine months ended September 30, 2021 and 2020, such lease expense were $170,000 and $168,000, respectively.

We also have an existing lease with Silver Springs Property Investments, LLC, an HCI subsidiary, for an office building in Ocala, Florida. For the years ended December 31, 2020, 2019 and 2018, lease expenses related to these leases were $199,000, $200,000 and $0, respectively, and for the nine months ended September 30, 2021 and 2020, such lease expenses were $150,000.

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We also have an existing lease with M/S RKR Software Solutions Private Limited, for an office building in Noida, India. For the years ended December 31, 2020, 2019 and 2018, lease expenses related to these leases were $108,000, $131,000 and $136,000, respectively, and for the nine months ended September 30, 2021 and 2020, such lease expense were $74,000 and $84,000, respectively.

HCI Loans

On December 30, 2020, we issued a promissory note to HCI for the principal amount of $22 million. The note bore an annual interest rate of 1.75% and would have matured on June 30, 2022. We used the proceeds of this loan from HCI to make a capital contribution to TypTap Insurance Company, our insurance subsidiary. On March 2, 2021, we repaid HCI the full amount of this promissory note, including interest of approximately $66,000.

On February 12, 2021, we issued a promissory note to HCI for the principal amount of $33 million in settlement of the amount payable to HCI as of December 31, 2020. The note bore an annual interest of 1.75% and would have matured on June 30, 2022. In connection with the Financing Transaction on February 26, 2021, HCI contributed to TypTap the $33 million of principal amount and approximately $23,000 of unpaid interest under this note as a capital contribution.

On February 12, 2021, HCI also agreed to provide a revolving line of credit with borrowing capacity of up to $60 million to us. The credit line was available to us until the earlier of June 30, 2022 and the securing of alternative financing. As a result of the Financing Transaction on February 26, 2021, HCI ended this commitment to provide a revolving line of credit to us.

Tax Allocation Agreement

HCI and certain of its subsidiaries, including us, have entered into a Tax Allocation Agreement. The Tax Allocation Agreement requires each subsidiary that joins in HCI’s consolidated federal income tax return to pay to HCI the amount of the federal income tax the subsidiary would owe for each taxable year if the subsidiary had filed a federal income tax return for the year as a separate company. If a subsidiary incurs a loss (or has unused tax credits) for a taxable year that can be carried back to prior years, HCI is required to pay to the subsidiary the amount of the federal income tax refund the subsidiary would be entitled to receive, computed on a separate company basis; but if no carryback would be allowed, HCI is obligated to pay the subsidiary the amount of the reduction in the consolidated federal income taxes of the affiliated group that results from the group’s use of the subsidiary’s losses or credits. Adjustments to the amount of required payments are required to reflect any audit changes made to the tax reporting of a subsidiary. The Tax Allocation Agreement contemplates that a subsidiary will become a party to the Tax Allocation Agreement when it joins the affiliated group, and it automatically terminates with respect to a subsidiary when the subsidiary’s membership in the affiliated group terminates (but rights and obligations arising during the period when the subsidiary was a party survive termination). For the years ended December 31, 2020, 2019 and 2018, we received net income tax benefits from HCI of approximately $4,024,000, $2,439,000 and $1,661,000, respectively, and for the nine months ended September 30, 2021 and 2020, we received net income tax benefits from HCI of approximately $6,391,000 and $2,661,000, respectively.

Quota Share Reinsurance Agreement

On June 16, 2021, we and our affiliate, Homeowners Choice, another subsidiary of our parent company, HCI, entered into a quota share reinsurance agreement with United. As part of the transactions of assuming policies from United, we and Homeowners Choice agreed to provide 100% quota share reinsurance on all of the United’s in-force and renewal policies in the states of Connecticut, New Jersey, Massachusetts and Rhode Island from June 1, 2021 through May 31, 2022. In exchange, we and Homeowners Choice will pay United a ceding commission of 24% of premium. As of September 30, 2021 the agreement represents approximately $117 million of annual premiums which are divided equally between us and Homeowners Choice.

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Service Agreements

In March 2021, TypTap Management Company, one of our subsidiaries (“TTM”), entered into a policy administration service agreement with Homeowners Choice Managers, a subsidiary of HCI (“HCM”), pursuant to which TTM receives $35 for each new and renewed Homeowners Choice flood policy outside of Florida. For the three and nine months ended September 30, 2021, TTM recognized policy administration income of approximately $1,000 and $5,000, respectively.

In March 2021, Exzeo USA, Inc., one of our subsidiaries, entered into a software license and service agreement with HCM pursuant to which HCM pays Exzeo USA various usage-based or flat fees for use of following software: SAMS, Harmony, CasaClue, AtlasViewer, and Claim Colony. An additional flat fee is paid for other general software services. For the three and nine months ended September 30, 2021, Exzeo USA recognized license and service income of approximately $443,000 and $1,030,000, respectively.

In March 2021, TTM entered into a claims services agreement with Griston Claims Management, another subsidiary of HCI (“GCM”), pursuant to which TTM pays GCM $1,200 per TypTap Insurance Company non-catastrophe claim and $5,000 per non-catastrophe litigated internally handled TypTap Insurance Company claim. TTM also pays GCM $1,200 per TypTap Insurance Company catastrophe claim and 4% of the incurred loss for each catastrophe claim. For the three and nine months ended September 30, 2021, TTM incurred claims services expenses of approximately $1,208,000 and $2,711,000, respectively.

HCI Employee Benefit Plans

Through HCI, we have a 401(k) Safe Harbor Profit Sharing Plan that qualifies as a defined contribution plan under Section 401(k) of the Internal Revenue Code. Under this plan, participating employees are eligible for matching and discretionary profit-sharing contributions from us. Plan participants may elect to defer up to 100% of their pre-tax gross wages, subject to annual limitations. Our matching contribution is limited to a maximum of 4% of the employee’s annual salary or wage and is fully vested when contributed. Eligibility and vesting of our discretionary profit sharing contribution is subject to the plan participant’s years of service. During the years ended December 31, 2020, 2019 and 2018, we contributed approximately $244,000, $150,000 and $121,000, respectively, in matching contributions.

HCI has an incentive plan that provides restricted stock awards to employees of HCI and its subsidiaries, including us, in connection with their service. The terms of the restricted stock grants include only service conditions and the awards generally vest over a period of four years. In February 2021, HCI cancelled 141,600 shares of unvested restricted stock for the employees transferred to us. In exchange, these employees received replacement restricted stock issued under our 2021 Equity Plan. For the years ended December 31, 2020, 2019 and 2018, we recognized compensation expense related to HCI restricted stock of approximately $1,807,000, $961,000 and $660,000, respectively, and for the nine months ended September 30, 2021 and 2020, we recognized compensation expense related to HCI restricted stock of approximately $152,000 and $1,316,000, respectively,

Board of Directors

In connection with the Financing Transaction, Eric Hoffman, a managing director at Centerbridge, was appointed to our board of directors (as well as the board of directors of HCI), James Macchiarola and Loreen Spencer resigned from the HCI board of directors and Ms. Spencer was appointed to our board of directors (Mr. Macchiarola was already serving as one of our directors).

Paresh Patel, our president, chief executive officer and chairman of our board of directors, also serves as chairman of the HCI board of directors and HCI’s chief executive officer. Mr. Patel receives an annual salary of $475,000 and other compensation benefits from HCI for serving as its chief executive officer.

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Directed Share Program

At our request, the underwriters have reserved for sale, at the initial public offering price, up to 5% of the shares offered by this prospectus for sale through a directed share program to some of our directors, officers, employees, business associates and related persons. The directed share program will not limit the ability of our directors, officers and their family members, or holders of more than 5% of our common stock, to purchase more than $120,000 in value of our common stock. We do not currently know the extent to which these related persons will participate in our directed share program, if at all, or to the extent they will purchase more than $120,000 in value of our common stock. See “Underwriting—Directed Share Program.”

Review and Approval of Related Party Transactions

Prior to the completion of this offering, our board of directors will adopt a written policy regarding the review and approval of related party transactions. Our audit committee charter provides that the audit committee shall review and approve or disapprove any related party transactions, which are transactions between us and related persons in which the aggregate amount involved exceeds or may be expected to exceed $120,000 and in which a related person has or will have a direct or indirect material interest. Upon the completion of this offering, our policy regarding transactions between us and related persons will provide that a related person is defined as a director, executive officer, nominee for director or greater than 5% beneficial owner of our common stock, in each case since the beginning of the most recently completed year, and any of their immediate family members.

Certain of the foregoing disclosures are summaries of certain provisions of our related party agreements, and are qualified in their entirety by reference to all of the provisions of such agreements. Because these descriptions are only summaries of the applicable agreements, they do not necessarily contain all of the information that you may find useful. Copies of certain of the agreements have been filed as exhibits to the registration statement of which this prospectus is a part, and are available electronically on the website of the SEC at www.sec.gov.

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PRINCIPAL SHAREHOLDERS

The following table sets forth information as of October 31, 2021 with respect to the beneficial ownership of our common stock (i) immediately prior to this offering and (ii) as adjusted to reflect the sale of                shares of our common stock in this offering, in each case by:

• each of our named executive officers;

• each of our directors;

• all of our current directors and executive officers as a group; and

• each person known by us to be the beneficial owner of more than 5% of the outstanding shares of our common stock.

We have determined beneficial ownership in accordance with the rules of the SEC, and thus it represents sole or shared voting or investment power with respect to our securities. Unless otherwise indicated below, to our knowledge, the persons and entities named in the table have sole voting and sole investment power with respect to all shares that they beneficially owned, subject to community property laws where applicable. The information does not necessarily indicate beneficial ownership for any other purpose, including for purposes of Sections 13(d) and 13(g) of the Securities Act.

In the table below, the applicable percentage ownership relating to shares beneficially owned prior to this offering is based on 91,263,210 shares of our common stock outstanding as of October 31, 2021, which includes 5,945,443 shares of restricted common stock outstanding under the 2021 Equity Plan that are unvested as of October 31, 2021, and which reflects 10,000,000 shares of our preferred stock that will convert into shares of our common stock in connection with the completion of this offering as if such conversion had occurred as of October 31, 2021. The applicable percentage ownership relating to shares beneficially owned after this offering is based on                shares of our common stock outstanding (or                shares of our common stock if the underwriters’ option to purchase additional shares is exercised in full). The following table does not reflect any shares of our common stock that may be purchased pursuant to our directed share program described under “Underwriting—Directed Share Program.” Unless otherwise indicated in the footnotes below, the address of each beneficial owner listed in the table below is c/o TypTap Insurance Group, Inc., 5300 West Cypress Street, Suite 100, Tampa, Florida 33607.

	Shares of common stock beneficially owned
	Shares of common stock beneficially owned before this offering					Shares of common stock beneficially owned after this offering assuming underwriters’ option is not exercised				Shares of common stock beneficially owned after this offering assuming underwriters’ option is exercised in full(1)
Name of beneficial owner	Number of Shares		Percentage			Number of Shares		Percentage		Number of Shares		Percentage
Directors and Executive Officers
Paresh Patel(2)		1,497,716		1.64	%		1,497,716		*		1,497,716		*
Kevin Mitchell(2)		551,625		*			551,625		*		551,625		*
Mark Harmsworth(3)		0		*			0		*		0		*
Eric Hoffman		0		*			0		*		0		*
Irene Hurst(2)		10,500		*			10,500		*		10,500		*
Robert Lopes(2)		10,000		*			10,000		*		10,000		*
James Macchiarola(2)		20,000		*			20,000		*		20,000		*
Steve Shafran(2)		10,000		*			10,000		*		10,000		*
Loreen Spencer(2)		10,000		*			10,000		*		10,000		*
All current directors and executive officers as a group(2) (9 persons)		2,409,841		2.64	%		2,409,841		*		2,409,841		*
Other Holders
HCI Group, Inc.		75,000,000		82.18	%		75,000,000		%		75,000,000		%
CB Snowbird Holdings, L.P.(4)		10,000,000		10.96	%		10,000,000		%		10,000,000		%

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* Represents beneficial ownership of less than 1%.

(1) The underwriters have the option to purchase up to an additional                  shares of common stock from us at the initial public offering price, less underwriting discounts and commissions, within 30 days of the date of this prospectus.

(2) Includes unvested restricted shares outstanding under our 2021 Equity Plan held as follows: Mr. Patel, 1,480,935 shares; Mr. Mitchell, 531,500 shares; Ms. Hurst, 10,000 shares; Mr. Lopes, 10,000 shares; Mr. Macchiarola, 10,000 shares; Mr. Shafran, 10,000 shares; Ms. Spencer, 10,000 shares; and all current directors and executive officers as a group, 2,362,435 shares (including 300,000 unvested restricted shares held by Mr. Bhandari). Does not include options granted under the 2021 Omnibus Plan on October 1, 2021 (since such options will not vest within 60 days of October 31, 2021) held as follows: Mr. Patel, 5,000,000 shares; Mr. Mitchell, 1,000,000 shares; and all current directors and executive officers as a group 6,100,000 (including unvested options to acquire 100,000 shares held by Mr. Bhandari).

(3) Mr. Harmsworth ceased to serve as our Chief Financial Officer as of July 2021 when Mr. Bhandari began as our new Chief Financial Officer.

(4) The address of CB Snowbird Holdings, L.P. is c/o Centerbridge Partners, L.P., 375 Park Avenue, 11th Floor, New York, New York 10152. Shares are held of record by CB Snowbird Holdings, L.P. (“CB Snowbird”). The general partner of CB Snowbird is CSCP III Cayman GP Ltd., a Cayman Islands exempted company (“CSCP III”) of which Jeffrey H. Aronson is the sole director. Centerbridge Special Credit Partners III-Flex, L.P., a Delaware limited partnership (“Special Credit III-Flex”), is a limited partner of CB Snowbird owning 98.5% of CB Snowbird, and Centerbridge Special Credit Partners General Partner III, L.P., a Delaware limited partnership (“General Partner III”), is the general partner of Special Credit III-Flex, and the general partner of General Partner III is CSCP III. Accordingly, Mr. Aronson is the sole natural person deemed to have voting and dispositive power over the securities held by CB Snowbird. Shares indicated as owned prior to the offering represent common shares into which an aggregate of 10,000,000 shares of Series A-1 Preferred Stock and Series A-2 Preferred Stock held of record by CB Snowbird are convertible.

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DESCRIPTION OF CAPITAL STOCK

The following description of the material terms of our amended and restated articles of incorporation and our bylaws, each of which will become effective immediately prior to the completion of this offering, is a summary, does not purport to be complete and is qualified in its entirety by reference to our amended and restated articles of incorporation and bylaws, which are filed as exhibits to the registration statement of which this prospectus is a part and are incorporated by reference into this prospectus. The description of our capital stock reflects changes to our capital structure that will occur immediately prior to the completion of this offering.

Upon completion of this offering, our authorized capital stock will consist of                 shares of our common stock, par value $0.001 per share, and                 shares of preferred stock, par value $0.001 per share. No shares of preferred stock will be issued or outstanding immediately after the completion of this offering. Unless our board of directors determines otherwise, we will issue all shares of our capital stock in uncertificated form.

Corporate Governance

We are a corporation organized under the laws of the state of Florida and are governed by the Florida Business Corporation Act, which we sometimes refer to as the FBCA, our amended and restated articles of incorporation and our bylaws.

Common Stock

Holders of our common stock are entitled to one vote for each share held on all matters submitted to a vote of shareholders. Accordingly, holders of a majority of the shares of our common stock entitled to vote in any election of directors may elect all of the directors standing for election. Holders of our common stock are entitled to receive proportionately any dividends if and when such dividends are declared by our board of directors, subject to any preferential dividend rights of outstanding preferred stock. Upon the liquidation, dissolution or winding up of the company, the holders of our common stock are entitled to receive ratably net assets available after the payment of all debts and other liabilities and subject to the prior rights of holders of any outstanding preferred stock. The rights, preferences and privileges of holders of our common stock are subject to, and may be adversely affected by, the rights of the holders of shares of any series of preferred stock that we may designate and issue in the future.

Preferred Stock

Under the terms of our amended and restated articles of incorporation, which we sometimes refer to as the articles, the board of directors is authorized to designate and issue up to                 shares of preferred stock in one or more series without shareholder approval. Our board of directors will have discretion to determine the rights, preferences, privileges and restrictions, including voting rights, dividend rights, conversion rights, redemption privileges and liquidation preferences, of each series of preferred stock.

It is not possible to state the actual effect of the issuance of any shares of preferred stock upon the rights of holders of our common stock until the board of directors determines the specific rights of the holders of the preferred stock. However, these effects might include:

• restricting dividends on the common stock;

• diluting the voting power of the common stock;

• impairing the liquidation rights of the common stock; and

• delaying or preventing a change in control of the company.

Upon completion of this offering, there will be no shares of preferred stock outstanding and, at present, we have no plans to issue any shares of preferred stock.

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Dividends and Other Distributions

The holders of our common stock will be entitled to receive proportionately any cash or stock dividends if and when such dividends are declared by the board of directors, subject to any preferential dividend rights of outstanding preferred stock. In the event of the dissolution or liquidation of the company, after the full preferential rights, if any, on any outstanding preferred stock has been paid to or set aside for the holders of such preferred stock, the holders of our common stock will be entitled to receive proportionately all of our remaining assets.

The declaration and payment of any dividend will be subject to the discretion of our board of directors, subject to applicable laws. The time and amount of any dividend will depend on a number of factors, including our financial condition, results of operations, capital requirements, contractual restrictions, general business conditions, and any other factors that our board of directors may deem relevant.

We currently intend to retain all available funds and any future earnings for general corporate purposes, including working capital, operating expenses and capital expenditures, and do not anticipate declaring or paying any cash dividends on our common stock in the foreseeable future. See “Dividend Policy.”

Number and Election of Directors

Our board of directors consists of eight members. Our articles provide that our directors are divided into three classes, designated as Class A, Class B and Class C. The terms of the directors of each class will expire at the annual meetings of shareholders to be held in 2022 (Class B), 2023 (Class C) and 2024 (Class A). At each annual meeting of shareholders, one class of directors will be elected to succeed that class of directors whose terms are expiring to hold office until the third succeeding annual meeting, and until their successors are duly elected and qualified.

Quorum/Voting

At all meetings of our board of directors, a majority of the total number of directors constitutes a quorum. If there is a quorum, a vote of the majority of the directors present at the meeting is considered an act of our board of directors.

Removal of Directors

Our articles provide that any director may be removed from office, but only for cause by the affirmative vote of not less than a majority of our shareholders entitled to vote in the election of directors. “Cause” is construed to exist only if the director whose removal is proposed has been convicted of a felony or has been adjudged to be liable for willful misconduct in the performance of his or her duties to us in a matter which has a material adverse effect on our business.

Vacancies on the Board of Directors

Any vacancy occurring in our board of directors may be filled by the affirmative vote of a majority of the directors then in office.

Voting by Shareholders

Each holder of our common stock is entitled to one vote per share for the election of directors and for all other corporate purposes.

Amendment of Articles

The FBCA allows us to amend our articles at any time to add or change a provision that is required or permitted to be included in the articles of incorporation or to delete a provision that is not required to be included in the

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articles of incorporation. Our board of directors can propose one or more amendments for submission to shareholders and may condition its submission of the proposed amendment on any basis if it provides certain notice and includes certain information regarding the proposed amendment in that notice. The provisions in our articles that require a greater voting requirement than provided in the FBCA may only be amended by the same vote required to take action under that voting requirement.

Amendment of Bylaws

Our bylaws may be amended or repealed and new bylaws may be adopted by our shareholders at any annual or special meeting at which a quorum is present. The bylaws may also be amended or repealed and new bylaws may be adopted by our board of directors by affirmative vote of a majority of the number of directors present at any meeting at which a quorum is in attendance. Notwithstanding the foregoing, pursuant to our articles, the provisions of our bylaws that require a greater voting requirement than provided in the FBCA may only be amended by the same vote required to take action under that voting requirement.

Registration Rights

Under the Shareholders Agreement among HCI, Centerbridge, and TypTap, Centerbridge is currently entitled to rights with respect to the registration of its shares of TypTap common stock under the Securities Act. See “Certain Relationships and Related Party Transactions—Shareholders Agreement.” Prior to the completion of this offering, HCI, Centerbridge, and TypTap will enter into an amendment to the Shareholders Agreement providing that the Shareholders Agreement (including the registration rights therein) will automatically terminate upon the completion of this offering and that Centerbridge and TypTap will enter into a new registration rights agreement prior to the completion of this offering. The new registration rights agreement will provide that, as soon after the completion of this offering as we are eligible to use a Form S-3 Registration Statement, Centerbridge may make a written request that we register the offer and sale of its shares on a registration statement on Form S-3. We will not be obligated to effect any such registration if Centerbridge proposes to sell securities at an aggregate offering price of $20 million or less. In addition, within 15 days of TypTap initially qualifying for use of a shelf registration on Form S-3, TypTap will file a registration statement registering the resale of its shares held by Centerbridge. For so long as such shelf registration statement remains effective, Centerbridge may at any time elect to sell its shares pursuant to an underwritten offering, provided that the aggregate offering price is at least $5.0 million. If we are actively seeking to file a TypTap-initiated registration statement, we will not be obligated to effect any of the foregoing registrations during the period that is 60 days before we estimate that we will file such registration statement and ending 90 days after the effectiveness of such registration statement, provided that we may exercise this right only once in any 12-month period and such right will not prohibit Centerbridge from engaging in an underwritten block trade or bought deal pursuant to an automatic shelf registration statement or an existing shelf registration statement. In addition, in certain circumstances, we may postpone the filing or effectiveness of a demand registration or suspend sales pursuant to an existing shelf registration for up to 60 days, in which case we have the right to defer such filing, effectiveness, and sales, not more than twice in any 12-month period. Centerbridge will also have piggyback registration rights with respect to a TypTap-initiated registration statement, subject to limited exceptions. Centerbridge’s registration rights will terminate on the date when Centerbridge can sell all of its shares of TypTap common stock with the public information requirements, provided that Centerbridge holds less than 5% of the outstanding shares of common stock of TypTap. We will pay all expenses relating to any such registration, subject to specified limitations and excluding underwriters’ discounts or commissions.

Anti-Takeover Effects of Various Provisions of Florida Law, Our Amended and Restated Articles of Incorporation and Our Bylaws

Provisions of Florida law have certain anti-takeover effects. Our amended and restated articles of incorporation and bylaws also contain provisions that may have similar effects.

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Florida Anti-Takeover Statutes

The control share acquisition statute, Section 607.0902 of the FBCA, generally provides that in the event a person acquires voting shares of the company in excess of 20% of the voting power of all of our issued and outstanding shares, such acquired shares will not have any voting rights unless such rights are restored by the holders of a majority of the votes of each class or series entitled to vote separately, excluding shares held by the person acquiring the control shares or any of our officers or employees who are also directors of the company. Certain acquisitions of shares are exempt from these rules, such as shares acquired pursuant to the laws of intestate succession or pursuant to a gift or testamentary transfer, pursuant to a merger or share exchange effected in compliance with the FBCA if we are a party to the agreement, or pursuant to an acquisition of our shares if the acquisition has been approved by our board of directors before the acquisition. The control share acquisition statute generally applies to any “issuing public corporation,” which means a Florida corporation which has:

• One hundred or more shareholders;

• Its principal place of business, its principal office, or substantial assets within Florida; and

• Either (i) more than 10% of its shareholders are resident in Florida; (ii) more than 10% of its shares are owned by residents of Florida; or (iii) one thousand shareholders are resident in Florida.

The affiliated transaction (or so-called “business combination”) statute, Section 607.0901 of the FBCA, provides that we may not engage in certain mergers, consolidations, sales of assets, issuances of stock, reclassifications, recapitalizations, and other affiliated transactions with any “interested shareholder” for a period of three years following the time that such shareholder became an interested shareholder, unless:

• Prior to the time that such shareholder became an interested shareholder, our board of directors approved either the affiliated transaction or the transaction which resulted in the shareholder becoming an interested shareholder; or

• Upon consummation of the transaction that resulted in the shareholder becoming an interested shareholder, the interested shareholder owned at least 85% of our voting shares outstanding at the time the transaction commenced; or

• At or subsequent to the time that such shareholder became an interested shareholder, the affiliated transaction is approved by our board of directors and authorized at an annual or special meeting of shareholders, and not by written consent, by the affirmative vote of at least two-thirds of the outstanding voting shares which are not owned by the interested shareholder.

An “interested shareholder” is generally defined as any person who is the beneficial owner of more than 15% of our outstanding voting shares.

The voting requirements set forth above do not apply to a particular affiliated transaction if one or more conditions are met, including, but not limited to, the following: if the affiliated transaction has been approved by a majority of our disinterested directors; if we have not had more than 300 shareholders of record at any time during the three years preceding the date the affiliated transaction is announced; if the interested shareholder has been the beneficial owner of at least 80% of our outstanding voting shares for at least three years preceding the date the affiliated transaction is announced; or if the consideration to be paid to the holders of each class or series of voting shares in the affiliated transaction meets certain requirements of the statute with respect to form and amount, among other things.

The foregoing provisions of the FBCA do not currently apply to HCI since our board of directors approved for purposes of these provisions any acquisition made HCI.

Florida insurance statutes

Pursuant to Section 628.461 of the Florida Statutes, generally no person may acquire a controlling interest in our insurance subsidiary, TypTap Insurance Company, whether by purchase of 10% or more of TypTap Insurance

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Company’s or our (as its parent company) voting securities or otherwise, unless the acquiring person gives prior notice to the insurer and has received prior approval from the Florida Office of Insurance Regulation. Under Florida insurance law, an entity is presumed to have control of an insurance company if it owns, directly or indirectly, 10% or more of the voting stock of that insurance company or its parent company. See “Regulation—Changes of Control.”

In addition to the provisions described above, various provisions of our amended and restated articles and our bylaws, which are summarized in the following paragraphs, may be deemed to have anti-takeover effects.

No Shareholder Action by Written Consent

Our articles require that all shareholder action be taken upon the vote of shareholders at an annual or special meeting of shareholders duly noticed and called in accordance with Florida law, and no such action may be taken without a meeting by written consent of shareholders.

Classified Board of Directors

Our articles provide that the board of directors is divided into three classes, with staggered terms of three years each. Each year the term of one class expires. The articles provide that any vacancies on the board of directors can be filled only by the affirmative vote of a majority of the directors in office. Any director so elected will serve until the next election of the class for which he or she is chosen and until his or her successor is duly elected and qualified.

No Cumulative Voting

The FBCA provides that shareholders do not have the right to cumulate votes in the election of directors unless the articles of incorporation provide otherwise. Our articles do not provide for cumulative voting.

Advance Notice Requirements for Shareholder Proposals and Director Nominations; Calling a Special Meeting

Our bylaws provide that shareholders seeking to bring business before an annual meeting must provide timely notice of their proposal in writing to the corporate secretary. To be timely, a shareholder’s notice must have been received on or before December 31 of the year immediately preceding the annual meeting; provided, however, that in the event that the date of the annual meeting is on or after May 1 in any year, notice by the shareholder to be timely must be received not later than the close of business on the day which is determined by adding to December 31 of the year immediately preceding such annual meeting the number of days starting with May 1 and ending on the date of the annual meeting in such year. The bylaws also specify requirements as to the form and content of a shareholder’s notice. These provisions may impede shareholders’ ability to bring matters before an annual meeting of shareholders or make nominations for directors at an annual meeting of shareholders.

Our bylaws also provide that a special meeting of shareholders can only be called by our chairman of the board of directors, our chief executive officer, our president (in the absence of a chief executive officer), a majority of our board of directors or the holders of 10% or more of all of our votes entitled to be cast on any issue proposed to be considered at the special meeting of shareholders.

Authorized but Unissued Shares

Our authorized but unissued shares of common stock and preferred stock will be available for future issuance without shareholder approval. We could use these additional shares for a variety of corporate purposes, including future public offerings to raise additional capital, acquisitions of other businesses or entities and issuances under employee benefit plans. Additionally, we could issue a series of preferred stock that could, depending on its terms, impede the completion of a merger, tender offer or other takeover attempt. Our board of directors will

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make any determination to issue such shares based on its judgment as to the best interests of us and our shareholders. The board of directors, in so acting, could issue preferred stock having terms that could discourage an acquisition attempt through which an acquiror may be able to change the composition of the board of directors, including a tender offer or other transaction that some, or a majority, of our shareholders might believe to be in their best interests or in which shareholders might receive a premium over the then-current market price of the common stock.

Preemptive Rights

No holder of our common stock has any preemptive or subscription rights to acquire shares of our capital stock.

Exclusive Jurisdiction

Our bylaws provide that, unless we consent in writing to the selection of an alternative forum, the sole and exclusive forum for (i) any derivative action or proceeding brought on our behalf, (ii) any action asserting a claim of breach of a fiduciary duty owed by any of our current or former directors, officers or other employees to us or our shareholders, (iii) any action arising pursuant to any provision of the FBCA, our amended and restated articles of incorporation or our bylaws, or (iv) any other action asserting a claim that is governed by the internal affairs doctrine shall be a state court located within the state of Florida (or, if a state court located within the state of Florida does not have jurisdiction, the federal district court for the Middle District of Florida); provided that, the exclusive forum provision will not apply to suits brought to enforce any liability or duty created by the Exchange Act, or to any claim for which the federal courts have exclusive jurisdiction. Our bylaws also provide that, unless we consent in writing to the selection of an alternative forum, the U.S. federal district courts shall be the exclusive forum for the resolution of any claims arising under the Securities Act. Any person or entity purchasing or otherwise acquiring any interest in our securities shall be deemed to have notice of and consented to these provisions. Although we believe these provisions benefit us by providing increased consistency in the application of law for the specified types of actions and proceedings, the provisions may have the effect of discouraging lawsuits against us or our directors and officers. We note that investors cannot waive compliance with the federal securities laws and the rules and regulations thereunder. Please also see the section titled “Risk Factors—Risks Related to Ownership of our Common Stock—Our bylaws that will be in effect immediately prior to the completion of this offering designates the state courts located within the state of Florida as the exclusive forum for substantially all disputes between us and our shareholders and the federal district courts as the exclusive forum for Securities Act claims, which could limit our shareholders’ ability to obtain a favorable judicial forum for disputes with us.”

Liability and Indemnification of Officers and Directors

Our amended and restated articles of incorporation and bylaws provide that we shall indemnify, and advance any and all reasonable expenses incurred by, any current or former director or officer to the fullest extent permitted by law.

Section 607.0831 of the FBCA, provides that a director is not personally liable for monetary damages to the corporation or any other person for any statement, vote, decision to take or not to take action, or any failure to take any action, as a director, unless (1) the director breached or failed to perform his or her duties as a director and (2) the director’s breach of, or failure to perform, those duties constitutes (a) a violation of the criminal law, unless the director had reasonable cause to believe his or her conduct was lawful or had no reasonable cause to believe his or her conduct was unlawful, (b) a transaction from which the director derived an improper personal benefit, either directly or indirectly, (c) a circumstance under which the liability provisions of Section 607.0834 of the FBCA are applicable, (d) in a proceeding by or in the right of the corporation to procure a judgment in its favor or by or in the right of a shareholder, conscious disregard for the best interest of the corporation, or willful or intentional misconduct, or (e) in a proceeding by or in the right of someone other than the corporation or a shareholder, recklessness or an act or omission which was committed in bad faith or with malicious purpose or in a manner exhibiting wanton and willful disregard of human rights, safety, or property. A judgment or other final

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adjudication against a director in any criminal proceeding for a violation of the criminal law estops that director from contesting the fact that his or her breach, or failure to perform, constitutes a violation of the criminal law; but does not estop the director from establishing that he or she had reasonable cause to believe that his or her conduct was lawful or had no reasonable cause to believe that his or her conduct was unlawful.

Under Section 607.0851 of the FBCA, a corporation has power to indemnify any person who is a party to any proceeding (other than an action by, or in the right of the corporation), because he or she is or was a director or officer of the corporation against liability incurred in connection with such proceeding, including any appeal thereof, if he or she acted in good faith and in a manner he or she reasonably believed to be in, or not opposed to, the best interests of the corporation and, with respect to any criminal action or proceeding, had no reasonable cause to believe his or her conduct was unlawful. The termination of any proceeding by judgment, order, settlement or conviction or upon a plea of nolo contendere or its equivalent shall not, of itself, create a presumption that the person did not act in good faith and in a manner which he or she reasonably believed to be in, or not opposed to, the best interests of the corporation or, with respect to any criminal action or proceeding, has reasonable cause to believe that his or her conduct was unlawful.

For purposes of the indemnification provisions of the FBCA, “director” or “officer” means an individual who is or was a director or officer, respectively, of a corporation or who, while a director or officer of the corporation, is or was serving at the corporation’s request as a director or officer, manager, partner, trustee, employee, or agent of another domestic or foreign corporation, limited liability company, partnership, joint venture, trust, employee benefit plan, or another enterprise or entity and the terms include, unless the context otherwise requires, the estate, heirs, executors, administrators, and personal representatives of a director or officer.

In addition, under Section 607.0851 of the FBCA, a corporation has the power to indemnify any person, who was or is a party to any proceeding by or in the right of the corporation to procure a judgment in its favor by reason of the fact that the person is or was a director or officer, against expenses and amounts paid in settlement not exceeding, in the judgment of the board of directors, the estimated expense of litigating the proceeding to conclusion, actually and reasonably incurred in connection with the defense or settlement of such proceeding, including any appeal thereof. Such indemnification shall be authorized if such person acted in good faith and in a manner he or she reasonably believed to be in, or not opposed to, the best interests of the corporation, except that no indemnification shall be made under this subsection in respect of any claim, issue, or matter as to which such person shall have been adjudged to be liable unless, and only to the extent that, the court in which such proceeding was brought, or any other court of competent jurisdiction, shall determine upon application that, despite the adjudication of liability but in view of all circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses which such court shall deem proper.

Section 607.0852 of the FBCA provides that a corporation must indemnify an individual who is or was a director or officer who was wholly successful, on the merits or otherwise, in the defense of any proceeding to which the individual was a party because he or she is or was a director or officer of the corporation against expenses incurred by the individual in connection with the proceeding.

Section 607.0853 of the FBCA provides that a corporation may, before final disposition of a proceeding, advance funds to pay for or reimburse expenses incurred in connection with the proceeding by an individual who is a party to the proceeding because that individual is or was a director or an officer if the director or officer delivers to the corporation a signed written undertaking of the director or officer to repay any funds advanced if (a) the director or officer is not entitled to mandatory indemnification under Section 607.0852; and (b) it is ultimately determined under Section 607.0854 or Section 607.0855 (as described below) that the director or officer has not met the relevant standard of conduct described in Section 607.0851 or the director or officer is not entitled to indemnification under Section 607.0859 (as described below).

Section 607.0854 of the FBCA provides that, unless the corporation’s articles of incorporation provide otherwise, notwithstanding the failure of a corporation to provide indemnification, and despite any contrary determination

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of the board of directors or of the shareholders in the specific case, a director or officer of the corporation who is a party to a proceeding because he or she is or was a director or officer may apply for indemnification or an advance for expenses, or both, to a court having jurisdiction over the corporation which is conducting the proceeding, or to a circuit court of competent jurisdiction. Our amended and restated articles of incorporation do not provide any such exclusion. After receipt of an application and after giving any notice it considers necessary, the court may order indemnification or advancement of expenses upon certain determinations of the court.

Section 607.0855 of the FBCA provides that, unless ordered by a court under Section 607.0854, a corporation may not indemnify a director or officer under Section 607.0851 unless authorized for a specific proceeding after a determination has been made that indemnification is permissible because the director or officer has met the relevant standard of conduct set forth in Section 607.0851.

Section 607.0857 of the FBCA also provides that a corporation shall have the power to purchase and maintain insurance on behalf of and for the benefit of any person who is or was a director or officer of the corporation against any liability asserted against the person and incurred by him or her in any such capacity or arising out of his or her status as such, whether or not the corporation would have the power to indemnify or advance expenses to the individual against such liability under the provisions of Section 607.0857.

Section 607.0858 of the FBCA provides that the indemnification provided pursuant to Section 607.0851 and Section 607.0852, and the advancement of expenses provided pursuant to Section 607.0853, are not exclusive. A corporation may, by a provision in its articles of incorporation, bylaws or any agreement, or by vote of shareholders or disinterested directors, or otherwise, obligate itself in advance of the act or omission giving rise to a proceeding to provide any other or further indemnification or advancement of expenses to any of its directors or officers.

Section 607.0859 of the FBCA provides that, unless ordered by a court under the provisions of Section 607.0854 of the FBCA, a corporation may not indemnify a director or officer under Section 607.0851 or Section 607.0858, or advance expenses to a director or officer under Section 607.0853 or Section 607.0858, if a judgment or other final adjudication establishes that his or her actions, or omissions to act, were material to the cause of action so adjudicated and constitute: (a) willful or intentional misconduct or a conscious disregard for the best interests of the corporation in a proceeding by or in the right of the corporation to procure a judgment in its favor or in a proceeding by or in the right of a shareholder; (b) a transaction in which a director or officer derived an improper personal benefit; (c) a violation of the criminal law, unless the director or officer had reasonable cause to believe his or her conduct was lawful or had no reasonable cause to believe his or her conduct was unlawful; or (d) in the case of a director, a circumstance under which the liability provisions of Section 607.0834 are applicable (relating to unlawful distributions).

These provisions may have the practical effect in certain cases of eliminating the ability of shareholders to collect monetary damages from our directors and officers. We believe that these provisions are necessary to attract and retain qualified persons to serve as our directors and officers. There is currently no pending material litigation or proceeding involving any of our directors, officers or employees for which indemnification is sought.

Transfer Agent and Registrar

American Stock Transfer & Trust Company, LLC will be the transfer agent and registrar for our common stock.

Listing

We intend to apply to list our common stock on the NYSE under the symbol “TYTP”.

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SHARES ELIGIBLE FOR FUTURE SALE

Prior to this offering, there was no public market for our common stock, and there can be no assurance that a significant public market for our common stock will develop or be sustained after this offering. Future sales of substantial amounts of our common stock in the public market (including securities convertible into or redeemable, exchangeable or exercisable for shares of common stock) or the perception that such sales may occur or the availability of such shares for sale in the public market, after this offering could adversely affect the prevailing market price of our common stock. Furthermore, because all of our common stock outstanding prior to the completion of this offering (including securities convertible into or redeemable, exchangeable, or exercisable for shares of our common stock) will be subject to the contractual and legal restrictions on resale described below, the sale of a substantial amount of common stock in the public market after these restrictions lapse could materially adversely affect the prevailing market price of our common stock and our ability to raise equity capital in the future. See “Risk Factors—Risks Related to Ownership of Our Common Stock—A substantial portion of the outstanding shares of our common stock after this offering will be restricted from immediate resale, but may be sold on a stock exchange in the near future. The large number of shares eligible for public sale could depress the market price of our common stock.”

Assuming the conversion of all outstanding shares of our preferred stock into shares of our common stock, which will occur in connection with the completion of this offering, as of October 31, 2021, we expect to have 91,263,210 shares of our common stock outstanding, including 5,945,443 outstanding shares of restricted stock that are unvested as of that date, and assuming that the underwriters have not exercised their option to purchase additional shares of common stock.

All of the shares of common stock sold in this offering will be freely transferable without restriction or further registration under the Securities Act by persons other than “affiliates,” as that term is defined in Rule 144 under the Securities Act, except that any shares purchased by our directors, executive officers or key employees pursuant to our directed share program will be subject to the lock-up agreements described below.

Generally, the balance of our outstanding shares of common stock will be deemed “restricted securities” within the meaning of Rule 144 under the Securities Act, subject to the limitations and restrictions that are described below. Common stock purchased by our affiliates will be “restricted securities” under Rule 144. Restricted securities may be sold in the public market only if they are registered under the Securities Act or if they qualify for an exemption from registration under Rule 144 or Rule 701 under the Securities Act, which rules are summarized below.

As a result of the lock-up agreements described below and subject to the provisions of Rule 144 or Rule 701, shares of our common stock will be available for sale in the public market as follows:

• beginning on the date of this prospectus, all                shares of our common stock sold in this offering will be immediately available for sale in the public market;

• beginning 181 days after the date of this prospectus,                additional shares of common stock become eligible for sale in the public market, of which                shares would be held by affiliates and subject to the volume and other restrictions of Rule 144, as described below.

Lock-up Agreements

We have agreed that we will not: (1) offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, lend or otherwise transfer or dispose of, directly or indirectly, or file with, or submit to, the SEC a registration statement under the Securities Act relating to, any shares of our common stock or securities convertible into exchangeable or exercisable for any shares of our common stock, or publicly disclose the intention to make any offer, sale, pledge, loan, disposition, or filing, or (2) enter into any swap or other arrangement that transfers all or a portion

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of the economic consequences associated with the ownership of any shares of common stock or any such other securities (regardless of whether any of these transactions are to be settled by the delivery of shares of common stock or such other securities, in cash or otherwise), in each case without the prior written consent of JMP Securities LLC and Truist Securities, Inc. for a period of 180 days after the date of this prospectus.

The directors, executive officers and key employees of the company, as well as substantially all holders of the company’s currently outstanding shares, have entered into lock-up agreements with the underwriters prior to the commencement of this offering pursuant to which each of these persons or entities, subject to certain limited exceptions, for a period of 180 days after the date of this prospectus, may not, without the prior written consent of JMP Securities LLC and Truist Securities, Inc.: (1) lend, offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right, or warrant to purchase, or otherwise transfer or dispose of, directly or indirectly, any shares of our common stock or any securities convertible into or exercisable or exchangeable (directly or indirectly) for our common stock; (2) enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of such securities, whether any such transaction described in clause (1) or (2) above is to be settled by delivery of our common stock or other securities, in cash, or otherwise; (3) make any demand for or exercise any right with respect to the registration of any shares of our common stock or any security convertible into or exercisable or exchangeable for our common stock; or (4) publicly disclose the intention to do any of the foregoing.

Rule 144

In general, under Rule 144 as in effect on the date of this prospectus, beginning 90 days after completion of this offering, a person (or persons whose common stock is required to be aggregated) who is an affiliate and who has beneficially owned our common stock for at least six months is entitled to sell in any three-month period a number of shares that does not exceed the greater of:

• 1% of the number of shares of our common stock then outstanding, which will equal approximately                  shares immediately after completion of this offering; or

• the average weekly trading volume in our common stock on the NYSE during the four calendar weeks preceding the filing of a notice on Form 144 with respect to such a sale.

Sales by our affiliates under Rule 144 are also subject to manner of sale provisions and notice requirements and to the availability of current public information about us. An “affiliate” is a person that directly, or indirectly through one or more intermediaries, controls or is controlled by, or is under common control with, an issuer.

Under Rule 144, a person (or persons whose shares are aggregated) who is not deemed to have been an affiliate of ours at any time during the 90 days preceding a sale, and who has beneficially owned the shares proposed to be sold for at least six months (including the holding period of any prior owner other than an affiliate), would be entitled to sell those shares subject only to availability of current public information about us, and after beneficially owning such shares for at least 12 months, would be entitled to sell an unlimited number of shares without restriction. To the extent that our affiliates sell their shares of common stock, other than pursuant to Rule 144 or a registration statement, the purchaser’s holding period for the purpose of effecting a sale under Rule 144 commences on the date of transfer from the affiliate.

Rule 701

In general, under Rule 701 as in effect on the date of this prospectus, any of our employees, directors, officers, consultants, or advisors who purchased shares from us in reliance on Rule 701 in connection with a compensatory stock or option plan or other written agreement before the effective date of this offering, or who purchase shares from us after that date upon the exercise of options granted before that date, are eligible to resell such shares 90 days after the effective date of this offering in reliance upon Rule 144. If such person is not an affiliate, such sale may be made subject only to current public information provisions of Rule 144. If such a

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person is an affiliate, such sale may be made under Rule 144 without compliance with the holding period requirement, but subject to the other Rule 144 restrictions described above.

Equity Incentive Plans

Following the completion of this offering, we intend to file one or more registration statements on Form S-8 under the Securities Act to register all shares of common stock issued or issuable under the 2021 Equity Plan and the 2021 Omnibus Plan. Any such Form S-8 registration statements will automatically become effective upon filing. Accordingly, shares registered under such registration statements will be available for sale in the open market following the expiration of the lock-up period. We expect that the initial registration statements on Form S-8 will cover approximately                shares of our common stock. Shares issued under the 2021 Equity Plan and 2021 Omnibus Plan after the effective date of the applicable Form S-8 registration statement will be eligible for resale in the public market without restriction, subject to Rule 144 limitations applicable to affiliates and the lock-up agreements described above. See “Executive Compensation—Executive Compensation Arrangements—Equity Compensation,” “Executive Compensation—2021 Equity Incentive Plan” and “Executive Compensation—2021 Omnibus Incentive Plan” for a description of our equity compensation plans.

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MATERIAL U.S. FEDERAL INCOME TAX CONSIDERATIONS FOR NON-U.S.

HOLDERS OF OUR COMMON STOCK

The following discussion is a summary of the material U.S. federal income tax consequences to Non-U.S. Holders (as defined below) of the ownership and disposition of our common stock issued pursuant to this offering, but is not intended to be a complete analysis of all potential tax consequences. The effects of other U.S. federal tax laws, such as estate and gift tax laws, and any applicable state, local or non-U.S. tax laws are not discussed. This discussion is based on the U.S. Internal Revenue Code of 1986, as amended (the “Code”), final, temporary, and proposed Treasury Regulations, judicial decisions, and published rulings and administrative pronouncements of the U.S. Internal Revenue Service (the “IRS”), in each case as in effect as of the date of this prospectus. These authorities may change or be subject to differing interpretations, and any such change or differing interpretation may be applied retroactively in a manner that could adversely affect a Non-U.S. Holder of our common stock. We have not sought and will not seek any rulings from the IRS regarding the matters discussed below. There can be no assurance the IRS or a court will not take a contrary position to that discussed below regarding the tax consequences of the ownership and disposition of our common stock.

This discussion is limited to a Non-U.S. Holder that holds our common stock as a “capital asset” within the meaning of Section 1221 of the Code (generally, property held for investment). This discussion does not address all U.S. federal income tax consequences relevant to a Non-U.S. Holder’s particular circumstances, including the impact of the alternative minimum tax, the special tax accounting rules in Section 451(b) of the Code or the Medicare contribution tax on net investment income. In addition, it does not address consequences relevant to Non-U.S. Holders subject to special rules, including, without limitation:

• U.S. expatriates and former citizens or long-term residents of the United States;

• persons holding our common stock as part of a straddle, or other risk reduction strategy or as part of a conversion transaction or other integrated investment;

• banks, insurance companies, and other financial institutions;

• brokers, dealers, or certain electing traders in securities that use a mark-to-market method of tax accounting for their securities positions;

• “controlled foreign corporations,” “passive foreign investment companies,” and corporations that accumulate earnings to avoid U.S. federal income tax;

• partnerships or other entities or arrangements treated as partnerships for U.S. federal income tax purposes and other pass-through entities (and investors in such entities);

• tax-exempt organizations or governmental organizations;

• persons deemed to sell our common stock under the constructive sale provisions of the Code;

• tax-qualified retirement plans; and

• “qualified foreign pension funds” as defined in Section 897(l)(2) of the Code and entities all of the interests of which are held by qualified foreign pension funds.

If an entity treated as a partnership for U.S. federal income tax purposes holds our common stock, the tax treatment of a partner in the partnership will depend on the status of the partner, the activities of the partnership, and certain determinations made at the partner level. Partnerships holding our common stock and the partners in such partnerships should consult their tax advisors regarding the U.S. federal income tax consequences to them.

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THIS DISCUSSION IS FOR INFORMATIONAL PURPOSES ONLY AND IS NOT TAX ADVICE. INVESTORS SHOULD CONSULT THEIR TAX ADVISORS WITH RESPECT TO THE APPLICATION OF THE U.S. FEDERAL INCOME TAX LAWS TO THEIR PARTICULAR SITUATIONS AS WELL AS ANY TAX CONSEQUENCES OF THE PURCHASE, OWNERSHIP, AND DISPOSITION OF OUR COMMON STOCK ARISING UNDER THE U.S. FEDERAL ESTATE OR GIFT TAX LAWS OR UNDER THE LAWS OF ANY STATE, LOCAL, OR NON-U.S. TAXING JURISDICTION OR UNDER ANY APPLICABLE INCOME TAX TREATY.

Definition of a Non-U.S. Holder

For purposes of this discussion, a “Non-U.S. Holder” is any beneficial owner of our common stock that is an individual, corporation, estate or trust and is not a “U.S. person.” A U.S. person is any person that, for U.S. federal income tax purposes, is or is treated as any of the following:

• an individual who is a citizen or resident of the United States;

• a corporation created or organized under the laws of the United States, any state thereof, or the District of Columbia;

• an estate, the income of which is subject to U.S. federal income tax regardless of its source; or

• a trust that (1) is subject to the primary supervision of a U.S. court and the control of one or more “United States persons” (within the meaning of Section 7701(a)(30) of the Code), or (2) has a valid election in effect to be treated as a United States person for U.S. federal income tax purposes.

Distributions

As described in the section entitled “Dividend Policy,” we do not anticipate declaring or paying dividends to holders of our common stock in the foreseeable future. However, if we do make distributions of cash or property on our common stock, such distributions will constitute dividends for U.S. federal income tax purposes to the extent paid from our current or accumulated earnings and profits, as determined under U.S. federal income tax principles. Amounts not treated as dividends for U.S. federal income tax purposes will constitute a nontaxable return of capital and first be applied against and reduce a Non-U.S. Holder’s adjusted tax basis in its common stock, but not below zero, and any excess will be treated as capital gain and will be treated as described below under “— Sale or Other Taxable Disposition.”

Subject to the discussion below on effectively connected income, dividends paid to a Non-U.S. Holder of our common stock will be subject to U.S. federal withholding tax at a rate of 30% of the gross amount of the dividends (or such lower rate specified by an applicable income tax treaty, provided the Non-U.S. Holder will be required to furnish a valid IRS Form W-8BEN or W-8BEN-E (or other applicable documentation) certifying qualification for the lower treaty rate of withholding). A Non-U.S. Holder that does not timely furnish the required documentation, but that qualifies for a reduced treaty rate, may obtain a refund of any excess amounts withheld by timely filing an appropriate claim for refund with the IRS. Non-U.S. Holders should consult their tax advisors regarding their entitlement to benefits under any applicable income tax treaty.

If dividends paid to a Non-U.S. Holder are effectively connected with the Non-U.S. Holder’s conduct of a trade or business within the United States (and, if required by an applicable income tax treaty, the Non-U.S. Holder maintains a permanent establishment in the United States to which such dividends are attributable), the Non-U.S. Holder will be exempt from the U.S. federal withholding tax described above. To claim the exemption, the Non-U.S. Holder must furnish to the applicable withholding agent a valid IRS Form W-8ECI, certifying that the dividends are effectively connected with the Non-U.S. Holder’s conduct of a trade or business within the United States.

Any such effectively connected dividends will be subject to U.S. federal income tax on a net income basis at the rates applicable to U.S. persons. A Non-U.S. Holder that is a corporation also may be subject to a branch profits tax at a rate of 30% (or such lower rate specified by an applicable income tax treaty) on such effectively connected dividends, as adjusted for certain items. Non-U.S. Holders should consult their tax advisors regarding any applicable tax treaties that may provide for different rules.

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Sale or Other Taxable Disposition

Subject to the discussion below under “—Information Reporting and Backup Withholding” and “—Additional Withholding Tax Under FATCA”, a Non-U.S. Holder will not be subject to U.S. federal income tax on any gain realized upon the sale or other taxable disposition of our common stock unless:

• the gain is effectively connected with the Non-U.S. Holder’s conduct of a trade or business within the United States (and, if required by an applicable income tax treaty, the Non-U.S. Holder maintains a permanent establishment in the United States to which such gain is attributable);

• the Non-U.S. Holder is a nonresident alien individual present in the United States for 183 days or more during the taxable year of the disposition and certain other requirements are met; or

• our common stock constitutes a U.S. real property interest (a “USRPI”) by reason of our being treated as a U.S. real property holding corporation (a “USRPHC”) for U.S. federal income tax purposes at any applicable time within the shorter of the five year period preceding the Non-U.S. Holder’s disposition of, or the Non-U.S. Holder’s holding period for, our common stock.

Gain described in the first bullet point above generally will be subject to U.S. federal income tax on a net income basis at the rates applicable to U.S. persons. A Non-U.S. Holder that is a corporation also may be subject to a branch profits tax at a rate of 30% (or such lower rate specified by an applicable income tax treaty) on such effectively connected gain, as adjusted for certain items.

Gain described in the second bullet point above will be subject to U.S. federal income tax at a rate of 30% (or such lower rate specified by an applicable income tax treaty), which may be offset by U.S. source capital losses of the Non-U.S. Holder (even though the individual is not considered a resident of the United States), provided the Non-U.S. Holder has timely filed U.S. federal income tax returns with respect to such losses.

With respect to the third bullet point above, generally a corporation is a USRPHC if the fair market value of its USRPIs equals or exceeds 50% of the sum of the fair market value of its worldwide real property interests and its other assets used or held for use in trades or businesses (all as determined for U.S. federal income tax purposes). We believe we currently are not, and we do not anticipate becoming, a USRPHC. Because the determination of whether we are a USRPHC depends, however, on the fair market value of our USRPIs relative to the fair market value of all our real property interests and our other business assets, there can be no assurance that we currently are not a USRPHC or will not become one in the future. Even if we are or were to become a USRPHC, gain arising from the sale or other taxable disposition by a Non-U.S. Holder of our common stock will not be subject to U.S. federal income tax if our common stock is “regularly traded,” as defined by applicable Treasury Regulations, on an established securities market, and such Non-U.S. Holder owned, actually and constructively, 5% or less of our common stock throughout the shorter of the five-year period ending on the date of the sale or other taxable disposition or the Non-U.S. Holder’s holding period.

Non-U.S. Holders should consult their tax advisors regarding potentially applicable income tax treaties that may provide for different rules.

Information Reporting and Backup Withholding

Information returns are required to be filed with the IRS in connection with any dividends on our common stock paid to a Non-U.S. Holder whether or not withholding is required. Copies of the information returns reporting such interest, dividends, and withholding may also be made available to the tax authorities in the country in which a Non-U.S. Holder resides under the provisions of an applicable income tax treaty. Payments of dividends on our common stock will not be subject to backup withholding, provided the applicable withholding agent does not have actual knowledge or reason to know the beneficial owner is a United States person and the Non-U.S. Holder either certifies its non-U.S. status, such as by furnishing a valid IRS Form W-8BEN, W-8BEN-E or W-8ECI, or other applicable documentation, or otherwise establishes an exemption. Proceeds of the sale or other

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taxable disposition of our common stock within the United States or conducted through certain U.S.-related brokers generally will not be subject to backup withholding or information reporting, if the applicable withholding agent receives the certification described above and does not have actual knowledge or reason to know that such beneficial owner is a United States person, or otherwise establishes an exemption. Proceeds of a disposition of our common stock conducted through a non-U.S. office of a non-U.S. broker generally will not be subject to backup withholding or information reporting.

Backup withholding is not an additional tax. Any amounts withheld under the backup withholding rules may be allowed as a refund or a credit against a Non-U.S. Holder’s U.S. federal income tax liability, provided the required information is timely furnished to the IRS.

Additional Withholding Tax Under FATCA

Sections 1471 to 1474 of the Code (such sections commonly referred to as the Foreign Account Tax Compliance Act, or “FATCA”) and the Treasury Regulations and administrative guidance thereunder impose a 30% withholding tax on certain types of payments made to a “foreign financial institution” or a “non-financial foreign entity” (each as defined in the Code), including, in some cases, when such foreign financial institution or non-financial foreign entity acts as an intermediary, unless (1) the foreign financial institution has entered into an agreement with the U.S. government to withhold on certain payments and to undertake certain diligence and reporting obligations regarding U.S. account holders (including certain account holders that are non-U.S. entities with U.S. owners), (2) the non-financial foreign entity either certifies it does not have any “substantial United States owners” (as defined in the Code) or furnishes identifying information regarding each substantial United States owner, or (3) the foreign financial institution or non-financial foreign entity otherwise qualifies for an exemption from these rules. Foreign financial institutions located in jurisdictions that have an intergovernmental agreement with the United States governing FATCA may be subject to different rules.

Under the applicable Treasury Regulations and administrative guidance, withholding under FATCA generally applies to payments of dividends on our common stock. While withholding under FATCA would have applied also to payments of gross proceeds from the sale or other disposition of stock on or after January 1, 2019, recently proposed Treasury Regulations eliminate FATCA withholding on payments of gross proceeds entirely. Taxpayers generally may rely on these proposed Treasury Regulations until final Treasury Regulations are issued.

Prospective investors should consult their tax advisors regarding the potential application of withholding under FATCA to their investment in our common stock.

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UNDERWRITING

We and the underwriters named below have entered into an underwriting agreement with respect to the shares being offered. JMP Securities LLC, Truist Securities, Inc. and Oppenheimer & Co. Inc. are acting as joint book-runners of the offering. JMP Securities LLC and Truist Securities, Inc. are acting as representatives of the underwriters. Subject to the terms and conditions of the underwriting agreement, we have agreed to sell to the underwriters, and each underwriter has severally agreed to purchase, at the public offering price less the underwriting discounts and commissions set forth on the cover page of this prospectus, the number of shares of common stock listed next to its name in the following table:

Underwriters	Number of shares
JMP Securities LLC
Truist Securities, Inc.
Oppenheimer & Co. Inc.
Dowling and Partners Securities, LLC
Fifth Third Securities, Inc.
TigerRisk Capital Strategies LLC .
Total

The underwriters are committed to purchase all the shares of common stock offered by us if they purchase any shares. The underwriting agreement also provides that if an underwriter defaults, the purchase commitments of non-defaulting underwriters may also be increased or the offering may be terminated.

The underwriters have an option to buy up to                additional shares of common stock from us to cover sales of shares by the underwriters which exceed the number of shares specified in the table above. The underwriters have 30 days from the date of this prospectus to exercise this option to purchase additional shares. If any shares are purchased with this option to purchase additional shares, the underwriters will purchase shares in approximately the same proportion as shown in the table above. If any additional shares of common stock are purchased, the underwriters will offer the additional shares on the same terms as those on which the shares are being offered.

The underwriting fee is equal to the public offering price per share of common stock less the amount paid by the underwriters to us per share of common stock. The underwriting fee is $            per share. The following table shows the per share and total underwriting discounts and commissions to be paid to the underwriters assuming both no exercise and full exercise of the underwriters’ option to purchase                additional shares.

Paid by Us	No exercise	Full exercise
Per share	$	$
Total	$	$

We estimate that the total expenses paid by us for this offering, excluding underwriting discounts and commissions, will be approximately $            million. We have agreed to reimburse the underwriters for expenses related to any applicable state securities filings and to the Financial Industry Regulatory Authority incurred by them in connection with this offering in an amount up to $            .

A prospectus in electronic format may be made available on the web sites maintained by one or more underwriters participating in the offering. The underwriters may agree to allocate a number of shares to underwriters for sale to their online brokerage account holders. Internet distributions will be allocated by the representatives to underwriters that may make Internet distributions on the same basis as other allocations.

We have agreed that we will not: (1) offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, lend or otherwise transfer or dispose of, directly or indirectly, or file with, or submit to, the SEC a registration statement under the

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Securities Act relating to, any shares of our common stock or securities convertible into exchangeable or exercisable for any shares of our common stock, or publicly disclose the intention to make any offer, sale, pledge, loan, disposition, or filing, or (2) enter into any swap or other arrangement that transfers all or a portion of the economic consequences associated with the ownership of any shares of common stock or any such other securities (regardless of whether any of these transactions are to be settled by the delivery of shares of common stock or such other securities, in cash or otherwise), in each case without the prior written consent of JMP Securities LLC and Truist Securities, Inc. for a period of 180 days after the date of this prospectus.

The directors, executive officers and key employees of the company, as well as substantially all holders of the company’s currently outstanding shares, have entered into lock-up agreements with the underwriters prior to the commencement of this offering pursuant to which each of these persons or entities, subject to certain limited exceptions, for a period of 180 days after the date of this prospectus, may not, without the prior written consent of JMP Securities LLC and Truist Securities, Inc.: (1) lend, offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right, or warrant to purchase, or otherwise transfer or dispose of, directly or indirectly, any shares of our common stock or any securities convertible into or exercisable or exchangeable (directly or indirectly) for our common stock; (2) enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of such securities, whether any such transaction described in clause (1) or (2) above is to be settled by delivery of our common stock or other securities, in cash, or otherwise; (3) make any demand for or exercise any right with respect to the registration of any shares of our common stock or any security convertible into or exercisable or exchangeable for our common stock; or (4) publicly disclose the intention to do any of the foregoing.

We have agreed to indemnify the underwriters against certain liabilities, including liabilities under the Securities Act of 1933.

We intend to apply to list our common stock listed on the NYSE under the symbol “TYTP”.

In connection with this offering, the underwriters may engage in stabilizing transactions, which involves making bids for, purchasing and selling shares of common stock in the open market for the purpose of preventing or retarding a decline in the market price of the common stock while this offering is in progress. These stabilizing transactions may include making short sales of common stock, which involves the sale by the underwriters of a greater number of shares of common stock than they are required to purchase in this offering, and purchasing shares of common stock on the open market to cover positions created by short sales. Short sales may be “covered” shorts, which are short positions in an amount not greater than the underwriters’ option to purchase additional shares referred to above, or may be “naked” shorts, which are short positions in excess of that amount. The underwriters may close out any covered short position either by exercising their option to purchase additional shares, in whole or in part, or by purchasing shares in the open market. In making this determination, the underwriters will consider, among other things, the price of shares available for purchase in the open market compared to the price at which the underwriters may purchase shares through the option to purchase additional shares. A naked short position is more likely to be created if the underwriters are concerned that there may be downward pressure on the price of the common stock in the open market that could adversely affect investors who purchase in this offering. To the extent that the underwriters create a naked short position, they will purchase shares in the open market to cover the position.

The underwriters have advised us that, pursuant to Regulation M of the Securities Act of 1933, they may also engage in other activities that stabilize, maintain or otherwise affect the price of the common stock, including the imposition of penalty bids. This means that if the representatives of the underwriters purchase common stock in the open market in stabilizing transactions or to cover short sales, the representatives can require the underwriters that sold those shares as part of this offering to repay the underwriting discount received by them.

These activities may have the effect of raising or maintaining the market price of the common stock or preventing or retarding a decline in the market price of the common stock, and, as a result, the price of the

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common stock may be higher than the price that otherwise might exist in the open market. If the underwriters commence these activities, they may discontinue them at any time. The underwriters may carry out these transactions on the NYSE, in the over the counter market or otherwise.

Prior to this offering, there has been no public market for our common stock. The initial public offering price will be determined by negotiations between us and the representatives of the underwriters. In determining the initial public offering price, we and the representatives of the underwriters expect to consider a number of factors including:

• the information set forth in this prospectus and otherwise available to the representatives;

• our prospects and the history and prospects for the industry in which we compete;

• an assessment of our management;

• our prospects for future earnings;

• the general condition of the securities markets at the time of this offering;

• the recent market prices of, and demand for, publicly traded common stock of generally comparable companies; and

• other factors deemed relevant by the underwriters and us.

Neither we nor the underwriters can assure investors that an active trading market will develop for our shares of common stock, or that the shares will trade in the public market at or above the initial public offering price.

The underwriters and their respective affiliates are full service financial institutions engaged in various activities, which may include sales and trading, commercial and investment banking, advisory, investment management, investment research, principal investment, hedging, market making, brokerage, and other financial and non-financial activities and services. Certain of the underwriters and their respective affiliates have provided, and may in the future provide, a variety of these services to us and to persons and entities with relationships with us, for which they received or will receive customary fees and expenses.

In the ordinary course of their various business activities, the underwriters and their respective affiliates, officers, directors, and employees may purchase, sell, or hold a broad array of investments and actively traded securities, derivatives, loans, commodities, currencies, credit default swaps, and other financial instruments for their own account and for the accounts of their customers, and such investment and trading activities may involve or relate to assets, securities, and/or instruments of our company (directly, as collateral securing other obligations or otherwise) or persons and entities with relationships with our company. The underwriters and their respective affiliates may also communicate independent investment recommendations, market color, or trading ideas or publish or express independent research views in respect of such assets, securities, or instruments and may at any time hold, or recommend to clients that they should acquire, long and/or short positions in such assets, securities, and instruments.

Certain of the underwriters and their affiliates have provided in the past to us and our affiliates and may provide from time to time in the future certain commercial banking, financial advisory, investment banking and other services for us and such affiliates in the ordinary course of their business, for which they have received and may continue to receive customary fees and commissions. In addition, from time to time, certain of the underwriters and their affiliates may effect transactions for their own account or the account of customers, and hold on behalf of themselves or their customers, long or short positions in our debt or equity securities or loans, and may do so in the future.

165

Directed Share Program

At our request, the underwriters have reserved for sale, at the initial public offering price, up to 5% of the shares of our common stock offered by this prospectus for sale through a directed share program to some of our directors, officers, employees, business associates and related persons. Any shares sold under the directed share program will not be subject to the terms of any lock-up agreement, except in the case of shares purchased by our executive officers, directors or key employees. The number of shares of our common stock available for sale to the general public will be reduced by the number of reserved shares sold to these individuals. Any reserved shares not purchased by these individuals will be offered by the underwriters to the general public on the same basis as the other shares of common stock offered under this prospectus.

Selling Restrictions

Other than in the United States, no action has been taken by us or the underwriters that would permit a public offering of the securities offered by this prospectus in any jurisdiction where action for that purpose is required. The securities offered by this prospectus may not be offered or sold, directly or indirectly, nor may this prospectus or any other offering material or advertisements in connection with the offer and sale of any such securities be distributed or published in any jurisdiction, except under circumstances that will result in compliance with the applicable rules and regulations of that jurisdiction. Persons into whose possession this prospectus comes are advised to inform themselves about and to observe any restrictions relating to the offering and the distribution of this prospectus. This prospectus does not constitute an offer to sell or a solicitation of an offer to buy any securities offered by this prospectus in any jurisdiction in which such an offer or a solicitation is unlawful.

Canada

The shares may be sold only to purchasers purchasing, or deemed to be purchasing, as principal that are accredited investors, as defined in National Instrument 45-106 Prospectus Exemptions or subsection 73.3(1) of the Securities Act (Ontario), and are permitted clients, as defined in National Instrument 31-103 Registration Requirements, Exemptions and Ongoing Registrant Obligations. Any resale of the shares must be made in accordance with an exemption from, or in a transaction not subject to, the prospectus requirements of applicable securities laws.

Securities legislation in certain provinces or territories of Canada may provide a purchaser with remedies for rescission or damages if this prospectus (including any amendment thereto) contains a misrepresentation, provided that the remedies for rescission or damages are exercised by the purchaser within the time limit prescribed by the securities legislation of the purchaser’s province or territory. The purchaser should refer to any applicable provisions of the securities legislation of the purchaser’s province or territory for particulars of these rights or consult with a legal advisor.

Pursuant to section 3A.3 of National Instrument 33-105 Underwriting Conflicts (NI 33-105), the underwriters are not required to comply with the disclosure requirements of NI 33-105 regarding underwriter conflicts of interest in connection with this offering.

European Economic Area

In relation to each Member State of the European Economic Area (each a “Member State”), no shares have been offered or will be offered pursuant to this offering to the public in that Member State prior to the publication of a prospectus in relation to the shares which has been approved by the competent authority in that Member State or, where appropriate, approved in another Member State and notified to the competent authority in that Member State, all in accordance with the Prospectus Regulation, except that offers of shares may be made to the public in that Member State at any time under the following exemptions under the Prospectus Regulation:

(a) to any legal entity which is a qualified investor as defined under the Prospectus Regulation;

166

(b) to fewer than 150 natural or legal persons (other than qualified investors as defined under the Prospectus Regulation), subject to obtaining the prior consent of the underwriters; or

(c) in any other circumstances falling within Article 1(4) of the Prospectus Regulation,

provided that no such offer of shares shall require us or any underwriter to publish a prospectus pursuant to Article 3 of the Prospectus Regulation or supplement a prospectus pursuant to Article 23 of the Prospectus Regulation and each person who initially acquires any shares or to whom any offer is made will be deemed to have represented, acknowledged and agreed to and with each of the underwriters and us that it is a “qualified investor” within the meaning of Article 2(e) of the Prospectus Regulation. In the case of any shares being offered to a financial intermediary as that term is used in the Prospectus Regulation, each such financial intermediary will be deemed to have represented, acknowledged and agreed that the shares acquired by it in the offer have not been acquired on a non-discretionary basis on behalf of, nor have they been acquired with a view to their offer or resale to, persons in circumstances which may give rise to an offer of any shares to the public other than their offer or resale in a Member State to qualified investors as so defined or in circumstances in which the prior consent of the underwriters has been obtained to each such proposed offer or resale.

For the purposes of this provision, the expression an “offer to the public” in relation to shares in any Member State means the communication in any form and by any means of sufficient information on the terms of the offer and any shares to be offered so as to enable an investor to decide to purchase or subscribe for any shares, and the expression “Prospectus Regulation” means Regulation (EU) 2017/1129.

United Kingdom

In relation to the United Kingdom, no shares have been offered or will be offered pursuant to this offering to the public in the United Kingdom prior to the publication of a prospectus in relation to the shares that either (i) has been approved by the Financial Conduct Authority, or (ii) is to be treated as if it had been approved by the Financial Conduct Authority in accordance with the transitional provision in Regulation 74 of the Prospectus (Amendment etc.) (EU Exit) Regulations 2019, except that offers of shares may be made to the public in the United Kingdom at any time under the following exemptions under the UK Prospectus Regulation:

• to any legal entity which is a qualified investor as defined in Article 2 of the UK Prospectus Regulation;

• to fewer than 150 natural or legal persons (other than qualified investors as defined in Article 2 of the UK Prospectus Regulation); or

• in any other circumstances falling within section 86 of the Financial Services and Markets Act 2000 (“FSMA”),

provided that no such offer of shares shall require the Issuer or any representative to publish a prospectus pursuant to section 85 of the FSMA or supplement a prospectus pursuant to Article 23 of the UK Prospectus Regulation.

For the purposes of this provision, the expression an “offer to the public” in relation to any shares in any relevant state means the communication in any form and by any means of sufficient information on the terms of the offer and any shares to be offered so as to enable an investor to decide to purchase or subscribe for any shares, and the expression “UK Prospectus Regulation” means Regulation (EU) 2017/1129 as it forms part of domestic law by virtue of the European Union (Withdrawal) Act 2018.

We have not authorized and do not authorize the making of any offer of shares through any financial intermediary on their behalf, other than offers made by the underwriters with a view to the final placement of the shares as contemplated in this prospectus. Accordingly, no purchaser of the shares, other than the underwriters, is authorized to make any further offer of the shares on behalf of us or the underwriters.

167

In addition, in the United Kingdom, this document is being distributed only to, and is directed only at, and any offer subsequently made may only be directed at persons who are “qualified investors” (as defined in Article 2 of the UK Prospectus Regulation) (i) who have professional experience in matters relating to investments falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the “Order”) and/or (ii) who are high net worth companies (or persons to whom it may otherwise be lawfully communicated) falling within Article 49(2)(a) to (d) of the Order (all such persons together being referred to as “relevant persons”) or otherwise in circumstances which have not resulted and will not result in an offer to the public of the securities in the United Kingdom within the meaning of the FSMA.

Any person in the United Kingdom that is not a relevant person should not act or rely on the information included in this document or use it as basis for taking any action. In the United Kingdom, any investment or investment activity that this document relates to may be made or taken exclusively by relevant persons.

168

LEGAL MATTERS

The validity of the shares of common stock offered hereby will be passed upon for us by Foley & Lardner LLP, Tampa, Florida. Certain legal matters in connection with this offering will be passed upon for the underwriters by Davis Polk  & Wardwell LLP, New York, New York.

EXPERTS

The consolidated and combined financial statements of TypTap Insurance Group, Inc. and its subsidiaries as of December 31, 2019 and December 31, 2020, and for each of the two years in the period ended December 31, 2020, appearing in this prospectus and registration statement, have been audited by Dixon Hughes Goodman LLP, independent registered public accounting firm, as set forth in their report thereon appearing elsewhere herein, and are included in reliance upon such report given on the authority of such firm as experts in accounting and auditing.

WHERE YOU CAN FIND MORE INFORMATION

We have filed with the SEC a registration statement on Form S-1 under the Securities Act with respect to the shares of common stock offered by this prospectus. This prospectus, which constitutes a part of the registration statement, does not contain all the information set forth in the registration statement, some of which is contained in exhibits to the registration statement as permitted by the rules and regulations of the SEC. For further information with respect to us and our common stock, we refer you to the registration statement, including the exhibits filed as a part of the registration statement. Statements contained in this prospectus concerning the contents of any contract or any other document are not necessarily complete. If a contract or document has been filed as an exhibit to the registration statement, please see the copy of the contract or document that has been filed. Each statement in this prospectus relating to a contract or document filed as an exhibit is qualified in all respects by the filed exhibit. The SEC maintains an internet website that contains reports and other information about issuers, like us, that file electronically with the SEC. The address of that website is www.sec.gov. You may also request copies of those documents, at no cost to you, by contacting us at the following address:

TypTap Insurance Group, Inc.

5300 West Cypress Street, Suite 100

Tampa, Florida 33607

844-289-7968

On the closing of this offering, we will be subject to the information reporting requirements of the Exchange Act and other reporting requirements of the NYSE, and we will file reports and other information with the SEC as required and make any proxy statements available to the holders of our capital stock as required by the rules of the NYSE. These reports, proxy statements and other information will be available for inspection and copying at the public reference room and website of the SEC referred to above.

169

Index to Consolidated and Combined Financial Statements

TypTap Insurance Group, Inc. and Subsidiaries

Consolidated and Combined Financial Statements

for the Years Ended December 31, 2020 and 2019

	Page
Report of Dixon Hughes Goodman LLP, independent registered public accounting firm		F-2
Consolidated and combined balance sheets at December 31, 2020 and 2019		F-3
Consolidated and combined statements of income for the years ended December 31, 2020 and 2019		F-4
Consolidated and combined statements of comprehensive loss for the years ended December 31, 2020 and 2019		F-5
Consolidated and combined statements of stockholder’s equity for the years ended December 31, 2020 and 2019		F-6
Consolidated and combined statements of cash flows for the years ended December 31, 2020 and 2019		F-7
Notes to consolidated and combined financial statements for the years ended December 31, 2020 and 2019		F-8

TypTap Insurance Group, Inc. and Subsidiaries

Consolidated and Combined Financial Statements

at September 30, 2021 and December 31, 2020 and

for the Three and Nine Months Ended September 30, 2021 and 2020

	Page
Consolidated balance sheets at September  30, 2021 (unaudited) and December 31, 2020		F-40
Consolidated and combined statements of income for the three and nine months ended September 30, 2021 and 2020 (unaudited)		F-41
Consolidated and combined statements of comprehensive loss for the three and nine months ended September 30, 2021 and 2020 (unaudited)		F-42
Consolidated statement of stockholders’ equity for the three months ended September 30, 2021 (unaudited)		F-43
Combined statement of stockholder’s equity for the three months ended September 30, 2020 (unaudited)		F-44
Consolidated statement of stockholders’ equity for the nine months ended September 30, 2021 (unaudited)		F-45
Combined statement of stockholder’s equity for the nine months ended September 30, 2020 (unaudited)		F-46
Consolidated and combined statements of cash flows for the nine months ended September 30, 2021 and 2020 (unaudited)		F-47
Notes to consolidated and combined financial statements (unaudited)		F-48

F-1

Report of independent registered public accounting firm

Shareholder and the Board of Directors

TypTap Insurance Group, Inc. and Subsidiaries

Tampa, FL

Opinion on the Consolidated and Combined Financial Statements

We have audited the accompanying consolidated and combined balance sheets of TypTap Insurance Group, Inc. and Subsidiaries (the “Company”) as of December 31, 2020 and 2019, the related consolidated and combined statements of income, comprehensive loss, stockholder’s equity, and cash flows, for each of the two years in the period ended December 31, 2020, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2020 and 2019, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2020, in conformity with U.S. generally accepted accounting principles.

Basis for Opinion

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

/s/ Dixon Hughes Goodman LLP

We have served as the Company’s auditor since 2020.

Tampa, FL

February 15, 2021, except for Notes 13, 16, 17, and 23, as to which the date is August 3, 2021.

F-2

TYPTAP INSURANCE GROUP, INC. AND SUBSIDIARIES

Consolidated and Combined Balance Sheets

(Dollar amounts in thousands, except per share amounts)

	December 31,
	2020			2019
Assets
Fixed-maturity securities, available for sale, at fair value (amortized costs: $16,013 and $16,597, respectively, and allowance for credit losses: $3 and $0, respectively)	$	16,519		$	16,787
Equity securities, at fair value (cost: $4,115 and $2,136, respectively)		4,454			2,449
Short-term investments, at fair value		—			491
Total investments		20,973			19,727
Cash and cash equivalents		99,725			51,562
Restricted cash		2,000			300
Accrued interest and dividends receivable		105			138
Income taxes receivable		—			746
Premiums receivable, net		7,734			5,372
Prepaid reinsurance premiums		7,386			1,691
Reinsurance recoverable:
Paid losses and loss adjustment expenses (allowance: none in 2020 and 2019)		81			13
Unpaid losses and loss adjustment expenses (allowance: none in 2020 and 2019)		9			109
Deferred policy acquisition costs		10,281			7,199
Property and equipment, net		6,065			5,682
Right-of-use assets—operating leases		302			713
Other assets		2,920			980
Total assets	$	157,581		$	94,232
Liabilities and Stockholder’s Equity
Losses and loss adjustment expenses	$	19,348		$	4,765
Unearned premiums		63,704			37,684
Advance premiums		3,373			820
Accrued expenses		4,272			3,569
Income taxes payable		143			—
Deferred income taxes, net		1,251			1,289
Lease liabilities—operating leases		316			738
Due to related parties		33,190			25,550
Note payable—related party		22,000			—
Other liabilities		3,433			2,853
Total liabilities		151,030			77,268
Commitments and contingencies (Note 20)
Stockholder’s equity:
Common stock (par value $0.001 per share, 183,000,000 shares authorized, 75,000,000 shares and none issued and outstanding in 2020 and 2019, respectively)		75			—
Additional paid-in capital		11,001			—
Retained deficits		(4,909	)		—
Stockholder’s net investment		—			16,821
Accumulated other comprehensive income, net of taxes		384			143
Total stockholder’s equity		6,551			16,964
Total liabilities and stockholder’s equity	$	157,581		$	94,232

F-3

TYPTAP INSURANCE GROUP, INC. AND SUBSIDIARIES

Consolidated and Combined Statements of Income

(Dollar amounts in thousands, except per share amounts)

	Years ended December 31,
	2020			2019
Revenue
Gross premiums earned	$	78,836		$	30,904
Premiums ceded		(28,822	)		(11,076	)
Net premiums earned		50,014			19,828
Net investment income		814			1,056
Net realized investment losses		(43	)		(8	)
Net unrealized investment gains on equity securities		26			489
Policy fee income		819			424
Other		97			40
Total revenue		51,727			21,829
Expenses
Losses and loss adjustment expenses		34,059			8,505
Policy acquisition and other underwriting expenses		15,579			6,897
General and administrative personnel expenses		10,782			8,158
Interest expense		2			2
Other operating expenses		7,766			6,758
Total expenses		68,188			30,320
Loss before income taxes		(16,461	)		(8,491	)
Income tax benefit		(4,037	)		(1,580	)
Net loss	$	(12,424	)	$	(6,911	)
Basic loss per share (Note 16)	$	(0.17	)	$	(0.09	)

F-4

TYPTAP INSURANCE GROUP, INC. AND SUBSIDIARIES

Consolidated and Combined Statements of Comprehensive Loss

(Amounts in thousands)

	Years ended December 31,
	2020			2019
Net loss	$	(12,424	)	$	(6,911	)
Other comprehensive income:
Change in unrealized gain on investments:
Net unrealized gains arising during the period		314			314
Credit losses charged to income		3			—
Call and repayment gains charged to investment income		(7	)		(2	)
Reclassification adjustment for net realized losses (gains)		9			(5	)
Net change in unrealized gains		319			307
Deferred income taxes on above change		(78	)		(76	)
Total other comprehensive income, net of income taxes		241			231
Comprehensive loss	$	(12,183	)	$	(6,680	)

F-5

TYPTAP INSURANCE GROUP, INC. AND SUBSIDIARIES

Consolidated and Combined Statements of Stockholder’s Equity

for the Years Ended December 31, 2020 and 2019

(Dollar amounts in thousands)

	Stockholder’s net investment			Common stock shares		Amount		Additional paid-in capital		Retained deficits			Accumulated other comprehensive (loss) income, net of tax			Total stockholder’s equity
Balance at December 31, 2018	$	15,926			—	$	—	$	—	$	—		$	(88	)	$	15,838
Net loss		(6,911	)		—		—		—		—			—			(6,911	)
Capital contribution from parent		5,000			—		—		—		—			—			5,000
Non-cash allocated expense from parent		1,855			—		—		—		—			—			1,855
Stock-based compensation		951			—		—		—		—			—			951
Total other comprehensive income, net of income taxes		—			—		—		—		—			231			231
Balance at December 31, 2019	$	16,821			—	$	—	$	—	$	—		$	143		$	16,964
Net loss		(7,515	)		—		—		—		(4,909	)		—			(12,424	)
Return of capital to parent		(9	)		—		—		—		—			—			(9	)
Stock-based compensation		1,293			—		—		476		—			—			1,769
Total other comprehensive income, net of income taxes		—			—		—		—		—			241			241
Capital contribution from parent		—			1,000		—		10		—			—			10
Contribution of net investment from parent		(10,590	)		74,999,000		75		10,515		—			—			—
Balance at December 31, 2020	$	—			75,000,000	$	75	$	11,001	$	(4,909	)	$	384		$	6,551

F-6

TYPTAP INSURANCE GROUP, INC. AND SUBSIDIARIES

Consolidated and Combined Statements of Cash Flows

(Dollar amounts in thousands)

	Years ended December 31,
	2020			2019    1
Cash flows from operating activities:
Net loss	$	(12,424	)	$	(6,911	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Stock-based compensation		1,769			951
Net amortization of premiums on investments in fixed-maturity securities		45			63
Depreciation and amortization		1,103			676
Deferred income tax (benefit) expense		(116	)		750
Net realized investment losses		43			8
Net unrealized investment gains on equity securities		(26	)		(489	)
Non-cash allocated expense from parent		—			1,855
Impairment charges related to investments		3			—
Foreign currency remeasurement loss		32			57
Changes in operating assets and liabilities:
Accrued interest and dividends receivable		33			(9	)
Premiums receivable		(2,362	)		(4,408	)
Prepaid reinsurance premiums		(5,695	)		(1,172	)
Reinsurance recoverable		32			534
Deferred policy acquisition costs		(3,082	)		(6,166	)
Income taxes		889			(680	)
Other assets		(1,531	)		(1,489	)
Losses and loss adjustment expenses		14,583			3,758
Unearned premiums		26,020			29,369
Advance premiums		2,553			607
Accrued expenses and other liabilities		874			5,546
Due to related parties		7,640			10,244
Net cash provided by operating activities		30,383			33,094
Cash flows from investing activities:
Purchase of property and equipment		(1,486	)		(2,454	)
Purchase of fixed-maturity securities		(13,368	)		(9,494	)
Purchase of equity securities		(5,138	)		(1,443	)
Purchase of short-term investments		—			(991	)
Proceeds from sales of fixed-maturity securities		9,298			156
Proceeds from calls, repayments and maturities of fixed-maturity securities		4,611			6,047
Proceeds from sales of equity securities		3,114			1,377
Proceeds from sales, redemptions and maturities of short-term investments		460			6,067
Net cash used in investing activities		(2,509	)		(735	)
Cash flows from financing activities:
Capital contribution from parent company		—			5,000
Return of capital contribution to parent company		(9	)		—
Proceeds from issuance of note payable—related party		22,000			—
Net proceeds from the issuance of common stock		10			—
Repayment of long-term debt		(14	)		(12	)
Net cash provided by financing activities		21,987			4,988
Effect of exchange rate changes on cash		2			(22	)
Net increase in cash, cash equivalents and restricted cash		49,863			37,325
Cash, cash equivalents and restricted cash at beginning of year		51,862			14,537
Cash, cash equivalents and restricted cash at end of year	$	101,725		$	51,862
Supplemental disclosure of cash flow information:
Cash paid for income taxes	$	152		$	113
Cash paid for interest	$	2		$	2
Non-cash investing and financing activities:
Unrealized gain on investments in available-for-sale securities, net of tax	$	241		$	231
Addition to property and equipment under finance lease	$	—		$	6
Contribution of net investment from parent	$	10,590		$	—

See accompanying Notes to Consolidated and Combined Financial Statements.

F-7

TYPTAP INSURANCE GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated and Combined Financial Statements

(Amounts in thousands, unless otherwise stated)

Note 1—Nature of Operations

TypTap Insurance Group, Inc. (“TTIG” or “the Company”) was organized in July 2020 and is a wholly-owned subsidiary of HCI Group, Inc. (“HCI”), its parent company. In October 2020, HCI contributed its ownership interests in four of its wholly-owned subsidiaries to TTIG. These subsidiaries include TypTap Insurance Company (“TypTap”), TypTap Management Company, Exzeo USA, Inc., and Cypress Tech Development Company which also owns Exzeo Software Private Limited, a subsidiary domiciled in India.

TypTap currently provides homeowners and flood insurance in Florida and is approved to underwrite homeowners insurance in various other states. Its operations are supported by TypTap Management Company which is responsible for managing activities such as claims processing, policyholder service/support, marketing, premium payment collection, underwriting and insurance application processing. TypTap Management Company’s operations are solely in support of TypTap.

Exzeo USA, Inc. and Cypress Tech Development Company are technology companies that mainly focus on the development of products to modernize the insurance industry. These products include Atlasviewer^®, an online data visualization and mapping platform, SAMS^TM, a policy administration platform, Harmony^TM, a next generation policy administration platform under development, and ClaimColony^TM, an application that provides intelligent automation of insurance claims and other business processes. Exzeo USA and Cypress Tech provide services to the insurance-related subsidiaries of HCI and TTIG. Currently, these entities do not charge HCI for the services.

TTIG, together with its subsidiaries (the “Company”) is primarily engaged in the property and casualty insurance business in Florida, focusing on standalone flood and homeowners multi-peril policies. In October 2020, TypTap began applying for approval to offer homeowners coverage in 23 states outside of Florida. Since then, TypTap has received approvals from ten states. The Company is currently using internally developed technologies to collect and analyze claims and other supplemental data to generate savings and efficiency for the operations of the insurance business.

Risks and uncertainties caused by novel coronavirus (“COVID-19”)

On March 11, 2020, the World Health Organization (“WHO”) declared the outbreak of COVID-19 a pandemic. COVID-19 is a respiratory illness caused by a virus that can spread from person to person. To contain the spread of COVID-19 during the first half of 2020, measures were undertaken in the United States of America and elsewhere around the world. These measures included, but were not limited to, domestic and international travel restrictions, temporary closure of nonessential businesses, cessation of public activity, and work-from-home orders, which had led to significantly reduced economic activity. To prevent the U.S. economy from further deterioration, several state and local governments have relaxed or lifted some of these measures even though infection rates remain above five percent, the level at which the WHO recommends rates fall below for at least 14 days before reopening. In Florida where the Company is located, a statewide stay-at-home order was issued and later lifted in May 2020. In response to the pandemic, the Company temporarily closed its offices in Florida and asked employees to work from home. Since then, some employees who have gone through the Company’s health safety training are allowed to alternate their work location between home and office. As a provider of homeowners insurance, the Company continually prepares for disasters and catastrophic events, including events that could disrupt business continuity. As a result, the Company was able to quickly adjust its technologies and infrastructure to support a remote workforce and maintain business continuity.

In response to the pandemic, the U.S. Congress had passed two stimulus bills intended to provide fast and direct economic assistance for American workers and families, small businesses, and to preserve jobs in American

F-8

TYPTAP INSURANCE GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated and Combined Financial Statements

(Amounts in thousands, unless otherwise stated)

industries. In addition, the authorization for use and dissemination of COVID-19 vaccines in the U.S. has brought optimism to the business community for the economic outlook, contributing to a rebound in the financial markets. However, it is still uncertain when the U.S. economy will return to pre COVID-19 levels.

The Company’s insurance subsidiary has not experienced and, at present, does not foresee a direct material impact from the outbreak of COVID-19 in terms of increased claims and losses. However, the resulting economic uncertainty adversely affected the results of the Company’s investment portfolios during the first half of 2020. Most of these investment portfolios have recovered. The Company generally holds or invests premiums collected from policyholders in the financial markets in order to earn income before claims need to be paid.

In addition, the Company’s insurance subsidiary may experience difficulties collecting premiums from some policyholders. Policyholders with financial difficulties may decide not to renew insurance policies with the Company. At present, there is no material impact from uncollectibility of premiums. Reinsurance companies with which the Company has contracted may also face liquidity issues and may not timely settle reinsurance balances that become due. Reinsurance costs have increased as reinsurers pay COVID-19 related claims worldwide and face the possibility of increases in the cost of capital needed to fund their operations.

It is difficult to predict when the overall economy will no longer need the intervention and support of the government. As of the date of issuance of these consolidated and combined financial statements, the extent to which the COVID-19 pandemic may materially affect the Company’s financial condition, liquidity, or results of operations in the long-term future remains uncertain and unquantifiable.

Note 2—Summary of Significant Accounting Policies

Basis of presentation.     The accompanying financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”). Both the consolidated and combined financial statements include the accounts of TTIG’s controlled subsidiaries. All significant intercompany accounts and transactions have been eliminated.

Consolidation     Effective October 1, 2020, the Company established a new consolidated reporting structure. The financial statements presented for the period on or after the effective date are presented on a consolidated basis.

Combination     The financial statements for 2019 and the period prior to October 1, 2020 have been prepared on a combined carve-out basis using the historical results of operations, assets, and liabilities attributable to the transferred subsidiaries as described in Note 1—“Nature of Operations,” assuming that the new reporting structure had existed since the beginning of the periods presented.

The combined statements of income included expenses allocated to the Company for shared services provided by HCI. Some of these expenses were directly identifiable to the Company, whereas the remainder was allocated based on other reasonable allocation measures. The Company considers the allocation methods and results to be reasonable for the periods presented. The combined financial statements may not be indicative of what the carve-out business would have been as a standalone entity.

Adoption of new accounting standards.

In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update No. 2016-13 (“ASU 2016-13”), Financial Instruments—Credit Losses (Topic 326), effective January 1, 2020. This update amends guidance on the recognition and measurement of credit losses for assets held at amortized

F-9

TYPTAP INSURANCE GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated and Combined Financial Statements

(Amounts in thousands, unless otherwise stated)

cost and available-for-sale debt securities. For assets held at amortized cost, ASU 2016-13 eliminates the probable initial recognition threshold and, instead, requires credit losses to be measured using the Current Expected Credit Loss (“CECL”) model. The CECL model requires the measurement of all expected credit losses based on historical experience, current conditions, and reasonable and supportable forecasts which incorporate forward-looking information. The incurred loss model previously used to estimate credit losses is replaced with the CECL model for premiums receivable and reinsurance recoverable. For available-for-sale debt securities, credit losses will continue to be measured in a manner similar to the current standard. See also “Allowance for Credit Losses” within this note.

Effective January 1, 2020, the Company used a modified retrospective method for transition to the CECL model. There was no cumulative-effect adjustment recognized at the adoption date.

Use of estimates.     The preparation of the consolidated and combined financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities as well as the disclosure of contingent assets and liabilities at the date of the consolidated and combined financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results may differ materially from these estimates. Material estimates that are particularly susceptible to significant change in the near term are primarily related to losses and loss adjustment expenses, reinsurance with retrospective provisions, reinsurance recoverable, non-cash allocated expense, and deferred income taxes.

Cash and cash equivalents.     The Company considers all short-term highly liquid investments with original maturities of less than three months to be cash and cash equivalents.

Restricted Cash.     Restricted cash primarily represents funds held by the State of Florida in which the Company’s insurance subsidiary conducts business to meet regulatory requirements.

Available-for-sale fixed-maturity securities.     Fixed-maturity securities that are available for sale include debt securities. The Company’s available-for-sale securities are carried at fair value. Changes in the fair value of available-for-sale securities representing unrealized gains or losses, other than impairments, are excluded from net investment income and reported in stockholder’s equity as a component of accumulated other comprehensive income (loss), net of deferred income taxes. Realized investment gains and losses from sales are recorded on the trade date and are determined using the first-in first-out (“FIFO”) method. Investment income is recognized as earned and discounts or premiums arising from the purchase of debt securities are recognized in investment income using the interest method over the estimated remaining term of the security. Gains and losses from call redemptions and repayments are charged to investment income.

The Company reviews available-for-sale fixed-maturity securities for impairment on a monthly basis. Effective January 1, 2020, net unrealized loss in the fair value of an available-for-sale fixed-maturity security is evaluated for impairment. When reviewing impaired securities, the Company considers its ability and intent to hold these securities and whether it is probable that the Company will be required to sell these securities prior to their anticipated recovery or maturity. For the fixed-maturity securities that the Company intends to sell or it is probable that the Company will have to sell before recovery or maturity, the unrealized losses are recognized currently as impairment losses in income.

Impaired securities where the Company has the ability and intent to hold until recovery and believes it is not probable that the Company will be required to sell these securities prior to their anticipated recovery or maturity, are evaluated for the existence of credit-related losses. When determining impairment due to a credit-related loss, the Company carefully considers factors such as the issuer’s financial ratios and condition, the security’s current

F-10

TYPTAP INSURANCE GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated and Combined Financial Statements

(Amounts in thousands, unless otherwise stated)

ratings and maturity date, the failure of the issuer to make a scheduled payment, and overall market conditions in estimating the cash flows expected to be collected. The expected cash flows discounted at the effective interest rate of the security implicit at the date of acquisition is then compared with the security’s amortized cost at the measurement date. A credit loss is incurred when the present value of the expected cash flows is less than the security’s amortized cost. If such credit-related losses exist, an allowance for credit losses is established with a charge in the statement of income. Subsequent changes in the allowance, whether favorable or unfavorable, are recorded on the statement of income. See additional information in the Allowance for Credit Losses section within this note. Any remaining impairment loss related to other non-credit factors such as changes in interest rates or market conditions is reflected as a component of accumulated other comprehensive income (loss).

Prior to January 1, 2020, when the fair value of any investment was lower than its cost, an assessment was made to determine whether the decline was temporary or other-than-temporary. If the decline was determined to be other-than-temporary, the investment was written down to fair value and an impairment loss was recognized in income in the period in which the Company made such determination. When reviewing impaired securities, the Company considered its ability and intent to hold these securities and whether it was probable that the Company would be required to sell these securities prior to their anticipated recovery or maturity. For the fixed-maturity securities that the Company intended to sell or it was probable that the Company would have to sell before recovery or maturity, the unrealized losses were recognized as other-than-temporary losses in income. In instances where there were credit-related losses associated with the impaired fixed-maturity securities for which the Company asserted that it did not have the intent to sell, and it was probable that the Company would not be required to sell until a market price recovery or maturity, the amount of the other-than-temporary impairment loss related to credit losses was recognized in income, and the amount of the other-than-temporary impairment loss related to other non-credit factors such as changes in interest rates or market conditions was recorded as a component of accumulated other comprehensive income (loss).

Equity securities.     Equity securities represent ownership interests held by the Company in entities for investment purposes. Unrealized holding gains and losses related to equity securities are reported in the consolidated and combined statements of income as net unrealized investment gains and losses. Realized investment gains and losses from sales are recorded on the trade date and are determined using the FIFO method.

Short-term investments.     Short-term investments include certificates of deposit issued by financial institutions with original maturities of more than three months but less than one year at the acquisition. These short-term investments are carried at cost, which approximates fair value.

Deferred policy acquisition costs.     Deferred policy acquisition costs (“DAC”) represent direct costs to acquire insurance contracts and consist of premium taxes and commissions paid to outside agents at the time of collection of the policy premium. DAC is amortized over the life of the related policy in relation to the amount of gross premiums earned.

The method followed in computing DAC limits the amount of such deferred costs to their estimated realizable value, which gives effect to the gross premium earned, related investment income, unpaid losses and loss adjustment expenses and certain other costs expected to be incurred as the premium is earned.

DAC is reviewed to determine if it is recoverable from future premium income, including investment income. If such costs are determined to be unrecoverable, they are expensed at the time of determination. The amount of DAC considered recoverable could be reduced in the near term if the estimates of total gross premium earned are reduced or permanently impaired as a result of the disposition of a line of business. The amount of amortization of DAC could be revised in the near term if any of the gross premium earned estimates discussed above are revised.

F-11

TYPTAP INSURANCE GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated and Combined Financial Statements

(Amounts in thousands, unless otherwise stated)

Property and equipment.     Property and equipment is stated at cost less accumulated depreciation and amortization, which is included in other operating expenses. Depreciation is calculated on a straight-line basis over the estimated useful lives as follows: computer hardware and software, three years, and furniture and office equipment, three to seven years. Leasehold improvements are amortized over the shorter of the lease term or the asset’s useful life. Expenditures for improvements are capitalized to the property accounts. Replacements and maintenance and repairs that do not improve or extend the life of the respective assets are expensed as incurred. The Company capitalizes both internal and external costs for internally developed software during the application development stage. During the preliminary project and post-implementation stage, internal-use software development costs are expensed as incurred. Capitalized software costs are depreciated on a straight-line basis over the estimated useful life of seven years.

Leases.     The Company leases office equipment and office space from affiliates and non-affiliates under terms ranging from one month up to five years. In assessing whether a contract is or contains a lease, the Company first determines whether there is an identified asset in the contract. The Company then determines whether the contract conveys the right to obtain substantially all of the economic benefits from use of the identified asset or the right to direct the use of the identified asset. The Company elects not to record any lease with a term of 12 months or less on the consolidated and combined balance sheet. For such short-term leases, the Company recognizes the lease payments in expense on a straight-line basis over the lease term.

If the contract is or contains a lease and the Company has the right to control the use of the identified asset, the right-of-use (“ROU”) asset and the lease liability is measured from the lease component of the contract and recognized on the consolidated and combined balance sheet. In measuring the lease liability, the Company uses its incremental borrowing rate for a loan secured by a similar asset that has a term similar to the lease term to discount the lease payments. The contract is further evaluated to determine the classification of the lease as to whether it is finance or operating. If the lease is a finance lease, the ROU asset is depreciated to depreciation expense over the shorter of the useful life of the asset or the lease term. Interest expense is recorded in connection with the lease liability using the effective interest method. If the lease is an operating lease, the ROU asset is amortized to lease expense on a straight-line basis over the lease term. For the presentation of finance leases on the Company’s consolidated and combined balance sheets, ROU assets and corresponding lease liabilities are included with property and equipment, net, and other liabilities, respectively.

Losses and loss adjustment expenses.     Reserves for losses and loss adjustment expenses (“LAE”) are determined by establishing liabilities in amounts estimated to cover incurred losses and LAE. Such reserves are determined based on the assessment of claims reported and the development of pending claims. These reserves are based on individual case estimates for the reported losses and LAE and estimates of such amounts that are incurred but not reported. Changes in the estimated liability are charged or credited to income as the losses and LAE are settled.

The estimates of unpaid losses and LAE are subject to trends in claim severity and frequency and are continually reviewed. As part of the process, the Company reviews historical data and considers various factors, including known and anticipated regulatory and legal developments, changes in social attitudes, inflation and economic conditions. As experience develops and other data becomes available, these estimates are revised, as required, resulting in increases or decreases to the existing unpaid losses and LAE. Adjustments are reflected in the results of operations in the period in which they are made and the liabilities may deviate substantially from prior estimates. Losses and LAE ceded to reinsurers are recorded as a reduction to losses and LAE on the consolidated and combined statements of income.

Advance premiums.     Premium payments received prior to the policy effective date are recorded as advance premiums. Once the policy is in force, the premiums are recorded as described under “Premium Revenue” below.

F-12

TYPTAP INSURANCE GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated and Combined Financial Statements

(Amounts in thousands, unless otherwise stated)

Reinsurance.     In the normal course of business, the Company seeks to reduce the loss that may arise from catastrophes or other events by reinsuring certain levels of risk in various areas of exposure with other insurance enterprises or reinsurers. The Company contracts with a number of reinsurers to secure its annual reinsurance coverage, which generally becomes effective June 1st each year. The Company purchases reinsurance each year taking into consideration probable maximum losses and reinsurance market conditions. The Company also participates in a reinsurance contract with an affiliate. The reinsurance allocation method is governed by HCI’s reinsurance allocation agreement, which states that each cedant’s retention and reinsurer’s limit of liability for a loss occurrence is apportioned based on the amount of loss contributed to that occurrence. The reinsurance allocation agreement also states that the reinsurance premium shall be apportioned to each company in the same proportion that the company’s premium subject to the reinsurance agreement bears to the total premium subject to the reinsurance agreement. See Note 22—“Related Party Transactions.”

Amounts recoverable from reinsurers are estimated in a manner consistent with the applicable reinsurance contract or contracts. Reinsurance premiums and reserves related to reinsured business are accounted for on a basis consistent with those used in accounting for the original policies issued and the terms of the reinsurance contracts. Premiums ceded to other companies have been reported as a reduction of gross premiums earned. Prepaid reinsurance premiums represent the unexpired portion of premiums ceded to reinsurers.

One of the Company’s current reinsurance contracts contains retrospective provisions including terms and conditions that adjust premiums based on the loss experience under the contracts. In such cases, a with-and-without method is used to estimate the asset or liability amount to be recognized at each reporting date. The amount of the estimate is the difference between the net contract costs before and after the loss experience under the contract. Estimates related to premium adjustments are recognized in ceded premiums earned. These estimates are reviewed monthly based on the loss experience to date and as adjustments become necessary. Such adjustments are reflected in the Company’s current operations and recorded in other assets until received upon the expiration of the contracts.

The Company receives ceding commissions from ceding gross written premiums to a third-party reinsurer under one flood quota share reinsurance contract. The ceding commissions represent the reimbursement of the Company’s policy acquisition, underwriting and other operating expenses. Ceding commissions received cover a portion of premium taxes and agent commissions capitalized by the Company and a portion of non-capitalized acquisition costs and other underwriting expenses. Ceding commissions are recognized as income on a pro-rata basis over the terms of the policies reinsured, the amount of which is included in policy acquisition and other underwriting expenses in the consolidated and combined statements of income. The unearned portion of ceding commissions that represents recovery of capitalized acquisition costs is classified as a reduction of DAC whereas the remaining unearned balance is classified as deferred revenue in other liabilities.

Premium revenue.     Premium revenue is earned on a daily pro-rata basis over the term of the policies and is included in gross premiums earned. Unearned premiums represent the portion of the premiums attributable to the unexpired policy term. The Company reviews its policy detail and establishes an allowance for any amount outstanding for more than 90 days.

Premium receivable.     Premium receivable represents the amount of premiums due from policyholders for insurance coverage. Premiums are recorded as receivable on the effective date of the policy. Premiums are billed to the policyholder 45-60 days in advance of the effective date. The policyholder is given a 30-day grace period after the effective date to pay the premium before the insurance coverage is cancelled. If the policyholder does not pay the premium, the Company can cancel the policy and has no obligation to provide insurance coverage. Unpaid renewal policies are cancelled at midnight on the last day of the period for which the policyholder has

F-13

TYPTAP INSURANCE GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated and Combined Financial Statements

(Amounts in thousands, unless otherwise stated)

paid. The unearned premium liability for the cancelled policy is reversed along with the premium receivable balance. Therefore, there is no unpaid earned premium and credit loss associated with the cancelled policy.

However, when the 30-day grace period falls between two reporting periods, the premium receivable balance at the end of the first reporting period may potentially be overstated for not considering the policy that is subsequently cancelled during the following reporting period. To mitigate the overstatement issue, the Company estimates the monetary impact from the subsequent policy cancellation by multiplying the historical cancellation rate to the premium receivable balance at the reporting date. The premium receivable balance, together with the unearned premium liability is then reduced by the computed amount.

At December 31, 2020 and 2019, allowances for uncollectible premiums were $649 and $0, respectively.

Allowance for credit losses.     Allowance for credit losses represents an estimation of potential losses that the Company may experience due to credit risk. The allowance for credit losses account is a contra account of a financial asset to reflect the net amount expected to be collected. Any increase or decrease in the allowance for credit losses related to investments is recognized and reflected as credit losses on investments in the Company’s consolidated and combined statements of income. For all other financial assets, credit loss expense is included in other operating expenses. When the risk of credit loss becomes certain, the allowance for credit losses account will be written off against the financial asset. Under the CECL model, the Company measures all expected credit losses related to relevant financial assets based on historical experience, current conditions, and reasonable and supportable forecasts which incorporate forward-looking information. The Company primarily uses a discounted cash flow method and a rating-based method in estimating credit losses at a reporting date for financial assets under the scope of the CECL model. The discounted cash flow method is a valuation method used to estimate the value of a financial asset based on its future cash flows. The Company uses this method to determine the expected credit losses for available-for-sale fixed-maturity securities. In addition, the Company elected not to measure an allowance for credit losses for accrued interest receivable as any uncollectible amount is adjusted to interest income on a monthly basis.

For certain financial assets related to insurance business such as reinsurance recoverable and reinsurance receivable for premium refund, the Company uses a rating-based method, which is a modified version of the probability of default method. It requires two key inputs: a) the liquidation rate and b) the amount of loss exposure. The liquidation rate, which is published annually, is the ratio of impaired insurance companies that were eventually liquidated to the group of insurance companies considered by A.M. Best in its study. The amount of loss exposure represents the future billing balance, net of any collateral, spread over the projected periods that are based on the Company’s historical claim payment pattern. The rating-based method measures credit losses by multiplying the future billings grouped by insurance rating over the projected periods by their corresponding liquidation rates by insurance rating. At present, the exposure to credit losses for certain financial assets related to non-insurance business is considered immaterial to the Company’s financial position.

Policy fees.     Policy fees represent nonrefundable fees for insurance coverage, which are intended to reimburse a portion of the costs incurred to underwrite the policy. Policy fees are recognized ratably over the policy coverage period.

Florida insurance guaranty association assessments.     The Company’s Florida insurance subsidiary may be assessed by the Florida Guaranty Association. The assessments are intended to be used for the payment of covered claims of insolvent insurance entities. The assessments are generally based on a percentage of premiums written during or following the year of insolvency. Liabilities are recognized when the assessments are probable to be imposed on the premiums on which they are expected to be based and the amounts can be reasonably

F-14

TYPTAP INSURANCE GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated and Combined Financial Statements

(Amounts in thousands, unless otherwise stated)

estimated. An insurer is permitted by Florida statutes to recover the entire amount of assessments from in-force and future policyholders through policy surcharges. U.S. GAAP provides that the Company should record an asset based on the amount of written or obligated-to-write premiums and limited to the amounts recoverable over the life of the in-force policies.

Foreign currency.     The functional currency of the Company’s Indian subsidiary is the U.S. dollar. As such, the monetary assets and liabilities of this subsidiary are remeasured into U.S. dollars at the exchange rate in effect on the balance sheet date. Non-monetary assets and liabilities are remeasured using historical rates. Expenses recorded in the local currency are remeasured at the prevailing exchange rate. Exchange gains and losses resulting from these remeasurements are included in other operating expenses.

Corporate overhead allocation.     There are certain overhead costs incurred by HCI that are related to operating the business as a group. Such costs may include but are not limited to, corporate administration expenses, salaries, benefits, bonus and other expenses related to human resources services, accounting and legal services, and other indirect operational costs. On a monthly basis, these costs are allocated to the Company on a predetermined overhead rate which is annually determined by considering headcounts, revenues, and activities that can influence costs.

Income taxes.     HCI files consolidated federal and state income tax returns and allocates taxes among its wholly-owned subsidiaries, including the Company and its subsidiaries in accordance with a written tax-allocation agreement. All estimated income tax payments and payments made when filing the federal and state tax returns are paid by HCI. A foreign subsidiary is responsible for filing and paying its own income taxes.

In accordance with a written tax sharing agreement, each entity within the consolidated group pays its portion of the income tax (based on each subsidiary’s separate return tax liability). If the entity incurs a loss, it will be entitled to a tax benefit from HCI.

The Company accounts for income taxes in accordance with U.S. GAAP, resulting in two components of income tax expense and benefit: current and deferred. Current income tax expense and benefit reflects taxes to be paid or refunded for the current period by applying the provisions of the enacted tax law to the taxable income or excess of deductions over revenues. The Company determines deferred income taxes using the liability (or balance sheet) method. Under this method, the net deferred tax asset or liability is based on the tax effects of the differences between the book and tax bases of assets and liabilities, and enacted changes in tax rates and laws are recognized in the period in which they occur.

Deferred income tax expense and benefit results from changes in deferred tax assets and liabilities between periods. Deferred tax assets are recognized if it is more likely than not, based on the technical merits, that the tax position will be realized or sustained upon examination. The term “more likely than not” means a likelihood of more than fifty percent; the terms “examined” and “upon examination” also include resolution of the related appeals or litigation processes, if any. A tax position that meets the more-likely-than-not recognition threshold is initially and subsequently measured as the largest amount of tax benefit that has a greater than fifty percent likelihood of being realized upon settlement with a taxing authority that has full knowledge of all relevant information. The determination of whether or not a tax position has met the more-likely-than-not recognition threshold considers the facts, circumstances, and information available at the reporting date and is subject to management’s judgment. Deferred tax assets are reduced by a valuation allowance if, based on the weight of evidence available, it is more likely than not that some portion or all of a deferred tax asset will not be realized.

Stock-based compensation.     HCI may grant stock-based awards of its stock to the Company’s employees. The measurement of the awards is based on estimated fair values at the grant date. The fair value of stock-based

F-15

TYPTAP INSURANCE GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated and Combined Financial Statements

(Amounts in thousands, unless otherwise stated)

awards is generally recognized as compensation expense over the requisite service period, which is defined as the period during which a recipient is required to provide service in exchange for an award. Forfeitures of stock-based awards are accounted for as they occur. The Company recognizes compensation expense associated with the awards received by its employees as a non-cash capital contribution from HCI. Compensation expense related to stock-based awards is included in general and administrative personnel expenses. For grants to employees of foreign subsidiaries, there is a recharge agreement between HCI and the foreign subsidiary, under which the foreign subsidiary reimburses HCI for the cost of the stock-based awards.

Basic earnings (loss) per common share.     Basic earnings (loss) per common share is computed by dividing net income (loss) attributable to common stockholders by the weighted-average number of common shares outstanding for the period. Currently, the Company does not have any common stock equivalents outstanding.

Statutory accounting practices.     TypTap complies with statutory accounting practices prescribed by the National Association of Insurance Commissioners. There are no state prescribed or permitted practices that have been adopted by the Company’s insurance subsidiary.

Note 3—Recent Accounting Pronouncements

Accounting standards update No. 2020-01.     In January 2020, the FASB issued Accounting Standards Update No. 2020-01 (“ASU 2020-01”) Investments-Equity Securities (Topic 321), Investments-Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815) Clarifying the Interactions between Topic 321, Topic 323, and Topic 815. This update, among others, clarifies the interaction of the accounting for equity securities under Topic 321 and investments under the equity method of accounting in Topic 323 when there is a change in level of ownership or degree of influence. ASU 2020-01 is effective for the Company beginning with the first quarter of 2021 and will be applied prospectively. Early adoption is permitted. This guidance will not have a material impact on the Company’s consolidated financial statements.

Accounting standards update No. 2020-08.     In October 2020, the FASB issued Accounting Standards Update No. 2020-08 (“ASU 2020-08”) Codification Improvements to Subtopic 310-20, Receivable Fees and Other Costs. ASU 2020-08 states that an entity should reevaluate whether a callable debt security that has multiple call dates is within the scope of ASC 310-20-35-33 for each reporting period. Securities within the scope are those that have explicit, noncontingent call options that are callable at fixed prices and on preset dates at prices less than the amortized cost basis of the security. ASC 310-20-35-33 requires that for each reporting period, to the extent the amortized cost basis of an individual callable debt security exceeds the amount repayable by the issuer at the next call date, the excess should be amortized to the next call date, unless the guidance in ASC 310-20-35-26 applies. ASU 2020-08 is effective for the Company beginning with the first quarter of 2021 and will be applied prospectively. Early adoption is not permitted. This guidance will not have a material impact on the Company’s consolidated financial statements.

F-16

TYPTAP INSURANCE GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated and Combined Financial Statements

(Amounts in thousands, unless otherwise stated)

Note 4—Cash, Cash Equivalents, and Restricted Cash

The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the Company’s consolidated and combined balance sheets that sum to the total of the same such amounts shown in the consolidated and combined statements of cash flows.

	December 31,
	2020		2019
Cash and cash equivalents	$	99,725	$	51,562
Restricted cash		2,000		300
Total	$	101,725	$	51,862

At December 31, 2020, $88,504 or 89% of the Company’s cash and cash equivalents were deposited at two national banks and included $18,786 in two custodial accounts. At December 31, 2019, $45,362 or 88% of the Company’s cash and cash equivalents were deposited at two national banks and included $1,588 in one custodial account. At December 31, 2020 and 2019, the Company’s cash deposits at any one bank generally exceed the Federal Deposit Insurance Corporation’s $250 coverage limit for insured deposit accounts.

Note 5—Investments

a) Available-for-sale fixed-maturity securities

The Company holds investments in fixed-maturity securities that are classified as available-for-sale. At December 31, 2020 and 2019, the cost or amortized cost, gross unrealized gains and losses, and estimated fair value of the Company’s available-for-sale securities by security type were as follows:

	Cost or amortized cost		Allowance for credit loss			Gross unrealized gain		Gross unrealized loss			Estimated fair value
As of December 31, 2020
U.S. Treasury and U.S. government agencies	$	8,788	$	—		$	166	$	(1	)	$	8,953
Corporate bonds		7,125		—			341		—			7,466
Exchange-traded debt		100		(3	)		3		—			100
Total	$	16,013	$	(3	)	$	510	$	(1	)	$	16,519

	Cost or amortized cost		Gross unrealized gain		Gross unrealized loss			Estimated fair value
As of December 31, 2019
U.S. Treasury and U.S. government agencies	$	6,622	$	34	$	—		$	6,656
Corporate bonds		8,946		135		(1	)		9,080
Exchange-traded debt		1,029		22		—			1,051
Total	$	16,597	$	191	$	(1	)	$	16,787

F-17

TYPTAP INSURANCE GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated and Combined Financial Statements

(Amounts in thousands, unless otherwise stated)

Expected maturities will differ from contractual maturities as borrowers may have the right to call or prepay obligations with or without penalties. The scheduled contractual maturities of fixed-maturity securities at December 31, 2020 and 2019 are as follows:

	December 31,
	2020				2019
	Cost or amortized cost		Estimated fair value		Cost or amortized cost		Estimated fair value
Available-for-sale
Due in one year or less	$	2,132	$	2,143	$	3,875	$	3,879
Due after one year through five years		13,648		14,131		12,473		12,657
Due after five years through ten years		233		245		249		251
	$	16,013	$	16,519	$	16,597	$	16,787

Sales of available-for-sale fixed-maturity securities

Proceeds received, and the gross realized gains and losses from sales of available-for-sale fixed-maturity securities, for the years ended December 31, 2020 and 2019 were as follows:

	Proceeds		Gross realized gains		Gross realized losses
Year ended December 31, 2020	$	9,298	$	198	$	(207	)
Year ended December 31, 2019	$	156	$	5	$	—

Gross unrealized losses for available-for-sale fixed-maturity securities

Securities with gross unrealized loss positions at December 31, 2020 and 2019 aggregated by investment category and length of time the individual securities have been in a continuous loss position, are as follows:

	Less than 12 months					12 Months or longer				Total
	Gross unrealized loss			Estimated fair value		Gross unrealized loss		Estimated fair value		Gross unrealized loss			Estimated fair value
As of December 31, 2020
U.S. Treasury and U.S. government agencies	$	(1	)	$	1,337	$	—	$	—	$	(1	)	$	1,337
As of December 31, 2019
Corporate bonds	$	(1	)	$	488	$	—	$	—	$	(1	)	$	488

At December 31, 2020, there were three securities in an unrealized loss position versus two securities at December 31, 2019.

Allowance for credit losses of available-for-sale fixed-maturity securities

The Company regularly reviews its individual investment securities for credit impairment. The Company considers various factors in determining whether each individual security is impaired, including:

• the financial condition and near-term prospects of the issuer, including any specific events that may affect its operations or earnings;

F-18

TYPTAP INSURANCE GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated and Combined Financial Statements

(Amounts in thousands, unless otherwise stated)

• the extent to which the market value of the security has been below its cost or amortized cost;

• general market conditions and industry or sector specific factors and other qualitative factors;

• nonpayment by the issuer of its contractually obligated interest and principal payments; and

• the Company’s intent and ability to hold the investment for a period of time sufficient to allow for the recovery of costs.

The table below summarized the activity in the allowance for credit losses of available-for-sale securities during the year:

	2020
Balance at January 1	$	—
Credit Loss expense		3
Balance at December 31	$	3

b) Equity securities

The Company holds investments in equity securities measured at fair values which are readily determinable. At December 31, 2020 and 2019, the cost, gross unrealized gains and losses, and estimated fair value of the Company’s equity securities were as follows:

	Cost		Gross unrealized gain		Gross unrealized loss			Estimated fair value
December 31, 2020	$	4,115	$	472	$	(133	)	$	4,454
December 31, 2019	$	2,136	$	345	$	(32	)	$	2,449

The table below presents the portion of unrealized gains and losses in the Company’s consolidated and combined statements of income related to equity securities still held.

	Years Ended December 31,
	2020			2019
Net (losses) gains recognized	$	(19	)	$	476
Exclude: Net realized (losses) recognized for securities sold		(45	)		(13	)
Net unrealized gains recognized	$	26		$	489

Sales of equity securities

Proceeds received, and the gross realized gains and losses from sales of equity securities, for the years ended December 31, 2020 and 2019 were as follows:

	Proceeds		Gross realized gains		Gross realized losses
Year ended December 31, 2020	$	3,114	$	341	$	(386	)
Year ended December 31, 2019	$	1,377	$	76	$	(89	)

F-19

TYPTAP INSURANCE GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated and Combined Financial Statements

(Amounts in thousands, unless otherwise stated)

c) Net investment income

Net investment income (loss), by source, is summarized as follows:

	Years ended December 31,
	2020			2019
Available-for-sale fixed-maturity securities	$	455		$	445
Equity securities		90			87
Investment expense		(87	)		(69	)
Cash and cash equivalents		355			536
Short-term investments		1			57
Net investment income	$	814		$	1,056

Note 6—Comprehensive Income (Loss)

Comprehensive income (loss) includes net income (loss) and other comprehensive income or loss, which for the Company includes changes in unrealized gains or losses of available-for-sale fixed-maturity securities carried at fair value and changes in the allowance for credit losses related to these investments. Reclassification adjustments for realized (gains) losses are reflected in net realized investment gains (losses) on the consolidated and combined statements of income. The components of other comprehensive income or loss and the related tax effects allocated to each component were as follows:

	Year ended December 31, 2020
	Before tax			Income tax effect			Net of tax
Unrealized gain arising during the period	$	314		$	77		$	237
Change in allowance for credit losses		3			1			2
Call and repayment gains charged to investment income		(7	)		(2	)		(5	)
Reclassification adjustment for net realized losses		9			2			7
Total other comprehensive income	$	319		$	78		$	241

	Year ended December 31, 2019
	Before tax			Income tax effect			Net of tax
Unrealized gain arising during the period	$	314		$	77		$	237
Call and repayment gains charged to investment income		(2	)		—			(2	)
Reclassification adjustment for realized gains		(5	)		(1	)		(4	)
Total other comprehensive income	$	307		$	76		$	231

Note 7—Fair Value Measurements

The Company records and discloses certain financial assets at their estimated fair value. The fair value hierarchy prioritizes the inputs to valuation techniques used to measure fair value into three broad levels as follows:

Level 1	Unadjusted quoted prices in active markets for identical assets.
Level 2	Other inputs that are observable for the assets, either directly or indirectly such as quoted prices for identical assets that are not observable throughout the full term of the asset.
Level 3	Inputs that are unobservable.

F-20

TYPTAP INSURANCE GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated and Combined Financial Statements

(Amounts in thousands, unless otherwise stated)

Valuation Methodology

Cash and cash equivalents

Cash and cash equivalents primarily consist of money-market funds and certificates of deposit maturing within 90 days. Their carrying value approximates fair value due to the short maturity and high liquidity of these assets.

Restricted cash

Restricted cash consists of funds held by the State of Florida for which carrying value approximates fair value.

Short-term investments

Short-term investments consist of certificates of deposit with maturities of 91 to 365 days. Due to their short maturity, the carrying value approximates fair value.

Fixed-maturity and equity securities

Estimated fair values are determined in accordance with U.S. GAAP using valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. Fair values are generally measured using quoted prices in active markets for identical securities or other inputs that are observable either directly or indirectly, such as quoted prices for similar securities. In those instances where observable inputs are not available, fair values are measured using unobservable inputs. Unobservable inputs reflect the Company’s own assumptions about the assumptions that market participants would use in pricing the security and are developed based on the best information available in the circumstances. Fair value estimates derived from unobservable inputs are significantly affected by the assumptions used, including the discount rates and the estimated amounts and timing of future cash flows. The derived fair value estimates cannot be substantiated by comparison to independent markets and are not necessarily indicative of the amounts that would be realized in a current market exchange.

The estimated fair values for securities that do not trade on a daily basis are determined by management, utilizing prices obtained from an independent pricing service and information provided by brokers, which are level 2 inputs. Management reviews the assumptions and methods utilized by the pricing service and then compares the relevant data and pricing to broker-provided data. The Company gains assurance of the overall reasonableness and consistent application of the assumptions and methodologies and compliance with accounting standards for fair value determination through ongoing monitoring of the reported fair values.

F-21

TYPTAP INSURANCE GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated and Combined Financial Statements

(Amounts in thousands, unless otherwise stated)

Assets measured and recorded at estimated fair value on a recurring basis:

The following tables present information about the Company’s financial assets measured at estimated fair value on a recurring basis. The tables indicate the fair value hierarchy of the valuation techniques utilized by the Company to determine such fair value as of December 31, 2020 and 2019:

	Fair value measurements using						Total
	(Level 1)		(Level 2)		(Level 3)
As of December 31, 2020
Financial Assets:
Cash and cash equivalents	$	99,725	$	—	$	—	$	99,725
Restricted cash	$	2,000	$	—	$	—	$	2,000
Fixed-maturity securities:
U.S. Treasury and U.S. government agencies	$	6,922	$	2,031	$	—	$	8,953
Corporate bonds		7,466		—		—		7,466
Exchange-traded debt		100		—		—		100
Total available-for-sale securities	$	14,488	$	2,031	$	—	$	16,519
Equity securities	$	4,454	$	—	$	—	$	4,454

	Fair value measurements using						Total
	(Level 1)		(Level 2)		(Level 3)
As of December 31, 2019
Financial Assets:
Cash and cash equivalents	$	51,562	$	—	$	—	$	51,562
Restricted cash	$	300	$	—	$	—	$	300
Short-term investments	$	491	$	—	$	—	$	491
Fixed-maturity securities:
U.S. Treasury and U.S. government agencies	$	5,655	$	1,001	$	—	$	6,656
Corporate bonds		9,080		—		—		9,080
Exchange-traded debt		1,051		—		—		1,051
Total available-for-sale securities	$	15,786	$	1,001	$	—	$	16,787
Equity securities	$	2,449	$	—	$	—	$	2,449

Liabilities carried at other than fair value    

The following table presents fair value information for note payable – related party that is carried on the balance sheet at December 31, 2020:

	Carrying Value		Fair value measurements using						Estimated fair value
			(Level 1)		(Level 2)		(Level 3)
As of December 31, 2020
Note payable—related party	$	22,000	$	—	$	—	$	22,000	$	22,000

F-22

TYPTAP INSURANCE GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated and Combined Financial Statements

(Amounts in thousands, unless otherwise stated)

Note 8—Deferred Policy Acquisition Costs

The following table summarizes the activity with respect to deferred policy acquisition costs:

	December 31,
	2020			2019
Beginning balance	$	7,199		$	1,033
Policy acquisition costs deferred		16,796			11,441
Amortization		(13,714	)		(5,275	)
Ending balance	$	10,281		$	7,199

The amount of policy acquisition costs amortized and included in policy acquisition and other underwriting expenses for the years ended December 31, 2020 and 2019 were $13,714 and $5,275, respectively.

Note 9—Property and Equipment, Net

Property and equipment, net consists of the following:

	December 31,
	2020			2019
Computer hardware and software	$	8,161		$	4,089
Office furniture and equipment		258			243
Tenant and leasehold improvements		343			343
Other		826			2,929
Total, at cost*		9,588			7,604
Less:accumulated depreciation and amortization		(3,523	)		(1,922	)
Property and equipment, net	$	6,065		$	5,682

* Includes $7,114 and $6,160 of capitalized costs related to the Harmony project at December 31, 2020 and 2019, respectively. Harmony is an internally-developed application that facilitates complete insurance policy management.

Depreciation and amortization expense for property and equipment were $1,103 and $676 for the years ended December 31, 2020 and 2019, respectively.

Note 10—Other Assets

The following table summarizes the Company’s other assets:

	December 31,
	2020		2019
Benefits receivable related to retrospective reinsurance contracts	$	2,075	$	502
Prepaid expenses		373		184
Deposits		59		91
Other		413		203
Total other assets	$	2,920	$	980

F-23

TYPTAP INSURANCE GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated and Combined Financial Statements

(Amounts in thousands, unless otherwise stated)

Note 11—Reinsurance

The Company cedes a portion of its homeowners’ insurance exposure to other entities under catastrophe excess of loss reinsurance contracts and one quota share reinsurance agreement. Ceded premiums under most catastrophe excess of loss reinsurance contracts are subject to revision resulting from subsequent adjustments in total insured value. Under the terms of the quota share reinsurance agreement, the Company is entitled to a 30% ceding commission on ceded premiums written. The reinsurance premiums under one flood catastrophe excess of loss reinsurance contract are generally determined on a quarterly basis based on the premiums associated with the applicable flood total insured value in force on the last day of the preceding quarter.

The Company remains liable for claims payments in the event that any reinsurer is unable to meet its obligations under the reinsurance agreements. Failure of reinsurers to honor their obligations could result in losses to the Company. The Company evaluates the financial condition of its reinsurers and monitors concentrations of credit risk arising from similar geographic regions, activities or economic characteristics of the reinsurers to minimize its exposure to significant losses from reinsurer insolvencies. The Company contracts with a number of reinsurers to secure its annual reinsurance coverage, which generally becomes effective June 1^st each year. The Company purchases reinsurance each year taking into consideration probable maximum losses and reinsurance market conditions.

The impact of the reinsurance treaties on premiums written and earned is as follows:

	Years ended December 31,
	2020			2019
Premiums Written:
Direct gross written	$	104,855		$	60,272
Ceded		(28,822	)		(11,076	)
Net premiums written	$	76,033		$	49,196
Premiums Earned:
Direct gross earned	$	78,836		$	30,904
Ceded		(28,822	)		(11,076	)
Net premiums earned	$	50,014		$	19,828

During the years ended December 31, 2020 and 2019, ceded losses of $502 and $148 were recognized, respectively, as reductions in losses and LAE. These ceded losses related to non-catastrophe claims. At December 31, 2020 and 2019, there were 39 and 29 reinsurers, respectively, participating in the Company’s reinsurance program. Total gross amounts recoverable and receivable from reinsurers at December 31, 2020 and 2019 were $90 and $122, respectively. The reinsurance recoverable balances at December 31, 2020 and 2019 were receivable from one reinsurer. Based on all available information considered in the rating-based method described in Note 2—“Summary of Significant Accounting Policies,” the Company did not recognize any credit loss expense for the year ended December 31, 2020. There were no allowances for credit losses related to the reinsurance recoverable balance at December 31, 2020 and 2019.

One of the reinsurance contracts includes retrospective provisions that adjust premiums in the event losses are minimal or zero. For the years ended December 31, 2020 and 2019, the Company recognized a reduction in ceded premiums of $2,411 and $502, respectively. In addition, amounts receivable related to retrospective provisions are reflected in other assets. At December 31, 2020 and 2019, other assets included $2,075 and $502, respectively, of these accrued benefits. In June 2020, the Company received $838 of premium refund under the

F-24

TYPTAP INSURANCE GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated and Combined Financial Statements

(Amounts in thousands, unless otherwise stated)

retrospective reinsurance contract that ended May 31, 2020. Management believes the credit risks associated with the collectability of these accrued benefits are minimal as the amounts receivable are concentrated with one reinsurer and the Company monitors the creditworthiness of this reinsurer based on available information about the reinsurer’s financial condition.

Note 12—Losses and Loss Adjustment Expenses

The Company establishes reserves for the estimated total unpaid costs of losses including LAE. Loss and LAE reserves reflect management’s best estimate of the total cost of (i) claims that have been incurred, but not yet paid in full, and (ii) claims that have been incurred but not yet reported to the Company (“IBNR”). Reserves established by management represent an estimate of the outcome of future events and, as such, cannot be considered an exact calculation of our liability. Rather, loss and LAE reserves represent management’s best estimate of the Company’s liability based on the application of actuarial techniques and other projection methodologies and taking into consideration other facts and circumstances known at the balance sheet date. The process of establishing loss and LAE reserves is complex and inherently imprecise, as it involves the estimation of the outcome of future uncertain events. The impact of both internal and external variables on ultimate losses and LAE costs is difficult to estimate. In determining loss and LAE reserves, the Company gives careful consideration to all available data and actuarial analyses.

When a claim is reported to the Company, the claims personnel establish a “case reserve” for the estimated amount of the ultimate amount payable to settle the claim. This estimate reflects an informed judgment based upon general insurance reserving practices and on the experience and knowledge of the claims adjuster. The individual estimating the reserve considers the nature and value of the specific claim, the severity of injury or damage, location, and the policy provisions relating to the type of loss. Case reserves are adjusted as more information becomes available. It is the Company’s policy to settle each claim as expeditiously as possible.

Reserves are closely monitored and are recalculated periodically using the most recent information on reported claims and a variety of actuarial techniques. Specifically, claims management personnel complete weekly and ongoing reviews of existing case reserves, new claims, changes to existing case reserves, and paid losses with respect to the current and prior years. As the Company continues to expand historical data regarding paid and incurred losses, the data is used to develop expected ultimate loss and LAE ratios, then these expected loss and LAE ratios are applied to earned premium to derive a reserve level for each line of business. In connection with the determination of these reserves, other specific factors such as recent weather-related losses, trends in historical reported and paid losses, and litigation and judicial trends regarding liability will also be considered. Therefore, the loss ratio method, among other methods, is used to project an ultimate loss expectation, and then the related loss history must be regularly evaluated and loss expectations updated, with the possibility of variability from the initial estimate of ultimate losses.

The Company maintains IBNR reserves to provide for claims that have been incurred but have not been reported and subsequent development on reported claims. The IBNR reserve is determined by estimating TypTap’s ultimate net liability for both reported and unreported claims and then subtracting the case reserves and payments made to date for reported claims.

Loss and LAE reserve estimation methods.     The Company applies the following general methods in projecting reserves for losses and LAE:

• Reported loss development;

• Paid loss development;

F-25

TYPTAP INSURANCE GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated and Combined Financial Statements

(Amounts in thousands, unless otherwise stated)

• Paid Bornhuetter-Ferguson method;

• Reported Experience-Modified Bornhuetter-Ferguson method;

• Paid Experience-Modified Bornhuetter-Ferguson method;

• Loss ratio method;

• Several variations of the Frequency-Severity method, depending on exposure; and

• A factor load to loss and allocated LAE reserves for the unallocated LAE.

Selected reserves are based on a review of the indications from these methods as well as other considerations such as emergence since the most recent evaluation and number of open claims for a given accident period.

Currently, the estimated ultimate liability is calculated using the principles and procedures described above, which are applied to the lines of business written. However, because the establishment of loss and LAE reserves is an inherently uncertain process, ultimate losses and LAE may exceed the established loss and LAE reserves and have a material, adverse effect on our results of operations and financial condition. Changes in estimates, or differences between estimates and amounts ultimately paid, are reflected in the operating results of the period during which such adjustments are made.

The Company’s reported results, financial position and liquidity would be affected by likely changes in key assumptions that determine the net loss reserves. However, it is believed that a reasonably likely increase or decrease in the severity of claims could impact our net loss reserves.

Activity in the liability for losses and LAE is summarized as follows:

	Years ended December 31,
	2020			2019
Net balance, beginning of year*	$	4,656		$	465
Incurred, net of reinsurance, related to:
Current year		34,059			8,383
Prior years		—			122
Total incurred, net of reinsurance		34,059			8,505
Paid, net of reinsurance, related to:
Current year		(15,799	)		(3,929	)
Prior years		(3,577	)		(385	)
Total paid, net of reinsurance		(19,376	)		(4,314	)
Net balance, end of year		19,339			4,656
Add: reinsurance recoverable		9			109
Gross balance, end of year	$	19,348		$	4,765

* Net balance represents beginning-of-period liability for unpaid losses and LAE less beginning-of-period reinsurance recoverable for unpaid losses and LAE.

The establishment of loss and LAE reserves is an inherently uncertain process and changes in loss and LAE reserve estimates are expected as these estimates are subject to the outcome of future events. Changes in estimates, or differences between estimates and amounts ultimately paid, are reflected in the operating results of the period during which such adjustments are adjusted.

F-26

TYPTAP INSURANCE GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated and Combined Financial Statements

(Amounts in thousands, unless otherwise stated)

The following is information about incurred and paid claims development as of December 31, 2020, net of reinsurance, as well as cumulative claim frequency and the total of IBNR liabilities plus expected development on reported claims included within the net incurred claims amounts. The information is provided beginning with 2016, the year TypTap commenced operations. The information about incurred and paid claims development for the years ended December 31, 2018 to 2016 is presented as supplementary information and is unaudited.

Homeowners multi-peril and dwelling fire insurance (a)

											As of December 31, 2020
	Incurred claims and allocated claim adjustment expenses, net of reinsurance for the years ended December 31,										Total of IBNR plus expected development reported claims		Cumulative number of reported claims (not in dollar amounts)(b)
Year	2016		2017		2018		2019		2020
2016	$	—	$	—	$	—	$	—	$	—		—		—
2017		—		—		—		—		—		—		—
2018		—		—		218		332		343		—		21
2019		—		—		—		8,042		7,772		630		413
2020		—		—		—		—		32,490		13,910		1,843
								Total	$	40,605

	Cumulative paid claims and allocated claim adjustment expenses, net of reinsurance for the years ended December 31,
Year	2016		2017		2018		2019		2020
2016	$	—	$	—	$	—	$	—	$	—
2017		—		—		—		—		—
2018		—		—		84		274		331
2019		—		—		—		3,787		6,846
2020		—		—		—		—		15,203
								Total	$	22,380
		Liabilities for loss and LAE, net of reinsurance							$	18,225

(a) Excludes losses from any hurricane event prior to 2020.

(b) The cumulative number of reported claims is measured as the number of per-policyholder, per-event claims for all coverages regardless of whether the claim results in loss or expense to the Company.

F-27

TYPTAP INSURANCE GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated and Combined Financial Statements

(Amounts in thousands, unless otherwise stated)

Losses specific to any hurricane event prior to 2020

											As of December 31, 2020
											Total of IBNR plus expected development reported claims		Cumulative number of reported claims (not in dollar amounts)(b)
	Incurred claims and allocated claim adjustment expenses, net of reinsurance for the years ended December 31,
Year	2016		2017		2018		2019		2020
2016	$	82	$	83	$	85	$	85	$	85		—		2
2017		—		2,264		2,303		2,317		2,332		43		180
2018		—		—		489		486		485		95		15
2019		—		—		—		—		—		—		—
2020		—		—		—		—		—		—		—
								Total	$	2,902

	Cumulative paid claims and allocated claim adjustment expenses, net of reinsurance for the years ended December 31,
Year	2016		2017		2018		2019		2020
2016	$	76	$	83	$	85	$	85	$	85
2017		—		2,094		2,230		2,280		2,289
2018		—		—		246		379		390
2019		—		—		—		—		—
2020		—		—		—		—		—
								Total	$	2,764
		Liabilities for loss and LAE, net of reinsurance							$	138

(b) The cumulative number of reported claims is measured as the number of per-policyholder, per-event claims for all coverages regardless of whether the claim results in loss or expense to the Company.

The reconciliation of the net incurred and paid loss development tables to the liability for losses and LAE is as follows:

	December 31,
	2020		2019
Net outstanding liabilities
Homeowners multi-peril and dwelling fire insurance	$	18,225	$	4,313
Losses specific to any hurricane prior to 2020		138		144
Other short-duration insurance lines		976		199
Liabilities for unpaid losses and loss adjustment expenses, net of reinsurance		19,339		4,656
Reinsurance recoverables		9		109
Total gross liability for unpaid losses and loss adjustment expenses	$	19,348	$	4,765

F-28

TYPTAP INSURANCE GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated and Combined Financial Statements

(Amounts in thousands, unless otherwise stated)

The following is supplementary and unaudited information about average historical claims duration as of December 31, 2020:

Average annual percentage payout of incurred losses by age, net of reinsurance years	1			2			3			4			5
Homeowners multi-peril and dwelling fire insurance		47.0	%		8.0	%		0.1	%		0.0	%		0.0	%
Losses specific to any hurricane prior to 2020		83.3	%		9.5	%		2.2	%		0.3	%		0.0	%

Note 13—Segment Information

The Company identifies its operating divisions based on managerial emphasis, organizational structure and revenue source. Previously, the Company had two reportable segments: insurance operations and corporate and other. Subsequent to the capital investment transaction described in Note 23—“Subsequent Events,” to better manage the consolidated group, the Company now groups its operations into three segments: insurance operations, information technology and corporate. The insurance operations segment represents the property and casualty insurance operations of TypTap, together with TTM, its managing general agent. The information technology segment represents the operations of technology companies Exzeo USA and Cypress Tech which owns Exzeo India. The corporate segment represents the activities of holding company TTIG. The information herein has been recast to reflect the new segmental reporting. The determination of segments may change over time due to changes in operational emphasis, revenues, and results of operations.

For the years ended December 31, 2020 and 2019, revenues from the Company’s insurance operations before intracompany elimination represented 96.5% and 93.5%, respectively, and revenues from the information technology segment before intracompany elimination represented 3.5% and 6.5%, respectively, of total revenues of all operating segments. At December 31, 2020 and 2019, insurance operations’ total assets represented 94.2% and 91.2%, and the information technology segment’s total assets represented 5.8% and 8.8%, respectively, of the combined assets of all operating segments. See Note 1—“Nature of Operations” for a description of the Company’s insurance operations and information technology operations. The following tables present segment information reconciled to the Company’s consolidated and combined statements of income. Intersegment transactions are not eliminated from segment results. However, intracompany transactions are eliminated in segment results below.

For the year ended December 31, 2020	Insurance operations			Information technology		Corporate		Elimination			Combined
Revenue:
Gross premium earned	$	78,836		$	—	$	—	$	—		$	78,836
Ceded premiums		(28,822	)		—		—		—			(28,822	)
Net premiums earned		50,014			—		—		—			50,014
Net income from investment portfolio		765			32		—		—			797
Policy fee income		819			—		—		—			819
Other		97			82		—		(82	)		97
Total revenue		51,695			114		—		(82	)		51,727
Expenses:
Losses and loss adjustment expenses		34,059			—		—		—			34,059
Amortization of deferred policy acquisition costs		13,714			—		—		—			13,714
Other policy acquisition expenses		1,865			—		—		—			1,865
General and administrative personnel expenses		4,386			6,396		—		—			10,782
Interest expense		2			—		—		—			2
Depreciation and amortization		34			1,069		—		—			1,103

F-29

TYPTAP INSURANCE GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated and Combined Financial Statements

(Amounts in thousands, unless otherwise stated)

For the year ended December 31, 2020	Insurance operations			Information technology			Corporate		Elimination			Combined
Other operating expenses		3,746			2,999			—		(82	)		6,663
Total expenses		57,806			10,464			—		(82	)		68,188
Loss before income taxes	$	(6,111	)	$	(10,350	)	$	—	$	—		$	(16,461	)
Total revenue from non-affiliates	$	52,774		$	32		$	—

For the year ended December 31, 2019	Insurance operations			Information technology			Corporate		Elimination			Combined
Revenue:
Gross premiums earned	$	30,904		$	—		$	—	$	—		$	30,904
Ceded premiums		(11,076	)		—			—		—			(11,076	)
Net premiums earned		19,828			—			—		—			19,828
Net income (loss) from investment portfolio		1,456			81			—		—			1,537
Policy fee income		424			—			—		—			424
Other		39			83			—		(82	)		40
Total revenue		21,747			164			—		(82	)		21,829
Expenses:
Losses and loss adjustment expenses		8,505			—			—		—			8,505
Amortization of deferred policy acquisition costs		5,275			—			—		—			5,275
Other policy acquisition expenses		1,622			—			—		—			1,622
General and administrative expenses*		3,253			4,905			—		—			8,158
Interest expense		2			—			—		—			2
Depreciation and amortization		28			648			—		—			676
Other operating expenses		3,069			3,095			—		(82	)		6,082
Total expenses		21,754			8,648			—		(82	)		30,320
Income (loss) before income taxes	$	(7	)	$	(8,484	)	$	—	$	—		$	(8,491	)
Total revenue from non-affiliates	$	21,747		$	82		$	—

* General and administrative expenses under the insurance operations segment were recast to include $1,855 of payroll costs allocated from HCI in connection with shared services.

The following table presents segment assets reconciled to the Company’s total assets in the consolidated and combined balance sheets.

	December 31,
	2020			2019
Segment:
Insurance Operations	$	150,690		$	86,913
Information Technology		9,232			8,368
Corporate and Other		294			483
Elimination		(2,635	)		(1,532	)
Total assets	$	157,581		$	94,232

F-30

TYPTAP INSURANCE GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated and Combined Financial Statements

(Amounts in thousands, unless otherwise stated)

Note 14—Leases

The table below summarizes the Company’s ROU assets and corresponding liabilities for operating and finance leases:

	December 31,
	2020		2019
Operating leases:
ROU Assets	$	302	$	713
Liabilities	$	316	$	738
Finance leases:
ROU Assets	$	67	$	67
Liabilities*	$	36	$	50

* Included in other liabilities.

In December 2020, the Company, as a lessee, terminated one of its operating leases for office space in Tampa, Florida. There was no gain or loss recognized for this early termination.

The following table summarizes the Company’s operating and finance leases in which the Company is a lessee:

Class of Assets	Initial term		Renewal option		Other terms and conditions
Operating lease:
Office space		3 to 10 years		Yes		(a), (b)
Finance lease:
Office equipment		3 to 5 years		Not applicable		(c)

(a) There are no variable lease payments.

(b) Rent escalation provisions exist.

(c) There is a bargain purchase option.

As of December 31, 2020, maturities of lease liabilities were as follows:

	Leases
	Operating		Finance
Due in Year 2021	$	332	$	15
2022		—		14
2023		—		9
Total lease payments		332		38
Less: interest and foreign taxes	$	16	$	2
Total lease obligations	$	316	$	36

F-31

TYPTAP INSURANCE GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated and Combined Financial Statements

(Amounts in thousands, unless otherwise stated)

The following table provides quantitative information with regard to the Company’s operating and finance leases.

	Years ended December 31,
	2020		2019
Lease costs:
Finance lease costs:
Amortization—ROU assets*	$	13	$	13
Interest expense		2		2
Operating lease costs*		522		511
Short-term lease costs *		14		50
Total lease costs	$	551	$	576
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows—finance leases	$	2	$	2
Operating cash flows—operating leases	$	526	$	513
Financing cash flows—finance leases	$	14	$	12

	December 31, 2020
Weighted-average remaining lease term (in years):
Finance leases		2.8
Operating leases		1.1
Weighted-average discount rate:
Finance leases		3.8	%
Operating leases		3.3	%

* Included in other operating expenses of the consolidated and combined statements of income.

Note 15—Income Taxes

A summary of income tax expense and (benefit) is as follows:

	Years ended December 31,
	2020			2019
Current:
Federal	$	(3,294	)	$	(1,994	)
State		(732	)		(443	)
Foreign		105			107
Total current taxes		(3,921	)		(2,330	)
Deferred:
Federal		(90	)		635
State		(20	)		117
Foreign		(6	)		(2	)
Total deferred taxes		(116	)		750
Income tax benefit	$	(4,037	)	$	(1,580	)

F-32

TYPTAP INSURANCE GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated and Combined Financial Statements

(Amounts in thousands, unless otherwise stated)

The reasons for the differences between the statutory federal income tax rate and the effective tax rate are summarized as follows:

	Years ended December 31,
	2020						2019
	Amount			%			Amount			%
Income taxes at statutory rate	$	(3,457	)		21.0		$	(1,783	)		21.0
Increase (decrease) in income taxes resulting from:
State income taxes, net of federal tax benefits		(594	)		3.6			(305	)		3.6
Nondeductible allocated expense from parent		—			—			455			(5.4	)
Effects of tax rate changes		—			—			(18	)		0.2
Other		14			(0.1	)		71			(0.8	)
Income tax benefit	$	(4,037	)		24.5		$	(1,580	)		18.6

The Company has no uncertain tax positions or unrecognized tax benefits that, if recognized, would impact the effective income tax rate. The Company elected to classify interest and penalties, if any, arising from uncertain tax positions as income tax expense as permitted by current accounting standards. There have been no material amounts of interest or penalties for the years ended December 31, 2020 and 2019. For the years ended December 31, 2020 and 2019, the Company recorded income tax benefits of $4,037 and $1,580, respectively, and resulting in effective tax rates of 24.5% and 18.6%, respectively. The increase in the effective tax rate in 2020 was attributable to the nondeductible expense allocated from HCI in 2019.

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes.

Significant components of the Company’s net deferred income tax liabilities are as follows:

	December 31,
	2020			2019
Deferred tax assets:
Unearned premiums	$	2,470		$	1,609
Stock-based compensation		261			155
Losses and loss adjustment expenses		240			63
Unearned revenue		129			94
Property and equipment		—			52
Accrued expenses		51			—
Other		33			28
Total deferred tax assets		3,184			2,001
Deferred tax liabilities:
Deferred policy acquisition costs		(2,653	)		(1,803	)
Intangible assets		(1,428	)		(1,305	)
Net unrealized investment gains		(208	)		(123	)
Prepaid expenses		(65	)		(31	)
Other		(81	)		(28	)
Total deferred tax liabilities		(4,435	)		(3,290	)
Net deferred tax liabilities	$	(1,251	)	$	(1,289	)

F-33

TYPTAP INSURANCE GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated and Combined Financial Statements

(Amounts in thousands, unless otherwise stated)

A valuation allowance is established if, based upon the relevant facts and circumstances, management believes any portion of the deferred tax assets will not be realized. Although realization of deferred income tax assets is not certain, management believes it is more likely than not that deferred tax assets will be realized. Thus, the Company did not have a valuation allowance established as of December 31, 2020 and 2019.

Note 16—Earnings (Loss) Per Share

A summary of the numerator and denominator of the basic loss per common share is presented below:

	Net loss (numerator)			Shares(a) (denominator)		Per share amount
Year Ended December 31, 2020
Pro forma basic loss per share(b)	$	(12,424	)		75,000	$	(0.17	)
Year Ended December 31, 2019
Pro forma basic loss per share(b)	$	(6,911	)		75,000	$	(0.09	)

(a) Shares in thousands.

(b) As the Company did not have any common shares outstanding prior to October 1, 2020, the pro forma basic loss per common share is calculated as if the Company’s common shares had been outstanding since January 1, 2018.

Note 17—Stockholder’s Equity

The following summarizes certain activities in the Company’s statements of stockholder’s equity for the pre- and post-period of ownership interest transfer on October 1, 2020 as described in Note 1—“Nature of Operations”:

Pre-transfer

Transactions prior to the date of transfer which are reflected in the stockholder’s net investment consisted of:

• Cash capital contribution of $5,000 from HCI in 2019.

• Non-cash allocated expense of $1,855 from HCI in 2019.

• $951 and $1,253 of non-cash capital contributions in the form of stock-based awards to employees of the Company in 2019 and 2020, respectively.

On and after transfer

In October 2020, TTIG issued 90 million shares of its common stock to HCI in exchange for $10 of cash contribution and contributed ownership interests in TypTap, TypTap Management Company, Exzeo USA, Inc., and Cypress Tech Development Company, which also owns Exzeo Software Private Limited, a subsidiary domiciled in India. Since these entities are under common control of HCI, the transfer of ownership interest was measured at their carrying values. On February 26, 2021, the number of issued and outstanding common shares was reduced from 90 million to 75 million after HCI returned 15 million shares to the Company. The transfer was accounted for as a reverse stock split by the Company. See Note 23—“Subsequent Events” for additional information.

At incorporation in July 2020, TTIG was authorized to issue 175 million shares of common stock with a par value of $0.001 per share, and 25 million shares of preferred stock. On February 26, 2021, the authorization of

F-34

TYPTAP INSURANCE GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated and Combined Financial Statements

(Amounts in thousands, unless otherwise stated)

175 million shares of common stock was amended to 183 million shares with 181,860,000 shares of voting common stock and 1,140,000 shares of non-voting common stock, and the authorization of 25 million shares of preferred stock was amended to 37,502,000 shares with 36,362,000 voting Series A-1 preferred stock and 1,140,000 shares of non-voting Series A-2 preferred stock. See Note 23—“Subsequent Events” for additional information.

Note 18—Stock-Based Compensation

HCI has an incentive plan that provides restricted stock awards to employees of the Company in connection with their service. The terms of the restricted stock grants include only service conditions and the awards generally vest over a period of four years.

For the years ended December 31, 2020 and 2019, the Company recognized compensation expense related to restricted stock of $1,807 and $961, respectively, $38 and $10 of which are payable to HCI under the recharge agreement. At December 31, 2020 and 2019, there were approximately $3,676 and $3,267, respectively, of total unrecognized compensation expense related to nonvested restricted stock arrangements with employees of the consolidated and combined company. The Company expects to recognize the remaining compensation expense over a weighted-average period of 2.7 years. The following table summarizes information about deferred tax benefits recognized and tax benefits realized related to restricted stock awards, and the fair value of vested restricted stock for the years ended December 31, 2020 and 2019:

	2020		2019
Deferred tax benefits recognized	$	443	$	236
Tax benefits realized	$	359	$	192
Fair value of vested restricted stock	$	1,363	$	795

Note 19—Employee Benefit Plan

Through HCI, the Company has a 401(k) Safe Harbor Profit Sharing Plan (“401(k) Plan”) that qualifies as a defined contribution plan under Section 401(k) of the Internal Revenue Code. Under the 401(k) Plan, participating employees are eligible for company matching and discretionary profit-sharing contributions. Plan participants may elect to defer up to one hundred percent of their pre-tax gross wages, subject to annual limitations. The Company’s matching contribution is limited to a maximum of four percent of the employee’s annual salary or wage and is fully vested when contributed. Eligibility and vesting of the Company’s discretionary profit sharing contribution is subject to the plan participant’s years of service. During the years ended December 31, 2020 and 2019, the Company contributed approximately $244 and $150, respectively, in matching contributions, which are included in general and administrative personnel expenses. There has been no discretionary profit sharing contribution since the plan’s inception.

The Company also maintains benefit plans for its employees in India including a statutory post-employment benefit plan, or gratuity plan, providing defined, lump-sum benefits. The Company’s liability for the gratuity plan reflects the undiscounted benefit obligation payable as of the balance sheet date, which was based upon the employees’ salary and years of service. At December 31, 2020 and 2019, the amounts accrued under the gratuity plan were $130 and $89, respectively. In addition, the Company provides matching contributions with respect to two defined contribution plans: the Provident Fund and the Employees State Insurance Fund, both of which are available to qualifying employees in India. Expense recognized by the Company for all benefit plans in India were $41 and $17 for the years ended December 31, 2020 and 2019.

F-35

TYPTAP INSURANCE GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated and Combined Financial Statements

(Amounts in thousands, unless otherwise stated)

Note 20—Commitments and Contingencies

Credit facility

Since December 2018, some of the companies within the consolidated and combined group had been guarantors to a secured revolving credit agreement between HCI and Fifth Third Bank. The agreement provides for up to $65,000 of borrowing capacity. In January 2021, the agreement was revised to exclude these entities from the list of guarantors.

General matters

The Company is a party to claims and legal actions arising routinely in the ordinary course of its business. Although the Company cannot predict with certainty the ultimate resolution of the claims asserted against us, the Company does not believe that any pending legal proceeding to which the Company is a party will have a material, adverse effect on its consolidated and combined financial position, results of operations or cash flows.

Note 21—Regulatory Requirements and Restrictions

The following briefly describes certain related and other requirements and restrictions imposed by the state or jurisdiction in which the Company’s insurance subsidiary is incorporated.

TypTap, which is domiciled in Florida, prepares its statutory financial statements in accordance with accounting principles and practices prescribed or permitted by the Florida Department of Financial Services, Office of Insurance Regulation (“FLOIR”), which Florida utilizes for determining solvency under the Florida Insurance Code (the “Code”). The commissioner of the FLOIR has the right to permit other practices that may deviate from prescribed practices. Prescribed statutory accounting practices are those practices that are incorporated directly or by reference in state laws, regulations, and general administrative rules applicable to all insurance enterprises domiciled in Florida. Permitted statutory accounting practices encompass all accounting practices that are not prescribed; such practices differ from state to state, may differ from entity to entity within a state, and may change in the future.

The Code requires TypTap to maintain capital and surplus equal to the greater of 10% of its liabilities or a statutory minimum as defined in the Code. At December 31, 2020 and 2019, TypTap was required to maintain the same minimum capital and surplus of $10,000.

U.S. GAAP differs in certain respects from the accounting practices prescribed or permitted by insurance regulatory authorities (statutory-basis). The entity’s statutory-basis financial statements are presented on the basis of accounting practices prescribed or permitted by the FLOIR. The FLOIR has adopted the National Association of Insurance Commissioner’s Accounting Practices and Procedures Manual as the basis of its statutory accounting practices. At December 31, 2020 and 2019, TypTap’s statutory-basis capital and surplus was $38,518 and $27,283, respectively. For the years ended December 31, 2020 and 2019, TypTap’s statutory-basis net loss was $10,893 and $5,164, respectively. Statutory-basis surplus differs from stockholder’s equity reported in accordance with U.S. GAAP primarily because policy acquisition costs are expensed when incurred. In addition, the recognition of deferred tax assets is based on different recoverability assumptions.

From inception to September 2020, TypTap had maintained a cash deposit with the Insurance Commissioner of the State of Florida in the amount of $300 to meet regulatory requirements. TypTap later increased its cash deposit to $2,000 and placed a U.S. Government security in the amount of $310 with the State during the fourth quarter of 2020 in connection with its current expansion.

F-36

TYPTAP INSURANCE GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated and Combined Financial Statements

(Amounts in thousands, unless otherwise stated)

Under Florida law, a domestic insurer may not pay any dividend or distribute cash or other property to its stockholders except out of that part of its available and accumulated capital and surplus funds which is derived from realized net operating profits on its business and net realized capital gains. A Florida domestic insurer may not make dividend payments or distributions to stockholders without prior approval of the FLOIR if the dividend or distribution would exceed the larger of (1) the lesser of (a) 10.0% of its capital surplus or (b) net income, not including realized capital gains, plus a two year carry forward, (2) 10.0% of capital surplus with dividends payable constrained to unassigned funds minus 25% of unrealized capital gains or (3) the lesser of (a) 10.0% of capital surplus or (b) net investment income plus a three year carry forward with dividends payable constrained to unassigned funds minus 25% of unrealized capital gains.

Alternatively, a Florida domestic insurer may pay a dividend or distribution without the prior written approval of the FLOIR if (1) the dividend is equal to or less than the greater of (a) 10.0% of the insurer’s capital surplus as regards to policyholders derived from realized net operating profits on its business and net realized capital gains or (b) the insurer’s entire net operating profits and realized net capital gains derived during the immediately preceding calendar year, (2) the insurer will have policy holder capital surplus equal to or exceeding 115.0% of the minimum required statutory capital surplus after the dividend or distribution, (3) the insurer files a notice of the dividend or distribution with the FLOIR at least ten business days prior to the dividend payment or distribution and (4) the notice includes a certification by an officer of the insurer attesting that, after the payment of the dividend or distribution, the insurer will have at least 115% of required statutory capital surplus as to policyholders. Except as provided above, a Florida domiciled insurer may only pay a dividend or make a distribution (1) subject to prior approval by the FLOIR or (2) 30 days after the FLOIR has received notice of such dividend or distribution and has not disapproved it within such time. As a result, TypTap was not qualified to make dividend payments at December 31, 2020 and 2019.

In addition, Florida property and casualty insurance companies are required to adhere to prescribed premium-to-capital surplus ratios. Florida state law requires that the ratio of 90% of written premiums divided by surplus as to policyholders does not exceed 10 to 1 for gross written premiums or 4 to 1 for net written premiums. The required ratio of gross and net written premium to surplus for the years ended December 31, 2020 and 2019, which TypTap exceeded, is summarized below:

	2020		2019
Gross		2.47 to 1		2.23 to 1
Net		1.50 to 1		1.63 to 1

At December 31, 2020 and 2019, restricted net assets represented by the Company’s insurance subsidiary amounted to $38,518 and $27,283, respectively.

Note 22—Related Party Transactions

The Company participates in reinsurance contracts with affiliates, Homeowner’s Choice Property & Casualty Insurance Company, Inc. and Claddaugh Casualty Insurance Company Ltd. The reinsurance allocation method is governed by HCI’s reinsurance allocation agreement, which states that each cedant’s retention and reinsurer’s limit of liability for a loss occurrence is apportioned based on the amount of loss contributed to that occurrence. The reinsurance allocation agreement also states that the reinsurance premium shall be apportioned to each company in the same proportion that the companies’ premium subject to the reinsurance agreement bears to the total premium subject to the reinsurance agreement.

F-37

TYPTAP INSURANCE GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated and Combined Financial Statements

(Amounts in thousands, unless otherwise stated)

The Company receives cost allocations from HCI under a corporate overhead cost allocation agreement between HCI and its subsidiaries. The expenses allocated under this agreement during the years ended December 31, 2020 and 2019 were $3,625 and $3,389, respectively.

Under an agent commission agreement with its affiliate, Omega Insurance Agency, Inc., the Company pays commissions on premiums received in cash for policies issued during the term of the agreement. For the years ended December 31, 2020 and 2019, commission expenses were $108 and $84, respectively.

During 2020 and 2019, the Company leased office space in two different locations from two of its affiliates. The lease agreements have an initial lease term of three years and contain renewal options. For the years ended December 31, 2020 and 2019, lease expenses related to these leases were $307 and $392, respectively.

On December 30, 2020, the Company issued a demand promissory note to HCI for the principal amount of $22,000. The note bears an annual interest rate of 1.75%. On February 12, 2021, HCI set a maturity date for the principal and accrued interest of June 30, 2022. The Company used the proceeds to make a capital contribution to TypTap.

Note 23—Subsequent Events

On February 26, 2021, the Company completed its investment transaction with a fund associated with Centerbridge Partners, L.P. Under the agreement, the Company issued 9,000,000 voting shares of its Series A-1 Preferred Stock and 1,000,000 non-voting shares of its Series A-2 Preferred Stock (together “Series A Preferred Stock”), $0.001 par value, at a price of $10 per share for total proceeds of $100,000. Cumulative dividends are payable semi-annually in cash or paid-in-kind at the Company’s option. Cash dividend rates are $0.50 per share in Year 1, $0.60 per share in Year 2, $0.75 per share in Year 3, and $0.95 per share in Year 4 and thereafter. The rates for paid-in-kind dividends are $0.60 per share in Year 1 and $0.70 per share in Year 2. The holders of the Series A Preferred Stock have the right to convert the stock at any time into shares of the Company’s common stock with an initial conversion rate of 1 to 1. The conversion rate will be adjusted under certain conditions. Unless converted earlier, all shares of Series A Preferred Stock will be automatically converted into shares of the Company’s common stock at the then-applicable conversion rate upon 1) a qualified public offering of the Company’s common stock with gross proceeds of not less than $250,000 with a price per share at least equal to 150% of the original purchase price of the Series A Preferred share, or 2) at the election of requisite holders of a majority of the Series A Preferred Stock, whichever comes first. The holders of Series A Preferred Stock also have redemption rights and liquidation preference.

In connection with the transaction, the lead investor was granted warrants to purchase 750,000 shares of HCI’s common stock with an exercise price of $54.40 per share. The warrants were immediately exercisable and will expire on the fourth anniversary of the date of issuance.

On February 12, 2021, the Company agreed to issue a promissory note to HCI for the principal amount of $33,000 in settlement of the amount payable to HCI of December 31, 2020. Interest on the note is accrued at a fixed rate of 1.75% per annum. Furthermore, HCI agreed to provide a revolving line of credit with borrowing capacity of up to $60,000 to the Company. As a result of the capital investment transaction as described above, HCI ended its commitment of revolving line of credit and contributed the $33,000 loan plus $23 of unpaid interest as a capital contribution to the Company.

On February 26, 2021, HCI returned 15 million shares to the Company, thereby reducing the number of issued and outstanding common shares from 90 million to 75 million. The Company accounted for the transfer as a

F-38

TYPTAP INSURANCE GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated and Combined Financial Statements

(Amounts in thousands, unless otherwise stated)

reverse stock split and accordingly shares and per share data included in the consolidated and combined financial statements, Note 16—“Earnings (Loss) Per Share” and Note 17—“Stockholder’s Equity” have been restated to retroactively reflect the effect of such transfer.

On the same day, the Company’s Articles of Incorporation were amended. The Company is now authorized to issue 183,000,000 shares of common stock with 181,860,000 shares of voting common stock and 1,140,000 shares of non-voting common stock, and to issue 37,502,000 shares of Series A preferred stock with 36,362,000 shares of voting Series A-1 preferred stock and 1,140,000 shares of non-voting Series A-2 preferred stock.

After the capital investment transaction described earlier was completed in February 2021, the Company established a separate workforce, board of director and financial reporting structure. The Company after the capital infusion is now grouped into three segments: insurance operations, information technology and corporate to better align with the chief operating decision maker’s evaluation of operations. The information in Note 13—“Segment Information” was recast to reflect the new segmental reporting.

On March 2, 2021, the Company repaid its note payable issued to HCI. The principal plus $66 interest totaled $22,066.

On March 30, 2021, a $3,500 payable amount to HCI was contributed by HCI as a capital contribution. The amount related to issuance costs paid by HCI on the Company’s behalf.

On June 16, 2021, the Company and its affiliate, Homeowners Choice Property & Casualty Insurance Company (‘HCPCI”), entered into a quota share reinsurance agreement with United Property & Casualty Insurance Company (“United”). As part of the transactions of assuming policies from United, the Company and HCPCI agreed to provide 100% quota share reinsurance on all of the United’s in-force and renewal policies in the states of Connecticut, New Jersey, Massachusetts and Rhode Island from June 1, 2021 through May 31, 2022. In exchange, the Company and HCPCI will pay United a ceding commission of 24% of premium. The agreement represents approximately $120,000 of annual premiums which are divided equally between the Company and HCPCI.

F-39

TYPTAP INSURANCE GROUP, INC. AND SUBSIDIARIES

Consolidated Balance Sheets

(Dollar amounts in thousands, except per share amounts)

	September 30, 2021			December 31, 2020
	(Unaudited)
Assets
Fixed-maturity securities, available for sale, at fair value (amortized cost: $16,333 and $16,013, respectively and allowance for credit losses: $0 and $3, respectively)	$	16,499		$	16,519
Equity securities, at fair value (cost: $2,667 and $4,115, respectively)		3,040			4,454
Total investments		19,539			20,973
Cash and cash equivalents		180,840			99,725
Restricted cash		2,000			2,000
Accrued interest and dividends receivable		91			105
Premiums receivable, net (allowance: $487 and $649, respectively)		17,522			7,734
Prepaid reinsurance premiums		12,502			7,386
Reinsurance recoverable, net of allowance for credit losses:
Paid losses and loss adjustment expenses (allowance: $0 and $0, respectively)		137			81
Unpaid losses and loss adjustment expenses (allowance: $0 and $0, respectively)		548			9
Deferred policy acquisition costs		19,481			10,281
Property and equipment, net		6,688			6,065
Right-of-use assets—operating leases		456			302
Funds held in trust for assumed business		32,782			—
Other assets		2,345			2,920
Total assets	$	294,931		$	157,581
Liabilities, Redeemable Preferred Stock and Stockholders’ Equity
Losses and loss adjustment expenses	$	39,951		$	19,348
Unearned premiums		105,942			63,704
Advance premiums		7,928			3,373
Accrued expenses		5,358			4,272
Reinsurance payable on paid losses and loss adjustment expenses		2,049			—
Income tax payable		3,030			143
Deferred income taxes, net		371			1,251
Lease liabilities—operating leases		459			316
Due to related parties		337			33,190
Note payable—related party		—			22,000
Other liabilities		7,672			3,433
Total liabilities		173,097			151,030
Commitments and contingencies (Note 17)
Redeemable Series A preferred stock ($0.001 par value, 37,502,000 shares authorized; 10,000,000 shares and no shares issued and outstanding at September 30, 2021 and December 31, 2020, respectively; redemption amount $100,000 and $0 at September 30, 2021 and December 31, 2020, respectively) (Note 14)		87,731			—
Stockholders’ equity:
Common stock ($0.001 par value, 183,000,000 shares authorized, 81,278,175 and 75,000,000 shares issued and outstanding at September 30, 2021 and December 31, 2020, respectively)		81			75
Additional paid-in capital		58,650			11,001
Retained deficits		(24,753	)		(4,909	)
Accumulated other comprehensive income, net of taxes		125			384
Total stockholders’ equity		34,103			6,551
Total liabilities, redeemable preferred stock and stockholders’ equity	$	294,931		$	157,581

See accompanying Notes to Consolidated and Combined Financial Statements (unaudited).

F-40

TYPTAP INSURANCE GROUP, INC. AND SUBSIDIARIES

Consolidated and Combined Statements of Income

(Unaudited)

(Dollar amounts in thousands, except per share amounts)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2021			2020			2021			2020
Revenue
Gross premiums earned	$	51,553		$	19,854		$	119,364		$	54,829
Premiums ceded		(20,135	)		(10,171	)		(42,229	)		(19,078	)
Net premiums earned		31,418			9,683			77,135			35,751
Net investment income		85			153			317			673
Net realized investment gains (losses)		77			53			582			(216	)
Net unrealized investment gains (losses)		(59	)		160			34			(71	)
Policy fee income		307			211			856			584
Other		480			21			1,130			84
Total revenue		32,308			10,281			80,054			36,805
Expenses
Losses and loss adjustment expenses		24,225			7,405			52,976			22,043
Policy acquisition and other underwriting expenses		10,360			4,067			23,612			10,641
General and administrative personnel expenses		4,256			2,544			11,368			7,891
Interest expense		1			—			91			1
Other operating expenses		3,771			2,262			10,581			6,173
Total expenses		42,613			16,278			98,628			46,749
Loss before income taxes		(10,305	)		(5,997	)		(18,574	)		(9,944	)
Income tax benefit		(2,432	)		(1,490	)		(3,905	)		(2,429	)
Net loss		(7,873	)		(4,507	)		(14,669	)		(7,515	)
Less: Dividends on preferred stock		(2,202	)		—			(5,175	)		—
Net loss attributable to common stockholders	$	(10,075	)	$	(4,507	)	$	(19,844	)	$	(7,515	)
Basic and diluted loss per share	$	(0.12	)	$	(0.06	)	$	(0.25	)	$	(0.10	)

See accompanying Notes to Consolidated and Combined Financial Statements (unaudited).

F-41

TYPTAP INSURANCE GROUP, INC. AND SUBSIDIARIES

Consolidated and Combined Statements of Comprehensive Loss

(Unaudited)

(Amounts in thousands)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2021			2020			2021			2020
Net loss	$	(7,873	)	$	(4,507	)	$	(14,669	)	$	(7,515	)
Other comprehensive (loss) income:
Change in unrealized (loss) gain on investments:
Net unrealized gains (losses) arising during the period		(65	)		(9	)		(133	)		310
Other-than-temporary impairment		—			3			—			3
Call and repayment gains charged to investment income		—			(7	)		(3	)		(7	)
Reclassification adjustment for net realized (gains) losses		(10	)		2			(207	)		33
Net change in unrealized (losses) gains		(75	)		(11	)		(343	)		339
Deferred income taxes on above change		18			2			84			(83	)
Total other comprehensive (loss) income, net of income taxes		(57	)		(9	)		(259	)		256
Comprehensive loss	$	(7,930	)	$	(4,516	)	$	(14,928	)	$	(7,259	)

See accompanying Notes to Consolidated and Combined Financial Statements (unaudited).

F-42

TYPTAP INSURANCE GROUP, INC. AND SUBSIDIARIES

Consolidated Statement of Stockholders’ Equity

For the Three Months Ended September 30, 2021

(Unaudited)

(Dollar amounts in thousands)

	Common Stock					Additional Paid-In Capital		Retained Deficits			Accumulated Other Comprehensive Income, Net of Tax			Total Stockholders’ Equity
	Shares			Amount
Balance at June 30, 2021		81,090,585		$	81	$	58,178	$	(14,678	)	$	182		$	43,763
Net loss		—			—		—		(7,873	)		—			(7,873	)
Total other comprehensive loss, net of income taxes		—			—		—		—			(57	)		(57	)
Issuance of restricted stock		356,100			—		—		—			—			—
Forfeiture of restricted stock		(168,510	)		—		—		—			—			—
Preferred stock dividends		—			—		—		(2,202	)		—			(2,202	)
Stock-based compensation		—			—		472		—			—			472
Balance at September 30, 2021		81,278,175		$	81	$	58,650	$	(24,753	)	$	125		$	34,103

See accompanying Notes to Consolidated and Combined Financial Statements (unaudited).

F-43

TYPTAP INSURANCE GROUP, INC. AND SUBSIDIARIES

Combined Statement of Stockholder’s Equity

For the Three Months Ended September 30, 2020

(Unaudited)

(Dollar amounts in thousands)

	Common Stock				Additional Paid-In Capital			Retained Deficits			Accumulated Other Comprehensive Income, Net of Tax			Total Stockholder’s Equity
	Shares		Amount
Balance at June 30, 2020		—	$	—	$	41,951		$	(27,255	)	$	408			15,104
Net loss		—		—		—			(4,507	)		—			(4,507	)
Total other comprehensive income, net of income taxes		—		—		—			—			(9	)		(9	)
Return of capital to parent						(9	)		—			—			(9	)
Stock-based compensation		—		—		410			—			—			410
Balance at September 30, 2020		—	$	—	$	42,352		$	(31,762	)	$	399		$	10,989

See accompanying Notes to Consolidated and Combined Financial Statements (unaudited).

F-44

TYPTAP INSURANCE GROUP, INC. AND SUBSIDIARIES

Consolidated Statement of Stockholders’ Equity

For the Nine Months Ended September 30, 2021

(Unaudited)

(Dollar amounts in thousands)

	Common Stock					Additional Paid-In Capital			Retained Deficits			Accumulated Other Comprehensive Income, Net of Tax			Total Stockholders’ Equity
	Shares			Amount
Balance at December 31, 2020		75,000,000		$	75	$	11,001		$	(4,909	)	$	384		$	6,551
Net loss		—			—		—			(14,669	)		—			(14,669	)
Total other comprehensive loss, net of income taxes		—			—		—			—			(259	)		(259	)
Issuance of restricted stock		6,509,900			—		—			—			—			—
Forfeiture of restricted stock		(179,710	)		—		—			—			—			—
Repurchase and retirement of common stock		(52,015	)		—		(58	)		—			—			(58	)
Capital contribution from parent (Note 18)		—			—		36,644			—			—			36,644
Contribution of warrants from parent, net of issuance costs (Note 18)		—			—		8,640			—			—			8,640
Preferred stock dividends		—			—		—			(5,175	)		—			(5,175	)
Stock-based compensation		—			6		2,423			—			—			2,429
Balance at September 30, 2021		81,278,175		$	81	$	58,650		$	(24,753	)	$	125		$	34,103

See accompanying Notes to Consolidated and Combined Financial Statements (unaudited).

F-45

TYPTAP INSURANCE GROUP, INC. AND SUBSIDIARIES

Combined Statement of Stockholder’s Equity

For the Nine Months Ended September 30, 2020

(Unaudited)

(Dollar amounts in thousands)

	Common Stock				Additional Paid-In Capital			Retained Deficits			Accumulated Other Comprehensive Income, Net of Tax		Total Stockholder’s Equity
	Shares		Amount
Balance at December 31, 2019		—	$	—	$	41,068		$	(24,247	)	$	143	$	16,964
Net loss		—		—		—			(7,515	)		—		(7,515	)
Total other comprehensive income, net of income taxes		—		—		—			—			256		256
Return of capital to parent		—		—		(9	)		—			—		(9	)
Stock-based compensation		—		—		1,293			—			—		1,293
Balance at September 30, 2020		—	$	—	$	42,352		$	(31,762	)	$	399	$	10,989

See accompanying Notes to Consolidated and Combined Financial Statements (unaudited).

F-46

TYPTAP INSURANCE GROUP, INC. AND SUBSIDIARIES

Consolidated and Combined Statements of Cash Flows

(Unaudited)

(Amounts in thousands)

	Nine Months Ended September 30,
	2021			2020
Cash flows from operating activities:
Net loss	$	(14,669	)	$	(7,515	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Stock-based compensation		2,429			1,293
Net amortization of premiums on investments in fixed-maturity securities		27			41
Depreciation and amortization		942			820
Deferred income tax expense		(675	)		493
Net realized investment (gains) losses		(582	)		219
Net unrealized investment (gains) losses		(34	)		71
Foreign currency remeasurement loss		49			40
Changes in operating assets and liabilities:
Accrued interest and dividends receivable		14			31
Income taxes		2,887			(73	)
Premiums receivable, net		(9,788	)		(699	)
Prepaid reinsurance premiums		(5,116	)		(6,571	)
Reinsurance recoverable		(595	)		77
Reinsurance payable on paid losses and loss adjustment expenses		2,049			—
Deferred policy acquisition costs		(9,200	)		(487	)
Funds held in trust for assumed business and other assets		(32,361	)		(845	)
Losses and loss adjustment expenses		20,603			9,187
Unearned premiums		42,238			6,631
Advance premiums		4,555			2,887
Accrued expenses and other liabilities		5,468			1,108
Due to related parties		3,670			5,530
Net cash provided by operating activities		11,911			12,238
Cash flows from investing activities:
Purchase of property and equipment		(1,565	)		(1,098	)
Purchase of fixed-maturity securities		(3,613	)		(10,208	)
Purchase of equity securities		(1,945	)		(4,125	)
Proceeds from sales of fixed-maturity securities		1,747			7,762
Proceeds from calls, repayments and maturities of fixed-maturity securities		1,725			4,111
Proceeds from sales of equity securities		3,769			1,802
Proceeds from sales, redemptions and maturities of short-term and other investments		—			460
Net cash provided by (used in) investing activities		118			(1,296	)
Cash flows from financing activities:
Proceeds from issuance of redeemable preferred stock and HCI warrants (See Note 14 and Note 18)		100,000			—
Issuance costs—redeemable preferred stock and HCI warrants		(6,262	)		—
Cash dividends paid to redeemable preferred stock		(2,542	)
Repayment of long term debt		(10	)		(10	)
Return of capital contribution to parent		—			(9	)
Repurchases of common stock		(58	)		—
Repayment of note payable—related party		(22,000	)		—
Net cash provided by (used in) financing activities		69,128			(19	)
Effect of exchange rate changes on cash		(42	)		(6	)
Net increase in cash, cash equivalents, and restricted cash		81,115			10,917
Cash, cash equivalents, and restricted cash at beginning of period		101,725			51,862
Cash, cash equivalents, and restricted cash at end of period	$	182,840		$	62,779
Non-cash investing and financing activities:
Non-cash capital contribution from parent (Note 18)	$	45,284		$	—
Unrealized (loss) gain on investments in available-for-sale securities, net of tax	$	(259	)	$	256

See accompanying Notes to Consolidated and Combined Financial Statements (unaudited).

F-47

TYPTAP INSURANCE GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated and Combined Financial Statements (unaudited)

(Amounts in thousands, except share and per share amounts, unless otherwise stated)

Note 1—Nature of Operations

TypTap Insurance Group, Inc. (“TTIG”) was established in July 2020 and is a subsidiary of HCI Group, Inc. (“HCI”). In October 2020, HCI contributed the ownership interests in four of its wholly-owned subsidiaries to TTIG. Subsidiaries contributed by HCI were TypTap Insurance Company (“TypTap”), TypTap Management Company (“TTM”), Exzeo USA, Inc. (“Exzeo USA”), and Cypress Tech Development Company, Inc. (“Cypress Tech”) which also owns Exzeo Software Private Limited (“Exzeo India”), a subsidiary domiciled in India.

TypTap is authorized to underwrite homeowners and flood insurance policies in Florida and in various other states. Its operations are supported by TTM which is responsible for managing activities such as claims processing, policyholder service/support, marketing, premium payment collection, underwriting and insurance application processing. TTM’s operations are solely in support of TypTap.

Exzeo USA and Cypress Tech are technology companies that mainly focus on the development of products to modernize the insurance business. These products include Atlasviewer^®, an online data visualization and mapping platform, SAMS^TM, a policy administration platform, Harmony^TM, a next generation policy administration platform under development, and ClaimColony^TM, an application that provides intelligent automation of insurance claims and other business processes. Exzeo USA and Cypress Tech provide services to the insurance-related subsidiaries of HCI and TTIG. The Company began charging HCI subsidiaries for the services during the first quarter of 2021.

TTIG, together with its subsidiaries (collectively, the “Company”) is primarily engaged in the property and casualty insurance business in Florida, focusing on standalone flood and homeowners multi-peril policies. In October 2020, TypTap began applying for approval to offer homeowners insurance coverage in 23 states outside of Florida. Since then, TypTap has received approvals from 17 states and has issued policies in six states other than Florida. The Company currently uses its in-house developed technologies to collect and analyze claims and other supplemental data to generate savings and efficiency for its insurance operations.

In February 2021, the Company received a capital investment from a third party as described in Note 14—“Redeemable Series A Preferred Stock.” To better manage the consolidated group after the capital infusion, the Company’s operations are now grouped into three segments: insurance operations segment, information technology segment and corporate segment. In addition, the Company established a separate workforce, board of directors and financial reporting structure to focus on these specific business segments.

On June 16, 2021, the Company and its affiliate, Homeowners Choice Property & Casualty Insurance Company (“HCPCI”), entered into a quota share reinsurance agreement with United Property & Casualty Insurance Company Inc., a subsidiary of United Insurance Holdings Corporation (“United”). As part of the transactions of assuming policies from United, the Company and HCPCI agreed to provide 100% quota share reinsurance on all of the United’s in-force, new and renewal policies in the states of Connecticut, New Jersey, Massachusetts and Rhode Island from June 1, 2021 through May 31, 2022. In exchange, the Company and HCPCI will pay United a ceding commission of 24% of premium. The agreement represents approximately $120,000 of annual premiums which are divided equally between the Company and HCPCI.

Note 2—Summary of Significant Accounting Policies

Basis of Presentation

The accompanying unaudited consolidated and combined financial statements for the Company have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S.

F-48

TYPTAP INSURANCE GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated and Combined Financial Statements (unaudited)

(Amounts in thousands, except share and per share amounts, unless otherwise stated)

GAAP”) for interim financial information. Both the consolidated and combined financial statements include the accounts of the Company’s controlled subsidiaries. All significant intercompany accounts and transactions have been eliminated. Combined financial statements are prepared by adding the results of operations, assets, and liabilities of entities which previously were not in a consolidated group so that results can be presented as a single unit. The combined statement of income includes expenses allocated to the Company for shared services provided by HCI.

Certain information and footnote disclosures normally included in consolidated and combined financial statements prepared in accordance with U.S. GAAP have been omitted in this interim financial reporting. However, in the opinion of management, the accompanying consolidated and combined financial statements reflect all normal recurring adjustments necessary to present fairly the Company’s financial position as of September 30, 2021 and the results of operations and cash flows for the interim periods presented. The results of operations for the interim periods presented are not necessarily indicative of the results of operations to be expected for any subsequent interim period or for the fiscal year ending December 31, 2021. The accompanying unaudited consolidated and combined financial statements and notes thereto should be read in conjunction with the audited consolidated and combined financial statements for the year ended December 31, 2020.

In preparing the interim unaudited consolidated and combined financial statements, management was required to make certain judgments, assumptions, and estimates that affect the reported amounts of assets, liabilities, revenues, expenses and related disclosures at the financial reporting date and throughout the periods being reported upon. Certain of the estimates result from judgments that can be subjective and complex and consequently actual results may differ from these estimates.

Material estimates that are particularly susceptible to significant change in the near term are related to the Company’s losses and loss adjustment expenses (“LAE”), which include amounts estimated for claims incurred but not yet reported. The Company uses various assumptions and actuarial data it believes to be reasonable under the circumstances to make these estimates. In addition, accounting policies specific to reinsurance with retrospective provisions, deferred income taxes, redeemable preferred stock, and stock-based compensation expense involve significant judgments and estimates material to the Company’s consolidated and combined financial statements.

Adoption of New Accounting Standards

Accounting Standard Update No. 2020-06.    In August 2020, the Financial Accounting Standards Board (‘FASB”) issued Accounting Standards Update No. 2020-06 (“ASU 2020-06”) Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Equity’s Own Equity (Subtopic 815-40). ASU 2020-06 removes certain bifurcation models for convertible debt instruments and convertible preferred stock. Therefore, the embedded conversion features no longer are separated from the host contract for convertible instruments with conversion features that are not required to be accounted for as derivatives under Topic 815, Derivatives and Hedging, or that do not result in substantial premiums accounted for as paid-in-capital. The amendments also remove three settlement conditions that are required for equity contracts in an entity’s own equity. In addition, the amendments expand disclosure requirements for convertible instruments and simplify areas of the guidance for diluted earnings-per-share calculations that are impacted by the amendments.

The Company elected to early adopt the update on January 1, 2021 using the modified retrospective method. The adoption of this update had no impact on the Company’s consolidated financial statements.

F-49

TYPTAP INSURANCE GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated and Combined Financial Statements (unaudited)

(Amounts in thousands, except share and per share amounts, unless otherwise stated)

Redeemable Series A Preferred Stock

Redeemable Series A preferred stock is a class of stock issued with redemption features that are outside the control of the issuer, is not classified as an asset or liability in conformity with U.S. GAAP and is presented in the temporary equity (mezzanine) section of the consolidated balance sheet. The stock contains features with rights in dividends, voting, conversion, participation, liquidation preference and redemption (See Note 14—“Redeemable Series A Preferred Stock”).

The redeemable series A preferred stock is initially recorded at fair value and is decreased by related issuance costs. The fair value is estimated using a residual fair value approach. The effect of increasing dividend rates is accreted to the redeemable series A preferred stock with a corresponding debit to retained income or deficits. The effective interest method is used for accretion over the period of the increasing dividend rates. The carrying value of the preferred stock is also subsequently adjusted for accrued dividends and dividend payments. The Company has an option to pay the dividends in cash or make a payment in kind. The dividends are accrued monthly assuming that they will be settled in cash.

When the redemption is probable, the Company elects to recognize changes in the redemption value immediately as it occurs and adjust the carrying value of the stock to the maximum redemption value which is the higher of the redemption price or fair market value at the reporting date. Such changes in the redemption value are treated as dividends when calculating income available to common stockholders.

Stock-Based Compensation

The Company accounts for stock-based compensation under the fair value recognition provisions of U.S. GAAP which requires the measurement and recognition of compensation for all stock-based awards made to employees and directors based on estimated fair values. In accordance with U.S. GAAP, the fair value of stock-based awards with service condition is generally recognized as compensation expense over the requisite service period, which is defined as the period during which a recipient is required to provide service in exchange for an award. Forfeitures of the Company’s stock-based awards are accounted for as they occur. The Company uses a straight-line attribution method for all grants that include only service condition. Restricted stock grants with market conditions are expensed over the derived service period. Expensing market-based awards may be expedited if the conditions are met sooner than anticipated. The Company’s outstanding stock-based awards include restricted stock awards with service and market conditions. Compensation expense related to all awards is included in general and administrative personnel expenses. The Company receives a windfall tax benefit for restricted stock awards if these awards vest at a higher value than the value used to recognize compensation expense. In the event the restricted stock awards vest at a lower value than the value used to recognize compensation expense, the Company experiences a tax shortfall. The Company recognizes tax windfalls and shortfalls in the consolidated and combined statements of income. For grants to employees of foreign subsidiaries, there is a recharge agreement between the Company and the foreign subsidiary, under which the foreign subsidiary reimburses the Company for the cost of the stock-based awards.

Prior to February 2021, the Company’s employees received stock-based awards granted by HCI. All unvested stock-based awards under HCI’s 2012 Omnibus Incentive Plan were cancelled effective February 26, 2021 and replaced with awards issued from the Company’s equity incentive plan.

Other Revenue Recognition

The Company’s service revenue, which is included in other revenue in the consolidated statement of income, is derived primarily from fees for policy administration and software license and services provided to the

F-50

TYPTAP INSURANCE GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated and Combined Financial Statements (unaudited)

(Amounts in thousands, except share and per share amounts, unless otherwise stated)

Company’s affiliates starting March 2021. These services, which are offered through various proprietary software as Software as a Service (“SaaS”), include policy administration, claims administration, billing, reporting and compliance. Pricing for the services is based on the volume of policies or claims processed by the affiliate using our software at the end of each quarter or a fixed fee. While there are a variety of activities performed, the overall nature of the obligation is to provide an integrated solution to the affiliates. Accordingly, the ongoing administration and software services are deemed to have one performance obligation. Each of these arrangements represents a stand-ready obligation to perform these activities on an as-needed basis. Revenue is recognized when or as the performance obligation is satisfied. Policy administration revenue is recognized over time, generally ratably over the terms of the policies. Software license and services revenue is recognized either at the point in time when the service has been delivered or over time as the performance obligation of each service is satisfied, generally ratably over the contract period. As the Company has a right to invoice the affiliates at an amount that corresponds directly with the value to the affiliates, the Company applied the as-invoiced practical expedient to recognize revenue for the administrative and software services.

The table below summarizes the Company’s disaggregation of the revenue from contracts with customers:

	Disaggregated Other Revenue
	Three Months Ended September 30				Nine Months Ended September 30
Performance Obligations	2021		2020		2021		2020
Policy Administration Services Agreement:
General policy administration(a)	$	1	$	—	$	5	$	—
Software License & Service Agreement:
SaaS—right to use software & webpage maintenance(b)	$	443	$	—	$	1,030	$	—

(a) Service revenue from administration of the new and renewed flood insurance polices outside of Florida, see Note—18 “Related Party Transactions” for additional information, included within Insurance operations segment.

(b) Service revenue from right of use for the series of software, see Note—18 “Related Party Transactions” for additional information, included within Information technology segment. The accounts receivable related to contracts from customers are recorded within other assets.

Note 3—Cash, Cash Equivalents, and Restricted Cash

The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the Company’s consolidated balance sheets that sum to the total of the same such amounts shown in the consolidated and combined statements of cash flows.

	September 30, 2021		December 31, 2020
Cash and cash equivalents	$	180,840	$	99,725
Restricted cash		2,000		2,000
Total	$	182,840	$	101,725

Restricted cash represents funds held to meet regulatory requirements of certain states in which the Company’s insurance subsidiary conducts business.

F-51

TYPTAP INSURANCE GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated and Combined Financial Statements (unaudited)

(Amounts in thousands, except share and per share amounts, unless otherwise stated)

Note 4—Investments

a) Available-for-Sale Fixed-Maturity Securities

The Company holds investments in fixed-maturity securities that are classified as available-for-sale. At September 30, 2021 and December 31, 2020, the cost or amortized cost, allowance for credit loss, gross unrealized gains and losses, and estimated fair value of the Company’s available-for-sale securities by security type were as follows:

	Cost or Amortized Cost		Allowance for Credit Loss			Gross Unrealized Gain		Gross Unrealized Loss			Estimated Fair Value
As of September 30, 2021
U.S. Treasury and U.S. government agencies	$	9,553	$	—		$	91	$	(16	)	$	9,628
Corporate bonds		6,780		—			110		(19	)		6,871
Total	$	16,333	$	—		$	201	$	(35	)	$	16,499
As of December 31, 2020
U.S. Treasury and U.S. government agencies	$	8,788	$	—		$	166	$	(1	)	$	8,953
Corporate bonds		7,125		—			341		—			7,466
Exchange-traded debt		100		(3	)		3		—			100
Total	$	16,013	$	(3	)	$	510	$	(1	)	$	16,519

Expected maturities will differ from contractual maturities as borrowers may have the right to call or prepay obligations with or without penalties. The scheduled contractual maturities of fixed-maturity securities at September 30, 2021 and December 31, 2020 are as follows:

	September 30,				December 31,
	2021				2020
	Cost or Amortized Cost		Estimated Fair Value		Cost or Amortized Cost		Estimated Fair Value
Available-for-sale
Due in one year or less	$	4,647	$	4,682	$	2,132	$	2,143
Due after one year through five years		9,501		9,653		13,648		14,131
Due after five years through ten years		2,185		2,164		233		245
	$	16,333	$	16,499	$	16,013	$	16,519

F-52

TYPTAP INSURANCE GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated and Combined Financial Statements (unaudited)

(Amounts in thousands, except share and per share amounts, unless otherwise stated)

Sales of Available-for-Sale Fixed-Maturity Securities

Proceeds received, and the gross realized gains and losses from sales of available-for-sale fixed-maturity securities, for the three and nine months ended September 30, 2021 and 2020 were as follows:

	Proceeds		Gross Realized Gains		Gross Realized Losses
Three months ended September 30, 2021	$	653	$	13	$	(3	)
Three months ended September 30, 2020	$	642	$	8	$	(10	)
Nine months ended September 30, 2021	$	1,747	$	210	$	(3	)
Nine months ended September 30, 2020	$	7,762	$	174	$	(207	)

Gross Unrealized Losses for Available-for-Sale Fixed-Maturity Securities

Securities with gross unrealized loss positions at September 30, 2021 and December 31, 2020 aggregated by investment category and length of time the individual securities have been in a continuous loss position, are as follows:

	Less Than Twelve Months					Twelve Months or Longer				Total
As of September 30, 2021	Gross Unrealized Loss			Estimated Fair Value		Gross Unrealized Loss		Estimated Fair Value		Gross Unrealized Loss			Estimated Fair Value
U.S. Treasury and U.S. government agencies	$	(16	)	$	3,215	$	—	$	—	$	(16	)	$	3,215
Corporate bonds		(19	)		2,240		—		—		(19	)		2,240
Total available-for-sale securities	$	(35	)	$	5,455	$	—	$	—	$	(35	)	$	5,455

	Less Than Twelve Months					Twelve Months or Longer				Total
As of December 31, 2020	Gross Unrealized Loss			Estimated Fair Value		Gross Unrealized Loss		Estimated Fair Value		Gross Unrealized Loss			Estimated Fair Value
U.S. Treasury and U.S. government agencies	$	(1	)	$	1,337	$	—	$	—	$	(1	)	$	1,337
Total available-for-sale securities	$	(1	)	$	1,337	$	—	$	—	$	(1	)	$	1,337

At September 30, 2021 and December 31, 2020, there were 16 and 3 securities, respectively, in an unrealized loss position.

Allowance for Credit Losses of Available-for-Sale Fixed-Maturity Securities

The Company regularly reviews its individual investment securities for credit impairment. The Company considers various factors in determining whether each individual security is impaired, including:

• the financial condition and near-term prospects of the issuer, including any specific events that may affect its operations or earnings;

• the extent to which the market value of the security has been below its cost or amortized cost;

F-53

TYPTAP INSURANCE GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated and Combined Financial Statements (unaudited)

(Amounts in thousands, except share and per share amounts, unless otherwise stated)

• general market conditions and industry or sector specific factors and other qualitative factors;

• nonpayment by the issuer of its contractually obligated interest and principal payments; and

• the Company’s intent and ability to hold the investment for a period of time sufficient to allow for the recovery of costs.

The table below summarizes the activity in the allowance for credit losses of available-for-sale securities for the three and nine months ended September 30, 2021 and 2020:

	2021			2020
Balance at January 1	$	3		$	—
Credit loss expense		—			—
Reductions for securities sold		(3	)		—
Balance at March 31		—			—
Credit loss expense		—			—
Balance at June 30	$	—		$	—
Credit loss expense		—			—
Balance at September 30	$	—		$	—

b) Equity Securities

The Company holds investments in equity securities measured at fair values which are readily determinable. At September 30, 2021 and December 31, 2020, the cost, gross unrealized gains and losses, and estimated fair value of the Company’s equity securities were as follows:

	Cost		Gross Unrealized Gain		Gross Unrealized Loss			Estimated Fair Value
September 30, 2021	$	2,667	$	504	$	(131	)	$	3,040
December 31, 2020	$	4,115	$	472	$	(133	)	$	4,454

The table below presents the portion of unrealized gains and losses in the Company’s consolidated and combined statements of income related to equity securities still held:

	Three Months Ended September 30,					Nine Months Ended September 30,
	2021			2020		2021		2020
Net gains (losses) recognized	$	8		$	205	$	409	$	(264	)
Exclude: Net realized gains (losses) recognized for securities sold		67			45		375		(193	)
Net unrealized gains (losses) recognized	$	(59	)	$	160	$	34	$	(71	)

F-54

TYPTAP INSURANCE GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated and Combined Financial Statements (unaudited)

(Amounts in thousands, except share and per share amounts, unless otherwise stated)

Sales of Equity Securities

Proceeds received, and the gross realized gains and losses from sales of equity securities, for the three and nine months ended September 30, 2021 and 2020 were as follows:

	Proceeds		Gross Realized Gains		Gross Realized Losses
Three months ended September 30, 2021	$	798	$	95	$	(28	)
Three months ended September 30, 2020	$	512	$	51	$	(6	)
Nine months ended September 30, 2021	$	3,769	$	413	$	(38	)
Nine months ended September 30, 2020	$	1,802	$	173	$	(366	)

c) Net Investment Income

Net investment income, by source, is summarized as follows:

	Three Months Ended September 30,						Nine Months Ended September 30,
	2021			2020			2021			2020
Available-for-sale fixed-maturity securities	$	59		$	109		$	249		$	356
Equity securities		15			22			52			62
Investment expense		(24	)		(22	)		(68	)		(65	)
Cash and cash equivalents		35			44			84			320
Net investment income	$	85		$	153		$	317		$	673

F-55

TYPTAP INSURANCE GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated and Combined Financial Statements (unaudited)

(Amounts in thousands, except share and per share amounts, unless otherwise stated)

Note 5—Comprehensive Income (Loss)

Comprehensive loss includes net income (loss) and other comprehensive income or loss, which for the Company includes changes in unrealized gains or losses of available-for-sale fixed-maturity securities carried at fair value and changes in the allowance for credit losses related to these investments. Reclassification adjustments for realized (gains) losses, at the cost or amortized cost, are reflected in net realized investment gains (losses) on the consolidated and combined statements of income. The components of other comprehensive income or loss and the related tax effects allocated to each component were as follows:

	Three Months Ended September 30, 2021									Three Months Ended September 30, 2020
	Before Tax			Income Tax Effect			Net of Tax			Before Tax			Income Tax Effect			Net of Tax
Unrealized gains arising during the period	$	(65	)	$	(16	)	$	(49	)	$	(9	)	$	(2	)	$	(7	)
Other-than-temporary impairment		—			—			—			3			1			2
Call and repayment gains charged to investment income		—			—			—			(7	)		(1	)		(6	)
Reclassification adjustment for realized gains		(10	)		(2	)		(8	)		2			—			2
Total other comprehensive (loss) income	$	(75	)	$	(18	)	$	(57	)	$	(11	)	$	(2	)	$	(9	)
	Nine Months Ended September 30, 2021									Nine Months Ended September 30, 2020
	Before Tax			Income Tax Effect			Net of Tax			Before Tax			Income Tax Effect			Net of Tax
Unrealized (losses) gains arising during the period	$	(133	)	$	(33	)	$	(100	)	$	310		$	76		$	234
Other-than-temporary impairment		—			—			—			3			1			2
Call and repayment gains charged to investment income		(3	)		(1	)		(2	)		(7	)		(2	)		(5	)
Reclassification adjustment for realized (gains) losses		(207	)		(50	)		(157	)		33			8			25
Total other comprehensive (loss) income	$	(343	)	$	(84	)	$	(259	)	$	339		$	83		$	256

Note 6—Fair Value Measurements

The Company records and discloses certain financial assets at their estimated fair values. The fair value hierarchy prioritizes the inputs to valuation techniques used to measure fair value into three broad levels as follows:

Level 1	Unadjusted quoted prices in active markets for identical assets.
Level 2	Other inputs that are observable for the assets, either directly or indirectly such as quoted prices for identical assets that are not observable throughout the full term of the asset.
Level 3	Inputs that are unobservable.

Valuation Methodology

Cash and Cash Equivalents

Cash and cash equivalents primarily consist of money-market funds and certificates of deposit maturing within 90 days. Their carrying value approximates fair value due to the short maturity and high liquidity of these assets.

F-56

TYPTAP INSURANCE GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated and Combined Financial Statements (unaudited)

(Amounts in thousands, except share and per share amounts, unless otherwise stated)

Restricted Cash

Restricted cash represents cash held by state authorities and the carrying value approximates fair value.

Fixed-Maturity and Equity Securities

Estimated fair values are determined in accordance with U.S. GAAP using valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. Fair values are generally measured using quoted prices in active markets for identical securities or other inputs that are observable either directly or indirectly, such as quoted prices for similar securities. In those instances where observable inputs are not available, fair values are measured using unobservable inputs. Unobservable inputs reflect the Company’s own assumptions about the assumptions that market participants would use in pricing the security and are developed based on the best information available in the circumstances. Fair value estimates derived from unobservable inputs are significantly affected by the assumptions used, including the discount rates and the estimated amounts and timing of future cash flows. The derived fair value estimates cannot be substantiated by comparison to independent markets and are not necessarily indicative of the amounts that would be realized in a current market exchange.

The estimated fair values for securities that do not trade on a daily basis are determined by management, utilizing prices obtained from an independent pricing service and information provided by brokers, which are level 2 inputs. Management reviews the assumptions and methods utilized by the pricing service and then compares the relevant data and pricing to broker-provided data. The Company gains assurance of the overall reasonableness and consistent application of the assumptions and methodologies and compliance with accounting standards for fair value determination through ongoing monitoring of the reported fair values.

F-57

TYPTAP INSURANCE GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated and Combined Financial Statements (unaudited)

(Amounts in thousands, except share and per share amounts, unless otherwise stated)

Assets Measured and Recorded at Estimated Fair Value on a Recurring Basis

The following tables present information about the Company’s financial assets measured at estimated fair value on a recurring basis. The tables indicate the fair value hierarchy of the valuation techniques utilized by the Company to determine such fair value as of September 30, 2021 and December 31, 2020:

	Fair Value Measurements Using
	(Level 1)		(Level 2)		(Level 3)		Total
As of September 30, 2021
Financial Assets:
Cash and cash equivalents	$	180,840	$	—	$	—	$	180,840
Restricted cash	$	2,000	$	—	$	—	$	2,000
Fixed-maturity securities:
U.S. Treasury and U.S. government agencies	$	7,626	$	2,002	$	—	$	9,628
Corporate bonds		6,871		—		—		6,871
Total available-for-sale securities	$	14,497	$	2,002	$	—	$	16,499
Equity securities	$	3,040	$	—	$	—	$	3,040
	Fair Value Measurements Using
	(Level 1)		(Level 2)		(Level 3)		Total
As of December 31, 2020
Financial Assets:
Cash and cash equivalents	$	99,725	$	—	$	—	$	99,725
Restricted cash	$	2,000	$	—	$	—	$	2,000
Fixed-maturity securities:
U.S. Treasury and U.S. government agencies	$	6,922	$	2,031	$	—	$	8,953
Corporate bonds		7,466		—		—		7,466
Exchange-traded debt		100		—		—		100
Total available-for-sale securities	$	14,488	$	2,031	$	—	$	16,519
Equity securities	$	4,454	$	—	$	—	$	4,454

Liabilities Carried at Other Than Fair Value

The following table present fair value information for note payable—related party that is carried on the consolidated balance sheets at December 31, 2020:

	Carrying Value		Fair Value Measurements Using						Estimated Fair Value
			(Level 1)		(Level 2)		(Level 3)
As of December 31, 2020
Note payable—related party	$	22,000	$	—	$	—	$	22,000	$	22,000

F-58

TYPTAP INSURANCE GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated and Combined Financial Statements (unaudited)

(Amounts in thousands, except share and per share amounts, unless otherwise stated)

Note 7—Other Assets

The following table summarizes the Company’s other assets:

	September 30, 2021		December 31, 2020
Benefits receivable related to retrospective reinsurance contract	$	410	$	2,075
Prepaid expenses		1,003		373
Deposits		59		59
Other		873		413
Total other assets	$	2,345	$	2,920

Note 8—Reinsurance

The Company cedes a portion of its homeowners’ insurance exposure to other entities under catastrophe excess of loss reinsurance contracts and one quota share reinsurance agreement. Ceded premiums under most catastrophe excess of loss reinsurance contracts are subject to revision resulting from subsequent adjustments in total insured value. Under the terms of the quota share reinsurance agreement, the Company is entitled to a 30% ceding commission on ceded premiums written. The reinsurance premiums under one flood catastrophe excess of loss reinsurance contract are generally determined on a quarterly basis based on the premiums associated with the applicable flood total insured value in force on the last day of the preceding quarter.

The Company remains liable for claims payments in the event that any reinsurer is unable to meet its obligations under the reinsurance agreements. Failure of reinsurers to honor their obligations could result in losses to the Company. The Company evaluates the financial condition of its reinsurers and monitors concentrations of credit risk arising from similar geographic regions, activities or economic characteristics of the reinsurers to minimize its exposure to significant losses from reinsurer insolvencies. The Company contracts with a number of reinsurers to secure its annual reinsurance coverage, which generally becomes effective June 1^st of each year. The Company purchases reinsurance each year taking into consideration probable maximum losses and reinsurance market conditions.

F-59

TYPTAP INSURANCE GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated and Combined Financial Statements (unaudited)

(Amounts in thousands, except share and per share amounts, unless otherwise stated)

The impact of the reinsurance treaties on premiums written and earned is as follows:

	Three Months Ended September 30,						Nine Months Ended September 30,
	2021			2020			2021			2020
Premiums Written:
Direct	$	40,567		$	27,349		$	112,441		$	62,708
Assumed		15,420			—			49,161			—
Gross written premium		55,987			27,349			161,602			62,708
Ceded		(20,135	)		(10,171	)		(42,229	)		(19,078	)
Net premiums written	$	35,852		$	17,178		$	119,373		$	43,630
Premiums Earned:
Direct	$	37,030		$	19,854		$	99,970		$	54,829
Assumed		14,523			—			19,394			—
Gross earned premium		51,553			19,854			119,364			54,829
Ceded		(20,135	)		(10,171	)		(42,229	)		(19,078	)
Net premiums earned	$	31,418		$	9,683		$	77,135		$	35,751

During the three months ended September 30, 2021 and 2020, ceded losses of $676 and $41 were recognized, respectively, as reductions in losses and LAE. During the nine months ended September 30, 2021 and 2020, ceded losses of $689 and $415 were recognized, respectively, as reductions in losses and LAE. At September 30, 2021 and December 31, 2020, there were 49 and 39 reinsurers, respectively, participating in the Company’s reinsurance program. Total gross amounts recoverable and receivable from reinsurers at September 30, 2021 and December 31, 2020 were $685 and $90, respectively. Based on all available information considered in the rating-based method, the Company did not recognize any credit loss expense for the three and nine months ended September 30, 2021 and 2020. There were no allowances for credit losses related to the reinsurance recoverable balance at September 30, 2021 and December 31, 2020.

The Company has one reinsurance contract that includes retrospective provisions that adjust premiums in the event losses are minimal or zero. For the three months ended September 30, 2021 and 2020, the Company recognized a reduction in ceded premiums of $307 and $1,130, respectively, related to these adjustments. For the nine months ended September 30, 2021 and 2020, the Company recognized a reduction in ceded premiums of $1,891 and $1,700, respectively.

Amounts receivable related to retrospective provisions are reflected in other assets. At September 30, 2021 and December 31, 2020, other assets included $410 and $2,075, respectively, of these accrued benefits. Management believes the credit risks associated with the collectability of these accrued benefits are minimal as the amounts receivable are concentrated with one reinsurer and the Company monitors the creditworthiness of this reinsurer based on available information about the reinsurer’s financial condition.

Effective June 1, 2021, the Company began providing quota share reinsurance on all in-force, new and renewal policies issued by United. The policies were issued in the states of Connecticut, New Jersey, Massachusetts and Rhode Island. For the three and nine months ended September 30, 2021, assumed premiums written related to United were $15,420 and $49,161, respectively. At September 30, 2021, the Company had a net balance of $5,704 due from United, consisting of premiums receivable of $10,201 offset by ceding commission payable of $2,448 and payable on paid losses and loss adjustment expenses of $2,049.

F-60

TYPTAP INSURANCE GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated and Combined Financial Statements (unaudited)

(Amounts in thousands, except share and per share amounts, unless otherwise stated)

The Company presents the trust account deposits with regards to the quota share reinsurance agreements as Funds held in trust for assumed business on the consolidated balance sheet. This balance consists of funds deposited to establish the trust accounts and assumed premiums written net of provisional commission, any catastrophe cost allowance applicable, and paid losses and loss adjustment expenses.

The Company participates in reinsurance contracts with affiliates, HCPCI and Claddaugh Casualty Insurance Company Ltd. See Note 18—“Related Party Transactions” for additional information.

Note 9—Losses and Loss Adjustment Expenses

The liability for losses and LAE is determined on an individual case basis for all claims reported. The liability also includes amounts for unallocated expenses, anticipated future claim development and losses incurred but not reported.

The Company primarily writes insurance in the states which could be exposed to hurricanes or other natural catastrophes. The occurrence of a major catastrophe could have a significant effect on the Company’s quarterly results and cause a temporary disruption of the normal operations of the Company. However, the Company is unable to predict the frequency or severity of any such events that may occur in the near term or thereafter.

Activity in the liability for losses and LAE is summarized as follows:

	Three Months Ended September 30,						Nine Months Ended September 30,
	2021			2020			2021			2020
Net balance, beginning of period*	$	30,855		$	12,787		$	19,339		$	4,656
Incurred, net of reinsurance, related to:
Current period		22,951			7,374			48,814			22,077
Prior period		1,274			31			4,162			(34	)
Total incurred, net of reinsurance		24,225			7,405			52,976			22,043
Paid, net of reinsurance, related to:
Current period		(11,158	)		(5,517	)		(15,780	)		(9,659	)
Prior period		(4,510	)		(722	)		(17,132	)		(3,091	)
Total paid, net of reinsurance		(15,668	)		(6,239	)		(32,912	)		(12,750	)
Net balance, end of period		39,412			13,953			39,403			13,949
Add: reinsurance recoverable before allowance for credit losses		539			(1	)		548			3
Gross balance, end of period	$	39,951		$	13,952		$	39,951		$	13,952

* Net balance represents beginning-of-period liability for unpaid losses and LAE less beginning-of-period reinsurance recoverable for unpaid losses and LAE.

The establishment of loss and LAE reserves is an inherently uncertain process and changes in loss and LAE reserve estimates are expected as these estimates are subject to the outcome of future events. Changes in estimates, or differences between estimates and amounts ultimately paid, are reflected in the operating results of the period during which such adjustments are adjusted. During the three and nine months ended September 30, 2021, the Company recognized losses related to prior periods of $1,274 and $4,162, respectively, primarily to

F-61

TYPTAP INSURANCE GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated and Combined Financial Statements (unaudited)

(Amounts in thousands, except share and per share amounts, unless otherwise stated)

increase the reserve for the 2020 loss year resulting from litigation. Losses and LAE for the three and nine months ended September 30, 2021 included estimated losses, net of reinsurance, of $4,763 and $7,123, respectively, related to policies assumed from United.

Note 10—Segment Information

The Company identifies its segments based on managerial emphasis, organizational structure and revenue source. The Company identifies three reportable segments: insurance operations, information technology and corporate. The insurance operations segment represents the property and casualty insurance operations of TypTap, together with TTM, its managing general agent. The information technology segment represents the operations of the technology companies Exzeo USA and Cypress Tech which owns Exzeo India. The corporate segment represents the activities of the holding company TTIG. The determination of segments may change over time due to changes in operational emphasis, revenues, and results of operations.

The following tables present segment information reconciled to the Company’s consolidated and combined statements of income. Intersegment transactions are not eliminated from segment results. However, intracompany transactions are eliminated in segment results below:

For Three Months Ended September 30, 2021	Insurance Operations			Information Technology			Corporate			Elimination			Consolidated
Revenue:
Gross premiums earned	$	51,553		$	—		$	—		$	—		$	51,553
Ceded premiums		(20,135	)		—			—			—			(20,135	)
Net premiums earned		31,418			—			—			—			31,418
Net income from investment portfolio		96			7			—			—			103
Policy fee income		307			—			—			—			307
Other		38			460			—			(18	)		480
Total revenue		31,859			467			—			(18	)		32,308
Expenses:
Losses and loss adjustment expenses		24,225			—			—			—			24,225
Amortization of deferred policy acquisition costs		9,250			—			—			—			9,250
Other policy acquisition expenses		1,110			—			—			—			1,110
Interest expense		1			—			—			—			1
Depreciation and amortization		11			326			6			—			343
Personnel and other operating expenses		4,120			2,797			785			(18	)		7,684
Total expenses		38,717			3,123			791			(18	)		42,613
Loss before income taxes	$	(6,858	)	$	(2,656	)	$	(791	)	$	—		$	(10,305	)
Total revenue from non-affiliates	$	31,857		$	6		$	—

F-62

TYPTAP INSURANCE GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated and Combined Financial Statements (unaudited)

(Amounts in thousands, except share and per share amounts, unless otherwise stated)

For Three Months Ended September 30, 2020	Insurance Operations			Information Technology			Corporate*		Elimination			Consolidated
Revenue:
Gross premiums earned	$	19,854		$	—		$	—	$	—		$	19,854
Ceded premiums		(10,171	)		—			—		—			(10,171	)
Net premiums earned		9,683			—			—		—			9,683
Net income from investment portfolio		357			6			—		—			363
Policy fee income		211			—			—		—			211
Other		24			25			—		(25	)		24
Total revenue		10,275			31			—		(25	)		10,281
Expenses:
Losses and loss adjustment expenses		7,405			—			—		—			7,405
Amortization of deferred policy acquisition costs		3,536			—			—		—			3,536
Other policy acquisition expenses		531			—			—		—			531
Interest expense		—			—			—		—			—
Depreciation and amortization		8			271			—		—			279
Personnel and other operating expenses		2,188			2,364			—		(25	)		4,527
Total expenses		13,668			2,635			—		(25	)		16,278
Income (loss) before income taxes	$	(3,393	)	$	(2,604	)	$	—	$	—		$	(5,997	)
Total revenue from non-affiliates	$	10,275		$	6		$	—

For Nine Months Ended September 30, 2021	Insurance Operations			Information Technology			Corporate			Elimination			Consolidated
Revenue:
Gross premiums earned	$	119,364		$	—		$	—		$	—		$	119,364
Ceded premiums		(42,229	)		—			—			—			(42,229	)
Net premiums earned		77,135			—			—			—			77,135
Net income from investment portfolio		917			16			—			—			933
Policy fee income		856			—			—			—			856
Other		98			1,088			—			(56	)		1,130
Total revenue		79,006			1,104			—			(56	)		80,054
Expenses:
Losses and loss adjustment expenses		52,976			—			—			—			52,976
Amortization of deferred policy acquisition costs		20,541			—			—			—			20,541
Other policy acquisition expenses		3,071			—			—			—			3,071
Interest expense		1			—			90			—			91
Depreciation and amortization		29			906			7			—			942
Personnel and other operating expenses		11,043			8,366			1,654			(56	)		21,007
Total expenses		87,661			9,272			1,751			(56	)		98,628
Loss before income taxes	$	(8,655	)	$	(8,168	)	$	(1,751	)	$	—		$	(18,574	)
Total revenue from non-affiliates	$	79,001		$	18		$	—

F-63

TYPTAP INSURANCE GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated and Combined Financial Statements (unaudited)

(Amounts in thousands, except share and per share amounts, unless otherwise stated)

For Nine Months Ended September 30, 2020	Insurance Operations			Information Technology			Corporate*		Elimination			Consolidated
Revenue:
Gross premiums earned	$	54,829		$	—		$	—	$	—		$	54,829
Ceded premiums		(19,078	)		—			—		—			(19,078	)
Net premiums earned		35,751			—			—		—			35,751
Net (loss) income from investment portfolio		356			27			—		—			383
Policy fee income		584			—			—		—			584
Other		87			66			—		(66	)		87
Total revenue		36,778			93			—		(66	)		36,805
Expenses:
Losses and loss adjustment expenses		22,043			—			—		—			22,043
Amortization of deferred policy acquisition costs		9,222			—			—		—			9,222
Other policy acquisition expenses		1,419			—			—		—			1,419
Interest expense		1			—			—		—			1
Depreciation and amortization		25			795			—		—			820
Personnel and other operating expenses		6,190			7,120			—		(66	)		13,244
Total expenses		38,900			7,915			—		(66	)		46,749
Income (loss) before income taxes	$	(2,122	)	$	(7,822	)	$	—	$	—		$	(9,944	)
Total revenue from non-affiliates	$	36,778		$	27		$	—

* Corporate holding company TTIG had no operations until October 1, 2020.

The following table presents segment assets reconciled to the Company’s total assets in the consolidated balance sheets.

	September 30, 2021			December 31, 2020
Segments:
Insurance Operations	$	250,461		$	150,690
Information Technology		10,268			9,232
Corporate		138,185			294
Elimination		(103,983	)		(2,635	)
Total assets	$	294,931		$	157,581

F-64

TYPTAP INSURANCE GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated and Combined Financial Statements (unaudited)

(Amounts in thousands, except share and per share amounts, unless otherwise stated)

Note 11—Leases

The table below summarizes the Company’s right-of-use (“ROU”) assets and corresponding liabilities for operating and finance leases:

	September 30, 2021		December 31, 2020
Operating leases:
ROU Assets	$	456	$	302
Liabilities	$	459	$	316
Finance leases:
ROU Assets(1)	$	67	$	67
Liabilities(2)	$	26	$	36

(1) ROU Assets classified as finance lease are recorded within Property and Equipment, net.

(2) Liabilities classified as finance lease are recorded within Other liabilities.

In January 2021, the Company entered into a sublease agreement with HCI for office space in Tampa, Florida. See Note 18—“Related Party Transactions” for additional information.

The following table summarizes the Company’s operating and finance leases in which the Company is a lessee:

Class of Assets	Initial Term		Renewal Option		Other Terms and Conditions
Operating lease:
Office space		2 to 9 years		Yes		(a), (b)
Finance lease:
Office equipment		3 to 5 years		Not applicable		(c)

(a) There are no variable lease payments.

(b) Rent escalation provisions exist.

(c) There is a bargain purchase option.

As of September 30, 2021, maturities of lease liabilities were as follows:

	Leases
	Operating		Finance
Due in 12 months following September 30,
2021	$	323	$	14
2022		190		13
Total lease payments		513		27
Less: interest and foreign taxes		54		1
Total lease obligations	$	459	$	26

F-65

TYPTAP INSURANCE GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated and Combined Financial Statements (unaudited)

(Amounts in thousands, except share and per share amounts, unless otherwise stated)

The following table provides quantitative information with regard to the Company’s operating and finance leases.

	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
Lease costs:
Finance lease costs:
Amortization—ROU assets*	$	3	$	3	$	10	$	10
Interest expense		—		—		1		1
Operating lease costs*		130		131		393		401
Total lease costs	$	133	$	134	$	404	$	412
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows—finance leases	$	—	$	—	$	1	$	1
Operating cash flows—operating leases	$	132	$	123	$	399	$	383
Financing cash flows—finance leases	$	3	$	3	$	10	$	10

	September 30, 2021
Weighted-average remaining lease term:
Finance leases (in years)		1.8
Operating leases (in years)		1.6
Weighted-average discount rate:
Finance leases		3.8	%
Operating leases		2.6	%

* Included in other operating expenses of the consolidated and combined statements of income.

Note 12—Income Taxes

During the three months ended September 30, 2021 and 2020, the Company recorded income tax benefits of $2,432 and $1,490, respectively, which resulted in effective tax rates of 23.6% and 24.8% respectively. During the nine months ended September 30, 2021 and 2020, the Company recorded income tax benefits of $3,905 and $2,429, respectively, which resulted in effective tax rates of 21.0% and 24.4% respectively. The decrease in the effective rate in 2021 as compared to the corresponding periods in the prior year was primarily attributable to a tax shortfall experienced by the Company on the vesting of restricted shares granted to employees. This shortfall resulted from the vesting date value of the shares being less than the accumulated deferred tax assets attributable to the restricted shares that vested. The Company’s estimated annual effective tax rate differs from the statutory federal rate due to state and foreign income taxes, as well as certain non-deductible and tax-exempt items.

Note 13—Earnings (Loss) Per Share

U.S. GAAP requires the Company to use the two-class method in computing basic earnings per share since holders of the Company’s restricted stock have the right to share in dividends, if declared, equally with common stockholders. These participating securities affect the computation of both basic and diluted earnings per share

F-66

TYPTAP INSURANCE GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated and Combined Financial Statements (unaudited)

(Amounts in thousands, except share and per share amounts, unless otherwise stated)

during periods of net income or loss. A summary of the numerator and denominator of the basic and diluted loss per common share for the three and nine months ended September 30, 2021 and 2020 is presented below:

	Three Months Ended September 30, 2021								Nine Months Ended September 30, 2021
	Loss (Numerator)			Shares(a) (Denominator)		Per Share Amount			Loss (Numerator)			Shares(a) (Denominator)		Per Share Amount
Net loss attributable to common stockholders	$	(10,075	)						$	(19,844	)
Less: Loss attributable to participating securities		734								1,152
Basic Loss Per Share:
Loss allocated to common stockholders		(9,341	)		75,318	$	(0.12	)		(18,692	)		75,155	$	(0.25	)
Effect of Dilutive Securities:
Redeemable Series A Preferred Stock(b)(c)		—			—					—			—
Diluted Loss Per Share:
Loss available to common stockholders and assumed conversions	$	(9,341	)		75,318	$	(0.12	)	$	(18,692	)		75,155	$	(0.25	)

	Three Months Ended September 30, 2020								Nine Months Ended September 30, 2020
	Loss (Numerator)			Shares (a) (Denominator)		Per Share Amount			Loss (Numerator)			Shares (a) (Denominator)		Per Share Amount
Pro forma basic loss per share(d)	$	(4,507	)		75,000	$	(0.06	)	$	(7,515	)		75,000	$	(0.10	)

(a) Shares in thousands.

(b) See Redeemable Series A Preferred Stock under Note 2—“Summary of Significant Accounting Policies” for additional information.

(c) Excluded due to anti-dilutive effect.

(d) As the Company did not have any common shares outstanding prior to October 31, 2020, the pro forma basic loss per common share is calculated as if the Company’s common shares had been outstanding since January 1, 2020.

Note 14—Redeemable Series A Preferred Stock

On February 26, 2021, the Company completed a capital investment transaction with a fund associated with Centerbridge Partners, L.P. (collectively, the “Lead Investor”), a private investment management fund. Under the investment agreement, the Company issued 9,000,000 voting shares of its Series A-1 Preferred Stock and 1,000,000 non-voting shares of its Series A-2 Preferred Stock (together “Series A Preferred Stock”), $0.001 par value, at a price of $10 per share for total proceeds of $100,000. The proceeds will be used for TypTap’s operations and continued expansion. The Company incurred $6,262 of related issuance costs. In connection with the transaction, the Lead Investor was granted warrants by HCI to purchase 750,000 shares of HCI’s common stock with an exercise price of $54.40 per share. The warrants valued at $9,217 or $12.29 per warrant were immediately exercisable and will expire on the fourth anniversary of the date of issuance.

F-67

TYPTAP INSURANCE GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated and Combined Financial Statements (unaudited)

(Amounts in thousands, except share and per share amounts, unless otherwise stated)

Dividends

Dividends accrue and accumulate from the date of issuance. Cumulative dividends are payable semi-annually in cash or paid-in-kind at the Company’s option. Cash dividend rates are $0.50 per share in Year 1, $0.60 per share in Year 2, $0.75 per share in Year 3, and $0.95 per share in Year 4 and thereafter. The rates for paid-in-kind dividends are $0.60 per share in Year 1 and $0.70 per share in Year 2. In addition, the Series A Preferred Stock will be paid dividends on an as-converted basis when and if the Company declares common stock dividends.

Conversion Rights

The holders of Series A Preferred Stock have the right to convert the stock at any time into shares of common stock with an initial conversion rate of 1 to 1. The conversion rate will be adjusted under certain conditions. Unless converted earlier, all shares of Series A Preferred Stock will be automatically converted into shares of common stock at the then-applicable conversion rate upon (1) a qualified public offering of common stock with gross proceeds of not less than $250,000 with a price per share at least equal to 150% of the original purchase price of the Series A Preferred Stock, or (2) at the election of requisite holders of a majority of Series A Preferred Stock, whichever comes first.

Redemption Rights

On or after the fourth anniversary of the issuance date, Series A Preferred Stock is redeemable at the option of the holders at a price equal to the greater of (1) $10 per share plus any accrued but unpaid dividends and (2) a fair market value per share determined by an independent valuation firm selected by the Board of Directors. Management determined that the redemption was not probable at September 30, 2021.

Guaranty by HCI

All payment obligations to the holders of Series A Preferred Stock are fully guaranteed by HCI as long as Series A Preferred Stock is outstanding.

Liquidation Preference

In the event of any liquidation, the Series A Preferred Stock ranks senior to common stock with respect to distribution rights.

Anti-Dilutive Protection

The holders of Series A Preferred Stock receive protection in the form of a down-round feature which will be triggered in the event that the Company issues additional common equivalent shares at an effective price per share less than $10 per share.

F-68

TYPTAP INSURANCE GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated and Combined Financial Statements (unaudited)

(Amounts in thousands, except share and per share amounts, unless otherwise stated)

The following table summarizes the activity of redeemable preferred stock during the nine months ended September 30, 2021:

Balance at January 1, 2021	$	—
Initial proceeds from Centerbridge		100,000
Increase (decrease):
Proceeds allocated to contributed warrants		(9,217	)
Issuance costs		(6,262	)
Issuance costs allocated to contributed warrants		577
Accrued cash dividends		458
Accretion—increasing dividend rate		336
Balance at March 31, 2021		85,892
Increase (decrease):
Accrued cash dividends		1,250
Accretion—increasing dividend rate		929
Balance at June 30, 2021		88,071
Increase (decrease):
Payment of dividends		(2,542	)
Accrued cash dividends		1,250
Accretion—increasing dividend rate		952
Balance at September 30, 2021	$	87,731

For the three months ended September 30, 2021, dividends on Series A Preferred Stock were $2,202, consisting of accrued cash dividends of $1,250 and accretion related to increasing dividend rates of $952. For the nine months ended September 30, 2021, dividends on Series A Preferred Stock were $5,175, consisting of accrued cash dividends of $2,958 and accretion related to increasing dividend rates of $2,217.

Note 15—Stockholders’ Equity

Common Stock

In October 2020, the Company issued 90 million shares of its common stock to HCI in exchange for contributed cash and ownership interests in four of HCI’s wholly-owned subsidiaries. On February 26, 2021, HCI returned 15 million shares to the Company, thereby reducing the number of issued and outstanding common shares from 90 million to 75 million. The Company accounted for the transfer as a reverse stock split and accordingly, shares and per share data included herein have been restated to retroactively reflect the effect of such transfer. On the same day, the Company’s Articles of Incorporation were amended. The Company is now authorized to issue 183,000,000 shares of common stock with 181,860,000 shares of voting common stock and 1,140,000 shares of non-voting common stock.

Preferred Stock

The Company is authorized to issue up to additional 27,362,000 shares of voting Series A-1 preferred stock and additional 140,000 shares of non-voting Series A-2 preferred stock, $0.001 par value. The authorized but unissued preferred stock will have the rights as specified in the Company’s amended Articles of Incorporation.

F-69

TYPTAP INSURANCE GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated and Combined Financial Statements (unaudited)

(Amounts in thousands, except share and per share amounts, unless otherwise stated)

Note 16—Stock-Based Compensation

2021 Equity Incentive Plan

On February 26, 2021, the Company’s Board of Directors approved the 2021 Equity Incentive Plan (the “2021 Plan”) which provides for broad-based equity awards to its employees and nonemployee directors. The maximum number of shares that may be issued under the 2021 Plan is 7,000,000 shares. On September 27, 2021, the Board of Directors terminated the 2021 Plan and replaced it with the 2021 Omnibus Incentive Plan (the “2021 Omnibus Plan”). The initial maximum number of shares that may be issued under the 2021 Omnibus Plan is 7,700,000 shares. As of September 30, 2021, there are 669,810 shares remaining for future grant.

Information with respect to the activity of unvested restricted stock awards during the three and nine months ended September 30, 2021 is as follows:

	Number of Restricted Stock Awards			Weighted Average Grant Date Fair Value
Balance at January 1, 2021		—		$	—
Granted		5,749,300		$	1.19
Nonvested at March 31, 2021		5,749,300		$	1.19
Granted		404,500		$	0.71
Vested		(369,782	)	$	3.99
Forfeited		(11,200	)	$	2.29
Nonvested at June 30, 2021		5,772,818		$	0.97
Granted		356,100		$	0.72
Vested		—		$	—
Forfeited		(168,510	)	$	1.30
Nonvested at September 30, 2021		5,960,408		$	0.95

For the three and nine months ended September 30, 2021, the Company recognized compensation expense of $472 and $2,286, respectively, and deferred tax benefits of $116 and $561, respectively, related to restricted stock awards. At September 30, 2021, there was approximately $4,846 of total unrecognized compensation expense related to nonvested restricted stock. The Company expects to recognize the remaining compensation expense over a weighted-average period of 3.2 years.

HCI Equity Incentive Plan

HCI has an incentive plan that provides restricted stock awards to employees of HCI and its subsidiaries in connection with their service. The terms of the restricted stock grants include only service conditions and the awards generally vest over a period of four years. In February 2021, HCI cancelled 141,600 shares of unvested restricted stock for the employees transferred to the Company. In exchange, these employees received replacement restricted stock issued under TTIG’s 2021 Plan.

For the three months ended September 30, 2021, the Company did not recognize compensation expense related to HCI restricted stock. For three months ended September 30, 2020, the Company recognized compensation expense to HCI restricted stock of $421, $11 of which were payable to HCI under the recharge agreement. For

F-70

TYPTAP INSURANCE GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated and Combined Financial Statements (unaudited)

(Amounts in thousands, except share and per share amounts, unless otherwise stated)

the nine months ended September 30, 2021 and 2020, the Company recognized compensation expense related to HCI restricted stock of $152 and $1,316, respectively, $9 and $23 of which were payable to HCI under the recharge agreement.

Note 17—Commitments and Contingencies

General Matters

The Company is a party to claims and legal actions arising routinely in the ordinary course of its business. Although the Company cannot predict with certainly the ultimate resolution of the claims asserted against us, the Company does not believe that any pending legal proceeding to which the Company is a party will have a material, adverse effect on its consolidated and combined financial position, results of operations or cash flows.

Note 18—Related Party Transactions

The Company participates in reinsurance contracts with affiliates, HCPCI and Claddaugh Casualty Insurance Company Ltd. The reinsurance allocation method is governed by HCI’s reinsurance allocation agreement, which states that each cedant’s retention and reinsurer’s limit of liability for a loss occurrence is apportioned based on the amount of loss contributed to that occurrence. The reinsurance allocation agreement also states that the reinsurance premium shall be apportioned to each company in the same proportion that the companies’ premium subject to the reinsurance agreement bears to the total premium subject to the reinsurance agreement. For three and nine months ended September 30, 2021, the Company has ceded $437 of losses related to Hurricane Ida and Tropical Strom Eta to Claddaugh.

The Company receives cost allocations from HCI under a corporate overhead cost allocation agreement between HCI and its subsidiaries. Expenses allocated under this agreement during the three months ended September 30, 2021 and 2020 were $779 and $1,216, respectively, and during the nine months ended September 30, 2021 and 2020 were $3,523 and $3,095, respectively.

Under an agent commission agreement with its affiliate, Omega Insurance Agency, Inc., the Company pays commissions on premiums received in cash for policies issued during the term of the agreement. Commission expenses for the three months ended September 30, 2021 and 2020 were $29 and $22, respectively, and for nine months ended September 30, 2021 and 2020 were $88 and $78, respectively.

The company receives field adjuster services from its affiliate, Griston Claims Services (“GCS”), and pays fee for the services received. Field adjuster services expenses for the three months ended September 30, 2021 and 2020 were $145 and $204, respectively, and for the nine months ended September 30, 2021 and 2020, were $542 and $451, respectively.

In February 2021, the Company entered into a sublease agreement with HCI for office space in Tampa, Florida. The lease term began on January 1, 2021 and will end on July 31, 2023. The lease can be terminated at any time with prior written notice. The Company also has an existing lease with one of its affiliates for an office building in Ocala, Florida. For the three months ended September 30, 2021 and 2020, lease expenses related to these leases were $100 and $64, respectively, and for the nine months ended September 30, 2021 and 2020 were $299 and $260, respectively.

F-71

TYPTAP INSURANCE GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated and Combined Financial Statements (unaudited)

(Amounts in thousands, except share and per share amounts, unless otherwise stated)

As a result of the capital investment transaction on February 26, 2021 as described in Note 14—“Redeemable Series A Preferred Stock,” the following are the transactions that occurred between HCI and the Company:

• HCI ended its commitment to provide a revolving line of credit with borrowing capacity of up to $60,000 to the Company. The commitment which was provided to the Company on February 12, 2021 would have been available until June 30, 2022.

• HCI issued warrants to purchase 750,000 shares of its common stock and simultaneously transferred them to the Company as a non-cash capital contribution. The estimated fair value of the warrants was $9,217. The net amount after allocated issuance costs of $577 was $8,640.

• A $3,500 payable amount to HCI was contributed as a capital contribution by HCI. The amount related to issuance costs paid by HCI on the Company’s behalf.

• HCI contributed a $33,000 loan plus $23 of unpaid interest as a capital contribution to the Company. The loan resulted from a promissory note issued to HCI on February 12, 2021 in settlement of an amount payable to HCI as of December 31, 2020. The note bore an annual interest rate of 1.75% and would have matured on June 30, 2022.

On March 2, 2021, the Company repaid its note payable issued to HCI. The principal plus $66 of interest expense totaled $22,066.

The Company entered into the service agreements listed below with its affiliates in March 2021 and began to record the associated income and expenses beginning in March 2021:

• Policy administration service agreement between TTM and Homeowners Choice Managers (“HCM”): TTM receives $0.035 for each new and renewed HCPCI flood policy and this service agreement only applies to flood policies outside of Florida. For the three and nine months ended September 30, 2021, TTM recognized policy administration income of $1 and $5, respectively.

• Software license and service agreement between Exzeo USA and HCM: HCM pays Exzeo USA various usage-based or flat fees for use of the following software: SAMS, Harmony, CasaClue, AtlasViewer, and Claim Colony. An additional flat fee is paid for other general software services. For the three and nine months ended September 30, 2021, Exzeo USA recognized license and service income of $443 and $1,030, respectively.

• Claims services agreement between TTM and Griston Claims Management (“GCM”): TTM pays GCM $1.2 per TypTap non-catastrophe claim and $5 per non-catastrophe litigated internally handled TypTap claim. TTM also pays GCM $1.2 per TypTap catastrophe claim and 4% of the incurred loss for each catastrophe claim. For the three and nine months ended September 30, 2021, TTM incurred claims services expenses of $1,208 and $2,711, respectively.

In April 2021, HCI transferred a deferred tax asset of $121 as a capital contribution to the Company. The deferred tax asset related to unvested restricted stock for the employees transferred to the Company.

Note 19—Subsequent Events

On October 1, 2021, the Company issued to certain members of management options to purchase an aggregate of 6,450,000 shares of the Company’s common stock at an exercise price of $23.00 per share. The options will have a 10-year term and were granted pursuant to the 2021 Omnibus Plan. One-fourth of the options will vest on October 1, 2022. The remaining options will vest in equal installments on each January 1, April 1, July 1, and October 1 during the three years following October 1, 2022. The valuation of the options is currently in process and therefore it is not yet possible to accurately state the impact on the financial statements of such grants.

F-72

TYPTAP INSURANCE GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated and Combined Financial Statements (unaudited)

(Amounts in thousands, except share and per share amounts, unless otherwise stated)

In October 2021, the Florida Office of Insurance Regulation approved a 2022 assessment for the Florida Insurance Guaranty Association (“FIGA”) which is necessary to secure funds for the payment of covered claims of insolvent insurance companies. The 2022 FIGA assessment will be levied at 0.70% on collected premiums of all covered lines of business except auto insurance. The surcharge, which is collectible from a policyholder, will be assessed on new and renewal policies with effective dates beginning January 1, 2022 through December 31, 2022. The Company’s insurance subsidiaries, as member insurers, will be required to collect and remit the pass-through assessments to FIGA on a quarterly basis.

F-73

Common Stock

            shares

TypTap Insurance Group, Inc.

Preliminary Prospectus

Book-Runners

JMP Securities

Truist Securities

Oppenheimer & Co.

Co-Managers

Dowling and Partners Securities, LLC

Fifth Third Securities

TigerRisk Capital Markets & Advisory

Through and including                    , 20    (the 25th day after the date of this prospectus), all dealers that effect transactions in these securities, whether or not participating in this offering, may be required to deliver a prospectus. This is in addition to the dealers’ obligation to deliver a prospectus when acting as underwriters and with respect to their unsold allotments or subscriptions.

                    , 2021

PART II.

INFORMATION NOT REQUIRED IN PROSPECTUS

Item 13. Other Expenses of Issuance and Distribution

The following table sets forth all the costs and expenses, other than underwriting discounts and commissions, to be paid by us in connection with the sale of the shares of common stock being registered hereby. All amounts shown below are estimates, except the SEC registration fee, the FINRA filing fee and the stock exchange listing fee:

	Amount
SEC registration fee	$	*
FINRA filing fee		*
NYSE listing fee		*
Printing expenses		*
Legal fees and expenses		*
Accounting fees and expenses		*
Transfer agent and registrar fees and expenses		*
Miscellaneous expenses		*
Total	$	*

* To be filed by amendment.

Item 14. Indemnification of Directors and Officers

TypTap Insurance Group, Inc. is incorporated under the laws of the state of Florida. Section 607.0831 of the Florida Business Corporation Act, as amended (the “FBCA”), provides that a director is not personally liable for monetary damages to the corporation or any other person for any statement, vote, decision to take or not to take action, or any failure to take any action, as a director, unless (1) the director breached or failed to perform his or her duties as a director and (2) the director’s breach of, or failure to perform, those duties constitutes (a) a violation of the criminal law, unless the director had reasonable cause to believe his or her conduct was lawful or had no reasonable cause to believe his or her conduct was unlawful, (b) a transaction from which the director derived an improper personal benefit, either directly or indirectly, (c) a circumstance under which the liability provisions of Section 607.0834 of the FBCA are applicable, (d) in a proceeding by or in the right of the corporation to procure a judgment in its favor or by or in the right of a shareholder, conscious disregard for the best interest of the corporation, or willful or intentional misconduct, or (e) in a proceeding by or in the right of someone other than the corporation or a shareholder, recklessness or an act or omission which was committed in bad faith or with malicious purpose or in a manner exhibiting wanton and willful disregard of human rights, safety, or property. A judgment or other final adjudication against a director in any criminal proceeding for a violation of the criminal law estops that director from contesting the fact that his or her breach, or failure to perform, constitutes a violation of the criminal law; but does not estop the director from establishing that he or she had reasonable cause to believe that his or her conduct was lawful or had no reasonable cause to believe that his or her conduct was unlawful.

Under Section 607.0851 of the FBCA, a corporation has power to indemnify any person who is a party to any proceeding (other than an action by, or in the right of the corporation), because he or she is or was a director or officer of the corporation against liability incurred in connection with such proceeding, including any appeal thereof, if he or she acted in good faith and in a manner he or she reasonably believed to be in, or not opposed to, the best interests of the corporation and, with respect to any criminal action or proceeding, had no reasonable cause to believe his or her conduct was unlawful. The termination of any proceeding by judgment, order, settlement or conviction or upon a plea of nolo contendere or its equivalent shall not, of itself, create a

II-1

presumption that the person did not act in good faith and in a manner which he or she reasonably believed to be in, or not opposed to, the best interests of the corporation or, with respect to any criminal action or proceeding, has reasonable cause to believe that his or her conduct was unlawful.

For purposes of the indemnification provisions of the FBCA, “director” or “officer” means an individual who is or was a director or officer, respectively, of a corporation or who, while a director or officer of the corporation, is or was serving at the corporation’s request as a director or officer, manager, partner, trustee, employee, or agent of another domestic or foreign corporation, limited liability company, partnership, joint venture, trust, employee benefit plan, or another enterprise or entity and the terms include, unless the context otherwise requires, the estate, heirs, executors, administrators, and personal representatives of a director or officer.

In addition, under Section 607.0851 of the FBCA, a corporation has the power to indemnify any person, who was or is a party to any proceeding by or in the right of the corporation to procure a judgment in its favor by reason of the fact that the person is or was a director or officer, against expenses and amounts paid in settlement not exceeding, in the judgment of the board of directors, the estimated expense of litigating the proceeding to conclusion, actually and reasonably incurred in connection with the defense or settlement of such proceeding, including any appeal thereof. Such indemnification shall be authorized if such person acted in good faith and in a manner he or she reasonably believed to be in, or not opposed to, the best interests of the corporation, except that no indemnification shall be made under this subsection in respect of any claim, issue, or matter as to which such person shall have been adjudged to be liable unless, and only to the extent that, the court in which such proceeding was brought, or any other court of competent jurisdiction, shall determine upon application that, despite the adjudication of liability but in view of all circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses which such court shall deem proper.

Section 607.0852 of the FBCA provides that a corporation must indemnify an individual who is or was a director or officer who was wholly successful, on the merits or otherwise, in the defense of any proceeding to which the individual was a party because he or she is or was a director or officer of the corporation against expenses incurred by the individual in connection with the proceeding.

Section 607.0853 of the FBCA provides that a corporation may, before final disposition of a proceeding, advance funds to pay for or reimburse expenses incurred in connection with the proceeding by an individual who is a party to the proceeding because that individual is or was a director or an officer if the director or officer delivers to the corporation a signed written undertaking of the director or officer to repay any funds advanced if (a) the director or officer is not entitled to mandatory indemnification under Section 607.0852; and (b) it is ultimately determined under Section 607.0854 or Section 607.0855 (as described below) that the director or officer has not met the relevant standard of conduct described in Section 607.0851 or the director or officer is not entitled to indemnification under Section 607.0859 (as described below).

Section 607.0854 of the FBCA provides that, unless the corporation’s articles of incorporation provide otherwise, notwithstanding the failure of a corporation to provide indemnification, and despite any contrary determination of the board of directors or of the shareholders in the specific case, a director or officer of the corporation who is a party to a proceeding because he or she is or was a director or officer may apply for indemnification or an advance for expenses, or both, to a court having jurisdiction over the corporation which is conducting the proceeding, or to a circuit court of competent jurisdiction. Our amended and restated articles of incorporation do not provide any such exclusion. After receipt of an application and after giving any notice it considers necessary, the court may order indemnification or advancement of expenses upon certain determinations of the court.

Section 607.0855 of the FBCA provides that, unless ordered by a court under Section 607.0854, a corporation may not indemnify a director or officer under Section 607.0851 unless authorized for a specific proceeding after a determination has been made that indemnification is permissible because the director or officer has met the relevant standard of conduct set forth in Section 607.0851.

II-2

Section 607.0857 of the FBCA also provides that a corporation shall have the power to purchase and maintain insurance on behalf of and for the benefit of any person who is or was a director or officer of the corporation against any liability asserted against the person and incurred by him or her in any such capacity or arising out of his or her status as such, whether or not the corporation would have the power to indemnify or advance expenses to the individual against such liability under the provisions of Section 607.0857.

Section 607.0858 of the FBCA provides that the indemnification provided pursuant to Section 607.0851 and Section 607.0852, and the advancement of expenses provided pursuant to Section 607.0853, are not exclusive. A corporation may, by a provision in its articles of incorporation, bylaws or any agreement, or by vote of shareholders or disinterested directors, or otherwise, obligate itself in advance of the act or omission giving rise to a proceeding to provide any other or further indemnification or advancement of expenses to any of its directors or officers.

Section 607.0859 of the FBCA provides that, unless ordered by a court under the provisions of Section 607.0854 of the FBCA, a corporation may not indemnify a director or officer under Section 607.0851 or Section 607.0858, or advance expenses to a director or officer under Section 607.0853 or Section 607.0858, if a judgment or other final adjudication establishes that his or her actions, or omissions to act, were material to the cause of action so adjudicated and constitute: (a) willful or intentional misconduct or a conscious disregard for the best interests of the corporation in a proceeding by or in the right of the corporation to procure a judgment in its favor or in a proceeding by or in the right of a shareholder; (b) a transaction in which a director or officer derived an improper personal benefit; (c) a violation of the criminal law, unless the director or officer had reasonable cause to believe his or her conduct was lawful or had no reasonable cause to believe his or her conduct was unlawful; or (d) in the case of a director, a circumstance under which the liability provisions of Section 607.0834 are applicable (relating to unlawful distributions).

Our amended and restated articles of incorporation and bylaws provide that we shall indemnify, and advance any and all reasonable expenses incurred by, any director or former director to the fullest extent permitted by law.

The underwriting agreement for this offering will provide that the underwriters indemnify us against certain civil liabilities that may be incurred in connection with this offering, including certain liabilities under the Securities Act of 1933.

We also maintain director and officer liability insurance against certain claims and liabilities which may be made against our former, current or future directors and officers. In addition, we have individual indemnification agreements with our directors.

Item 15. Recent Sales of Unregistered Securities

In the preceding three years, we have sold and issued the following securities that were not registered under the Securities Act:

On October 1, 2020, we issued 90,000,000 shares of our common stock to HCI in consideration of HCI’s contribution to us of all of the capital stock of TypTap Insurance Company. The issuance of such shares was exempt from registration under the Securities Act of 1933, as amended (the “Securities Act”), because the offer and sale of such securities did not involve a “public offering” as defined in Section 4(a)(2) of the Securities Act, was made without any form of general solicitation to a sophisticated party, and was made with full access to any information requested by HCI.

On February, 26, 2021, we issued and sold an aggregate of 9,000,000 shares of our Series A-1 Preferred Stock and 1,000,000 shares of our Series A-1 Preferred Stock to CB Snowbird Holdings, L.P., an affiliate of Centerbridge Capital Partners L.P. The issuance of such shares was exempt from registration under the Securities Act because the offer and sale of such securities did not involve a “public offering” as defined in Section 4(a)(2)

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of the Securities Act, was made without any form of general solicitation to a sophisticated party, and was made with full access to any information requested by the purchaser regarding our company and the purchased securities.

From February 26, 2021 through September 30, 2021, we granted to our employees, directors, consultants, and other service providers an aggregate of 6,487,800 shares of restricted common stock pursuant to our 2021 Equity Plan. We claimed exemption from registration under the Securities Act for such grants under Section 4(a)(2) of the Securities Act in that such sales and issuances did not involve a public offering or under Rule 701 promulgated under the Securities Act, in that they were offered and sold either pursuant to written compensatory plans or pursuant to a written contract relating to compensation, as provided by Rule 701.    

On October 1, 2021, we granted to seven employees options to purchase an aggregate of 6,450,000 shares of our common stock pursuant to our 2021 Omnibus Incentive Plan at an exercise price of $23.00 per share. We claimed exemption from registration under the Securities Act for such grants under Section 4(a)(2) of the Securities Act in that such sales and issuances did not involve a public offering or under Rule 701 promulgated under the Securities Act, in that they were offered and sold either pursuant to written compensatory plans or pursuant to a written contract relating to compensation, as provided by Rule 701.”

Item 16. Exhibits and Financial Statement Schedules

(A) Exhibits. See the Exhibit Index immediately preceding the signature page hereto, which is incorporated by reference as if fully set forth herein.

(B) Financial Statement Schedules.

All schedules are omitted because the required information is (i) not applicable, (ii) not present in amounts sufficient to require submission of the schedule and/or (iii) included in the financial statements and accompanying notes thereto included in the prospectus filed as part of this Registration Statement.

Item 17. Undertakings

The undersigned registrant hereby undertakes to provide to the underwriters at the closing specified in the underwriting agreement certificates in such denominations and registered in such names as required by the underwriters to permit prompt delivery to each purchaser.

Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the provisions referenced in Item 14 of this registration statement, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.

The undersigned registrant hereby undertakes that:

(1) For purposes of determining any liability under the Securities Act of 1933, the information omitted from the form of prospectus filed as part of this Registration Statement in reliance upon Rule 430A and contained in a form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be part of this registration statement as of the time it was declared effective.

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(2) For the purpose of determining any liability under the Securities Act of 1933, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

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INDEX TO EXHIBITS

1*	Form of Underwriting Agreement.
3.1	Amended and Restated Articles of Incorporation of TypTap Insurance Group, Inc., to be in effect immediately prior to the completion of this offering.
3.2	Bylaws of TypTap Insurance Group, Inc., to be in effect immediately prior to the completion of this offering.
4	Preferred Stock Purchase Agreement, dated February 26, 2021, among TypTap Insurance Group, Inc., HCI Group, Inc., and CB Snowbird Holdings, L.P.
5*	Opinion of Foley & Lardner LLP.
10.1+	TypTap Insurance Group, Inc. 2021 Equity Incentive Plan (the 2021 Equity Plan).
10.2+	Form of Restricted Stock Award Agreement under the TypTap Insurance Group, Inc. 2021 Equity Incentive Plan.
10.3+	TypTap Insurance Group, Inc. 2021 Omnibus Incentive Plan (the 2021 Omnibus Plan).
10.4+	Form of Stock Option Award under the TypTap Insurance Group, Inc. 2021 Omnibus Incentive Plan.
10.5+	Executive Employment Agreement, dated June 14, 2021, by and between TypTap Insurance Group, Inc. and Ankur Bhandari.
10.6*+	Form of Indemnification Agreement between TypTap Insurance Group, Inc. and its directors.
10.7	Shareholders Agreement, dated February 26, 2021, among TypTap Insurance Group, Inc., HCI Group, Inc., CB Snowbird Holdings, L.P., and the other shareholders party thereto.
10.8*	Amendment, dated [●], to the Shareholders Agreement among TypTap Insurance Group, Inc., CB Snowbird Holdings, L.P., HCI Group Inc., and the other shareholders party thereto.
10.9†	Property Catastrophe First Excess of Loss Reinsurance Contract effective June 1, 2021 issued to TypTap Insurance Company by subscribing reinsurers.
10.10†	Reinstatement Premium Protection Reinsurance Contract (For First Excess Cat) effective June 1, 2021 issued to TypTap Insurance Company by subscribing reinsurers.
10.11†	7th Layer Non-Florida Property Catastrophe Excess of Loss Reinsurance Contract effective June 1, 2021 issued to Homeowners Choice Property & Casualty Insurance Company, Inc. and TypTap Insurance Company by subscribing reinsurers.
10.12†	Flood Property Catastrophe Excess of Loss Reinsurance Contract effective July 1, 2021 issued to Homeowners Choice Property & Casualty Insurance Company, Inc. and TypTap Insurance Company by subscribing reinsurers.
10.13†	Property Catastrophe Excess of Loss Reinsurance Contract effective June 1, 2021 issued to TypTap Insurance Company by subscribing reinsurers.
10.14†	Non-Florida Property Catastrophe Excess of Loss Reinsurance Contract effective June 1, 2021 issued to Homeowners Choice Property & Casualty Insurance Company, Inc. and TypTap Insurance Company by subscribing reinsurers.
10.15†	Reinstatement Premium Protection Reinsurance Contract effective June 1, 2021 issued to TypTap Insurance Company by subscribing reinsurers.
10.16†	Non-Florida Reinstatement Premium Protection Reinsurance Contract effective June 1, 2021, issued to Homeowners Choice Property & Casualty Insurance Company, Inc. and TypTap Insurance Company by subscribing reinsurers.
10.17†	Reinstatement Premium Protection Reinsurance Contract effective June 1, 2021, issued to TypTap Insurance Company by subscribing reinsurers.

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10.18†	Top Layer Flood/Wind Property Catastrophe Excess of Loss Reinsurance Contract effective June 1, 2021 issued to Homeowners Choice Property & Casualty Insurance Company, Inc. and TypTap Insurance Company by subscribing reinsurers.
10.19†	Property Catastrophe First Excess of Loss Reinsurance Contract effective June 1, 2021 issued to TypTap Insurance Company by subscribing reinsurers.
10.20†	Reinstatement Premium Protection Reinsurance Contract (For First Excess Cat) effective June 1, 2021 issued to TypTap Insurance Company by subscribing reinsurers.
10.21†	Non-Florida Property Catastrophe $6MXS$4M Excess of Loss Reinsurance Contract effective June  1, 2021 issued to Homeowners Choice Property & Casualty Insurance Company, Inc. and TypTap Insurance Company by subscribing reinsurers.
10.22†	Non-Florida Reinstatement Premium Protection Reinsurance Contract (For $6MXS$4m Excess Cat) effective June 1, 2021 issued to Homeowners Choice Property & Casualty Insurance Company, Inc. and TypTap Insurance Company by subscribing reinsurers.
10.23	Reimbursement Contract effective June 1, 2021 issued to TypTap Insurance Company by the State Board of Administration of the State of Florida.
10.24†	Multi-Year Property Catastrophe Excess of Loss Reinsurance Contract effective June 1, 2021 issued to Homeowners Choice Property & Casualty Insurance Company, Inc. and TypTap Insurance Company by subscribing reinsurers.
10.25	Cost Apportionment Contract, dated January 4, 2016, by and between HCI Group, Inc. and each of HCI Group, Inc.’s subsidiaries listed thereto.
10.26	Agreement to Allocate United States Federal Income Tax Liability, dated February 13, 2020, by and among HCI Group, Inc. and each of HCI Group, Inc.’s other subsidiaries listed thereto.
10.27	Interests and Liabilities Agreement of TypTap Insurance Company, dated June 16, 2021, with respect to the Property Quota Share Reinsurance Contract, dated June 1, 2021, issued to United Property & Casualty Insurance Company.
10.28*	Registration Rights Agreement, dated [●], 2021, by and between TypTap Insurance Group, Inc. and CB Snowbird Holdings, L.P.
10.29*	Stock Restriction Agreement, dated [●], 2021, by and between HCI Group, Inc. and CB Snowbird Holdings, L.P.
10.30	Claims Services Agreement, dated March 1, 2021, by and between Griston Claim Management, Inc. and TypTap Management Company.
10.31	Software License and Services Agreement, dated March 1, 2021, by and between Homeowners Choice Managers, Inc. and Exzeo USA, Inc.
21	List of Subsidiaries of TypTap Insurance Group, Inc.
23.1	Consent of Dixon Hughes Goodman LLP.
23.2*	Consent of Foley & Lardner LLP (included in Exhibit 5).
24	Power of Attorney (included on signature page).

* To be filed by amendment.

† Certain portions of the exhibit have been omitted pursuant to Rule 601(b)(10) of Regulation S-K. The omitted information is (i) not material and (ii) would likely cause us competitive harm if publicly disclosed.

+ Denotes management contract or compensatory plan or arrangement.

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SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, as amended, the registrant has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Tampa, Florida, on this 8th day of November, 2021.

TypTap Insurance Group, Inc.
By:	/s/ Paresh Patel
	Name: Paresh Patel
	Title: Chief Executive Officer

Pursuant to the requirements of the Securities Act of 1933, as amended, this Registration Statement has been signed below by the following persons in the capacities and on the dates indicated. Each person whose signature appears below constitutes and appoints each of Paresh Patel and Kevin Mitchell, and each of them individually, his or her true and lawful attorneys-in-fact and agents, with full powers of substitution and resubstitution, for him or her and in his or her name, place and stead, in any and all capacities, to sign any or all amendments (including post effective amendments) to this registration statement and any subsequent registration statement filed pursuant to Rule 462 under the Securities Act of 1933, as amended, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in connection therewith, as fully to all intents and purposes as he or she might or could do in person, and hereby ratifying and confirming all that either of the said attorneys-in-fact and agents, or his or her substitute or substitutes, may lawfully do or cause to be done by virtue hereof.

Signature	Title	Date
/s/ Paresh Patel Paresh Patel	President, Chief Executive Officer (Principal Executive Officer) and Chairman of the Board of Directors	November 8, 2021
/s/ Ankur Bhandari Ankur Bhandari	Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer)	November 8, 2021
/s/ Kevin Mitchell Kevin Mitchell	Executive Vice President and Director	November 8, 2021
/s/ Eric Hoffman Eric Hoffman	Director	November 8, 2021
/s/ Irene Hurst Irene Hurst	Director	November 8, 2021
/s/ Robert Lopes Robert Lopes	Director	November 8, 2021
/s/ James Macchiarola James Macchiarola	Director	November 8, 2021
/s/ Steve Shafran Steve Shafran	Director	November 8, 2021
/s/ Loreen Spencer Loreen Spencer	Director	November 8, 2021

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EX-3.1

Exhibit 3.1

AMENDED AND RESTATED

ARTICLES OF INCORPORATION

OF

TYPTAP INSURANCE GROUP, INC.

(Pursuant to Sections 607.1007 and 607.1003

of the Florida Business Corporation Act)

TypTap Insurance Group, Inc., a corporation organized and existing under and by virtue of the provisions of the Florida Business Corporation Act (the “FBCA”),

DOES HEREBY CERTIFY:

1. That this Corporation is named TypTap Insurance Group, Inc. (the “Corporation”) and was originally incorporated in the State of Florida on July 21, 2020, and that these Amended and Restated Articles of Incorporation shall amend, restate and supersede in their entirety any and all prior Amended and Restated Articles of Incorporation, Articles of Incorporation, and any Articles of Amendment or Certificates of Designation thereto, filed with the State of Florida from the date of the Corporation’s original incorporation through the date hereof.

2. That these Amended and Restated Articles of Incorporation have been approved by the Board of Directors and shareholders of the Corporation in the manner and by the vote required by the FBCA. These Amended and Restated Articles of Incorporation contain amendments that require shareholder approval. These Amended and Restated Articles of Incorporation were approved by the shareholders pursuant to a written consent in lieu of a meeting dated                2021, and the votes cast for the amendments by the shareholders were sufficient for approval.

That the existing Amended and Restated Articles of Incorporation of this Corporation have been further amended and restated in their entirety to read as follows:

FIRST: The name of this corporation is TypTap Insurance Group, Inc. (the “Corporation”).

SECOND: The address of the principal office of the Corporation is 5300 W. Cypress Street, Suite 100, Tampa, Florida 33607. The mailing address of the Corporation is 5300 W. Cypress Street, Suite 100, Tampa, Florida 33607. The address of the Corporation’s registered office is One Independent Drive, Suite 1300, Jacksonville, Florida 32202. The name of the registered agent at such address is F&L Corp.

THIRD: The nature of the business or purposes to be conducted or promoted is to engage in any lawful act or activity for which corporations may be organized under the Florida Business Corporation Act (the “FBCA”).

FOURTH: The total number of shares of all classes of stock which the Corporation shall have authority to issue is (i)                shares of Common Stock, par value $0.001 per share (“Common Stock”), and (ii)                shares of Preferred Stock, par value $0.001 per share (“Preferred Stock”).

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The following is a statement of the designations and the powers, privileges and rights, and the qualifications, limitations or restrictions thereof in respect of each class of capital stock of the Corporation.

A. COMMON STOCK

1. Dividends and Distributions. Subject to the rights, if any, of the holders of any outstanding shares of Preferred Stock, the Board of Directors of the Corporation may, in its sole discretion, out of funds legally available for the payment of dividends and at such times and in such manner as determined by the Board of Directors, declare and pay dividends or other distributions on the Common Stock.

2. Liquidation Rights. In the event of any voluntary or involuntary liquidation, dissolution or winding up of the Corporation, after there shall have been paid to or set aside for the holders of Preferred Stock the full preferential amounts, if any, to which they are entitled, the holders of outstanding shares of Common Stock shall be entitled to receive pro rata, according to the number of shares held by each, the remaining net assets of the Corporation available for distribution.

3. Voting Rights. Except as otherwise provided by the FBCA, and except as may be determined by the Board of Directors with respect to Preferred Stock pursuant to Section B of this Article Fourth, only the holders of Common Stock shall be entitled to vote for the election of directors of the Corporation and for all other corporate purposes. Upon any such vote the holders of Common Stock shall, except as otherwise provided by law, be entitled to one vote for each share of Common Stock held by them respectively.

B. PREFERRED STOCK

1. Series and Variations Between Series. Pursuant to Section 607.0602 of the FBCA, the Board of Directors of the Corporation is hereby expressly authorized, without the approval of the shareholders of the Corporation, to (a) provide for the classification and reclassification of any unissued shares of Preferred Stock and determine the preferences, limitations, and relative rights thereof and (b) issue Preferred Stock in one or more series, all within the limitations set forth in Section 607.0601 of the FBCA. The authority of the Board of Directors of the Corporation with respect to each series of Preferred Stock shall include, but not be limited to, determination of the following:

(1) the number of shares constituting such series and the distinctive designation of that series;

(2) the dividend rate, if any, on the shares of such series, whether dividends shall be cumulative, and, if so, from which date or dates, and the relative rights of priority, if any, of payment of dividends on shares of that series;

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(3) whether such series shall have voting rights, in addition to the voting rights provided by law, and, if so, the terms of such voting rights;

(4) whether such series shall have conversion privileges and, if so, the terms and conditions of conversion, including provision for adjustment of the conversion rate upon such events as the Board of Directors shall determine;

(5) whether or not the shares of such series shall be redeemable, and, if so, the terms and conditions of such redemption, including the date or dates upon or after which they shall be redeemable and the amount per share payable in case of redemption, which amount may vary under different conditions and at different redemption dates;

(6) whether such series shall have a sinking fund for the redemption or purchase of shares of the series, and, if so, the terms and amount of such sinking fund;

(7) the rights of the shares of such series in the event of voluntary or involuntary dissolution or winding up of the Corporation, and the relative rights of priority, if any, of payment of shares of that series; and

(8) any other preferences and relative, participating, optional or other special rights, and qualifications, limitations or restrictions of such series.

C. NO PREEMPTIVE RIGHTS

No holder of shares of any class of capital stock of the Corporation shall have any preferential or preemptive right to subscribe to or acquire (1) unissued or treasury shares of the Corporation of any class, (2) securities of the Corporation convertible into or carrying a right to acquire or subscribe to shares of any class or (3) any other obligations, warrants, rights to subscribe to shares or other securities of the Corporation of any class, in each case whether now or hereafter authorized.

FIFTH: Subject to any additional vote required by these Amended and Restated Articles of Incorporation or the Bylaws of the Corporation, in furtherance and not in limitation of the powers conferred by statute, the Board of Directors is expressly authorized to make, repeal, alter, amend and rescind any or all of the Bylaws of the Corporation.

SIXTH: The Board of Directors is classified as set forth in these Amended and Restated Articles of Incorporation. The directors are classified with respect to the time for which they severally hold office, into three classes, Class A, Class B and Class C, each of which shall be as nearly equal number as possible, and shall be adjusted from time to time in the manner specified in the Bylaws of the Corporation to maintain such proportionality. At the 2021 annual meeting of the shareholders, each director in Class A was elected to hold office for a term expiring at the 2024 annual meeting of the shareholders; each director in Class B was elected to hold office for a term expiring at the 2022 annual meeting of the shareholders; and each director in Class C was elected to hold office for a term expiring at the 2023 annual meeting of the shareholders. Notwithstanding the foregoing provisions of this Article Sixth, each director will serve until such director’s successor is duly elected and qualified or until such director’s earlier death, resignation or removal. At each annual meeting of the shareholders beginning in 2022, successors to the class of directors whose term expires at that meeting will be elected to hold office for a term expiring at the annual meeting of the shareholders held in the third year following the year of election and until their successors have been duly elected and qualified or until such director’s earlier death, resignation or removal.

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Subject to any additional vote required by these Amended and Restated Articles of Incorporation, the number of directors of the Corporation shall be determined in the manner set forth in the Bylaws of the Corporation. Each director shall be entitled to one vote on each matter presented to the Board of Directors.

SEVENTH: Any director may be removed from office, but only for Cause (as defined below) by the affirmative vote of holders of at least a majority of the voting power of the then outstanding shares of stock entitled to vote for the election of directors (or, if a director is elected by a voting group of shareholders, at least a majority of the voting power of the then outstanding shares of stock of the voting group of shareholders that elected the director to be removed). As used herein, “Cause” shall exist only if the director whose removal is proposed (1) has been convicted of a felony by a court of competent jurisdiction and such conviction is no longer subject to direct appeal or (2) has been adjudged by a court of competent jurisdiction to be liable for willful misconduct in the performance of his or her duties to the Corporation in a matter which has a material adverse effect on the business of the Corporation and such adjudication is no longer subject to direct appeal.

EIGHTH: Any vacancy occurring in the Board of Directors, including a vacancy created by the removal of a director or an increase in the number of directors, shall be filled by the affirmative vote of a majority of the directors then in office, although less than a quorum of the Board of Directors; provided, however, that if the vacant office was held by a director elected by a voting group of shareholders, only the remaining directors elected by that voting group shall fill the vacancy. A director elected by directors to fill a vacant office pursuant to this Article Eighth shall be deemed to be a director elected by the same voting group of shareholders that elected the director(s) who voted to fill the vacancy. Any director elected pursuant to this Article Eighth shall serve until the next meeting of the shareholders at which directors are elected or, if then permitted by the FBCA, the next election of the class for which such director shall have been chosen, and until such director’s successor is duly elected and qualified or until such director’s earlier death, resignation or removal.

NINTH: Elections of directors need not be by written ballot unless the Bylaws of the Corporation shall so provide.

TENTH: Meetings of shareholders may be held within or without the State of Florida, as the Bylaws of the Corporation may provide. The books of the Corporation may be kept outside the State of Florida at such place or places as may be designated from time to time by the Board of Directors or in the Bylaws of the Corporation.

ELEVENTH: Any action required or permitted to be taken by shareholders of the Corporation may be taken only upon the vote of shareholders at an annual or special meeting of shareholders duly noticed and called in accordance with the FBCA and the Bylaws of the Corporation, and no such action may be taken without a meeting by written consent of shareholders.

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TWELFTH: To the fullest extent permitted by law, a director of the Corporation shall not be personally liable to the Corporation or its shareholders for monetary damages for breach of fiduciary duty as a director. If the FBCA or any other law of the State of Florida is amended after approval by the shareholders of this Article Twelfth to authorize corporate action further eliminating or limiting the personal liability of directors, then the liability of a director of the Corporation shall be eliminated or limited to the fullest extent permitted by the FBCA as so amended.

Any repeal or modification of the foregoing provisions of this Article Twelfth by the shareholders of the Corporation shall not adversely affect any right or protection of a director of the Corporation existing at the time of, or increase the liability of any director of the Corporation with respect to any acts or omissions of such director occurring prior to, such repeal or modification.

THIRTEENTH: To the fullest extent permitted by applicable law, the Corporation is authorized to provide indemnification of (and advancement of expenses to) directors, officers and agents of the Corporation (and any other persons to which FBCA permits the Corporation to provide indemnification) through Bylaw provisions, agreements with such agents or other persons, vote of shareholders or disinterested directors or otherwise, in excess of the indemnification and advancement otherwise provided by the FBCA.

Any amendment, repeal or modification of the foregoing provisions of this Article Thirteenth shall not (a) adversely affect any right or protection of any director, officer or other agent of the Corporation existing at the time of such amendment, repeal or modification or (b) increase the liability of any director of the Corporation with respect to any acts or omissions of such director, officer or agent occurring prior to, such amendment, repeal or modification.

FOURTEENTH: Notwithstanding any other provision of these Amended and Restated Articles of Incorporation or any provision in the Bylaws of the Corporation: (1) any provisions in these Amended and Restated Articles of Incorporation that require a greater voting requirement than provided in the FBCA may only be amended by the same vote required to take action under the voting requirement then in effect; and (2) any provisions in the Bylaws of the Corporation that require a greater voting requirement than provided in the FBCA may only be amended by the same vote required to take action under the voting requirement then in effect.

FIFTEENTH:

A. COMPETITION AND CORPORATE OPPORTUNITIES

1. Subject to any express agreement that may from time to time be in effect, a Dual Role Person (as defined below) may, and shall have no duty not to, on behalf of HCI (as defined below), in each case (a) carry on and conduct, whether directly, or as a partner in any partnership, or as a joint venturer in any joint venture, or as a director, officer or shareholder of any corporation, or as a participant in any syndicate, pool, trust or association, any business of any kind, nature or description, whether or not such business is competitive with or in the same

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or similar lines of business as the Corporation or its Controlled Affiliates (as defined below), (b) do business with any customer or vendor of any of the Corporation or its Controlled Affiliates, and (c) employ or otherwise engage any officer or employee of the Corporation or its Controlled Affiliates. To the fullest extent permitted by Florida law, the Corporation hereby renounces any interest or expectancy of the Corporation or its Controlled Affiliates to participate in any business of HCI, and waives any claim against a Dual Role Person and shall indemnify a Dual Role Person against any claim that such Dual Role Person is liable to the Corporation or its shareholders or its Controlled Affiliates for breach of any fiduciary duty solely by reason of such Dual Role Person’s participation in any such business. To the fullest extent permitted by Florida law, the Corporation shall pay in advance any expenses incurred in defense of such claim as provided in the Bylaws of the Corporation.

2. In the event that a Dual Role Person acquires knowledge of a potential transaction or matter which may constitute a corporate opportunity for both (x) HCI and (y) the Corporation or its Controlled Affiliates, the Dual Role Person shall not have any duty to offer or communicate information regarding such corporate opportunity to the Corporation or its Controlled Affiliates. To the fullest extent permitted by Florida law, the Corporation hereby renounces any interest or expectancy of the Corporation or its Controlled Affiliates in such corporate opportunity, and waives any claim against each Dual Role Person and shall indemnify a Dual Role Person against any claim that such Dual Role Person is liable to the Corporation or its shareholders or its Controlled Affiliates for breach of any fiduciary duty solely by reason of the fact that such Dual Role Person (a) pursues or acquires any corporate opportunity for the account of HCI, (b) directs, recommends, sells, assigns, or otherwise transfers such corporate opportunity to HCI or (c) does not communicate information regarding such corporate opportunity to the Corporation or its Controlled Affiliates; provided, however, in each case, that any corporate opportunity which is expressly offered to a Dual Role Person in writing solely in his or her capacity as a director or officer of the Corporation or its Controlled Affiliates shall belong to the Corporation or its Controlled Affiliates. To the fullest extent permitted by Florida law, the Corporation shall pay in advance any expenses incurred in defense of such claim as provided in the Bylaws of the Corporation.

3. To the fullest extent permitted by the laws of the State of Florida, no potential transaction or matter may be deemed to be a corporate opportunity of the Corporation or Controlled Affiliates unless (a) the Corporation and its Controlled Affiliates would be permitted to undertake such transaction or matter in accordance with these Amended and Restated Articles of Incorporation and applicable law, (b) the Corporation and its Controlled Affiliates at such time have sufficient financial resources to undertake such transaction or matter, (c) such transaction or matter would be in the same or similar line of business in which the Corporation and its Controlled Affiliates are then engaged or a line of business that is reasonably related to, or a reasonable extension of, such line of business and (d) the Corporation and its Controlled Affiliates at such time have an interest or reasonable expectancy therein.

B. CONFLICT

In the event of a conflict between this Article Fifteenth and any other provision of these Amended and Restated Articles of Incorporation, this Article Fifteenth shall prevail in all circumstances.

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C. AMENDMENTS

Neither the alteration, amendment or repeal of this Article Fifteenth, nor the adoption of any provision of these Amended and Restated Articles of Incorporation inconsistent with this Article Fifteenth, nor, to the fullest extent permitted by Florida law, any modification of law, shall eliminate or reduce the effect of this Article Fifteenth in respect of any business opportunity first identified or any other matter occurring, or any cause of action, suit or claim that, but for this Article Fifteenth, would accrue or arise, prior to the effective date of such alteration, amendment, repeal, adoption or modification.

D. DEFINED TERMS

For purposes of this Article Fifteenth:

1. “Affiliate” means with respect to any Person, any other Person directly or indirectly controlling, controlled by or under common control with such Person. For purposes of the foregoing definition, the term “controlling,” “controlled by,” or “under common control with” means 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.

2. “Controlled Affiliate” means, with respect to the Corporation, any Person controlled by the Corporation. For purposes of the foregoing definition, “controlled” means 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.

3. “Dual Role Person” means (i) any director or officer of the Corporation who is also a director, officer, employee or Affiliate of HCI and (ii) HCI.

4. “HCI” means HCI Group, Inc. and its Affiliates (other than the Corporation and its Controlled Affiliates), together with their respective successors and assigns.

5. “Person” means an individual or any corporation, partnership, limited liability company, estate, trust, association, private foundation joint stock company or any other entity.

*    *    *

3. That the foregoing amendment and restatement was approved by the holders of the requisite number of shares of this Corporation in accordance with the FBCA.

4. That these Amended and Restated Articles of Incorporation, which restate and integrate and further amend the provisions of this Corporation’s prior Amended and Restated Articles of Incorporation, has been duly adopted in accordance with the FBCA.

5. That these Amended and Restated Articles of Incorporation shall be effective as of                , Eastern Time, on                , 2021.

[Signature Page Follows]

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IN WITNESS WHEREOF, these Amended and Restated Articles of Incorporation have been executed by a duly authorized officer of this Corporation on this    day of    , 2021.

By:

Name: Paresh Patel

Its: Chief Executive Officer

EX-3.2

Exhibit 3.2

BYLAWS

OF

TYPTAP INSURANCE GROUP, INC.

(a Florida corporation)

Effective     2021

ARTICLE 1

OFFICES

TypTap Insurance Group, Inc. (the “Corporation”) may have such principal and other business offices, either within or without the State of Florida, as the Board of Directors may designate or as the business of the Corporation may require from time to time.

ARTICLE 2

SHAREHOLDERS

Section 2.1 Annual Meeting. The annual meeting of the shareholders shall be held at such time and on such date as may be fixed by or under the authority of the Board of Directors. In fixing a meeting date for any annual meeting of shareholders, the Board of Directors may consider such factors as it deems relevant within the good faith exercise of its business judgment. At each annual meeting of shareholders, the shareholders shall elect directors and transact only such other business that is properly brought before the meeting in accordance with Section 2.14 of these Bylaws. If the election of directors shall not be held on the date fixed as herein provided for any annual meeting of shareholders, or any adjournment thereof, the Board of Directors shall cause the election to be held at a special meeting of shareholders as soon thereafter as is practicable.

Section 2.2 Special Meetings. Special meetings of the shareholders may be called only by the Chairman of the Board, the Chief Executive Officer, the President (in the absence of the Chief Executive Officer) or a majority of the Board of Directors, and shall be called by the Corporation in the event that the holders of not less than ten percent (10%) of all of the votes entitled to be cast on any issue proposed to be considered at the proposed special meeting sign, date, and deliver to the Secretary one or more written demands for the meeting describing one or more purposes for which it is to be held. The Corporation shall give notice of such a special meeting within sixty (60) days after the date that the demands are delivered to the Corporation.

Section 2.3 Place of Meeting. The Board of Directors may designate any place, either within or without the State of Florida, as the place of meeting for any annual meeting of shareholders or for any special meeting of shareholders. The Board of Directors, in its sole discretion, may determine that the annual meeting of shareholders or a special meeting of shareholders shall not be held at any place, but shall instead be held solely by means of remote communication as provided under Sections 607.0701, 607.0702 and 607.0709 of the Florida Business Corporation Act, as it may be amended from time to time, or any successor legislation thereto (the “Act”). If no designation is made, the place of meeting shall be the Corporation’s principal office.

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Section 2.4 Notice of Meeting.

(a) Content and Delivery.

(i) Notice of the place, if any, date, time, and means of remote communication, if any, of each annual and special meeting of shareholders shall be given by the Corporation not less than ten (10) nor more than sixty (60) days before the date of the meeting. Notices of special meetings shall also specify the purpose or purposes for which the meeting has been called. Unless otherwise required by the Act or the Corporation’s Articles of Incorporation:

(A) Notice of a shareholders’ meeting need be given only to shareholders entitled to vote at the meeting; and

(B) Notices of annual meetings need not specify the purpose or purposes for which the meeting has been called.

(ii) Notices to shareholders must be in writing and may be communicated in person, by electronic means (in a manner authorized by the shareholder), or by mail or other method of delivery, in each case, by or at the direction of the Board of Directors, the Chairman of the Board, the Chief Executive Officer, the President, the Secretary, or the officer or persons calling the meeting. If mailed, the notice shall be effective when deposited in the United States mail addressed to the shareholder at the shareholder’s address as it appears in the Corporation’s shareholder records, with postage thereon prepaid.

(b) Notice of Adjourned Meetings. If an annual or special meeting of shareholders is adjourned to a different date, time or place, or to add or modify the terms of participation by remote communication, the Corporation shall not be required to give notice of the new date, time, place or terms of participation by remote communications if the new date, time, place or terms of participation by remote communications is announced at the meeting before adjournment; provided, however, that if a new record date for an adjourned meeting is or must be fixed, the Corporation shall give notice of the adjourned meeting to persons who are shareholders as of the new record date who are entitled to notice of the meeting.

(c) No Notice Under Certain Circumstances. Notwithstanding the other provisions of this Section 2.4, no notice of a meeting of shareholders need be given to a shareholder if: (i) an annual report and proxy statement for two consecutive annual meetings of shareholders, or (ii) all, and at least two, checks in payment of dividends or interest on securities during a twelve-month period have been sent by first-class, United States mail, addressed to the shareholder at his or her address as it appears on the share transfer books of the Corporation, and returned undeliverable. The obligation of the Corporation to give notice of a shareholders’ meeting to any such shareholder shall be reinstated once the Corporation has received a new address for such shareholder for entry on its share transfer books.

Section 2.5 Waiver of Notice.

(a) Written Waiver. A shareholder may waive any notice required by the Act or these Bylaws before or after the date and time stated for the meeting in the notice. The waiver shall be in writing and signed by the shareholder entitled to the notice, and be delivered to the Corporation for inclusion in the minutes or filing with the corporate records. Neither the business to be transacted at nor the purpose of any regular or special meeting of shareholders need be specified in any written waiver of notice.

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(b) Waiver by Attendance. A shareholder’s attendance at a meeting, whether physical or remote, in person or by proxy, waives objection to all of the following: (i) lack of notice or defective notice of the meeting, unless the shareholder at the beginning of the meeting objects to holding the meeting or transacting business at the meeting; and (ii) consideration of a particular matter at the meeting that is not within the purpose or purposes described in the meeting notice, unless the shareholder objects to considering the matter when it is presented.

Section 2.6 Fixing of Record Date.

(a) General. The Board of Directors may fix in advance a date as the record date for the purpose of determining shareholders entitled to notice of a shareholders’ meeting, entitled to vote, or take any other action. In no event may a record date fixed by the Board of Directors be (i) a date preceding the date upon which the resolution fixing the record date is adopted or (ii) a date more than seventy (70) days before the date of meeting or action requiring a determination of shareholders.

(b) Special Meeting. The record date for determining shareholders entitled to demand a special meeting shall be the close of business on the date the first shareholder delivers his or her demand to the Corporation.

(c) Absence of Board Determination for Shareholders’ Meeting. If the Board of Directors does not determine the record date for determining shareholders entitled to notice of and to vote at an annual or special meeting of shareholders, such record date shall be the close of business on the day before the first notice with respect thereto is delivered to shareholders.

(d) Adjourned Meeting. A record date for determining shareholders entitled to notice of or to vote at a shareholders’ meeting is effective for any adjournment of the meeting unless the Board of Directors fixes a new record date, which it must do if the meeting is adjourned to a date more than 120 days after the date fixed for the original meeting.

Section 2.7 Shareholders’ List for Meetings.

(a) Preparation and Availability. After a record date for a meeting of shareholders has been fixed, the Corporation shall prepare an alphabetical list of the names of all of the shareholders entitled to notice of the meeting (and, if the Board of Directors fixes a different record date to determine the shareholders entitled to vote at the meeting, an alphabetical list of the names of all shareholders entitled to vote at the meeting). The list shall be arranged by class or series of shares, if any, and show the address of and number of shares held by each shareholder. Such list shall be available for inspection by any shareholder for a period of ten days prior to the meeting or such shorter time as exists between the record date and the meeting date, and continuing through the meeting, at the Corporation’s principal office, at a place identified in the meeting notice in the city where the meeting will be held, or at the office of the Corporation’s transfer agent or registrar, if any. A shareholder or his or her agent or attorney may, on written demand, inspect the list, subject to the requirements of the Act, during regular business hours and at his or her expense, during the period that it is available for inspection pursuant to this Section 2.7. The Corporation shall make the shareholders’ list available at the meeting and any shareholder or his or her agent or attorney may inspect the list at any time during the meeting or any adjournment thereof.

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(b) Prima Facie Evidence. The shareholders’ list is prima facie evidence of the identity of shareholders entitled to examine the shareholders’ list or to vote at a meeting of shareholders.

(c) Failure to Comply. If the requirements of this Section 2.7 have not been substantially complied with, or if the Corporation refuses to allow a shareholder or his or her agent or attorney to inspect the shareholders’ list before or at the meeting, on the demand of any shareholder, in person or by proxy, who failed to get such access, the meeting shall be adjourned until such requirements are complied with.

(d) Validity of Action Not Affected. Refusal or failure to prepare or make available the shareholders’ list shall not affect the validity of any action taken at a meeting of shareholders.

Section 2.8 Conduct of Meetings by Remote Communication. The Board of Directors may adopt guidelines and procedures for shareholders and proxy holders not physically present at an annual or special meeting of shareholders to participate in the meeting, be deemed present in person, vote, communicate and read or hear the proceedings of the meeting substantially concurrently with such proceedings, all by means of remote communication. The Board of Directors may adopt procedures and guidelines for the conduct of an annual or special meeting solely by means of remote communication rather than holding the meeting at a designated place.

Section 2.9 Quorum.

(a) What Constitutes a Quorum. Shares entitled to vote as a separate voting group may take action on a matter at a meeting only if a quorum of those shares exists with respect to that matter. If the Corporation has only one class of stock outstanding, such class shall constitute a separate voting group for purposes of this Section 2.9. Except as otherwise provided in the Act, a majority of the votes entitled to be cast on the matter shall constitute a quorum of the voting group for action on that matter. After a quorum has been established at a shareholders’ meeting, the subsequent withdrawal of shareholders, so as to reduce the number of shares entitled to vote at the meeting below the number required for a quorum, shall not affect the validity of any action taken at the meeting or any adjournment thereof.

(b) Presence of Shares. Once a share is represented for any purpose at a meeting, other than for the purpose of objecting to holding the meeting or transacting business at the meeting, it is considered present for purposes of determining whether a quorum exists for the remainder of the meeting and for any adjournment of that meeting unless a new record date is or must be set for the adjourned meeting.

(c) Adjournment in Absence of Quorum. Where a quorum is not present, the holders of a majority of the shares represented and who would be entitled to vote at the meeting if a quorum were present may adjourn such meeting from time to time.

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Section 2.10 Voting Entitlement of Shares.

(a) Unless the Corporation’s Articles of Incorporation or the Act provide otherwise, each outstanding share, regardless of class, is entitled to one vote on each matter submitted to a vote at a meeting of shareholders. Only shares are entitled to vote.

(b) The shares of the Corporation are not entitled to vote if they are owned, directly or indirectly, by a second corporation, domestic or foreign, and the first corporation owns, directly or indirectly, a majority of shares entitled to vote for directors of the second corporation.

(c) This Section 2.10 does not limit the power of the Corporation to vote any shares, including its own shares, held by it in a fiduciary capacity.

(d) Redeemable shares are not entitled to vote on any matter, and shall not be deemed to be outstanding, after notice of redemption is mailed to the holders thereof and a sum sufficient to redeem such shares has been deposited with a bank, trust company, or other financial institution upon an irrevocable obligation to pay the holders the redemption price upon surrender of the shares.

(e) Shares standing in the name of another corporation, domestic or foreign, may be voted by such officer, agent, or proxy as the bylaws of the corporate shareholder may prescribe or, in the absence of any applicable provision, by such person as the Board of Directors of the corporate shareholder may designate. In the absence of any such designation or in case of conflicting designation by the corporate shareholder, the chairman of the board, the president, any vice president, the secretary, and the treasurer of the corporate shareholder, in that order, shall be presumed to be fully authorized to vote such shares.

(f) Shares held by an administrator, executor, guardian, personal representative, or conservator may be voted by him or her, either in person or by proxy, without a transfer of such shares into his or her name. Shares standing in the name of a trustee may be voted by him or her, either in person or by proxy, but no trustee shall be entitled to vote shares held by him or her without a transfer of such shares into his name or the name of his or her nominee.

(g) Shares held by or under the control of a receiver, a trustee in bankruptcy proceedings, or an assignee for the benefit of creditors may be voted by him or her without the transfer thereof into his or her name.

(h) If a share or shares stand of record in the names of two or more persons, whether fiduciaries, members of a partnership, joint tenants, tenants in common, tenants by the entirety, or otherwise, or if two or more persons have the same fiduciary relationship respecting the same shares, unless the Secretary of the Corporation is given notice to the contrary and is furnished with a copy of the instrument or order appointing them or creating the relationship wherein it is so provided, then acts with respect to voting have the following effect:

(i) If only one votes, in person or in proxy, his or her act binds all;

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(ii) If more than one vote, in person or by proxy, the act of the majority so voting binds all;

(iii) If more than one vote, in person or by proxy, but the vote is evenly split on any particular matter, each faction is entitled to vote the share or shares in question proportionally;

(iv) If the instrument or order so filed shows that any such tenancy is held in unequal interest, a majority or a vote evenly split for purposes of this subsection shall be a majority or a vote evenly split in interest;

(v) The principles of this subsection shall apply, insofar as possible, to execution of proxies, waivers, consents, or objections and for the purpose of ascertaining the presence of a quorum;

(vi) Subject to Section 2.10(i), nothing herein contained shall prevent trustees or other fiduciaries holding shares registered in the name of a nominee from causing such shares to be voted by such nominee as the trustee or other fiduciary may direct. Such nominee may vote shares as directed by a trustee or their fiduciary without the necessity of transferring the shares to the name of the trustee or other fiduciary.

(i) The Corporation may establish a procedure by which the beneficial owner of shares that are registered in the name of a nominee is recognized by the Corporation as the shareholder. The extent of this recognition may be determined in the procedure. The procedure may set forth (a) the types of nominees to which it applies; (b) the rights or privileges that the Corporation recognizes in a beneficial owner; (c) the manner in which the procedure is selected by the nominee; (d) the information that must be provided when the procedure is selected; (e) the period for which selection of the procedure is effective; and (f) other aspects of the rights and duties created.

Section 2.11 Vote Required.

(a) Matters Other Than Election of Directors. If a quorum exists, except in the case of the election of directors, action on a matter shall be approved if the votes cast favoring the action exceed the votes cast opposing the action, unless the Act or the Corporation’s Articles of Incorporation require a greater number of affirmative votes.

(b) Election of Directors.

(i) Each shareholder who is entitled to vote at an election of directors has the right to vote the number of shares owned by him or her for as many persons as there are directors to be elected. Shareholders do not have a right to cumulate their votes for directors.

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(ii) Unless otherwise provided in the Corporation’s Articles of Incorporation, each director to be elected shall be elected by a plurality of the votes cast by the shares entitled to vote in the election of directors at an annual meeting or special meeting of shareholders at which a quorum is present.

Section 2.12 Conduct of Meeting. The Chairman of the Board, and in his or her absence, the Vice Chairman (if any), and in his or her absence, the Chief Executive Officer, and in his or her absence, the President, and in his or her absence, a Vice President, and in his or her absence, any person chosen by the shareholders present shall call a shareholders’ meeting to order and shall act as presiding officer of the meeting, and the Secretary of the Corporation shall act as secretary of all meetings of the shareholders, but, in the absence of the Secretary, the presiding officer may appoint any other person to act as secretary of the meeting. The presiding officer of the meeting shall have broad discretion in determining the order of business at a shareholders’ meeting. The presiding officer’s authority to conduct the meeting shall include, but in no way be limited to, recognizing shareholders entitled to speak, calling for the necessary reports, stating questions and putting them to a vote, calling for nominations, and announcing the results of voting. The presiding officer also shall take such actions as are necessary and appropriate to preserve order at the meeting. The rules of parliamentary procedure need not be observed in the conduct of shareholders’ meetings; however, meetings shall be conducted in accordance with accepted usage and common practice with fair treatment to all who are entitled to take part.

Section 2.13 Proxies.

(a) Appointment. At all meetings of shareholders, a shareholder or attorney- in-fact for a shareholder may vote the shareholder’s shares in person or by proxy. If an appointment form expressly provides, any proxy holder may appoint, in writing, a substitute to act in his or her place. A shareholder or attorney-in-fact for a shareholder may appoint a proxy to vote or otherwise act for the shareholder by signing an appointment form or by electronic transmission. As provided by Section 607.0722 of the Act, any type of electronic transmission appearing to have been, or containing or accompanied by such information or obtained under such procedures to reasonably ensure that the electronic transmission was, transmitted or authorized by such person is a sufficient appointment, subject to the verification requested by the Corporation under Section 2.15 of these Bylaws and Section 607.0724 of the Act. The appointment may be signed by any reasonable means, including, but not limited to, facsimile or electronic signature. Any copy, facsimile transmission or other reliable reproduction of the writing or electronic transmission of the appointment may be substituted or used in lieu of the original writing or electronic transmission for any purpose for which the original writing or electronic transmission could be used if the copy, facsimile transmission or other reproduction is a complete reproduction of the entire original writing or electronic transmission.

(b) When Effective. An appointment of a proxy is effective when received by the Secretary or other officer or agent of the Corporation authorized to tabulate votes. An appointment is valid for up to eleven (11) months unless a longer or shorter period is expressly provided in the appointment form. An appointment of a proxy is revocable by the shareholder unless the appointment form conspicuously states that it is irrevocable and the appointment is coupled with an interest.

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Section 2.14 Advance Notice of Shareholder Nominations and Proposals.

(a) Annual Meetings. At a meeting of the shareholders, only such nominations of persons for the election of directors and such other business shall be conducted as shall have been properly brought before the meeting. To be properly brought before an annual meeting, nominations or such other business must be:

(i) specified in the notice of meeting (or any supplement thereto) given by or at the direction of the Board of Directors;

(ii) otherwise properly brought before the meeting by or at the direction of the Board of Directors; or

(iii) otherwise properly brought before an annual meeting by a shareholder who is a shareholder of record of the Corporation at the time such notice of meeting is delivered, who is entitled to vote at the meeting, and who complies with the procedures set forth in this Section 2.14.

In addition, any proposal of business (other than the nomination of persons for election to the Board of Directors) must be a proper matter for shareholder action.

For business (including, but not limited to, director nominations) to be properly brought before an annual meeting by a shareholder pursuant to Section 2.14(a)(iii), the shareholder or shareholders of record intending to propose the business (the “Proposing Shareholder”) must have given timely notice thereof pursuant to this Section 2.14(a), in writing to the Secretary of the Corporation even if such matter is already the subject of any notice to the shareholders or Public Disclosure from the Board of Directors. To be timely, a Proposing Shareholder’s notice for an annual meeting must be delivered to or mailed and received at the Corporation’s principal office on or before December 31 of the year immediately preceding the annual meeting; provided, however, that in the event that the date of the annual meeting is on or after May 1 in any year, notice by the shareholder to be timely must be so received not later than the close of business on the day which is determined by adding to December 31 of the year immediately preceding such annual meeting the number of days starting with May 1 and ending on the date of the annual meeting in such year. In no event shall the Public Disclosure of an adjournment or postponement of an annual meeting commence a new notice time period (or extend any notice time period). For the purposes of this Section 2.14, “Public Disclosure” shall mean a disclosure made in a press release reported by the Dow Jones News Services, The Associated Press, or a comparable national news service or in a document filed by the Corporation with the Securities and Exchange Commission pursuant to Sections 13, 14, or 15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).

(b) Shareholder Nominations. For the nomination of any person or persons for election to the Board of Directors pursuant to Section 2.14(a)(iii) or Section 2.14(d), a Proposing Shareholder’s notice to the Secretary shall set forth or include:

(i) the name, age, business address, and residence address of each nominee proposed in such notice;

(ii) the principal occupation or employment of each such nominee;

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(iii) the class and number of shares of capital stock of the Corporation which are owned of record and beneficially by each such nominee (if any);

(iv) such other information concerning each such nominee as would be required to be disclosed in a proxy statement soliciting proxies for the election of such nominee as a director in an election contest (even if an election contest is not involved) or that is otherwise required to be disclosed, under Section 14(a) of the Exchange Act;

(v) a written questionnaire with respect to the background and qualification of such proposed nominee (which questionnaire shall be provided by the Secretary upon written request) and a written statement and agreement executed by each such nominee acknowledging that such person:

(A) consents to being named in the Corporation’s proxy statement as a nominee and to serving as a director if elected; and

(B) makes the following representations: (1) that the director nominee has read and agrees to adhere to the Corporation’s corporate governance guidelines, code of conduct and ethics, and any other of the Corporation’s policies or guidelines applicable to directors, including with regard to securities trading; (2) that the director nominee is not and will not become a party to any agreement, arrangement or understanding with, and has not given any commitment or assurance to, any person or entity as to how such person, if elected as a director of the Corporation, will act or vote on any issue or question (a “Voting Commitment”) that has not been disclosed to the Corporation or any Voting Commitment that could limit or interfere with such person’s ability to comply, if elected as a director of the Corporation, with such person’s fiduciary duties under applicable law; and (3) that the director nominee is not and will not become a party to any agreement, arrangement or understanding with any person or entity other than the Corporation with respect to any direct or indirect compensation, reimbursement, or indemnification that has not been disclosed to the Corporation in connection with such person’s nomination for director or service as a director; and

(vi) as to the Proposing Shareholder:

(A) the name and address of the Proposing Shareholder as they appear on the Corporation’s books and of the beneficial owner, if any, on whose behalf the nomination is being made;

(B) the class and number of shares of the Corporation which are owned by the Proposing Shareholder (beneficially and of record) and owned by the beneficial owner, if any, on whose behalf the nomination is being made, as of the date of the Proposing Shareholder’s notice, and a representation that the Proposing Shareholder will notify the Corporation in writing of the class and number of such shares owned of record and beneficially as of the record date for the meeting within five business days after the record date for such meeting;

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(C) a description of any agreement, arrangement or understanding with respect to such nomination between or among the Proposing Shareholder or the beneficial owner, if any, on whose behalf the nomination is being made and any of their affiliates or associates, and any others (including their names) acting in concert with any of the foregoing, and a representation that the Proposing Shareholder will notify the Corporation in writing of any such agreement, arrangement, or understanding in effect as of the record date for the meeting within five business days after the record date for such meeting;

(D) a description of any agreement, arrangement or understanding (including any derivative or short positions, profit interests, options, hedging transactions, and borrowed or loaned shares) that has been entered into as of the date of the Proposing Shareholder’s notice by, or on behalf of, the Proposing Shareholder or the beneficial owner, if any, on whose behalf the nomination is being made and any of their affiliates or associates, the effect or intent of which is to mitigate loss to, manage risk or benefit of share price changes for, or increase or decrease the voting power of such person or any of their affiliates or associates with respect to shares of stock of the Corporation, and a representation that the Proposing Shareholder will notify the Corporation in writing of any such agreement, arrangement, or understanding in effect as of the record date for the meeting within five business days after the record date for such meeting;

(E) a representation that the Proposing Shareholder is a holder of record of shares of the Corporation entitled to vote at the meeting and intends to appear in person or by proxy at the meeting to nominate the person or persons specified in the notice; and

(F) a representation whether the Proposing Shareholder intends to deliver a proxy statement and/or form of proxy to holders of at least the percentage of the Corporation’s outstanding capital stock required to approve the nomination and/or otherwise to solicit proxies from shareholders in support of the nomination.

The Corporation may require any proposed nominee to furnish such other information as it may reasonably require to determine the eligibility of such proposed nominee to serve as an independent director of the Corporation or that could be material to a reasonable shareholder’s understanding of the independence, or lack thereof, of such nominee.

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(c) Other Shareholder Proposals. For all business other than director nominations, a Proposing Shareholder’s notice to the Secretary shall set forth as to each matter the Proposing Shareholder proposes to bring before the annual meeting:

(i) a brief description of the business desired to be brought before the annual meeting;

(ii) the reasons for conducting such business at the annual meeting;

(iii) the text of any proposal or business (including the text of any resolutions proposed for consideration and in the event that such business includes a proposal to amend these Bylaws, the language of the proposed amendment);

(iv) any substantial interest (within the meaning of Item 5 of Schedule 14A under the Exchange Act) in such business of such shareholder and the beneficial owner (within the meaning of Section 13(d) of the Exchange Act), if any, on whose behalf the business is being proposed;

(v) any other information relating to such shareholder and beneficial owner, if any, on whose behalf the proposal is being made, required to be disclosed in a proxy statement or other filings required to be made in connection with solicitations of proxies for the proposal and pursuant to and in accordance with Section 14(a) of the Exchange Act and the rules and regulations promulgated thereunder;

(vi) a description of all agreements, arrangements or understandings between or among such shareholder, the beneficial owner, if any, on whose behalf the proposal is being made, any of their affiliates or associates, and any other person or persons (including their names) in connection with the proposal of such business and any material interest of such shareholder, beneficial owner, or any of their affiliates or associates, in such business, including any anticipated benefit therefrom to such shareholder, beneficial owner, or their affiliates or associates; and

(vii) the information required by Section 2.14(b)(vi) above.

(d) Special Meetings of Shareholders. Only such business shall be conducted at a special meeting of shareholders as shall have been brought before the meeting pursuant to the Corporation’s notice of meeting. Nominations of persons for election to the Board of Directors may be made at a special meeting of shareholders called by the Board of Directors at which directors are to be elected pursuant to the Corporation’s notice of meeting:

(i) by or at the direction of the Board of Directors; or

(ii) provided that the Board of Directors has determined that directors shall be elected at such meeting, by any shareholder of the Corporation who is a shareholder of record at the time the notice provided for in this Section 2.14(d) is delivered to the Secretary of the Corporation, who is entitled to vote at the meeting, and upon such election and who complies with the notice procedures set forth in this Section 2.14.

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In the event the Corporation calls a special meeting of shareholders for the purpose of electing one or more directors to the Board of Directors, any such shareholder entitled to vote in such election of directors may nominate a person or persons (as the case may be) for election to such position(s) as specified in the Corporation’s notice of meeting, if such shareholder delivers a shareholder’s notice that complies with the requirements of Section 2.14(b) to the Secretary at the Corporation’s principal office not earlier than the close of business on the 120th day prior to such special meeting and not later than the close of business on the later of: (x) the 90th day prior to such special meeting; or (y) the tenth (10^th) day following the date of the first Public Disclosure of the date of the special meeting and of the nominees proposed by the Board of Directors to be elected at such meeting. In no event shall the Public Disclosure of an adjournment or postponement of a special meeting commence a new time period (or extend any notice time period).

(e) Effect of Noncompliance. Only such persons who are nominated in accordance with the procedures set forth in this Section 2.14 shall be eligible to be elected at any meeting of shareholders of the Corporation to serve as directors, and only such other business shall be conducted at a meeting as shall be brought before the meeting in accordance with the procedures set forth in this Section 2.14. If any proposed nomination or other business was not made or proposed in compliance with this Section 2.14, then, except as otherwise required by law, the chair of the meeting shall have the power and duty to declare that such nomination shall be disregarded or that such proposed other business shall not be transacted. Notwithstanding anything in these Bylaws to the contrary, unless otherwise required by law, if a Proposing Shareholder intending to propose business or make nominations at an annual meeting or propose a nomination at a special meeting pursuant to this Section 2.14 does not provide the information required under this Section 2.14 to the Corporation, including the updated information required by Section 2.14(b)(vi)(B), Section 2.14(b)(vi)(C) and Section 2.14(b)(vi)(D) within five (5) business days after the record date for such meeting or the Proposing Shareholder (or a qualified representative of the Proposing Shareholder) does not appear at the meeting to present the proposed business or nominations, such business or nominations shall not be considered, notwithstanding that proxies in respect of such business or nominations may have been received by the Corporation.

(f) Rule 14a-8. This Section 2.14 shall not apply to a proposal proposed to be made by a shareholder if the shareholder has notified the Corporation of the shareholder’s intention to present the proposal at an annual or special meeting only pursuant to and in compliance with Rule 14a-8 under the Exchange Act and such proposal has been included in a proxy statement that has been prepared by the Corporation to solicit proxies for such meeting.

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Section 2.15 Acceptance of Instruments Showing Shareholder Action. If the name signed on a vote, consent, waiver, or proxy appointment corresponds to the name of a shareholder, the Corporation, if acting in good faith, may accept the vote, consent, waiver, or proxy appointment and give it effect as the act of a shareholder. If the name signed on a vote, consent, waiver, or proxy appointment does not correspond to the name of a shareholder, the Corporation, if acting in good faith, may accept the vote, consent, waiver, or proxy appointment and give it effect as the act of the shareholder if any of the following apply:

(a) The shareholder is an entity and the name signed purports to be that of an officer or agent of the entity;

(b) The name signed purports to be that of an administrator, executor, guardian, personal representative, or conservator representing the shareholder and, if the Corporation requests, evidence of fiduciary status acceptable to the Corporation is presented with respect to the vote, consent, waiver, or proxy appointment;

(c) The name signed purports to be that of a receiver or trustee in bankruptcy, or assignee for the benefit of creditors of the shareholder and, if the Corporation requests, evidence of this status acceptable to the Corporation is presented with respect to the vote, consent, waiver, or proxy appointment;

(d) The name signed purports to be that of a pledgee, beneficial owner, or attorney-in-fact of the shareholder and, if the Corporation requests, evidence acceptable to the Corporation of the signatory’s authority to sign for the shareholder is presented with respect to the vote, consent, waiver, or proxy appointment; or

(e) Two or more persons are the shareholder as co-tenants or fiduciaries and the name signed purports to be the name of at least one of the co-owners and the person signing appears to be acting on behalf of all co-owners.

The Corporation may reject a vote, consent, waiver, or proxy appointment if the Secretary or other officer or agent of the Corporation who is authorized to tabulate votes, acting in good faith, has reasonable basis for doubt about the validity of the signature on it or about the signatory’s authority to sign for the shareholder.

ARTICLE 3

BOARD OF DIRECTORS

Section 3.1 General Powers, Number and Qualifications. All corporate powers shall be exercised by or under the authority of, and the business and affairs of the Corporation managed under the direction of, the Board of Directors. The Board of Directors shall consist of not less than three (3) directors. Subject to the foregoing, the exact number of directors shall be established from time to time by resolution of the Board of Directors. If the terms of the directors are staggered or classified under Section 3.5 of these Bylaws, any increase or decrease in the number of directors shall be allocated proportionately among the classes. Any decrease in the number of directors shall not prematurely shorten the term of any incumbent director. Directors must be natural persons who are eighteen (18) years of age or older, but need not be residents of the State of Florida or shareholders of the Corporation.

Section 3.2 Term of Office. The term of each director shall expire at the next annual meeting of shareholders following his or her election or until his or her successor is elected and qualifies, unless their terms are staggered or classified under Section 3.5.

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Section 3.3 Removal. A director may be removed from office only as provided in the Corporation’s Articles of Incorporation at a meeting called for that purpose.

Section 3.4 Resignation. A director may resign at any time by delivering written notice to the Board of Directors or its Chairman or Vice Chairman (if any), or to the Corporation. A director’s resignation is effective when the notice is delivered unless the notice specifies a later effective date.

Section 3.5 Staggered Terms for Directors/Classification of the Board of Directors. The Board of Directors may, by the Corporation’s Articles of Incorporation, or by amendment to these Bylaws adopted by a vote of the shareholders, be divided into one, two or three classes with the number of directors in each class being as nearly equal as possible; the term of office of those of the first class to expire at the annual meeting next ensuing; of the second class one year thereafter; at the third class two years thereafter; and at each annual election held after such classification and election, directors shall be chosen for a full term, as the case may be, to succeed those whose terms expire. If the directors have staggered terms, then any increase or decrease in the number of directors shall be so apportioned among the classes as to make all classes as nearly equal in number as possible.

Section 3.6 Vacancies. Any vacancy occurring on the Board of Directors shall be filled as provided in the Corporation’s Articles of Incorporation.

Section 3.7 Compensation. The Board of Directors, irrespective of any personal interest of any of its members, may establish reasonable compensation of all directors for services to the Corporation as directors or may delegate such authority to an appropriate committee. The Board of Directors also shall have authority to provide for or delegate authority to an appropriate committee to provide for reasonable pensions, disability or death benefits, and other benefits or payments, to directors, officers and employees and to their families, dependents, estates or beneficiaries on account of prior services rendered to the Corporation by such directors, officers and employees.

Section 3.8 Chairman of the Board and Vice Chairman. The Board of Directors may elect a director as the Chairman of the Board and, if it has done so, the Board of Directors may also elect another director as the Vice Chairman. The Chairman of the Board shall, when present, preside at all meetings of the shareholders and of the Board of Directors, may call meetings of the shareholders and the Board of Directors, shall advise and counsel with the management of the Corporation, and shall perform such other duties as set forth in these Bylaws and as determined by the Board of Directors. In the absence of the Chairman of the Board, the Vice Chairman shall, when present, preside at all meetings of the shareholders and of the Board of Directors. Except as provided in this Section 3.8, neither the Chairman of the Board nor the Vice Chairman shall be an officer or an employee of the Corporation by virtue of his or her election and service as Chairman of the Board or Vice Chairman; provided, however, the Chairman or Vice Chairman may be an officer of the Corporation. The Chairman may use the title Chairman or Chairman of the Board interchangeably.

Section 3.9 Regular Meetings. The Board of Directors may provide the date, time and place, either within or without the State of Florida, for the holding of regular meetings of the Board of Directors without notice. Such meetings may also be remotely held as provided by Section 3.14(d).

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Section 3.10 Special Meetings. Special meetings of the Board of Directors may be called by or at the request of the Chairman of the Board, the Vice Chairman (if any), the Chief Executive Officer, the President or any two (2) directors. The person or persons calling the meeting may fix any place, either within or without the State of Florida, as the place for holding any special meeting of the Board of Directors, and if no other place is fixed, the place of the meeting shall be the the Corporation’s principal office. Such meetings may also be remotely held as provided by Section 3.14(d).

Section 3.11 Notice. Special meetings of the Board of Directors must be preceded by at least two days’ notice of the date, time, and place of the meeting. The notice need not describe the purpose of the special meeting. The Corporation may give notice of a regular or special meeting of the Board of Directors by electronic means to each director who consents to such electronic means of notice in the manner authorized by that director.

Section 3.12 Waiver of Notice. Notice of a meeting of the Board of Directors need not be given to any director who signs a waiver of notice either before or after the meeting. Attendance of a director at a meeting shall constitute a waiver of notice of such meeting and waiver of any and all objections to the place of the meeting, the time of the meeting, or the manner in which it has been called or convened, except when a director states, at the beginning of the meeting or promptly upon arrival at the meeting, any objection to the transaction of business because the meeting is not lawfully called or convened.

Section 3.13 Quorum and Voting. A majority of the total number of directors shall constitute a quorum for the transaction of business at any meeting of the Board of Directors. If a quorum is present when a vote is taken, the affirmative vote of a majority of directors present is the act of the Board of Directors. A director who is present at a meeting of the Board of Directors or a committee of the Board of Directors when corporate action is taken is deemed to have assented to the action taken unless: (a) he or she objects at the beginning of the meeting (or promptly upon his or her arrival) to holding it or transacting specified business at the meeting; or (b) he or she votes against or abstains from the action taken.

Section 3.14 Conduct of Meetings.

(a) Presiding Officer. The Chairman of the Board, and in his or her absence, the Vice Chairman (if any), and in his or her absence, the Chief Executive Officer, and in his or her absence, the President, and in his or her absence, any director chosen by the directors present, shall call meetings of the Board of Directors to order and shall act as presiding officer of the meeting.

(b) Minutes. The Secretary of the Corporation shall act as secretary of all meetings of the Board of Directors but in the absence of the Secretary, the presiding officer may appoint any other person present to act as secretary of the meeting. Minutes of any regular or special meeting of the Board of Directors shall be prepared and distributed to each director.

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(c) Adjournments. A majority of the directors present, whether or not a quorum exists, may adjourn any meeting of the Board of Directors to another time and place. Notice of any such adjourned meeting shall be given to the directors who are not present at the time of the adjournment and, unless the time and place of the adjourned meeting are announced at the time of the adjournment, to the other directors.

(d) Participation by Conference Call or Similar Means. The Board of Directors may permit any or all directors to participate in a regular or a special meeting by, or conduct the meeting through the use of, any means of communication by which all directors participating may simultaneously hear each other during the meeting, including virtual meetings. A director participating in a meeting by this means is deemed to be present in person at the meeting.

Section 3.15 Committees. The Board of Directors, by resolution adopted by a majority of all of the directors then in office, may establish from among its members one or more committees (which may include, by way of example and not as a limitation, an executive committee, a compensation committee, an audit committee and a nominating and corporate governance committee) each of which, to the extent provided in such resolution and in any charter adopted by the Board of Directors for any committee, shall have and may exercise all the authority of the Board of Directors, except that no such committee shall have the authority to:

(a) approve, recommend to shareholders or propose to shareholders actions required by the Act to be approved by shareholders;

(b) fill vacancies on the Board of Directors or any committee thereof;

(c) adopt, amend, or repeal these Bylaws; or

(d) authorize or approve the reacquisition of shares unless pursuant to a general formula or method, or within limits, prescribed by the Board of Directors.

Each committee must have one or more members, who shall serve at the pleasure of the Board of Directors. The Board of Directors, by resolution adopted in accordance with this Section 3.15, may designate one or more directors as alternate members of any such committee, who may act in the place and stead of any absent member or members at any meeting of such committee. The Board of Directors may adopt a charter for any such committee specifying requirements with respect to committee chairs and membership, responsibilities of the committee, the conduct of meetings and business of the committee and such other matters as the Board may designate. In the absence of a committee charter or a provision of a committee charter governing such matters, the provisions of these Bylaws which govern meetings, notice and waiver of notice, and quorum and voting requirements of the Board of Directors apply to committees and their members as well.

Section 3.16 Action Without Meeting. Any action required or permitted by the Act to be taken at a meeting of the Board of Directors or a committee thereof may be taken without a meeting if the action is taken by all members of the Board or of the committee. The action shall be evidenced by one or more written consents describing the action taken, signed by each director or committee member and retained by the Corporation. Such action shall be effective when the last director or committee member signs the consent, unless the consent specifies a different effective date. A consent signed under this Section 3.16 has the effect of a vote at a meeting and may be described as such in any document.

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ARTICLE 4

OFFICERS

Section 4.1 Number. The principal officers of the Corporation shall be a Chief Executive Officer, a President, a Chief Financial Officer, the number of Vice Presidents as authorized from time to time by the Board of Directors and a Secretary, each of whom shall be elected by the Board of Directors. Such other officers and assistant officers as may be deemed necessary may be elected or appointed by the Board of Directors. The Board of Directors may also authorize any duly appointed officer to appoint one or more officers or assistant officers. Any two or more offices may be held by the same person.

Section 4.2 Election and Term of Office. The officers of the Corporation to be elected by the Board of Directors shall be elected annually by the Board of Directors at the first meeting of the Board of Directors held after each annual meeting of the shareholders. If the election of officers shall not be held at such meeting, such election shall be held as soon thereafter as is practicable. Each officer shall hold office until his or her successor shall have been duly elected or until his or her prior death, resignation, or removal.

Section 4.3 Removal. The Board of Directors may remove any officer and, unless restricted by the Board of Directors, an officer may remove any officer or assistant officer appointed by that officer, at any time, with or without cause and notwithstanding the contract rights, if any, of the officer removed. The appointment of an officer does not of itself create contract rights.

Section 4.4 Resignation. An officer may resign at any time by delivering notice to the Corporation. The resignation shall be effective when the notice is delivered, unless the notice specifies a later effective date and the Corporation accepts the later effective date. If a resignation is made effective at a later date and the Corporation accepts the future effective date, the pending vacancy may be filled before the effective date but the successor may not take office until the effective date.

Section 4.5 Vacancies. A vacancy in any principal office because of death, resignation, removal, disqualification, or otherwise, shall be filled as soon thereafter as practicable by the Board of Directors for the unexpired portion of the term.

Section 4.6 Chief Executive Officer. The Chief Executive Officer shall be the principal executive officer of the Corporation and, subject to the control of the Board of Directors, shall in general supervise and control all of the business and affairs of the Corporation. The Chief Executive Officer shall have authority, subject to such rules as may be prescribed by the Board of Directors, to appoint such agents and employees of the Corporation as he or she shall deem necessary, to prescribe their powers, duties and compensation, and to delegate authority to them. Such agents and employees shall hold office at the discretion of the Chief

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Executive Officer. He or she shall have authority to sign, execute and acknowledge, on behalf of the Corporation, all deeds, mortgages, bonds, stock certificates, contracts, leases, reports and all other documents or instruments necessary or proper to be executed in the course of the Corporation’s regular business, or which shall be authorized by resolution of the Board of Directors; and, except as otherwise provided by law or the Board of Directors, he or she may authorize the President or any Vice President or other officer or agent of the Corporation to sign, execute and acknowledge such documents or instruments in his or her place and stead. In general, he or she shall perform all duties incident to the office of Chief Executive Officer and such other duties as may be prescribed by the Board of Directors from time to time. In the absence or disability of the Chairman of the Board, or when that position is vacant, the Chief Executive Officer shall, when present, preside at all meetings of the shareholders and of the Board of Directors.

Section 4.7 President. The President shall be the Chief Executive Officer if that position is not filled by another individual and shall have the powers and perform the duties incident to that particular position. If the Chief Executive Officer position is filled by another individual, the President shall assist the Chief Executive Officer in exercising general supervision over the business and affairs of the Corporation, and shall perform such other duties and have such authority as from time to time may be delegated or assigned to him or her by the Chief Executive Officer or by the Board of Directors. The President shall have authority, subject to the authority of the Chief Executive Officer and to such rules as may be prescribed by the Board of Directors, to appoint such agents and employees of the Corporation as he or she shall deem necessary, to prescribe their powers, duties and compensation, and to delegate authority to them. Such agents and employees shall hold office at the discretion of the President. He or she shall have authority to sign, execute and acknowledge, on behalf of the Corporation, all deeds, mortgages, bonds, stock certificates, contracts, leases, reports and all other documents or instruments necessary or proper to be executed in the course of the Corporation’s regular business, or which shall be authorized by the Chief Executive Officer or by resolution of the Board of Directors; and, except as otherwise provided by law, the Chief Executive Officer or the Board of Directors, he or she may authorize any Vice President or other officer or agent of the Corporation to sign, execute and acknowledge such documents or instruments in his or her place and stead.

Section 4.8 Chief Financial Officer. The Chief Financial Officer shall responsible for the financial operations of the Corporation, including the maintenance of financial records, the preparation and reporting of financial results and related tax returns, the co-ordination of the reporting practices of the Corporation with outside auditors, the negotiation of credit arrangements with the Corporations’ lenders and investors and related budgeting, tax-planning and forecasting functions. Subject to the further direction from time to time from the Board of Directors, the Chief Executive Officer or the President, the Chief Financial Officer shall have the authority to execute documentation on behalf of the Corporation and shall have such other powers and perform such other duties incident to the position as well as such other duties as may be delegated or assigned by the Chief Executive Officer, the President or the Board of Directors.

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Section 4.9 Vice Presidents. In the absence or disability of the President, the Vice President (or in the event there be more than one Vice President, the Vice Presidents in the order and with the status designated by the Board of Directors, or in the absence of any designation, then in the order of their election) shall perform the duties of the President, and when so acting, shall have all the powers of and be subject to all the restrictions upon the President. Any Vice President may sign, with the Secretary or Assistant Secretary, certificates for shares of the Corporation; and shall perform such other duties and have such authority as from time to time may be delegated or assigned to him or her by the Chief Executive Officer, the President or the Board of Directors. The execution of any instrument of the Corporation by any Vice President shall be conclusive evidence, as to third parties, of his or her authority to act in the stead of the President. The Board of Directors may designate any Vice President as being senior in rank or degree of responsibility and may accord such a Vice President an appropriate title designating his or her senior rank, such as (in order of seniority) “Executive Vice President” or “Senior Vice President.” The Board of Directors may assign a certain Vice President responsibility for a designated group, division or function of the Corporation’s business and add an appropriate descriptive designation to his or her title.

Section 4.10 The Secretary. The Secretary shall: (a) keep minutes of the meetings of the shareholders and of the Board of Directors (and of committees thereof) in one or more books provided for that purpose (including records of actions taken by the shareholders or the Board of Directors (or committees thereof) without a meeting); (b) see that all notices are duly given in accordance with the provisions of these Bylaws or as required by the Act; (c) be custodian of the corporate records and of the seal of the Corporation (if any) and see that the seal of the Corporation (if any) is affixed to all documents the execution of which on behalf of the Corporation under its seal is duly authorized; (d) maintain or cause an authorized agent to maintain a record of the shareholders of the Corporation, in a form that permits preparation of a list of the names and addresses of all shareholders, by class or series of shares and showing the number and class or series of shares held by each shareholder; (e) sign with the Chief Executive Officer, the President or a Vice President, certificates for shares of the Corporation, the issuance of which shall have been authorized by resolution of the Board of Directors; (f) have general charge of the stock transfer books of the Corporation; and (g) in general perform all duties incident to the office of Secretary and have such other duties and exercise such authority as from time to time may be delegated or assigned by the Chief Executive Officer, the President or the Board of Directors.

Section 4.11 Assistant Secretaries. There shall be such number of Assistant Secretaries as the Board of Directors may from time to time authorize. The Assistant Secretaries may sign with the Chief Executive Officer, the President or a Vice President certificates for shares of the Corporation the issuance of which shall have been authorized by a resolution of the Board of Directors. The Assistant Secretaries, in general, shall perform such duties and have such authority as shall from time to time be delegated or assigned to them by the Secretary or by the Chief Executive Officer, the President or the Board of Directors.

Section 4.12 Other Assistants and Acting Officers. The Board of Directors shall have the power to appoint, or to authorize any duly appointed officer of the Corporation to appoint, any person to act as assistant to any officer, or as agent for the Corporation in his or her stead, or to perform the duties of such officer whenever for any reason it is impracticable for such officer to act personally, and such assistant or acting officer or other agent so appointed by the Board of Directors or an authorized officer shall have the power to perform all the duties of the office to which he or she is so appointed to be an assistant, or as to which he or she is so appointed to act, except as such power may be otherwise defined or restricted by the Board of Directors or the appointing officer.

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Section 4.13 Salaries. The salaries of the principal officers shall be fixed from time to time by the Board of Directors or by a duly authorized committee thereof, and no officer shall be prevented from receiving such salary by reason of the fact that he or she is also a director of the Corporation.

ARTICLE 5

CONTRACTS, CHECKS AND DEPOSITS

Section 5.1 Contracts. The Board of Directors may authorize any officer or officers, or any agent or agents to enter into any contract or execute or deliver any instrument in the name of and on behalf of the Corporation, and such authorization may be general or confined to specific instances. In the absence of other designation, all deeds, mortgages, and instruments of assignment or pledge made by the Corporation shall be executed in the name of the Corporation by the Chief Executive Officer, the President or a Vice President; the Secretary or an Assistant Secretary (if any), when necessary or required, shall attest and affix the corporate seal, if any, thereto; and when so executed no other party to such instrument or any third party shall be required to make any inquiry into the authority of the signing officer or officers.

Section 5.2 Checks, Drafts, etc. All checks, drafts or other orders for the payment of money, notes, or other evidences of indebtedness issued in the name of the Corporation, shall be signed by such officer or officers, agent or agents of the Corporation and in such manner as shall from time to time be determined by or under the authority of a resolution of the Board of Directors.

Section 5.3 Deposits. All funds of the Corporation not otherwise employed shall be deposited from time to time to the credit of the Corporation in such banks, trust companies, or other depositaries as may be selected by or under the authority of a resolution of the Board of Directors.

ARTICLE 6

SHARE CERTIFICATES; DIVIDENDS AND DISTRIBUTIONS

Section 6.1 Form and Content of Share Certificates.

(a) Shares may but need not be represented by certificates. Unless the Act or another Florida statute expressly provides otherwise, the rights and obligations of shareholders are identical whether or not their shares are represented by certificates.

(b) At a minimum, each share certificate must state on its face:

(i) The name of the issuing corporation and that the Corporation is organized under the laws of the State of Florida;

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(ii) The name of the person to whom issued; and

(iii) The number and class of shares and the designation of the series, if any, the certificate represents.

(c) If the shares being issued are of different classes of shares or different series within a class, the designations, relative rights, preferences, and limitations applicable to each class and the variations in rights, preferences, and limitations determined for each series (and the authority of the Board of Directors to determine variations for future series) must be summarized on the front or back of each certificate. Alternatively, each certificate may state conspicuously on its front or back that the Corporation will furnish the shareholder a full statement of this information on request and without charge.

(d) Each share certificate:

(i) Must be signed (either manually or in facsimile) by an officer or officers designated by the Board of Directors; and

(ii) May bear the corporate seal or its facsimile.

(e) If the person who signed (either manually or in facsimile) a share certificate no longer holds office when the certificate is issued, the certificate is nevertheless valid.

Section 6.2 Shares Without Certificates.

(a) The Board of Directors may authorize the issue of some or all of the shares of any or all of its classes or series without certificates. The authorization does not affect shares already represented by certificates until they are surrendered to the Corporation.

(b) Within a reasonable time after the issue or transfer of shares without certificates, the Corporation shall send the shareholder a written statement of the information required on certificates by the Act.

Section 6.3 Restriction on Transfer of Shares and Other Securities.

(a) The Corporation’s Articles of Incorporation, these Bylaws, an agreement among shareholders, or an agreement between shareholders and the Corporation may impose restrictions on the transfer or registration of transfer of shares of the Corporation. A restriction does not affect shares issued before the restriction was adopted unless the holders of such shares are parties to the restriction agreement or voted in favor of the restriction.

(b) A restriction on the transfer or registration of transfer of shares is valid and enforceable against the holder or a transferee of the holder if the restriction is authorized by this Section 6.3, and effected in compliance with the provisions of the Act, including having a proper purpose as referred to in the Act.

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Section 6.4 Distributions to Shareholders.

(a) The Board of Directors may authorize, and the Corporation may make, distributions to its shareholders subject to any limitations in the and the Act.

(b) If the Board of Directors does not fix the record date for determining shareholders entitled to a distribution (other than one involving a purchase, redemption, or other acquisition of the Corporation’s shares), it is the date the Board of Directors authorizes the distribution.

ARTICLE 7

SEAL

The Board of Directors may provide for a corporate seal for the Corporation.

ARTICLE 8

INDEMNIFICATION

Section 8.1 Indemnification. The Corporation shall, to the fullest extent permitted or required by the Act, including any amendments thereto (but in the case of any such amendment, only to the extent such amendment permits or requires the Corporation to provide broader indemnification rights than prior to such amendment), indemnify its Directors and Officers against any and all Liabilities, and advance any and all reasonable Expenses, incurred thereby in connection with any Proceeding to which any such Director or Officer is a Party or in which such Director or Officer is deposed or called to testify as a witness because he or she is or was a Director or Officer of the Corporation, whether or not such person continues to serve in such capacity at the time the obligation to indemnify against Liabilities or advance Expenses is incurred or paid. The rights to indemnification granted hereunder shall not be deemed exclusive of any other rights to indemnification against Liabilities or the advancement of Expenses which a Director or Officer may be entitled under any written agreement, Board of Director resolution, vote of shareholders, the Act or otherwise. The Corporation may, but shall not be required to, supplement the foregoing rights to indemnification against Liabilities and advancement of Expenses by the purchase of insurance on behalf of any one or more of its Directors or Officers whether or not the Corporation would be obligated to indemnify or advance Expenses to such Director or Officer under this Article 8. For purposes of this Article 8, the term “Directors” includes former directors and any directors who are or were serving at the request of the Corporation as directors, officers, employees, or agents of another Corporation, partnership, joint venture, trust, or other enterprise, including, without limitation, any employee benefit plan (other than in the capacity as agents separately retained and compensated for the provision of goods or services to the enterprise, including, without limitation, attorneys-at-law, accountants, and financial consultants), whether or not such person continues to serve in such capacity at the time the obligation to indemnify against Liabilities or advance Expenses is incurred or paid. All other capitalized terms used in this Article 8 and not otherwise defined herein shall have the meaning set forth in Section 607.0850 of the Act (or successor provision). The provisions of this Article 8 are intended solely for the benefit of the indemnified parties described herein, their heirs and personal representatives and shall not create any rights in favor of third parties. No amendment to or repeal of this Article 8 shall diminish the rights of indemnification provided for herein to any person who serves or served as a Director or Officer at any time prior to such amendment or repeal.

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Section 8.2 No Subrogation. The indemnification provided for by these Bylaws will be personal in nature and the Corporation will not have any liability under this Article 8 to any insurer or any person, corporation, partnership, trust or association or other entity (other than heirs, executors or administrators) by reason of subrogation, assignment, or succession by any other means to the claim of any person indemnified pursuant to these Bylaws.

ARTICLE 9

EXCLUSIVE JURISDICATION

Section 9.1 Florida Courts. Unless the Corporation consents in writing to the selection of an alternative forum, the sole and exclusive forum for (a) any derivative action or proceeding brought on behalf of the Corporation, (b) any action asserting a claim of breach of a fiduciary duty owed by any current or former directors, officers or other employees of the Corporation to the Corporation or the Corporation’s shareholders, (c) any action arising pursuant to any provision of the Act or the Corporation’s Articles of Incorporation or these Bylaws (as either may be amended from time to time), or (d) any other action asserting a claim governed by the internal affairs doctrine, shall be a state court located within the state of Florida (or, if a state court located within the state of Florida does not have jurisdiction, the federal district court for the Middle District of Florida); provided that, the provisions of this Section 9.1 will not apply to suits brought to enforce any liability or duty created by the Securities Exchange Act or 1934, as amended, or to any other claim for which the U.S. federal courts have exclusive jurisdiction.

Section 9.2 U.S. Federal Courts. Unless the Corporation consents in writing to the selection of an alternative forum, the U.S. federal district courts shall be the exclusive forum for the resolution of any complaint asserting a cause of action against the Corporation or any director, officer, other employee or agent of the Corporation arising under the Securities Act of 1933, as amended.

Section 9.3 Deemed Notice and Consent. Any person or entity purchasing or otherwise acquiring any interest in any security of the Corporation shall be deemed to have notice of and consented to the provisions of this Article 9. This Article 9 shall be enforceable by any party to a complaint covered by the provisions of this Article 9.

ARTICLE 10

AMENDMENTS

As provided in the Corporation’s Articles of Incorporation, any provisions in these Bylaws that require a greater voting requirement than provided in the Act may only be amended by the shareholders by the same vote required to take action under the voting requirement then in effect.

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ARTICLE 11

MISCELLANEOUS

Section 11.1 Application of Florida Law. Whenever any provision of these Bylaws is inconsistent with any provision of the Act, as they may be amended from time to time, then in such instance, Florida law shall prevail.

Section 11.2 Fiscal Year. The fiscal year of the Corporation shall be determined by resolution of the Board of Directors.

Section 11.3 Conflicts with the Corporation’s Articles of Incorporation. In the event that any provision contained in these Bylaws conflicts with any provision of the Corporation’s Articles of Incorporation, as amended from time to time, the provisions of the Corporation’s Articles of Incorporation shall prevail and be given full force and effect, to the full extent permissible under the Act.

Section 11.4 Partial Invalidity. If any provision of these Bylaws shall, for any reason, be held by a court of competent jurisdiction to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other provision of these Bylaws, and these Bylaws shall be construed as if such invalid, illegal or unenforceable provision had never been contained herein.

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EX-4

Exhibit 4

PREFERRED STOCK PURCHASE AGREEMENT

TABLE OF CONTENTS

			Page
1.	Purchase and Sale of Preferred Stock			1
	1.1	Sale and Issuance of Series A-1 and A-2 Preferred Stock		1
	1.2	Closing; Delivery		1
	1.3	Defined Terms Used in this Agreement		1
2.	Representations and Warranties of the Company			7
	2.1	Organization, Good Standing, Corporate Power and Qualification		7
	2.2	Capitalization		7
	2.3	Subsidiaries		8
	2.4	Authorization		8
	2.5	Valid Issuance of Shares		9
	2.6	Governmental Consents and Filings		10
	2.7	Litigation		10
	2.8	Intellectual Property		10
	2.9	Data Privacy and Security		11
	2.10	Compliance with Law		11
	2.11	Compliance with Other Instruments		11
	2.12	Agreements; Actions		12
	2.13	Certain Transactions		12
	2.14	Rights of Registration and Voting Rights		13
	2.15	Property		13
	2.16	Financial Statements		13
	2.17	Changes		14
	2.18	Employee Matters		14
	2.19	Tax Matters		15
	2.20	Regulatory Filings; Guaranty Funds		15
	2.21	Employee Agreements		16
	2.22	Permits; Insurance Licenses		16
	2.23	Insurance Regulatory		16
	2.25	Producers		17
	2.26	Other Regulatory Provisions		18
	2.27	Corporate Documents		18
	2.28	Investment Company		19
	2.29	Ratings		19
3.	Representations and Warranties of the Purchaser			19
	3.1	Authorization		19
	3.2	Purchase Entirely for Own Account		19
	3.3	Disclosure of Information		20
	3.4	Restricted Securities		20
	3.5	No Public Market		20
	3.6	Legends		20
	3.7	Accredited Investor		21

i

TABLE OF CONTENTS

(continued)

			Page
	3.8	No General Solicitation		21
	3.9	Exculpation		21
4.	Conditions to the Purchaser’s Obligations at Closing			22
	4.1	Representations and Warranties		22
	4.2	Performance		22
	4.3	Compliance Certificate		22
	4.4	Qualifications		22
	4.5	Shareholders Agreement		22
	4.6	Restated Articles		22
	4.7	Secretary’s Certificate		22
	4.8	Proceedings and Documents		23
	4.9	Guaranty Agreement		23
	4.10	Warrant Agreement		23
	4.11	Parent Debt		23
	4.12	Board of Directors		23
	4.13	Indemnification Agreement		24
5.	Conditions of the Company’s Obligations at Closing			24
	5.1	Representations and Warranties		24
	5.2	Performance		24
	5.3	Qualifications		24
	5.4	Shareholders Agreement		24
6.	Miscellaneous.			24
	6.1	Survival of Warranties		24
	6.2	Successors and Assigns		24
	6.3	Governing Law		24
	6.4	Counterparts		24
	6.5	Titles and Subtitles		24
	6.6	Press Releases and Announcements		25
	6.7	Notices		25
	6.8	Indemnification for Finder’s Fees		25
	6.9	Amendments and Waivers		25
	6.10	Severability		25
	6.11	Delays or Omissions		26
	6.12	Entire Agreement		26
	6.13	Expenses		26
	6.14	Cooperation		26
	6.15	Dispute Resolution		26

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TABLE OF CONTENTS

(continued)

Exhibit A –	SCHEDULE OF PURCHASER
Exhibit B –	FORM OF AMENDED AND RESTATED ARTICLES OF INCORPORATION
Exhibit C –	DISCLOSURE SCHEDULE*
Exhibit D –	FORM OF SHAREHOLDERS AGREEMENT
Exhibit E	FORM OF GUARANTY AGREEMENT
Exhibit F	FORM OF WARRANT AGREEMENT

* The Disclosure Schedules to the Preferred Stock Purchase Agreement have been omitted pursuant to Item 601(b)(2) of Regulation S-K and will be furnished to the Securities and Exchange Commission upon request.

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PREFERRED STOCK PURCHASE AGREEMENT

THIS PREFERRED STOCK PURCHASE AGREEMENT (this “Agreement”), is made as of the 26th day of February, 2021 by and among TypTap Insurance Group, Inc., a Florida corporation (the “Company”), HCI Group, Inc., a Florida corporation (“Parent”), and CB Snowbird Holdings, L.P., a Delaware limited partnership (the “Purchaser”).

The parties hereby agree as follows:

1. Purchase and Sale of Preferred Stock.

1.1 Sale and Issuance of Series A-1 and A-2 Preferred Stock.

(a) The Company shall adopt and file with the Secretary of State of the State of Florida on or before the Closing (as defined below) the Amended and Restated Articles of Incorporation in substantially the form of Exhibit B attached to this Agreement (the “Restated Articles”).

(b) Subject to the terms and conditions of this Agreement, the Purchaser agrees to purchase at the Closing and the Company agrees to sell and issue to the Purchaser at the Closing that number of voting shares of Series A-1 Preferred Stock, $0.001 par value per share (the “Series A-1 Preferred Stock”) and that number of non-voting shares of Series A-2 Preferred Stock, $0.001 par value per share (the “Series A-2 Preferred Stock” and together with the Series A-1 Preferred Stock, the “Preferred Stock”), set forth opposite the Purchaser’s name on Exhibit A, at a purchase price of $10.00 per share. The shares of Preferred Stock issued to the Purchaser pursuant to this Agreement shall be referred to in this Agreement as the “Shares.”

1.2 Closing; Delivery.

(a) The purchase and sale of the Shares shall take place remotely via the exchange of documents and signatures, at 10:00 a.m., on February 26, 2021, or at such other time and place as the Company and the Purchaser shall mutually agree upon, orally or in writing (which time and place are designated as the “Closing”).

(b) At the Closing, the Company shall deliver to the Purchaser the Shares free and clear of all liens, which shall be recorded by the Secretary of the Company in book entry form (unless the Purchaser requests physical certificates, in which case physical certificate will be delivered as requested) against payment of the purchase price therefor by wire transfer to a bank account designated by the Company.

1.3 Defined Terms Used in this Agreement. In addition to the terms defined above, the following terms used in this Agreement shall be construed to have the meanings set forth or referenced below.

(a) “Affiliate” means, with respect to any specified Person, any other Person who, directly or indirectly, controls, is controlled by, or is under common control with such Person, including, without limitation, any general partner, managing member, officer or director of such Person or any venture capital fund now or hereafter existing that is controlled by one or more general partners or managing members of, or shares the same management company with, such Person. Notwithstanding the foregoing, the portfolio companies (including Parent, the Company and their respective Subsidiaries) of investment funds or accounts organized, managed or advised by Centerbridge Partners, L.P. or any of its Affiliates will not be deemed to be Affiliates of the Purchaser for purposes of this Agreement.

(b) “Anti-Money Laundering Laws” has the meaning set forth in Section 2.26(b).

(c) “Board” has the meaning set forth in Section 4.12.

(d) “Bylaws” means the Bylaws of the Company, as amended from time to time.

(e) “Code” means the Internal Revenue Code of 1986, as amended.

(f) “Company Covered Person” means, with respect to the Company as an “issuer” for purposes of Rule 506 promulgated under the Securities Act, any Person listed in the first paragraph of Rule 506(d)(1).

(g) “Company Intellectual Property” means all patents, patent applications, trademarks, trademark applications, service marks, service mark applications, tradenames, copyrights, trade secrets, domain names, mask works, information and proprietary rights and processes, similar or other intellectual property rights, subject matter of any of the foregoing, tangible embodiments of any of the foregoing, licenses in, to and under any of the foregoing, and any and all such cases as are necessary to the Company in the conduct of the Company’s business as now conducted and as presently proposed to be conducted.

(h) “Control Filing” has the meaning set forth in Section 6.14.

(i) “Data Breach” means any unauthorized Processing of Company data or IT Systems or any other data security incident requiring notification to any Person (including any Governmental Entity) under Privacy Requirements.

(j) “Data Processor” means a Person that Processes Personal Data on behalf of, at the direction of, or while providing services to, the Company or any of its Subsidiaries.

(k) “Deficiency” has the meaning set forth in Section 2.22.

(l) “Disclosure Schedule” has the meaning set forth in Section 2.

(m) “Disqualification Event” has the meaning set forth in Section 2.5(b).

(n) “ERISA” has the meaning set forth in Section 2.18(d).

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(o) “Financial Statements” has the meaning set forth in Section 2.16(a).

(p) “GAAP” has the meaning set forth in Section 2.16(a).

(q) “Governmental Entity” has the meaning set forth in Section 2.9(c).

(r) “Guaranty Agreement” means the Parent Guaranty Agreement, dated as of the date hereof, by and among the Company, the Parent and the Purchaser in substantially all the form of Exhibit D attached to this Agreement.

(s) “Indemnification Agreement” means the agreement between the Company and the director designated by the Purchaser (as long as it is entitled to designate a member of the Board of Directors) pursuant to the Shareholders Agreement, dated as of the Closing, in the form mutually agreed upon by the Company and the Purchaser.

(t) “Insurance Contract” means any insurance policy, binder, slip or contract issued by TTIC.

(u) “Insurance Laws” means all Laws applicable to the business of insurance or the regulation of insurance holding companies, whether domestic or foreign, and all applicable orders of Governmental Entities and Insurance Regulatory Authorities.

(v) “Insurance Licenses” has the meaning set forth in Section 2.22.

(w) “Insurance Producer” means any insurance agent, insurance broker, insurance intermediary, general agent, managing general agent, excess or surplus lines broker or insurance agency currently responsible for soliciting, selling, negotiating, offering, marketing or producing Insurance Contracts.

(x) “Insurance Regulatory Authority” means with respect to any state or the District of Columbia, the Governmental Entity charged with the regulation and supervision of insurance companies in such state or the District of Columbia.

(y) “IT Systems” mean the hardware, software, firmware, middleware, equipment, electronics, platforms, servers, workstations, routers, hubs, switches, interfaces, data, databases, data communication lines, network and telecommunications equipment, websites and internet-related information, technology infrastructure, wide area network and other data communications or information technology equipment, owned or leased by, licensed to, or Processed in the conduct of the business of the Company.

(z) “Key Employee” means any executive-level employee (including division director and vice president-level positions).

(aa) “Knowledge” including the phrase “to the Company’s knowledge” shall mean the actual knowledge of the following officers after reasonable inquiry of direct reports: Paresh Patel, Kevin Mitchell, Andrew Graham, Mark Harmsworth, Karen Coleman and Brook Baker.

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(bb) “Law” has the meaning set forth in Section 2.10.

(cc) “Malicious Code” means any “back door,” “drop dead device,” “time bomb,” “Trojan horse,” “virus,” “ransomware,” or “worm” (as such terms are commonly understood in the software industry) or any other code designed or intended to have, or capable of performing, any of the following functions: (a) disrupting, disabling, harming, interfering with or otherwise impeding in any manner the operation of, or providing unauthorized access to, a computer system or network or other device on which such code is stored or installed; or (b) damaging or destroying any data or file without the user’s consent.

(dd) “Material Adverse Effect” means a material adverse effect on the business, assets (including intangible assets), liabilities, financial condition, property, or results of operations of the Company; provided, however, that none of the following shall be deemed in themselves, either alone or in combination, to constitute, and none of the following shall be taken into account in determining, whether there has been a Material Adverse Effect: any occurrence, state of facts, change, event, effect or circumstance to the extent arising after the date hereof and resulting from (i) changes in operating, business, regulatory or other conditions in the homeowners insurance industry in the geographic locations in which the Company operates, except to the extent that the effect of such change or condition disproportionately affects the Company and its Subsidiaries, taken as a whole, compared to similar businesses in such geographic locations generally, (ii) changes in global, national or regional political conditions, including hostilities, acts of war, sabotage or terrorism or military actions or any escalation, worsening or diminution of any such hostilities, acts of war, sabotage or terrorism or military actions existing or underway as of the date hereof, except to the extent that the effect of such change or condition disproportionately affects the Company and its Subsidiaries, taken as a whole, compared to similar businesses in such geographic locations generally; (iii) any change affecting the United States economy generally or the economy of any region in which such entity conducts business that is material to the business of such entity, including changes in the credit, debt or financial or capital markets (including changes in interest or exchange rates), except to the extent that the effect of such change or condition disproportionately affects the Company and its Subsidiaries, taken as a whole, compared to similar businesses in the United States generally, (iv) changes in GAAP or other accounting requirements or principles or any changes in applicable laws or the interpretation or enforcement thereof, including by the National Association of Insurance Commissioners and the Financial Accounting Standards Board, (v) compliance with the terms of, or taking any action permitted by, this Agreement or with the consent of the Purchaser, including the impact thereof on relationships, contractual or otherwise, with, or actual or potential loss or impairment of, agents or other third-party marketing partners or producers, suppliers, financing sources, employees and/or consultants or regulators and/or on revenue, profitability and cash flows, (vi) the failure of the Company or any of its Subsidiaries to meet or achieve any earnings, commissions, premiums written or other results set forth in any projection or forecast (provided, that this clause (vi) shall not prevent a determination that any change or effect underlying such failure to meet projections or forecasts has resulted in a Material Adverse Effect (to the extent such change or effect is not otherwise excluded from this definition of Material Adverse Effect), and (vii) pandemics (including COVID-19), hurricanes, earthquakes, floods, windstorms, hailstorms or other natural disasters or catastrophes (provided, that this clause (vii) shall not prevent a determination that any loss or losses (or portions thereof) arising from such disasters or catastrophes has or have resulted in a Material Adverse Effect, but only to the extent (1) any such losses are not covered by reinsurance (including any applicable deductible the payment of which shall not be taken into account in determining whether there has been a Material Adverse Effect), and (2) not otherwise excluded from this definition of Material Adverse Effect).

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(ee) “OFAC” has the meaning set forth in Section 2.26(c).

(ff) “Parent” has the meaning set forth in the Preamble.

(gg) “Person” means any individual, corporation, partnership, trust, limited liability company, association or other entity.

(hh) “Personal Data” means information relating to or reasonably capable of being associated with an identified or identifiable person, device, or household, including: (a) a natural person’s name, street address or specific geolocation information, date of birth, telephone number, email address, online contact information, photograph, biometric data, Social Security number, driver’s license number, passport number, tax identification number, any government-issued identification number, financial account number, credit card number, any information that would permit access to a financial account, a user name and password that would permit access to an online account, health information, insurance account information, any persistent identifier such as customer number held in a cookie, an internet protocol address, a processor or device serial number, or a unique device identifier; (b) “personal data,” “personal information,” “protected health information,” “nonpublic personal information,” or other similar terms as defined by Privacy Requirements; or (c) any other information that allows the identification of a natural person.

(ii) “Privacy Requirements” means any and all applicable Laws, industry requirements, and contracts relating to the Processing of Personal Data, including: (a) each Law relating to the protection or Processing of Personal Data that is applicable to the Company, (b) each contract relating to the Processing of Personal Data applicable to the Company; and (c) each applicable rule, code of conduct, or other requirement of self-regulatory bodies and applicable industry standards.

(jj) “Processing”, “Process” or “Processed”, with respect to any Company data or IT Systems, means any collection, access, acquisition, storage, protection, use, recording, maintenance, operation, dissemination, re-use, disposal, disclosure, re-disclosure, destruction, transfer, modification, or any other processing (as defined by Privacy Requirements) of such Company Data or IT Systems.

(kk) “Purchaser” has the meaning set forth in the Preamble.

(ll) “Regulatory Filings” has the meaning set forth in Section 2.20.

(mm) “Reinsurance Contract” has the meaning set forth in Section 2.24(a).

(nn) “Reserves” means the reserves, funds or provisions of TTIC, as applicable, for losses, claims, premiums, policy benefits and expenses, including unearned premium reserves, reserves for incurred losses, incurred but not reported losses and loss adjustment expenses, in respect of an Insurance Contract or any insurance policies reinsured or assumed by TTIC.

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(oo) “Sanctioned Country” has the meaning set forth in Section 2.26(c).

(pp) “Sanctions” has the meaning set forth in Section 2.26(c).

(qq) “SAP” means, as to any insurance company, the statutory accounting practices and procedures prescribed or permitted by the applicable Insurance Regulatory Authority in the jurisdiction in which such insurance company is domiciled.

(rr) “SAP Statements” has the meaning set forth in Section 2.16(b).

(ss) “Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.

(tt) “Shareholders Agreement” means the Shareholder Agreement, dated as of the date hereof, by and among the Company, the Parent and the Purchaser in substantially the form of Exhibit E attached to this Agreement.

(uu) “Shares” means the shares of Series A-1 Preferred Stock and Series A-2 Preferred Stock issued at the Closing.

(vv) “Stock Plan” has the meaning set forth in Section 2.2(b).

(ww) “Subsidiary” means, with respect to any Person, any entity of which (a) a majority of the total voting power of shares of stock or equivalent ownership interests entitled (without regard to the occurrence of any contingency) to vote in the election of directors, managers, trustees or other members of the applicable governing body thereof is at the time owned or controlled, directly or indirectly, by that Person or one or more of the Subsidiaries of that Person or a combination thereof, or (b) if no such governing body exists at such entity, a majority of the total voting power of shares of stock or equivalent ownership interests of the entity is at the time owned or controlled, directly or indirectly, by that Person or one or more Subsidiaries of that Person or a combination thereof. For purposes hereof, a Person or Persons shall be deemed to have a majority ownership interest in a limited liability company, partnership, association or other business entity if such Person or Persons has been allocated a majority of limited liability company, partnership, association or other business entity gains or losses or shall be or control the managing member or general partner of such limited liability company, partnership, association or other business entity.

(xx) “Tax” or “Taxes” means federal, state, county, local, non-U.S., or other income, gross receipts, ad valorem, franchise, profits, sales or use, transfer, registration, excise, utility, environmental, communications, real or personal property, capital stock, license, disability, windfall profits, payroll, wage or other withholding, employment, social security, severance, stamp, occupation, alternative or add-on minimum, estimated, unclaimed property or escheatment, charges, fees, imposts, levies or other assessments by any Governmental Entity or taxing authority, and other taxes of any kind whatsoever (including, without limitation, deficiencies, penalties, additions to tax, and interest attributable thereto) whether disputed or not.

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(yy) “Tax Return” means any return, claim or refund, declaration, information report or filing (including schedules, attachments or any related or supporting information) with respect to Taxes, filed or required to be filed with any Governmental Entity or taxing authority, including any schedules attached thereto and including any amendment thereof.

(zz) “Transaction” has the meaning set forth in Section 3.2.

(aaa) “Transaction Agreements” means this Agreement, the Guaranty Agreement, and the Shareholders Agreement.

(bbb) “TTIC” means TypTap Insurance Company, an insurance company domiciled in the State of Florida and a wholly owned Subsidiary of the Company.

(ccc) “Warrant Agreement” means the Warrant Agreement, dated as of the date hereof, by and among Purchaser and Parent in substantially the form of Exhibit F attached to this Agreement.

2. Representations and Warranties of the Company. The Company and, solely with respect to Sections 2.1, 2.3, 2.4, 2.5, 2.6 and 2.7(c), the second sentence of Section 2.11, and the second sentence of Section 2.14, and Section 2.27, Parent, each hereby represents and warrants to the Purchaser that, except as set forth on the Disclosure Schedule attached as Exhibit C to this Agreement (the “Disclosure Schedule”), which exceptions shall be deemed to qualify the representations and warranties made hereunder, the following representations are true and complete as of the date of the Closing, except as otherwise indicated. The Disclosure Schedule shall be arranged in sections corresponding to the numbered and lettered sections and subsections contained in this Section 2, and the disclosures in any section or subsection of the Disclosure Schedule shall qualify other sections and subsections in this Section 2 to the extent the applicability of such disclosure to such other sections and subsections is reasonably apparent on its face.

For purposes of these representations and warranties (other than those in Subsection 2.2), the term the “Company” shall include any Subsidiaries of the Company, unless otherwise noted herein.

2.1 Organization, Good Standing, Corporate Power and Qualification. The Company is a corporation duly organized, validly existing and in good standing under the laws of the State of Florida and has all requisite corporate power and authority to carry on its business as presently conducted and as proposed to be conducted. The Company is duly qualified to transact business and is in good standing in each jurisdiction in which the failure to so qualify would have a Material Adverse Effect.

2.2 Capitalization.

(a) The authorized capital stock of the Company consists, immediately prior to the Closing, of:

(i) 183,000,000 shares of common stock, $0.001 par value per share (the “Common Stock”), 75,000,000 shares of which are issued and outstanding immediately prior to the Closing. All of the outstanding shares of Common Stock have been duly authorized and validly issued, are fully paid and non-assessable and are owned, beneficially and of record, solely by Parent. Parent has not entered into any agreement or arrangement to transfer or sell or transfer any of its shares of Common Stock to any Person, and except as set forth in Section 2.2 of the Disclosure Schedule, such shares of Common Stock are not subject to any lien.

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(ii) 37,502,000 shares of Preferred Stock, of which (x) 36,362,000 shares have been designated Series A-1 Preferred Stock, none of which are issued and outstanding immediately prior to the Closing, and (y) 1,140,000 shares have been designated Series A-2 Preferred Stock, none of which are issued or outstanding immediately prior to the Closing. The rights, privileges and preferences of the Preferred Stock are as stated in the Restated Articles and as provided by the Florida Business Corporation Act.

(b) The Company has reserved 7,000,000 shares of Common Stock for issuance to officers, directors, employees and consultants of the Company pursuant to its 2021 Equity Incentive Plan (the “Stock Plan”). Of such reserved shares of Common Stock, 6,000,000 shares of restricted stock have been granted and are currently outstanding or will be granted on or prior to the Closing, and 1,000,000 shares will remain available for issuance to officers, directors, employees and consultants pursuant to the Stock Plan following the Closing. The Company has furnished to the Purchaser complete and accurate copies of the Stock Plan and forms of agreements used thereunder.

(c) Except for (A) the conversion privileges of the Shares to be issued under this Agreement, (B) the rights provided in the Shareholders Agreement, and (C) the securities and rights described in Subsection 2.2(a) and Subsection 2.2(b) of this Agreement (including the conversion privileges of Preferred Stock issued and outstanding immediately prior to the Closing), there are no outstanding options, warrants, rights (including conversion or preemptive rights and rights of first refusal or similar rights) or agreements, orally or in writing, to purchase or acquire from the Company or Parent any shares of Common Stock or Preferred Stock, or any securities convertible into or exchangeable for shares of Common Stock or Preferred Stock.

2.3 Subsidiaries. Except as set forth in Section 2.3 of the Disclosure Schedule, the Company and Parent do not currently own or control, directly or indirectly, any interest in any other Person. Each of the Subsidiaries of the Company that are required to be listed in Section 2.3 of the Disclosure Schedules is a corporation or limited liability company that is duly, organized, validly existing and in good standing under the laws of the State of Florida, and has all requisite power and authority to carry on its business as presently conducted and as proposed to be conducted. All of the issued and outstanding capital shares of, and all of the equity interests in, each of the Company’s Subsidiaries are owned beneficially and of record solely by the Company, free and clear of all liens, preemptive rights and any other material limitations or restrictions and have been duly authorized and validly issued, and are fully paid and non-assessable. The Company is not a participant in any joint venture, partnership, or similar arrangement.

2.4 Authorization. All corporate action required to be taken by the Board of Directors and shareholders of the Company and Parent in order to authorize the Company and Parent to enter into the Transaction Agreements, and to issue the Shares at the Closing and the Common Stock issuable upon conversion of the Shares, to issue the warrants as contemplated by

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the Warrant Agreement, and to consummate the transactions consummated hereby and thereby, has been taken or will be taken prior to the Closing. All action on the part of the officers of the Company and Parent necessary for the execution and delivery of the Transaction Agreements, the performance of all obligations of the Company and Parent under the Transaction Agreements to be performed, and the issuance and delivery of the Shares and the warrants contemplated by the Warrant Agreement and the consummation of the other transactions contemplated hereby and thereby has been taken or will be taken prior to the Closing. The Transaction Agreements, when executed and delivered by the Company and Parent, shall constitute valid and legally binding obligations of the Company and Parent, as applicable, enforceable against the Company and Parent in accordance with their respective terms except (i) as limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance, or other laws of general application relating to or affecting the enforcement of creditors’ rights generally, (ii) as limited by Laws relating to the availability of specific performance, injunctive relief, or other equitable remedies, or (iii) to the extent the indemnification provisions contained in the Shareholders Agreement may be limited by applicable federal or state securities laws.

2.5 Valid Issuance of Shares.

(a) The Shares, when issued, sold and delivered in accordance with the terms and for the consideration set forth in this Agreement, will be validly issued, fully paid and non-assessable and free of all liens or encumbrances and restrictions on transfer other than restrictions on transfer under the Transaction Agreements, applicable state and federal securities laws of general applicability and liens or encumbrances created by or imposed by the Purchaser. Assuming the accuracy of the representations of the Purchaser in Section 3 of this Agreement and subject to the filings described in Subsection 2.6(b) below, the Shares will be issued in compliance with all applicable federal and state securities laws. The Common Stock issuable upon conversion of the Shares has been duly reserved for issuance, and upon issuance in accordance with the terms of the Restated Articles, will be validly issued, fully paid and non-assessable and free of all liens or encumbrances and restrictions on transfer other than restrictions on transfer under the Transaction Agreements, applicable federal and state securities laws of general applicability and liens or encumbrances created by or imposed by the Purchaser. Based in part upon the representations of the Purchaser in Section 3 of this Agreement, and subject to Subsection 2.6(b) below, the Common Stock issuable upon conversion of the Shares will be issued in compliance with all applicable federal and state securities laws.

(b) No “bad actor” disqualifying event described in Rule 506(d)(1)(i)-(viii) of the Securities Act (a “Disqualification Event”) is applicable to the Company or Parent, to the Company or Parent’s knowledge, any Company Covered Person, except for a Disqualification Event as to which Rule 506(d)(2)(ii–iv) or (d)(3), is applicable.

(c) Neither the Company nor Parent, nor any of their respective Affiliates has, whether directly or through any agent or person acting on its behalf, sold, offered for sale, solicited offers to buy or otherwise negotiated in respect of any security (as defined in the Securities Act) which is or will be integrated with the offering and sale of the Shares contemplated by this Agreement pursuant to the Securities Act. No registration of the Shares under the Securities Act is required for the sale and delivery of the Shares in the manner contemplated by this Agreement.

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2.6 Governmental Consents and Filings. Assuming the accuracy of the representations made by the Purchaser in Section 3 of this Agreement, no consent, approval, order or authorization of, or registration, qualification, designation, declaration or filing with, any federal, state or local Governmental Entity is required on the part of the Company or Parent in connection with the execution and delivery of this Agreement or any of the other Transaction Agreements or the consummation of the transactions contemplated by this Agreement or the other Transaction Agreements, except for (a) the filing of the Restated Articles with the Secretary of State of the State of Florida, which will have been filed as of the Closing, (b) filings pursuant to applicable state securities laws that are listed on Section 2(b) of the Disclosure Schedule, which have been made or will be made in a timely manner and (c) filings and consents from the Florida Office of Insurance Regulation pursuant to Section 628.461, Fla. Stat. (2020) that are listed in Section 2(c) of the Disclosure Schedule, which filings have been or will be made in a timely manner.

2.7 Litigation. There is no claim, action, suit, proceeding, arbitration, complaint or charge pending or, to the Company’s knowledge, threatened in writing (a) against the Company other than ordinary cause claim litigation seeking recoveries within applicable policy limits, (b) against any officer, director or Key Employee of the Company arising out of their employment or board relationship with the Company; or (c) against the Company or Parent or any of their Affiliates and that questions the validity of the Transaction Agreements or the right of the Company or the Parent to enter into them, or to consummate the transactions contemplated by the Transaction Agreements. Neither the Company nor, any of its officers, directors or Key Employees is a party or is named as subject to the provisions of any order, writ, injunction, judgment or decree of any court or government agency or instrumentality (in the case of officers, directors or Key Employees, such as would affect the Company). There is no action, suit, proceeding or investigation by the Company pending or which the Company intends to initiate. The foregoing includes, without limitation, actions, suits or proceedings pending or threatened in writing (or any basis therefor known to the Company) involving the prior employment of any of the Company’s employees, their services provided in connection with the Company’s business, any information or techniques allegedly proprietary to any of their former employers or their obligations under any agreements with prior employers.

2.8 Intellectual Property. The Company owns or possesses sufficient legal rights to all Company Intellectual Property without any conflict with, or infringement of, the rights of others. Other than with respect to commercially available software products under standard end-user object code license agreements, there are no outstanding options, licenses, agreements, claims, encumbrances or shared ownership interests of any kind relating to the Company Intellectual Property, nor is the Company bound by or a party to any options, licenses or agreements of any kind with respect to the patents, trademarks, service marks, trade names, copyrights, trade secrets, licenses, information, proprietary rights and processes of any other Person. To the Company’s knowledge, no third party (including Parent and its Subsidiaries other than the Company and its Subsidiaries) is infringing, misappropriating, or otherwise violating, or has since January 1, 2018, infringed, misappropriated or otherwise violated, any Company Intellectual Property.

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2.9 Data Privacy and Security.

(a) The IT Systems currently used by the Company (or any Affiliate of the Company that provides relevant services to the Company) are in good working condition, do not, to the Knowledge of the Company, contain any Malicious Code or defect, and operate and perform as necessary to conduct the business of the Company as currently conducted.

(b) The Company and, with respect to the Processing of Company data, its Data Processors, comply and have complied at all times with the Privacy Requirements in all material respects. To the extent required by Privacy Requirements, (i) Personal Data is Processed by the Company and its Data Processors in an encrypted manner and (ii) Personal Data is securely deleted or destroyed by the Company and its Data Processors.

(c) The Company and, to the Company’s Knowledge, its Data Processors, have not suffered a Data Breach, been required to notify any person or any United States or foreign governmental or regulatory agency, commission, court, body, entity or authority (each, a “Governmental Entity”) of any Data Breach or been adversely affected by any Malicious Code or denial-of-service attacks on any IT Systems. Neither the Company, nor any third party acting at the direction or authorization of the Company, has paid any perpetrator of any actual or threatened Data Breach or cyber-attack, including, but not limited to a ransomware attack or a denial-of-service attack. Neither the Company nor any of its Affiliates has received a written notice (including any enforcement notice), letter, or complaint from a Governmental Entity or any other Person alleging noncompliance or potential noncompliance with any Privacy Requirements relating to the Company’s business.

2.10 Compliance with Law. The Company is, and since January 1, 2018 has been, in compliance in all material respects with and is not in any material respect in default under or in violation of all applicable federal, state, local or foreign law, statute, ordinance, rule, regulation, judgment, order, injunction, directive, decree, agency requirement, or published interpretation of any Governmental Entity or self-regulatory organization (collectively, “Laws” and each, a “Law”).

2.11 Compliance with Other Instruments. The Company is not, and since January 1, 2018 has not been, in violation or default (a) of any provisions of its Restated Articles or Bylaws, (b) of any instrument, judgment, order, writ or decree, (c) under any note, indenture or mortgage, or (d) under any lease, agreement, contract or purchase order to which it is a party or by which it is bound that is required to be listed on the Disclosure Schedule. The execution, delivery and performance of the Transaction Agreements by the Company or Parent and their consummation of the transactions contemplated by the Transaction Agreements will not result in any such violation or be in conflict with or constitute, with or without the passage of time and giving of notice, either (i) a default under any such provision, instrument, judgment, order, writ, decree, contract or agreement; or (ii) an event which results in the creation of any lien, charge or encumbrance upon any assets of the Company or Parent or the suspension, revocation, forfeiture, or nonrenewal of any material permit or license applicable to the Company or Parent.

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2.12 Agreements; Actions.

(a) Except as set forth in Section 2.12(a) of the Disclosure Schedule and except for the Transaction Agreements themselves, there are no agreements, understandings, instruments, contracts or proposed transactions to which the Company is a party or by which it is bound that involve (i) obligations (contingent or otherwise) of, or payments to, the Company in excess of $100,000, (ii) the exclusive license of any patent, copyright, trademark, trade secret or other proprietary right to or from the Company or (iii) is otherwise material to the Company’s business.

(b) Section 2.12(b) of the Disclosure Schedule sets forth all agreements between the Company and its Subsidiaries, on the one hand, and Parent and its Subsidiaries (other than the Company and its Subsidiaries), on the other hand.

(c) Except as set forth in Section 2.12(c) of the Disclosure Schedule, the Company has not (i) declared or paid any dividends, or authorized or made any distribution upon or with respect to any class or series of its capital stock, (ii) incurred any indebtedness for money borrowed or incurred any other liabilities individually in excess of $50,000 or in excess of $250,000 in the aggregate, (iii) made any loans or advances to any Person, other than ordinary advances for travel expenses, or (iv) sold, exchanged or otherwise disposed of any of its assets or rights, other than the sale of its inventory in the ordinary course of business or sales of obsolete equipment in the ordinary course of business. For the purposes of (a) and (b) of this Subsection 2.12, all indebtedness, liabilities, agreements, understandings, instruments, contracts and proposed transactions involving the same Person (including Persons the Company has reason to believe are affiliated with each other) shall be aggregated for the purpose of meeting the individual minimum dollar amounts of such subsection. Immediately after the Closing and after taking into account the payment contemplated by Section 4.11, neither the Company nor any of its Subsidiaries will have any indebtedness for borrowed money owed to Parent or any of its Subsidiaries (other than the Company and its Subsidiaries) other than as described in Section 2.12(c) of the Disclosure Schedule.

(d) Except as set forth in the Disclosure Schedule, the Company is not a guarantor or indemnitor of any indebtedness of any other Person.

2.13 Certain Transactions.

(a) Other than (i) standard employee benefits generally made available to all employees, (ii) standard director and officer indemnification agreements approved by the Board of Directors, (iii) the purchase of shares of the Company’s capital stock and the issuance of options to purchase shares of the Company’s Common Stock, in each instance, approved in the written minutes of the Board of Directors (previously provided to the Purchaser or its counsel), there are no agreements, understandings or proposed transactions between the Company and any of its officers, directors, consultants or Key Employees, or any Affiliate thereof.

(b) The Company is not indebted, directly or indirectly, to any of its directors, officers or employees or to their respective spouses or children or to any Affiliate of any of the foregoing, other than in connection with expenses or advances of expenses incurred in the ordinary course of business or employee relocation expenses and for other customary employee benefits made generally available to all employees. None of the Company’s directors, officers or employees, or any members of their immediate families, or any Affiliate of the foregoing are, directly or indirectly, indebted to the Company.

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2.14 Rights of Registration and Voting Rights. Except as provided in the Shareholders Agreement, the Company is not and has not been under any obligation to register under the Securities Act any of its currently outstanding securities or any securities issuable upon exercise or conversion of its currently outstanding securities. Except as contemplated in the Shareholders Agreement, no shareholder of the Company (i.e. Parent) has entered into any agreements with respect to the voting of capital shares of the Company.

2.15 Property. The property and assets that the Company owns are free and clear of all mortgages, deeds of trust, liens, loans and encumbrances, except for statutory liens for the payment of current taxes that are not yet delinquent and encumbrances and liens that arise in the ordinary course of business and do not materially impair the Company’s ownership or use of such property or assets. With respect to the property and assets it leases, the Company is in compliance with such leases and, to its knowledge, holds a valid leasehold interest free of any liens, claims or encumbrances other than those of the lessors of such property or assets. The Company does not own any real property.

2.16 Financial Statements.

(a) The Company has delivered to the Purchaser its audited financial statements as of and for the years ended December 31, 2019 and 2020 (including balance sheet, and income statement and statement of cash flows as of and for the year ended December 31, 2020 (collectively, the “Financial Statements”). The Financial Statements have been prepared in accordance with generally accepted accounting principles (“GAAP”) applied on a consistent basis throughout the periods indicated. The Financial Statements fairly present in all material respects the financial condition and operating results of the Company as of the dates, and for the periods, indicated therein. Except as set forth in the Financial Statements, the Company has no material liabilities or obligations, contingent or otherwise, other than (i) liabilities incurred in the ordinary course of business after December 31, 2020; (ii) obligations under contracts and commitments incurred in the ordinary course of business; and (iii) liabilities and obligations of a type or nature not required under GAAP to be reflected in the Financial Statements. The Company maintains and will continue to maintain a standard system of accounting established and administered in accordance with GAAP.

(b) The financial statements of TTIC included in the Regulatory Filings (the “SAP Statements”) were prepared in accordance with SAP, consistently applied for the periods covered thereby, and fairly present, in all material respects, the statutory financial position of TTIC, as of the respective dates thereof, and the results of operations and changes in capital and surplus and cash flows of TTIC for the respective periods set forth therein subject, in the case of the SAP Statements with respect to interim periods, to normal year-end audit adjustments and the absence of footnote disclosures. No material violation or Deficiency has been asserted by any Governmental Entity with respect to any SAP Statements that has not been cured or resolved, to the Company’s Knowledge, to the satisfaction of the Governmental Entity prior to the date hereof. As of their respective filing dates, the SAP Statements complied with, all Insurance Laws in all material respects.

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(c) The Reserves, (i) were determined in accordance with SAP applied on a consistent basis for the periods presented, (ii) were determined in accordance with generally accepted actuarial standards applied on a consistent basis for the periods presented (except as otherwise noted in the SAP Statements or the notes thereto), (iii) satisfied the requirements of applicable Insurance Laws in all material respects and (iv) were computed on the basis of assumptions consistent with those used in computing the corresponding items in the SAP Statements.

2.17 Changes. Since December 31, 2020, there have been no events or circumstances of any kind that have had or could reasonably be expected to result in a Material Adverse Effect.

2.18 Employee Matters.

(a) To the Company’s knowledge, none of its employees is obligated under any contract (including licenses, covenants or commitments of any nature) or other agreement, or subject to any judgment, decree or order of any court or administrative agency, that would materially interfere with such employee’s ability to promote the interest of the Company or that would conflict with the Company’s business. Neither the execution or delivery of the Transaction Agreements, nor the carrying on of the Company’s business by the employees of the Company, nor the conduct of the Company’s business as now conducted and as presently proposed to be conducted, will conflict with or result in a breach of the terms, conditions, or provisions of, or constitute a default under, any contract, covenant or instrument under which any such employee is now obligated.

(b) The Company is not delinquent in payments to any of its employees, consultants, or independent contractors for any wages, salaries, commissions, bonuses, or other direct compensation for any service performed for it to the date hereof or amounts required to be reimbursed to such employees, consultants or independent contractors. The Company has complied in all material respects with all applicable state and federal equal employment opportunity Laws and with other Laws related to employment, including those related to wages, hours, worker classification and collective bargaining. The Company has withheld and paid to the appropriate Governmental Entity or is holding for payment not yet due to such Governmental Entity all amounts required to be withheld from employees of the Company and is not liable for any arrears of wages, Taxes, penalties or other sums for failure to comply with any of the foregoing.

(c) To the Company’s knowledge, no Key Employee intends to terminate employment with the Company or is otherwise likely to become unavailable to continue as a Key Employee, nor does the Company have a present intention to terminate the employment of any of the foregoing. The employment of each employee of the Company is terminable at the will of the Company. Except as set forth in Subsection 2.18 of the Disclosure Schedule or as required by law, upon termination of the employment of any such employees, no severance or other payments will become due. Except as set forth in Subsection 2.18 of the Disclosure Schedule, the Company has no policy, practice, plan or program of paying severance pay or any form of severance compensation in connection with the termination of employment services.

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(d) Subsection 2.18 of the Disclosure Schedule sets forth each employee benefit plan maintained, established or sponsored by the Company, or which the Company participates in or contributes to, which is subject to the Employee Retirement Income Security Act of 1974, as amended (“ERISA”). The Company has made all required contributions and has no liability to any such employee benefit plan, other than liability for health plan continuation coverage described in Part 6 of Title I(B) of ERISA, and has complied in all material respects with all applicable laws for any such employee benefit plan.

2.19 Tax Matters. There are no Taxes due and payable by the Company which have not been timely paid. There are no accrued and unpaid federal, state, country, local or foreign Taxes of the Company which are due, whether or not assessed or disputed. There have been no examinations or audits or other proceedings of any Tax Returns or reports by any applicable federal, state, local or foreign Governmental Entity and no such examinations, audits or proceedings have been threatened in writing. The Company has duly and timely filed all federal, state, county, local and foreign Tax Returns required to have been filed by it and all such Tax Returns are true, correct and complete in all material respects. There are in effect no waivers of applicable statutes of limitations with respect to Taxes for any year. All material Taxes that the Company is required to withhold or to collect for payment have been duly withheld and collected and paid to the proper Governmental Entity or third party when due (or set aside for payment when due). No claim has ever been made by a Governmental Entity in a jurisdiction where the Company does not file Tax Returns that the Company is or may be subject to taxation by that jurisdiction. There are no liens for Taxes (other than Taxes not yet due and payable) upon any of the assets of the Company. The Company is not a United States real property holding corporation within the meaning of Section 897(c)(2) of the Code. The Company has not distributed stock of another Person or has had its stock distributed by another Person in a transaction that was purported or intended to be governed in whole or in part by Section 355 of Section 361 of the Code. The Company will not be required to include any material item of income in, or exclude any material item of deduction from, taxable income for any taxable period (or portion thereof) ending after the Closing as a result of any: (i) change in method of accounting for a taxable period ending on or prior to the Closing Date; (ii) use of an improper method of accounting for a taxable period ending on or prior to the Closing; (iii) “closing agreement” as described in Section 7121 of the Code (or any corresponding or similar provision of state, local or non-U.S. Tax law) executed on or prior to the Closing; (iv) intercompany transaction or excess loss account described in Treasury Regulations under Section 1502 of the Code (or any corresponding or similar provision of state, local or non-U.S. Tax Law); (v) installment sale or open transaction disposition made prior to the Closing; or (vi) prepaid amount or deferred revenue received prior to the Closing. The Company (i) has not been a member of an affiliated group filing a consolidated, combined, or unitary federal, state, local, or non-U.S. income Tax Return (other than a group the common parent of which was Parent or the Company) or (ii) has any material liability for the Taxes of any Person (other than Parent or its Subsidiaries) under Section 1.1502-6 of the Treasury Regulations (or any similar provision of state, local, or non-U.S. Law), as a transferee or successor, by contract, or otherwise. The Company is not a party to any Tax sharing, allocation or similar agreement.

2.20 Regulatory Filings; Guaranty Funds. Except as set forth on Subsection 2.20 of the Disclosure Schedules, the Company has filed all material reports, statements, documents, registrations (including registrations with applicable Insurance Regulatory Authorities as a member of an insurance holding company system), filings, notices or submissions, and any supplements or amendments thereto (collectively, the “Regulatory Filings”) required to be filed by it with any Governmental Entity since January 1, 2018. The Regulatory Filings were in

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compliance with applicable Law in all material respects when filed and, to the Company’s Knowledge, no material Deficiencies have been asserted by any Insurance Regulatory Authority with respect to any Regulatory Filing. Except as disclosed on Subsection 2.20 of the Disclosure Schedules, no fine or penalty has been imposed on the Company by any Insurance Regulatory Authority since January 1, 2018. Except as set forth on Subsection 2.20 of the Disclosure Schedules, the Company does not currently participate in, nor is it required under applicable Law to participate in, any guaranty fund, risk sharing plan, pool, joint underwriting association or similar arrangement.

2.21 Employee Agreements. Each current and former employee, consultant and officer of the Company has executed an agreement with the Company regarding confidentiality and proprietary information substantially in the form or forms delivered to the counsel for the Purchaser. The Company is not aware that any of its Key Employees is in violation of any agreement covered by this Subsection 2.21.

2.22 Permits; Insurance Licenses. The Company has all franchises, permits, licenses and any similar authority necessary for the conduct of its business, the lack of which could reasonably be expected to be material to the Company’s business. The Company is not, and since January 1, 2018 has not been, in default in any material respect under any of such franchises, permits, licenses or other similar authority. Subsection 2.22 of the Disclosure Schedules contains a true and correct list of each state in which the Company is licensed to conduct an insurance business on an admitted or authorized basis or as an approved, qualified or eligible excess and surplus lines carrier (the “Insurance Licenses”). Except as set forth on Subsection 2.22 of the Disclosure Schedules, (i) the Company has not received any notice of suspension, termination or material limitation with respect to any Insurance License (a “Deficiency”); (ii) to the Company’s knowledge, there is no threatened Deficiency action or suspension or termination therewith; and (iii) no investigation or proceeding is pending or, to the Company’s knowledge, threatened, that would be reasonably likely to result in the imposition of a Deficiency or any revocation or suspension, or any adverse modification, limitation or restriction of any Insurance License. All of the Insurance Licenses are duly issued, valid, in full force and effect and authorize the Company to transact the business of insurance as set forth in such Insurance License, without restriction, condition or qualification of any kind other than those restrictions, conditions or qualifications generally applicable to all insurance companies transacting the business of insurance as an admitted carrier or excess and surplus carrier, as applicable, in one or more of the Authorized States, or as may otherwise be set forth in any such Insurance License.

2.23 Insurance Regulatory.

(a) TTIC is the only Subsidiary through which the Company sells insurance products. As of the date hereof, there are no material examinations, investigations or inquiries by any Insurance Regulatory Authority in progress with respect to TTIC (other than normal and customary inquiries) nor are any such examinations, investigations or inquiries (other than normal and customary inquiries) pending or scheduled.

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(b) All the Insurance Contracts are, to the extent required under applicable Insurance Laws, on forms and at premium rates approved by the applicable Insurance Regulatory Authority or, to the extent required by applicable Laws, have been filed with and approved or not objected to, as applicable, by such Insurance Regulatory Authority within the period provided for objection, except as is not, or would not reasonably be expected to be, material to the Company. All (i) premiums established and charged by TTIC conform to such premium rates as filed and approved or not objected to, as applicable, by the applicable Insurance Regulatory Authority and (ii) any marketing materials of TTIC have been, to the extent required under applicable Law, filed with or submitted to and approved or not objected to by the relevant Governmental Entity within the period provided for objection, in each case, except as is not, or would not reasonably be expected to be, material to the Company.

(f) Except as required by any Insurance Laws of general applicability and Insurance Licenses, there are no written agreements, memoranda of understanding, commitment letters or similar undertakings between TTIC, on the one hand, and any Governmental Entity, on the other hand. There are no material orders or directives by, or supervisory letters or cease-and-desist orders from, any Governmental Entity that materially restricts the conduct of the business of TTIC, limits in any material respect the ability of TTIC to pay dividends or in any manner relates to its capital adequacy, credit or risk management policies or management.

(i) TTIC is not commercially domiciled in any U.S. jurisdiction or is otherwise treated as domiciled in a jurisdiction other than its jurisdiction of organization.

Section 2.24 Reinsurance.

(a) Each reinsurance or retrocession treaty or agreement slip, binder, cover or other similar arrangement to which TTIC is a party (“Reinsurance Contract”) is valid and binding on TTIC and, to the Company’s Knowledge, each other party thereto, and is in full force and effect, except in each case, as limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance and any other Laws of general application affecting enforcement of creditors rights generally, and as limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies, and except where the failure to be valid, binding or in full force and effect is not, or would not reasonably be expected to be, material to the Company. TTIC and, to the Company’s Knowledge, each third party ceding company or reinsurer that is a party to any Reinsurance Contract is not insolvent or the subject of rehabilitation, liquidation, conservatorship, receivership, bankruptcy or similar proceeding, and the financial condition of such ceding company or reinsurer is not impaired to the extent that a default thereunder is reasonably anticipated, except as is not, or would not reasonably be expected to be, material to the Company. TTIC and, to the Company’s Knowledge, any other party to any Reinsurance Contract, has performed all obligations required to be performed by it thereunder in all material respects.

(c) Since January 1, 2018, (i) there has not been any dispute with respect to any amounts recoverable or payable by TTIC pursuant to any Reinsurance Contract, (ii) no reinsurer party to a Reinsurance Contract has denied coverage or disputed the amount of such with respect to any current or prospective claim and (iii) no ceding party under a Reinsurance Contract has disputed the denial of or the amount of coverage afforded with respect to any current or prospective claim, in each case, except as is not, or would not reasonably be expected to be, material to the Company. TTIC was entitled under SAP to take full financial statement credit for all amounts for which such financial statement credit was taken in the SAP Statements for any amounts recoverable by it pursuant to any Reinsurance Contract.

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2.25 Producers. Any Affiliates and employees of the Company and, to the Company’s Knowledge, each other Person, who, in the case of each of the foregoing, is performing or has performed the duties of an Insurance Producer on behalf of TTIC, at the time such Insurance Producer offered sold, solicited, negotiated or produced any insurance business or otherwise performed services for or on behalf of TTIC, was duly licensed as required by applicable Insurance Laws to perform such duties and performed such duties in compliance with applicable Insurance Laws, except as is not, or would not reasonably be expected to be, material to the Company.

2.26 Other Regulatory Provisions.

(a) To the Company’s Knowledge, none of the Company or Parent nor any director, officer, agent, employee, controlled Affiliate or other person associated with or acting on behalf of the Company or Parent has (i) used any corporate funds for any unlawful contribution, gift, entertainment or other unlawful expense, (ii) made or taken an act in furtherance of any direct or indirect unlawful payment to any foreign or domestic government official or employee from corporate funds or (iii) violated or is in violation of any provision of the Foreign Corrupt Practices Act of 1977, the Bribery Act 2010 of the United Kingdom or any other applicable anti-bribery or anti-corruption Law. The Company, Parent and their Affiliates conduct their business in compliance with applicable anti-corruption Laws and have instituted and maintained policies and procedures reasonably designed to promote and achieve compliance with such Laws.

(b) The operations of the Company and Parent are and have been conducted at all times in compliance with the requirements of applicable Anti-Money Laundering Laws, including the Bank Secrecy Act of 1970, as amended, and the rules and regulations promulgated thereunder, and the applicable Anti-Money Laundering Laws of the various jurisdictions in which the Company and Parent conduct business (collectively, the “Anti-Money Laundering Laws”) and no action by or before any Governmental Entity involving the Company or Parent with respect to the Anti-Money Laundering Laws is pending or threatened.

(c) None of the Company nor Parent nor any director, officer, agent, employee or Affiliate of the Company or Parent is currently the subject or the target of any sanctions administered or enforced by the U.S. Government, including the Office of Foreign Assets Control of the U.S. Department of the Treasury (“OFAC”), or the U.S. Department of State (including the designation as a “specially designated national” or “blocked person”), the European Union, Her Majesty’s Treasury, the United Nations Security Council, or other relevant sanctions authority (collectively, “Sanctions”) or is located, organized, or resident in a country or territory that is the subject of Sanctions, including Crimea, Cuba, Iran, North Korea and Syria (each, a “Sanctioned Country”); and the Company will not directly or indirectly use the proceeds of the offering of the Shares hereunder, or lend, contribute or otherwise make available such proceeds to any Subsidiary, joint venture partner or other Person (i) to fund any activities of or business with any Person, or in any country or territory, that, at the time of such funding, is the subject or the target of Sanctions or (ii) in any other manner that will result in a violation by any Person (including any Person participating in the Transaction, whether as underwriter, advisor, investor or otherwise) of Sanctions. To the Company’s Knowledge, the Company and Parent have not knowingly engaged in and are not now knowingly engaged in, any dealings or transactions with any person that at the time of the dealing or transaction is or was the subject of Sanctions or with any Sanctioned Country in a manner that would violate any Sanctions.

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2.27 Corporate Documents. The Restated Articles and Bylaws of the Company are in the form provided to the Purchaser. The copy of the minute books of the Company provided to the Purchaser contains minutes of all meetings of directors and shareholders and all actions by written consent without a meeting by the directors and shareholders since the date of incorporation and accurately reflects in all material respects all actions by the directors (and any committee of directors) and shareholders with respect to all transactions referred to in such minutes.

2.28 Investment Company. The Company is not required to be registered as, and is not an Affiliate of, and immediately following the Closing will not be required to register as, an “investment company” within the meaning of the Investment Company Act of 1940, as amended.

2.29 Ratings. As of the date of this Agreement, Demotech, Inc. has not announced or notified the Company in writing that the ratings of the Company are under negative watch. To the Company’s Knowledge, as of the date of this Agreement, there are no conditions (financial or otherwise) relating to the Company that result in, or would reasonably be expected to result in, Demotech, Inc. reducing the rating currently held by the Company.

3. Representations and Warranties of the Purchaser. The Purchaser hereby represents and warrants to the Company that:

3.1 Authorization. The Purchaser has full limited partnership power and authority to enter into the Transaction Agreements. The Transaction Agreements to which the Purchaser is a party, when executed and delivered by the Purchaser, will constitute valid and legally binding obligations of the Purchaser, enforceable in accordance with their terms, except (a) as limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance and any other Laws of general application affecting enforcement of creditors rights generally, and as limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies, or (b) to the extent the indemnification provisions contained in the Shareholders Agreement may be limited by applicable federal or state securities laws.

3.2 Purchase Entirely for Own Account. This Agreement is made with the Purchaser in reliance upon the Purchaser’s representation to the Company, which Purchaser hereby confirms, that the entire beneficial ownership interest in the Shares to be acquired by the Purchaser will be acquired for investment for the Purchaser’s own account, not as a nominee or agent, and not with a view to the resale or distribution of any part thereof, and that the Purchaser has no present intention of selling, granting any participation in, or otherwise distributing the same. The Purchaser further represents that the Purchaser does not presently have any contract, undertaking, agreement or arrangement with any Person to sell, transfer or grant participations to such Person or to any third Person, with respect to any of the Shares. The Purchaser has not been formed for the specific purpose of acquiring the Shares.

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3.3 Disclosure of Information. The Purchaser acknowledges that it has (a) received, reviewed and understood the materials made available to it in connection with the transactions contemplated herein (the “Transaction”), (b) had the opportunity to ask questions of and receive answers from the Company directly and (c) had an opportunity to discuss the Company’s business, management, financial affairs and the terms and conditions of the offering of the Shares with the Company’s management and has had an opportunity to review the Company’s facilities. Based on such information as the Purchaser has deemed appropriate, and without reliance upon the Company’s placement agent, J.P. Morgan, the Purchaser has independently made its own analysis and decision to enter into the Transaction. The foregoing, however, does not limit or modify the representations and warranties of the Company in Section 2 of this Agreement or the right of the Purchaser to rely thereon and, except for such representations and warranties, the Purchaser is relying exclusively on its own sources of information, investment analysis and due diligence with respect to the Transaction, the Shares and the business, condition (financial and otherwise), management, operations, properties and prospects of the Company, including but not limited to all business, legal, regulatory, accounting, credit and tax matters.

3.4 Restricted Securities. The Purchaser understands that the Shares are “restricted securities” under applicable U.S. federal and state securities Laws and that, pursuant to these Laws, the Purchaser must hold the Shares indefinitely unless they are registered with the Securities and Exchange Commission and qualified by state authorities or an exemption from such registration and qualification requirements is available. The Purchaser acknowledges that the Company has no obligation to register or qualify the Shares, or the Common Stock into which it may be converted, for resale except as set forth in the Shareholders Agreement. The Purchaser further acknowledges that if an exemption from registration or qualification is available, it may be conditioned on various requirements including, but not limited to, the time and manner of sale, the holding period for the Shares, and on requirements relating to the Company which are outside of the Purchaser’s control, and which the Company is under no obligation and may not be able to satisfy.

3.5 No Public Market. The Purchaser understands that (a) the Shares have not been registered under the securities laws of the United States or any other jurisdiction, (b) no public market now exists for the Shares and (c) the Shares may not be resold or transferred in the United States or otherwise except in compliance with applicable Law and the restrictions on transfer set forth in the Transaction Agreements.

3.6 Legends. The Purchaser understands that the Shares and any securities issued in respect of or exchange for the Shares, may be notated with one or all of the following legends:

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“THE SHARES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AND HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE OR DISTRIBUTION THEREOF. NO SUCH TRANSFER MAY BE EFFECTED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT RELATED THERETO OR PURSUANT TO AN EXEMPTION THEREFROM.

THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO A SHAREHOLDERS AGREEMENT RESTRICTING THE TRANSFER, PLEDGE OR ENCUMBRANCE OF SHARES. ANY TRANSFER OR ACQUISITION IN VIOLATION OF THAT AGREEMENT IS NULL AND VOID. THE COMPANY WILL FURNISH ANY OF ITS SHAREHOLDERS A COPY OF THE AGREEMENT UPON REQUEST AND WITHOUT CHARGE.”

(a) Any legend set forth in, or required by, the other Transaction Agreements.

(b) Any legend required by the securities laws of any state to the extent such Laws are applicable to the Shares represented by the certificate, instrument, or book entry so legended.

3.7 Accredited Investor. The Purchaser is (a) an “accredited investor” within the meaning of Rule 501(a) under the United States Securities Act of 1933, as amended, (b) an Institutional Account as defined in FINRA Rule 4512(c) and (c) a sophisticated institutional investor, experienced in investing in private equity transactions and capable of evaluating investment risks independently, both in general and with regard to all transactions and investment strategies involving a security or securities, including its participation in the Transaction. The Purchaser has determined, based on its own independent review and such professional advice as it deems appropriate, that the purchase of the Shares does not and will not violate or constitute a default under its charter, by-laws or other constituent document or under any law, rule, regulation, agreement or other obligation by which it is bound. The Purchaser is able to bear the substantial risks associated with its purchase of the Shares, including, but not limited to, loss of the entire investment therein.

3.8 No General Solicitation. Neither the Purchaser, nor any of its officers, directors, employees, agents, shareholders or partners has either directly or indirectly, including, through a broker or finder (a) engaged in any general solicitation, or (b) published any advertisement in connection with the offer and sale of the Shares.

3.9 Third Party Beneficiary. The Purchaser acknowledges that J.P. Morgan is an intended third party beneficiary of the representations made by the Purchaser in this Section 3 and may rely on such representations to the same extent as if the representations in this Section 3 had been made to J.P. Morgan.

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3.10 Exculpation . The Purchaser hereby acknowledges and agrees that (a) J.P. Morgan is acting solely as placement agent in connection with the Transaction and is not acting as an underwriter or in any other capacity and is not and shall not be construed as a fiduciary for the Purchaser, (b) J.P. Morgan has not made and will not make any representation or warranty, whether express or implied, of any kind or character to the Purchaser and has not provided any advice or recommendation to the Purchaser in connection with the Transaction, (c) J.P. Morgan will have no responsibility with respect to (i) any representations, warranties or agreements made by any other Person under or in connection with the Transaction or any of the documents furnished pursuant thereto or in connection therewith, or the execution, legality, validity or enforceability (with respect to any person) or any of the foregoing, or (ii) the business, affairs, financial condition, operations, properties or prospects of the Company, and (d) J.P. Morgan shall have no liability or obligation (including without limitation, for or with respect to any losses, claims, damages, obligations, penalties, judgments, awards, liabilities, costs, expenses or disbursements incurred by the Purchaser, whether in contract, tort or otherwise, to the Purchaser in respect of the Transaction. The foregoing will in no way affect the terms of any engagement or retention agreement between the Company and J.P. Morgan.

4. Conditions to the Purchaser’s Obligations at Closing. The obligations of the Purchaser to purchase Shares at the Closing are subject to the fulfillment, on or before such Closing, of each of the following conditions, unless otherwise waived:

4.1 Representations and Warranties. The representations and warranties of the Company contained in Section 2 shall be true and correct in all respects as of such Closing.

4.2 Performance. The Company shall have performed and complied with all covenants, agreements, obligations and conditions contained in this Agreement that are required to be performed or complied with by the Company on or before such Closing.

4.3 Compliance Certificate. The President of the Company shall deliver to the Purchaser at such Closing a certificate certifying that the conditions specified in Subsections 4.1 and 4.2 have been fulfilled.

4.4 Qualifications. All authorizations, approvals or permits, if any, of any Governmental Entity that are required in connection with the lawful issuance and sale of the Shares pursuant to this Agreement shall be obtained and effective as of such Closing.

4.5 Shareholders Agreement. The Company, the Purchaser and the Parent shall have executed and delivered the Shareholders Agreement.

4.6 Restated Articles. The Company shall have filed the Restated Articles with the Secretary of State of Florida on or prior to the Closing, which shall continue to be in full force and effect as of the Closing.

4.7 Secretary’s Certificate. The Secretary of the Company shall have delivered to the Purchaser at the Closing a certificate certifying (i) the Bylaws of the Company, (ii) resolutions of the Board of Directors of the Company approving the Transaction Agreements and the transactions contemplated under the Transaction Agreements, and (iii) resolutions of the shareholders of the Company approving the Restated Articles.

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4.8 Proceedings and Documents. All corporate and other proceedings in connection with the transactions contemplated at the Closing and all documents incident thereto shall be reasonably satisfactory in form and substance to the Purchaser, and the Purchaser (or its counsel) shall have received all such counterpart original and certified or other copies of such documents as reasonably requested. Such documents shall include good standing certificates of the Company and Parent.

4.9 Guaranty Agreement.

(a) The Company and the Parent shall have executed and delivered the Guaranty Agreement.

(b) The Purchaser shall have received a certificate of the Secretary or Assistant Secretary of the Parent, attaching and certifying copies of the Parent’s organization documents and resolutions of its Board of Directors, authorizing the execution and delivery by, and performance of, the Parent of the Guaranty Agreement.

(c) The Purchaser shall have received reasonably acceptable evidence that Parent has received all consents, approvals, authorizations, registrations and filings and orders required or advisable to be made or obtained under any applicable Law, the organization documents of Parent or by any contractual obligation of Parent, in connection with the execution, delivery, performance, validity and enforceability of the Guaranty Agreement or any of the transactions contemplated thereby, and such consents, approvals, authorizations, registrations, filings and orders shall be in full force and effect and all applicable waiting periods shall have expired.

(d) The Purchaser shall have received a legal opinion from Foley & Lardner LLP, in form and substance reasonably acceptable to the Purchaser containing customary matters for transactions of this type and dated as of the Closing.

(e) The Purchaser shall have received a certificate of a responsible officer of Parent certifying as to the accuracy, as of the Closing, of each of the representations and warranties of Parent set forth in Section 3 of the Guaranty Agreement.

4.10 Warrant Agreement. Parent shall have executed and delivered to the Purchaser the Warrant Agreement in substantially the form of Exhibit F attached hereto (the “Warrant Agreement”).

4.11 Parent Debt. The Company shall, in connection with the Closing, repay up to $22 million in borrowed money indebtedness arising after December 10, 2020 and owing to the Parent on or prior to the Closing. Parent will deliver to the Company a pay-off letter for any such indebtedness described in the preceding sentence, evidencing the full repayment and discharge of such indebtedness.

4.12 Board of Directors. The authorized size of the Board of Directors of the Company (the “Board”) shall be eight (8) as of the Closing and the Board shall be comprised of Paresh Patel, Eric Hoffman, Kevin Mitchell, Loreen Spencer, Jim Macchiarola, and Martin Dolan.

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4.13 Indemnification Agreement. The Company shall have executed and delivered the Indemnification Agreements.

5. Conditions of the Company’s Obligations at Closing. The obligations of the Company to sell Shares to the Purchaser at the Closing are subject to the fulfillment, on or before the Closing, of each of the following conditions, unless otherwise waived:

5.1 Representations and Warranties. The representations and warranties of the Purchaser contained in Section 3 shall be true and correct in all respects as of such Closing.

5.2 Performance. The Purchaser shall have performed and complied with all covenants, agreements, obligations and conditions contained in this Agreement that are required to be performed or complied with by them on or before such Closing.

5.3 Qualifications. All authorizations, approvals or permits, if any, of any Governmental Entity that are required in connection with the lawful issuance and sale of the Shares pursuant to this Agreement shall be obtained and effective as of the Closing.

5.4 Shareholders Agreement. The Purchaser shall have executed and delivered the Shareholders Agreement.

6. Miscellaneous.

6.1 Survival of Warranties. Unless otherwise set forth in this Agreement, the representations and warranties of the Company, Parent and the Purchaser contained in or made pursuant to this Agreement shall survive the execution and delivery of this Agreement and the Closing and shall in no way be affected by any investigation or knowledge of the subject matter thereof made by or on behalf of the Purchaser, Parent or the Company.

6.2 Successors and Assigns. The terms and conditions of this Agreement shall inure to the benefit of and be binding upon the respective successors and assigns of the parties. Nothing in this Agreement, express or implied, is intended to confer upon any party other than the parties hereto or their respective successors and assigns any rights, remedies, obligations or liabilities under or by reason of this Agreement, except as expressly provided in this Agreement.

6.3 Governing Law. This Agreement shall be governed by the internal law of the State of New York regardless of its internal choice of law provisions.

6.4 Counterparts. This Agreement may be executed in two (2) or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Counterparts may be delivered via facsimile, electronic mail (including pdf or any electronic signature complying with the U.S. federal ESIGN Act of 2000, e.g., www.docusign.com) or other transmission method and any counterpart so delivered shall be deemed to have been duly and validly delivered and be valid and effective for all purposes.

6.5 Titles and Subtitles. The titles and subtitles used in this Agreement are used for convenience only and are not to be considered in construing or interpreting this Agreement.

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6.6 Press Releases and Announcements. Unless required by Law (in which case each of the parties hereto agrees to use reasonable efforts to consult with the other parties prior to any such disclosure as to the form and content of such disclosure) or as otherwise agreed in writing by the parties, no press releases or other public releases of information related to this Agreement or the other Transaction Agreements or the transactions contemplated hereby or thereby will be issued or released without the consent of each of the parties; provided, that (a) the Purchaser, the Company and their respective Affiliates may issue any such releases of information which do not disclose the economic terms hereof without the consent of any other party hereto and (b) the Purchaser and its Affiliates may provide ordinary course communications regarding this Agreement and the other Transaction Agreements and the transactions contemplated hereby and thereby to existing or prospective direct or indirect equityholders, limited partners or lenders on a confidential basis.

6.7 Notices. All notices and other communications given or made pursuant to this Agreement shall be in writing and shall be deemed effectively given upon the earlier of actual receipt, or (a) personal delivery to the party to be notified, (b) when sent, if sent by electronic mail or facsimile during normal business hours of the recipient, and if not sent during normal business hours, then on the recipient’s next business day, (c) five (5) days after having been sent by registered or certified mail, return receipt requested, postage prepaid, or (d) one (1) business day after deposit with a nationally recognized overnight courier, freight prepaid, specifying next business day delivery, with written verification of receipt. All communications shall be sent to the respective parties at their address as set forth on the signature page or Exhibit A, or to such e-mail address, facsimile number or address as subsequently modified by written notice given in accordance with this Subsection 6.7. If notice is given to the Company or Parent, a copy shall also be sent to Foley & Lardner, LLP, 100 North Tampa St., Suite 2700, Tampa, Florida 33602, Attn.: Curt Creely (ccreely@foley.com) and Beth Felder (bfelder@foley.com), and if notice is given to the Purchaser, a copy shall also be given to Kirkland & Ellis LLP, 601 Lexington Avenue, New York, NY 10022, Attn.: Rajab S. Abbassi (rajab.abbassi@kirkland.com).

6.8 Indemnification for Finder’s Fees. The Purchaser agrees to indemnify and to hold harmless the Company from any liability for any commission or compensation in the nature of a finder’s or broker’s fee arising out of this Transaction (and the costs and expenses of defending against such liability or asserted liability) for which the Purchaser or any of its officers, employees or representatives is responsible. The Company agrees to indemnify and hold harmless the Purchaser from any liability for any commission or compensation in the nature of a finder’s or broker’s fee arising out of this Transaction (and the costs and expenses of defending against such liability or asserted liability) for which the Company or any of its officers, employees or representatives is responsible.

6.9 Amendments and Waivers. Any term of this Agreement may be amended, terminated or waived only with the written consent of the parties. Any amendment or waiver effected in accordance with this Subsection 6.9 shall be binding upon the Purchaser and each transferee of the Shares (or the Common Stock issuable upon conversion thereof), each future holder of all such securities, Parent and the Company.

6.10 Severability. The invalidity or unenforceability of any provision hereof shall in no way affect the validity or enforceability of any other provision.

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6.11 Delays or Omissions. No delay or omission to exercise any right, power or remedy accruing to any party under this Agreement, upon any breach or default of any other party under this Agreement, shall impair any such right, power or remedy of such non-breaching or non-defaulting party nor shall it be construed to be a waiver of any such breach or default, or an acquiescence therein, or of or in any similar breach or default thereafter occurring; nor shall any waiver of any single breach or default be deemed a waiver of any other breach or default theretofore or thereafter occurring. Any waiver, permit, consent or approval of any kind or character on the part of any party of any breach or default under this Agreement, or any waiver on the part of any party of any provisions or conditions of this Agreement, must be in writing and shall be effective only to the extent specifically set forth in such writing. All remedies, either under this Agreement or by law or otherwise afforded to any party, shall be cumulative and not alternative.

6.12 Entire Agreement. This Agreement (including the Exhibits hereto), the Restated Articles and the other Transaction Agreements constitute the full and entire understanding and agreement between the parties with respect to the subject matter hereof, and any other written or oral agreement relating to the subject matter hereof existing between the parties are expressly canceled.

6.13 Expenses. The Company will pay for or reimburse each party for its costs and expenses incurred in the negotiation, preparation, execution and performance of this Agreement and the transactions contemplated hereby that are contemplated to occur at the Closing and in connection with the Control Filing and the actions contemplated by Section 6.14, including in each case the fees and expenses of legal counsel, investment advisors and accountants. Notwithstanding the foregoing, the fees and expenses of J.P. Morgan that are incurred in connection with the transactions contemplated by this Agreement shall be borne by Parent.

6.14 Cooperation. The Purchaser may, at its election and in its sole discretion, after the Closing and in connection with the conversion of the Series A-2 Preferred Stock to Series A-1 Preferred Stock, submit to the Florida Office of Insurance Regulation an application to acquire control of the Company and TTIC under § 628.461 of Fla. Stat. (the “Control Filing”). If the Purchaser elects to submit the Control Filing, the Company and Parent shall cooperate with the Purchaser in good faith in connection with the preparation and filing by the Purchaser of the Control Filing, and in order to obtain, as promptly as practicable after the date of such filing, the approval of the Florida Office of Insurance Regulation with respect thereto, including by furnishing the Purchaser with such necessary information and reasonable assistance as the Purchaser may reasonably request in connection with preparing any necessary filings or submissions of information to the Florida Office of Insurance Regulation, including the Control Filing. The Purchaser may in its sole discretion at any time decide to abandon its attempt to obtain the approval of the Control Filing by the Florida Office of Insurance Regulation.

6.15 Dispute Resolution. The parties (a) hereby irrevocably and unconditionally submit to the jurisdiction of the state courts of New York and to the jurisdiction of the United States District Court for the Southern District of New York, all as located in Manhattan, for the purpose of any suit, action or other proceeding arising out of or based upon this Agreement, (b) agree not to commence any suit, action or other proceeding arising out of or based upon this Agreement except in the federal and

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state courts located within the geographic boundaries of the United States District Court for the Southern District of New York in Manhattan, and (c) hereby waive, and agree not to assert, by way of motion, as a defense, or otherwise, in any such suit, action or proceeding, any claim that it is not subject personally to the jurisdiction of the above-named courts, that its property is exempt or immune from attachment or execution, that the suit, action or proceeding is brought in an inconvenient forum, that the venue of the suit, action or proceeding is improper or that this Agreement or the subject matter hereof may not be enforced in or by such court.

WAIVER OF JURY TRIAL: EACH PARTY HEREBY WAIVES ITS RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT, THE OTHER TRANSACTION AGREEMENTS, THE SECURITIES OR THE SUBJECT MATTER HEREOF OR THEREOF. THE SCOPE OF THIS WAIVER IS INTENDED TO BE ALL-ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY BE FILED IN ANY COURT AND THAT RELATE TO THE SUBJECT MATTER OF THIS TRANSACTION, INCLUDING, WITHOUT LIMITATION, CONTRACT CLAIMS, TORT CLAIMS (INCLUDING NEGLIGENCE), BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW AND STATUTORY CLAIMS. THIS SECTION HAS BEEN FULLY DISCUSSED BY EACH OF THE PARTIES HERETO AND THESE PROVISIONS WILL NOT BE SUBJECT TO ANY EXCEPTIONS. EACH PARTY HERETO HEREBY FURTHER WARRANTS AND REPRESENTS THAT SUCH PARTY HAS REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL, AND THAT SUCH PARTY KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL.

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IN WITNESS WHEREOF, the parties have executed this Preferred Stock Purchase Agreement as of the date first written above.

COMPANY:
TYPTAP INSURANCE GROUP, INC.
By:	/s/ Paresh Patel
Name: Paresh Patel
Title: Chief Executive Officer
PARENT:
HCI GROUP, INC.
By:	/s/ Andrew L. Graham
Name: Andrew L. Graham
Title: Secretary and General Counsel
Address for Company and Parent:
5300 West Cypress Street, Suite 100
Tampa, Florida 33607
Attention: Andrew L. Graham, General Counsel
Email: agraham@hcigroup.com

SIGNATURE PAGE TO STOCK PURCHASE AGREEMENT

PURCHASER:
CB SNOWBIRD HOLDINGS, L.P.
By: CSCP III Cayman GP Ltd., its general partner
By:	/s/ Gavin Baiera
Name: Gavin Baiera
Title: Authorized Signatory
Address:
c/o Centerbridge Partners, L.P. 375 Park Avenue, 11th Floor
New York, NY 10152-0002
Attn: The Office of the General Counsel
Eric Hoffman
Email: ehoffman@centerbridge.com
	legalnotices@centerbridge.com

SIGNATURE PAGE TO STOCK PURCHASE AGREEMENT

EXHIBITS

Exhibit A -	SCHEDULE OF PURCHASER
Exhibit B -	FORM OF AMENDED AND RESTATED ARTICLES OF INCORPORATION
Exhibit C -	DISCLOSURE SCHEDULE
Exhibit D -	FORM OF SHAREHOLDERS AGREEMENT
Exhibit E -	FORM OF GUARANTY AGREEMENT
Exhibit F -	FORM OF WARRANT AGREEMENT

EXHIBIT A

SCHEDULE OF PURCHASER’S SHARES

	No. of A-1 Shares		No. of A-2 Shares		Total Price
CB Snowbird Holdings, L.P.		9,000,000		1,000,000	$	100,000,000.00

EXHIBIT B

FORM OF AMENDED AND RESTATED

ARTICLES OF INCORPORATION

AMENDED AND RESTATED

ARTICLES OF INCORPORATION

OF

TYPTAP INSURANCE GROUP, INC.

(Pursuant to Sections 607.1007 and 607.1003

of the Florida Business Corporation Act)

TypTap Insurance Group, Inc., a corporation organized and existing under and by virtue of the provisions of the Florida Business Corporation Act (the “FBCA”),

DOES HEREBY CERTIFY:

1. That this Corporation is named TypTap Insurance Group, Inc. (the “Corporation”) and was originally incorporated in the State of Florida on July 21, 2020, and that these Amended and Restated Articles of Incorporation shall amend, restate and supersede in their entirety any and all prior Articles of Incorporation, as amended, and any other Articles of Amendment or Certificates of Designation thereto, filed with the State of Florida from the date of the Corporation’s original incorporation through the date hereof.

2. That these Amended and Restated Articles of Incorporation have been approved by the Board of Directors and shareholders of the Corporation in the manner and by the vote required by the FBCA. These Amended and Restated Articles of Incorporation contain amendments that require shareholder approval. These Amended and Restated Articles of Incorporation were approved by the shareholders pursuant to a written consent in lieu of a meeting dated February 26, 2021, and the votes cast for the amendment by the shareholders were sufficient for approval.

That the Articles of Incorporation of this Corporation have been amended and restated in their entirety to read as follows:

FIRST: The name of this corporation is TypTap Insurance Group, Inc. (the “Corporation”).

SECOND: The address of the principal office of the Corporation is 5300 W. Cypress Street, Suite 100, Tampa, Florida 33607. The mailing address of the Corporation is 5300 W. Cypress Street, Suite 100, Tampa, Florida 33607. The address of the Corporation’s registered office is One Independent Drive, Suite 1300, Jacksonville, Florida 32202. The name of the registered agent at such address is F&L Corp.

THIRD: The nature of the business or purposes to be conducted or promoted is to engage in any lawful act or activity for which corporations may be organized under the FBCA.

FOURTH: The total number of shares of all classes of stock which the Corporation shall have authority to issue is (i) 181,860,000 shares of voting Common Stock, $0.001 par value per share (“Voting Common Stock”), (ii) 1,140,000 shares of non-voting Common Stock, $0.001 par value per share (“Non-Voting Common Stock,” and, together with Voting Common Stock, “Common Stock”) and (iii) 37,502,000 shares of Preferred Stock, $0.001 par value per share

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(“Preferred Stock”). Pursuant to Section 607.0602 of the FBCA, the Board of Directors is authorized, without the approval of the shareholders of the Corporation, to (a) provide for the classification and reclassification of any unissued shares of Preferred Stock and determine the preferences, limitations, and relative rights thereof and (b) issue Preferred Stock in one or more classes or series, all within the limitations set forth in Section 607.0601 of the FBCA.

The following is a statement of the designations and the powers, privileges and rights, and the qualifications, limitations or restrictions thereof in respect of each class of capital stock of the Corporation.

A. COMMON STOCK

1. General. The voting, dividend and liquidation rights of the holders of the Common Stock are subject to and qualified by the rights, powers and preferences of the holders of the Preferred Stock set forth herein.

2. Voting. The holders of the Voting Common Stock are entitled to one vote for each share of Voting Common Stock held at all meetings of shareholders (and written actions in lieu of meetings). The holders of the Non-Voting Common Stock are not entitled to vote on any matter presented to the shareholders of the Corporation for their action or consideration at any meeting of stockholders of the Corporation (or by written consent of shareholders in lieu of meeting). The number of authorized shares of Common Stock may be increased or decreased (but not below the number of shares thereof then outstanding) by (in addition to any vote of the holders of one or more series of Preferred Stock that may be required by the terms of these Amended and Restated Articles of Incorporation) the affirmative vote of the holders of shares of capital stock of the Corporation representing a majority of the votes represented by all outstanding shares of capital stock of the Corporation entitled to vote, irrespective of the provisions of Section 607.1004 of the FBCA.

B. PREFERRED STOCK

36,362,000 shares of the authorized and unissued Preferred Stock of the Corporation are hereby designated “Series A-1 Preferred Stock”, and 1,140,000 shares of the authorized and unissued Preferred Stock of the Corporation are hereby designated “Series A-2 Preferred Stock”, each with the following rights, preferences, powers, privileges and restrictions, qualifications and limitations set forth in this Part B of Article Fourth. The Series A-1 Preferred Stock and the Series A-2 Preferred Stock are hereinafter referred to collectively as “Series A Preferred Stock”. Unless otherwise indicated, references to “Sections” in this Part B of this Article Fourth refer to sections of Part B of this Article Fourth.

1. Dividends.

1.1 Accrual of Dividends. From and after the Original Issue Date dividends shall accrue on such shares of Series A Preferred Stock (as adjusted in the event of any stock dividend, stock split, combination or other similar recapitalization with respect to the Series A Preferred Stock, the “Accruing Dividends”) at the following rates: (i) during the first year following the Original Issue Date, $0.50 per share per annum, or, if the Corporation elects to pay such dividends as PIK Dividends as defined in and pursuant to Section 1.2 below, $0.60 per share

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per annum; (ii) during the second year following the Original Issue Date, $0.60 per share per annum or, if the Corporation elects to pay such dividends as PIK Dividends as defined in and pursuant to Section 1.2 below, $0.70 per share per annum; (iii) during the third year following the Original Issue Date, $0.75 per share per annum; and (iv) during the fourth year following the Original Issue Date and thereafter, $0.95 per share per annum. Accruing Dividends shall accrue from day to day, whether or not declared, shall be cumulative and shall be payable semi-annually in arrears on March 1 and September 1 of each year, commencing September 1, 2021 (pro-rated for partial months), except that if such date is not a Business Day then to the extent so declared by the Board of Directors the dividend shall be payable on the first immediately succeeding Business Day (as used herein, the term “Business Day” shall mean any day except a Saturday, Sunday or day on which banking institutions are legally authorized to close in Tampa, Florida) (each such date being hereinafter referred to as a “Dividend Payment Date”).

1.2 Payment of Dividends. Accruing Dividends shall be paid in cash out of legally available funds; provided, however, the Corporation may elect, in its sole discretion, to pay the Accruing Dividends accrued on the Series A Preferred Stock during the first year following the Original Issue Date and the second year following the Original Issue Date in fully paid and non-assessable shares of Series A-2 Preferred Stock until the Special Mandatory Conversion Date (as defined below) and in fully paid and non-assessable shares of Series A-1 Preferred Stock following the Special Mandatory Conversion Date (such dividends paid in shares as set forth herein being the “PIK Dividends”). PIK Dividends shall be paid by issuing to each record holder of Series A Preferred Stock a number of shares of Series A-1 Preferred Stock or Series A-2 Preferred Stock, as applicable (“PIK Dividend Shares”), determined by dividing (x) the total aggregate dollar amount of unpaid Accruing Dividends with respect to the applicable Series A Preferred Stock owned by such record holder on the record date for the applicable Dividend Payment Date (rounded to the nearest whole cent) by (y) the Original Issue Price (as defined below) for such applicable series of Series A Preferred Stock. PIK Dividend Shares will be delivered in book entry form unless a holder requests physical certificates. If the Corporation delivers PIK Dividend Shares in lieu of cash with respect to any of the Accruing Dividends for an applicable Dividend Payment Date, it must do so with respect to all (but not less than all) of such dividends payable for the applicable Dividend Payment Date. The Corporation shall not issue fractional shares of Series A Preferred Stock to which holders may become entitled pursuant to this subparagraph, but in lieu thereof, the Corporation shall pay to such holders an amount equal to the product obtained by multiplying the Original Issue Price by the fraction of a share not issued pursuant to the previous sentence. Each dividend shall be paid to the holders of record of Series A Preferred Stock as they appear on the stock register of the Corporation on the record date, not more than ten (10) days after the applicable Dividend Payment Date, as shall be fixed by the Board of Directors. Dividends payable on each Dividend Payment Date shall be computed on the basis of a 360-day year of twelve 30-day months and rounded to the nearest cent. Dividends on account of arrearages for any past Dividend Payment Date may be declared and paid at any time, without reference to any scheduled Dividend Payment Date, to holders of record on such date, as may be fixed by the Board of Directors of the Corporation. Interest shall accrue and be payable with respect to any dividend payment that may be in arrears at the dividend rate then in effect, compounding semi-annually.

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1.3 Other Dividends. The Corporation shall not declare, pay or set aside any dividends on shares of any other class or series of capital stock of the Corporation (other than dividends on shares of Common Stock payable in shares of Common Stock) unless (in addition to the obtaining of any consents required elsewhere in these Amended and Restated Articles of Incorporation) the holders of the Series A Preferred Stock then outstanding shall first receive, or simultaneously receive, a dividend on each outstanding share of Series A Preferred Stock in an amount at least equal to the sum of (i) the amount of the aggregate Accruing Dividends then accrued on such share of Series A Preferred Stock and not previously paid plus (ii) (A) in the case of a dividend on Common Stock or any class or series that is convertible into Common Stock, that dividend per share of Series A Preferred Stock as would equal the product of (1) the dividend payable on each share of such class or series determined, if applicable, as if all shares of such class or series had been converted into Common Stock and (2) the number of shares of Common Stock issuable upon conversion of a share of Series A Preferred Stock, in each case calculated on the record date for determination of holders entitled to receive such dividend or (B) in the case of a dividend on any class or series that is not convertible into Common Stock, at a rate per share of Series A Preferred Stock determined by (1) dividing the amount of the dividend payable on each share of such class or series of capital stock by the original issuance price of such class or series of capital stock (subject to appropriate adjustment in the event of any stock dividend, stock split, combination or other similar recapitalization with respect to such class or series) and (2) multiplying such fraction by an amount equal to the applicable Original Issue Price; provided that if the Corporation declares, pays or sets aside, on the same date, a dividend on shares of more than one (1) class or series of capital stock of the Corporation, the dividend payable to the holders of Series A Preferred Stock pursuant to this Section 1 shall be calculated based upon the dividend on the class or series of capital stock that would result in the highest Series A Preferred Stock dividend. The “Original Issue Price” shall mean, as to the Series A Preferred Stock, $10.00 per share, subject to appropriate adjustment in the event of any stock dividend, stock split, combination or other similar recapitalization with respect to the applicable Series A Preferred Stock.

2. Liquidation, Dissolution or Winding Up; Certain Mergers, Consolidations and Asset Sales.

2.1 Preferential Payments to Holders of Series A Preferred Stock.

2.1.1 Company Liquidation. In the event of a Liquidation Event (as defined below) or Deemed Liquidation Event with respect to the Corporation, the holders of shares of Series A Preferred Stock then outstanding shall be entitled to be paid before any payment shall be made to the holders of Common Stock by reason of their ownership thereof, an amount per share equal to the greater of (i) the Original Issue Price, plus any Accruing Dividends accrued but unpaid thereon, whether or not declared, together with any other dividends declared but unpaid thereon (the “Liquidation Amount”), and (ii) the Fair Market Value (determined as in accordance with Section 6.1) of a single share of Series A Preferred Stock as of the date of the Liquidation Event or Deemed Liquidation Event (the amount payable pursuant to this sentence is hereinafter referred to as the “Liquidation Price”).

2.1.2 Parent Liquidation. In the event of a Liquidation Event or Deemed Liquidation Event with respect to HCI Group, Inc., a Florida corporation (“Parent”), the Series A Preferred Stock then outstanding shall be redeemed by the Corporation at the Liquidation Price within thirty (30) days after such Liquidation Event or Deemed Liquidation Event with respect to Parent, unless the Requisite Holders (as defined below) elect otherwise by written notice sent to the Corporation within ten (10) days after such Liquidation Event or Deemed Liquidation Event with respect to Parent.

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2.1.3 Definition. Each of the following events shall be considered a “Liquidation Event” with respect to any person:

(a) the commencement of an involuntary proceeding or the filing of an involuntary petition seeking:

(i) liquidation, court protection, reorganization or other relief in respect of such person or its debts, or of a material part of its assets, under any Federal, state or foreign bankruptcy, insolvency, receivership or similar law now or hereafter in effect; or

(ii) the appointment of a receiver, trustee, custodian, examiner, sequestrator, conservator or similar official for such person or for a material part of its assets;

(b) such person shall have:

(i) voluntarily commenced any proceeding or filed any petition seeking liquidation, court protection, reorganization or other relief under any Federal, state or foreign bankruptcy, insolvency, receivership or similar law now or hereafter in effect;

(ii) consented to the institution of, or fail to contest in a timely and appropriate manner, any proceeding or petition described in this definition;

(iii) applied for or consented to the appointment of a receiver, trustee, examiner, custodian, sequestrator, conservator or similar official for Parent or for a material part of its assets;

(iv) filed an answer admitting the material allegations of a petition filed against it in any such proceeding; or

(v) made a general assignment for the benefit of creditors.

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2.2 Payments to Holders of Common Stock. In the event of a Liquidation Event with respect to the Corporation, after the payment in full of the Liquidation Price required to be paid to the holders of shares of Series A Preferred Stock, the remaining assets of the Corporation available for distribution to its stockholders or, in the case of a Deemed Liquidation Event with respect to the Corporation, the consideration not payable to the holders of shares of Series A Preferred Stock pursuant to Section 2.1 or the remaining Available Proceeds, as the case may be, shall be distributed among the holders of shares of Common Stock, pro rata based on the number of shares held by each such holder.

2.3 Deemed Liquidation Events.

2.3.1 Definition. Each of the following events shall be considered a “Deemed Liquidation Event” with respect to any person unless the holders of at least a majority of the outstanding shares of Series A-1 Preferred Stock (the “Requisite Holders”) elect otherwise by written notice sent to the Corporation at least ten (10) days prior to the effective date of any such event:

(a) a merger or consolidation in which

(i) such person is a constituent party or

(ii) a subsidiary of such person is a constituent party and such person issues shares of its capital stock pursuant to such merger or consolidation,

except any such merger or consolidation involving such person or a subsidiary in which the shares of capital stock of such person outstanding immediately prior to such merger or consolidation continue to represent, or are converted into or exchanged for shares of capital stock that represent, immediately following such merger or consolidation, at least a majority, by voting power, of the capital stock of (1) the surviving or resulting corporation; or (2) if the surviving or resulting corporation is a wholly owned subsidiary of another corporation immediately following such merger or consolidation, the parent corporation of such surviving or resulting corporation;

(b) the sale, lease, transfer, exclusive license or other disposition, in a single transaction or series of related transactions, by such person or any subsidiary of such person of all or substantially all the assets of such person and its subsidiaries taken as a whole, or the sale or disposition (whether by merger, consolidation or otherwise, and whether in a single transaction or series of related transactions) of one or more subsidiaries of such person if substantially all of the assets of such person and its subsidiaries taken as a whole are held by such subsidiary or subsidiaries, except where such sale, lease, transfer, exclusive license or other disposition is to a wholly owned subsidiary of such person;

(c) in the case of the Corporation, a Liquidation Event or a Deemed Liquidation Event with respect to any subsidiary of the Corporation that is an insurance carrier; or

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(d)in the case of Parent, (A) the inaccuracy in any material respect of any representation or warranty made by Parent in that certain Parent Guaranty Agreement executed by Parent in favor of a certain holder of Series A Preferred Stock (the “Investor”) and dated on or about the date of these Amended and Restated Articles of Incorporation (the “Parent Guaranty”), or (B) the breach by Parent of (1) any of its payment obligations contemplated under Section 2 of the Parent Guaranty, or (2) any of the covenants set forth in Section 5.1, Section 5.2, Section 5.3, Section 5.4, Section 5.6, Section 6.1 or Section 6.2 of the Parent Guaranty, in each case, that remains uncured, or is not capable of being cured, thirty (30) days after Investor delivers to Parent written notice of such inaccuracy or breach.

2.3.2 Effecting a Deemed Liquidation Event of the Corporation.

(a) The Corporation shall not have the power to effect a Deemed Liquidation Event referred to in Section 2.3.1(a)(i) unless the agreement or plan of merger or consolidation for such transaction (the “Merger Agreement”) provides that the consideration payable to the stockholders of the Corporation in such Deemed Liquidation Event shall be allocated to the holders of capital stock of the Corporation in accordance with Sections 2.1 and 2.2.

(b) The Corporation shall give each holder of record of Series A Preferred Stock written notice of any impending Deemed Liquidation Event of the Corporation not later than twenty (20) days prior to the shareholders’ meeting called to approve such transaction, or twenty (20) days prior to the closing of such transaction, whichever is earlier, and shall also notify such holders in writing of the final approval of such transaction. The first of such notices shall describe the material terms and conditions of the impending transaction and the provisions of this Section 2, and the Corporation shall thereafter give such holders prompt notice of any material changes. The transaction shall in no event take place sooner than twenty (20) days after the Corporation has given the first notice provided for herein or sooner than ten (10) days after the Corporation has given notice of any material changes provided for herein; provided, however, that subject to compliance with Florida law such periods may be shortened or waived upon the written consent of the Requisite Holders. The Corporation shall on or before the thirtieth (30^th) day after such Deemed Liquidation Event, redeem all outstanding shares of Series A Preferred Stock at a price per share equal to the Liquidation Price, The Corporation shall use the consideration received by the Corporation from any Deemed Liquidation Event of the Corporation (net of any retained liabilities associated with the assets sold or technology licensed, as determined in good faith by the Board of Directors of the Corporation) towards the payment of the Liquidation Price in the event of any redemption in connection with a Deemed Liquidation Event of the Corporation (the “Available Proceeds”). The provisions of Section 6 shall apply, with such necessary changes in the details thereof as are necessitated by the context, to the redemption of the Series A Preferred Stock pursuant to this Section 2.3.2(b). Prior to the distribution or redemption provided for in this Section 2.3.2(b), the Corporation shall not expend or dissipate the consideration received for such Deemed Liquidation Event, except to discharge expenses incurred in connection with such Deemed Liquidation Event or in the ordinary course of business.

2.3.3 Amount Deemed Paid or Distributed. The amount deemed paid or distributed to the holders of capital stock of the Corporation upon any such merger, consolidation, sale, transfer, exclusive license, other disposition or redemption shall be the cash or the value of the property, rights or securities to be paid or distributed to such holders pursuant to such Deemed Liquidation Event.

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2.3.4 Allocation of Escrow and Contingent Consideration. In the event of a Deemed Liquidation Event of the Corporation pursuant to Section 2.3.1(a)(i), if any portion of the consideration payable to the stockholders of the Corporation is payable only upon satisfaction of contingencies (the “Additional Consideration”), the Merger Agreement shall provide that (a) the portion of such consideration that is not Additional Consideration (such portion, the “Initial Consideration”) shall be allocated among the holders of capital stock of the Corporation in accordance with Sections 2.1 and 2.2 as if the Initial Consideration were the only consideration payable in connection with such Deemed Liquidation Event of the Corporation; and (b) any Additional Consideration which becomes payable to the stockholders of the Corporation upon satisfaction of such contingencies shall be allocated among the holders of capital stock of the Corporation in accordance with Sections 2.1 and 2.2 after taking into account the previous payment of the Initial Consideration as part of the same transaction. For the purposes of this Section 2.3.4, consideration placed into escrow or retained as a holdback to be available for satisfaction of indemnification or similar obligations in connection with such Deemed Liquidation Event of the Corporation shall be deemed to be Additional Consideration.

3. Voting.

3.1 General. On any matter presented to the stockholders of the Corporation for their action or consideration at any meeting of stockholders of the Corporation (or by written consent of stockholders in lieu of meeting), each holder of outstanding shares of Series A-1 Preferred Stock shall be entitled to cast the number of votes equal to the number of whole shares of Common Stock into which the shares of Series A-1 Preferred Stock held by such holder are convertible as of the record date for determining stockholders entitled to vote on such matter. Except as provided by law or by the other provisions of these Amended and Restated Articles of Incorporation, holders of Series A-1 Preferred Stock shall vote together with the holders of Common Stock as a single class and on an as-converted to Common Stock basis. Other than as set forth in Section 3.3, holders of outstanding shares of Series A-2 Preferred Stock shall not be entitled to vote on any matter presented to the stockholders of the Corporation for their action or consideration at any meeting of stockholders of the Corporation (or by written consent of stockholders in lieu of meeting).

3.2 Election of Directors. The holders of record of the shares of Series A-1 Preferred Stock, exclusively and as a separate class, shall be entitled to elect one (1) director of the Corporation (the “Preferred Director”) and the holders of record of the shares of Common Stock, exclusively and as a separate class, shall be entitled to elect six (6) directors of the Corporation; provided, however, for administrative convenience, the initial Preferred Director may also be appointed by the Board of Directors in connection with the approval of the initial issuance of Series A-1 Preferred Stock without a separate action by the holders of Series A-1 Preferred Stock. Any director elected as provided in the preceding sentence may be removed without cause by, and only by, the affirmative vote of the holders of the shares of the class or series of capital stock entitled to elect such director or directors, given either at a special meeting of such stockholders duly called for that purpose or pursuant to a written consent of stockholders. If the holders of shares of Series A-1 Preferred Stock or Common Stock, as the case may be, fail to elect

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a sufficient number of directors to fill all directorships for which they are entitled to elect directors, voting exclusively and as a separate class, pursuant to the first sentence of this Section 3.2, then any directorship not so filled shall remain vacant until such time as the holders of the Series A-1 Preferred Stock or Common Stock, as the case may be, elect a person to fill such directorship by vote or written consent in lieu of a meeting; and no such directorship may be filled by stockholders of the Corporation other than by the stockholders of the Corporation that are entitled to elect a person to fill such directorship, voting exclusively and as a separate class. The holders of record of the shares of Common Stock and of any other class or series of voting stock (including the Series A-1 Preferred Stock on an as converted basis), exclusively and voting together as a single class, shall be entitled to elect the balance of the total number of directors of the Corporation. At any meeting held for the purpose of electing a director, the presence in person or by proxy of the holders of a majority of the outstanding shares of the class or series entitled to elect such director shall constitute a quorum for the purpose of electing such director. Except as otherwise provided in this Section 3.2, a vacancy in any directorship filled by the holders of any class or classes or series shall be filled only by vote or written consent in lieu of a meeting of the holders of such class or classes or series or by any remaining director or directors elected by the holders of such class or classes or series pursuant to this Section 3.2. The rights of the holders of the Series A-1 Preferred Stock under the first sentence of this Section 3.2 shall terminate on the first date following the date the first share of Series A Preferred Stock was issued (the “Original Issue Date”) on which there are issued and outstanding less than 3,300,000, in the aggregate, of any combination of (i) shares of Series A Preferred Stock, and (ii) shares of Common Stock issued upon any conversion of Series A Preferred Stock (in each case, subject to appropriate adjustment in the event of any stock dividend, stock split, combination, or other similar recapitalization with respect to the Series A Preferred Stock).

3.3 Series A Preferred Stock Protective Provisions. At any time when shares of Series A Preferred Stock are outstanding, the Corporation shall not, either directly or indirectly by amendment, merger, consolidation, recapitalization, reclassification, or otherwise, do any of the following without (in addition to any other vote required by law or these Amended and Restated Articles of Incorporation) the written consent or affirmative vote of the Requisite Holders and the holders of at least a majority of the outstanding shares of Series A-2 Preferred Stock given in writing or by vote at a meeting, consenting or voting (as the case may be) separately as a class, and any such act or transaction entered into without such consent or vote shall be null and void ab initio, and of no force or effect.

3.3.1 amend, alter, waiver or repeal any provision of these Amended and Restated Articles of Incorporation or Bylaws of the Corporation or any similar document with respect to any capital stock the Corporation or any of its subsidiaries in a manner that adversely affects the powers, preferences or rights of any Series A Preferred Stock; or

3.3.2 increase or decrease the authorized number of shares of Preferred Stock.

3.4 Series A-1 Preferred Stock Protective Provisions. At any time when shares of Series A Preferred Stock are outstanding, the Corporation shall not, either directly or indirectly, by amendment, merger, consolidation, recapitalization, reclassification, or otherwise, do any of the following without (in addition to any other vote required by law or these Amended

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and Restated Articles of Incorporation) the written consent or affirmative vote of the Requisite Holders given in writing or by vote at a meeting, consenting or voting (as the case may be) separately as a class, and any such act or transaction entered into without such consent or vote shall be null and void ab initio, and of no force or effect.

3.4.1 effect a merger, liquidation, dissolution or winding up of the Corporation, or reclassification or recapitalization of the outstanding capital stock of the Corporation, effect any changes to the ownership structure of the Corporation’s subsidiaries (other than transfers to the Corporation or to any other subsidiary thereof), or consummate a “combination” transaction with a special purpose acquisition vehicle that has raised a blind pool of capital through an initial public offering pursuant to which the combined company’s securities are exchange listed and publicly traded; provided, however, a Drag-Along Transaction (as defined below) shall not require the written consent or affirmative vote of the Requisite Holders;

3.4.2 (i) create, or authorize the creation of, or issue or obligate itself to issue shares of, or reclassify, any capital stock unless the same ranks junior to the Series A Preferred Stock with respect to its rights, preferences and privileges, or (ii) increase the authorized number of shares of any class or series of capital stock of the Corporation (other than the Series A Preferred Stock) unless the same ranks junior to the Series A Preferred Stock with respect to its rights, preferences and privileges;

3.4.3 purchase or redeem (or permit any subsidiary to purchase or redeem), or authorize, pay or declare any dividend or make any distribution on, any shares of capital stock of the Corporation other than (i) redemptions of or dividends or distributions on the Series A Preferred Stock as expressly authorized herein and (iii) repurchases of stock owned by current or former employees of the Corporation or any of its subsidiaries or other service providers pursuant to contractual rights of first refusal;

3.4.4 incur, issue or repay any Indebtedness (whether in a single transaction or a series of related or unrelated transactions) that, in the aggregate, exceeds $5,000,000; provided that the maximum amount of such Indebtedness may be increased proportionally (but not above $25,000,000) to account for an increase of the consolidated book value of the Corporation and its subsidiaries (determined in accordance with United States generally accepted accounting principles) relative to the consolidated book value of the Corporation and its subsidiaries (determined in accordance with United States generally accepted accounting principles) as of the Original Issue Date with the consent of the Requisite Holders (such consent not to be unreasonably withheld, conditioned or delayed if the requested increase in such amount is commensurate or reasonably supported by the underlying growth of the Corporation), or incur any Indebtedness that is convertible into capital stock of the Corporation;

3.4.5 remove or replace or hire any new person to serve as the Chief Executive Officer or President of the Corporation other than for cause;

3.4.6 change the nature of the Corporation’s business operations or that of any of its subsidiaries;

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3.4.7 enter into any transaction with shareholders, officers, directors and affiliates (or shareholders, officers or directors of such affiliates) of the Corporation or amend any such existing transaction or arrangement, in each case, other than issuances of capital stock of the Corporation on which the Series A Preferred Stockholders have preemptive rights and transactions or agreements between the Corporation and its subsidiaries, on the one hand, and Parent and its subsidiaries, on the other hand, which are both (a) not materially less favorable in the aggregate to the Corporation and its subsidiaries than transactions or agreements that would be available on an arm’s length basis with independent third parties and (b) consistent with past practice; or

3.4.8 enter into any agreement or arrangement to do any of the foregoing.

3.5 Definitions.

3.5.1 “Indebtedness” means (a) any indebtedness for borrowed money, (b) other indebtedness that is evidenced by a note, bond, draft, debenture, mortgage or similar debt instrument, (c) obligations under capital leases, (d) letters of credit to the extent drawn or funded with cash collateral, (e) obligations created or arising under any conditional sale or other title retention agreement with respect to property acquired, (f) indebtedness secured by any encumbrance on any assets of the Corporation or its subsidiaries, (g) earnout payments, installment payments or other similar payments of deferred or contingent purchase price relating to any acquisition of the assets or securities of any person, (h) any performance or surety bonds, performance guaranties or similar financial commitments to the extent drawn or funded with cash collateral, (i) interest rate protection, hedges or similar arrangements, including swaps, caps, collars, hedges or similar arrangements, and (j) guarantees, whether direct or indirect, of Indebtedness of others or Indebtedness of any other person secured by any assets of the Corporation or any of its subsidiaries.

3.5.2 “Drag-Along Transaction” means a sale to a third party of a majority of the equity, or all or substantially all of the assets, of the Corporation, including by means of a merger, consolidation, recapitalization or any other means, occurring prior to a Qualified Public Offering and pursuant to which the holders of shares of Series A Preferred Stock and any shares of Common Stock that were issued upon the prior conversion of the Series A Preferred Stock, in the aggregate, receive or have the right to receive consideration having a value equal to or greater than one and one half (1.5) times the Original Issue Price with respect to all shares of Series A Preferred Stock that are then issued.

4. Optional Conversion. The holders of the Series A Preferred Stock shall have conversion rights as follows (the “Conversion Rights”):

4.1 Right to Convert.

4.1.1 Conversion Ratio. Each share of Series A-1 Preferred Stock shall be convertible, at the option of the holder thereof, at any time and from time to time, and without the payment of additional consideration by the holder thereof, into such number of fully paid and non-assessable shares of Voting Common Stock as is determined by dividing the Original

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Issue Price by the Conversion Price (as defined below) in effect at the time of conversion. Each share of Series A-2 Preferred Stock shall be convertible, at the option of the holder thereof, at any time and from time to time, and without the payment of additional consideration by the holder thereof, into such number of fully paid and non-assessable shares of Non-Voting Common Stock as is determined by dividing the Original Issue Price by the Conversion Price in effect at the time of conversion. The “Conversion Price” applicable to the Series A Preferred Stock shall initially be equal to the Original Issue Price. Such initial Conversion Price, and the rate at which shares of Series A Preferred Stock may be converted into shares of Common Stock, shall be subject to adjustment as contemplated by the definition of Original Issue Price and also as provided below.

4.1.2 Termination of Conversion Rights. In the event of a notice of redemption of any shares of Series A Preferred Stock pursuant to Section 6, the Conversion Rights of the shares designated for redemption shall terminate at the close of business on the last full day preceding the date fixed for redemption, unless the redemption price is not fully paid on such redemption date, in which case the Conversion Rights for such shares shall continue until such price is paid in full. In the event of a Liquidation Event of the Corporation or a Deemed Liquidation Event of the Corporation, the Conversion Rights shall terminate at the close of business on the last full day preceding the date fixed for the payment of any such amounts distributable on such event to the holders of Series A Preferred Stock; provided that the foregoing termination of Conversion Rights shall not affect the amount(s) otherwise paid or payable in accordance with Section 2.1 to holders of Series A Preferred Stock pursuant to such Liquidation Event of the Corporation or a Deemed Liquidation Event of the Corporation.

4.2 Fractional Shares. No fractional shares of Common Stock shall be issued upon conversion of the Series A Preferred Stock. In lieu of any fractional shares to which the holder would otherwise be entitled, the number of shares of Common Stock to be issued upon conversion of the Series A Preferred Stock shall be rounded to the nearest whole share.

4.3 Mechanics of Conversion.

4.3.1 Notice of Conversion. In order for a holder of Series A Preferred Stock to voluntarily convert shares of Series A Preferred Stock into shares of Voting Common Stock or Non-Voting Common Stock, as applicable, such holder shall (a) provide written notice to the Corporation’s transfer agent at the office of the transfer agent for the Series A Preferred Stock (or at the principal office of the Corporation if the Corporation serves as its own transfer agent) that such holder elects to convert all or any number of such holder’s shares of Series A Preferred Stock and, if applicable, any event on which such conversion is contingent and (b), if such holder’s shares are certificated, surrender the certificate or certificates for such shares of Series A Preferred Stock (or, if such registered holder alleges that such certificate has been lost, stolen or destroyed, a lost certificate affidavit and agreement reasonably acceptable to the Corporation to indemnify the Corporation against any claim that may be made against the Corporation on account of the alleged loss, theft or destruction of such certificate), at the office of the transfer agent for the Series A Preferred Stock (or at the principal office of the Corporation if the Corporation serves as its own transfer agent). Such notice shall state such holder’s name or the names of the nominees in which such holder wishes the shares of Voting Common Stock or Non-Voting Common Stock to be issued, as applicable. If required by the Corporation, any certificates surrendered for conversion shall be endorsed or accompanied by a written instrument

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or instruments of transfer, in form satisfactory to the Corporation, duly executed by the registered holder or his, her or its attorney duly authorized in writing. The close of business on the date of receipt by the transfer agent (or by the Corporation if the Corporation serves as its own transfer agent) of such notice and, if applicable, certificates (or lost certificate affidavit and agreement) shall be the time of conversion (the “Conversion Time”), and the shares of Voting Common Stock or Non-Voting Common Stock, as applicable, issuable upon conversion of the specified shares shall be deemed to be outstanding of record as of such date. The Corporation shall, if applicable, as soon as practicable after the Conversion Time (i) issue and deliver to such holder of Series A Preferred Stock, or to his, her or its nominees, a certificate or certificates for the number of full shares of Voting Common Stock or Non-Voting Common Stock, as applicable, issuable upon such conversion in accordance with the provisions hereof and a certificate for the number (if any) of the shares of Series A Preferred Stock represented by the surrendered certificate that were not converted into Common Stock, and (ii) pay all Accruing Dividends then accrued but unpaid (and any other declared but unpaid dividends) on the shares of Series A Preferred Stock converted in cash or, at the option of the holder, in the number of non-assessable shares of Voting Common Stock or, in the case of Series A-2 Preferred Stock, Non-Voting Common Stock, as is determined by dividing such aggregate amount of dividends then accrued but unpaid by the Original Issue Price, subject to adjustment as provided below.

4.3.2 Reservation of Shares. The Corporation shall at all times when the Series A Preferred Stock shall be outstanding, reserve and keep available out of its authorized but unissued capital stock, for the purpose of effecting the conversion of the Series A Preferred Stock, such number of its duly authorized shares of Common Stock as shall from time to time be sufficient to effect the conversion of all outstanding Series A Preferred Stock; and if at any time the number of authorized but unissued shares of Voting Common Stock or Non-Voting Common Stock shall not be sufficient to effect the conversion of all then outstanding shares of the Series A-1 Preferred Stock or Series A-2 Preferred Stock, as applicable, the Corporation shall take such corporate action as may be necessary to increase its authorized but unissued shares of Voting Common Stock or Non-Voting Common Stock to such number of shares as shall be sufficient for such purposes, including, without limitation, engaging in best efforts to obtain the requisite stockholder approval of any necessary amendment to these Amended and Restated Articles of Incorporation. Before taking any action which would cause an adjustment reducing the Conversion Price below the then par value of the shares of Common Stock issuable upon conversion of the Series A Preferred Stock, the Corporation will take any corporate action which may, in the opinion of its counsel, be necessary in order that the Corporation may validly and legally issue fully paid and non-assessable shares of Common Stock at such adjusted Conversion Price.

4.3.3 Effect of Conversion. All shares of Series A Preferred Stock which shall have been surrendered for conversion as herein provided shall no longer be deemed to be outstanding and all rights with respect to such shares shall immediately cease and terminate at the Conversion Time, except only the right of the holders thereof to receive shares of Common Stock in exchange therefor and to receive payment of any Accruing Dividends accrued but unpaid thereon, whether or not declared, together with any other dividends declared but unpaid thereon. Any shares of Series A Preferred Stock so converted shall be retired and cancelled and may not be reissued as shares of such series, and the Corporation may thereafter take such appropriate action (without the need for stockholder action) as may be necessary to reduce the authorized number of shares of Series A Preferred Stock accordingly.

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4.3.4 No Further Adjustment. Upon any such conversion, no adjustment to the Conversion Price shall be made for any declared but unpaid dividends on the Series A Preferred Stock surrendered for conversion or on the Common Stock delivered upon conversion.

4.3.5 Taxes. The Corporation shall pay any and all issue and other similar taxes that may be payable in respect of any issuance or delivery of shares of Common Stock upon conversion of shares of Series A Preferred Stock pursuant to this Section 4. The Corporation shall not, however, be required to pay any tax which may be payable in respect of any transfer involved in the issuance and delivery of shares of Common Stock in a name other than that in which the shares of Series A Preferred Stock so converted were registered, and no such issuance or delivery shall be made unless and until the person or entity requesting such issuance has paid to the Corporation the amount of any such tax or has established, to the satisfaction of the Corporation, that such tax has been paid.

4.3.6 Transfer Agent. The Corporation shall initially serve as its own transfer agent. The Corporation may appoint another transfer agent at any time with prior written notice to stockholders of the name of the transfer agent and its office.

4.4 Adjustments to Conversion Price for Diluting Issues.

4.4.1 Special Definitions. For purposes of this Article Fourth, the following definitions shall apply:

(a) “Additional Shares of Common Stock” shall mean all shares of Common Stock issued (or, pursuant to Section 4.4.3 below, deemed to be issued) by the Corporation after the Original Issue Date, other than (1) the following shares of Common Stock and (2) shares of Common Stock deemed issued pursuant to the following Options and Convertible Securities (clauses (1) and (2), collectively, “Exempted Securities”):

(i) as to any series of Preferred Stock, shares of Common Stock, Options or Convertible Securities issued as a dividend or distribution on such series of Preferred Stock;

(ii) shares of Common Stock, Options or Convertible Securities issued by reason of a dividend, stock split, split-up or other distribution on shares of Common Stock that is covered by Section 4.5, 4.6, 4.7 or 4.8;

(iii) shares of Common Stock or Options issued to employees or directors of, or consultants or advisors to, the Corporation or any of its subsidiaries pursuant to a plan, agreement or arrangement approved by the Board of Directors of the Corporation; or

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(iv) shares of Common Stock or Convertible Securities actually issued upon the exercise of Options or shares of Common Stock actually issued upon the conversion or exchange of Convertible Securities, in each case provided such issuance is pursuant to the terms of such Option or Convertible Security.

(b) “Convertible Securities” shall mean any evidences of indebtedness, shares or other securities directly or indirectly convertible into or exchangeable for Common Stock, but excluding Options.

(c) “Option” shall mean rights, options or warrants to subscribe for, purchase or otherwise acquire Common Stock or Convertible Securities.

4.4.2 No Adjustment of Conversion Price. No adjustment in the Conversion Price shall be made as the result of the issuance or deemed issuance of Additional Shares of Common Stock if the Corporation receives written notice from the Requisite Holders agreeing that no such adjustment shall be made as the result of the issuance or deemed issuance of such Additional Shares of Common Stock.

4.4.3 Deemed Issue of Additional Shares of Common Stock.

(a) If the Corporation at any time or from time to time after the Original Issue Date shall issue any Options or Convertible Securities (excluding Options or Convertible Securities which are themselves Exempted Securities) or shall fix a record date for the determination of holders of any class of securities entitled to receive any such Options or Convertible Securities, then the maximum number of shares of Common Stock (as set forth in the instrument relating thereto, assuming the satisfaction of any conditions to exercisability, convertibility or exchangeability but without regard to any provision contained therein for a subsequent adjustment of such number) issuable upon the exercise of such Options or, in the case of Convertible Securities and Options therefor, the conversion or exchange of such Convertible Securities, shall be deemed to be Additional Shares of Common Stock issued as of the time of such issue or, in case such a record date shall have been fixed, as of the close of business on such record date.

(b) If the terms of any Option or Convertible Security, the issuance of which resulted in an adjustment to the Conversion Price pursuant to the terms of Section 4.4.4, are revised as a result of an amendment to such terms or any other adjustment pursuant to the provisions of such Option or Convertible Security (but excluding automatic adjustments to such terms pursuant to anti-dilution or similar provisions of such Option or Convertible Security) to provide for either (1) any increase or decrease in the number of shares of Common Stock issuable upon the exercise, conversion and/or exchange of any such Option or

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Convertible Security or (2) any increase or decrease in the consideration payable to the Corporation upon such exercise, conversion and/or exchange, then, effective upon such increase or decrease becoming effective, the Conversion Price computed upon the original issue of such Option or Convertible Security (or upon the occurrence of a record date with respect thereto) shall be readjusted to such Conversion Price as would have obtained had such revised terms been in effect upon the original date of issuance of such Option or Convertible Security. Notwithstanding the foregoing, no readjustment pursuant to this clause (b) shall have the effect of increasing the Conversion Price to an amount which exceeds the Conversion Price that would have resulted from any issuances of Additional Shares of Common Stock (other than deemed issuances of Additional Shares of Common Stock as a result of the issuance of such Option or Convertible Security) between the original adjustment date and such readjustment date.

(c) If the terms of any Option or Convertible Security (excluding Options or Convertible Securities which are themselves Exempted Securities), the issuance of which did not result in an adjustment to the Conversion Price pursuant to the terms of Section 4.4.4 (either because the consideration per share (determined pursuant to Section 4.4.5) of the Additional Shares of Common Stock subject thereto was equal to or greater than the Conversion Price then in effect, or because such Option or Convertible Security was issued before the Original Issue Date), are revised after the Original Issue Date as a result of an amendment to such terms or any other adjustment pursuant to the provisions of such Option or Convertible Security (but excluding automatic adjustments to such terms pursuant to anti-dilution or similar provisions of such Option or Convertible Security) to provide for either (1) any increase in the number of shares of Common Stock issuable upon the exercise, conversion or exchange of any such Option or Convertible Security or (2) any decrease in the consideration payable to the Corporation upon such exercise, conversion or exchange, then such Option or Convertible Security, as so amended or adjusted, and the Additional Shares of Common Stock subject thereto (determined in the manner provided in Section 4.4.3(a)) shall be deemed to have been issued effective upon such increase or decrease becoming effective.

(d) Upon the expiration or termination of any unexercised Option or unconverted or unexchanged Convertible Security (or portion thereof) which resulted (either upon its original issuance or upon a revision of its terms) in an adjustment to the Conversion Price pursuant to the terms of Section 4.4.4, the Conversion Price shall be readjusted to such Conversion Price as would have obtained had such Option or Convertible Security (or portion thereof) never been issued.

(e) If the number of shares of Common Stock issuable upon the exercise, conversion and/or exchange of any Option or Convertible Security, or the consideration payable to the Corporation upon such exercise, conversion and/or exchange, is calculable at the time such Option or Convertible Security is issued or amended but is subject to adjustment based upon subsequent events, any adjustment to the Conversion Price provided for in this Section 4.4.3 shall be effected at the time of such issuance or amendment based on such number of shares or amount of consideration without regard to any provisions for subsequent adjustments (and any subsequent adjustments shall be treated as provided in clauses (b) and (c) of this Section 4.4.3). If the number of shares of Common Stock issuable upon the exercise, conversion and/or exchange of any Option or Convertible Security, or the consideration payable to the Corporation upon such exercise, conversion and/or exchange, cannot be calculated at all at

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the time such Option or Convertible Security is issued or amended, any adjustment to the Conversion Price that would result under the terms of this Section 4.4.3 at the time of such issuance or amendment shall instead be effected at the time such number of shares and/or amount of consideration is first calculable (even if subject to subsequent adjustments), assuming for purposes of calculating such adjustment to the Conversion Price that such issuance or amendment took place at the time such calculation can first be made.

4.4.4 Adjustment of Conversion Price Upon Issuance of Additional Shares of Common Stock. In the event the Corporation shall at any time after the Original Issue Date issue Additional Shares of Common Stock (including Additional Shares of Common Stock deemed to be issued pursuant to Section 4.4.3), without consideration or for a consideration per share less than the Conversion Price in effect immediately prior to such issuance or deemed issuance, then the Conversion Price shall be reduced, concurrently with such issue, to a price (calculated to the nearest one-hundredth of a cent) determined in accordance with the following formula:

CP₂ = CP₁* (A + B) ÷ (A + C).

For purposes of the foregoing formula, the following definitions shall apply:

(a) “CP₂” shall mean the Conversion Price in effect immediately after such issuance or deemed issuance of Additional Shares of Common Stock

(b) “CP₁” shall mean the Conversion Price in effect immediately prior to such issuance or deemed issuance of Additional Shares of Common Stock;

(c) “A” shall mean the number of shares of Common Stock outstanding immediately prior to such issuance or deemed issuance of Additional Shares of Common Stock (treating for this purpose as outstanding all shares of Common Stock issuable upon exercise of Options outstanding immediately prior to such issuance or deemed issuance or upon conversion or exchange of Convertible Securities (including the Series A Preferred Stock) outstanding (assuming exercise of any outstanding Options therefor) immediately prior to such issue);

(d) “B” shall mean the number of shares of Common Stock that would have been issued if such Additional Shares of Common Stock had been issued or deemed issued at a price per share equal to CP₁ (determined by dividing the aggregate consideration received by the Corporation in respect of such issue by CP₁); and

(e) “C” shall mean the number of such Additional Shares of Common Stock issued in such transaction.

4.4.5 Determination of Consideration. For purposes of this Section 4.4, the consideration received by the Corporation for the issuance or deemed issuance of any Additional Shares of Common Stock shall be computed as follows:

(a) Cash and Property. Such consideration shall:

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(i) insofar as it consists of cash, be computed at the aggregate amount of cash received by the Corporation, excluding amounts paid or payable for accrued interest;

(ii) insofar as it consists of property other than cash, be computed at the fair market value thereof at the time of such issue, as determined in good faith by the Board of Directors of the Corporation; and

(iii) in the event Additional Shares of Common Stock are issued together with other shares or securities or other assets of the Corporation for consideration which covers both, be the proportion of such consideration so received, computed as provided in clauses (i) and (ii) above, as determined in good faith by the Board of Directors of the Corporation.

(b) Options and Convertible Securities. The consideration per share received by the Corporation for Additional Shares of Common Stock deemed to have been issued pursuant to Section 4.4.3, relating to Options and Convertible Securities, shall be determined by dividing:

(i) The total amount, if any, received or receivable by the Corporation as consideration for the issue of such Options or Convertible Securities, plus the minimum aggregate amount of additional consideration (as set forth in the instruments relating thereto, without regard to any provision contained therein for a subsequent adjustment of such consideration) payable to the Corporation upon the exercise of such Options or the conversion or exchange of such Convertible Securities, or in the case of Options for Convertible Securities, the exercise of such Options for Convertible Securities and the conversion or exchange of such Convertible Securities, by

(ii) the maximum number of shares of Common Stock (as set forth in the instruments relating thereto, without regard to any provision contained therein for a subsequent adjustment of such number) issuable upon the exercise of such Options or the conversion or exchange of such Convertible Securities, or in the case of Options for Convertible Securities, the exercise of such Options for Convertible Securities and the conversion or exchange of such Convertible Securities.

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4.4.6 Multiple Closing Dates. In the event the Corporation shall issue on more than one date Additional Shares of Common Stock that are a part of one transaction or a series of related transactions and that would result in an adjustment to the Conversion Price pursuant to the terms of Section 4.4.4, then, upon the final such issuance, the Conversion Price shall be readjusted to give effect to all such issuances as if they occurred on the date of the first such issuance (and without giving effect to any additional adjustments as a result of any such subsequent issuances within such period).

4.5 Adjustment for Stock Splits and Combinations. If the Corporation shall at any time or from time to time after the Original Issue Date effect a subdivision of the outstanding Common Stock, the Conversion Price in effect immediately before that subdivision shall be proportionately decreased so that the number of shares of Common Stock issuable on conversion of each share of such series shall be increased in proportion to such increase in the aggregate number of shares of Common Stock outstanding. If the Corporation shall at any time or from time to time after the Original Issue Date combine the outstanding shares of Common Stock, the Conversion Price in effect immediately before the combination shall be proportionately increased so that the number of shares of Common Stock issuable on conversion of each share of such series shall be decreased in proportion to such decrease in the aggregate number of shares of Common Stock outstanding. Any adjustment under this Section shall become effective at the close of business on the date the subdivision or combination becomes effective.

4.6 Adjustment for Certain Dividends and Distributions. In the event the Corporation at any time or from time to time after the Original Issue Date shall make or issue, or fix a record date for the determination of holders of Common Stock entitled to receive, a dividend or other distribution payable on the Common Stock in additional shares of Common Stock, then and in each such event the Conversion Price in effect immediately before such event shall be decreased as of the time of such issuance or, in the event such a record date shall have been fixed, as of the close of business on such record date, by multiplying the Conversion Price then in effect by a fraction:

(1) the numerator of which shall be the total number of shares of Common Stock issued and outstanding immediately prior to the time of such issuance or the close of business on such record date, and

(2) the denominator of which shall be the total number of shares of Common Stock issued and outstanding immediately prior to the time of such issuance or the close of business on such record date plus the number of shares of Common Stock issuable in payment of such dividend or distribution.

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Notwithstanding the foregoing, (a) if such record date shall have been fixed and such dividend is not fully paid or if such distribution is not fully made on the date fixed therefor, the Conversion Price shall be recomputed accordingly as of the close of business on such record date and thereafter the Conversion Price shall be adjusted pursuant to this Section as of the time of actual payment of such dividends or distributions; and (b) that no such adjustment shall be made if the holders of Series A Preferred Stock simultaneously receive a dividend or other distribution of shares of Common Stock in a number equal to the number of shares of Common Stock as they would have received if all outstanding shares of Series A Preferred Stock had been converted into Common Stock on the date of such event.

4.7 Adjustments for Other Dividends and Distributions. In the event the Corporation at any time or from time to time after the Original Issue Date shall make or issue, or fix a record date for the determination of holders of Common Stock entitled to receive, a dividend or other distribution payable in securities of the Corporation (other than a distribution of shares of Common Stock in respect of outstanding shares of Common Stock) or in other property and the provisions of Section 1 do not apply to such dividend or distribution, then and in each such event the holders of Series A Preferred Stock shall receive, simultaneously with the distribution to the holders of Common Stock, a dividend or other distribution of such securities or other property in an amount equal to the amount of such securities or other property as they would have received if all outstanding shares of Series A Preferred Stock had been converted into Common Stock on the date of such event.

4.8 Adjustment for Merger or Reorganization, etc. Subject to the provisions of Section 2.3, if there shall occur any reorganization, recapitalization, reclassification, consolidation or merger involving the Corporation in which the Common Stock (but not the Series A Preferred Stock) is converted into or exchanged for securities, cash or other property (other than a transaction covered by Sections 4.4, 4.6 or 4.7), then, following any such reorganization, recapitalization, reclassification, consolidation or merger, each share of Series A Preferred Stock shall thereafter be convertible in lieu of the Common Stock into which it was convertible prior to such event into the kind and amount of securities, cash or other property which a holder of the number of shares of Common Stock of the Corporation issuable upon conversion of one (1) share of Series A Preferred Stock immediately prior to such reorganization, recapitalization, reclassification, consolidation or merger would have been entitled to receive pursuant to such transaction; and, in such case, appropriate adjustment (as determined in good faith by the Board of Directors of the Corporation) shall be made in the application of the provisions in this Section 4 with respect to the rights and interests thereafter of the holders of the Series A Preferred Stock, to the end that the provisions set forth in this Section 4 (including provisions with respect to changes in and other adjustments of the Conversion Price) shall thereafter be applicable, as nearly as reasonably may be, in relation to any securities or other property thereafter deliverable upon the conversion of the Series A Preferred Stock.

4.9 Certificate as to Adjustments. Upon the occurrence of each adjustment or readjustment of the Conversion Price pursuant to this Section 4, the Corporation at its expense shall, as promptly as reasonably practicable but in any event not later than ten (10) days thereafter, compute such adjustment or readjustment in accordance with the terms hereof and furnish to each holder of Series A Preferred Stock a certificate setting forth such adjustment or readjustment (including the kind and amount of securities, cash or other property into which the

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Series A Preferred Stock is convertible) and showing in detail the facts upon which such adjustment or readjustment is based. The Corporation shall, as promptly as reasonably practicable after the written request at any time of any holder of Series A Preferred Stock (but in any event not later than ten (10) days thereafter), furnish or cause to be furnished to such holder a certificate setting forth (i) the Conversion Price then in effect, and (ii) the number of shares of Common Stock and the amount, if any, of other securities, cash or property which then would be received upon the conversion of Series A Preferred Stock.

4.10 Notice of Record Date. In the event:

(a) the Corporation shall take a record of the holders of its Common Stock (or other capital stock or securities at the time issuable upon conversion of the Series A Preferred Stock) for the purpose of entitling or enabling them to receive any dividend or other distribution, or to receive any right to subscribe for or purchase any shares of capital stock of any class or any other securities, or to receive any other security; or

(b) of any capital reorganization of the Corporation, any reclassification of the Common Stock of the Corporation, or any Deemed Liquidation Event; or

(c) of the voluntary or involuntary dissolution, liquidation or winding-up of the Corporation,

then, and in each such case, the Corporation will send or cause to be sent to the holders of the Series A Preferred Stock a notice specifying, as the case may be, (i) the record date for such dividend, distribution or right, and the amount and character of such dividend, distribution or right, or (ii) the effective date on which such reorganization, reclassification, consolidation, merger, transfer, dissolution, liquidation or winding-up is proposed to take place, and the time, if any is to be fixed, as of which the holders of record of Common Stock (or such other capital stock or securities at the time issuable upon the conversion of the Series A Preferred Stock) shall be entitled to exchange their shares of Common Stock (or such other capital stock or securities) for securities or other property deliverable upon such reorganization, reclassification, consolidation, merger, transfer, dissolution, liquidation or winding-up, and the amount per share and character of such exchange applicable to the Series A Preferred Stock and the Common Stock. Such notice shall be sent at least ten (10) days prior to the record date or effective date for the event specified in such notice.

4.11 Certain Other Events. If any event occurs of the type contemplated by the provisions of this Section 4 but not expressly provided for by such provisions (including, without limitation, the granting of stock dividends, stock appreciation rights, phantom stock rights, or other rights with equity features), then the Board of Directors shall make an appropriate adjustment in the Conversion Price so as to protect the rights of the record holders of the Series A Preferred Stock; provided that no such adjustment shall increase the Conversion Price or decrease the number of issuable shares of Common Stock upon conversion of the Series A Preferred Stock.

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5. Mandatory Conversion.

5.1 Trigger Events. Upon either (a) the closing of the sale of shares of Common Stock to the public at a price of at least one and one half (1.5) times the Original Issue Price (subject to appropriate adjustment in the event of any stock dividend, stock split, combination or other similar recapitalization with respect to the Common Stock), in a firm-commitment underwritten public offering pursuant to an effective registration statement under the Securities Act of 1933, as amended, resulting in at least $250 million of gross proceeds to the Corporation (from unaffiliated parties) and in connection with such offering the Common Stock is listed for trading on the Nasdaq Stock Market’s National Market, the New York Stock Exchange or another “national securities exchange” that has registered with the Securities and Exchange Commission under the Securities Exchange Act of 1934 (a “National Securities Exchange”) approved the Board of Directors (a “Qualified Public Offering”) or (b) the date and time, or the occurrence of an event, specified by vote or written consent of the Requisite Holders (the time of such closing or the date and time specified or the time of the event specified in such vote or written consent is referred to herein as the “Mandatory Conversion Time”), then (i) all outstanding shares of Series A Preferred Stock shall automatically be converted into shares of Common Stock, at the then effective conversion rate as calculated pursuant to Section 4.1.1 and (ii) such shares may not be reissued by the Corporation.

5.2 Procedural Requirements. All holders of record of shares of Series A Preferred Stock shall be sent written notice of the Mandatory Conversion Time and the place designated for mandatory conversion of all such shares of Series A Preferred Stock pursuant to this Section 5. Such notice need not be sent in advance of the occurrence of the Mandatory Conversion Time. Upon receipt of such notice, each holder of shares of Series A Preferred Stock in certificated form shall surrender his, her or its certificate or certificates for all such shares (or, if such holder alleges that such certificate has been lost, stolen or destroyed, a lost certificate affidavit and agreement reasonably acceptable to the Corporation to indemnify the Corporation against any claim that may be made against the Corporation on account of the alleged loss, theft or destruction of such certificate) to the Corporation at the place designated in such notice. If so required by the Corporation, any certificates surrendered for conversion shall be endorsed or accompanied by written instrument or instruments of transfer, in form satisfactory to the Corporation, duly executed by the registered holder or by his, her or its attorney duly authorized in writing. All rights with respect to the Series A Preferred Stock converted pursuant to Section 5.1, including the rights, if any, to receive notices and vote (other than as a holder of Common Stock), will terminate at the Mandatory Conversion Time (notwithstanding the failure of the holder or holders thereof to surrender any certificates at or prior to such time), except only the rights of the holders thereof, upon surrender of any certificate or certificates of such holders (or lost certificate affidavit and agreement) therefor, to receive the items provided for in the next sentence of this Section 5.2. As soon as practicable after the Mandatory Conversion Time and, if applicable, the surrender of any certificate or certificates (or lost certificate affidavit and agreement) for Series A Preferred Stock, the Corporation shall (a) issue and deliver to such holder, or to his, her or its nominees, a certificate or certificates for the number of full shares of Common Stock issuable on such conversion in accordance with the provisions hereof and (b) pay any declared but unpaid dividends on the shares of Series A Preferred Stock converted. Such converted Series A Preferred Stock shall be retired and cancelled and may not be reissued as shares of such series, and the Corporation may thereafter take such appropriate action (without the need for stockholder action) as may be necessary to reduce the authorized number of shares of Series A Preferred Stock accordingly.

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5.3 Special Mandatory Conversion.

5.3.1 Trigger Event. In the event that (a) the Florida Office of Insurance Regulation grants the Approval, or (b) the Approval is no longer required for the Acquisition, then each share of Series A-2 Preferred Stock outstanding as of the date of such Approval or the date on which the Approval becomes no longer necessary, as applicable, shall automatically, and without any further action on the part of any holder thereof, be converted into one (1) share of Series A-1 Preferred Stock, effective as of the close of business on the such date, as applicable. Such conversion is referred to as a “Special Mandatory Conversion” and the date of such conversion is referred to as the “Special Mandatory Conversion Date”.

5.3.2 Procedural Requirements. Upon a Special Mandatory Conversion, each holder of shares of Series A-2 Preferred Stock converted pursuant to Section 5.3.1 shall be sent written notice of such Special Mandatory Conversion and, if such shares are certificated, each holder of such shares of Series A-2 Preferred Stock in certificated form shall surrender his, her or its certificate or certificates for all such shares (or, if such holder alleges that any such certificate has been lost, stolen or destroyed, a lost certificate affidavit and agreement reasonably acceptable to the Corporation to indemnify the Corporation against any claim that may be made against the Corporation on account of the alleged loss, theft or destruction of such certificate) to the Corporation at the place designated in such notice. If so required by the Corporation, any certificates surrendered for conversion shall be endorsed or accompanied by written instrument or instruments of transfer, in form satisfactory to the Corporation, duly executed by the registered holder or by his, her or its attorney duly authorized in writing. All rights with respect to the Series A-2 Preferred Stock converted pursuant to Section 5.3.1, including the rights, if any, to receive notices and vote (other than as a holder of Common Stock), will terminate at the time of the Special Mandatory Conversion (notwithstanding the failure of the holder or holders thereof to surrender any certificates for such shares at or prior to such time), except only the rights of the holders thereof, upon surrender of any certificate or certificates of such holders therefor (or lost certificate affidavit and agreement), to receive the items provided for in the next sentence of this Section 5.3.2. As soon as practicable after the Special Mandatory Conversion and, if applicable, the surrender of any certificate or certificates (or lost certificate affidavit and agreement) for the Series A-2 Preferred Stock so converted, the Corporation shall issue and deliver to such holder, or to his, her or its nominees, a certificate or certificates for the number of full shares of Series A-1 Preferred Stock issuable on such conversion in accordance with the provisions hereof. Such converted Series A-2 Preferred Stock shall be retired and cancelled and may not be reissued as shares of such series, and the Corporation may thereafter take such appropriate action (without the need for stockholder action) as may be necessary to reduce the authorized number of shares of Series A-2 Preferred Stock accordingly. For the avoidance of doubt, the failure of any holder of Series A-2 Preferred Stock converted pursuant to Section 5.3.1 to surrender any certificates for such shares following the Special Mandatory Conversion shall not adversely affect such holder’s rights as a holder of Series A-1 Preferred Stock thereafter. To the extent that any shares of Series A-2 Preferred Stock have been converted into shares of Non-Voting Common Stock prior to a Special Mandatory Conversion, then upon the Special Mandatory Conversion Date, each share of Non-Voting Common Stock shall automatically and without any action on the part of the holder thereby, convert into one (1) share of Voting Common Stock, and the provisions of this Section 5.3.2 shall apply to such conversion mutatis mutandis.

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5.3.3 Definitions. For purposes of this Section 5.3, the following definitions shall apply:

(a) “Acquisition” shall mean the acquisition of “control” of the Corporation’s insurance company subsidiaries under applicable insurance laws, such that a filing under § 628.461, Fla. Stat. (2020) is required in connection therewith, by Investor through the acquisition of Voting Common Stock of the Corporation.

(b) “Approval” shall mean the approval of the Acquisition by the Florida Office of Insurance Regulation pursuant to § 628.461, Fla. Stat. (2020).

6. Redemption.

6.1 General. At any time on or after the date that is ninety (90) days prior to the fourth (4^th) anniversary of the Original Issue Date, the Requisite Holders may provide the Corporation with a written notice requesting redemption of all shares of Series A Preferred Stock on or after (but not before) such fourth anniversary (the “Redemption Request”) and such shares of Series A Preferred Stock shall be redeemed by the Corporation at a price equal to the greater of (A) the Liquidation Amount, and (B) the Fair Market Value (determined in the manner set forth below) of a single share of Series A Preferred Stock as of the date of the Corporation’s receipt of the Redemption Request ((A) or (B), as applicable, the “Redemption Price”), not more than ninety (90) days after receipt by the Corporation of such Redemption Request (but not before such fourth anniversary). Upon receipt of a Redemption Request, the Corporation shall apply all of its assets to any such redemption, and to no other corporate purpose. The date of the redemption shall be referred to as a “Redemption Date.” On the Redemption Date, the Corporation shall redeem all of the outstanding shares of Series A Preferred Stock owned by each holder. For purposes of this Section 6.1, the fair market value of a single share of Series A Preferred Stock shall be the fair market value as determined by giving effect to the terms applicable to the Series A Preferred Stock, including the dividend rate, the Conversion Price and the amounts to which the holder of such shares of Series A Preferred Stock would be entitled in any liquidation or extraordinary corporate transaction assuming all the holders of the Series A Preferred Stock to Common Stock converted their Series A Preferred Stock to Common Stock immediately prior to such liquidation or extraordinary corporate transaction, and without applying any “minority discount” or similar reduction in value as a result of the Series A Preferred Stock, or the Common Stock into which it is convertible, not representing a controlling stake in the Corporation. The Fair Market Value will initially be determined by an independent valuation firm selected by the Board of Directors and will be included in the Redemption Notice delivered pursuant to Section 6.2. If the Requisite Holders notify the Corporation in writing within ten (10) days after receipt of the Redemption Notice of their objection to the Fair Market Value determination, the Requisite Holders may select an independent valuation firm to calculate the Fair Market Value and, if different than the Fair Market Value determined by the independent valuation firm selected by the Board of Directors, the Requisite Holders and the Corporation shall jointly hire a third independent valuation firm, which will select the valuation performed by either of the two independent valuation firms previously selected by the Board of Directors and the Requisite Holders to be the prevailing valuation of Fair Market Value hereunder (based on such third valuation firm’s view of the relative propriety of the two valuations).

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6.2 Redemption Notice. The Corporation shall send written notice of the mandatory redemption required to be effected pursuant to Section 2.1.2 or any redemption to be effected pursuant to any Redemption Request delivered pursuant to Section 6.1 (a “Redemption Notice”), to each holder of record of Series A Preferred Stock as soon as practicable after becoming aware of such mandatory redemption requirement or occurrence or the receipt of such Redemption Request, as applicable. Each Redemption Notice or other notice delivered hereunder shall state:

(a) the number of shares of Series A Preferred Stock held by the holder;

(b) the Redemption Date and the Redemption Price or Liquidation Price, as applicable (including the Fair Market Value per share of Series A Preferred Stock subject to redemption or liquidation, as applicable);

(c) the date upon which the holder’s right to convert such shares terminates (as determined in accordance with Section 4.1); and

(d) for holders of shares in certificated form, that the holder is to surrender to the Corporation, in the manner and at the place designated, his, her or its certificate or certificates representing the shares of Series A Preferred Stock to be redeemed.

6.3 Surrender of Certificates; Payment. On or before the Redemption Date, each holder of shares of Series A Preferred Stock to be redeemed on the Redemption Date, unless such holder has exercised his, her or its right to convert such shares as provided in Section 4, shall, if a holder of shares in certificated form, surrender the certificate or certificates representing such shares (or, if such registered holder alleges that such certificate has been lost, stolen or destroyed, a lost certificate affidavit and agreement reasonably acceptable to the Corporation to indemnify the Corporation against any claim that may be made against the Corporation on account of the alleged loss, theft or destruction of such certificate) to the Corporation, in the manner and at the place designated in the Redemption Notice, and thereupon the Redemption Price for such shares shall be payable to the order of the person whose name appears on such certificate or certificates as the owner thereof. In the event less than all of the shares of Series A Preferred Stock represented by a certificate are redeemed, a new certificate, instrument, or book entry representing the unredeemed shares of Series A Preferred Stock shall promptly be issued to such holder. For so long as the shares of common stock of Parent are listed on a National Securities Exchange, any portion of the Redemption Price in excess of the Liquidation Amount may be settled and paid, at the Corporation’s option, in shares of the common stock of Parent based on the trailing 30-day volume-weighted average price of such shares.

6.4 Rights Subsequent to Redemption. If the Redemption Notice shall have been duly given, and if on the Redemption Date the Redemption Price payable upon redemption of the shares of Series A Preferred Stock to be redeemed on the Redemption Date is paid or tendered for payment or deposited with an independent payment agent so as to be available therefor in a timely manner, then notwithstanding that any certificates evidencing any of the shares of Series A Preferred Stock so called for redemption shall not have been surrendered, dividends with respect to such shares of Series A Preferred Stock shall cease to accrue after the Redemption Date and all rights with respect to such shares shall forthwith after the Redemption Date terminate, except only the right of the holders to receive the Redemption Price without interest upon surrender of any such certificate or certificates therefor.

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7. Redeemed or Otherwise Acquired Shares. Any shares of Series A Preferred Stock that are redeemed, converted or otherwise acquired by the Corporation or any of its subsidiaries shall be automatically and immediately cancelled and retired and shall not be reissued, sold or transferred. Neither the Corporation nor any of its subsidiaries may exercise any voting or other rights granted to the holders of Series A Preferred Stock following redemption, conversion or acquisition.

8. Waiver. Except as otherwise set forth herein, (a) any of the rights, powers, preferences and other terms of the Series A Preferred Stock set forth herein may be waived on behalf of all holders of Series A Preferred Stock by the affirmative written consent or vote of the Requisite Holders, and (b) at any time more than one (1) series of Preferred Stock is issued and outstanding, any of the rights, powers, preferences and other terms of any series of Preferred Stock set forth herein may be waived on behalf of all holders of such series of Preferred Stock by the affirmative written consent or vote of the holders of at least a majority of the shares of such series of Preferred Stock then outstanding.

9. Notices. Any notice required or permitted by the provisions of this Article Fourth to be given to a holder of shares of Series A Preferred Stock shall be mailed, postage prepaid, to the post office address last shown on the records of the Corporation, or given by electronic communication in compliance with the provisions of the FBCA, and shall be deemed sent upon such mailing or electronic transmission.

FIFTH: Subject to any additional vote required by these Amended and Restated Articles of Incorporation or Bylaws, in furtherance and not in limitation of the powers conferred by statute, the Board of Directors is expressly authorized to make, repeal, alter, amend and rescind any or all of the Bylaws of the Corporation.

SIXTH: The Board of Directors will be classified as set forth in these Amended and Restated Articles of Incorporation. The directors will be classified with respect to the time for which they severally hold office, into three classes, Class A, Class B and Class C, each of which will be as nearly equal number as possible, and will be adjusted from time to time in the manner specified in the Bylaws to maintain such proportionality. Each director in Class A will hold office for a term expiring at the 2021 annual meeting of the shareholders; each director in Class B will hold office for a term expiring at the 2022 annual meeting of the shareholders; and each director in Class C will hold office for a term expiring at the 2023 annual meeting of the shareholders. Notwithstanding the foregoing provisions of this Article Sixth, each director will serve until such director’s successor is duly elected and qualified or until such director’s earlier death, resignation or removal. At each annual meeting of the shareholders, successors to the class of directors whose term expires at that meeting will be elected to hold office for a term expiring at the annual meeting of the shareholders held in the third year following the year of election and until their successors have been duly elected and qualified or until such director’s earlier death, resignation or removal. Subject to any additional vote required by these Amended and Restated Articles of Incorporation, the number of directors of the Corporation shall be determined in the manner set forth in the Bylaws of the Corporation. Each director shall be entitled to one (1) vote on each matter presented to the Board of Directors.

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SEVENTH: Elections of directors need not be by written ballot unless the Bylaws of the Corporation shall so provide.

EIGHTH: Meetings of stockholders may be held within or without the State of Florida, as the Bylaws of the Corporation may provide. The books of the Corporation may be kept outside the State of Florida at such place or places as may be designated from time to time by the Board of Directors or in the Bylaws of the Corporation.

NINTH: To the fullest extent permitted by law, a director of the Corporation shall not be personally liable to the Corporation or its stockholders for monetary damages for breach of fiduciary duty as a director. If the FBCA or any other law of the State of Florida is amended after approval by the stockholders of this Article Ninth to authorize corporate action further eliminating or limiting the personal liability of directors, then the liability of a director of the Corporation shall be eliminated or limited to the fullest extent permitted by the FBCA as so amended.

Any repeal or modification of the foregoing provisions of this Article Ninth by the stockholders of the Corporation shall not adversely affect any right or protection of a director of the Corporation existing at the time of, or increase the liability of any director of the Corporation with respect to any acts or omissions of such director occurring prior to, such repeal or modification.

TENTH: To the fullest extent permitted by applicable law, the Corporation is authorized to provide indemnification of (and advancement of expenses to) directors, officers and agents of the Corporation (and any other persons to which FBCA permits the Corporation to provide indemnification) through Bylaw provisions, agreements with such agents or other persons, vote of stockholders or disinterested directors or otherwise, in excess of the indemnification and advancement otherwise permitted by the FBCA.

Any amendment, repeal or modification of the foregoing provisions of this Article Tenth shall not (a) adversely affect any right or protection of any director, officer or other agent of the Corporation existing at the time of such amendment, repeal or modification or (b) increase the liability of any director of the Corporation with respect to any acts or omissions of such director, officer or agent occurring prior to, such amendment, repeal or modification.

*     *     *

3. That the foregoing amendment and restatement was approved by the holders of the requisite number of shares of this Corporation in accordance with the FBCA.

4. That these Amended and Restated Articles of Incorporation, which restate and integrate and further amend the provisions of this Corporation’s Articles of Incorporation, has been duly adopted in accordance with the FBCA.

[Signature Page Follows]

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IN WITNESS WHEREOF, these Amended and Restated Articles of Incorporation have been executed by a duly authorized officer of this Corporation on this 26th day of February, 2021.

By:

Name: Paresh Patel

Its: Chief Executive Officer

EXHIBIT C

DISCLOSURE SCHEDULE

The Disclosure Schedules to the Preferred Stock Purchase Agreement have been omitted pursuant to Item 601(b)(2) of Regulation S-K and will be furnished to the Securities and Exchange Commission upon request.

EXHIBIT D

FORM OF SHAREHOLDERS AGREEMENT

TYPTAP INSURANCE GROUP, INC.

SHAREHOLDERS AGREEMENT

February 26, 2021

TABLE OF CONTENTS

		Page
Section 1.	Certain Definitions		1
Section 2.	Corporate Governance		8
2.01	Governing Documents		8
2.02	Board of Directors		9
2.03	Key Man Event		11
2.04	Subsidiaries		12
2.05	Parent Board Nomination Rights		12
2.06	Corporate Opportunities		15
Section 3.	Transfers of Securities		16
3.01	Restrictions on Transfer		16
3.02	Tag-Along Rights		19
3.03	Drag-Along Rights		20
3.04	Legend		23
3.05	Market Standstill		23
Section 4.	Periodic Information Reporting Requirements.		24
4.01	Information Rights		24
4.02	Books and Records		25
4.03	Confidentiality		25
Section 5.	Registration Rights		26
5.01	Company Registration Rights		26
5.02	Parent Registration Rights		26
Section 6.	Other Covenants		26
6.01	Preemptive Rights		26
6.02	Certain Parent Agreements		28
6.03	Further Assurances		29
6.04	Tax Matters.		29
Section 7.	Representations and Warranties		30
7.01	Authority; Enforceability		30
7.02	No Breach		30
7.03	Consents		31
7.04	Spousal Consent		31
Section 8.	Miscellaneous		31
8.01	Amendments and Waivers		31
8.02	Entire Agreement		32
8.03	Term and Termination		32
8.04	Notices		32
8.05	Successors and Assigns; Assignment		33

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8.06	Specific Performance	34
8.07	Submission to Jurisdiction; No Jury Trial	34
8.08	Counterparts	35
8.09	Governing Law	35
8.10	Headings	35
8.11	Construction	35
8.12	Severability	35
8.13	Conflicts With Company Organizational Documents	35

ANNEX A	Registration Rights
EXHIBIT A	Form of Joinder to Shareholders Agreement
EXHIBIT B	Spousal Consent

ii

This SHAREHOLDERS AGREEMENT (this “Agreement”) is made as of February 26, 2021 (the “Effective Date”), by and among TypTap Insurance Group, Inc., a Florida corporation (the “Company”), CB Snowbird Holdings, L.P., a Delaware limited partnership (“Centerbridge”), HCI Group Inc., a Florida corporation (“Parent”), the Management Shareholders (as defined below) and each other Person who becomes a Shareholder (as defined below) in accordance with the terms of this Agreement. Parent, Centerbridge and any other shareholder of the Company who agrees in writing to become bound by this Agreement following the Effective Date, and each of their respective successors and permitted assignees, are collectively referred to herein as the “Shareholders” and each individually as a “Shareholder.”

RECITALS

WHEREAS, pursuant to the Stock Purchase Agreement, dated as of February 26, 2021, by and among Parent, the Company and Centerbridge (the “Purchase Agreement”), on the date hereof, Centerbridge acquired 10,000,000 shares of Preferred Stock (as defined below) of the Company, comprising 9,000,000 shares of Series A-1 Preferred Stock of the Company, $0.001 par value per share (the “Voting Senior Preferred Shares”) and 1,000,000 shares of Series A-2 Preferred Stock of the Company, $0.001 par value per share (the “Non-Voting Senior Preferred Shares” and, together with the Voting Senior Preferred Shares, the “Senior Preferred Shares”);

WHEREAS, upon the closing of the transactions contemplated by the Purchase Agreement and concurrently with the execution and delivery of this Agreement and the acquisition of the Senior Preferred Shares by Centerbridge, Parent has issued to Centerbridge warrants to purchase 750,000 shares of common stock of Parent on the terms, and subject to the conditions, set forth therein (the “Parent Warrants”) and Parent and Centerbridge have executed and delivered a Guarantee Agreement, dated as of the date hereof, pursuant to which, among other things, Parent has agreed to guarantee certain of the Company’s obligations with respect to the Senior Preferred Shares, on the terms and subject to the conditions set forth therein (the “Guarantee”);

WHEREAS, concurrently with the execution and delivery of this Agreement, pursuant to the Purchase Agreement, the Company has adopted the TypTap Insurance Group, Inc. 2021 Equity Incentive Plan (the “TypTap Equity Incentive Plan”); and

WHEREAS, Parent, the Company and Centerbridge each desire to enter into this Agreement, among other things, to establish certain rights and obligations among them relating to the governance of the Company and to the Equity Securities (as defined below), all as set forth herein;

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

Section 1. Certain Definitions. As used in this Agreement, the following terms shall have the meanings set forth below:

“Affiliate” of any Person means any other Person controlling, controlled by or under common control with such Person. As used in this definition, “control” (including, with its correlative meanings, “controlled by” and “under common control with”) means, with respect to

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any Person, the possession, directly or indirectly, of the power to direct or cause the direction of management or policies (whether through ownership of securities or partnership or other ownership interests, by contract or otherwise) of such Person. Notwithstanding the foregoing, the portfolio companies (including Parent, the Company and their respective Subsidiaries) of investment funds or accounts organized, managed or advised by Centerbridge Partners, L.P. or any of its Affiliates will not be deemed to be Affiliates of Centerbridge for purposes of this Agreement.

“Affiliate Transfer” means a Transfer of Equity Securities from a Shareholder that is not a natural person to an Affiliate of such Shareholder, and “Affiliate Transferee” shall have the corresponding meaning.

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

“Articles of Incorporation” means the certificate of formation of the Company, as amended from time to time.

“Beneficially Own”, “Beneficially Owned” or “Beneficial Ownership” shall have the meaning set forth in Rule 13d-3 of the rules and regulations promulgated under the Exchange Act, except that for purposes of this Agreement the words “within sixty days” in Rule 13d-3(d)(1)(i) shall not apply, to the effect that a person shall be deemed to be the Beneficial Owner of a security if that person has the right to acquire beneficial ownership of such security at any time.

“Board” means the Board of Directors of the Company.

“Business Day” means any day other than a Saturday, a Sunday or any day on which banks located in the State of New York or the State of Florida are authorized or obliged to close.

“Bylaws” means the Bylaws of the Company, as amended from time to time.

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

“Centerbridge Director” has the meaning set forth in Section 2.02(c).

“Centerbridge Parent Board Designee” means any individual designated by Centerbridge for appointment or nomination by Parent for election as a director on the Parent Board pursuant to clauses (a), (b) or (f) of Section 2.4, whether such individual has been proposed or designated for such appointment or nomination, is standing for election as director on the Parent Board, or is then serving on the Parent Board. For the avoidance of doubt, only one individual may be a Centerbridge Parent Board Designee at any particular time, and the Centerbridge Parent Board Designee and the Centerbridge Director (i.e., Centerbridge’s appointee to serve as a director on the Company’s Board of Directors) may be the same individual or different individuals.

“Charitable Gifting Event” means any Transfer by a Shareholder, or any subsequent Transfer by such Shareholder’s members, partners or other employees, in connection with a bona fide gift to any Charitable Organization on the date of, but prior to, the execution of the underwriting agreement entered into in connection with any underwritten offering.

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“Charitable Organization” means a charitable organization as described in Section 501(c)(3) of the Code.

“Code” means the Internal Revenue Code of 1986, as in effect from time to time.

“Combined Returns” has the meaning set forth in Section 6.04(c).

“Commission” means the United States Securities and Exchange Commission.

“Common Shares” means the Common Shares of the Company, $0.001 par value per share.

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

“Company Registrable Securities” means (i) any Senior Preferred Shares held (directly or indirectly) by Centerbridge or any of its Affiliates, (ii) any Common Shares issued or issuable upon the conversion of the Senior Preferred Shares and (iii) any equity securities of the Company or any Subsidiary of the Company issued or issuable with respect to the securities referred to in clauses (i) and (ii) above by way of dividend, distribution, split or combination of securities, or any recapitalization, merger, consolidation or other reorganization.

“Conflicted Action” has the meaning set forth in Section 2.02(g)(iii)(B).

“Convertible Security” has the meaning set forth in Section 6.01(b).

“Covered Persons” has the meaning set forth in Section 2.07.

“Deemed Liquidation Event” has the meaning set forth in the Articles of Incorporation.

“Director” means any member of the Board.

“Disqualified Designee” means any director designee to whom any Disqualification Event is applicable, except for a Disqualification Event as to which Rule 506(d)(2)(ii) or (iii) or (d)(3) is applicable.

“Disqualification Event” means a “bad actor” disqualifying event described in Rule 506(d)(1)(i)-(viii) promulgated under the Securities Act.

“Drag-Along Shareholder” has the meaning set forth in Section 3.03(a).

“Drag-Along Transaction” has the meaning set forth in Section 3.03(a).

“Drag-Along Transaction Notice” has the meaning set forth in Section 3.03(d).

“Drag-Along Transaction Period” has the meaning set forth in Section 3.03(e).

“Dragged Shareholder” has the meaning set forth in Section 3.03(a).

“Effective Date” has the meaning set forth in the preamble.

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“Employer” means, with respect to any Management Shareholder or Officer, Parent, the Company or any of their respective Affiliates by which such Management Shareholder or Officer is principally employed or to which such Management Shareholder or Officer provides services, as applicable.

“Equity Securities” means any equity securities of the Company, including the Common Shares, the Voting Senior Preferred Shares, the Non-Voting Senior Preferred Shares and any other Preferred Stock.

“Exchange Act” means the Securities Exchange Act of 1934, as amended from time to time, or any successor federal law then in force, together with all rules and regulations promulgated thereunder.

“Family Limited Liability Company” means, with respect to any individual, any limited liability company created for the sole benefit of one or more of such individual’s Related Persons and controlled by such individual.

“Family Limited Partnership” means, with respect to any individual, any limited partnership created for the sole benefit of one or more of such individual’s Related Persons and controlled by such individual.

“Family Member” means, with respect to any individual, any Related Person, Family Trust, Family Limited Liability Company or Family Limited Partnership of such individual.

“Family Trust” means, with respect to any individual, any trust created for the sole benefit of such individual or one or more of such individual’s Related Persons.

“Federal Combined Return” has the meaning set forth in Section 6.04(c).

“FINRA” means the Financial Industry Regulatory Authority.

“Free Writing Prospectus” means a free-writing prospectus, as defined in Rule 405.

“GAAP” means United States generally accepted accounting principles.

“Guarantee” has the meaning set forth in the Recitals.

“Investment Company Act” means the United States Investment Company Act of 1940, as amended, or any similar federal statute, and the rules and regulations of the Commission promulgated thereunder, as the same may be amended from time to time.

“IPO” means the first underwritten public offering and sale of Equity Securities for cash pursuant to an effective registration statement (other than Form S-4, S-8 or a comparable form) under the Securities Act.

“Key Man Event” has the meaning set forth in Section 2.03.

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“Liquidation Amount” has the meaning given to such term with respect to the Senior Preferred Shares in the Articles of Incorporation.

“Management Shareholder” means any Shareholder that is a current or former employee of the Company, including any employee who receives Common Shares under the TypTap Equity Incentive Plan, and holds issued Equity Securities equal to or exceeding 1% or more of the Company’s issued capital stock.

“Minimum Ownership Threshold” means that Centerbridge and its Affiliates collectively continue to Beneficially Own at least 3,300,000, in aggregate, of Equity Securities comprising either, or a mixture of, (i) Senior Preferred Shares or (ii) Common Shares issued upon conversion of the Senior Preferred Shares, in each case as equitably adjusted for any stock split, reverse stock split, recapitalization or similar event.

“New Company Securities” has the meaning set forth in Section 6.01(b).

“New Issue Notice” has the meaning set forth in Section 6.01(c).

“Notice of Acceptance” has the meaning set forth in Section 6.01(c).

“Officer” means any officer of the Company.

“Order” means any decision, decree, order, writ, judgment, stipulation, award, injunction (whether temporary, preliminary, or permanent), temporary restraining order or other order in any suit or proceeding by any Regulatory Agency.

“Original Meeting Agenda” has the meaning set forth in Section 2.02(g)(ii).

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

“Parent Board” means the Board of Directors of Parent.

“Parent Board Designation Condition” means that Centerbridge and its Affiliates continue to meet the Minimum Ownership Threshold.

“Parent Registrable Securities” means (i) any common shares of Parent issued or issuable upon the conversion of the Parent Warrants and (ii) any equity securities of Parent or any Subsidiary of Parent issued or issuable with respect to the securities referred to in clause (i) above by way of divided, distribution, split or combination of securities, or any recapitalization, merger, consolidation or other registration.

“Parent Warrants” has the meaning set forth in the Recitals.

“Permitted Transfer” has the meaning set forth in Section 3.01(b).

“Permitted Transferee” has the meaning set forth in Section 3.01(b).

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“Person” means an individual, a partnership, a company, a corporation, a limited liability company, an association, a joint stock company, a trust, a joint venture, an unincorporated organization or a governmental or quasi-governmental entity or any department, agency or political subdivision thereof.

“Personal Representative” means the successor or legal representative (including a guardian, executor, administrator or conservator) of a dead or incompetent Shareholder.

“Preferred Stock” means shares of the Company’s preferred stock, without par value per share.

“Prime Rate” means the rate from time to time published in the “Money Rates” section of The Wall Street Journal as being the “Prime Rate” (or, if more than one rate is published as the Prime Rate, then the highest of such rates).

“Proposed Purchaser” has the meaning set forth in Section 3.01(d).

“Proposed Tag Transfer” has the meaning set forth in Section 3.02(a).

“Public Offering” means any sale or distribution by the Registrant, one of its Subsidiaries or Centerbridge to the public of common equity or other securities convertible into or exchangeable for common equity of the Registrant pursuant to an offering registered under the Securities Act.

“Purchase Agreement” has the meaning set forth in the Recitals.

“Qualified Public Offering” means an underwritten public offering of Common Shares listed on an international stock exchange with gross proceeds (from unaffiliated parties) to the Company or selling Shareholders of not less than $250 million with a price per share equal to or greater than 1.50 times the Original Purchase Price of a Senior Preferred Share, as defined in the Articles of Incorporation (and subject to the adjustments set forth therein).

“Registrable Securities” means the Company Registrable Securities. Any Registrable Security shall cease to be a Registrable Security at the earliest of the following: (a) when a registration statement covering such Registrable Security becomes or has been declared effective by the SEC and such Registrable Security has been sold or disposed of pursuant to such effective registration statement; (b) when such Registrable Security has been sold or disposed of (excluding Transfers by Centerbridge to an Affiliate of Centerbridge) pursuant to Rule 144 under the Securities Act (or any successor or similar provision adopted by the SEC then in effect); or (c) when such Registrable Security is held by the Registrant or one of its Affiliates (other than Centerbridge and its Affiliates).

“Registrant” means the Company.

“Regulatory Agency” means any nation, government, court, regulatory, taxing or administrative agency, commission or authority or other legislative, executive or judicial governmental entity, body, agency, official or instrumentality, domestic or foreign, whether federal, national, provincial, state, local or multinational or self-regulatory organization or agency or other similar quasi-governmental regulatory body or arbitration panel, tribunal or arbitrator.

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“Related Person” means, with respect to any individual, such individual’s parents, spouse, siblings, children and grandchildren.

“ROFR Authorization Date” has the meaning set forth in Section 3.01(d)(i).

“ROFR Shares” has the meaning set forth in Section 3.01(d)(i).

“ROFR Transfer Notice” has the meaning set forth in Section 3.01(d)(i).

“Rule 144”, “Rule 158”, “Rule 405”, and “Rule 415” mean, in each case, such rule promulgated under the Securities Act (or any successor provision) by the SEC, as the same will be amended from time to time, or any successor rule then in force.

“Rule 506(d) Related Party” means, with respect to any Person, any other Person that is a beneficial owner of such first Person’s securities for purposes of Rule 506(d) under the Securities Act.

“Sale Transaction” means a sale to a third party of a majority of the equity, or all or substantially all of the assets, of the Company, including by means of a merger, consolidation, recapitalization or any other means.

“SAP” means means statutory accounting principles prescribed or permitted by the Regulatory Agency charged with the supervision of insurance companies in the state of domicile of the applicable insurance company Subsidiary of the Company.

“SEC” means the United States Securities and Exchange Commission.

“Securities Act” means the United States Securities Act of 1933, as amended, or any similar federal statute and the rules and regulations of the Commission promulgated thereunder, as the same may be amended from time to time.

“Selling Shareholder” has the meaning set forth in Section 3.01(d)(i).

“Senior Preferred Shares” has the meaning set forth in the Recitals.

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

“Spousal Consent” has the meaning set forth in Section 8.04.

“State Combined Return” has the meaning set forth in Section 6.04(b).

“Subsidiary” means, with respect to any Person, any entity of which (a) a majority of the total voting power of shares of stock or equivalent ownership interests entitled (without regard to the occurrence of any contingency) to vote in the election of directors, managers, trustees or other members of the applicable governing body thereof is at the time owned or Controlled, directly or indirectly, by that Person or one or more of the Subsidiaries of that Person or a combination thereof, or (b) if no such governing body exists at such entity, a majority of the total voting power of shares of stock or equivalent ownership interests of the entity is at the time owned or Controlled,

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directly or indirectly, by that Person or one or more Subsidiaries of that Person or a combination thereof. For purposes hereof, a Person or Persons shall be deemed to have a majority ownership interest in a limited liability company, partnership, association or other business entity if such Person or Persons has been allocated a majority of limited liability company, partnership, association or other business entity gains or losses or shall be or Control the managing member or general partner of such limited liability company, partnership, association or other business entity.

“Tagging Notice” has the meaning set forth in Section 3.02(b).

“Tagging Shareholder” has the meaning set forth in Section 3.02(b).

“Tax” or “Taxes” means any and all taxes, including any interest, penalties or other additions to tax that may become payable in respect thereof, imposed by any Regulatory Agency, which taxes shall include all income, profits, alternative minimum, estimated, payroll, employee withholding, social security, sales, use, ad valorem, value added, excise, franchise, premium, gross receipts, stamp, transfer, net worth, and other taxes, fees, duties, levies, customs, tariffs, imposts, assessments, obligations and charges of the same or of a similar nature to any of the foregoing.

“Tax Allocation Agreement” means that certain Tax Allocation Agreement, dated May 10, 2017, among Parent and certain of its Subsidiaries.

“Transfer” means any direct or indirect sale, exchange, transfer (including any transfer by gift), assignment, pledge, hypothecation, mortgage, distribution or other disposition, or issuance or creation of any option or any voting proxy, voting trust or other transfer of legal or equitable interest in a security, in whole or in part, whether voluntarily or involuntarily or by operation of law or at a judicial sale or otherwise; and “Transferred” and “Transferring” shall have a correlative meaning.

“Transfer Notice” has the meaning set forth in Section 3.02(b).

“Transferee” has the meaning set forth in Section 3.01(a).

“TypTap Equity Incentive Plan” has the meaning set forth in the Recitals.

“TypTap Group” has the meaning set forth in Section 6.04(b).

“Voting Senior Preferred Shares” has the meaning set forth in the Recitals.

“WKSI” means a “well-known seasoned issuer” as defined under Rule 405.

Section 2. Corporate Governance.

2.01 Governing Documents. Each Shareholder agrees to vote its voting Equity Securities or execute proxies or written consents, as the case may be, and to take all other actions necessary to ensure that the Articles of Incorporation and Bylaws (and, as applicable and subject to applicable law and any shareholder approval requirements (which Parent shall use commercially reasonable efforts to obtain, if necessary), the articles of incorporation and bylaws of Parent) (a) facilitate, and do not at any time conflict with, any provision of this Agreement and (b) permit

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each Shareholder to receive the benefits to which each such Shareholder is entitled under this Agreement. The Company agrees to vote the voting securities of all Subsidiaries of the Company and to take all other necessary actions necessary to ensure that the organizational documents of each Subsidiary (i) facilitate, and do not at any time conflict with, any provision of this Agreement and (ii) permit each Shareholder to receive the benefits to which each such Shareholder is entitled under this Agreement.

2.02 Board of Directors.

(a) Board Matters; Size of Board; Initial Board of Directors. Each Shareholder agrees to vote its voting Equity Securities or execute proxies or written consents, as the case may be, and use its commercially reasonable efforts to take all other necessary action, including amending the Articles of Incorporation and Bylaws, so as to establish the size, composition and governance of the Board as set forth in this Section 2. As of the Effective Date, the Board shall consist of eight (8) Directors comprised of the individuals set forth on Schedule 1 hereto.

(b) Appointment of Directors. For so long as Centerbridge continues to hold at least the Minimum Ownership Threshold, Centerbridge shall be entitled to designate one (1) individual to serve as a Director (the “Centerbridge Director”) and Centerbridge and Parent, acting reasonably and in good faith, shall jointly be entitled to designate one (1) individual, on whom they mutually agree. The remaining Directors shall be the Chief Executive Officer and five (5) other individuals designated by Parent (the “Parent Directors”).

(c) Bad Actor Covenants. Each Shareholder with the right to designate or participate in the designation of a director pursuant to this Agreement covenants and agrees (i) not to designate or participate in the designation of any director designee who, to such Shareholder’s knowledge, is a Disqualified Designee, (ii) to exercise reasonable care to determine whether any director designee designated by such person is a Disqualified Designee, (iii) that in the event such Shareholder becomes aware that any individual previously designated by any such Shareholder is or has become a Disqualified Designee, such Shareholder shall as promptly as practicable take such actions as are necessary to remove such Disqualified Designee from the Board and designate a replacement designee who is not a Disqualified Designee, and (iv) to notify the Company promptly in writing in the event a Disqualification Event becomes applicable to such Shareholder’s designee, except, if applicable, for a Disqualification Event as to which Rule 506(d)(2)(ii) or (iii) or (d)(3) is applicable.

(d) Removal of Directors. A Director may be removed at any time in accordance with the Bylaws only upon the written request or approval of the Shareholder who designated such Director in accordance with Section 2.02(b). Upon receipt of such a written request from the designating Shareholder, each Shareholder agrees to vote all voting Equity Securities owned by such Shareholder, and shall take all other actions necessary or desirable within its control, and the Company shall take all necessary or desirable actions within its control, in order to remove such Director in accordance with such written request.

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(e) Resignation. A Director may resign at any time from the Board by delivering a written resignation to the Board. Any such resignation shall be effective upon receipt thereof unless it is specified to be effective at some other time or upon the occurrence of some other event. The Board’s acceptance of a resignation shall not be necessary to make it effective.

(f) Vacancies. Upon the death, resignation or removal of a Director, the Shareholder who designated such Director shall be entitled to designate a new Director to fill such office in accordance with Sections 2.02(b) and (c).

(g) Board Procedures. The Board shall follow the following procedures:

(i) Notice. The Company shall give prior written notice to each Director of any meeting of the Board at least two (2) Business Days prior to such meeting. Attendance of a Person at a meeting shall constitute a waiver of notice of such meeting, except where the Person attends such meeting for the express purpose of objecting, at the beginning of such meeting, to the transaction of business at such meeting because such meeting is not properly called or convened.

(ii) Quorum. Except as otherwise required by applicable law, the presence of the Centerbridge Director is required for a quorum for any meeting of the Board or any of its committees; provided, however, that unless a matter that requires the affirmative vote of the Centerbridge Director pursuant to Section 2.02(k) below is on the agenda for such meeting (the “Original Meeting Agenda”), if there is a failure of quorum at such meeting for which notice was given in accordance with Section 2.02(g)(i) as a result of the absence of the Centerbridge Director, the Directors in attendance may adjourn such meeting and re-call it for a time (unless otherwise agreed to by the Centerbridge Director) not less than 48 hours after the scheduled start of such meeting, and at such recalled meeting the presence of such absent Centerbridge Director shall not be required for the purpose of establishing a quorum in respect of any matters set forth in the Original Meeting Agenda. No Director may intentionally refuse to appear at any meeting of the Board in order to frustrate the establishment of a quorum.

(iii) Voting.

(A) Except as otherwise provided in the Bylaws or in this Agreement, (A) the approval by a vote of a majority of the Board or (B) the written consent of all of the Directors then in office shall be required for all actions requiring approval of the Board.

(B) Notwithstanding Section 2.02(f)(iii)(A), if any Director is conflicted with respect to any action requiring approval of the Board (each such action, a “Conflicted Action”), such Director shall be required to disclose the conflict to the other current Directors serving on the Board promptly; provided that in no event shall an issuance of New Company Securities that is subject to the preemptive rights in Section 6.01 be deemed to be a Conflicted Action.

(h) Insurance. The Company shall maintain directors’ and officers’ liability insurance and fiduciary liability insurance with insurers of recognized financial responsibility in such amounts as the Board determines to be prudent and customary for the Company’s business and operations. In addition, the Articles of Incorporation and Bylaws shall at all times provide for indemnification, exculpation and advancement of expenses to the fullest extent permitted under applicable law.

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(i) Compensation; Expenses. The Board shall set Director compensation; provided that a Director who is also an employee of the Company or a Shareholder or one of their respective Affiliates shall not be compensated for service as a Director. The Company shall reimburse each Director for his or her reasonable and documented out-of-pocket expenses incurred by each such Director in connection with attending regular and special meetings of the Board and any committee thereof.

(j) Board Committees. There shall at all times be an audit committee and a compensation committee of the Board, and the Board may designate one or more committees on a standing or ad hoc basis. Each committee of the Board shall consist of one or more of the Directors and may include members on such committee that are not Directors. If not otherwise restricted by applical law or the rules or regulations of the SEC or Nasdaq, if Centerbridge so elects, the Director designated by Centerbridge will serve on each committee of the Board with respect to which such an election has been made.

(k) The Company shall not, and shall not permit any of its Subsidiaries to, directly or indirectly, take any of the following actions without the approval of a majority of the Board that includes the affirmative vote of the Centerbridge Director:

(i) repurchase, or authorize the repurchase or redemption of, Equity Securities held by any Shareholder that (A) is also the present or former Chief Executive Officer of the Company or (B) is also an employee or former employee of the Company or any of its Subsidiaries (other than any present or former Chief Executive Officer of the Company) to the extent that the aggregate purchase price for such repurchase or redemption, together with the purchase price of all prior repurchases and redemptions effected pursuant to this clause (i)(B), would exceed $5,000,000 in any single year; or

(ii) (A) amend any compensation arrangement of, or issue any securities (including any Equity Securities or any securities that are convertible into or exercisable for Equity Securities), or any incentive compensation or other similar rights or interests to, any current or former Chief Executive Officer of the Company, (B) adopt any incentive compensation plans that, in the aggregate, would reasonably be expected to increase costs to the Company and its Subsidiaries by more than $10,000,000 relative to the compensation plans in effect (or adopted) as of the date of this Agreement or (C) issue or authorize the issuance of any securities (including any Equity Securities or any securities that are convertible into or exercisable for Equity Securities but excluding all Equity Securities granted or issued pursuant to the 2021 TypTap Insurance Group, Inc. Equity Incentive Plan, as amended) to employees or independent contractors other than any current or former Chief Executive Officer of the Company that, when combined with all other issuances of the type contemplated by this clause (C), would have an aggregate fair market value as of the date of such issuance of more than $10,000,000 in any one year or increase the number of Equity Securities issuable under the 2021 TypTap Insurance Group, Inc. Equity Incentive Plan.

2.03 Key Man Event. From and after the Effective Date for so long as Centerbridge continues to hold at least the Minimum Ownership Threshold, in the event that the Chief Executive Officer or President of the Company, TypTap Insurance Company or Exzeo USA, Inc. as of the date hereof ceases to be the Chief Executive Officer or President of the Company, TypTap Insurance Company or Exzeo USA, Inc., as applicable (the “Key Man Event”), then his successor will be identified and selected by a special committee of the Board, which committee shall include the Centerbridge Director.

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2.04 Subsidiaries.

(a) General. The Company agrees to vote the voting securities of all Subsidiaries of the Company and to take all other necessary actions in respect of such Subsidiaries consistent with the provisions of this Agreement.

(b) Directors of Subsidiaries. The Company and each Shareholder shall take, and each Shareholder shall cause each Director designated by such Shareholder to take, such corporate actions as may be reasonably required to ensure that the composition of the board of directors of each Subsidiary includes at least one (1) Centerbridge Director. Such designee(s) shall have the same right to participate on committees of the board of directors of each Subsidiary of the Company as designee(s) have pursuant to Section 2.02(i).

2.05 Parent Board Nomination Rights.

(a) As of the Effective Date, the Parent Board either (i) has a vacancy as a result of a resignation, removal from office or death of a director or (ii) has a vacancy as a result of an increase in the size of the Parent Board effective as of the Effective Time pursuant to Section 9 of Article III of Parent’s bylaws. Eric Hoffman (or, at the option of Centerbridge, another individual identified by Centerbridge in a written notice to Parent) shall be deemed to be the initial Centerbridge Parent Board Designee and Parent shall ensure that on the Effective Date and immediately after the execution and delivery of this Agreement, the Parent Board appoint him to fill such vacancy until the next election of directors on the Parent Board by the shareholders of Parent. At the first annual meeting of Parent’s shareholders after the Effective Time, Parent shall nominate the Centerbridge Parent Board Designee for election by Parent’s shareholders as a director on the Parent Board to serve a three-year term (starting from such annual meeting, and as part of the applicable class of directors being elected at such meeting).

(b) Subject to the terms and conditions of this Section 2.06 and applicable law, for so long as the Parent Board Designation Condition continues to be met, Parent agrees to include the Centerbridge Parent Board Designee in its slate of nominees for election as directors of Parent at each annual meeting of Parent’s shareholders and each adjournment or postponement thereof (or action by written consent in lieu of such meeting) following the Effective Date at which the Centerbridge Parent Board Designee’s term as a director expires (or, if the shareholders of Parent fail to elect any Centerbridge Parent Board Designee standing for election to the Parent Board, the next annual meeting of Parent’s shareholders at which the directors will be elected to the Parent Board) and to use its reasonable efforts to cause the election of the Centerbridge Parent Board Designee to the Parent Board (for clarity, Parent will be required to use substantially the same level of efforts and provide substantially the same level of support as is used and provided for the other director nominees of Parent with respect to the applicable annual meeting of shareholders or action by written consent in lieu of such meeting). Failure of the shareholders of Parent to elect any Centerbridge Parent Board Designee to the Parent Board shall not affect the right of Centerbridge to nominate directors for election pursuant to this Section 2.06

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in any future election of directors. If the Centerbridge Parent Board Designee is not appointed or elected to the Parent Board for any reason, or if the Centerbridge Parent Board Designee is otherwise unavailable or unable to serve on the Parent Board, including as a result of such person’s death, disability, disqualification, withdrawal as a nominee or for any other reason, Centerbridge shall be entitled to designate another nominee promptly and the director position for which the original Centerbridge Parent Board Designee was nominated shall not be filled pending such designation and the Parent Board shall fill any such vacancy on the Parent Board only in accordance with Section 2.06(f) below.

(c) Each Centerbridge Parent Board Designee will be (x) Eric Hoffman or (y) another individual designated by Centerbridge who meets in all material respects all of the requirements of a director of Parent described in this Section 2.06. As a condition to any Centerbridge Parent Board Designee’s appointment to the Parent Board and nomination for election as a director of Parent pursuant to this Section 2.06, (i) Centerbridge and the Centerbridge Parent Board Designee shall provide to Parent (A) all information reasonably requested by Parent that is required to be or is customarily disclosed for directors, candidates for directors, and their Affiliates and representatives in a proxy statement or other filings under applicable law or regulation or stock exchange rules or listing standards, in each case, relating to their nomination or election as a director of Parent or Parent’s operations in the ordinary course of business and (B) information reasonably requested by Parent in connection with assessing eligibility, independence and other criteria applicable to directors or satisfying compliance and legal or regulatory obligations, in each case, relating to their nomination or election as a director of Parent or Parent’s operations in the ordinary course of business and (ii) the Centerbridge Parent Board Designee must be qualified to serve as a director of Parent under the Florida Business Corporation Act and the SEC rules and regulations to the same extent as all other directors of Parent (for the avoidance of doubt, the Centerbridge Parent Board Designee shall not be required to qualify as an independent director under applicable stock exchange rules and federal securities laws and regulations). Parent will make all information requests pursuant to this Section 2.06(c) in good faith in a timely manner that allows Centerbridge and the Centerbridge Parent Board Designee a reasonable amount of time to provide such information, and will cooperate in good faith with Centerbridge and the Centerbridge Parent Board Designee in connection with their efforts to provide the requested information.

(d) Parent acknowledges and agrees that (i) under no circumstances will any policies, procedures, processes, codes, rules, standards and guidelines applicable to service on the Parent Board be violated by the Centerbridge Parent Board Designee (A) receiving compensation from Centerbridge or any of its Affiliates or (B) failing to notify an officer or director of Parent prior to accepting an invitation to serve on another board of directors, and (ii) any share ownership requirement for the Centerbridge Parent Board Designees serving on the Parent Board will be deemed satisfied by the securities owned by Centerbridge and its Affiliates, and under no circumstance shall any policies, procedures, processes, codes, rules, standards and guidelines applicable to service on the Parent Board impose any restrictions on the ability of Centerbridge or its Affiliates to Transfer any securities.

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(e) For so long as the Centerbridge Parent Board Designee is on the Parent Board, Parent shall not implement any trading policy or similar guideline or policy with respect to the trading of securities of Parent that is targeted at Centerbridge or its Affiliates (other than a policy applicable to all directors and their respective Affiliates that (and solely to the extent that it) (i) limits, prohibits or restricts the trading of securities of Parent by such Centerbridge Parent Board Designee in his or her personal capacity, (ii) generally restricts the trading of securities of Parent while in possession of material non-public information concerning Parent or its Subsidiaries and (iii) requires compliance with applicable federal securities or other laws).

(f) Subject to the terms and conditions of this Section 2.06, if a vacancy on the Parent Board is created as a result of the Centerbridge Parent Board Designee’s death, resignation, disqualification or removal (in each case, except with respect to a removal or resignation contemplated by Sections 2.06(g)), or if Centerbridge desires to nominate a different individual to replace the then-existing Centerbridge Parent Board Designee, then, at the request of Centerbridge, Centerbridge and Parent shall work together in good faith to fill such vacancy or replace such nominee as promptly as reasonably practicable with a replacement Centerbridge Parent Board Designee subject to the terms and conditions hereof, and thereafter such individual shall as promptly as reasonably practicable be appointed to the Parent Board to fill such vacancy or be nominated by Parent for election to the Parent Board as a “Centerbridge Parent Board Designee” pursuant to this Section 2.06.

(g) Parent’s obligations under this Section 2.06 with respect to any Centerbridge Parent Board Designee shall terminate, and Centerbridge shall have no designation or nomination rights hereunder with respect to the Centerbridge Parent Board Designee if, Centerbridge and its Affiliates no longer continue to meet the Parent Board Designation Condition, and in such case the Centerbridge Parent Board Designee shall promptly offer to resign from the Parent Board (and, if requested by Parent, promptly deliver his written resignation to the Parent Board).

(h) If any Centerbridge Parent Board Designee ceases to satisfy in all material respects the conditions and obligations set forth in Section 2.06(c), Parent may notify Centerbridge thereof and, promptly following such notification, (i) the Centerbridge Parent Board Designee shall promptly offer to resign from the Parent Board (and, if requested by Parent, promptly deliver his written resignation to the Parent Board) and (ii) Centerbridge shall be entitled to fill the vacancy created thereby in accordance with Section 2.06(f).

(i) For so long as Centerbridge shall have the right to designate the Centerbridge Parent Board Designee for appointment or nomination by Parent for election to the Parent Board pursuant to this Section 2.06, Parent shall provide to Centerbridge access to (i) any materials or documents provided generally by Parent to the Parent Board or any committee of the Parent Board on which any Centerbridge Parent Board Designee then serves, in each case, substantially concurrently with the time such materials or documents are provide to the Parent Board or such committee and (ii) access to the officers of Parent to discuss Parent’s affairs, finances, and accounts, during normal business hours, as may be reasonably requested by such Persons; provided that Parent shall not be obligated to provide materials, documents or information that it reasonably and in good faith considers to be a trade secret or the disclosure of which would reasonably be likely to jeopardize the attorney-client privilege between Parent and its counsel or violate applicable law (but in such case Parent shall use commercially reasonable efforts to share such materials, documents or information in a manner, and to the extent, that it would not violate such privilege or violate applicable law).

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(j) The Centerbridge Parent Board Designee shall at all times be entitled to compensation and reimbursement in connection with his or her service on the Parent Board consistent with the policies and practices of Parent generally applicable to independent members of the Parent Board.

(k) For so long as Centerbridge shall have the right to designate the Centerbridge Parent Board Designee for appointment or nomination by Parent for election to the Parent Board pursuant to this Section 2.06, Parent shall maintain in effect at all times directors and officers indemnity insurance coverage that is reasonably satisfactory to Centerbridge, and Parent’s articles of incorporation and bylaws shall at all times provide for indemnification, exculpation and advancement of expenses to the fullest extent permitted under applicable law.

(l) For so long as Centerbridge shall have the right to designate the Centerbridge Parent Board Designee for appointment or nomination by Parent for election to the Parent Board pursuant to this Section 2.06, Parent shall not take any action, including making or recommending any amendment to Parent’s articles of incorporation or bylaws, that would reasonably be expected to affect adversely Centerbridge’s rights under this Agreement (including this Section 2.06), without the prior written consent of Centerbridge.

(m) Parent recognizes that the Centerbridge Parent Board Designee will from time to time receive non-public information relating to Parent and its Affiliates and may share such information with other individuals associated with Centerbridge and its Affiliates. Parent hereby irrevocably consents to such sharing. The terms of Section 4.03 shall apply to such information.

2.06 Corporate Opportunities. To the fullest extent permitted by applicable law, Parent agrees that the Centerbridge Director, the Centerbridge Parent Board Designee, Centerbridge, any Affiliate of Centerbridge, or any portfolio company or Centerbridge or any Affiliate of such portfolio company (collectively, “Covered Persons”) may, and shall have no duty not to, (i) invest in, carry on and conduct, whether directly, or as a partner in any partnership, or as a joint venturer in any joint venture, or as an officer, director, stockholder, equityholder or investor in any Person, or as a participant in any syndicate, pool, trust or association, any business of any kind, nature or description, whether or not such business is competitive with or in the same or similar lines of business as Parent or any of its Affiliates, (ii) do business with any client, customer, vendor, policyholder, reinsurer or lessor of any of Parent or its Affiliates; or (iii) make investments in any kind of property in which Parent may make investments. To the fullest extent permitted by applicable law, Parent and the Company, on behalf of themselves and their respective Affiliates, renounce any interest or expectation to participate in any business or investments of any Covered Person as currently conducted or as may be conducted in the future, and waive any claim against a Covered Person, and shall, jointly and severally, indemnify each Covered Person against any and all losses, claims, damages, liabilities, costs, expenses (including reasonable expenses of investigation and reasonable attorneys’ fees and expenses), judgments, fines, penalties, charges and amounts paid in settlement (collectively, “Losses”), in each case to which such Covered Person may become subject, as a result of, arising in connection with or relating to a Covered Person’s breach of any fiduciary duty by reason of such Person’s participation in any such business or investment. Parent shall pay in advance any reasonable out-of-pocket expenses incurred by a Covered Person in the defense of any claim for which such Covered Person is, or would reasonably

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be expected to be, entitled to indemnification under this Section 2.07. Parent and the Company each agree that, in the event that a Covered Person acquires knowledge of a potential transaction or matter that may constitute a corporate opportunity for both (x) the Covered Person and (y) Parent, the Company or any of their respective Subsidiaries, the Covered Person shall not have any duty to offer or communicate information regarding such corporate opportunity to Parent, the Company or their respective Subsidiaries. To the fullest extent permitted by applicable law, Parent and the Company hereby renounce any interest or expectation in any potential transaction or matter of which the Covered Person acquires knowledge, except for any corporate opportunity which is expressly offered to a Covered Person in writing solely in his or her capacity as a member of the Board or the Parent Board, and waives any claim against each Covered Person, and shall indemnify each Covered Person against any Losses incurred by such Covered Person, and any and all Losses to which such Covered Person may become subject, as a result of, arising in connection with or relating to a Covered Person’s breach of any fiduciary duty solely by reason of the fact that such Covered Person (A) pursues or acquires any corporate opportunity for its own account or the account of any Affiliate or other Person, (B) directs, recommends, sells, assigns or otherwise transfers such corporate opportunity to another Person or (C) does not communicate information regarding such corporate opportunity to Parent, the Company, or any of their respective Affiliates; provided, that, in each such case, any corporate opportunity that is expressly offered to a Covered Person in writing solely in his or her capacity as a member of the Board or the Parent Board shall belong to the Company or to Parent, as applicable.

Section 3. Transfers of Securities.

3.01 Restrictions on Transfer.

(a) General. Prior to a Qualified Public Offering, and, in the case of any Shareholder other than Parent, for so long as no Key Man Event has occurred, each Shareholder agrees that, except for any Transfer permitted by Section 3.01(b), a Proposed Tag Transfer permitted by Section 3.02, a Drag-Along Transaction permitted by Section 3.03, and any indirect Transfer of Equity Securities solely by and among the members or partners of such Shareholder, such Shareholder shall not Transfer any Equity Securities now or hereafter at any time owned by such Shareholder (or any interest therein) to another Person (any such Person, a “Transferee”) without first complying with the terms of Section 3.01(c). Prior to a Qualified Public Offering, Parent agrees that, except in the case of (i) an IPO, (ii) a Drag-Along Transaction, (iii) a Transfer of up to 5,000,000 shares (in the aggregate for all such Transfers considered together) of Common Stock by Parent (as adjusted for stock splits, combinations or similar equitable events) or (iv) with Centerbridge’s prior written consent, it shall not, nor shall it permit any of its Affiliates to, Transfer any Equity Securities now or hereafter at any time owned by it or any such Affiliate (or any interest therein) to any Transferee. The restrictions on transferability set forth in this Section 3 are in addition to any other restrictions on Transfer to which a Shareholder’s Equity Securities may be subject (including, in the case of the Management Shareholders, under the terms of the applicable equity plan pursuant to which they were issued).

(b) Permitted Transfers. Notwithstanding Section 3.01(a), Shareholders shall be permitted to Transfer Equity Securities: (i) to an Affiliate that agrees to be bound by the terms and conditions of this Agreement; (ii) in connection with the repurchase of Equity Securities by the Company; (iii) pursuant to an IPO or in connection with the exercise of registration rights

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as contemplated by Annex A; (iv) in the case of any Management Shareholder, to the Company in exchange for amounts needed for the satisfaction of Taxes related to such shares or to such Management Shareholder’s Family Members or Personal Representative; provided that such Management Shareholder or Personal Representative retains exclusive voting control over the Transferred Equity Securities and such transferee agrees to be bound by repurchase rights in favor of the Company identical to those contained in any applicable Management Repurchase Agreement; and (v) in the case of Centerbridge, as a distribution on a relative basis in accordance with the applicable governing documents of Centerbridge to its partners entitled to receive such distribution provided each such partner agrees to be bound by the terms and conditions of this Agreement, or alternatively appoints Centerbridge as its representative and attorney-in-fact with respect to this Agreement (each of (i)-(v), a “Permitted Transfer” and “Permitted Transferee” shall have the corresponding meaning).

(c) Right of First Refusal.

(i) Prior to a Qualified Public Offering, for so long as no Key Man Event has occurred, any Shareholder (other than Parent) wishing to Transfer all or part of such Shareholder’s Equity Securities (the “Selling Shareholder”) (except Affiliate Transfers) shall deliver written notice of such Transfer to the Parent and the Company, disclosing in reasonable detail the identity of the prospective transferee(s) (the “Proposed Purchaser”), the number and type of Equity Securities to be transferred (the “ROFR Shares”) and all material terms and conditions of the proposed Transfer (the “ROFR Transfer Notice”), and the ROFR Transfer Notice shall constitute a binding offer to sell the ROFR Shares on such terms and conditions to Parent or the Company. If Parent or the Company have elected to purchase all or any portion of the ROFR Shares pursuant to this Section 3.01(c), the closing of the purchase and sale of such ROFR Shares shall be consummated as soon as practical after the delivery of the election notice(s) to the Selling Shareholder but no later than 60 days after the ROFR Transfer Notice, subject to clause (d) below. In the event of competing elections to purchase ROFR Shares by Parent and the Company, the election of Parent shall take precedence over the election of the Company.

(ii) In the event of a proposed Transfer described in Section 3.01(c)(i), Parent or the Company may elect to purchase all or any portion of the ROFR Shares to be transferred upon the same economic terms and conditions as those set forth in the ROFR Transfer Notice by delivering a written notice of such election to the Selling Shareholder within 30 days after the ROFR Transfer Notice has been delivered pursuant to Section 3.01(c)(i). If neither Parent nor the Company elects to purchase all of the ROFR Shares specified in the ROFR Transfer Notice in accordance with this Section 3.01(c), the Selling Shareholder may Transfer any ROFR Shares not being purchased by the Parent or the Company to the Proposed Purchaser, subject to the provisions of Section 3.01(c), on the same terms as set forth in the ROFR Transfer Notice and such other terms that are no more favorable to the Proposed Purchaser than those specified in the ROFR Transfer Notice, during the 60 day period immediately following the ROFR Transfer Notice, with the purchase and sale of all shares subject to the ROFR Transfer Notice being consummated to the Parent, the Company and any Proposed Purchaser in such 60 day period. Any ROFR Shares not transferred within such 60 day period (as extended pursuant to clause (d) below) shall be subject to the provisions of Section 3.01(a) and this Section 3.01(c) upon any subsequently proposed Transfer.

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(d) Regulatory and Tax Matters. No Transfer of Equity Securities by any Shareholder shall be permitted unless such Transfer: (i) has been approved, if necessary, by all applicable Regulatory Agencies; (ii) would not cause the Company to become subject to registration as an investment company under the Investment Company Act; and (iii) would not have any other material adverse legal, Tax or regulatory effect on the Company. The 60 day period for the Transfer or shares subject to the ROFR Transfer Notice shall be extended as necessary to obtain any approvals required by clause (i) and such purchase and sale shall be consummated within five (5) Business days after receipt of such approvals.

(e) Compliance with Securities Laws. In addition to any other restrictions provided herein, no Shareholder shall Transfer any Equity Securities, and the Company shall not transfer on its books any Equity Securities, unless (i) the Company determines, upon the advice of counsel, that the Company would not be required to file periodic reports under the Exchange Act and (ii) the transferring Shareholder first delivers to the Company, at the transferring Shareholder’s sole cost and expenses, evidence reasonably satisfactory to the Company (such as an opinion of counsel) to the effect that such Transfer is not required to be registered under the Securities Act.

(f) Improper Transfer. In the event of any purported or attempted Transfer by a Shareholder that does not comply with the provisions of this Agreement, such attempted Transfer shall be null and void ab initio and will confer no rights whatsoever on the purported Transferee as against the Company or any other Shareholder of the Company, including the Shareholders, and the Company shall not record such Transfer on its books or treat any purported Transferee of such Equity Securities as the owner of such Equity Securities for any purpose.

(g) Joinder. Notwithstanding anything contained herein to the contrary, any Transferee who is not a Shareholder (other than the Company) and has acquired such Equity Securities from a Shareholder shall upon the consummation of, and as a condition to, such Transfer execute and deliver to the Company a transfer agreement and an instrument substantially in the form attached hereto as Exhibit A (or a counterpart to this Agreement) pursuant to which such Transferee agrees to be bound by the terms of this Agreement as a Shareholder, with such rights of the transferor that are assigned by the transferor in compliance with this Section 3.01; provided, however, that the foregoing shall not apply to Transferees who acquire Equity Securities in a Permitted Transfer pursuant to clause (ii) of the definition thereof.

(h) Expenses of Transfer. The transferring Shareholder agrees that it will pay all reasonable out-of-pocket expenses incurred by the Company in connection with any attempted or realized Transfer of all or any portion of its Equity Securities. Such costs generally will include the amount of any transfer Taxes due as a result of a Shareholder’s Transfer and the costs of accounting for such Transfers, including for applicable Tax purposes.

(i) Deemed Liquidation Event. Notwithstanding anything to the contrary contained in this Agreement, no Shareholder shall knowingly Transfer any Equity Securities or participate in any transaction constituting a Deemed Liquidation Event unless Centerbridge receives the full amounts that it is entitled to receive pursuant to the Articles of Incorporation in connection with such Deemed Liquidation Event.

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3.02 Tag-Along Rights.

(a) If any Shareholder (or any Transferee of Shareholder) holding Equity Securities representing 5% or more of the outstanding Equity Securities of the Company (calculated on an as-converted basis) proposes to Transfer any or all of its Equity Securities to a third party (except for Permitted Transfers), the provisions of this Section 3.02 shall apply (a “Proposed Tag Transfer”); provided, that if any such Shareholder proposes to Transfer any or all of its Senior Preferred Shares to a third party (except for Permitted Transfers), the provisions of this Section 3.02 shall only apply to such Transfer if such Shareholder is selling its Senior Preferred Shares for a price per share that is greater than the Liquidation Amount, and any Transfer of Senior Preferred Shares for a price per share that is below the Liquidation Amount will not constitute a “Proposed Tag Transfer” hereunder.

(b) Prior to any Proposed Tag Transfer, the Transferring Shareholder shall deliver a notice (the “Transfer Notice”) to the other Shareholders and to the Company of its intention to make a Proposed Tag Transfer. The Transfer Notice shall specify the terms and conditions on which the Transferring Shareholder proposes to Transfer Equity Securities, including the number of shares proposed to be Transferred and the price therefor. Within ten (10) days after receipt of a Transfer Notice, each other Shareholder may give written notice (the “Tagging Notice”) to the Transferring Shareholder and the Company that it desires to sell Equity Securities owned by it on the same terms and conditions as set forth in the Transfer Notice, which Tagging Notice shall specify the number of Equity Securities as to which such right is being exercised. The maximum number of Equity Securities which any Shareholder delivering a Tagging Notice (each such Shareholder, a “Tagging Shareholder,” and collectively with any other Tagging Shareholder, the “Tagging Shareholders”) may include in the proposed Transfer shall be equal to the product obtained by multiplying (i) the number of Equity Securities proposed to be Transferred by the Transferring Shareholder by (ii) the pro rata portion of the number of Equity Securities held by such Tagging Shareholder relative to the number of Equity Securities held by all Shareholders participating in such Transfer (including the Transferring Shareholder), for all purposes considering all Derivative Securities on an as-converted basis. For the avoidance of doubt, the number of Equity Securities the Transferring Shareholder would otherwise be entitled to sell shall be reduced by the number of Equity Securities sold by the Tagging Shareholders pursuant to this Section 3.02(b).

(c) If the Transferring Shareholder receives one or more Tagging Notices in a timely manner, the Tagging Shareholder(s) shall be entitled to sell the lesser of (i) the number of Equity Securities that a Tagging Shareholder is entitled to sell, determined as provided in Section 3.02(b), and (ii) the number of Equity Securities a Tagging Shareholder has requested to sell in its Tagging Notice; provided that in the event any Shareholder entitled to deliver a Tagging Notice does not provide a Tagging Notice or elects in its Tagging Notice to sell less than the maximum provided for under the preceding sentence, the Transferring Shareholder and each Tagging Shareholder that provided a Tagging Notice in which such Tagging Shareholder included a number of Equity Securities available for sale that exceeds the amount allotted under Section 3.02(b) shall have the right to include additional Equity Securities in the Transfer in proportion to each such Shareholder’s relative ownership interests in the Company until full allotment in accordance with this Section 3.02. The costs and expenses of the Transfer incurred for the benefit of all of the Shareholders will be paid by all such Shareholders on a pro rata basis according to the relative number of Equity Securities being sold by each such Shareholder.

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(d) Any sale of Equity Securities by a Tagging Shareholder pursuant to this Section 3.02 will be at the same price (except that any accrued but unpaid dividends on any Senior Preferred Shares being sold in such sale shall be paid only to the Shareholders of such Senior Preferred Shares and then the remaining portion of the aggregate consideration to be paid by the buyer(s) in such sale will then be allocated to Equity Securities to be sold in such sale ratably on an as-converted basis) and on the same terms and conditions as the Transfer by the Transferring Shareholder that is the subject matter of the Transfer Notice; provided that, notwithstanding the foregoing, (i) any representations and warranties or indemnities given by each of the Transferring Shareholder and the Tagging Shareholders shall be several and not joint, (ii) the indemnity obligations shall be (x) apportioned pro rata among each of the Transferring Shareholder and the Tagging Shareholders based on the relative proportion of Equity Securities being sold in the applicable Proposed Tag Transfer (with Derivative Securities considered on an as-converted basis) and (y) limited in respect of each Shareholder to the proceeds received by such Shareholder in such Proposed Tag Transfer (except in connection with claims relating to such Shareholder’s fraud), (iii) Centerbridge and its Affiliates, and any Person to which Centerbridge or any of its Affiliates Transfers Equity Securities, shall not be required to agree to any restrictive covenants (such as non-competition or non-solicitation) other than a customary confidentiality covenant, and (iv) each of the Transferring Shareholder and the Tagging Shareholders will receive the same form of consideration and the same portion of the aggregate consideration that such Shareholders would have received if such aggregate consideration had been distributed by the Company in a complete liquidation or Deemed Liquidation Event pursuant to the rights and preferences set forth in the Articles of Incorporation as in effect immediately prior to such Proposed Tag Transfer.

(e) If a Shareholder does not deliver a Tagging Notice pursuant to this Section 3.02, then the Transferring Shareholder and any other Tagging Shareholder shall be free to sell the Equity Securities that are the subject of the Transfer Notice in strict accordance with the terms and conditions stated in the Transfer Notice. The Equity Securities that are the subject of such proposed Transfer may not be Transferred if the Transferring Shareholder and proposed Transferee shall have failed to consummate the Transfer on the terms and conditions stated in the Transfer Notice within ninety (90) days following the date of delivery of the Transfer Notice.

3.03 Drag-Along Rights.

(a) If, prior to a Qualified Public Offering, the Company’s Board of Directors or group of Shareholders that, in the aggregate, owns a majority of the voting power of the Company, receives an offer in a transaction or series of transactions pursuant to which a third party (which, for the avoidance of doubt, shall not include Parent or any of its Affiliates, or any other Person in which Parent or any of its Affiliates invests or has agreed to make an investment) proposes to acquire all of the Equity Securities of the Company, and, at the closing of such transaction, the holders of the Senior Preferred Shares and any Common Shares that were issued upon the prior conversion of the Senior Preferred Shares shall, in the aggregate, receive cash consideration at the closing of such transaction (not including any cash subject to a holdback or escrow arrangement on the closing date) equal to or greater than 1.5x the Original Purchase Price with respect to all Senior Preferred Shares that are then issued (as adjusted for any stock splits,

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dividends, combinations, subdivisions, recapitalizations and the like) (a “Drag-Along Transaction”), then such Shareholder or group of Shareholders that, in the aggregate, owns a majority of the voting power of the Company (collectively, the “Drag-Along Shareholder”) shall have the right, at its option, to require all of the other Shareholders (each such other Shareholder, a “Dragged Shareholder,” and collectively with any other Dragged Shareholder, the “Dragged Shareholders”), and each Dragged Shareholder hereby agrees, whether such Drag-Along Transaction is structured as a Transfer of Equity Securities, merger, consolidation, combination, reorganization, recapitalization, reclassification or otherwise, to Transfer all of such Dragged Shareholder’s Equity Securities on substantially the same terms and conditions as are applicable to the Drag-Along Shareholder; provided that (i) the terms of any Drag-Along Transaction may not contemplate any agreement or arrangement in which the Drag-Along Shareholder or any of its Affiliates will receive any consideration, payment or any other thing of value apart from the consideration to be paid to all selling Shareholders in the sale (including all Dragged Shareholders) other than repayment of indebtedness, reimbursement of customary expenses, payments related to services previously provided and ordinary course arrangements for services from Management Shareholders consistent with market terms or prior practices, and (ii) the price per share for each Equity Security to be sold in such Drag-Along Transaction shall be determined by allocating consideration pursuant to the terms of the Articles of Incorporation.

(b) Each Dragged Shareholder shall reasonably cooperate in, and shall take all actions requested by the Drag-Along Shareholder that are reasonably necessary or desirable to consummate, the Drag-Along Transaction, including: (i) to the extent applicable, voting its Equity Securities (or executing and delivering any written consents in lieu thereof) in favor of the Drag-Along Transaction and against all competing transactions, and all actions deemed reasonably necessary by the Drag- Along Shareholder in connection with the Drag-Along Transaction; (ii) if applicable, taking all actions necessary to cause the Board to approve the Drag-Along Transaction; and (iii) entering into all definitive and ancillary agreements with respect to the proposed Drag-Along Transaction, and using commercially reasonable efforts to cause the transactions contemplated by such definitive agreements and ancillary agreements to be consummated; provided that (A) such definitive agreements shall contain representations and warranties and indemnity obligations of such Dragged Shareholder only if the Drag-Along Shareholder has also made such representations and warranties, (B) any representations and warranties or indemnities given by each of the Dragging Shareholder and the Dragged Shareholders shall be several and not joint, (C) the indemnity obligations thereunder are (x) apportioned pro rata among each of the Drag-Along Shareholder and the Dragged Shareholders based on the relative proportion of Common Shares being sold in such Drag-Along Transaction (with Equity Securities convertible or exchangeable into Common Shares considered on an as-converted basis), (y) limited to breaches of fundamental representations and warranties regarding matters such as ownership, capacity and authorization (but under no circumstances will the Shareholders have any post-closing liability for operational matters or Company liabilities other than their pro rata share of any indemnity, escrow or holdback) and (z) limited in respect of each Shareholder to the proceeds received by such Shareholder in such Drag-Along Transaction (except in connection with claims relating to such Shareholder’s fraud), (D) no Dragged Shareholder that is not otherwise an employee of the Company shall be required to agree to any restrictive post-closing covenants (such as non-competition or non-solicitation) other than a customary confidentiality covenant, and (E) each of the Dragging Shareholder and the Dragged Shareholders that are not otherwise employees of the Company will receive the same form of consideration and the same portion of the aggregate consideration that such Shareholders would have received if such aggregate consideration had been distributed by the Company as a Deemed Liquidation Event pursuant to the rights and preferences set forth in the Articles of Incorporation as in effect immediately prior to such Drag-Along Transaction.

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(c) Without limitation of the foregoing, each Shareholder waives any dissenters, appraisal or other similar rights it may have in connection with any sale of the Company under applicable law that is approved or instituted pursuant to this Section 3.03 and agrees not to assert any claims challenging the validity of such sale of the Company that is approved or instituted pursuant to this Section 3.03.

(d) The Drag-Along Shareholder shall provide written notice of such Drag-Along Transaction to each Dragged Shareholder (a “Drag-Along Transaction Notice”) not later than ten (10) days prior to the proposed Drag-Along Transaction. The Drag-Along Transaction Notice shall identify the proposed Transferee, the consideration for which a Transfer is proposed to be made and all other material terms and conditions of the Drag-Along Transaction. Except as otherwise set forth herein, such Dragged Shareholder shall be required to participate in the Drag-Along Transaction on the terms and conditions set forth in the Drag-Along Transaction Notice.

(e) The Drag-Along Shareholder shall have a period of thirty (30) days from the date of delivery of the Drag-Along Transaction Notice to enter into definitive transaction agreements with respect to, and six (6) months from the date of delivery of the Drag-Along Transaction Notice to consummate, the Drag-Along Transaction on the terms and conditions set forth in such Drag-Along Transaction Notice; provided, however, that such six (6) month period shall be extended by the time necessary (but in no event to exceed three hundred sixty-five (365) days from the date of delivery of the Drag- Along Transaction Notice) to obtain any required approvals of any Regulatory Agency under any applicable laws (the “Drag-Along Transaction Period”). If the Drag-Along Transaction shall not have been consummated during the Drag-Along Transaction Period, the Drag-Along Shareholder shall promptly return any documents in the possession of the Drag-Along Shareholder executed by the Dragged Shareholders in connection with the Drag-Along Transaction, and all the restrictions on Transfer contained in this Agreement or otherwise applicable at such time with respect to any Equity Securities owned by each of the Shareholders shall continue to be in effect.

(f) Notwithstanding anything to the contrary in this Section 3.03, there shall be no liability on the part of the Drag-Along Shareholder to the Company or the Dragged Shareholders if the Drag-Along Transaction is not consummated for whatever reason, regardless of whether the Drag-Along Shareholder has delivered a Drag-Along Transaction Notice, except as may be agreed between the applicable parties in a separate written agreement. The decision to effect a Drag-Along Transaction is in the sole and absolute discretion of the Drag-Along Shareholder.

(g) Notwithstanding anything to the contrary herein, no Dragged Shareholder may Transfer any of its Equity Securities (except in connection with the Drag-Along Transaction) during the period beginning on the date of receipt of the Drag-Along Transaction Notice and ending at such earlier time as the Drag-Along Transaction (x) is consummated, (y) is abandoned or terminated (with notice of such abandonment or termination having been provided by the Drag-Along Shareholder), or (z) fails to be consummated within the Drag-Along Transaction Period.

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3.04 Legend. In addition to any other legend that may be required by applicable law, each certificate for Equity Securities, if any, issued to any Shareholder shall bear a legend in substantially the following form:

THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), UNDER APPLICABLE U.S. STATE SECURITIES LAWS OR UNDER THE LAWS OF ANY OTHER JURISDICTION AND MAY NOT BE OFFERED OR SOLD EXCEPT IN COMPLIANCE THEREWITH. THE SHARES REPRESENTED BY THIS CERTIFICATE ARE ALSO SUBJECT TO THE CORPORATION’S BYLAWS AND THE PROVISIONS OF A SHAREHOLDERS AGREEMENT DATED FEBRUARY 26, 2021 (AS MAY BE AMENDED FROM TIME TO TIME) THAT MAY PROVIDE FOR MANAGEMENT OF THE CORPORATION IN A MANNER DIFFERENT THAN IN OTHER CORPORATIONS AND MAY SUBJECT A SHAREHOLDER TO CERTAIN OBLIGATIONS OR LIABILITIES NOT IMPOSED IN SHAREHOLDERS IN OTHER CORPORATIONS. A COPY OF SUCH BYLAWS AND SHAREHOLDERS AGREEMENT WILL BE FURNISHED WITHOUT CHARGE BY THE CORPORATION TO THE HOLDER HEREOF UPON WRITTEN REQUEST.

If any Equity Securities are certificated and cease to be subject to any and all restrictions on Transfer set forth in this Agreement, the Company, upon the written request of the holder thereof, shall issue to such holder a new certificate evidencing such Equity Securities without reference in the above legend to this Agreement, as the case may be.

3.05 Market Standstill. Each Shareholder hereby agrees that he, she or it will not, without the prior written consent of the managing underwriter, during the period commencing on the date of the final prospectus relating to the registration by the Company of shares of its Common Stock or any other equity securities under the Securities Act on a registration statement on Form S-1 or Form S-3, and ending on the date specified by the Company and the managing underwriter (such period not to exceed one hundred eighty (180) days in the case of the IPO or ninety (90) days in the case of any registration other than the IPO, or such other period as may be requested by the Company or an underwriter to accommodate regulatory restrictions on (1) the publication or other distribution of research reports and (2) analyst recommendations and opinions, including, but not limited to, the restrictions contained in applicable FINRA rules, or any successor provisions or amendments thereto), (i) lend; offer; pledge; sell; contract to sell; sell any option or contract to purchase; purchase any option or contract to sell; grant any option, right, or warrant to purchase; or otherwise transfer or dispose of, directly or indirectly, any shares of Common Stock of the Company or any securities convertible into or exercisable or exchangeable (directly or indirectly) for Common Stock of the Company held immediately before the effective date of the registration statement for such offering or (ii) enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of such

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securities, whether any such transaction described in clause (i) or (ii) above is to be settled by delivery of Common Stock or other securities, in cash, or otherwise. The foregoing provisions of this Section 3.06 shall not apply to the sale of any shares to an underwriter pursuant to an underwriting agreement or to the establishment of a trading plan pursuant to Rule 10b5-1, provided that such plan does not permit transfers during the restricted period, or the transfer of any shares to any trust for the direct or indirect benefit of the Shareholder or the immediate family of the Shareholder, provided that the trustee of the trust agrees to be bound in writing by the restrictions set forth herein, and provided further that any such transfer shall not involve a disposition for value, and shall be applicable to the Shareholders only if all officers and directors are subject to the same restrictions and the Company uses commercially reasonable efforts to obtain a similar agreement from all stockholders individually owning more than five percent (5%) of the Company’s outstanding Common Stock (after giving effect to conversion into Common Stock of all outstanding Preferred Stock), including Parent. Each Shareholder further agrees to execute such agreements as may be reasonably requested by the underwriters in connection with such registration that are consistent with this Section 3.06 or that are necessary to give further effect thereto.

Section 4. Periodic Information Reporting Requirements.

4.01 Information Rights. On a confidential basis, the Company shall provide to each Shareholder for so long as such Shareholder owns, either individually or together with its Affiliates, the Minimum Ownership Threshold, the following:

(a) Within one-hundred and twenty (120) days after the end of each fiscal year of the Company, the audited annual financial statements of the Company and its Subsidiaries in accordance with GAAP or SAP, as applicable.

(b) Within forty-five (45) days after the end of each fiscal quarter of the Company, the unaudited quarterly financial statements of the Company and its Subsidiaries.

(c) Within ninety (90) days after the end of each fiscal year of the Company, a copy of of the annual budget and business plans of the Company and its Subsidiaries for each fiscal year, in such form and containing such information as approved by the Board.

(d) Any information reasonably requested by a Shareholder in writing to permit such Shareholder (or its direct or indirect owners) to comply with applicable United States federal income and other relevant tax laws and reporting requirements, or other regulatory obligations, with respect to its investment in the Company or to help facilitate any Transfer or proposed Transfer of Equity Securities by such Shareholder in a manner consistent with the terms of this Agreement (and the Company shall otherwise cooperate with the efforts of such Shareholder in connection with such Transfer or Proposed Transfer).

(e) As promptly as practical following the end of each fiscal quarter of the Company and if requested by a Shareholder in writing, a copy of the Company’s capitalization table as of date within ten (10) Business Days of the date of the request.

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(f) The Company shall permit each Shareholder (provided that the Board of Directors has not reasonably determined that such Shareholder is a competitor of the Company), at such Shareholder’s expense, to visit and inspect the Company’s properties; examine its books of account and records; and discuss the Company’s affairs, finances, and accounts with its officers, during normal business hours of the Company as may be reasonably requested by the Shareholder; provided, however, that the Company shall not be obligated pursuant to this Section Section 4.01(e) to provide access to any information that it reasonably and in good faith considers to be a trade secret or to the extent the disclosure of such information would adversely affect the attorney-client privilege between the Company and its counsel; provided that the Company will use commercially reasonable efforts to provide such information in a way that would not violate such privilege.

4.02 Books and Records. The Company shall maintain, at its principal place of business, separate books of account for the Company that shall show a true and accurate record, in all material respects, of all costs and expenses incurred, all charges made, all credits made and received and all income derived in connection with the operation of the Company’s business in accordance with GAAP (or SAP, in the case of the Company’s insurance company Subsidiaries).

4.03 Confidentiality. Except as authorized in writing by the Company, each of the Shareholders shall not disclose any of the information provided to such Shareholder pursuant to this Section 4 to any Person that is not an Affiliate of such Shareholder or a director, officer, partner, member, trustee, employee, representative (including any accountant, attorney or other professional), agent or consultant of such Shareholder or such Affiliate, or a party to this Agreement, and each Shareholder shall use its commercially reasonable efforts to cause its Affiliates, and the directors, officers, partners, members, trustees, employees, representatives, agents and consultant of such Shareholder and such Affiliates, not to disclose such information to any Person that is not a party to this Agreement; provided, however, that, notwithstanding anything to the contrary set forth herein, (i) such Shareholder and each Affiliate of such Shareholder shall not be prohibited from disclosing any such information if such information (w) becomes publicly available through no breach of this Agreement by such Shareholder or such Affiliate, or the directors, officers, partners, members, trustees, employees, representatives, agents or consultants of such Shareholder and such Affiliate, (x) is required to be disclosed by law or the rules of a national securities exchange, (y) is required to be furnished to or filed with any governmental authority or self-regulatory organization that has jurisdiction over such Shareholder and/or such Affiliate or in any filings or applications made by such Shareholder and/or such Affiliate to such governmental authority or self-regulatory organization, to the extent such filings or applications require the disclosure of such information, including the SEC, or (z) the information is requested by a prospective transferee or purchaser of Equity Securities in circumstances in which Equity Securities are permitted to be sold pursuant to the terms hereof (including pursuant to a Drag-Along Transaction or a Sale Transaction) so long as such third party enters into a confidentiality agreement with the Company reasonably satisfactory to the Company and such Shareholder has not otherwise breached any of its obligations under this Agreement, and (ii) neither Centerbridge nor any Affiliate of Centerbridge shall be prohibited from disclosing any such information (w) in connection with financial or operating reports or other information made available to the current, former or prospective limited partners, investors, managers, members, representatives and advisors of Centerbridge and/or such Affiliate, (x) in compliance with the terms of the limited partnership or other organizational documents of Centerbridge and/or such Affiliate, (y) in connection with the marketing of investment funds managed or advised, directly or indirectly, by the Centerbridge and/or such Affiliate, (z) to any Person to whom Centerbridge and/or such Affiliate is contractually

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obligated or required to provide such information. Notwithstanding the foregoing, prospective investors (and their agents) are authorized, without restriction of any kind, to disclose the Tax treatment and Tax structure of the transactions set forth or contemplated herein. Each Shareholder shall be responsible for any breach of this Section 4 by its Affiliates or the directors, officers, partners, members, trustees, employees, representatives, agents or consultants of such Shareholder and such Affiliate.

Section 5. Registration Rights.

5.01 Company Registration Rights. Parent, the Company and Centerbridge hereby make the agreements and covenants with respect to the marketing and registration of the Equity Securities that are set forth on Annex A to this Agreement, which is hereby incorporated into this Agreement by this reference. Any Shareholder to which Centerbridge Transfers any Senior Preferred Shares shall be entitled to registration rights for its Company Registrable Securities on the same terms as Centerbridge.

5.02 Parent Registration Rights. In addition, whenever Parent proposes to register any of its equity securities under the Securities Act (including primary and secondary registrations, and other than in connection with registrations on Form S-4 or S-8 promulgated by the SEC or any successor or similar forms), Parent hereby covenants and agrees to give prompt written notice to Centerbridge of its intention to effect such registration and will include in such registration (and in all related registrations or qualifications under blue sky laws and in any related underwriting) all Parent Registrable Securities with respect to which Parent has received written requests for inclusion therein within ten (10) days after delivery of Parent’s notice, subject to the opinion of the managing underwriters on whether the number of securities requested to be included in such registration can be sold in such offering without adversely affecting the marketability, proposed offering price, timing or method of distribution of the offering. Parent shall be responsible for all out-of-pocket expenses incurred by Parent or Centerbridge in connection with the performance of or compliance with this Section 5.02; provided that Centerbridge will bear and pay all underwriting discounts and commissions applicable to the Parent Registrable Securities sold for Centerbridge’s account and all transfer taxes (if any) attributable to the sale of Parent Registrable Securities.

Section 6. Other Covenants.

6.01 Preemptive Rights.

(a) The Company hereby grants to each Shareholder the right to purchase an amount up to such Shareholder’s pro rata share on an as converted basis of all New Company Securities that the Company or any Subsidiary of the Company may from time to time propose to issue, offer or sell. The “pro rata share” for purposes of this Section 6.01(a) with respect to any given Shareholder shall be expressed as a fraction, (i) the numerator of which is the number of Common Shares Beneficially Owned by such Shareholder on the date of the Company’s written notice pursuant to Section 6.01(c) hereof, and (ii) the denominator of which is the number of Common Shares outstanding on the date of the Company’s written notice pursuant to Section 6.01(c) hereof, assuming for this purpose conversion of all outstanding Derivative Securities (including, for the avoidance of doubt, the Senior Preferred Shares).

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(b) For purposes of this Section 6.01, “New Company Securities” means (A) any shares of capital stock (of any class) of the Company or any of its Subsidiaries, including Common Shares, shares of Preferred Stock or other Equity Securities, whether now authorized or not, issued after the Effective Date, or (B) any options, warrants, convertible notes, securities of any type or similar rights issued by the Company or any of its Subsidiaries after the Effective Date that are or may become convertible into or exercisable or exchangeable for, or that carry rights to subscribe for, any shares of capital stock (of any class), including Common Shares, shares of Preferred Stock or other Equity Securities (each of the foregoing reference in such clause (B), a “Convertible Security”); provided, however, that the term “New Company Securities” does not include any securities (1) issued as consideration to effect the acquisition of another entity by the Company or any of its Subsidiaries pursuant to a merger, consolidation, amalgamation, exchange of shares, the purchase of all or substantially all of the assets, or otherwise; (2) issued to any directors or employees of the Company or any of its Subsidiaries pursuant to any incentive stock plan or other form of incentive compensation approved and adopted by the Company, and any Common Shares or other equity issued upon the exercise thereof; (3) issued upon the exercise of or conversion of the Senior Preferred Shares; (4) issued to the Shareholders upon any stock split, stock dividend, combination or other similar event with respect to the Common Shares or other capital stock; (5) issued pursuant to the Purchase Agreement, or (6) issued as “kickers” to lenders or otherwise in connection with any financing arrangements which are entered into in a manner consistent with the provisions of the Articles of Incorporation.

(c) In the event that the Company proposes to undertake an issuance of New Company Securities, the Company will give the Shareholders written notice (a “New Issue Notice”) of its intention, describing the type of New Company Securities, the price and amount proposed to be issued and the other material terms and conditions upon which the Company proposes to issue New Company Securities. Such New Issue Notice shall be delivered to each Shareholder prior to the proposed issue date of such New Company Securities and each Shareholder shall have ten (10) days from the date of receipt of each New Issue Notice to deliver to the Company a written notice (a “Notice of Acceptance”) of the amount of the applicable New Company Securities that it intends to purchase. If no Notice of Acceptance is timely given it will be deemed a decline to purchase the Company New Securities by such Shareholder. The closing and funding of all New Company Securities pursuant to the Notices of Acceptances shall take place no later than ninety (90) days after the date of the New Issue Notice and the preparation, execution and delivery by the Company and such Shareholder of definitive documentation relating to the acquisition of such New Company Securities shall occur within such time frame and shall be in form and substance reasonably satisfactory to such Shareholder and the Company.

(d) If no Shareholder has delivered a Notice of Acceptance or if less than all of the New Company Securities set forth in such New Issue Notice are subject to Notices of Acceptance, the Company shall have one hundred twenty (120) days (or, if such issuance is subject to regulatory approval, two hundred ten (210) days) from the date of a New Issue Notice to consummate the issuance, sale or exchange in whole or in part of the New Company Securities described in such New Issue Notice that are not agreed to be purchased by Shareholders pursuant to Notices of Acceptance on terms and conditions that are either the same as the terms and conditions described in the New Issue Notice or less favorable to the purchaser of such New Company Securities than the terms and conditions described in the New Issue Notice. For avoidance of doubt, (i) upon expiration of such one hundred twenty (120) day (or, if such issuance

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is subject to regulatory approval, two hundred ten (210) day) period, or (ii) if no Shareholder delivered a Notice of Acceptance and the terms and conditions of the proposed issuance of New Company Securities are more favorable to the purchaser of such New Company Securities than those set forth in the initial New Issue Notice, the Company shall be required to deliver another New Issue Notice in connection with the proposed issuance of New Company Securities. At the option of any Shareholder acquiring New Company Securities pursuant to this Section 6.01, such New Company Securities shall be non-voting pending exchange for voting securities with the same terms, which exchange shall be effected by the Company on demand at the subsequent option of such Shareholder.

(e) The Company shall be under no obligation to consummate any proposed sale of New Company Securities, nor shall there be any liability on the part of the Company to any Shareholder if the Company does not consummate a proposed sale of New Company Securities for whatever reason, whether or not the Company shall have delivered a notice in respect thereof to the Shareholders.

(f) Notwithstanding any provision hereof to the contrary, in lieu of complying with the provisions of this Section 6.01, the Company may elect to give notice to the Shareholders within thirty (30) days after the issuance of New Company Securities. Such notice shall describe the type, price, and terms of the New Company Securities. Each Shareholder shall have twenty (20) days from the date notice is given to elect to purchase up to the number of New Company Securities that would, if purchased by such Shareholder, maintain such Shareholder’s percentage-ownership position, calculated as set forth in Section 6.1(a) before giving effect to the issuance of such New Company Securities. From the date on which the New Company Securities are issued through the earlier of (a) the date on which the 20-day period contemplated above has expired and (b) the date on which each Shareholder has purchased all the New Company Securities it is entitled to purchase hereunder, neither Parent nor the Company or any of its Subsidiaries shall (i) initiate or consummate any IPO, Drag-Along Transaction, Proposed Tag Transfer or Sale of the Company, (ii) otherwise take or authorize, or set any record date for, any action that would result in any payment or distribution being made to the Shareholders of the Company or (iii) otherwise make any material change to the management or governance of the Company or any of its Subsidiaries that would adversely affect the rights, preferences or privileges of the Series A Preferred Shares in a material way.

6.02 Certain Parent Agreements. The parties acknowledge and agree that any business opportunities that develop or arise in the management or operation of the business of the Company and its Subsidiaries or by the actions or activities of the personnel or through the intellectual property of the Company and its Subsidiaries shall be owned by the Company and not by Parent or any of its Affiliates (other than the Company and its Subsidiaries). Parent shall not, and shall cause its Affiliates not to, take any action the purpose or intent of which is to divert such business opportunities or the economic benefits of any such businesses opportunities to Parent or any of its Affiliates (other than the Company and its Subsidiaries) or otherwise to divert value relating to such business opportunities (or the associated economic benefits) away from the Company and its Subsidiaries (including by writing insurance business developed or sourced by the Company or any of its Subsidiaries or by using their intellectual property or assets out of any insurance company owned by Parent or any of its Affiliates (other than the Company and its Subsidiaries)). Notwithstanding anything herein to the contrary, the business opportunities

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described in the first sentence of this Section 6.02 shall not include opportunities directly relating to or arising from the historical businesses of Parent or its Affiliates, including, without limitation, insurance business in states where any one of them is, as of the date hereof, authorized to transact insurance, insurance agency services, claims handling and management and real estate operation and management, and shall not include insurance business to be transitioned from United Property & Casualty Insurance Company. Furthermore, it shall not be a violation of this Section 6.02 for Parent and its Affiliates (other than the Company and its Subsidiaries) to continue to operate and grow their respective historical businesses in a manner that is materially consistent with how such businesses have been historically operated. In addition, neither the Company or any of its Subsidiaries, on the one hand, nor Parent or any of its Subsidiaries (other than the Company and its Subsidiaries), on the other hand, may permit or effect any amendment in any material respect of any agreement between the Company or any of its Subsidiaries, on the one hand, and Parent or any of its Subsidiaries (other than the Company and its Subsidiaries), on the other hand, without the prior written consent of Centerbridge.

6.03 Further Assurances. Each party hereto agrees to use, and cause its Affiliates to use, its commercially reasonable and good faith efforts to execute and deliver, at no cost to the other parties hereto, such other documents, certificates, agreements and other writings, and to take such other actions as may be necessary or desirable in order to, consummate or implement expeditiously the transactions contemplated by this Agreement.

6.04 Tax Matters.

(a) The Company and the Shareholders agree (a) to treat the Senior Preferred Shares as stock that is not “preferred stock” within the meaning of Section 305(b)(4) of the Code and Treasury Regulation § 1.305-5 promulgated thereunder. The Company shall not take any position or action inconsistent with such intended treatment (including on any IRS Form 1099), unless otherwise required by either (A) a change in applicable law after the date hereof (or official interpretation thereof) or (B), a contrary “determination” (as defined in Section 1313(a) of the Code). If the Company determines to report, pursuant to Section 305 of the Code, any dividends in any year in excess of actual cash dividends paid in such year, the Company will notify Centerbridge not less than 20 days prior to the last day for reporting such dividends to the Internal Revenue Service, consult with Centerbridge in good faith regarding the need to report such dividend and, not report such dividends if the Company’s accountants advise that, more likely than not, such excess dividends are not required to be reported.

(b) To the extent that the District of Columbia, a U.S. state or any political subdivision thereof requires any Tax Return of or with respect to the Company or any of its Subsidiaries (the “TypTap Group”) to be filed on a combined basis with Parent or its Affiliates (other than the TypTap Group) (a “State Combined Return”) and the Company is not able to opt out of such filing, the Tax Allocation Agreement shall apply mutatis mutandis for purposes of such State Combined Returns, treating for such purpose the Parent Group and the TypTap Group as the only members of the group filing such State Combined Return.

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(c) Notwithstanding anything to the contrary in this Agreement or the Tax Allocation Agreement, Parent and the members of the Parent Group shall be responsible for and shall indemnify and hold harmless the Company and its Subsidiaries from and against any Losses relating to any Taxes imposed with respect to any consolidated federal income tax return that includes Parent and any member of the TypTap Group (a “Federal Combined Return”) or any State Combined Return (collectively, the “Combined Returns”) except to the extent that the TypTap Group is responsible for such Taxes pursuant to the Tax Allocation Agreement; provided the TypTap Group shall not be deemed responsible for (i) any Taxes arising from or attributable to the contributions or other transactions pursuant to which the stock of Subsidiaries of the Company was transferred to the Company on or prior to the date hereof, and (ii) any Taxes attributable to the acceleration of income or gain from deferred intercompany transactions that occurred on or prior to the date hereof pursuant to Section 1.1502-13 of the Treasury Regulations (or any similar provision of state or local law). The Company shall be entitled to all refunds of income Taxes (including credits in lieu of a refund and any interest thereon received from the applicable taxing authority) to the extent that any member of the TypTap Group is entitled to such refunds pursuant to the Tax Allocation Agreement and Parent shall pay all such refunds to the Company within fifteen (15) days after receipt thereof. Parent shall notify the Company in writing of any communication with respect to any pending or threatened audit or other proceeding by a taxing authority related to a Combined Return to the extent any member of the TypTap Group may be responsible pursuant to the Tax Allocation Agreement or Section 6.04(b); shall keep the Company reasonably informed regarding the progress of any such audit or other proceeding and shall not settle or otherwise resolve any such audit or proceeding without the prior written consent of the Company (not to be unreasonably withheld, conditioned or delayed) to the extent such settlement or resolution would give rise solely to Taxes for which the TypTap Group would be liable.

Section 7. Representations and Warranties.

7.01 Authority; Enforceability. Each of the parties hereto hereby severally represents and warrants to each of the other parties hereto that such party has, as applicable, the legal capacity or power and authority, corporate or otherwise, to enter into this Agreement. Such party is duly organized, validly existing and in good standing under the laws of its jurisdiction of organization, and the execution of this Agreement has been duly authorized by all necessary action. No other act or proceeding, corporate or otherwise, on its part is necessary to authorize the execution of this Agreement. This Agreement has been duly executed by such party and constitutes its legal, valid and binding obligation, enforceable against it in accordance with the terms of this Agreement, except to the extent that such enforceability may be limited by bankruptcy, insolvency, reorganization or other laws and judicial decisions of general application relating to or affecting the enforcement of creditors’ rights generally or by general equitable principles.

7.02 No Breach. Each of the parties hereto severally represents and warrants to each of the other parties hereto that the execution of this Agreement does not:

(a) conflict with or violate its certificate of formation, bylaws or other applicable organizational documents;

(b) violate, conflict with or result in the termination of, or otherwise give any other Person the right to accelerate, renegotiate or terminate or receive any payment or constitute a default or any event of default, with or without notice, lapse of time, or both, under the terms of, any contract or agreement to which it is a party or by which it or any of its assets or operations are bound or affected; or

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(c) constitute a violation by such party of any law, ruling, writ, injunction, award, determination or decree of any arbitral body or court or any agency, commission, department or body of any local, state, federal or foreign governmental, regulatory, administrative, judicial or quasi-governmental unit, entity or authority.

7.03 Consents. Each of the parties hereto hereby severally represents and warrants to each of the other parties hereto that no consent, waiver, approval, authorization, exemption, registration, license or declaration is required to be made or obtained by such party, other than those which have been made or obtained, in connection with the execution or enforceability of this Agreement.

7.04 Spousal Consent. Spouses of the Shareholders who are natural persons are not Shareholders as a result of such marital relationship. Each spouse of a Shareholder, as applicable, acknowledges and agrees to the foregoing by executing the Spousal Consent set forth as Exhibit B attached hereto (the “Spousal Consent”). If this Agreement is executed and delivered by a Shareholder without also delivering a copy of the Spousal Consent executed by the spouse of such Shareholder at such time of execution and delivery or promptly thereafter, then such Shareholder hereby represents and warrants to the Company and the other Shareholders that he or she is not married and does not have a common law spouse as of the date of such delivery. Each Shareholder shall promptly notify the Company whenever there is a change in such Shareholder’s marital status. If a Shareholder marries or remarries after the date of such delivery, such Shareholder shall promptly provide the Company with the name and address of his or her spouse. Each Shareholder shall use his or her best efforts to cause his or her current or future spouse to execute and deliver to the Company the Spousal Consent or an instrument substantially in the form of the Spousal Consent.

Section 8. Miscellaneous.

8.01 Amendments and Waivers. This Agreement may not be amended, modified, supplemented or restated, nor may any provisions of this Agreement be waived, in each case without the prior written consent of Parent and Centerbridge. Any and all amendments, modifications, supplements or waivers may be made to this Agreement from time to time thereafter by the Company or Parent, on the one hand, and Centerbridge, on the other hand, without the consent of any other Shareholder, including amendments, modifications, supplements or waivers to: (a) cure any ambiguity or correct or supplement any provision herein which may be inconsistent with any other provision herein; and (b) make any other provisions with respect to matters or questions arising under this Agreement that are not inconsistent with the provisions of this Agreement; provided, in the case of each of (a) and (b), that no right or benefit specifically provided to a Shareholder under any provision of this Agreement may be amended, modified or waived without the approval of such Shareholder; and provided, further, that any amendment, modification, supplement or waiver of this Agreement shall require the approval of a Shareholder in any case where such Shareholder’s rights or obligations hereunder are materially adversely affected by such amendment, modification, supplement or waiver. Any amendment, modification, supplement or waiver effected in accordance with this Section 8.01 shall be binding upon the

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Company, the Shareholders and their successors and assigns. Notwithstanding anything to the contrary contained herein, if the Company issues additional shares of its capital stock after the date hereof and, upon such issuance, the holder thereof will hold shares of capital stock in the Company representing 1% or more of the issued capital stock of the Company, then (x) such holder shall become a party to this Agreement by executing and delivering a counterpart signature page hereto as a “Shareholder” and thereafter shall be deemed a “Shareholder” for all purposes hereunder and (y) no action or consent by the parties hereto shall be required for such joinder to this Agreement so long as such acquirer has agreed in writing to be bound by all of the obligations as a “Shareholder” hereunder.

8.02 Entire Agreement. This Agreement, the Purchase Agreement, the Guarantee, the Parent Warrants and the Articles of Incorporation constitute the entire agreement and understanding of the parties in respect of the subject matters hereof and they together supersede all prior understandings, agreements, or representations by or among the parties, written or oral, to the extent they relate in any way to such subject matter hereof. Except as expressly contemplated hereby, there are no third party beneficiaries having rights under or with respect to this Agreement.

8.03 Term and Termination. This Agreement shall terminate automatically as to any Shareholder that Transfers all of its Equity Securities; provided, that this Agreement shall not terminate as to Centerbridge for so long as the Parent Board Designation Condition continues to be met and that the terms of this Agreement that relate to the Parent Registrable Securities (including Section 5.02 and Annex A) shall not terminate and shall continue in effect for so long as Centerbridge or any of its Affiliates holds any Warrants or Parent Registrable Securities.

8.04 Notices. All notices and other communications provided for hereunder shall be made in writing by hand-delivery, first-class mail, facsimile, e-mail, or air courier guaranteeing overnight delivery:

(i) if to the Company:

TypTap Insurance Group, Inc.

5300 West Cypress Street, Suite 100

Tampa, Florida 33607 Attention: Andrew J. Graham, General Counsel

Email: agraham@hcigroup.com

with a copy (which shall not constitute notice) to:

Foley & Lardner LLP

100 North Tampa Street, Suite 2700

Tampa, Florida 33602

Attention: Curt P. Creely

Email: ccreely@foley.com 

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(ii) if to Parent:

HCI Group, Inc.

5300 West Cypress Street, Suite 100

Tampa, Florida 33607 Attention: Andrew J. Graham, General Counsel

Email: agraham@hcigroup.com

with a copy to (which copy shall not constitute notice):

Foley & Lardner LLP

100 North Tampa Street, Suite 2700

Tampa, Florida 33602

Attention: Curt P. Creely

Email: ccreely@foley.com 

and

(iii) if to Centerbridge:

c/o Centerbridge Partners, L.P.

375 Park Avenue, 11th Floor

New York, NY 10152

Facsimile: (212) 672-5001

Attention: The Office of the General Counsel; Eric Hoffman

Email: legalnotices@centerbridge.com; ehoffman@centerbridge.com

with a copy to (which copy shall not constitute notice):

Kirkland & Ellis LLP

601 Lexington Avenue

New York, NY 10022

Facsimile: (212) 446-4900

Attention: Rajab S. Abbassi, P.C.

All such notices and communications shall be deemed to have been duly given when delivered by hand, if personally delivered; five (5) Business Days after being deposited in the United States mail, if being mailed by first class mail; two (2) Business Days after being delivered via a next-day air courier; when receipt is acknowledged by the recipient’s fax machine, if faxed; and on the date sent by e-mail (with confirmation of delivery) if sent during normal business hours of the recipient, and on the next Business Day if sent after normal business hours of the recipient.

8.05 Successors and Assigns; Assignment. This Agreement shall be binding upon and inure to the benefit of and be enforceable by the parties hereto and their respective successors and permitted assigns. Except pursuant to a Transfer effected in a manner consistent with this Agreement, no Shareholder may assign (including by operation of law or otherwise) either this Agreement or any of its rights, interests, or obligations hereunder without the prior

33

written consent of the Company and the other Shareholder. The Company may not, other than by operation of law, assign any or all of its rights, interests or obligations hereunder without the written consent of each Shareholder (in any or all of which cases the Company nonetheless will remain responsible for the performance of all of its obligations hereunder).

8.06 Specific Performance. Each party hereto acknowledges and agrees that irreparable damage would occur to the other parties hereto, and that the other parties hereto will not have an adequate remedy at law, in the event that any of the provisions of this Agreement to be performed by such party are not performed in accordance with their specific terms or are otherwise breached. Therefore, each party hereto is entitled to an injunction or injunctions to prevent breaches of this Agreement by the other parties and to enforce specifically the terms a provisions of this Agreement against such other parties hereto in any court of competent jurisdiction, without bond or other security being required, and appropriate injunctive relief may be applied for by such parties and granted in connection therewith. Such remedies are, however, cumulative and not exclusive and are in addition to any other remedies which any party may have under this Agreement or otherwise.

8.07 Submission to Jurisdiction; No Jury Trial.

(a) Each party submits to the jurisdiction of any state or federal court located in Hillsborough County or the Middle District, Tampa Division, in the state of Florida in any action arising out of or relating to this Agreement and agrees that all claims in respect of the action may be heard and determined in any such court. Each party agrees that a final judgment in any action so brought will be conclusive and may be enforced by action on the judgment or in any other manner provided at law or in equity. Each party waives any defense of inconvenient forum to the maintenance of any action so brought and waives any bond, surety, or other security that might be required of any other party with respect thereto.

(b) THE PARTIES EACH HEREBY AGREE TO WAIVE THEIR RESPECTIVE RIGHTS TO JURY TRIAL OF ANY DISPUTE BASED UPON OR ARISING OUT OF THIS AGREEMENT OR ANY OTHER AGREEMENTS RELATING HERETO OR ANY DEALINGS AMONG THEM RELATING TO THE TRANSACTIONS. The scope of this waiver is intended to be all encompassing of any and all action that may be filed in any court and that relate to the subject matter of the transactions contemplated hereby, including, contract claims, tort claims, breach of duty claims and all other common law and statutory claims. The parties each acknowledge that this waiver is a material inducement to enter into a business relationship and that they will continue to rely on the waiver in their related future dealings. Each party further represents and warrants that it has reviewed this waiver with its legal counsel, and that each knowingly and voluntarily waives its jury trial rights following consultation with legal counsel. NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED HEREIN, THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED ORALLY OR IN WRITING, AND THE WAIVER WILL APPLY TO ANY AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT OR TO ANY OTHER DOCUMENTS OR AGREEMENTS RELATING HERETO. In the event of an action, this Agreement may be filed as a written consent to trial by a court.

34

8.08 Counterparts. This Agreement may be executed in two or more counterparts (including by facsimile or PDF), each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

8.09 Governing Law. This Agreement shall be governed by the laws of the State of Florida, without giving effect to any choice of law or conflict of law provision or rule that would cause the application of the law of any jurisdiction other than the State of Florida.

8.10 Headings. The headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning hereof.

8.11 Construction. The parties have participated jointly in the negotiation and drafting of this Agreement. If an ambiguity or question of intent or interpretation arises, this Agreement will be construed as if drafted jointly by the parties and no presumption or burden of proof will arise favoring or disfavoring any party because of the authorship of any provision of this Agreement. Any reference to any federal, state, local, or foreign law will be deemed also to refer to law as amended and all rules and regulations promulgated thereunder, unless the context requires otherwise. The word “including” means “including without limitation. “ Pronouns in masculine, feminine, and neuter genders will be construed to include any other gender, and words in the singular form will be construed to include the plural and vice versa, unless the context otherwise requires. The words “this Agreement,” “herein,” “hereof,” “hereby,” “hereunder,” and words of similar import refer to this Agreement as a whole and not to any particular subdivision unless expressly so limited. The parties intend that each representation, warranty, and covenant contained herein will have independent significance. If any party has breached any representation, warranty, or covenant contained herein in any respect, the fact that there exists another representation, warranty or covenant relating to the same subject matter (regardless of the relative levels of specificity) which the party has not breached will not detract from or mitigate the fact that the party is in breach of the first representation, warranty, or covenant.

8.12 Severability. The remedies provided herein are cumulative and not exclusive of any remedies provided by law. If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction to be invalid, illegal, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions set forth herein shall remain in full force and effect and shall in no way be affected, impaired or invalidated, and the parties hereto shall use their reasonable efforts to find and employ an alternative means to achieve the same or substantially the same result as that contemplated by such term, provision, covenant or restriction. It is hereby stipulated and declared to be the intention of the parties that they would have executed the remaining terms, provisions, covenants and restrictions without including any of such that may be hereafter declared invalid, illegal, void or unenforceable.

8.13 Conflicts With Company Organizational Documents. To the extent that any of the provisions of this Agreement conflict with any of the provisions of the Articles of Incorporation or the Bylaws, the provisions of this Agreement shall prevail and the Shareholders, the Board and the Company shall take such steps as are necessary to amend the Articles of Incorporation or the Bylaws, as the case may be.

[remainder of page intentionally left blank]

35

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

TYPTAP INSURANCE GROUP, INC.

By:

Name:

Title:

HCI GROUP, INC.

By:

Name:

Title:

CB SNOWBIRD HOLDINGS, L.P.

By: CSCP III Cayman GP Ltd., its General

Partner

By:

Name:

Title:

[Shareholders Agreement Signature Page]

Schedule 1

Initial Directors

Paresh Patel

Eric Hoffman (Centerbridge appointment)

Kevin Mitchell

Loreen Spencer

Jim Macchiarola

Martin Dolan

[TBD (HCI appointment)]

[TBD (Joint appointment)]

Annex A

REGISTRATION RIGHTS

In consideration of the mutual covenants contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Company and Centerbridge hereby agree with respect to the Company Registrable Securities, as follows:

Section 1. Demand Registrations.

1.01 Requests for Registration. At any time and from after the fourth (4^th) anniversary of the Effective Date, Centerbridge may request (x) one registration under the Securities Act of all or any portion of its Company Registrable Securities resulting in anticipated proceeds to Centerbridge of at least $40 million on Form S-1 or any similar long-form registration statement (“Long-Form Registrations”) or (y) registration (not more than two times in a twelve month period) of its Company Registrable Securities on Form S-3 or any similar short-form registration statement (“Short-Form Registrations”), if available, if such Short-Form Registration would result in anticipated proceeds to Centerbridge of at least $5 million (any such requested registration, a “Demand Registration”). If Form S-3 is then available to the Registrant, Centerbridge may request that any Demand Registration be made pursuant to Rule 415 under the Securities Act (a “Shelf Registration”) and (if the Registrant is a WKSI at the time any such request is submitted to the Registrant or will become one by the time of the filing of such Shelf Registration) that such Shelf Registration be an automatic shelf registration statement (as defined in Rule 405 under the Securities Act) (an “Automatic Shelf Registration Statement”). Each request for a Demand Registration must specify the approximate number or dollar value of Registrable Securities requested to be registered by Centerbridge and (if known) the intended method of distribution.

1.02 Form of Registrations; Selection of Underwriters. Any Long-Form Registration will be an underwritten registration unless otherwise approved by Centerbridge, such approval not to be unreasonably withheld. The Company shall, with the consent of Centerbridge, not to be unreasonably withheld, select the legal counsel, the investment banker(s) and manager(s) to administer any underwritten offering in connection with any Demand Registration or Shelf Offering.

1.03 Shelf Registrations.

(a) For so long as a registration statement for a Shelf Registration (a “Shelf Registration Statement”) is and remains effective, Centerbridge will have the right at any time or from time to time to elect to sell pursuant to an offering (including an underwritten offering) Registrable Securities pursuant to such registration statement (“Shelf Registrable Securities”). If Centerbridge desires to sell Registrable Securities pursuant to an underwritten offering, then Centerbridge may deliver to the Registrant a written notice (a “Shelf Offering Notice”) specifying the number of Shelf Registrable Securities that Centerbridge desires to sell pursuant to such underwritten offering (the “Shelf Offering”). The Registrant will, as expeditiously as possible (and in any event within fourteen (14) days after the receipt of a Shelf Offering Notice), but subject to Section 1.04, use its commercially reasonable efforts to consummate such Shelf Offering.

Annex A

(b) If Centerbridge desires to engage in an underwritten block trade or bought deal pursuant to a Shelf Registration Statement (either through filing an Automatic Shelf Registration Statement or through a take-down from an already existing Shelf Registration Statement) (each, an “Underwritten Block Trade”) then Centerbridge may notify the Registrant of the Underwritten Block Trade not less than two (2) Business Days prior to the day such offering is first anticipated to commence.

(c) All determinations as to whether to complete any Shelf Offering and as to the timing, manner, price and other terms of any Shelf Offering contemplated by this Section 1.03 shall be determined by Centerbridge, and the Registrant shall use its commercially reasonable efforts to cause any Shelf Offering to occur in accordance with such determinations as promptly as practicable. At any time prior to the effective date of the registration statement relating to a Demand Registration or the “pricing” of any offering relating to a Shelf Offering Notice, Centerbridge may revoke or withdraw such notice of a Demand Registration or Shelf Offering Notice without liability to Centerbridge by providing written notice to the Registrant.

1.04 Priority on Demand Registrations and Shelf Offerings. The Registrant will not include in any Demand Registration any securities which are not Registrable Securities without the prior written consent of Centerbridge unless all Registrable Securities requested to be included by Centerbridge in such Demand Registration are included therein. If a Demand Registration or a Shelf Offering is an underwritten offering and the managing underwriters advise the Registrant in writing that in their opinion the number of Registrable Securities and (if permitted hereunder) other securities requested to be included in such offering exceeds the number of Registrable Securities and other securities (if any), which can be sold therein without adversely affecting the marketability, proposed offering price, timing or method of distribution of the offering, then the Registrant will include in such offering (prior to the inclusion of any securities which are not Registrable Securities) the number of Registrable Securities requested to be included by Centerbridge.

1.05 Restrictions on Demand Registration and Shelf Offerings. The Registrant may postpone, by notice in writing to Centerbridge, for up to 60 days (or with the consent of Centerbridge, a longer period) from the date of the request (the “Suspension Period”), the filing or the effectiveness of a registration statement for a Demand Registration or suspend the use of a prospectus that is part of a Shelf Registration Statement (and therefore suspend sales of the Shelf Registrable Securities) by providing written notice to Centerbridge if the following conditions are met: (A) the Registrant determines that the offer or sale of Registrable Securities would reasonably be expected to have a material adverse effect on any proposal or plan by the Registrant or any Subsidiary of the Registrant to engage in any material acquisition of assets or stock (other than in the ordinary course of business) or any material merger, consolidation, tender offer, recapitalization, reorganization, financing or other transaction involving the Registrant or (B) upon advice of counsel, the sale of Registrable Securities pursuant to the registration statement would require disclosure of material non-public information not otherwise required to be disclosed under applicable law, and either (x) the Registrant has a bona fide business purpose for preserving

Annex A

the confidentiality of such information, or (y) disclosure would have a material adverse effect on the Registrant or the Registrant’s ability to consummate a transaction. The Registrant may delay or suspend the effectiveness of a Demand Registration or Shelf Registration Statement pursuant to this Section 1.05 only two times in any twelve (12)-month period.

1.06 Other Registration Rights. From and after the date of this Agreement, the Company shall not, without the prior written consent of Centerbridge, which consent shall not be unreasonably withheld, enter into any agreement with any holder or prospective holder of any securities of the Company that would (i) provide to such holder or prospective holder the right to include securities in any registration on other than either a pro rata basis or on a subordinate basis to the Registrable Securities in the Company held by Centerbridge; or (ii) allow such holder or prospective holder to initiate a demand for registration of any securities of the Company held by such holder or prospective holder.

Section 2. Piggyback Registrations. Whenever the Registrant proposes to register any of its equity securities under the Securities Act (including primary and secondary registrations, and other than in connection with registrations on Form S-4 or S-8 promulgated by the SEC or any successor or similar forms) (a “Piggyback Registration”), the Registrant will give prompt written notice to Centerbridge of its intention to effect such Piggyback Registration and, subject to the following sentence, will include in such Piggyback Registration (and in all related registrations or qualifications under blue sky laws and in any related underwriting) all Registrable Securities with respect to which the Registrant has received written requests for inclusion therein within ten (10) days after delivery of the Registrant’s notice. Centerbridge’s Registrable Securities requested to be included in such registration shall be included if, in the opinion of the managing underwriters, the number of securities requested to be included in such registration can be sold in such offering without adversely affecting the marketability, proposed offering price, timing or method of distribution of the offering. Centerbridge may withdraw its request for inclusion at any time prior to executing the underwriting agreement, or if none, prior to the applicable registration statement becoming effective. The Registrant will have the right to terminate or withdraw any registration initiated by it under this Section 2, whether or not any holder of Registrable Securities has elected to include securities in such registration.

Section 3. Registration Procedures.

3.01 Registrant Obligations. Whenever Centerbridge has requested that any Registrable Securities be registered pursuant to this Agreement or have initiated a Shelf Offering, the Registrant will use its reasonable commercial 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 Registrant will as expeditiously as possible:

(a) prepare and file with (or submit confidentially to) the SEC a registration statement, and all amendments and supplements thereto and related prospectuses, with respect to such Registrable Securities and use its commercially reasonable efforts to cause such registration statement to become effective, all in accordance with the Securities Act and all applicable rules and regulations promulgated thereunder (provided that before filing or confidentially submitting a registration statement or prospectus or any amendments or supplements thereto, the Registrant will furnish to the counsel selected by Centerbridge covered by such registration statement copies of all such documents proposed to be filed or submitted, which documents will be subject to the review and comment of such counsel to be considered by Registrant in good faith);

Annex A

(b) notify Centerbridge of (A) the issuance by the SEC of any stop order suspending the effectiveness of any registration statement or the initiation of any proceedings for that purpose, (B) the receipt by the Registrant or its counsel of any notification with respect to the suspension of the qualification of the Registrable Securities for sale in any jurisdiction or the initiation or threatening of any proceeding for such purpose, and (C) the effectiveness of each registration statement filed hereunder;

(c) prepare and file with the SEC such 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 ending when all of the securities covered by such registration statement have been disposed of in accordance with the intended methods of distribution by the sellers thereof set forth in such registration statement (but not in any event before the expiration of any longer period required under the Securities Act or, if such registration statement relates to an underwritten Public Offering, such longer period as in the opinion of counsel for the underwriters a prospectus is required by law to be delivered in connection with sale of Registrable Securities by an underwriter or dealer) and comply with the provisions of the Securities Act with respect to the disposition of all securities covered by such registration statement during such period in accordance with the intended methods of disposition by the sellers thereof set forth in such registration statement;

(d) furnish, without charge, to Centerbridge and each underwriter, if any, such number of copies of such registration statement, each amendment and supplement thereto, the prospectus included in such registration statement (including each preliminary prospectus) (in each case including all exhibits and documents incorporated by reference therein), each amendment and supplement thereto, each Free Writing Prospectus and such other documents as such seller or underwriter, if any, may reasonably request in order to facilitate the disposition of the Registrable Securities owned by Centerbridge (the Registrant hereby consenting to the use in accordance with all applicable laws of each such registration statement, each such amendment and supplement thereto, and each such prospectus (or preliminary prospectus or supplement thereto) or Free Writing Prospectus and the underwriters, if any, in connection with the offering and sale of the Registrable Securities covered by such registration statement or prospectus);

(e) use its commercially reasonable efforts to register or qualify such Registrable Securities under such other securities or blue sky laws of such jurisdictions as any seller reasonably requests and do any and all other acts and things which may be reasonably necessary or advisable to enable such seller to consummate the disposition in such jurisdictions of the Registrable Securities owned by such seller (provided that the Registrant will not be required to (A) qualify generally to do business in any jurisdiction where it would not otherwise be required to qualify but for this subparagraph or (B) consent to general service of process in any such jurisdiction or (C) subject itself to taxation in any such jurisdiction);

Annex A

(f) notify in writing Centerbridge (A) promptly after it receives written notice thereof, of the date and time when such registration statement and each post-effective amendment thereto has become effective or a prospectus or supplement to any prospectus relating to a registration statement has been filed and when any registration or qualification has become effective under a state securities or blue sky law or any exemption thereunder has been obtained, (B) promptly after receipt thereof, of any request by the SEC for the amendment or supplementing of such registration statement or prospectus or for additional information, and (C) at any time when a prospectus relating thereto is required to be delivered under the Securities Act, of the happening of any event or of any information or circumstances 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, if required by applicable law or to the extent requested by Centerbridge, such Shareholder will use its commercially reasonable efforts to promptly prepare and file a supplement or amendment to such prospectus so that, as thereafter delivered to the purchasers of such Registrable Securities, such prospectus will not contain an untrue statement of a material fact or omit to state any fact necessary to make the statements therein not misleading and (D) if at any time the representations and warranties of the Registrant in any underwriting agreement, securities sale agreement, or other similar agreement, relating to the offering shall cease to be true and correct;

(g) (A) use commercially reasonable efforts to cause all such Registrable Securities to be listed on each securities exchange on which similar securities issued by the Registrant are then listed and, if not so listed, to be listed on a securities exchange;

(h) use commercially reasonable efforts to provide a transfer agent and registrar for all such Registrable Securities not later than the effective date of such registration statement;

(i) enter into and perform such customary agreements (including, as applicable, underwriting agreements in customary form) and take all such other actions as Centerbridge or the underwriters, if any, reasonably request in order to expedite or facilitate the disposition of such Registrable Securities;

(j) make available for inspection by Centerbridge, any underwriter participating in any disposition or sale pursuant to such registration statement and any attorney, accountant or other agent retained by any such seller or underwriter, all financial and other records, pertinent corporate and business documents and properties of the Registrant as will be necessary to enable them to exercise their due diligence responsibility, and cause the Registrant’s officers, directors, employees, agents, representatives and independent accountants to supply all information reasonably requested by any such seller, underwriter, attorney, accountant or agent in connection with such registration statement and the disposition of such Registrable Securities pursuant thereto;

Annex A

(k) take commercially reasonable actions to ensure that any Free-Writing Prospectus utilized in connection with any Demand Registration or Piggyback Registration or Shelf Offering hereunder complies in all material respects with the Securities Act, is filed in accordance with the Securities Act to the extent required thereby, is retained in accordance with the Securities Act to the extent required thereby and, when taken together with the related prospectus, prospectus supplement and related documents, will not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading;

(l) otherwise use its commercially reasonable efforts to comply in all material respects with all applicable rules and regulations of the SEC, and make available to its security holders, as soon as reasonably practicable, an earnings statement covering the period of at least twelve (12) months beginning with the first day of the Registrant’s first full calendar quarter after the effective date of the registration statement, which earnings statement will satisfy the provisions of Section 11(a) of the Securities Act and Rule 158 thereunder;

(m) use commercially reasonable efforts to (A) make Short-Form Registration available for the sale of Registrable Securities and (B) prevent the issuance of any stop order suspending the effectiveness of a registration statement, or the issuance of any order suspending or preventing the use of any related prospectus or suspending the qualification of any common equity included in such registration statement for sale in any jurisdiction use, and in the event any such order is issued, commercially reasonable efforts to obtain promptly the withdrawal of such order;

(n) use its commercially reasonable efforts to cause such Registrable Securities covered by such registration statement to be registered with or approved by such other governmental agencies or authorities as may be necessary to enable the sellers thereof to consummate the disposition of such Registrable Securities;

(o) cooperate with the managing underwriter or agent, if any, to facilitate the timely preparation and delivery of certificates (not bearing any restrictive legends) representing securities to be sold under the registration statement, or the removal of any restrictive legends associated with any account at which such securities are held, and enable such securities to be in such denominations and registered in such names as the managing underwriter, or agent, if any;

(p) if requested by any managing underwriter, include in any prospectus or prospectus supplement updated financial or business information for the Registrant’s most recent period or current quarterly period (including estimated results or ranges of results) if required for purposes of marketing the offering in the view of the managing underwriter;

(q) take no direct or indirect action prohibited by Regulation M under the Exchange Act; provided, however, that to the extent that any prohibition is applicable to the Registrant, the Registrant will take such action as is necessary to make any such prohibition inapplicable;

Annex A

(r) cooperate with each underwriter or agent participating in the disposition of such Registrable Securities and their respective counsel in connection with the preparation and filing of applications, notices, registrations and responses to requests for additional information with FINRA, the New York Stock Exchange, Nasdaq or any other national securities exchange on which the shares of common equity of the Registrant are or are to be listed, and (B) to the extent required by the rules and regulations of FINRA, retain a Qualified Independent Underwriter acceptable to the managing underwriter;

(s) in the case of any underwritten offering, use its commercially reasonable efforts to obtain, and deliver to the underwriter(s), in the manner and to the extent provided for in the applicable underwriting agreement, one or more cold comfort letters from such Registrant’s independent public accountants in customary form and covering such matters of the type customarily covered by cold comfort letters;

(t) use its commercially reasonable efforts to provide (A) a legal opinion of the Registrant’s outside counsel, dated the effective date of such registration statement addressed to the Registrant, (B) on the date that the Registrable Securities are delivered to the underwriters for sale in connection with a Demand Registration or Shelf Offering, if such securities are being sold through underwriters, or, if such securities are not being sold through underwriters, on the closing date of the applicable sale, (1) one or more legal opinions of the Registrant’s outside counsel, dated such date, in form and substance as customarily given to underwriters in an underwritten public offering or, in the case of a non-underwritten offering, to the broker, placement agent or other agent of the Holders assisting in the sale of the Registrable Securities and (2) one or more “negative assurances letters” of the Registrant’s outside counsel, dated such date, in form and substance as is customarily given to underwriters in an underwritten public offering or, in the case of a non-underwritten offering, to the broker, placement agent or other agent assisting in the sale of the Registrable Securities, in each case, addressed to the underwriters, if any, or, if requested, in the case of a non-underwritten offering, to the broker, placement agent or other agent assisting in the sale of the Registrable Securities and (3) customary certificates executed by authorized officers of the Registrant as may be requested by Centerbridge or any underwriter of such Registrable Securities;

(u) if the Registrant files an Automatic Shelf Registration Statement covering any Registrable Securities, use its commercially reasonable efforts to remain a WKSI (and not become an ineligible issuer (as defined in Rule 405 under the Securities Act)) during the period during which such Automatic Shelf Registration Statement is required to remain effective;

(v) if the Registrant does not pay the filing fee covering the Registrable Securities at the time an Automatic Shelf Registration Statement is filed, pay such fee at such time or times as the Registrable Securities are to be sold;

(w) if the Automatic Shelf Registration Statement has been outstanding for at least three (3) years, at the end of the third year, refile a new Automatic Shelf Registration Statement covering the Registrable Securities, and, if at any time when the Registrant is required to re-evaluate its WKSI status the Registrant determines that it is not a WKSI, use its commercially reasonable efforts to refile the Shelf Registration Statement on Form S-3 and, if such form is not available, Form S-1 and keep such registration statement effective during the period during which such registration statement is required to be kept effective.

Annex A

Section 4. Registration Expenses.

Except as expressly provided herein, all out-of-pocket expenses incurred by Centerbridge, not to exceed $150,000 per registration in the event that Registrant is also registering shares in such registration or $500,000 per registration in the event that Centerbridge is the only party registering shares in such registration, in connection with the performance of or compliance with this Agreement or in connection with any Demand Registration, Piggyback Registration or Shelf Offering, whether or not the same shall become effective, shall be paid by the Registrant, including, without limitation: (i) all registration and filing fees, and any other fees and expenses associated with filings required to be made with the SEC or FINRA, (ii) all fees and expenses in connection with compliance with any securities or “blue sky” laws, (iii) all printing, duplicating, word processing, messenger, telephone, facsimile and delivery expenses (including expenses of printing certificates for the Registrable Securities in a form eligible for deposit with The Depository Trust Company or other depositary and of printing prospectuses and Free Writing Prospectuses), (iv) all fees and disbursements of counsel for the Registrant and of all independent certified public accountants of the Registrant (including the expenses of any special audit and cold comfort letters required by or incident to such performance), (v) Securities Act liability insurance or similar insurance if the Registrant so desires or the underwriters so require in accordance with then-customary underwriting practice, (vi) all fees and expenses incurred in connection with the listing of the Registrable Securities on any securities exchange on which similar securities of the Registrant are then listed (or on which exchange the Registrable Securities are proposed to be listed in the case of the initial Public Offering), (vii) all applicable rating agency fees with respect to the Registrable Securities, (viii) all fees and disbursements of legal counsel for the Registrant, (ix) all reasonable fees and disbursements of one legal counsel for Centerbridge together with any necessary local counsel as may be required by Centerbridge, (x) any fees and disbursements of underwriters customarily paid by issuers or sellers of securities, (xi) all fees and expenses of any special experts or other Persons retained by the Registrant or Centerbridge in connection with any Registration (xii) all of the Registrant’s internal expenses (including all salaries and expenses of its officers and employees performing legal or accounting duties) and (xiii) all expenses related to the “road-show” for any underwritten offering, including all travel, meals and lodging. All such expenses are referred to herein as “Registration Expenses.” The Registrant shall not be required to pay, and each Person that sells securities pursuant to a Demand Registration, Shelf Offering or Piggyback Registration hereunder will bear and pay, all underwriting discounts and commissions applicable to the Registrable Securities sold for Centerbridge’s account and all transfer taxes (if any) attributable to the sale of Registrable Securities.

Annex A

Exhibit A

FORM OF JOINDER TO SHAREHOLDERS AGREEMENT

This Joinder Agreement (this “Joinder Agreement”) is made as of the date written below by the undersigned (the “Joining Party”) in accordance with the Shareholders Agreement dated as of [DATE] (the “Shareholders Agreement”) among TypTap Insurance Group, Inc. and certain other parties, as the same may be amended from time to time. Capitalized terms used, but not defined, herein shall have the meaning ascribed to such terms in the Shareholders Agreement.

The Joining Party hereby acknowledges, agrees and confirms that, by its execution of this Joinder Agreement, the Joining Party shall be deemed to be a party to the Shareholders Agreement as of the date hereof and shall have all of the rights and obligations of, and shall be deemed to have made all of the representations and warranties of a “Shareholder” thereunder as if it had executed the Shareholders Agreement (including, without limitation, the representations and warranties contained in Section 8 of the Shareholders Agreement) and all of such representations and warranties are true and correct as of the date hereof as if such representations and warranties were made by the Joining Party. The Joining Party hereby ratifies, as of the date hereof, and agrees to be bound by, all of the terms, provisions and conditions contained in the Shareholders Agreement.

IN WITNESS WHEREOF, the undersigned has executed this Joinder Agreement as of the date written below.

Date:                         ,             

[NAME OF JOINING PARTY]
By:
	Name:
	Title:
	Address for Notices:

Exhibit B

FORM OF SPOUSAL CONSENT

I, _______________, am the spouse of ______________________, a holder of [identify securities], without par value per share, of TypTap Insurance Group, Inc., a Florida corporation (the “Company”). I understand that my spouse is a party to the Shareholders Agreement of the Company, dated [●], 2021 (as amended, amended and restated or otherwise modified from time to time, the “Shareholders Agreement”). Capitalized terms used but not defined herein shall have the meanings ascribed to such terms in the Shareholders Agreement.

I understand that the Shareholders Agreement contains certain provisions regarding my acquiring or retaining any equity Equity securities Securities of the Company and regarding my rights to receive equity Equity securities Securities of the Company. I agree that I may not acquire any such equity Equity securities Securities of the Company (whether by gift, purchase, will, intestate succession, operation of law or decree, order or injunction of any court, division of community or marital property, or otherwise), except in compliance with the terms of the Stockholders Shareholders Agreement. I acknowledge and understand that if I ever propose to acquire any such equity Equity securities Securities of the Company in compliance with the Shareholders Agreement, I must first agree to become a party to the Shareholders Agreement. I further acknowledge and agree that any interest I may have in equity Equity securities Securities of the Company issued by the Company (whether as a result of community property rights or otherwise) as of the date hereof is subject to the provisions of the Shareholders Agreement. Executed as of the ______ day of ______, ______.

Name:

Address:

EXHIBIT E

FORM OF GUARANTY AGREEMENT

EXECUTION VERSION

PARENT GUARANTY AGREEMENT

This continuing Parent Guaranty Agreement (as may be amended, restated, amended and restated, supplemented, waived or otherwise modified from time to time, this “Guaranty”) is entered into as of February 26, 2021 by HCI Group, Inc. (the “Guarantor”), a Florida corporation, in favor of CB Snowbird Holdings, L.P., a Delaware limited partnership (in such capacity, together with its successors and assigns, the “Lead Investor”), on behalf of itself and the other Guaranteed Parties (as defined below).

Recitals

A. WHEREAS, pursuant to the Stock Purchase Agreement, dated as of February 26, 2021, by and among the Guarantor, TypTap Insurance Group, Inc., a Florida corporation (the “Company”) and the Lead Investor (the “Purchase Agreement”), on the date hereof, the Lead Investor acquired 10,000,000 shares of Senior Preferred Shares (as defined below) of the Company, comprising 9,000,000 of Series A-1 Preferred Stock of the Company, $0.001 par value per share (the “Voting Senior Preferred Shares”) and 1,000,000 of Series A-2 Preferred Stock of the Company, $0.001 par value per share (the “Non-Voting Senior Preferred Shares” and, together with the Voting Senior Preferred Shares, the “Senior Preferred Shares”);

B. WHEREAS, upon the closing of the transactions contemplated by the Purchase Agreement and concurrently with the execution and delivery of the Shareholders Agreement, dated as of February 26, 2021, by and among the Guarantor, the Company and the Lead Investor (the “Shareholders Agreement”), the Guarantor has issued to the Lead Investor warrants to purchase 750,000 shares of common stock of the Guarantor on the terms, and subject to the conditions, set forth therein;

C. WHEREAS, prior to the issuance of the Senior Preferred Shares, the Company amended its Articles of Incorporation by way of the Amended and Restated Articles of Incorporation of TypTap Insurance Group, Inc., pursuant to Sections 607.1007 and 6.07.1003 of the Florida Business Corporation Act, which set forth the designation, preferences, rights, privileges, powers, terms and conditions of the Senior Preferred Shares (as amended, restated, amended and restated, supplemented, waived or otherwise modified from time to time, the “TypTap Amended Charter”);

D. WHEREAS, the Company, prior to the issuance of the Senior Preferred Shares, is a direct, wholly owned subsidiary of the Guarantor, and the Guarantor will obtain substantial direct and indirect benefits from the issuance of the Senior Preferred Shares by the Company to the Lead Investor and

E. WHEREAS, in consideration therefor, the Guarantor is willing to guaranty the full payment by the Company of each of its Obligations (as defined below) to the Guaranteed Parties, all as further set forth herein.

NOW, THEREFORE, to induce the Lead Investor to purchase the Senior Preferred Shares from the Company, and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, and intending to be legally bound, the Guarantor hereby represents, warrants, covenants and agrees as follows:

Section 1. Definitions.

In addition to the other terms defined herein, the following terms used herein shall have the meanings herein specified (to be equally applicable to both the singular and plural forms of the terms defined):

“Affiliate” means, as to any Person, any other Person that directly, or indirectly through one or more intermediaries, Controls, is Controlled by, or is under common Control with, such Person. Notwithstanding the foregoing, the portfolio companies of investment funds or accounts organized, managed or advised by Centerbridge Partners, L.P. or any of its Affiliates will not be deemed to be Affiliates of Centerbridge Partners, L.P. for purposes of this Guaranty.

“Capital Stock” means all shares, options, warrants, general or limited partnership interests, membership interests or other equivalents (regardless of how designated) of or in a corporation, partnership, limited liability company or equivalent entity, whether voting or nonvoting, including common stock, preferred stock or any other “equity security” (as such term is defined in Rule 3a11-1 of the General Rules and Regulations promulgated by the U.S. Securities and Exchange Commission under the Securities Exchange Act of 1934).

“Consolidated Equity Value” means, as of any date of determination, the Market Capitalization of the Guarantor; provided that, should the Guarantor’s common shares cease to trade on, or be de-listed from, the New York Stock Exchange (NYSE), “Consolidated Equity Value” shall mean the consolidated stockholders’ equity of the Guarantor and its Subsidiaries calculated on a consolidated basis in accordance with GAAP on such date.

“Consolidated Priority Debt” means, as of any date of determination and without duplication, Indebtedness of the Guarantor and its Subsidiaries calculated on a consolidated basis in accordance with GAAP on such date that is (i) secured by a Lien on any assets or property of the Guarantor and/or any Subsidiary of the Guarantor and/or (ii) incurred, assumed or guaranteed by a Subsidiary of the Guarantor that does not guarantee the Obligations on terms and conditions substantially consistent with this Guaranty (as reasonably determined by the Lead Investor).

“Consolidated Total Debt” means, as of any date of determination and without duplication, Indebtedness of the Guarantor and its Subsidiaries calculated on a consolidated basis in accordance with GAAP on such date.

“Contractual Obligation” means, with respect to any Person, any provision of any security issued by such Person or of any agreement, instrument or undertaking under which such Person is obligated or by which it or any of the property in which it has an interest is bound.

“Control” means the power, directly or indirectly, either to (a) vote fifty percent (50%) or more of the securities having ordinary voting power for the election of directors (or persons performing similar functions) of a Person or (b) direct or cause the direction of the management and policies of a Person, whether through the ability to exercise voting power, by control, contract or otherwise. The terms “Controlling”, “Controlled by”, and “under common Control with” have the meanings correlative thereto.

“Convertible Notes” means the convertible notes issued by the Guarantor pursuant to the Indenture, dated as of March 3, 2017, between the Guarantor and The Bank of New York Mellon Trust Company, N.A., as trustee, in respect of the Guarantor’s 4.25% Convertible Senior Notes due 2037.

“Debtor Relief Laws” means the Bankruptcy Code of the United States of America, and all other liquidation, conservatorship, bankruptcy, assignment for the benefit of creditors, moratorium, rearrangement, receivership, insolvency, reorganization, or similar debtor relief Laws of the United States or other applicable jurisdictions in effect from time to time.

“Disqualified Capital Stock” means Capital Stock that by its terms (or by the terms of any security into which they are convertible or for which they are exchangeable) (a) require the payment of any cash dividends (other than dividends payable solely in shares of qualified capital stock or, in the case of any pass through entity, in respect of taxes), (b) mature or are mandatorily redeemable or subject to mandatory repurchase or redemption, in whole or in part, upon the occurrence of any event not within the control of the Person holding such security, pursuant to a sinking fund obligation or on a fixed date; or (c) are convertible or exchangeable, automatically or at the option of any holder thereof, into any Indebtedness for borrowed money.

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“GAAP” means generally accepted accounting principles in the United States applied on a consistent basis by such Person.

“Governmental Authority” means the government of the United States of America, any other nation or any political subdivision thereof, whether state or local, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government.

“Guaranteed Parties” means (i) each holder of Senior Preferred Shares and (ii) the successors and assigns of each of the foregoing.

“Indebtedness” means, with respect to any Person and without duplication, (a) all obligations of such Person for borrowed money, (b) this Guaranty, (c) all obligations of such Person evidenced by bonds, debentures, notes or other similar instruments, (d) all obligations of such Person in respect of the deferred purchase price of property or services (other than trade payables incurred in the ordinary course of business, (e) all obligations of such Person under any conditional sale or other title retention agreement(s) relating to property acquired by such Person, (f) all capital lease obligations of such Person, (g) all obligations, contingent or otherwise, of such Person in respect of letters of credit, acceptances or similar extensions of credit, (h) all obligations of such Person, contingent or otherwise, to purchase, redeem, retire or otherwise acquire for value any Disqualified Capital Stock of such Person, (i) Off-Balance Sheet Liabilities, (j) all obligations of such Person in respect of sale and lease-back transactions and (k) all guarantees of such Person of the type of Indebtedness described in clauses (a) through (j) above and (l) all Indebtedness of a third party secured by any Lien on property owned by such Person, whether or not such Indebtedness has been assumed by such Person. The Indebtedness of any Person shall include the Indebtedness of any partnership or joint venture in which such Person is a general partner or a joint venturer, except to the extent that the terms of such Indebtedness provide that such Person is not liable therefor.

“Insurance Company Subsidiary” means any Subsidiary of the Guarantor or the Company that is a licensed insurance carrier.

“Laws” or “Law” means, collectively, all international, foreign, federal, state and local statutes, treaties, rules, guidelines, regulations, ordinances, codes and administrative or judicial precedents or authorities, including the interpretation or administration thereof by any Governmental Authority charged with the enforcement, interpretation or administration thereof, and all applicable administrative orders, directed duties, requests, licenses, authorizations and permits of, and agreements with, any Governmental Authority, in each case whether or not having the force of law.

“Lien” means any mortgage, pledge, security interest, lien (statutory or otherwise), charge, encumbrance, hypothecation, assignment, deposit arrangement, or other arrangement having the practical effect of any of the foregoing or any security agreement or preferential arrangement of any kind or nature whatsoever (including any conditional sale or other title retention agreement and any capital lease having the same economic effect as any of the foregoing).

“Market Capitalization” means, as of any date of determination, the 30-day trailing volume weighted average price (VWAP) multiplied by the number of fully-diluted common shares of the Guarantor then outstanding as of such date.

“Material Adverse Effect” means, with respect to any event, act, condition or occurrence of whatever nature (including any adverse determination in any litigation, arbitration, or governmental investigation or proceeding), whether singularly or in conjunction with any other event or events, act or acts, condition or conditions, occurrence or occurrences whether or not related, resulting in a material adverse change in, or a material adverse effect on, (a) the ability of the Guarantor to perform any of its obligations under this Guaranty, (b) the rights and remedies of the Guaranteed Parties under this Guaranty or (c) the legality, validity or enforceability of this Guaranty.

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“Maximum Priority Debt to Consolidated Equity Value Ratio” means, as of any date of determination, the ratio of (x) Consolidated Priority Debt to (y) Consolidated Equity Value as of such date.

“Maximum Total Debt to Consolidated Equity Value Ratio” means, as of any date of determination, the ratio of (x) Consolidated Total Debt to (y) Consolidated Equity Value as of such date.

“Obligations” means the due and punctual payment by the Company to the Guaranteed Parties of any and all cash amounts due under or with respect to the Senior Preferred Shares for dividends, the “Liquidation Amount”, the “Liquidation Price” or the “Redemption Price”, each as defined in, and as and when and if due under, the TypTap Amended Charter, plus any amounts accruing or that become due and payable, in each case during the pendency of any bankruptcy, insolvency, receivership or other similar proceeding, regardless of whether allowed or allowable in such proceeding, including pursuant to Section 2.1.2 of the TypTap Amended Charter following a “Liquidation Event” or a “Deemed Liquidation Event” (each as defined in the TypTap Amended Charter) of the Guarantor.

“Off-Balance Sheet Liabilities” means, with respect to any Person, (a) any repurchase obligation or liability of such Person with respect to accounts or notes receivable sold by such Person, (b) any liability of such Person under any sale and leaseback transactions that do not create a liability on the balance sheet of such Person, (c) any synthetic lease obligation or (d) any obligation arising with respect to any other transaction which is the functional equivalent of or takes the place of borrowing but which does not constitute a liability on the balance sheet of such Person.

“Organization Documents” means (a) with respect to any corporation, the certificate or articles of incorporation and the bylaws (or equivalent or comparable constitutive documents with respect to any non-U.S. jurisdiction), (b) with respect to any limited liability company, the certificate or articles of formation or organization and operating agreement and (c) with respect to any partnership, joint venture, trust or other form of business entity, the partnership, joint venture or other applicable agreement of formation or organization and any agreement, instrument, filing or notice with respect thereto filed in connection with its formation or organization with the applicable Governmental Authority in the jurisdiction of its formation or organization and, if applicable, any certificate or articles of formation or organization of such entity.

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

“Priority Debt” means any Indebtedness of the type described in the definition of “Consolidated Priority Debt”.

“Restricted Payment” means any dividend or other distribution (whether in cash, securities or other property) with respect to any Capital Stock of any Person, or any payment (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, defeasance, acquisition, cancellation or termination of any such Capital Stock or on account of any return of capital to such Person’s stockholders, partners or members (or the equivalent Person thereof.

“Restricted Subsidiary” or “Restricted Subsidiaries” means each of the following Subsidiaries of the Guarantor: Homeowners Choice Managers, Inc., Greenleaf Capital, LLC, Omega Insurance Agency, Inc., Southern Administration, Inc., Enclave Services, Inc., Gators On The Pass Holdings LLC, John’s Pass Marina Investment Holdings LLC, Pass Investment Holdings LLC, TV Investment Holdings LLC, Silver Springs Property Investments, LLC, Griston Claim Services, Inc., HCPCI Holdings, LLC, Big Bend Lincoln SWC, LLC, FMKT Mel Owner LLC, Sorrento PBX, LLC, Century Park Holdings, LLC, Gulf To Bay LM, LLC, JP Beach Holdings LLC, HCI Insurance Administration Services, Inc., Westview Holdings, LLC.

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“SAP” means statutory accounting principles prescribed or permitted by the Regulatory Agency charged with the supervision of insurance companies in the state of domicile of the applicable insurance company Subsidiary of the Company.

“Solvent” means, with respect to any Person, as of any date of determination, (a) on a going concern basis the amount of the “fair value” of the assets of such Person will, as of such date, exceed the amount of all “liabilities of such Person, contingent or otherwise”, as of such date, as such quoted terms are determined in accordance with applicable federal, state, provincial, territorial, municipal, local and foreign laws governing determinations of the insolvency of debtors, (b) the present fair saleable value of the assets of such Person will, as of such date, be greater than the amount that will be required to pay the liability of such Person on its debts as such debts become absolute and matured, (c) such Person will not have, as of such date, an insufficient amount of capital with which to conduct its business, (d) such Person will be able to pay its debts as they mature and (e) such Person is not “insolvent” within the meaning of Section 101(32) of the Bankruptcy Code of the United States of America.

“Subsidiary” means, with respect to any Person (the “parent”), any corporation, partnership, joint venture, limited liability company, association or other entity the accounts of which would be consolidated with those of the parent in the parent’s consolidated financial statements if such financial statements were prepared in accordance with GAAP as of such date, (a) of which securities or other ownership interests representing more than fifty percent (50%) of the equity or more than fifty percent (50%) of the ordinary voting power, or in the case of a partnership, more than fifty percent (50%) of the general partnership interests are, as of such date, owned, controlled or held, or (b) that is, as of such date, otherwise Controlled, by the parent or one or more subsidiaries of the parent or by the parent and one or more subsidiaries of the parent. Unless otherwise indicated, all references to “Subsidiary” hereunder shall mean a Subsidiary of the Guarantor.

Section 2. Guaranty.

2.1 The Guaranty. The Guarantor hereby irrevocably and unconditionally guarantees to each of the Guaranteed Parties, as primary obligor and not as surety, the prompt payment of the Obligations in full when due (the Obligations so guaranteed hereunder by the Guarantor, the “Guaranteed Obligations”). The Guarantor hereby further agrees that if any of the Obligations is not paid in full when due, the Guarantor will promptly pay the same, without any demand or notice whatsoever, and that in the case of any extension of time of payment or renewal of any of the Obligations, the same will be promptly paid in full when due in accordance with the terms of such extension or renewal. Notwithstanding any provision to the contrary contained herein or in any other documents relating to the Obligations, the Guaranteed Obligations shall not exceed an aggregate amount equal to the largest amount that would not render such Guaranteed Obligations subject to avoidance under applicable Debtor Relief Laws. In furtherance of the foregoing and not in limitation of any other right that the Guaranteed Parties have at law or in equity against the Guarantor by virtue hereof, for the avoidance of doubt, upon the failure of the Company to pay any Obligation when and as the same shall become due, the Guarantor hereby promises to and will forthwith pay, or cause to be paid, to the Lead Investor for distribution to the Guaranteed Parties the amount of such unpaid Obligations.

2.2 Unconditional Guaranty of Payment. In consideration of the foregoing, the Guarantor hereby irrevocably, absolutely and unconditionally guarantees to each of the Guaranteed Parties the prompt and complete payment when due of all Obligations. The Guarantor agrees that it shall execute such other documents or agreements and take such action as the Lead Investor shall reasonably request to effect the purposes of this Guaranty. Without limiting the generality of the foregoing, this Guaranty shall not be released, discharged or otherwise affected by:

(a) any extension, renewal, settlement, compromise, waiver or release in respect of any obligation of the Company under the TypTap Amended Charter, by operation of Law or otherwise;

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(b) any modification or amendment of or supplement to the TypTap Amended Charter;

(c) any release, impairment, non-perfection or invalidity of any direct or indirect security for any obligation of the Company under the TypTap Amended Charter;

(d) any change in the corporate existence, structure or ownership of the Company or any insolvency, bankruptcy, reorganization or other similar proceeding affecting the Company or its assets or any resulting release or discharge of any obligation of the Company contained in the TypTap Amended Charter;

(e) the existence of any claim, set-off or other rights that the Guarantor may have at any time against the Company, the Guaranteed Parties or any other entity, whether in connection herewith or with any unrelated transactions; provided that nothing herein shall prevent the assertion of any such claim by separate suit or compulsory counterclaim;

(f) the (1) disposition, transfer or sale of any or all or substantially all of the Guarantor’s Capital Stock in the Company or (2) a Parent Deemed Liquidation Event (as defined in the Shareholders Agreement) occurs;

(g) any invalidity or unenforceability relating to or against the Company for any reason of the TypTap Amended Charter or any provision of applicable Law or regulation purporting to prohibit the payment by the Company of any amounts payable pursuant to the TypTap Amended Charter; or

(h) any other act or omission to act or delay of any kind by the Company, the Guaranteed Parties or any other person or any other circumstance whatsoever which might, but for the provisions of this paragraph, constitute a legal or equitable discharge of or defense to the Guarantor’s obligations hereunder.

2.3 Separate Obligations. The Guaranteed Obligations are independent of the Company’s Obligations under the TypTap Amended Charter and separate actions may be brought against the Guarantor (whether action is brought against the Company or whether the Company is joined in the action) hereunder. The Guarantor waives presentment to, demand of payment from and protest to the Company of any of the Obligations and waives notice of acceptance of its guarantee and notice of protest for nonpayment. The Guarantor’s liability under this Guaranty is not conditioned or contingent upon the genuineness, validity, regularity or enforceability of the TypTap Amended Charter; provided that such acknowledgment by the Guarantor shall not act as a waiver of any defense of the Guarantor that the Obligations have been paid in full at the time or prior to when due.

2.4 Guarantee of Payment; Continuing Guarantee. The guarantee in this Section 2 is a guaranty of payment and not of collection, is a continuing guarantee, and shall apply to the Obligations whenever or wherever arising.

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Section 3. Representations and Warranties. The Guarantor hereby represents and warrants to the Guaranteed Parties that:

3.1 Existence; Power. The Guarantor (a) is duly organized, validly existing and in good standing as a corporation under the Laws of the jurisdiction of its organization, (b) has all requisite power and authority to carry on its business as now conducted and (c) is duly qualified to do business, and is in good standing, in each jurisdiction where such qualification is required, except, in the case of this clause (c), where a failure to be so qualified could not reasonably be expected to result in a Material Adverse Effect.

3.2 Organizational Power; Authorization. The execution, delivery and performance by the Guarantor of this Guaranty are within the Guarantor’s organizational powers and have been duly authorized by all necessary organizational, and if required, shareholder action. This Guaranty has been duly executed and delivered by the Guarantor, and constitutes, when executed and delivered by the Guarantor, will constitute, a legal, valid and binding obligation of the Guarantor, enforceable against the Guarantor in accordance with its terms, except as may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, or similar laws affecting the enforcement of creditors’ rights generally and by general principles of equity.

3.3 Governmental Approvals; No Conflicts. The execution, delivery and performance by the Guarantor of this Guaranty (a) do not require any consent or approval of, registration or filing with, or any action by, any Governmental Authority, except those as have been obtained or made and are in full force and effect, (b) will not violate the Organization Documents of the Guarantor or any Law applicable to the Guarantor or any judgment, order or ruling of any Governmental Authority, (c) will not violate or result in a default under any indenture, agreement or other instrument binding on the Guarantor or any of its assets or give rise to a right thereunder to require any payment to be made by the Guarantor and (d) will not result in the creation or imposition of any Lien on any asset of the Guarantor.

3.4 Litigation. No litigation, investigation or proceeding of or before any arbitrators or Governmental Authorities is pending against or, to the Guarantor’s knowledge, threatened against or affecting the Guarantor which challenges the validity or enforceability of this Guaranty.

3.5 Compliance with Laws and Agreements. The Guarantor is in compliance with (a) all Laws and all judgments, decrees and orders of any Governmental Authority and (b) all indentures, agreements or other instruments binding upon it or its properties, in each case except where non-compliance, either individually or in the aggregate, would not reasonably be expected to result in a Material Adverse Effect.

3.6 No Default. The Guarantor is not in default under or with respect to any Contractual Obligation that could reasonably be expected to have a Material Adverse Effect.

3.7 Investment Company Act, Etc. The Guarantor is not an “investment company” or is “controlled” by an “investment company”, as such terms are defined in, or subject to regulation under, the Investment Company Act of 1940, as amended.

3.8 Taxes. The Guarantor and each other Person for whose taxes the Guarantor could become liable have timely filed or caused to be filed all federal, state and other material tax returns required to be filed by them, and have paid all federal, state and other material taxes, assessments made against it or its property and all other taxes, fees or other charges imposed on it or any of its property by any Governmental Authority, except where the same are currently being contested in good faith by appropriate proceedings and for which the Guarantor has set aside on its books adequate reserves in accordance with GAAP. The charges, accruals and reserves on the books of the Guarantor in respect of such taxes are adequate, and no tax liabilities that could be materially in excess of the amount so provided are anticipated.

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3.9 Solvency. After giving effect to the execution and delivery of this Guaranty and the incurrence by the Guarantor of the Guaranteed Obligations, the Guarantor is Solvent.

Section 4. Affirmative Covenants.

4.1 Compliance Certificate. The Guarantor agrees to deliver to the Lead Investor within 30 days of the end of each fiscal quarter of the Guarantor a compliance certificate certified by the Chief Financial Officer of the Guarantor (or equivalent officer) certifying as to compliance with the financial covenants set forth in Section 6 hereof as of the last day of such fiscal quarter, together with reasonably detailed calculations.

4.2 Ranking. The Guaranteed Obligations of the Guarantor under this Guaranty shall continue to rank at least senior in priority of payment to all subordinated Indebtedness of the Guarantor and at least pari passu in priority of payment to all senior Indebtedness of the Guarantor.

4.3 Notices. The Guarantor shall promptly and in any event within one business day after any officer or member of management of the Guarantor obtains knowledge thereof, deliver to the Lead Investor written notice of the occurrence of any event that constitutes a breach or other violation of any covenant, agreement or other obligation of the Guarantor or any Restricted Subsidiary under this Guaranty, which notice shall specify the nature thereof, the period of existence thereof and what action the Guarantor proposes to take with respect thereto.

Section 5. Negative Covenants. The Guarantor covenants and agrees that the Guarantor shall not, and (other than with respect to Section 5.1) shall not permit any of its Restricted Subsidiaries to, directly or indirectly:

5.1 Fundamental Changes. Merge into or consolidate the Guarantor into any Person, or permit any other Person to merge into or consolidate with the Guarantor, or sell, lease, transfer or otherwise dispose of (in a single transaction or series of transactions) all or substantially all of the assets of the Guarantor and its Subsidiaries, taken as a whole (in each case, whether now owned or hereafter acquired) or all or substantially all of the stock of the Guarantor’s Subsidiaries, taken as a whole (in each case, whether now owned or hereafter acquired), or liquidate or dissolve the Guarantor.

5.2 Restricted Payments. Declare or make, or agree to pay or make, directly or indirectly, any Restricted Payment, except for (i) any cash dividend on the Capital Stock of the Guarantor designated as an ordinary cash dividend by the Board of Directors of the Guarantor in an amount consistent with recent past practice and any annual increases thereon not to exceed 10.0% per year and (ii) repurchases of common Capital Stock or other similar common equity securities issued under any stockholder-approved employee equity incentive plan of the Guarantor in an aggregate amount not to exceed $10,000,000 per fiscal year of the Guarantor.

5.3 Transactions with Affiliates. Sell, lease or otherwise transfer any property or assets to, or purchase, lease or otherwise acquire any property or assets from, or otherwise engage in any other transactions with, any of its Affiliates, except (a) any transaction that is affirmed by a vote of a majority of the disinterested directors of the Board of Directors of the Guarantor and is at prices and on terms and conditions not less favorable to the Guarantor or any Restricted Subsidiary than could be obtained on an arm’s-length basis from unrelated third parties or (b) any Restricted Payment permitted by Section 5.2.

5.4 Amendment to Organizational Documents. Amend, modify or waive any of its rights in a manner adverse to any of the Guaranteed Parties express rights under its Organization Documents or amend, modify or waive any of the Company’s rights in a manner adverse to any of the Guaranteed Parties’ express rights under the TypTap Amended Charter.

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5.5 Accounting Changes. Make any material change in accounting treatment or reporting practices, except as required by GAAP or SAP, as the context may require, in a manner that is materially adverse to the Guaranteed Parties.

5.6 Modifications to Convertible Notes. Make any amendment or other modification to, or refinance, replace or otherwise renew (in a single transaction or series of transactions), the Convertible Notes, in each case that results in the Convertible Notes or the refinancing, replacement or other renewal thereof (in a single transaction or series of transactions) maturing, or having a repurchase option in favor of the holders thereof (i.e., a “put right”), on or prior to April 30, 2025.

Section 6. Financial Covenants

6.1 Maximum Total Debt to Consolidated Equity Value Ratio. The Guarantor covenants and agrees that at all times the Guarantor shall not permit the Maximum Total Debt to Consolidated Equity Value Ratio to exceed 60.0%; provided that if, as of any date of determination, Consolidated Total Debt is equal to or less than $350,000,000 in the aggregate as of such date, the Guarantor shall be deemed to be in compliance with this Section 6.1 as of such date.

6.2 Maximum Priority Debt to Consolidated Equity Value Ratio.

(a) The Guarantor covenants and agrees that at all times the Guarantor shall not permit the Maximum Priority Debt to Consolidated Equity Value Ratio to exceed 20.0%; provided that if, as of any date of determination, Consolidated Priority Debt is equal to or less than $100,000,000 in the aggregate as of such date, the Guarantor shall be deemed to be in compliance with this Section 6.2(a) as of such date.

(b) If, notwithstanding the prohibition contained in Section 6.2 (a), the Guarantor or any Subsidiary of the Guarantor shall, directly or indirectly, incur, assume or suffer to exist any Priority Debt that would result in a violation or breach of Section 6.2(a), the Guarantor shall, or shall cause such Subsidiary to, concurrently therewith (i) secure the Obligations on an equal and ratable basis with such Priority Debt pursuant to documentation reasonably acceptable to the Lead Investor and for so long as such Priority Debt shall be so secured and/or (ii) cause the obligor under such Priority Debt to guarantee the Obligations pursuant to documentation reasonably acceptable to the Lead Investor and for so long as such Priority Debt shall be outstanding. For the avoidance of doubt, if the Guarantor complies with this Section 6.2(b) concurrently with the incurrence of the applicable Priority Debt that results in what would otherwise be a breach or violation of Section 6.2(a), then the Guarantor shall be deemed to be in compliance with Section 6.2(a) at such time notwithstanding what would otherwise be a breach or violation.

(c) The Guarantor shall give the Lead Investor at least twenty (20) business days written notice prior to the incurrence of any Priority Debt that would require the application of the provisions set forth in Section 6.2(b) above.

Section 7. General Waivers. The Guarantor irrevocably waives:

(a) any right to require any Guaranteed Party to (i) proceed against the Company or any other Person, (ii) proceed against or exhaust any security or (iii) pursue any other remedy. Each Guaranteed Party may exercise or not exercise any right or remedy it has against the Company or any security it holds (including the right to foreclose by judicial or non-judicial sale) without affecting the Guarantor’s liability hereunder;

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(b) any defenses from disability or other defense of the Company or from the cessation of the Company’s liabilities;

(c) any setoff, defense or counterclaim against the Guaranteed Parties;

(d) any defense from the absence, impairment or loss of any right of reimbursement or subrogation or any other rights against the Company;

(e) any right to enforce any remedy that any Guaranteed Party has against the Company;

(f) any rights to participate in any security held by any Guaranteed Party (if any);

(g) any demands for performance, notices of nonperformance or of new or additional indebtedness incurred by the Company to any Guaranteed Party. The Guarantor is responsible for being and keeping itself informed of the Company’s financial condition; and

(h) the benefit of any act or omission by any Guaranteed Party that directly or indirectly results in or aids the discharge of the Company from any of the Obligations by operation of law or otherwise.

Section 8. Discharge of Guaranty Upon Payment In Full; Reinstatement. The Guarantor’s obligations hereunder shall remain in full force and effect until the earlier of: (i) all Obligations shall have been paid in full by the Company and/or the Guarantor and (ii) there are no longer any Senior Preferred Shares outstanding. Notwithstanding any provision of the TypTap Amended Charter or this Guaranty to the contrary, the Guaranteed Obligations shall be reinstated and revived and the rights of the Guaranteed Parties shall continue if and to the extent that for any reason any payment by or on behalf of the Guarantor or the Company is rescinded or must be otherwise restored by the Guaranteed Parties, whether as a result of any proceedings in bankruptcy or reorganization or otherwise, all as though such amount had not been paid. The determination as to whether any such payment must be rescinded or restored shall be made by the Lead Investor in its reasonable discretion; provided, however, that if the Lead Investor chooses to contest any such matter at the request of the Guarantor, the Guarantor agrees to indemnify and hold harmless the Investor from all costs and expenses (including, without limitation, reasonable and documented attorneys’ fees) of such litigation. To the extent any payment is rescinded or restored, the Guaranteed Obligations shall be revived in full force and effect without reduction or discharge for that payment. The Guarantor’s obligations under this Section 9 shall survive termination of this Guaranty.

Section 9. No Waiver; Amendments. No failure on the part of any Guaranteed Party to exercise, no delay in exercising and no course of dealing with respect to, any right hereunder shall operate as a waiver thereof nor shall any single or partial exercise of any right hereunder preclude any other or further exercise thereof or the exercise of any other right. The remedies herein provided are cumulative and not exclusive of any remedies provided by law. This Guaranty may not be amended or modified except by written agreement between the Guarantor and the Lead Investor, and no consent or waiver hereunder shall be valid unless in writing and signed by the Lead Investor.

Section 10. Compromise and Settlement. No compromise, settlement, release, renewal, extension, indulgence, change in, waiver or modification of any of the Obligations or the release or discharge of the Company from the performance of any of the Obligations shall release or discharge the Guarantor from this Guaranty or the performance of its obligations hereunder.

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Section 11. Remedies.

11.1 If any representation and warranty set forth in this Guaranty is inaccurate in any material respect, any covenant, condition or other agreement set forth in this Guaranty is breached or violated or any other obligation under this Guaranty is breached or violated (including, without limitation, the requirement for the Guarantor to make payment of the Guaranteed Obligations to the Guaranteed Parties when owing, due and payable hereunder), each Guaranteed Party may exercise any all rights and remedies available to it, whether based in contract, tort, equity or any other theory. Notwithstanding anything set forth herein to the contrary and without limiting the foregoing, (a) if any representation and warranty made by the Guarantor in this Guaranty is inaccurate in any material respect or the Guarantor breaches (1) any of its payment obligations to the Guaranteed Parties contemplated under Section 2 hereof or (2) any of the covenants set forth in Section 5.1, Section 5.2, Section 5.3, Section 5.4, Section 5.6, Section 6.1 or Section 6.2 hereof and (b) to the extent that such inaccurate representation and warranty or breach is capable of being cured and is not cured within 30 days after the Lead Investor delivers written notice to the Guarantor of such inaccuracy or breach, then such inaccuracy or breach shall constitute a “Deemed Liquidation Event” of Parent under the TypTap Amended Charter.

11.2 Unless the holders of at least a majority of the outstanding Senior Preferred Shares elect otherwise by written notice sent to the Company within ten (10) days after a “Liquidation Event” or a “Deemed Liquidation Event” (each as defined in the TypTap Amended Charter) with respect to the Guarantor, in the event of a “Liquidation Event” or a “Deemed Liquidation Event” with respect to the Guarantor, the Guaranteed Obligations shall immediately and automatically become due and payable without presentment, demand, protest or other notice of any kind, all of which are hereby waived by the Guarantor and the Company.

11.3 Unless the holders of at least a majority of the outstanding Senior Preferred Shares elect otherwise by written notice sent to the Company within ten (10) days after a “Deemed Liquidation Event” (as defined in the TypTap Amended Charter) with respect to the Company, in the event of a “Deemed Liquidation Event” with respect to the Company, the Guaranteed Obligations shall immediately and automatically become due and payable without presentment, demand, protest or other notice of any kind, all of which are hereby waived by the Guarantor and the Company. In the event of a “Liquidation Event” (as defined in the TypTap Amended Charter) with respect to the Company, the Guaranteed Obligations shall immediately and automatically become due and payable without presentment, demand, protest or other notice of any kind, all of which are hereby waived by the Guarantor and the Company.

Section 12. Notice. Any notice or other communication herein required or permitted to be given shall be in writing and may be delivered in person or sent by facsimile transmission, overnight courier, or by United States mail, registered or certified, return receipt requested, postage prepaid and addressed as follows:

If to the Guarantor:	HCI Group, Inc.
	5300 West Cypress Street, Suite 100
	Tampa, Florida 33607
	Attention: Andrew J. Graham, General Counsel
	Email: agraham@hcigroup.com

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with a copy to:	Foley & Lardner LLP
(which shall not	100 North Tampa Street, Suite 2700
constitute notice)	Tampa, Florida 33602
	Attention: Curt P. Creely and Beth Felder
	Email: ccreely@foley.com and bfelder@foley.com
If to the Lead Investor:	CB Snowbird Holdings, L.P.
	c/o Centerbridge Partners, L.P.
	375 Park Avenue, 11th Floor
	New York, NY 10152-0002
	Attn: The Office of the General Counsel; Eric Hoffman
	Email: ehoffman@centerbridge.com and
	legalnotices@centerbridge.com
with a copy to:	Kirkland & Ellis LLP
(which shall not	601 Lexington Avenue
constitute notice)	New York, NY 10022
	Attention: Rajab S. Abbassi, P.C., Judson A. Oswald, P.C. and
	Omar Raddawi
	Email: rajab.abbassi@kirkland.com;
	judson.oswald@kirkland.com and omar.raddawi@kirkland.com

or at such other address as may be substituted by notice given as herein provided. Every notice, demand, request, consent, approval, declaration or other communication hereunder shall be deemed to have been duly given or served on the date on which personally delivered or sent by facsimile transmission or three (3) business days after the same shall have been deposited in the United States mail. If sent by overnight courier service, the date of delivery shall be deemed to be the next business day after deposited with such service.

Section 13. Entire Agreement. This Guaranty constitutes and contains the entire agreement of the parties and supersedes any and all prior and contemporaneous agreements, negotiations, correspondence, understandings and communications between the Guarantor and the Guaranteed Parties, whether written or oral, respecting the subject matter hereof.

Section 14. Severability. If any provision of this Guaranty is held to be unenforceable under applicable Law for any reason, it shall be adjusted, if possible, rather than voided in order to achieve the intent of the Guarantor and the Guaranteed Parties to the extent possible. In any event, all other provisions of this Guaranty shall be deemed valid and enforceable to the full extent possible under applicable Law.

Section 15. Subrogation. Upon making full payment with respect to the Obligations of the Company, the Guarantor shall be subrogated to the rights of the payee against the Company with respect to such Obligations; provided that the Guarantor shall not enforce any payment by way of subrogation so long as any Obligation remains unpaid.

Section 16. Indemnity; Payment of Expenses. The Guarantor shall indemnify each Guaranteed Party against any and all losses, claims, damages, liabilities, costs, expenses (including reasonable expenses of investigation and reasonable attorneys’ fees and expenses), judgments, fines, penalties, charges and amounts paid in settlement, in each case to which such Guaranteed Party may become

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subject, as a result of, arising in connection with or relating to this Guaranty. The Guarantor shall pay, promptly on demand, all Expenses incurred by the Guaranteed Parties in defending and/or enforcing this Guaranty. For purposes hereof, “Expenses” shall mean costs and expenses (including reasonable out-of-pocket and documented attorneys’ fees and expenses) for defending and/or enforcing this Guaranty (including those incurred in connection with appeals or proceedings by or against the Guarantor under any Debtor Relief Laws).

Section 17. Assignment. This Guaranty shall be binding upon and inure to the benefit of the Guarantor and each of the Guaranteed Parties and their respective successors and assigns, except that the Guarantor shall not have the right to assign its rights hereunder or any interest herein without the prior written consent of the Lead Investor, which may be granted or withheld in the Lead Investor’s sole discretion. Any such purported assignment by the Guarantor without the Lead Investor’s written consent shall be void ab initio.

Section 18. Governing Law, Personal Jurisdiction, Waiver of Jury Trial.

(a) This Guaranty shall be construed in accordance with and governed by the law of the State of New York.

(b) The Guarantor hereby irrevocably and unconditionally submits, for itself and its property, to the nonexclusive jurisdiction of the Supreme Court of the State of New York sitting in New York County and of the United States District Court of the Southern District of New York, and any relevant appellate court, in any action or proceeding arising out of or relating to this Guaranty, or for recognition or enforcement of any judgment, and each party hereto hereby irrevocably and unconditionally agrees that all claims in respect of any such action or proceeding may be heard and determined in New York State court or, to the extent permitted by law, in such Federal court. Each party hereto agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law. Nothing in this Guaranty shall affect any right that the Beneficiary may otherwise have to bring any action or proceeding relating to this Guaranty against the Guarantor or its properties in the courts of any jurisdiction.

(c) The Guarantor irrevocably and unconditionally waives, to the fullest extent it may legally and effectively do so, any objection that it may now or hereafter have to the laying of venue of any suit, action or proceeding arising out of or relating to this Guaranty in any court referred to in subsection (b) of this Section. Each party hereto irrevocably waives, to the fullest extent permitted by law, the defense of an inconvenient forum to the maintenance of any such suit, action or proceeding in any such court.

(d) WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS GUARANTY.

Section 19. Counterparts. This Guaranty may be executed in two or more counterparts (including by facsimile or PDF), each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

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Section 20. Headings. The headings in this Guaranty are for convenience of reference only and shall not limit or otherwise affect the meaning hereof.

[Signature Page Follows.]

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GUARANTOR:

HCI GROUP, INC.

By:

Name:

Title:

[Signature Page to Guaranty]

LEAD INVESTOR:

CB SNOWBIRD HOLDINGS, L.P.

By:

Name:

Title:

[Signature Page to Guaranty]

EXHIBIT F

FORM OF WARRANT AGREEMENT

THIS WARRANT AND THE SECURITIES ISSUABLE UPON THE EXERCISE HEREOF HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND APPLICABLE STATE SECURITIES LAWS, AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO (I) AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR (IF REQUESTED BY THE COMPANY) TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY OR (II) RULE 144 PROMULGATED UNDER THE SECURITIES ACT.

COMMON STOCK PURCHASE WARRANT

HCI GROUP, INC.

Warrant Shares: 750,000 Date: February 26, 2021

THIS COMMON STOCK PURCHASE WARRANT (the “Warrant”) certifies that, for value received, CB Snowbird Holdings, L.P., a Delaware limited partnership, or its assigns (the “Holder”) is entitled, upon the terms and subject to the conditions hereinafter set forth, at any time on or after the date of this Warrant as set forth above (the “Initial Exercise Date”) and on or prior to 5:00 p.m. (New York City time) on the fourth (4^th) anniversary of the Initial Exercise Date unless earlier terminated as provided herein (the “Termination Date”) but not thereafter, to subscribe for and purchase from HCI Group, Inc., a Florida corporation (the “Company”), up to 750,000 shares (as subject to adjustment hereunder, the “Warrant Shares”) of Common Stock. The purchase price of one share of Common Stock under this Warrant shall be equal to the Exercise Price, as defined in Section 2(b) below.

Section 1. Definitions. In addition to the terms defined elsewhere in this Warrant, the following terms have the meanings indicated in this Section 1:

“Affiliate” means any Person that, directly or indirectly through one or more intermediaries, controls or is controlled by or is under common control with a Person, as such terms are used in and construed under Rule 405 under the Securities Act.

“Business Day” means any day except any Saturday, any Sunday, any day which is a federal legal holiday in the United States or any day on which banking institutions in the State of New York are authorized or required by law or other governmental action to close.

“Commission” means the United States Securities and Exchange Commission.

“Common Stock” means the common stock of the Company, no par value.

“Company Sale” means (i) a sale or transfer of 50% or more of the equity securities of the Company to transferees that are not Affiliates of the respective transferors and in which such transferors do not otherwise have an ownership interest, (ii) the sale or disposition of all or substantially all of the Company’s assets, or (iii) any merger, consolidation, or other business combination of the Company with an entity that is not an Affiliate of the Company.

“Ex-Dividend Date” means the first date on which shares of the Common Stock trade on the applicable exchange or in the applicable market, regular way, without the right to receive the issuance, dividend or distribution in question, from the Company or, if applicable, from the seller of Common Stock on such exchange or market (in the form of due bills or otherwise) as determined by such exchange or market.

“Fair Market Value” means, as of any particular date (i) the closing sales price of the Common Stock for such date on the Trading Market on which the Common Stock is at the time be listed, (ii) if there have been no sales of the Common Stock on such Trading Market on any such date, the average of the highest bid and lowest asked prices for the Common Stock on the Trading Market at the end of such date, (iii) if on any such day the Common Stock is not listed on a national securities exchange, the closing sales price of the Common Stock as quoted on the OTC for such date, (iv) if there have been no sales of the Common Stock on the OTC on such date, the average of the highest bid and lowest asked prices for the Common Stock quoted on the OTC at the end of such date or (v) if at any time the Common Stock is not listed on any domestic securities exchange or quoted on the OTC, the fair market value per share as determined in good faith by the Board of Directors; provided, with respect to clause (v) the Holder is entitled to object to the fair market value per share determined by the Board of Directors and require, at the Company’s sole expense, such determination to be made by a nationally recognized investment banking, accounting or valuation firm that is reasonably acceptable to the Board of Directors.

“OTC” means the Financial Industry Regulatory Authority OTC Bulletin Board electronic interdealer quotation system, the OTC Markets Group Inc. electronic interdealer quotation system, including OTCQX, OTCQB and OTC Pink, or any similar quotation system or association.

“Party” means either Company or Holder, as applicable.

“Person” means an individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability company, joint stock company, government (or an agency or subdivision thereof) or other entity of any kind.

“Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.

“Trading Day” means a day on which the Trading Market is open for trading.

“Trading Market” means the New York Stock Exchange or the market or exchange on which the Common Stock is listed or quoted for trading on the date in question.

“Transfer Agent” means the Company and any successor transfer agent of the Company.

“VWAP” means, for each of the 30 consecutive Trading Days preceding the date of testing, the per share volume-weighted average price as displayed under the heading “Bloomberg VWAP” on Bloomberg page “HCI<equity> AQR” (or its equivalent successor if such page is not available) in respect of the period from the scheduled open of trading until the scheduled close of trading of the primary trading session on such Trading Day (or if such volume-weighted average price is unavailable, the market value of one share of the Common Stock on such Trading Day determined, using a volume-weighted average method, by a nationally recognized independent investment banking firm retained for this purpose by the Company). The “VWAP” shall be determined without regard to after-hours trading or any other trading outside of the regular trading session trading hours.

Section 2. Exercise.

a) Exercise of Warrant. Exercise of the purchase rights represented by this Warrant may be made, in whole or in part, at any time or times on or after the Initial Exercise Date and on or before the Termination Date by delivery to the Company of a duly executed PDF copy submitted by e-mail (or e-mail attachment) of the Notice of Exercise in the form annexed hereto (the “Notice of Exercise”). Within the earlier of (i) two (2) Trading Days and (ii) the number of Trading Days comprising the Standard Settlement Period (as defined in Section 2(c)(i) herein) following the date of exercise as aforesaid, the Holder shall deliver the aggregate Exercise Price for the Warrant Shares specified in the applicable Notice of Exercise by wire transfer of immediately available funds or cashier’s check drawn on a United States bank. No ink-original Notice of Exercise shall be required, nor shall any medallion guarantee (or other type of guarantee or notarization) of any Notice of Exercise be required. Notwithstanding anything herein

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to the contrary, the Holder shall not be required to physically surrender this Warrant to the Company until the Holder has purchased all of the Warrant Shares available hereunder and the Warrant has been exercised in full, in which case, the Holder shall surrender this Warrant to the Company for cancellation within three (3) Trading Days of the date on which the final Notice of Exercise is delivered to the Company. Partial exercises of this Warrant resulting in purchases of a portion of the total number of Warrant Shares available hereunder shall have the effect of lowering the outstanding number of Warrant Shares purchasable hereunder in an amount equal to the applicable number of Warrant Shares purchased. The Holder and the Company shall maintain records showing the number of Warrant Shares purchased and the date of such purchases. The Holder and any assignee, by acceptance of this Warrant, acknowledge and agree that, by reason of the provisions of this paragraph, following the purchase of a portion of the Warrant Shares hereunder, the number of Warrant Shares available for purchase hereunder at any given time may be less than the amount stated on the face hereof.

b) Exercise Price. The exercise price per share of the Common Stock under this Warrant shall be $54.40 per share, subject to adjustment hereunder (the “Exercise Price”). The Exercise Price shall be payable, at the Holder’s election set forth in the Notice of Exercise, by (i) a cash payment to the Company of the Exercise Price by wire transfer of immediately available funds to an account designated in writing by the Company or (ii) an election to receive upon such exercise the “net number” of shares of Common Stock, where the Company will withhold a number of Warrant Shares (subject to Section 2(c)(v) hereof) then issuable upon exercise of this Warrant with an aggregate Fair Market Value as of the date of the Notice of Exercise equal to such Exercise Price (a “Cashless Exercise”).

c) Mechanics of Exercise.

i. Delivery of Warrant Shares Upon Exercise. The Company shall cause the Warrant Shares purchased hereunder to be transmitted by the Transfer Agent to the Holder by physical delivery of a certificate, registered in the Company’s share register in the name of the Holder or its designee, for the number of Warrant Shares to which the Holder is entitled pursuant to such exercise to the address specified by the Holder in the Notice of Exercise by the date that is the earlier of (i) two (2) Trading Days after the delivery to the Company of the Notice of Exercise, and (ii) the number of Trading Days comprising the Standard Settlement Period after the delivery to the Company of the Notice of Exercise (such date, the “Warrant Share Delivery Date”). Upon delivery of the Notice of Exercise, the Holder shall be deemed for all corporate purposes to have become the holder of record of the Warrant Shares with respect to which this Warrant has been exercised, irrespective of the date of delivery of the Warrant Shares, provided that payment of the aggregate Exercise Price is received within the earlier of (i) two (2) Trading Days after delivery to the Company of the Notice of Exercise and (ii) the number of Trading Days comprising the Standard Settlement Period following delivery of the Notice of Exercise. As used herein, “Standard Settlement Period” means the standard settlement period, expressed in a number of Trading Days, on the Company’s primary Trading Market with respect to the Common Stock as in effect on the date of delivery of the Notice of Exercise.

ii. Delivery of New Warrant Upon Exercise. If this Warrant shall have been exercised in part, the Company shall, at the request of a Holder and upon surrender of this Warrant at any time prior to the expiration of the Warrant, at the time of delivery of the Warrant Shares, deliver to the Holder a new Warrant evidencing the rights of the Holder to purchase the unpurchased Warrant Shares called for by this Warrant, which new Warrant shall in all other respects be identical with this Warrant.

iii. Rescission Rights. If the Company fails to transmit to the Holder the Warrant Shares pursuant to Section 2(c)(i) by the Warrant Share Delivery Date, then the Holder will have the right to rescind such exercise.

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iv. Conditional Exercise. Notwithstanding the foregoing, if an exercise of any portion of this Warrant is to be made in connection with a Company Sale, such exercise may at the election of the Holder be conditioned upon the consummation of such transaction, in which case the Warrant Share Delivery Date shall be the date of such consummation and such exercise shall not be deemed to be effective until immediately prior to such consummation on the Warrant Share Delivery Date.

v. No Fractional Shares or Scrip. No fractional shares or scrip representing fractional shares shall be issued upon the exercise of this Warrant. As to any fraction of a share which the Holder would otherwise be entitled to purchase upon such exercise, the Company shall, at its election, either pay a cash adjustment in respect of such final fraction in an amount equal to such fraction multiplied by the Exercise Price or round up to the next whole share.

vi. Charges, Taxes and Expenses. Issuance of Warrant Shares shall be made without charge to the Holder for any issue or transfer tax or other incidental expense in respect of the issuance of such Warrant Shares, all of which taxes and expenses shall be paid by the Company, and such Warrant Shares shall be issued in the name of the Holder or in such name or names as may be directed by the Holder; provided, however, that in the event that Warrant Shares are to be issued in a name other than the name of the Holder, this Warrant when surrendered for exercise shall be accompanied by the Assignment Form attached hereto duly executed by the Holder and the Company may require, as a condition thereto, the payment of a sum sufficient to reimburse it for any transfer tax incidental thereto. The Company shall pay all Transfer Agent fees required for same-day processing of any Notice of Exercise and all fees to the Depository Trust Company (or another established clearing corporation performing similar functions) required for same-day electronic delivery of the Warrant Shares.

vii. Automatic Exercise upon Termination Date. If, at the expiration of this Warrant, the Holder has remaining Warrant Shares subject to this Warrant (excluding Warrant Shares that the Holder has delivered a duly executed Notice of Exercise pursuant to Section 2(a) hereof), then such Warrant Shares shall be automatically deemed to be irrevocably exercised pursuant to a Cashless Exercise by the Holder immediately prior to the Termination Date.

Section 3. Certain Adjustments.

a) Adjustments.

i. Stock Dividends and Splits. If the Company, at any time while this Warrant is outstanding: (i) pays a stock dividend or otherwise makes a distribution or distributions on shares of its Common Stock or any other equity or equity equivalent securities payable in shares of Common Stock (which, for avoidance of doubt, shall not include any shares of Common Stock issued by the Company upon exercise of this Warrant), (ii) subdivides outstanding shares of Common Stock into a larger number of shares, (iii) combines (including by way of reverse stock split) outstanding shares of Common Stock into a smaller number of shares, or (iv) issues by reclassification of shares of the Common Stock any shares of capital stock of the Company, then in each case the Exercise Price shall be multiplied by a fraction of which the numerator shall be the number of shares of Common Stock (excluding treasury shares, if any) outstanding immediately before such event and of which the denominator shall be the number of shares of Common Stock outstanding immediately after such event, and the number of shares issuable upon exercise of this Warrant shall be proportionately adjusted such that the aggregate Exercise Price of this Warrant shall remain unchanged. Any adjustment made pursuant to this Section 3(a) shall become effective immediately after the record date for the determination of stockholders entitled to receive such dividend or distribution and shall become effective immediately after the effective date in the case of a subdivision, combination or re-classification.

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ii. Issuance of Rights, Options or Warrants. If the Company issues to all of the record holders of its Common Stock any rights, options or warrants entitling them, to subscribe for or purchase shares of the Common Stock (the “Purchase Rights”) at a price per share that is less than the average of the Fair Market Value of the Common Stock for the 10 consecutive Trading Day period ending on, and including, the Trading Day immediately preceding the date of announcement of such issuance, then the Holder will be entitled to acquire, upon the terms applicable to such Purchase Rights, the aggregate Purchase Rights which the Holder would have received if the Holder had held the number of shares of Common Stock that would have been issuable to the Holder upon complete exercise of this Warrant (assuming payment of the Exercise Price in cash) immediately before the date on which a record is taken for the grant, issuance or sale of such Purchase Rights, or, if no such record is taken, the date as of which the record holders of shares of Common Stock are to be determined for the grant, issue or sale of such Purchase Rights.

iii. Distribution Transactions. If the Company distributes shares of its Capital Stock, evidences of its indebtedness, other assets or property or rights, options or warrants to acquire its Capital Stock or other securities, to all holders of record of the Common Stock, excluding (a) dividends, distributions or issuances as to which an adjustment was effected pursuant to Section 3(a)(i) or Section 3(a)(ii), (b) dividends or distributions paid exclusively in cash, (c) distributions in a transaction described in Section 3(b); and (d) Spin-Offs as to which the provisions set forth below in this Section 3(a)(iii) shall apply (any of such shares of Capital Stock, evidences of indebtedness, other assets or property or rights, options or warrants to acquire Capital Stock or other securities of the Company, the “Distributed Property”), then the Exercise Price shall be decreased based on the following formula:

EP₁ = EP₀ x ((SP_o - FMV) ÷ SP₀)

where,

“EP₀” means the Exercise Price in effect immediately prior to the open of business on the Ex-Dividend Date for such distribution;

“EP₁” means the Exercise Price in effect immediately after the open of business on such Ex-Dividend Date;

“SP₀” means the average Fair Market Value of the Common Stock over the 10 consecutive Trading-Day period ending on, and including, the Trading Day immediately preceding the Ex-Dividend Date for such distribution; and

“FMV” means the fair market value (as determined by the Board of Directors) of the Distributed Property distributed with respect to each outstanding share of the Common Stock on the Ex-Dividend Date for such distribution.

Any decrease made under the portion of this Section 3(a)(iii) above shall become effective immediately after the open of business on the Ex-Dividend Date for such distribution.

Notwithstanding the foregoing, if “FMV” (as defined above) is equal to or greater than “SP₀” (as defined above), in lieu of the foregoing increase, the Holder of this Warrant shall receive at the same time and upon the same terms as holders of the Common Stock receive the Distributed Property, the amount and kind of Distributed Property such Holder would have received if such Holder had exercised this Warrant in full prior the distribution. If the Board of Directors determines the “FMV” (as defined above) of any distribution for purposes of this Section 3(a)(iii) by reference to the actual or when-issued trading market for any securities, it shall in doing so consider the prices in such market over the same period used in computing the Fair Market Value of the Common Stock over the 10 consecutive

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Trading Day period ending on, and including, the Trading Day immediately preceding the Ex-Dividend Date for such distribution. If the Company issues rights, options or warrants that are only exercisable upon the occurrence of certain triggering events, then the Company will not adjust the Exercise Price pursuant to the foregoing in this Section 3(a)(iii) until the earliest of these triggering events occurs, and the Company will readjust the Exercise Price to the extent any of these rights, options or warrants are not exercised before they expire; provided that the rights, options or warrants trade together with the Common Stock and will be issued in respect of future issuances of the shares of the Common Stock.

With respect to an adjustment pursuant to this Section 3(a)(iii) where there has been a payment of a dividend or other distribution on the Common Stock of shares of Capital Stock of any class or series, or similar equity interest, of or relating to a subsidiary or other business unit of the Company, that are, or, when issued, will be, listed or admitted for trading on a U.S. national securities exchange (a “Spin-Off”), the Exercise Price shall be decreased based on the following formula:

EP₁ = EP₀ x (MP₀ ÷ (FMV + MP_o))

where,

“EP₀” means the Exercise Price in effect immediately prior to the close of business on the Effective Date of the Spin-Off;

“EP₁” means the Exercise Price in effect immediately after the close of business on the Effective Date of the Spin-Off;

“FMV” means the average Fair Market Value of the Capital Stock or similar equity interest distributed to holders of the Common Stock applicable to one share of the Common Stock (determined by reference to the definition of Fair Market Value as if references therein to Common Stock were to such Capital Stock or similar equity interest) over the first 10 consecutive Trading Day period after, and including, the Ex-Dividend Date of the Spin-Off (the “Valuation Period”); and

“MP₀” means the average Fair Market Value of the Common Stock over the Valuation Period.

The adjustment to the Exercise Price under the preceding paragraph will be calculated as of the open of business on the last Trading Day of the Valuation Period, but shall be given effect as of the close of business on the Effective Date of the Spin-Off. If the Warrant Share Delivery Date occurs during the related Valuation Period, the Company will pay or deliver, as the case may be, the cash, shares of its Common Stock or a combination of cash and shares of its Common Stock, if any, on the third Business Day immediately following the last day of the Valuation Period, and the Person in whose name any shares of Common Stock delivered upon conversion is registered shall be treated as a stockholder of record as of the close of business on the last Trading Day of the Valuation Period. If any distribution of the type described in this Section 3(a)(iii) is declared but not so made, the conversion rate shall be immediately readjusted, effective as of the date the Board of Directors or a committee thereof determines not to make such distribution, to the conversion rate that would then be in effect if such distribution had not been declared.

iv. Cash Dividends. If any cash dividend or distribution is made to all holders of record of the Common Stock during any fiscal quarter in an aggregate amount that, together with all other cash dividends or distributions made during such fiscal quarter, exceeds $0.40 per share of Common Stock (appropriately adjusted from time to time for any share dividends or combinations or subdivisions of the Common Stock) (the “Reference Dividend”), the Exercise Price shall be adjusted based on the following formula:

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EP₁ = EP₀ x ((SP₀ - C) ÷ SP₀)

where,

“EP₀” means the Exercise Price in effect immediately prior to the open of business on the Ex-Dividend Date for such dividend or distribution;

“EP₁” means the Exercise Price in effect immediately after the open of business on such Ex-Dividend Date;

“SP₀” means the average Fair Market Value of the Common Stock over the 10 consecutive Trading Day period ending on, and including, the Trading Day immediately preceding the Ex-Dividend Date for such dividend or distribution; and

“C” means the amount in cash per share the Company distributes to all or substantially all holders of its Common Stock that exceeds the Reference Dividend.

Any increase pursuant to this Section 3(a)(iv) shall become effective immediately after the open of business on the Ex-Dividend Date for such dividend or distribution. If such dividend or distribution is not so paid, the Exercise Price shall be increased, effective as of the date the Board of Directors determines not to make or pay such dividend or distribution, to be the Exercise Price that would then be in effect if such dividend or distribution had not been declared.

Notwithstanding the foregoing, if “C” (as defined above) is equal to or greater than “SP₀” (as defined above), in lieu of the foregoing increase, the Holder of this Warrant shall receive, at the same time and upon the same terms as holders of shares of the Common Stock, the amount of cash that such Holder would have received if such Holder had exercised this Warrant in full prior the dividend or distribution.

Notwithstanding the foregoing, ten (10) Business Days following the receipt by the Holder of this Warrant of written notice from the Company that the VWAP of the Common Stock has exceeded $110.00 per share (subject to adjustment for stock splits, stock dividends, reverse stock splits, and the like) for ten (10) consecutive Trading Days, the Holder shall no longer be entitled to any further adjustment pursuant to this paragraph (iv).

b) Fundamental Transaction. If, at any time while this Warrant is outstanding (except in connection with a Sale Notice, as described below), (i) the Company, directly or indirectly, in one or more related transactions effects any merger or consolidation of the Company with or into another Person, (ii) the Company, directly or indirectly, effects any sale, lease, license, assignment, transfer, conveyance or other disposition of all or substantially all of its assets in one or a series of related transactions, (iii) any, direct or indirect, purchase offer, tender offer or exchange offer (whether by the Company or another Person) is completed pursuant to which holders of Common Stock are permitted to sell, tender or exchange their shares for other securities, cash or property and has been accepted by the holders of 50% or more of the outstanding Common Stock, (iv) the Company, directly or indirectly, in one or more related transactions effects any reclassification, reorganization or recapitalization of the Common Stock or any compulsory share exchange pursuant to which the Common Stock is effectively converted into or exchanged for other securities, cash or property, or (v) the Company, directly or indirectly, in one or more related transactions consummates a stock or share purchase agreement or other business combination (including, without limitation, a reorganization, recapitalization, spin-off or scheme of arrangement) with another Person or group of Persons whereby such other Person or group acquires more than 50% of the outstanding shares of Common Stock (not including any shares of Common Stock held by the other Person

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or other Persons making or party to, or associated or affiliated with the other Persons making or party to, such stock or share purchase agreement or other business combination) (each a “Fundamental Transaction”), then, upon any subsequent exercise of this Warrant, the Holder shall have the right to receive, for each Warrant Share that would have been issuable upon such exercise immediately prior to the occurrence of such Fundamental Transaction, at the option of the Holder, the number of shares of Common Stock of the successor or acquiring corporation or of the Company, if it is the surviving corporation, and any additional consideration (the “Alternate Consideration”) receivable as a result of such Fundamental Transaction by a holder of the number of shares of Common Stock for which this Warrant is exercisable immediately prior to such Fundamental Transaction. For purposes of any such exercise, the determination of the Exercise Price shall be appropriately adjusted to apply to such Alternate Consideration based on the amount of Alternate Consideration issuable in respect of one share of Common Stock in such Fundamental Transaction, and the Company shall apportion the Exercise Price among the Alternate Consideration in a reasonable manner reflecting the relative value of any different components of the Alternate Consideration. If holders of Common Stock are given any choice as to the securities, cash or property to be received in a Fundamental Transaction, then the Holder shall be given the same choice as to the Alternate Consideration it receives upon any exercise of this Warrant following such Fundamental Transaction. The Company shall cause any successor entity in a Fundamental Transaction in which the Company is not the survivor (the “Successor Entity”) to assume in writing all of the obligations of the Company under this Warrant and the other Transaction Documents in accordance with the provisions of this Section 3(b) pursuant to written agreements in form and substance reasonably satisfactory to the Holder and approved by the Holder (without unreasonable delay) prior to such Fundamental Transaction and shall, at the option of the Holder, deliver to the Holder in exchange for this Warrant a security of the Successor Entity evidenced by a written instrument substantially similar in form and substance to this Warrant which is exercisable for a corresponding number of shares of capital stock of such Successor Entity (or its parent entity) equivalent to the shares of Common Stock acquirable and receivable upon exercise of this Warrant prior to such Fundamental Transaction, and with an exercise price which applies the exercise price hereunder to such shares of capital stock (but taking into account the relative value of the shares of Common Stock pursuant to such Fundamental Transaction and the value of such shares of capital stock, such number of shares of capital stock and such exercise price being for the purpose of protecting the economic value of this Warrant immediately prior to the consummation of such Fundamental Transaction), and which is reasonably satisfactory in form and substance to the Holder. Upon the occurrence of any such Fundamental Transaction, the Successor Entity shall succeed to, and be substituted for (so that from and after the date of such Fundamental Transaction, the provisions of this Warrant and the other Transaction Documents referring to the “Company” shall refer instead to the Successor Entity), and may exercise every right and power of the Company and shall assume all of the obligations of the Company under this Warrant and the other Transaction Documents with the same effect as if such Successor Entity had been named as the Company herein. Notwithstanding the foregoing, in the event that the Company elects to provide the Holder with a Sale Notice for a proposed Company Sale that would otherwise be considered a Fundamental Transaction, as described below in Section 3(d)(iii), this Section 3(b) shall not apply to such proposed Company Sale.

c) Calculations. All calculations under this Section 3 shall be made to the nearest cent or the nearest 1/100th of a share, as the case may be. For purposes of this Section 3, the number of shares of Common Stock deemed to be issued and outstanding as of a given date shall be the sum of the number of shares of Common Stock (excluding treasury shares, if any) issued and outstanding.

d) Notice to Holder.

i. Adjustment to Exercise Price. Whenever the Exercise Price is adjusted pursuant to any provision of this Section 3, the Company shall promptly deliver to the Holder by email a notice setting forth the Exercise Price after such adjustment and any resulting adjustment to the number of Warrant Shares and setting forth a brief statement of the facts requiring such adjustment.

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ii. Notice to Allow Exercise by Holder. If (A) the Company shall declare a dividend (or any other distribution in whatever form) on the Common Stock (other than a regular dividend that is publicly announced in advance), (B) the Company shall declare a special nonrecurring cash dividend on or a redemption of the Common Stock, (C) the Company shall authorize the granting to all holders of the Common Stock rights or warrants to subscribe for or purchase any shares of capital stock of any class or of any rights, (D) the approval of any stockholders of the Company shall be required in connection with any reclassification of the Common Stock, any consolidation or merger to which the Company is a party, any sale or transfer of all or substantially all of the assets of the Company, or any compulsory share exchange whereby the Common Stock is converted into other securities, cash or property, or (E) the Company shall authorize the voluntary or involuntary dissolution, liquidation or winding up of the affairs of the Company, then, in each case, the Company shall cause to be delivered by email to the Holder at its last email address as it shall appear upon the Warrant Register of the Company, at least ten (10) calendar days prior to the applicable record or effective date hereinafter specified, a notice (unless such information is filed with the Commission, in which case a notice shall not be required) stating (x) the date on which a record is to be taken for the purpose of such dividend, distribution, redemption, rights or warrants, or if a record is not to be taken, the date as of which the holders of the Common Stock of record to be entitled to such dividend, distributions, redemption, rights or warrants are to be determined or (y) the date on which such reclassification, consolidation, merger, sale, transfer or share exchange is expected to become effective or close, and the date as of which it is expected that holders of the Common Stock of record shall be entitled to exchange their shares of the Common Stock for securities, cash or other property deliverable upon such reclassification, consolidation, merger, sale, transfer or share exchange. The Holder shall remain entitled to exercise this Warrant during the period commencing on the date of such notice to the effective date of the event triggering such notice except as may otherwise be expressly set forth herein.

iii. Sale Notice. Notwithstanding anything to the contrary set forth in this Warrant, in the event of a proposed Company Sale, the Company may elect to give written notice to the Holder of the proposed Company Sale (a “Sale Notice”). If provided, the Sale Notice will include the latest draft of the proposed definitive purchase agreement or merger agreement relating to the Company Sale unless the Company is contractually prohibited from providing a copy of such draft, in which case the Sale Notice will include a description of the material terms of the proposed Company Sale in reasonable detail. The Sale Notice, if elected to be provided by the Company, shall be provided no less than fifteen (15) Business Days prior to the anticipated closing date of the Company Sale. In the event that the Company does not receive a Notice of Exercise within fifteen (15) Business Days after delivering the Sale Notice, then, if the Holder has remaining Warrant Shares subject to this Warrant (excluding Warrant Shares that the Holder has delivered a duly executed Notice of Exercise pursuant to Section 2(a) hereof), such Warrant Shares shall be automatically deemed to be irrevocably exercised pursuant to a Cashless Exercise by the Holder immediately prior to the closing date of the Company Sale. For avoidance of doubt, Section 3(b) shall not apply in the event of Sale Notice with respect to a Company Sale that would otherwise be considered a Fundamental Transaction.

Section 4. Transfer of Warrant.

a) Transferability. This Warrant and all rights hereunder (including, without limitation, any registration rights) are transferable, in whole or in part, upon surrender of this Warrant at the principal office of the Company or its designated agent, together with a written assignment of this Warrant substantially in the form attached hereto duly executed by the Holder or its agent or attorney and funds sufficient to pay any transfer taxes payable upon the making of such transfer. Notwithstanding anything to the contrary contained herein, this Warrant and the Warrant Shares shall not be sold or transferred unless either (i) they first shall have been registered under the Securities Act, or (ii) such sale or transfer shall be exempt from the registration requirements of the Securities Act. Any certificate that may be issued representing Warrant Shares shall bear a restrictive legend regarding no registration under the Securities Act.

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b) Warrant Register. The Company shall register this Warrant, upon records to be maintained by the Company for that purpose (the “Warrant Register”), in the name of the record Holder hereof from time to time. The Company may deem and treat the registered Holder of this Warrant as the absolute owner hereof for the purpose of any exercise hereof or any distribution to the Holder, and for all other purposes, absent actual notice to the contrary.

Section 5. Miscellaneous.

a) No Rights as Stockholder Until Exercise; No Settlement in Cash. This Warrant does not entitle the Holder to any voting rights, dividends or other rights as a stockholder of the Company prior to the exercise hereof as set forth in Section 2(c)(i).

b) Loss, Theft, Destruction or Mutilation of Warrant. The Company covenants that upon receipt by the Company of evidence reasonably satisfactory to it of the loss, theft, destruction or mutilation of this Warrant or any stock certificate relating to the Warrant Shares, and in case of loss, theft or destruction, of indemnity or security reasonably satisfactory to it (which, in the case of the Warrant, shall not include the posting of any bond), and upon surrender and cancellation of such Warrant or stock certificate, if mutilated, the Company will make and deliver a new Warrant or stock certificate of like tenor and dated as of such cancellation, in lieu of such Warrant or stock certificate.

c) Saturdays, Sundays, Holidays, etc. If the last or appointed day for the taking of any action or the expiration of any right required or granted herein shall not be a Business Day, then, such action may be taken or such right may be exercised on the next succeeding Business Day.

d) Authorized Shares.

The Company covenants that, during the period the Warrant is outstanding, it will reserve from its authorized and unissued Common Stock a sufficient number of shares to provide for the issuance of the Warrant Shares upon the exercise of any purchase rights under this Warrant. The Company further covenants that its issuance of this Warrant shall constitute full authority to its officers who are charged with the duty of issuing the necessary Warrant Shares upon the exercise of the purchase rights under this Warrant. The Company will take all such reasonable action as may be necessary to assure that such Warrant Shares may be issued as provided herein without violation of any applicable law or regulation, or of any requirements of the Trading Market upon which the Common Stock may be listed. The Company covenants that all Warrant Shares which may be issued upon the exercise of the purchase rights represented by this Warrant will, upon exercise of the purchase rights represented by this Warrant and payment for such Warrant Shares in accordance herewith, be duly authorized, validly issued, fully paid and nonassessable and free from all taxes, liens and charges created by the Company in respect of the issue thereof (other than taxes in respect of any transfer occurring contemporaneously with such issue).

Except and to the extent waived or consented to by the Holder, the Company shall not by any action, including, without limitation, amending its certificate of incorporation or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant, but will at all times in good faith assist in the carrying out of all such terms and in the taking of all such actions as may be necessary or appropriate to protect the rights of Holder as set forth in this Warrant against impairment. Without limiting the generality of the foregoing, the Company will (i) not increase the par value of any Warrant Shares above the amount payable therefor upon such exercise immediately prior to such increase in par value, (ii) take all such action as may be necessary or appropriate in order that the Company may validly and legally issue fully paid and nonassessable Warrant Shares upon the exercise of this Warrant and (iii) use commercially reasonable efforts to obtain all such authorizations, exemptions or consents from any public regulatory body having jurisdiction thereof, as may be, necessary to enable the Company to perform its obligations under this Warrant.

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Before taking any action which would result in an adjustment in the number of Warrant Shares for which this Warrant is exercisable or in the Exercise Price, the Company shall obtain all such authorizations or exemptions thereof, or consents thereto, as may be necessary from any public regulatory body or bodies having jurisdiction thereof.

e) Governing Law. All questions concerning the construction, validity, enforcement and interpretation of this Warrant shall be governed by and construed and enforced in accordance with the internal laws of the State of New York, without regard to the principles of conflicts of law thereof. Each Party agrees that all legal proceedings concerning the interpretations, enforcement and defense of the transactions contemplated by this Warrant (whether brought against a Party hereto or their respective affiliates, directors, officers, shareholders, partners, members, employees or agents) shall be commenced exclusively in the state and federal courts sitting in the City of New York. Each Party hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in the City of New York, Borough of Manhattan for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein, and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding is improper or is an inconvenient venue for such proceeding. Each Party hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such Party at the address in effect for notices to it under this Warrant and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any other manner permitted by law. If either Party shall commence an action, suit or proceeding to enforce any provisions of this Warrant, the prevailing Party in such action, suit or proceeding shall be reimbursed by the other Party for their reasonable attorneys’ fees and other costs and expenses incurred with the investigation, preparation and prosecution of such action or proceeding. Notwithstanding the foregoing, nothing in this paragraph shall limit or restrict the federal district court in which a Holder may bring a claim under the federal securities laws.

f) Restrictions. The Holder acknowledges that the Warrant Shares acquired upon the exercise of this Warrant, if not registered, will have restrictions upon resale imposed by state and federal securities laws.

g) Nonwaiver and Expenses. No course of dealing or any delay or failure to exercise any right hereunder on the part of Holder shall operate as a waiver of such right or otherwise prejudice the Holder’s rights, powers or remedies. Without limiting any other provision of this Warrant, if the Company willfully and knowingly fails to comply with any provision of this Warrant, which results in any material damages to the Holder, the Company shall pay to the Holder such amounts as shall be sufficient to cover any costs and expenses including, but not limited to, reasonable attorneys’ fees, including those of appellate proceedings, incurred by the Holder in collecting any amounts due pursuant hereto or in otherwise enforcing any of its rights, powers or remedies hereunder.

h) Notices. Any and all notices or other communications or deliveries to be provided by the Holders hereunder including, without limitation, any Notice of Exercise, shall be in writing and delivered personally or e-mail, or sent by a nationally recognized overnight courier service, addressed to the Company, at 5300 West Cypress Street, Suite 100, Tampa, FL 33607, Attention: Andrew J. Graham, General Counsel, email address: agraham@hcigroup.com, or such other email address or address as the Company may specify for such purposes by notice to the Holder. Any and all notices or other communications or deliveries to be provided by the Company hereunder shall be in writing and delivered personally, by e-mail, or sent by a nationally recognized overnight courier service addressed to each Holder at the e-mail address or address of such Holder appearing on the books of the Company. Any notice or other communication or deliveries hereunder shall be deemed given and effective on the earliest of (i) the date of transmission, if such notice or communication is delivered via e-mail at the e-mail address set forth in this Section prior to 5:30 p.m. (New York City time) on any date, (ii) the next Trading Day after the date of transmission, if such notice or communication is delivered via e-mail at the e-mail address set forth in this Section on a day that is not a Trading Day or later than 5:30 p.m. (New York City time) on any Trading Day, (iii) the second Trading Day following the date of mailing, if sent by U.S. nationally recognized overnight courier service, or (iv) upon actual receipt by the Party to whom such notice is required to be given.

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i) Limitation of Liability. No provision hereof, in the absence of any affirmative action by the Holder to exercise this Warrant to purchase Warrant Shares, and no enumeration herein of the rights or privileges of the Holder, shall give rise to any liability of the Holder for the purchase price of any Common Stock or as a stockholder of the Company, whether such liability is asserted by the Company or by creditors of the Company.

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

k) Successors and Assigns. Subject to applicable securities laws, this Warrant and the rights and obligations evidenced hereby shall inure to the benefit of and be binding upon the successors and permitted assigns of the Company and the successors and permitted assigns of Holder. The provisions of this Warrant are intended to be for the benefit of any Holder from time to time of this Warrant and shall be enforceable by the Holder or holder of Warrant Shares.

l) Amendment. This Warrant may be modified or amended or the provisions hereof waived with the written consent of the Company and the Holder.

m) Severability. Wherever possible, each provision of this Warrant shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Warrant shall be prohibited by or invalid under applicable law, such provision shall be ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of such provisions or the remaining provisions of this Warrant.

n) Headings. The headings used in this Warrant are for the convenience of reference only and shall not, for any purpose, be deemed a part of this Warrant.

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

(Signature Page Follows)

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IN WITNESS WHEREOF, the Company has caused this Warrant to be executed by its officer thereunto duly authorized as of the date first above indicated.

HCI GROUP, INC. (“Company”)
By:
	Name:	Paresh Patel
	Title:	Chief Executive Officer

Agreed to and accepted as of the date first above indicated:
CB SNOWBIRD HOLDINGS, L.P. (“Holder”)
	By: CSCP III Cayman GP Ltd., its general partner
	By:
		Name:
		Title:

NOTICE OF EXERCISE

TO: HCI GROUP, INC.

(1) The undersigned hereby elects to purchase Warrant Shares of the Company pursuant to the terms of the attached Warrant (only if exercised in full), and [tenders herewith payment of the exercise price in full, together with all applicable transfer taxes, if any][surrenders Warrant Shares with an Exercise Price of $ , representing the full purchase price for such Warrant Shares at the exercise price per Warrant Shares provided for in such Warrant, together with all applicable transfer taxes, if any].

(2) Please issue said Warrant Shares in the name of the undersigned or in such other name as is specified below:

[(3) Pursuant to Section 2(c)(iv) of the Warrant, the foregoing exercise and purchase is conditioned on _________.]

The undersigned hereby represents and warrants as follows:

(a) the undersigned is acquiring such shares of Common Stock for its own account for investment and not for resale or with a view to distribution thereof in violation of the Securities Act of 1933, as amended, and the regulations promulgated thereunder (the “Securities Act”); and

(b) (i) the undersigned is an “accredited investor” as defined in Rule 501 of Regulation D promulgated under the Securities Act and was not organized for the purposes of acquiring the Warrant or such shares of Common Stock or (ii) the undersigned is not a US Person as defined in Regulation S under the Securities Act, and the Warrant is not being exercised on behalf of a US Person. The undersigned’s financial condition is such that it is able to bear the risk of holding such securities for an indefinite period of time and the risk of loss of its entire investment. The undersigned has sufficient knowledge and experience in investing in companies similar to the Company so as to be able to evaluate the risks and merits of investment in the Company.

[SIGNATURE OF HOLDER]

Name of Investing Entity:                                                                                                                                                                                                         

Signature of Authorized Signatory of Investing Entity:                                                                                                                                                              

Name of Authorized Signatory:                                                                                                                                                                                                 

Title of Authorized Signatory:                                                                                                                                                                                                 

Date:                                                                                                                                                                                                                                          

ASSIGNMENT FORM

(To assign the foregoing Warrant, execute this form and supply required information. Do not use this form to purchase shares.)

FOR VALUE RECEIVED, the foregoing Warrant and all rights evidenced thereby are hereby assigned to

Name:
	(Please Print)
Address:
	(Please Print)
Phone Number:
Email Address:

The undersigned hereby agrees that it will not sell, assign or transfer the right, title and interest in and to the Warrant unless applicable federal and state securities laws have been complied with.

Dated: ,                                              ,                     

Holder’s Signature:

Holder’s Address:

EX-10.1

Exhibit 10.1

TYPTAP INSURANCE GROUP, INC.

2021 EQUITY INCENTIVE PLAN

1. Purposes, History and Effective Date.

(a) Purpose. The TypTap Insurance Group, Inc. 2021 Equity Incentive Plan has two complementary purposes: (i) to attract and retain outstanding individuals to serve as officers, directors, employees and consultants and (ii) to increase shareholder value. The Plan will provide participants incentives to increase shareholder value by offering the opportunity to acquire shares of the Company’s common stock, receive monetary payments based on the value of such common stock, or receive other incentive compensation, on the potentially favorable terms that this Plan provides.

(b) Effective Date. This Plan will become effective, and Awards may be granted under this Plan, on and after the Effective Date, subject as to any Awards that are Incentive Stock Options to approval of the Plan by the shareholders of the Company within twelve (12) months of the Effective Date. Any Incentive Stock Options granted under the Plan prior to such shareholder approval shall be conditioned on such approval. This Plan will terminate as provided in Section 15.

2. Definitions. Capitalized terms used and not otherwise defined in this Plan or in any Award agreement have the following meanings:

(a) “Act” means the Securities Act of 1933, as amended from time to time. Any reference to a specific provision of the Act shall include any successor provision thereto.

(b) “Administrator” means the Board or the Committee; provided that, to the extent the Board or the Committee has delegated authority and responsibility as an Administrator of the Plan to one or more committees or officers of the Company as permitted by Section 3(b), the term “Administrator” shall also mean such committee, committees, officer or officers.

(c) “Affiliate” has the meaning ascribed to such term in Rule 12b-2 under the Exchange Act. Notwithstanding the foregoing, for purposes of determining those individuals to whom an Option or a Stock Appreciation Right may be granted, the term “Affiliate” means any entity that, directly or through one or more intermediaries, is controlled by or is under common control with, the Company within the meaning of Code Sections 414(b) or (c); provided that, in applying such provisions, the phrase “at least 20 percent” shall be used in place of “at least 80 percent” each place it appears therein.

(d) “Applicable Exchange” means the Nasdaq Stock Market, the New York Stock Exchange or such other exchange or automated trading system on which the Stock is principally traded at the applicable time.

(e) “Articles of Incorporation” means the articles of incorporation of the Company, as amended from time to time.

(f) “Award” means a grant of Options, Stock Appreciation Rights, Performance Shares, Performance Units, Stock, Restricted Stock, Restricted Stock Units, an Incentive Award, Dividend Equivalent Units or any other type of award permitted under this Plan. Any Award granted under this Plan shall be provided or made in such manner and at such time as complies with the applicable requirements of Code Section 409A to avoid a plan failure described in Code

Section 409A(a)(1), including, without limitation, deferring payment to a specified employee or until a specified distribution event, as provided in Code Section 409A(a)(2), and the provisions of Code Section 409A are incorporated into this Plan to the extent necessary for any Award that is subject to Code Section 409A to comply therewith.

(g) “Beneficial Owner” means a Person, with respect to any securities which:

(i) such Person or any of such Person’s Affiliates has the right to acquire (whether such right is exercisable immediately or only after the passage of time) pursuant to any agreement, arrangement or understanding, or upon the exercise of conversion rights, exchange rights, rights, warrants or options, or otherwise; provided, however, that a Person shall not be deemed the Beneficial Owner of, or to beneficially own, securities tendered pursuant to a tender or exchange offer made by or on behalf of such Person or any of such Person’s Affiliates until such tendered securities are accepted for purchase;

(ii) such Person or any of such Person’s Affiliates, directly or indirectly, has the right to vote or dispose of or has “beneficial ownership” of (as determined pursuant to Rule 13d-3 of the General Rules and Regulations under the Act), including pursuant to any agreement, arrangement or understanding; provided, however, that a Person shall not be deemed the Beneficial Owner of, or to beneficially own, any security under this clause (ii) as a result of an agreement, arrangement or understanding to vote such security if the agreement, arrangement or understanding: (A) arises solely from a revocable proxy or consent given to such Person in response to a public proxy or consent solicitation made pursuant to, and in accordance with, the applicable rules and regulations under the Act and (B) is not also then reportable on a Schedule l3D under the Act (or any comparable or successor report); or

(iii) are beneficially owned, directly or indirectly, by any other Person with which such Person or any of such Person’s Affiliates has any agreement, arrangement or understanding for the purpose of acquiring, holding, voting (except pursuant to a revocable proxy as described in clause (ii) above) or disposing of any voting securities of the Company.

(h) “Board” means the Board of Directors of the Company.

(i) “Cause” shall have the same meaning as set forth in a Participant’s employment agreement or individual Award with the Company, or, if the Participant does not have an employment agreement with the Company (or the Participant’s individual Award does not otherwise define the term), “Cause” shall mean a good faith finding by the Company that the Participant has (i) failed, neglected, or refused to perform the lawful employment duties related to the Participant’s position or as from time to time assigned to the Participant (other than due to disability within the meaning of Code Section 22(e)(3)); (ii) committed any willful, intentional, or grossly negligent act having the effect of injuring the interest, business, or reputation of the Company or any Affiliate; (iii) violated or failed to comply in any material respect with the Company’s or an Affiliate’s published rules, regulations, or policies, as in effect or amended from time to time, to the extent applicable to the Participant; (iv) committed an act constituting a felony or misdemeanor involving moral turpitude, fraud, theft, or dishonesty; (v) misappropriated or embezzled any property of the Company or an Affiliate (whether or not an act constituting a felony or misdemeanor); or (vi) breached any material provision of any applicable confidentiality, non-compete, non-solicit, general release, covenant not-to-sue, or other agreement with the Company or any Affiliate.

(j) “Change of Control” means, unless specified otherwise in an Award agreement, the occurrence of any of the following:

(i) any Person (other than (A) the Company or any of its subsidiaries, (B) a trustee or other fiduciary holding securities under any employee benefit plan of the Company or any of its subsidiaries, (C) an underwriter temporarily holding securities pursuant to an offering of such securities, (D) any Investor or (E) a corporation owned, directly or indirectly, by the shareholders of the Company in substantially the same proportions as their ownership of stock in the Company (“Excluded Persons”)) is or becomes the Beneficial Owner, directly or indirectly, of securities of the Company (not including in the securities beneficially owned by such Person any securities acquired directly from the Company or its Affiliates after the Effective Date, pursuant to express authorization by the Board that refers to this exception) representing twenty percent (20%) or more of either the then outstanding shares of common stock of the Company or the combined voting power of the Company’s then outstanding voting securities; or

(ii) the following individuals cease for any reason to constitute a majority of the number of directors of the Company then serving: (A) individuals who, on the Effective Date, constituted the Board and (B) any new director (other than a director whose initial assumption of office is in connection with an actual or threatened election contest, including but not limited to a consent solicitation, relating to the election of directors of the Company, as such terms are used in Rule 14a-11 of Regulation 14A under the Act) whose appointment or election by the Board or nomination for election by the Company’s shareholders was approved by a vote of at least two-thirds (2/3) of the directors then still in office who either were directors on the Effective Date, or whose appointment, election or nomination for election was previously so approved (collectively the “Continuing Directors”); provided, however, that individuals who are appointed to the Board pursuant to or in accordance with the terms of an agreement relating to a merger, consolidation, or share exchange involving the Company (or any direct or indirect Subsidiary of the Company) shall not be Continuing Directors for purposes of this Agreement until after such individuals are first nominated for election by a vote of at least two-thirds (2/3) of the then Continuing Directors and are thereafter elected as directors by the shareholders of the Company at a meeting of shareholders held following consummation of such merger, consolidation, or share exchange; and, provided further, that in the event the failure of any such persons appointed to the Board to be Continuing Directors results in a Change of Control, the subsequent qualification of such persons as Continuing Directors shall not alter the fact that a Change of Control occurred; or

(iii) the consummation of a merger, consolidation or share exchange of the Company with any other corporation or the issuance of voting securities of the Company in connection with a merger, consolidation or share exchange of the Company (or any direct or indirect Subsidiary of the Company), in each case, which requires approval of the shareholders of the Company, other than (A) a merger, consolidation or share exchange which would result in the voting securities of the Company outstanding immediately prior to such merger, consolidation or share exchange continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity or any parent thereof) at least fifty percent (50%) of the combined

voting power of the voting securities of the Company or such surviving entity or any parent thereof outstanding immediately after such merger, consolidation or share exchange, or (B) a merger, consolidation or share exchange effected to implement a recapitalization of the Company (or similar transaction) in which no Person (other than an Excluded Person) is or becomes the Beneficial Owner, directly or indirectly, of securities of the Company (not including in the securities beneficially owned by such Person any securities acquired directly from the Company or its Affiliates after the Effective Date, pursuant to express authorization by the Board that refers to this exception) representing twenty percent (20%) or more of either the then outstanding shares of common stock of the Company or the combined voting power of the Company’s then outstanding voting securities; or

(iv) the consummation of a plan of complete liquidation or dissolution of the Company or a sale or disposition by the Company of all or substantially all of the Company’s assets (in one transaction or a series of related transactions within any period of twenty-four (24) consecutive months), in each case, which requires approval of the shareholders of the Company, other than a sale or disposition by the Company of all or substantially all of the Company’s assets to an entity at least seventy-five percent (75%) of the combined voting power of the voting securities of which are owned by Persons in substantially the same proportions as their ownership of the Company immediately prior to such sale.

Notwithstanding the foregoing, no “Change of Control” shall be deemed to have occurred if there is consummated any transaction or series of integrated transactions immediately following which the record holders of the common stock of the Company immediately prior to such transaction or series of transactions continue to own, directly or indirectly, in the same proportions as their ownership in the Company, an entity that owns all or substantially all of the assets or voting securities of the Company immediately following such transaction or series of transactions.

Notwithstanding the foregoing, if an Award is considered deferred compensation subject to the provisions of Code Section 409A, and if a payment under such Award is triggered upon a “Change of Control,” then the foregoing definition shall be deemed amended as necessary to comply with Code Section 409A.

(k) “Code” means the Internal Revenue Code of 1986, as amended. Any reference to a specific provision of the Code includes any successor provision and the regulations promulgated under such provision.

(l) “Committee” means the Compensation Committee of the Board, any successor committee thereto or such other committee of the Board that is designated by the Board with the same or similar authority. The Committee shall consist only of Non-Employee Directors (not fewer than two (2)) to the extent necessary for the Plan and Awards to comply with Rule 16b-3 promulgated under the Exchange Act.

(m) “Company” means TypTap Insurance Group, Inc., a Florida corporation, or any successor thereto.

(n) “Director” means a member of the Board.

(o) “Disability” means, unless otherwise defined in the applicable Award agreement, a finding of disability under the long term disability plan sponsored by the Company or an Affiliate in which the Participant participates. Notwithstanding the foregoing, for Awards that are subject to Section 409A of the Code, Disability shall mean that a Participant is disabled under Section 409A(a)(2)(C)(i) or (ii) of the Code.

(p) “Dividend Equivalent Unit” means the right to receive a payment, in cash or Shares, equal to the cash dividends or other cash distributions paid with respect to a Share.

(q) “Effective Date” means the date on which the Board adopts the Plan.

(r) “Exchange Act” means the Securities Exchange Act of 1934, as amended. Any reference to a specific provision of the Exchange Act includes any successor provision and the regulations and rules promulgated under such provision.

(s) “Fair Market Value” means a price that is based on the opening, closing, actual, high or low sale price, or the arithmetic mean of selling prices of, a Share, on the Applicable Exchange on the applicable date, the preceding trading day, the next succeeding trading day, or the arithmetic mean of selling prices on all trading days over a specified averaging period weighted by volume of trading on each trading day in the period that is within 30 days before or 30 days after the applicable date, as determined by the Administrator in its discretion; provided that, if an arithmetic mean of prices is used to set a grant price or an exercise price for an Option or Stock Appreciation Right, the commitment to grant the applicable Award based on such arithmetic mean must be irrevocable before the beginning of the specified averaging period in accordance with Treasury Regulation 1.409A-1(b)(5)(iv)(A). The method of determining Fair Market Value with respect to an Award shall be determined by the Administrator and may differ depending on whether Fair Market Value is in reference to the grant, exercise, vesting, settlement, or payout of an Award; provided that, if the Administrator does not specify a different method, the Fair Market Value of a Share as of a given date shall be the closing sale price as of the trading day immediately preceding the date as of which Fair Market Value is to be determined or, if there shall be no such sale on such date, the next preceding day on which such a sale shall have occurred. If the Stock is not traded on an established stock exchange, the Administrator shall determine in good faith the Fair Market Value in whatever manner it considers appropriate, but based on objective criteria. Notwithstanding the foregoing, in the case of the sale of Shares on the Applicable Exchange, the actual sale price shall be the Fair Market Value of such Shares.

(t) “Incentive Award” means the right to receive a cash payment to the extent Performance Goals are achieved (or other requirements are met), and shall include “Annual Incentive Awards” as described in Section 10 and “Long-Term Incentive Awards” as described in Section 11.

(u) “Incentive Stock Option” means an Option that is intended to qualify as an “incentive stock option” within the meaning of Section 422 of the Code.

(v) “Investors” means, collectively, CB Snowbird Holdings, L.P., a Delaware limited partnership, Centerbridge Partners, L.P., a Delaware limited partnership (“Centerbridge”), and each of their Affiliates (but excluding the Company and its Subsidiaries) and any other investment fund or vehicle managed by Centerbridge or any of its Affiliates (including any successors or assigns of any such manager).

(w) “Non-Employee Director” means a Director who is not also an employee of the Company or its Subsidiaries.

(x) “Nonqualified Stock Option” means an Option that is not intended to qualify as an Incentive Stock Option.

(y) “Option” means the right to purchase a Share at a stated price for a specified period of time.

(z) “Participant” means an individual selected by the Administrator to receive an Award.

(aa) “Performance Goals” means any objective or subjective goals the Administrator establishes with respect to an Award. A Performance Goal may, but is not required to, relate to one or more of the following with respect to the Company or any one or more Subsidiaries, Affiliates or other business units: basic earnings per common share for the Company on a consolidated basis; diluted earnings per common share for the Company on a consolidated basis; total shareholder return; fair market value of shares; net sales; cost of sales; gross profit; selling, general and administrative expenses; operating income; earnings before interest and the provision for income taxes (EBIT); earnings before interest, the provision for income taxes, depreciation, and amortization (EBITDA); net income; accounts receivable; return on equity; return on assets; return on invested capital; return on sales; non-catastrophic claims incurred; reinsurance costs; gross premiums earned; economic value added, or other measure of profitability that considers the cost of capital employed; free cash flow; net cash provided by operating activities; net increase (decrease) in cash and cash equivalents; customer satisfaction; market share; and/or quality. Unless otherwise determined by the Administrator, the relevant measurement of performance as to each Performance Goal shall be computed in accordance with generally accepted accounting principles, if applicable. The Administrator reserves the right to adjust Performance Goals, or modify the manner of measuring or evaluating a Performance Goal, for any reason the Administrator determines is appropriate, including but not limited to by excluding the effects of (i) charges for reorganizing and restructuring, (ii) discontinued operations, (iii) asset write-downs, (iv) gains or losses on the disposition of a business, (v) mergers, acquisitions or dispositions, and (vi) extraordinary, unusual and/or non-recurring items of gain or loss. The inclusion in an Award agreement of specific adjustments or modifications shall not be deemed to preclude the Administrator from making other adjustments or modifications, in its discretion, as described herein, unless the Award agreement provides that the adjustments or modifications described in such agreement shall be the sole adjustments or modifications. The Administrator may establish other Performance Goals not listed in this Plan. Where applicable, the Performance Goals may be expressed, without limitation, in terms of attaining a specified level of the particular criterion or the attainment of an increase or decrease (expressed as absolute numbers or a percentage) in the particular criterion or achievement in relation to a peer group or other index. The Performance Goals may include a threshold level of performance below which no payment will be made (or no vesting will occur), levels of performance at which specified payments will be paid (or specified vesting will occur), and a maximum level of performance above which no additional payment will be made (or at which full vesting will occur).

(bb) “Performance Shares” means the right to receive Shares to the extent Performance Goals are achieved (or other requirements are met).

(cc) “Performance Unit” means the right to receive a cash payment and/or Shares valued in relation to a unit that has a designated dollar value or the value of which is equal to the Fair Market Value of one or more Shares, to the extent Performance Goals are achieved (or other requirements are met).

(dd) “Person” means any individual, firm, partnership, corporation or other entity, including any successor (by merger or otherwise) of such entity, or a group of any of the foregoing acting in concert.

(ee) “Plan” means this TypTap Insurance Group, Inc. 2021 Equity Incentive Plan, as it may be amended from time to time.

(ff) “Restricted Stock” means Shares that are subject to a risk of forfeiture or restrictions on transfer, or both a risk of forfeiture and restrictions on transfer, which may lapse upon the achievement or partial achievement of Performance Goals or upon the completion of a period of service, or both.

(gg) “Restricted Stock Unit” means the right to receive a cash payment and/or Shares the value of which is equal to the Fair Market Value of one Share.

(hh) “Section 16 Participants” means Participants who are subject to the provisions of Section 16 of the Exchange Act.

(ii) “Series A Preferred Stock” has the meaning set forth in the Articles of Incorporation.

(jj) “Share” means a share of Stock.

(kk) “Stock” means the common stock, par value $0.001 per share, of the Company.

(ll) “Stock Appreciation Right” or “SAR” means the right to receive a cash payment, and/or Shares with a Fair Market Value, equal to the appreciation of the Fair Market Value of a Share during a specified period of time.

(mm) “Subsidiary” means any corporation, limited liability company or other limited liability entity in an unbroken chain of entities beginning with the Company if each of the entities (other than the last entities in the chain) owns the stock or equity interest possessing more than fifty percent (50%) of the total combined voting power of all classes of stock or other equity interests in one of the other entities in the chain.

3. Administration.

(a) Administration. In addition to the authority specifically granted to the Administrator in this Plan, the Administrator has full discretionary authority to administer this Plan, including but not limited to the authority to: (i) interpret the provisions of this Plan or any agreement covering an Award; (ii) prescribe, amend and rescind rules and regulations relating to this Plan; (iii) correct any defect, supply any omission, or reconcile any inconsistency in the Plan, any Award or any agreement covering an Award in the manner and to the extent it deems desirable to carry this Plan or such Award into effect; and (iv) make all other determinations necessary or advisable for the administration of this Plan. All Administrator determinations shall be made in the sole discretion of the Administrator and are final and binding on all interested parties.

(b) Delegation to Other Committees or Officers. To the extent applicable law permits, the Board may delegate to another committee of the Board, or the Committee may delegate to a subcommittee of the Committee or to one or more officers of the Company, any or all of their respective authority and responsibility as an Administrator of the Plan; provided that no such delegation is permitted with respect to Stock-based Awards made to Section 16 Participants at the time any such delegated authority or responsibility is exercised unless the delegation is to another committee of the Board consisting entirely of Non-Employee Directors. If the Board or the Committee has made such a delegation, then all references to the Administrator in this Plan include such other committee, subcommittee or one or more officers to the extent of such delegation.

(c) No Liability; Indemnification. No member of the Board or the Committee, and no officer or member of any other committee to whom a delegation under Section 3(b) has been made, will be liable for any act done, or determination made, by the individual in good faith with respect to the Plan or any Award. The Company will indemnify and hold harmless each such individual as to any acts or omissions, or determinations made, in each case done or made in good faith, with respect to this Plan or any Award to the maximum extent that the law and the Company’s By-Laws permit.

4. Eligibility. The Administrator may designate any of the following as a Participant from time to time, to the extent of the Administrator’s authority: any officer or other employee of the Company or its Affiliates; any individual that the Company or an Affiliate has engaged to become an officer or employee; any consultant or advisor who provides services to the Company or its Affiliates; or any Director, including a Non-Employee Director. The Administrator’s designation of, or granting of an Award to, a Participant will not require the Administrator to designate such individual as a Participant or grant an Award to such individual at any future time. The Administrator’s granting of a particular type of Award to a Participant will not require the Administrator to grant any other type of Award to such individual.

5. Types of Awards. Subject to the terms of this Plan, the Administrator may grant any type of Award to any Participant it selects, but only employees of the Company or a Subsidiary may receive grants of Incentive Stock Options. Awards may be granted alone or in addition to, in tandem with, or (subject to the prohibition on repricing set forth in Section 15(e)) in substitution for any other Award (or any other award granted under another plan of the Company or any Affiliate, including the plan of an acquired entity).

6. Shares Reserved under this Plan.

(a) Plan Reserve. Subject to adjustment as provided in Section 17, an aggregate of 7,000,000 Shares are reserved for issuance under this Plan, all of which may be issued pursuant to the exercise of Incentive Stock Options. The Shares reserved for issuance may be either authorized and unissued Shares or Shares reacquired at any time and now or hereafter held as treasury stock. The aggregate number of Shares reserved under this Section 6(a) shall be depleted on the date of grant of an Award by the maximum number of Shares, if any, that may be issuable under an Award as determined at the time of grant. Notwithstanding the foregoing, an Award that may be settled solely in cash shall not cause any depletion of the Plan’s Share reserve at the time such Award is granted.

(b) Replenishment of Shares Under this Plan. To the extent (i) an Award lapses, expires, terminates or is cancelled without the issuance of Shares under the Award (whether due currently or on a deferred basis) or is settled in cash, (ii) it is determined during or at the conclusion of the term of an Award that all or some portion of the Shares with respect to which the Award was granted will not be issuable on the basis that the conditions for such issuance will not be satisfied, (iii) Shares are forfeited under an Award (except as described below), (iv) Shares are issued under any Award and the Company subsequently reacquires them pursuant to rights reserved upon the issuance of the Shares, or (v) Shares are tendered or withheld in payment of the exercise price of an Option or as a result of the net settlement of an outstanding Stock Appreciation Right or (vi) Shares are tendered or withheld to satisfy federal, state or local tax withholding obligations, then such Shares shall be recredited to the Plan’s reserve and may again be used for new Awards under this Plan, but Shares recredited to the Plan’s reserve pursuant to clause (iv), (v) or (vi) may not be issued pursuant to Incentive Stock Options.

7. Options. Subject to the terms of this Plan, the Administrator will determine all terms and conditions of each Option, including but not limited to: (a) whether the Option is an Incentive Stock Option that meets the requirements of Code Section 422, or a Nonqualified Stock Option that does not meet the requirements of Code Section 422; (b) the grant date, which may not be any day prior to the date that the Administrator approves the grant; (c) the number of Shares subject to the Option; (d) the exercise price, which may never be less than the Fair Market Value of the Shares subject to the Option as determined on the date of grant, (e) the terms and conditions of vesting and exercise; (f) the term, except that an Option must terminate no later than ten (10) years after the date of grant; and (g) the manner of payment of the exercise price. In all other respects, the terms of any Incentive Stock Option should comply with the provisions of Code Section 422 except to the extent the Administrator determines otherwise. If an Option that is intended to be an Incentive Stock Option fails to meet the requirements thereof, the Option shall automatically be treated as a Nonqualified Stock Option to the extent of such failure. To the extent permitted by the Administrator, and subject to such procedures as the Administrator may specify, the payment of the exercise price of Options may be made by (w) delivery of cash or other Shares or other securities of the Company (including by attestation) having a then Fair Market Value equal to the purchase price of such Shares, (x) by delivery (including by fax) to the Company or its designated agent of an executed irrevocable option exercise form together with irrevocable instructions to a broker-dealer to sell or margin a sufficient portion of the Shares and deliver the sale or margin loan proceeds directly to the Company to pay for the exercise price, (y) by surrendering the right to receive Shares otherwise deliverable to the Participant upon exercise of the Award having a Fair Market Value at the time of exercise equal to the total exercise price, or (z) by any combination of the methods set forth in clauses (w), (x) and/or (y). Except to the extent otherwise set forth in an Award agreement, a Participant shall have no rights as a holder of Stock as a result of the grant of an Option until the Option is exercised, the exercise price and applicable withholding taxes are paid and the Shares subject to the Option are issued thereunder.

8. Stock Appreciation Rights. Subject to the terms of this Plan, the Administrator will determine all terms and conditions of each SAR, including but not limited to: (a) whether the SAR is granted independently of an Option or relates to an Option; (b) the grant date, which may not be any day prior to the date that the Administrator approves the grant; (c) the number of Shares to which the SAR relates; (d) the grant price, which may never be less than the Fair Market Value of the Shares subject to the SAR as determined on the date of grant; (e) the terms and conditions of exercise or maturity, including vesting; (f) the term, provided that an SAR must terminate no later than ten (10) years after the date of grant; and (g) whether the SAR will be settled in cash, Shares or a combination thereof.

9. Performance and Stock Awards. Subject to the terms of this Plan, the Administrator will determine all terms and conditions of each award of Shares, Restricted Stock, Restricted Stock Units, Performance Shares or Performance Units, including, but not limited to: (a) the number of Shares and/or units to which such Award relates; (b) whether, as a condition for the Participant to realize all or a portion of the benefit provided under the Award, one or more Performance Goals must be achieved during such period as the Administrator specifies; (c) the length of the vesting and/or performance period and, if different, the date on which payment of the benefit provided under the Award will be made; (d) with respect to Performance Units, whether to measure the value of each unit in relation to a designated dollar value or the Fair Market Value of one or more Shares; and (e) with respect to Restricted Stock Units and Performance Units, whether to settle such Awards in cash, in Shares (including Restricted Stock), or in a combination of cash and Shares.

10. Annual Incentive Awards. Subject to the terms of this Plan, the Administrator will determine all terms and conditions of an Annual Incentive Award, including but not limited to the Performance Goals, performance period, the potential amount payable, and the timing of payment; provided that the Administrator must require that payment of all or any portion of the amount subject to the Annual Incentive Award is contingent on the achievement or partial achievement of one or more Performance Goals during the period the Administrator specifies, although the Administrator may specify that all or a portion of the Performance Goals subject to an Award are deemed achieved upon a Participant’s death, Disability, or such other circumstances as the Administrator may specify; and provided further that any performance period applicable to an Annual Incentive Award must relate to a period of at least one year.

11. Long-Term Incentive Awards. Subject to the terms of this Plan, the Administrator will determine all terms and conditions of a Long-Term Incentive Award, including, but not limited to, the Performance Goals, performance period (which must be more than one year), the potential amount payable, and the timing of payment; provided that the Administrator must require that payment of all or any portion of the amount subject to the Long-Term Incentive Award is contingent on the achievement or partial achievement of one or more Performance Goals during the period the Administrator specifies, although the Administrator may specify that all or a portion of the Performance Goals subject to an Award are deemed achieved upon a Participant’s death, Disability or retirement (as defined by the Administrator), or such other circumstances as the Administrator may specify.

12. Dividend Equivalent Units. Subject to the terms of this Plan, the Administrator will determine all terms and conditions of each award of Dividend Equivalent Units, including but not limited to whether: (a) such Award will be granted in tandem with another Award; (b) payment of the Award will be made concurrently with dividend payments or credited to an account for the Participant which provides for the deferral of such amounts until a stated time; (c) the Award will be settled in cash or Shares; and (d) as a condition for the Participant to realize all or a portion of the benefit provided under the Award, one or more Performance Goals must be achieved during such period as the Administrator specifies; provided that Dividend Equivalent Units may not be granted in connection with an Option or Stock Appreciation Right; and provided further that no Dividend Equivalent Unit granted in tandem with another Award shall include vesting provisions more favorable to the Participant than the vesting provisions, if any, to which the tandem Award is subject; and provided further that no Dividend Equivalent Unit relating to another Award shall provide for payment with respect such other Award prior to its vesting.

13. Other Stock-Based Awards. Subject to the terms of this Plan, the Administrator may grant to a Participant shares of unrestricted Stock as replacement for other compensation to which the Participant is entitled, such as in payment of director fees, in lieu of cash compensation, in exchange for cancellation of a compensation right, or as a bonus.

14. Transferability. Awards are not transferable other than by will or the laws of descent and distribution, unless and to the extent the Administrator allows a Participant to: (a) designate in writing a beneficiary to exercise the Award or receive payment under the Award after the Participant’s death; (b) transfer an Award to the former spouse of the Participant as required by a domestic relations order incident to a divorce; or (c) transfer an Award; provided, however, that with respect to clause (c) above the Participant may not receive consideration for such a transfer of an Award.

15. Termination and Amendment of Plan; Amendment, Modification or Cancellation of Awards.

(a) Term of Plan. Unless the Board earlier terminates this Plan pursuant to Section 15(b), this Plan will terminate on the tenth (10th) anniversary of the Effective Date.

(b) Termination and Amendment. The Board or the Administrator may amend, alter, suspend, discontinue or terminate this Plan at any time, subject to the following limitations:

(i) the Board must approve any amendment of this Plan to the extent the Company determines such approval is required by: (A) prior action of the Board, (B) applicable corporate law, or (C) any other applicable law;

(ii) shareholders must approve any amendment of this Plan to the extent the Company determines such approval is required by: (A) Section 16 of the Exchange Act, (B) the Code, (C) the listing requirements of any principal securities exchange or market on which the Shares are then traded, or (D) any other applicable law; and

(iii) shareholders must approve any of the following Plan amendments: (A) an amendment to materially increase any number of Shares specified in Section 6(a) or the limits set forth in Section 6(b)(except as permitted by Section 17), or (B) an amendment that would diminish the protections afforded by Section 15(e).

(c) Amendment, Modification, Cancellation and Disgorgement of Awards.

(i) Except as provided in Section 15(e) and subject to the requirements of this Plan, the Administrator may modify, amend or cancel any Award; provided that, except as otherwise provided in the Plan or the Award agreement, any modification or amendment that materially diminishes the rights of the Participant, or the cancellation of an Award, shall be effective only if agreed to by the Participant or any other person(s) as may then have an interest in such Award, but the Administrator need not obtain Participant (or other interested party) consent for the modification, amendment or cancellation of an Award pursuant to the provisions of subsection (ii) or Section 17 or as follows: (A) to the extent the Administrator deems such action necessary to comply with any applicable law or the listing requirements of any principal securities exchange or market on which the Shares are then traded; (B) to the extent the Administrator deems necessary to preserve favorable accounting or tax treatment of any Award for the Company; or (C) to the extent the Administrator determines that such action does not

materially and adversely affect the value of an Award or that such action is in the best interest of the affected Participant (or any other person(s) as may then have an interest in the Award). Notwithstanding the foregoing, unless determined otherwise by the Administrator, any such amendment shall be made in a manner that will enable an Award intended to be exempt from Code Section 409A to continue to be so exempt, or to enable an Award intended to comply with Code Section 409A to continue to so comply.

(ii) Notwithstanding anything to the contrary in an Award agreement, the Administrator shall have full power and authority to terminate or cause the Participant to forfeit the Award, and require the Participant to disgorge to the Company any gains attributable to the Award, if the Participant engages in any action constituting, as determined by the Administrator in its discretion, Cause for termination, or a breach of any Award agreement or any other agreement between the Participant and the Company or an Affiliate concerning noncompetition, nonsolicitation, confidentiality, trade secrets, intellectual property, nondisparagement or similar obligations.

(iii) Any Awards granted pursuant to this Plan, and any Stock issued or cash paid pursuant to an Award, shall be subject to any recoupment or clawback policy that is adopted by, or any recoupment or similar requirement otherwise made applicable by law, regulation or listing standards to, the Company from time to time.

(d) Survival of Authority and Awards. Notwithstanding the foregoing, the authority of the Board and the Administrator under this Section 15 and to otherwise administer the Plan with respect to then-outstanding Awards will extend beyond the date of this Plan’s termination. In addition, termination of this Plan will not affect the rights of Participants with respect to Awards previously granted to them, and all unexpired Awards will continue in force and effect after termination of this Plan except as they may lapse or be terminated by their own terms and conditions.

(e) Repricing and Backdating Prohibited. Notwithstanding anything in this Plan to the contrary, and except for the adjustments provided for in Section 17, neither the Administrator nor any other person may (i) amend the terms of outstanding Options or SARs to reduce the exercise or grant price of such outstanding Options or SARs; (ii) cancel outstanding Options or SARs in exchange for Options or SARs with an exercise or grant price that is less than the exercise or grant price of the original Options or SARs; or (iii) cancel outstanding Options or SARs with an exercise or grant price above the current Fair Market Value of a Share in exchange for cash or other securities. In addition, the Administrator may not make a grant of an Option or SAR with a grant date that is effective prior to the date the Administrator takes action to approve such Award.

(f) Foreign Participation. To assure the viability of Awards granted to Participants employed or residing in foreign countries, the Administrator may provide for such special terms as it may consider necessary or appropriate to accommodate differences in local law, tax policy, accounting or custom. Moreover, the Administrator may approve such supplements to, or amendments, restatements or alternative versions of, this Plan as it determines is necessary or appropriate for such purposes. Any such amendment, restatement or alternative versions that the Administrator approves for purposes of using this Plan in a foreign country will not affect the terms of this Plan for any other country. In addition, all such supplements, amendments, restatements or alternative versions must comply with the provisions of Section 15(b)(ii).

16. Taxes.

(a) Withholding. In the event the Company or one of its Affiliates is required to withhold any Federal, state or local taxes or other amounts in respect of any income recognized by a Participant as a result of the grant, vesting, payment or settlement of an Award or disposition of any Shares acquired under an Award, the Company may deduct (or require an Affiliate to deduct) from any payments of any kind otherwise due the Participant cash, or with the consent of the Administrator, Shares otherwise deliverable or vesting under an Award, to satisfy such tax or other obligations. Alternatively, the Company or its Affiliate may require such Participant to pay to the Company or its Affiliate, in cash, promptly on demand, or make other arrangements satisfactory to the Company or its Affiliate regarding the payment to the Company or its Affiliate of the aggregate amount of any such taxes and other amounts. If Shares are deliverable upon exercise or payment of an Award, then the Administrator may permit a Participant to satisfy all or a portion of the Federal, state and local withholding tax obligations arising in connection with such Award by electing to (i) have the Company or its Affiliate withhold Shares otherwise issuable under the Award, (ii) tender back Shares received in connection with such Award or (iii) deliver other previously owned Shares, in each case having a Fair Market Value equal to the amount to be withheld; provided that the amount to be withheld in Shares may not exceed the total maximum statutory tax withholding obligations associated with the transaction to the extent needed for the Company and its Affiliates to avoid an accounting charge. If an election is provided, the election must be made on or before the date as of which the amount of tax to be withheld is determined and otherwise as the Administrator requires. In any case, the Company and its Affiliates may defer making payment or delivery under any Award if any such tax may be pending unless and until indemnified to its satisfaction.

(b) No Guarantee of Tax Treatment. Notwithstanding any provisions of this Plan to the contrary, the Company does not guarantee to any Participant or any other Person with an interest in an Award that (i) any Award intended to be exempt from Code Section 409A shall be so exempt, (ii) any Award intended to comply with Code Section 409A or Code Section 422 shall so comply, or (iii) any Award shall otherwise receive a specific tax treatment under any other applicable tax law, nor in any such case will the Company or any Affiliate be required to indemnify, defend or hold harmless any individual with respect to the tax consequences of any Award.

17. Adjustment and Change of Control Provisions.

(a) Adjustment of Shares. If (i) the Company shall at any time be involved in a merger or other transaction in which the Shares are changed or exchanged; (ii) the Company shall subdivide or combine the Shares or the Company shall declare a dividend payable in Shares, other securities (other than stock purchase rights issued pursuant to a shareholder rights agreement) or other property; (iii) the Company shall effect a cash dividend the amount of which, on a per Share basis, exceeds ten percent (10%) of the Fair Market Value of a Share at the time the dividend is declared, or the Company shall effect any other dividend or other distribution on the Shares in the form of cash, or a repurchase of Shares, that the Board determines by resolution is special or extraordinary in nature or that is in connection with a transaction that the Company characterizes publicly as a recapitalization or reorganization involving the Shares; or (iv) any other event shall occur, which, in the case of this clause (iv), in the judgment of the Administrator necessitates an adjustment to prevent dilution or enlargement of the benefits or potential benefits intended to be made available under this Plan, then the Administrator shall, in such manner as it may deem equitable to prevent dilution or enlargement of the benefits or potential benefits intended to be made available under this Plan, adjust any or

all of: (A) the number and type of Shares subject to this Plan (including the number and type of Shares described in Sections 6(a)and 6(b)) and which may after the event be made the subject of Awards; (B) the number and type of Shares subject to outstanding Awards; (C) the grant, purchase, or exercise price with respect to any Award; and (D) the Performance Goals of an Award. In any such case, the Administrator may also (or in lieu of the foregoing) make provision for a cash payment to the holder of an outstanding Award in exchange for the cancellation of all or a portion of the Award (without the consent of the holder of an Award) in an amount determined by the Administrator effective at such time as the Administrator specifies (which may be the time such transaction or event is effective). However, in each case, with respect to Awards of Incentive Stock Options, no such adjustment may be authorized to the extent that such authority would cause this Plan to violate Code Section 422(b). Further, the number of Shares subject to any Award payable or denominated in Shares must always be a whole number. In any event, previously granted Options or SARs are subject to only such adjustments as are necessary to maintain the relative proportionate interest the Options and SARs represented immediately prior to any such event and to preserve, without exceeding, the value of such Options or SARs.

Without limitation, in the event of any reorganization, merger, consolidation, combination or other similar corporate transaction or event, whether or not constituting a Change of Control (other than any such transaction in which the Company is the continuing corporation and in which the outstanding Stock is not being converted into or exchanged for different securities, cash or other property, or any combination thereof), the Administrator may substitute, on an equitable basis as the Administrator determines, for each Share then subject to an Award and the Shares subject to this Plan (if the Plan will continue in effect), the number and kind of shares of stock, other securities, cash or other property to which holders of Stock are or will be entitled in respect of each Share pursuant to the transaction.

(b) Issuance or Assumption. Notwithstanding any other provision of this Plan, and without affecting the number of Shares otherwise reserved or available under this Plan, in connection with any merger, consolidation, acquisition of property or stock, or reorganization, the Administrator may authorize the issuance or assumption of awards under this Plan upon such terms and conditions as it may deem appropriate.

(c) Effect of Change of Control.

(i) In order to preserve a Participant’s rights under an Award in the event of a Change of Control, the Administrator in its discretion may, at the time an Award is made or at any time thereafter, take one or more of the following actions: (a) provide for the acceleration of any time period, or the deemed achievement of any Performance Goals, relating to the exercise or realization of the Award; (b) provide for the purchase or cancellation of the Award for an amount of cash or other property that could have been received upon the exercise or realization of the Award had the Award been currently exercisable or payable (or the cancellation of Awards in exchange for no payment to the extent that no cash or other property would be received upon the exercise or realization of the Award in such circumstances); (c) adjust the terms of the Award in the manner determined by the Administrator to reflect the Change of Control; (d) cause the Award to be assumed, or new right substituted therefor, by another entity; or (e) make such other provision as the Administrator may consider equitable and in the best interests of the Company.

(ii) Except to the extent the Participant has in effect an employment or similar agreement with the Company or any Affiliate or is subject to a policy that provides for a more favorable result to the Participant upon a Change of Control, in the event that the Company’s legal counsel or accounting advisor determines that any payment, benefit or transfer by the Company under this Plan or any other plan, agreement, or arrangement to or for the benefit of the Participant (in the aggregate, the “Total Payments”) would be subject to the tax (“Excise Tax”) imposed by Code Section 4999 but for this subsection (d), then, notwithstanding any other provision of this Plan to the contrary, the Total Payments shall be delivered either (i) in full or (ii) in an amount such that the value of the aggregate Total Payments that the Participant is entitled to receive shall be One Dollar ($1.00) less than the maximum amount that the Participant may receive without being subject to the Excise Tax, whichever of clause (i) or (ii) results in the receipt by the Participant of the greatest benefit on an after-tax basis (taking into account applicable federal, state and local income taxes and the Excise Tax). In the event that clause (ii) results in a greater after-tax benefit to the Participants, payments or benefits included in the Total Payments shall be reduced or eliminated by applying the following principles, in order: (A) the payment or benefit with the higher ratio of the parachute payment value to present economic value (determined using reasonable actuarial assumptions) shall be reduced or eliminated before a payment or benefit with a lower ratio; (B) the payment or benefit with the later possible payment date shall be reduced or eliminated before a payment or benefit with an earlier payment date; and (C) cash payments shall be reduced prior to non-cash benefits; provided that if the foregoing order of reduction or elimination would violate Code Section 409A, then the reduction shall be made pro rata among the payments or benefits included in the Total Payments (on the basis of the relative present value of the parachute payments).

(d) Certain Modifications. Notwithstanding anything contained in this Section 17, the Board may, in its sole and absolute discretion, amend, modify or rescind the provisions of this Section 17 if it determines that the operation of this Section 17 may prevent a transaction in which the Company, a Subsidiary or any Affiliate is a party from receiving desired tax treatment, including without limitation requiring that each Participant receive a replacement or substitute Award issued by the surviving or acquiring corporation.

18. Stock Transfer Restrictions and Repurchase Right.

(a) Restriction on Transfer. Shares issued under the Plan may not be sold or otherwise disposed of except as permitted by the Company. As a condition to the receipt of Shares hereunder, the Participant (or individual entitled to receive Shares following the Participant’s death) may be required to execute a stockholders agreement or other agreement required by the Board.

(b) Restrictions; Legends. All Shares delivered under the Plan shall be subject to such restrictions as the Company may deem advisable, and the Company may cause a legend or legends to be put on any certificates for shares to make appropriate references to such restrictions.

(c) Right to Purchase Shares. Pursuant to the provisions of this Section 18(c), the Company shall have the right (the “Purchase Right”), but not the obligation, to purchase all, but not less than all, of the Shares acquired by the Participant under this Plan upon the occurrence of any of the following events (a “Trigger Date”):

(i) the Participant’s separation from employment or service from the Company and its Affiliates, or

(ii) the Participant’s attempted or purported sale, assignment, exchange, disposition, distributions, transfer, pledge, encumbrance, hypothecation or other disposition or alienation of Shares acquired under the Plan without the Company’s prior written consent.

The purchase price (the “Purchase Price”) for the Shares subject to such Purchase Right shall be the Fair Market Value of the Shares on the applicable Trigger Date, unless (A) the Participant’s employment has been terminated for Cause, (B) the Company determines that the Participant’s employment could have been terminated for Cause, or (C) the Participant breaches any restrictive covenants set forth in any agreement by and between the Participant and the Company or any of its Subsidiaries, then in each case the purchase price shall be the lower of (x) the Fair Market Value of the Shares on the applicable Trigger Date and (y) the cost paid by the Participant to acquire the Shares.

The Company may exercise its Purchase Right by giving written notice thereof to the Participant within one (1) year after the Trigger Date (the one (1)-year period in each case, the “Call Period”) of the number of Shares with respect to which the Purchase Right is being exercised, and the Company intends that such date shall not be earlier than the first date on which the Purchase Price can be set without changing the accounting treatment for the acquisition of the Shares being repurchased from an equity-based accounting treatment to a liability-based accounting treatment (as contemplated by FASB ASC Topic 718 or any successor thereto). The Company shall promptly determine the Purchase Price for the Shares subject to the Purchase Right and shall notify the Participant of such determination. The Company may elect to pay all or any portion of such Purchase Price in cash; provided that if the Company does not elect to pay the entire Purchase Price in cash, the Company shall, at a minimum, pay to the Participant at least ten percent (10%) of the Purchase Price in cash, and shall deliver to the Participant a promissory note with a principal amount equal to the remainder of the Purchase Price, which promissory note shall provide that: (A) the principal shall be paid in no more than five (5) equal annual installments commencing one (1) year from the delivery of such promissory note, (B) interest on the unpaid principal amount shall accrue at an annual rate equal to the prime interest rate interest charged by the principal bank with which the Company conducts business as determined on the date the promissory note is issued, and shall be payable together with and in addition to each principal payment, and (C) the Company shall have the right, without penalty, to prepay all or any portion of the principal and accrued interest owing thereunder at any time.

Upon the delivery of the payment and/or the promissory note described herein by the Company, the Participant shall take all actions necessary, and execute all related documents specified by the Company as being reasonably necessary to consummate the sale of the Shares to the Company, and, by accepting an award under this Plan, the Participant appoints the Company’s Secretary as his or her true and lawful attorney-in-fact to exercise and deliver all such instruments, documents and writings, and to take all such actions as shall be required to consummate the sale of the Shares to the Company as contemplated in this Section. Such power is a special Power of Attorney coupled with an interest, is irrevocable, and shall run with the shares to any subsequent owners thereof.

(d) Termination Upon Initial Public Offering. The Company’s right to exercise its repurchase rights under Section 18(c) shall terminate upon the closing of the Company’s first underwritten public offering of equity securities pursuant to an effective registration statement under the Act.

19. Drag-Along Rights.

(a) If the Board or a group of shareholders that, in the aggregate, owns a majority of the voting power of the Company, receives an offer in a transaction or series of transactions pursuant to which a third party proposes to acquire all of the equity securities of the Company (a “Drag-Along Transaction”), any shareholder or any group of shareholders of the Company that, in the aggregate, owns a majority of the voting power of the Company (collectively, the “Drag-Along Shareholder”) shall have the right, at its option, to require the other shareholders of the Company, including any Participant who acquires Shares under this Plan (each such shareholder, a “Dragged Shareholder,” and collectively with any other Dragged Shareholder, the “Dragged Shareholders”), and each Dragged Shareholder hereby agrees, whether such Drag-Along Transaction is structured as a transfer of equity securities, merger, consolidation, combination, reorganization, recapitalization, reclassification or otherwise, to transfer all of such Dragged Shareholder’s equity securities on substantially the same terms and conditions as are applicable to the Drag-Along Shareholder; provided that the price per share for each equity security to be sold in such Drag-Along Transaction shall be determined by first allocation a portion of the aggregate consideration to be paid by the buyer(s) in such Drag-Along Transaction to the holders of the Series A Preferred Stock in the amount of any accrued but unpaid dividends thereon and then allocation the remainder of such aggregate consideration to the equity securities to be sold in such Drag-Along Transaction ratably on an as-converted basis.

(b) Each Dragged Shareholder shall reasonably cooperate in, and shall take all actions requested by the Drag-Along Shareholder that are reasonably necessary or desirable to consummate, the Drag-Along Transaction, including: (i) to the extent applicable, voting its equity securities (or executing and delivering any written consents in lieu thereof) in favor of the Drag-Along Transaction and all actions deemed reasonably necessary by the Drag- Along Shareholder in connection with the Drag-Along Transaction; (ii) if applicable, taking all actions necessary to cause the Board to approve the Drag-Along Transaction; and (iii) entering into definitive agreements as are customary for the nature of the proposed Drag-Along Transaction and any ancillary agreements with respect thereto, and using commercially reasonable efforts (including indemnification obligations on a ratable basis) to cause the transactions contemplated by such definitive agreements and ancillary agreements to be consummated.

(c) Without limitation of the foregoing, each shareholder waives any dissenters, appraisal or other similar rights it may have in connection with any sale of the Company under applicable law that is approved or instituted pursuant to this Section 19.

(d) The Drag-Along Shareholder shall provide written notice of such Drag-Along Transaction to each Dragged Shareholder (a “Drag-Along Transaction Notice”). The Drag-Along Transaction Notice shall identify the proposed transferee, the consideration for which a transfer is proposed to be made and all other material terms and conditions of the Drag-Along Transaction. Each Dragged Shareholder shall be required to participate in the Drag-Along Transaction on the terms and conditions set forth in the Drag-Along Transaction Notice.

(e) Notwithstanding anything to the contrary in this Section 19, there shall be no liability on the part of the Drag-Along Shareholder to the Company or the Dragged Shareholders if the Drag-Along Transaction is not consummated for whatever reason, regardless of whether the Drag-Along Shareholder has delivered a Drag-Along Transaction Notice. The decision to effect a Drag-Along Transaction is in the sole and absolute discretion of the Drag-Along Shareholder.

(f) The foregoing shall not affect the rights of the Company or the Administrator under Section 17 (or elsewhere) of this Plan.

20. Miscellaneous.

(a) Other Terms and Conditions. The Administrator may provide in any Award agreement such other provisions (whether or not applicable to the Award granted to any other Participant) as the Administrator determines appropriate to the extent not otherwise prohibited by the terms of the Plan.

(b) Employment and Service. The issuance of an Award shall not confer upon a Participant any right with respect to continued employment or service with the Company or any Affiliate, or the right to continue as a Director. Unless determined otherwise by the Administrator, for purposes of the Plan and all Awards, the following rules shall apply:

(i) a Participant who transfers employment between the Company and its Affiliates, or between Affiliates, will not be considered to have terminated employment;

(ii) a Participant who ceases to be a Non-Employee Director because he or she becomes an employee of the Company or an Affiliate shall not be considered to have ceased service as a Director with respect to any Award until such Participant’s termination of employment with the Company and its Affiliates;

(iii) a Participant who ceases to be employed by the Company or an Affiliate and immediately thereafter becomes a Non-Employee Director, a non-employee director of an Affiliate, or a consultant to the Company or any Affiliate shall not be considered to have terminated employment until such Participant’s service as a director of, or consultant to, the Company and its Affiliates has ceased; and

(iv) a Participant employed by an Affiliate will be considered to have terminated employment when such entity ceases to be an Affiliate.

Notwithstanding the foregoing, for purposes of an Award that constitutes “nonqualified deferred compensation” subject to Code Section 409A, if a Participant’s termination of employment or service triggers the payment of such nonqualified deferred compensation under such Award, then the Participant will be deemed to have terminated employment or service upon his or her “separation from service” within the meaning of Code Section 409A. Notwithstanding any other provision in this Plan or an Award to the contrary, if any Participant is a “specified employee” within the meaning of Code Section 409A as of the date of his or her “separation from service” within the meaning of Code Section 409A, then, to the extent required to avoid the imposition of additional taxes under Code Section 409A, any payment of nonqualified deferred compensation made to the Participant on account of such separation from service shall not be made before a date that is six (6) months after the date of the separation from service.

(c) No Fractional Shares. No fractional Shares or other securities may be issued or delivered pursuant to this Plan, and the Administrator may determine whether cash, other securities or other property will be paid or transferred in lieu of any fractional Shares or other securities, or whether such fractional Shares or other securities or any rights to fractional Shares or other securities will be canceled, terminated or otherwise eliminated.

(d) Unfunded Plan; Awards Not Includable for Benefits Purposes. This Plan is unfunded and does not create, and should not be construed to create, a trust or separate fund with respect to this Plan’s benefits. This Plan does not establish any fiduciary relationship between the Company and any Participant or other person. To the extent any person holds any rights by virtue of an Award granted under this Plan, such rights are no greater than the rights of the Company’s general unsecured creditors. Income recognized by a Participant pursuant to an Award shall not be included in the determination of benefits under any employee pension benefit plan (as such term is defined in Section 3(2) of the Employee Retirement Income Security Act of 1974, as amended) or group insurance or other benefit plans applicable to the Participant which are maintained by the Company or any Affiliate, except as may be provided under the terms of such plans or determined by resolution of the Board.

(e) Requirements of Law and Securities Exchange. The granting of Awards and the issuance of Shares in connection with an Award are subject to all applicable laws, rules and regulations and to such approvals by any governmental agencies or national securities exchanges as may be required. Notwithstanding any other provision of this Plan or any award agreement, the Company has no liability to deliver any Shares under this Plan or make any payment unless such delivery or payment would comply with all applicable laws and the applicable requirements of any securities exchange or similar entity, and unless and until the Participant has taken all actions required by the Company in connection therewith. The Company may impose such restrictions on any Shares issued under the Plan as the Company determines necessary or desirable to comply with all applicable laws, rules and regulations or the requirements of any national securities exchanges.

(f) Governing Law; Venue. This Plan, and all agreements under this Plan, will be construed in accordance with and governed by the laws of the State of Florida, without reference to any conflict of law principles. Any legal action or proceeding with respect to this Plan, any Award or any award agreement, or for recognition and enforcement of any judgment in respect of this Plan, any Award or any award agreement, may only be brought and determined in a court sitting in the State of Florida.

(g) Limitations on Actions. Any legal action or proceeding with respect to this Plan, any Award or any award agreement, must be brought within one (1) year after the day the complaining party first knew or should have known of the events giving rise to the complaint.

(h) Construction. Whenever any words are used herein in the masculine, they shall be construed as though they were used in the feminine in all cases where they would so apply; and wherever any words are used in the singular or plural, they shall be construed as though they were used in the plural or singular, as the case may be, in all cases where they would so apply. Titles of sections are for general information only, and this Plan is not to be construed with reference to such titles. The title, label or characterization of an Award in an award agreement or in the Company’s public filings or other disclosures shall not be determinative as to which specific Award type is represented by the award agreement. Instead, the Administrator may determine which specific type(s) of Award(s) is (are) represented by any award agreement, at the time such Award is granted or at any time thereafter. Except to the extent otherwise provided in the applicable award agreement, in the case of any Award that includes a “series of installment payments” (within the meaning of Section 1.409A-2(b)(2)(iii) of the Treasury Regulations), the Award holder’s right to the series of installment payments shall be treated as a right to a series of separate payments and not as a right to a single payment.

(i) Severability. If any provision of this Plan or any award agreement or any Award (a) is or becomes or is deemed to be invalid, illegal or unenforceable in any jurisdiction, or as to any person or Award, or (b) would cause this Plan, any award agreement or any Award to violate or be disqualified under any law the Administrator deems applicable, then such provision should be construed or deemed amended to conform to applicable laws, or if it cannot be so construed or deemed amended without, in the determination of the Administrator, materially altering the intent of this Plan, award agreement or Award, then such provision should be stricken as to such jurisdiction, person or Award, and the remainder of this Plan, such award agreement and such Award will remain in full force and effect.

EX-10.2

Exhibit 10.2

TYPTAP INSURANCE GROUP, INC.

2021 EQUITY INCENTIVE PLAN

RESTRICTED STOCK AWARD

Dear [______________]:

You have been granted an award of shares of the common stock (“Common Stock”) of TypTap Insurance Group, Inc. (the “Company”) constituting a Restricted Stock Award (this “Award”) under the TypTap Insurance Group, Inc. 2021 Equity Incentive Plan (the “Plan”) with terms and conditions described below. This Award is granted under and governed by the terms and conditions of the Plan. Additional provisions regarding this Award and definitions of capitalized terms used and not defined in this Award can be found in the Plan.

Grant Date:	[____________]
Number of Shares of Restricted Stock	[____________]
(“Restricted Shares”):
Vesting Schedule:	The Restricted Shares will vest as follows.
	•   [_____] of the Restricted Shares will vest in accordance with the following schedule provided that, on each such vesting date, you have been continuously employed by or in the service of the Company or an Affiliate through and including such date:
	(i) _____ shares on May 20, 2021
	(ii)  _____ shares on May 20, 2022
	(iii)  _____ shares on May 20, 2023
	(iv) _____ shares on May 20, 2024
	•   [_____] of the Restricted Shares (the “Time-Vested Shares”) will vest as follows: one-fourth of the Time-Vested Shares will vest on the first anniversary of the Grant Date, one-fourth of the Time-Vested Shares will vest on the second anniversary of the Grant Date, one-fourth of the Time-Vested Shares will vest on the third anniversary of the Grant Date, and one-fourth of the Time-Vested Shares will vest on the fourth anniversary of the Grant Date; provided that, on each such vesting date, you have been continuously employed by or in the service of the Company or an Affiliate through and including such date.
	•   [_____] of the Restricted Shares will vest, if ever, on the first anniversary of the date on which the Company Stock Value (as defined below) first equals or exceeds $15.00 for 30 consecutive trading days on the Applicable Exchange (or, if the Common Stock is not traded on an Applicable Exchange, the first anniversary of the Applicable Valuation Date (as defined below) on which the Company Stock Value first equals or exceeds $15.00, as evidenced by a Written Determination), provided that you have been continuously employed by or in the service of the Company or an Affiliate through and including such vesting date.

	•   [_____] of the Restricted Shares will vest, if ever, on the first anniversary of the date on which the Company Stock Value first equals or exceeds $20.00 for 30 consecutive trading days on the Applicable Exchange (or, if the Common Stock is not traded on an Applicable Exchange, the first anniversary of the Applicable Valuation Date (as defined below) on which the Company Stock Value first equals or exceeds $20.00, as evidenced by a Written Determination), provided that you have been continuously employed by or in the service of the Company or an Affiliate through and including such vesting date.
	All unvested Restricted Shares will immediately and automatically be forfeited on the sixth anniversary of the Grant Date. Other events of forfeiture appear in this Award and in the Plan. For purposes of this Award, the term “Company Stock Value” means (i) if the Company Stock Value is being measured on or following the date on which Company’s Common Stock is traded on an Applicable Exchange, then the Company Stock Value will be the closing price of the Company’s Common Stock on the Applicable Exchange, or (ii) if the Company’s Common Stock is not then traded on an Applicable Exchange, then the Company Stock Value will be equal to the fair market value of a share of Common Stock as will be determined in writing by the Administrator as of a valuation date specified by the Administrator (the “Applicable Valuation Date”), which determination will be made specifically for the purpose of determining whether a vesting condition hereunder is satisfied (a “Written Determination”). For purposes of foregoing clause (ii), the determination of fair market value will assume that all outstanding preferred shares are converted into Common Stock in accordance with the conversion terms thereof immediately prior to the Applicable Valuation Date, and such determination will be made without valuation discounts for lack of marketability or lack of control (or similar discounts). The foregoing share numbers and Company Stock Value numbers will be subject to adjustment by the Board or Administrator to take into account stock dividends or any subdivisions or combinations of the Common Stock by the Company that occur following the Grant Date. Notwithstanding the foregoing, the Restricted Shares will vest in full upon a Change in Control, if you are continuously employed with, or in the service of, the Company or an Affiliate thereof through the day preceding the date of the Change in Control.
Termination of Employment:	Upon your termination of employment with, or cessation of services to, the Company or an Affiliate thereof prior to the date the Restricted Shares are vested, you will forfeit the unvested Restricted Shares.

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Release of Shares:	The Restricted Shares will be held in an account at the Company’s transfer agent pending vesting (or in an account on the Company’s stock book at such time that the Company does not have a transfer agent). As soon as practicable after any Restricted Shares vest, the applicable restrictions on the Restricted Shares will be removed and such Shares will be issued according to your instructions.
Transferability of Restricted Shares:	You may not sell, transfer or otherwise alienate or hypothecate any of your Restricted Shares until they are vested. In addition, by accepting this Award, you agree not to sell any Shares acquired under this Award other than as set forth in the Plan and at a time when applicable laws, Company policies or an agreement between the Company and its underwriters do not prohibit a sale. The Company also may require you to enter into a shareholder’s agreement (or similar agreement) that will include additional restrictions on the transfer of Shares acquired under this Award that will remain effective after such Shares have vested.
Voting and Dividends:	While the Restricted Shares are subject to forfeiture, you may exercise full voting rights and will be entitled all dividends and other distributions paid with respect to the Restricted Shares, in each case so long as the applicable record date occurs before you forfeit the Restricted Shares; provided that any dividends and distributions other than cash dividends will be held in the custody of the Company and will be subject to the same risk of forfeiture, restrictions on transferability and other terms of this Award that apply to the Restricted Shares with respect to which such distributions were made. All such non-cash dividends or other distributions will be paid to you within 45 days following the full vesting of the Restricted Shares with respect to which such distributions were made.
Transferability of Award:	You may not transfer or assign this Award for any reason, other than as set forth in the Plan. Any attempted transfer or assignment will be null and void.
Market Stand-Off:	In connection with any underwritten public offering by the Company of its equity securities pursuant to an effective registration statement filed under the Securities Act of 1933, as amended, you agree that you will not directly or indirectly sell, make any short sale of, loan, hypothecate, pledge, offer, grant or sell any option or other contract for the purchase of, purchase any option or other contract for the sale of, or otherwise dispose of or transfer or agree to engage in any of the foregoing transactions with respect to, any Shares acquired under this Award without the prior written consent of the Company and the Company’s underwriters. Such restriction will be in effect for such period of time following the date of the final prospectus for the offering as may be determined by the Company. In no event, however, will such period exceed one hundred eighty (180) days. You agree to execute any lock-up agreement or similar agreement requested by the Company or the Company’s underwriters to evidence the foregoing obligations plus such other obligations that are generally applied to Company stockholders in connection with the underwritten public offering.

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Tax Withholding:	You understand that you (and not the Company or any Affiliate) will be responsible for your own federal, state, local or foreign tax liability and any other tax consequences that may arise as a result of the transactions contemplated by this Award. You will rely solely on the determinations of your tax advisors or your own determinations, and not on any statements or representations by the Company or any of its agents, with regard to all such tax matters. You understand that you may alter the tax treatment of the Shares subject to this Award by filing an election under Section 83(b) of the Internal Revenue Code of 1986, as amended (the “Code”). Such election must be filed within thirty (30) days after the date of this Award to be effective. You should consult with your tax advisor to determine the tax consequences of acquiring the Shares and the advantages and disadvantages of filing the Code Section 83(b) election. You acknowledge that it is your sole responsibility, and not the Company’s, to file a timely election under Code Section 83(b), even if you request the Company or its representatives to make this filing on your behalf. To the extent that the receipt or the vesting of the Restricted Shares, or the payment of dividends on the Restricted Shares, results in income to you for federal, state or local income tax purposes, except as otherwise provided in the following paragraph, you will deliver to the Company at the time the Company is obligated to withhold taxes in connection with such receipt, vesting or payment, as the case may be, such amount as the Company requires to meet its withholding obligation under applicable tax laws or regulations. If you fail to do so, the Company has the right and authority to deduct or withhold from other compensation payable to you (including Restricted Shares as described in the following paragraph) an amount sufficient to satisfy its withholding obligations or to delay delivery of the shares. If you do not make an election under Code Section 83(b) in connection with this Award and only if permitted by the Company, you may satisfy the withholding requirement in connection with the vesting of the Restricted Shares, in whole or in part, by electing to have the Company withhold for its own account the number of Restricted Shares that would otherwise be released to you on the date the tax is to be determined having an aggregate Fair Market Value (on the date the tax is to be determined) equal to the tax that the Company must withhold in connection with the vesting of such Restricted Shares. The Fair Market Value of any fractional Share not used to satisfy the withholding obligation (as determined on the date the tax is determined) will be paid to you in cash.
Miscellaneous:	•   This Award may be amended only by written consent signed by both you and the Company, unless the amendment is not to your detriment. Notwithstanding the foregoing, this Award may be amended or terminated by the Board or the Committee without your consent in accordance with the provisions of the Plan.
	•   The failure of the Company to enforce any provision of this Award at any time will in no way constitute a waiver of such provision or of any other provision hereof.

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•   In the event any provision of this Award is held illegal or invalid for any reason, such illegality or invalidity will not affect the legality or validity of the remaining provisions of this Award, and this Award will be construed and enforced as if the illegal or invalid provision had not been included in this Award.

•   As a condition to the grant of this Award, you agree (with such agreement being binding upon your legal representatives, guardians, legatees or beneficiaries) that this Award will be interpreted by the Committee and that any interpretation by the Committee of the terms of this Award or the Plan, and any determination made by the Committee pursuant to this Award or the Plan, will be final, binding and conclusive.

•   This Award may be executed in counterparts.

BY SIGNING BELOW AND ACCEPTING THIS RESTRICTED STOCK AWARD, YOU AGREE TO ALL OF THE TERMS AND CONDITIONS DESCRIBED HEREIN AND IN THE PLAN. YOU ALSO ACKNOWLEDGE RECEIPT OF THE PLAN.

TYPTAP INSURANCE GROUP, INC.
By:
	Paresh Patel, Chief Executive Officer	[Name of Recipient]
Date:

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EX-10.3

Exhibit 10.3

TYPTAP INSURANCE GROUP, INC.

2021 OMNIBUS INCENTIVE PLAN

1. Purposes and Effective Date.

(a) Purposes. The TypTap Insurance Group, Inc. 2021 Omnibus Incentive Plan has two complementary purposes: (i) to attract and retain outstanding individuals to serve as officers, directors, employees and consultants and (ii) to increase shareholder value. The Plan will provide participants incentives to increase shareholder value by offering the opportunity to acquire shares of the Company’s common stock, receive monetary payments based on the value of such common stock, or receive other incentive compensation, on the potentially favorable terms that this Plan provides.

(b) Effective Date. The Plan shall become effective on September 27, 2021 (the “Effective Date”). However, no Options or Stock Appreciation Rights will be exercisable; no Restricted Stock, Restricted Stock Units, Performance Shares, Performance Units valued in relating to Shares or other Stock-based awards will be granted; and no Cash Incentive Award will be paid unless and until the Plan has been approved by the shareholders of the Company, which approval must occur on or within twelve (12) months after the Effective Date. This Plan will terminate as provided in Section 15.

2. Definitions. Capitalized terms used and not otherwise defined in this Plan or in any Award agreement have the following meanings:

(a) “Act” means the Securities Act of 1933, as amended from time to time. Any reference to a specific provision of the Act shall include any successor provision thereto.

(b) “Administrator” means the Board or the Committee; provided that, to the extent the Board or the Committee has delegated authority and responsibility as an Administrator of the Plan to one or more committees or officers of the Company as permitted by Section 3(b), the term “Administrator” shall also mean such committee, committees, officer or officers.

(c) “Affiliate” has the meaning ascribed to such term in Rule 12b-2 under the Exchange Act. Notwithstanding the foregoing, for purposes of determining those individuals to whom an Option or a Stock Appreciation Right may be granted, the term “Affiliate” means any entity that, directly or through one or more intermediaries, is controlled by or is under common control with, the Company within the meaning of Code Sections 414(b) or (c); provided that, in applying such provisions, the phrase “at least 20 percent” shall be used in place of “at least 80 percent” each place it appears therein.

(d) “Applicable Exchange” means the Nasdaq Stock Market, the New York Stock Exchange or such other exchange or automated trading system on which the Stock is principally traded at the applicable time.

(e) “Award” means a grant of Options, Stock Appreciation Rights, Performance Shares, Performance Units, Stock, Restricted Stock, Restricted Stock Units, an Incentive Award, Dividend Equivalent Units or any other type of award permitted under this Plan. Any Award granted under this Plan shall be provided or made in such manner and at such time as complies with the applicable requirements of Code Section 409A to avoid a plan failure described in Code Section 409A(a)(1), including, without limitation, deferring payment to a specified employee or until a specified distribution event, as provided in Code Section 409A(a)(2), and the provisions of Code Section 409A are incorporated into this Plan to the extent necessary for any Award that is subject to Code Section 409A to comply therewith.

(f) “Beneficial Owner” means a Person, with respect to any securities which:

(i) such Person or any of such Person’s Affiliates has the right to acquire (whether such right is exercisable immediately or only after the passage of time) pursuant to any agreement, arrangement or understanding, or upon the exercise of conversion rights, exchange rights, rights, warrants or options, or otherwise; provided, however, that a Person shall not be deemed the Beneficial Owner of, or to beneficially own, securities tendered pursuant to a tender or exchange offer made by or on behalf of such Person or any of such Person’s Affiliates until such tendered securities are accepted for purchase;

(ii) such Person or any of such Person’s Affiliates, directly or indirectly, has the right to vote or dispose of or has “beneficial ownership” of (as determined pursuant to Rule 13d-3 of the General Rules and Regulations under the Act), including pursuant to any agreement, arrangement or understanding; provided, however, that a Person shall not be deemed the Beneficial Owner of, or to beneficially own, any security under this clause (ii) as a result of an agreement, arrangement or understanding to vote such security if the agreement, arrangement or understanding: (A) arises solely from a revocable proxy or consent given to such Person in response to a public proxy or consent solicitation made pursuant to, and in accordance with, the applicable rules and regulations under the Act and (B) is not also then reportable on a Schedule l3D under the Act (or any comparable or successor report); or

(iii) are beneficially owned, directly or indirectly, by any other Person with which such Person or any of such Person’s Affiliates has any agreement, arrangement or understanding for the purpose of acquiring, holding, voting (except pursuant to a revocable proxy as described in clause (ii) above) or disposing of any voting securities of the Company.

(g) “Board” means the Board of Directors of the Company.

(h) “Cause” shall have the same meaning as set forth in a Participant’s employment agreement or individual Award with the Company, or, if the Participant does not have an employment agreement with the Company (or the Participant’s individual Award does not otherwise define the term), “Cause” shall mean a good faith finding by the Company that the Participant has (i) failed, neglected, or refused to perform the lawful employment duties related to the Participant’s position or as from time to time assigned to the Participant (other than due to disability within the meaning of Code Section 22(e)(3)); (ii) committed any willful, intentional, or grossly negligent act having the effect of injuring the interest, business, or reputation of the Company or any Affiliate; (iii) violated or failed to comply in any material respect with the Company’s or an Affiliate’s published rules, regulations, or policies, as in effect or amended from time to time, to the extent applicable to the Participant; (iv) committed an act constituting a felony or misdemeanor involving moral turpitude, fraud, theft, or dishonesty; (v) misappropriated or embezzled any property of the Company or an Affiliate (whether or not an act constituting a felony or misdemeanor); or (vi) breached any material provision of any applicable confidentiality, non-compete, non-solicit, general release, covenant not-to-sue, or other agreement with the Company or any Affiliate.

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(i) “Change of Control” means, unless specified otherwise in an Award agreement, the occurrence of any of the following:

(i) any Person (other than (A) the Company or any of its subsidiaries, (B) a trustee or other fiduciary holding securities under any employee benefit plan of the Company or any of its subsidiaries, (C) an underwriter temporarily holding securities pursuant to an offering of such securities, (D) HCI Group, Inc. or any of its subsidiaries, or (E) a corporation owned, directly or indirectly, by the shareholders of the Company in substantially the same proportions as their ownership of stock in the Company (“Excluded Persons”)) is or becomes the Beneficial Owner, directly or indirectly, of securities of the Company (not including in the securities beneficially owned by such Person any securities acquired directly from the Company or its Affiliates after the Effective Date, pursuant to express authorization by the Board that refers to this exception) representing fifty percent (50%) or more of either the then outstanding shares of common stock of the Company or the combined voting power of the Company’s then outstanding voting securities; or

(ii) the following individuals cease for any reason to constitute a majority of the number of directors of the Company then serving: (A) individuals who, on the Effective Date, constituted the Board and (B) any new director (other than a director whose initial assumption of office is in connection with an actual or threatened election contest, including but not limited to a consent solicitation, relating to the election of directors of the Company, as such terms are used in Rule 14a-11 of Regulation 14A under the Act) whose appointment or election by the Board or nomination for election by the Company’s shareholders was approved by a vote of at least two-thirds (2/3) of the directors then still in office who either were directors on the Effective Date, or whose appointment, election or nomination for election was previously so approved (collectively the “Continuing Directors”); provided, however, that individuals who are appointed to the Board pursuant to or in accordance with the terms of an agreement relating to a merger, consolidation, or share exchange involving the Company (or any direct or indirect Subsidiary of the Company) shall not be Continuing Directors for purposes of this Agreement until after such individuals are first nominated for election by a vote of at least two-thirds (2/3) of the then Continuing Directors and are thereafter elected as directors by the shareholders of the Company at a meeting of shareholders held following consummation of such merger, consolidation, or share exchange; and, provided further, that in the event the failure of any such persons appointed to the Board to be Continuing Directors results in a Change of Control, the subsequent qualification of such persons as Continuing Directors shall not alter the fact that a Change of Control occurred; or

(iii) the consummation of a merger, consolidation or share exchange of the Company with any other corporation or the issuance of voting securities of the Company in connection with a merger, consolidation or share exchange of the Company (or any direct or indirect Subsidiary of the Company), in each case, which requires approval of the shareholders of the Company, other than (A) a merger, consolidation or share exchange which would result in the voting securities of the Company outstanding immediately prior to such merger, consolidation or share exchange continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity or any parent thereof) at least fifty percent (50%) of the combined voting power of the voting securities of the Company or such surviving entity or any parent thereof outstanding immediately after such merger, consolidation or share

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exchange, or (B) a merger, consolidation or share exchange effected to implement a recapitalization of the Company (or similar transaction) in which no Person (other than an Excluded Person) is or becomes the Beneficial Owner, directly or indirectly, of securities of the Company (not including in the securities beneficially owned by such Person any securities acquired directly from the Company or its Affiliates after the Effective Date, pursuant to express authorization by the Board that refers to this exception) representing twenty percent (20%) or more of either the then outstanding shares of common stock of the Company or the combined voting power of the Company’s then outstanding voting securities; or

(iv) the consummation of a plan of complete liquidation or dissolution of the Company or a sale or disposition by the Company of all or substantially all of the Company’s assets (in one transaction or a series of related transactions within any period of twenty-four (24) consecutive months), in each case, which requires approval of the shareholders of the Company, other than a sale or disposition by the Company of all or substantially all of the Company’s assets to an entity at least seventy-five percent (75%) of the combined voting power of the voting securities of which are owned by Persons in substantially the same proportions as their ownership of the Company immediately prior to such sale.

Notwithstanding the foregoing, no “Change of Control” shall be deemed to have occurred if there is consummated any transaction or series of integrated transactions immediately following which the record holders of the common stock of the Company immediately prior to such transaction or series of transactions continue to own, directly or indirectly, in the same proportions as their ownership in the Company, an entity that owns all or substantially all of the assets or voting securities of the Company immediately following such transaction or series of transactions.

Notwithstanding the foregoing, if an Award is considered deferred compensation subject to the provisions of Code Section 409A, and if a payment under such Award is triggered upon a “Change of Control,” then the foregoing definition shall be deemed amended as necessary to comply with Code Section 409A.

(j) “Code” means the Internal Revenue Code of 1986, as amended. Any reference to a specific provision of the Code includes any successor provision and the regulations promulgated under such provision.

(k) “Committee” means the Compensation Committee of the Board, any successor committee thereto or such other committee of the Board that is designated by the Board with the same or similar authority. The Committee shall consist only of Non-Employee Directors (not fewer than two (2)) to the extent necessary for the Plan and Awards to comply with Rule 16b-3 promulgated under the Exchange Act.

(l) “Company” means TypTap Insurance Group, Inc., a Florida corporation, or any successor thereto.

(m) “Director” means a member of the Board.

(n) “Disability” means, unless otherwise defined in the applicable Award agreement, a finding of disability under the long term disability plan sponsored by the Company or an Affiliate in which the Participant participates. Notwithstanding the foregoing, for Awards that are subject to Section 409A of the Code, Disability shall mean that a Participant is disabled under Section 409A(a)(2)(C)(i) or (ii) of the Code.

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(o) “Dividend Equivalent Unit” means the right to receive a payment, in cash or Shares, equal to the cash dividends or other cash distributions paid with respect to a Share.

(p) “Effective Date” has the meaning in Section 1(b).

(q) “Exchange Act” means the Securities Exchange Act of 1934, as amended. Any reference to a specific provision of the Exchange Act includes any successor provision and the regulations and rules promulgated under such provision.

(r) “Fair Market Value” means a price that is based on the opening, closing, actual, high or low sale price, or the arithmetic mean of selling prices of, a Share, on the Applicable Exchange on the applicable date, the preceding trading day, the next succeeding trading day, or the arithmetic mean of selling prices on all trading days over a specified averaging period weighted by volume of trading on each trading day in the period that is within 30 days before or 30 days after the applicable date, as determined by the Administrator in its discretion; provided that, if an arithmetic mean of prices is used to set a grant price or an exercise price for an Option or Stock Appreciation Right, the commitment to grant the applicable Award based on such arithmetic mean must be irrevocable before the beginning of the specified averaging period in accordance with Treasury Regulation 1.409A-1(b)(5)(iv)(A). The method of determining Fair Market Value with respect to an Award shall be determined by the Administrator and may differ depending on whether Fair Market Value is in reference to the grant, exercise, vesting, settlement, or payout of an Award; provided that, if the Administrator does not specify a different method, the Fair Market Value of a Share as of a given date shall be the closing sale price as of the trading day immediately preceding the date as of which Fair Market Value is to be determined or, if there shall be no such sale on such date, the next preceding day on which such a sale shall have occurred. If the Stock is not traded on an established stock exchange, the Administrator shall determine in good faith the Fair Market Value in whatever manner it considers appropriate, but based on objective criteria. Notwithstanding the foregoing, in the case of the sale of Shares on the Applicable Exchange, the actual sale price shall be the Fair Market Value of such Shares.

(s) “Incentive Award” means the right to receive a cash payment to the extent Performance Goals are achieved (or other requirements are met), and shall include “Annual Incentive Awards” as described in Section 10 and “Long-Term Incentive Awards” as described in Section 11.

(t) “Incentive Stock Option” means an Option that is intended to qualify as an “incentive stock option” within the meaning of Section 422 of the Code.

(u) “Non-Employee Director” means a Director who is not also an employee of the Company or its Subsidiaries and, to the extent necessary for Awards to comply with Rule 16b-3 under the Exchange Act, who otherwise meets the definition of “Non-Employee Director” in Rule 16b-3(b)(3) under the Exchange Act.

(v) “Nonqualified Stock Option” means an Option that is not intended to qualify as an Incentive Stock Option.

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(w) “Option” means the right to purchase a Share at a stated price for a specified period of time.

(x) “Participant” means an individual selected by the Administrator to receive an Award.

(y) “Performance Goals” means any objective or subjective goals the Administrator establishes with respect to an Award. A Performance Goal may, but is not required to, relate to one or more of the following with respect to the Company or any one or more Subsidiaries, Affiliates or other business units: basic earnings per common share for the Company on a consolidated basis; diluted earnings per common share for the Company on a consolidated basis; total shareholder return; fair market value of shares; net sales; cost of sales; gross profit; selling, general and administrative expenses; operating income; earnings before interest and the provision for income taxes (EBIT); earnings before interest, the provision for income taxes, depreciation, and amortization (EBITDA); net income; accounts receivable; return on equity; return on assets; return on invested capital; return on sales; non-catastrophic claims incurred; reinsurance costs; gross premiums earned; economic value added, or other measure of profitability that considers the cost of capital employed; free cash flow; net cash provided by operating activities; net increase (decrease) in cash and cash equivalents; customer satisfaction; market share; and/or quality. Unless otherwise determined by the Administrator, the relevant measurement of performance as to each Performance Goal shall be computed in accordance with generally accepted accounting principles, if applicable. The Administrator reserves the right to adjust Performance Goals, or modify the manner of measuring or evaluating a Performance Goal, for any reason the Administrator determines is appropriate, including but not limited to by excluding the effects of (i) charges for reorganizing and restructuring, (ii) discontinued operations, (iii) asset write-downs, (iv) gains or losses on the disposition of a business, (v) mergers, acquisitions or dispositions, and (vi) extraordinary, unusual and/or non-recurring items of gain or loss. The inclusion in an Award agreement of specific adjustments or modifications shall not be deemed to preclude the Administrator from making other adjustments or modifications, in its discretion, as described herein, unless the Award agreement provides that the adjustments or modifications described in such agreement shall be the sole adjustments or modifications. The Administrator may establish other Performance Goals not listed in this Plan. Where applicable, the Performance Goals may be expressed, without limitation, in terms of attaining a specified level of the particular criterion or the attainment of an increase or decrease (expressed as absolute numbers or a percentage) in the particular criterion or achievement in relation to a peer group or other index. The Performance Goals may include a threshold level of performance below which no payment will be made (or no vesting will occur), levels of performance at which specified payments will be paid (or specified vesting will occur), and a maximum level of performance above which no additional payment will be made (or at which full vesting will occur).

(z) “Performance Shares” means the right to receive Shares to the extent Performance Goals are achieved (or other requirements are met).

(aa) “Performance Unit” means the right to receive a cash payment and/or Shares valued in relation to a unit that has a designated dollar value or the value of which is equal to the Fair Market Value of one or more Shares, to the extent Performance Goals are achieved (or other requirements are met).

(bb) “Person” means any individual, firm, partnership, corporation or other entity, including any successor (by merger or otherwise) of such entity, or a group of any of the foregoing acting in concert.

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(cc) “Plan” means this TypTap Insurance Group, Inc. 2021 Omnibus Incentive Plan, as it may be amended from time to time.

(dd) “Restricted Stock” means Shares that are subject to a risk of forfeiture or restrictions on transfer, or both a risk of forfeiture and restrictions on transfer, which may lapse upon the achievement or partial achievement of Performance Goals or upon the completion of a period of service, or both.

(ee) “Restricted Stock Unit” means the right to receive a cash payment and/or Shares the value of which is equal to the Fair Market Value of one Share.

(ff) “Section 16 Participants” means Participants who are subject to the provisions of Section 16 of the Exchange Act.

(gg) “Share” means a share of Stock.

(hh) “Stock” means the common stock, par value $0.001 per share, of the Company.

(ii) “Stock Appreciation Right” or “SAR” means the right to receive a cash payment, and/or Shares with a Fair Market Value, equal to the appreciation of the Fair Market Value of a Share during a specified period of time.

(jj) “Subsidiary” means any corporation, limited liability company or other limited liability entity in an unbroken chain of entities beginning with the Company if each of the entities (other than the last entities in the chain) owns the stock or equity interest possessing more than fifty percent (50%) of the total combined voting power of all classes of stock or other equity interests in one of the other entities in the chain.

3. Administration.

(a) Administration. In addition to the authority specifically granted to the Administrator in this Plan, the Administrator has full discretionary authority to administer this Plan, including but not limited to the authority to: (i) interpret the provisions of this Plan or any agreement covering an Award; (ii) prescribe, amend and rescind rules and regulations relating to this Plan; (iii) correct any defect, supply any omission, or reconcile any inconsistency in the Plan, any Award or any agreement covering an Award in the manner and to the extent it deems desirable to carry this Plan or such Award into effect; and (iv) make all other determinations necessary or advisable for the administration of this Plan. All Administrator determinations shall be made in the sole discretion of the Administrator and are final and binding on all interested parties.

(b) Delegation to Other Committees or Officers. To the extent applicable law permits, the Board may delegate to another committee of the Board, or the Committee may delegate to a subcommittee of the Committee or to one or more officers of the Company, any or all of their respective authority and responsibility as an Administrator of the Plan; provided that no such delegation is permitted with respect to Stock-based Awards made to Section 16 Participants at the time any such delegated authority or responsibility is exercised unless the delegation is to another committee of the Board consisting entirely of Non-Employee Directors. If the Board or the Committee has made such a delegation, then all references to the Administrator in this Plan include such other committee, subcommittee or one or more officers to the extent of such delegation.

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(c) No Liability; Indemnification. No member of the Board or the Committee, and no officer or member of any other committee to whom a delegation under Section 3(b) has been made, will be liable for any act done, or determination made, by the individual in good faith with respect to the Plan or any Award. The Company will indemnify and hold harmless each such individual as to any acts or omissions, or determinations made, in each case done or made in good faith, with respect to this Plan or any Award to the maximum extent that the law and the Company’s By-Laws permit.

4. Eligibility. The Administrator may designate any of the following as a Participant from time to time, to the extent of the Administrator’s authority: any officer or other employee of the Company or its Affiliates; any individual that the Company or an Affiliate has engaged to become an officer or employee; any consultant or advisor who provides services to the Company or its Affiliates; or any Director, including a Non-Employee Director. The Administrator’s designation of, or granting of an Award to, a Participant will not require the Administrator to designate such individual as a Participant or grant an Award to such individual at any future time. The Administrator’s granting of a particular type of Award to a Participant will not require the Administrator to grant any other type of Award to such individual.

5. Types of Awards. Subject to the terms of this Plan, the Administrator may grant any type of Award to any Participant it selects, but only employees of the Company or a Subsidiary may receive grants of Incentive Stock Options. Awards may be granted alone or in addition to, in tandem with, or (subject to the prohibition on repricing set forth in Section 15(e)) in substitution for any other Award (or any other award granted under another plan of the Company or any Affiliate, including the plan of an acquired entity).

6. Shares Reserved under this Plan.

(a) Plan Reserve. Subject to adjustment as provided in Section 17, as of the Effective Date, an aggregate of 7,700,000 Shares are reserved for issuance under this Plan, all of which may be issued pursuant to the exercise of Incentive Stock Options. The aggregate number of Shares reserved for issuance under this Plan shall be increased annually on the first day of each fiscal year of the Company after the Effective Date, commencing on the first day of the Company’s fiscal year 2023, by a number of Shares equal to the least of: (i) 4,000,000 Shares, (ii) 2% of the outstanding shares of all classes of the Company’s common stock as of the last day of the immediately preceding fiscal year or (iii) such other number of Shares as the Board may determine. The aggregate number of Shares reserved for issuance under this Plan shall also be increased by the number of any Shares subject to awards granted under the Company’s 2021 Equity Incentive Plan as of the Effective Date that, after the Effective Date, expire or otherwise terminate without having been exercised in full or are forfeited to or repurchased by the Company (provided that the maximum number of Shares that may be added to the Plan pursuant to this sentence is 5,904,783 Shares). The Shares reserved for issuance may be either authorized and unissued Shares or Shares reacquired at any time and now or hereafter held as treasury stock. The aggregate number of Shares reserved under this Section 6(a) shall be depleted on the date of grant of an Award by the maximum number of Shares, if any, that may be issuable under an Award as determined at the time of grant. Notwithstanding the foregoing, an Award that may be settled solely in cash shall not cause any depletion of the Plan’s Share reserve at the time such Award is granted.

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(b) Replenishment of Shares Under this Plan. To the extent (i) an Award lapses, expires, terminates or is cancelled without the issuance of Shares under the Award (whether due currently or on a deferred basis) or is settled in cash, (ii) it is determined during or at the conclusion of the term of an Award that all or some portion of the Shares with respect to which the Award was granted will not be issuable on the basis that the conditions for such issuance will not be satisfied, (iii) Shares are forfeited under an Award (except as described below), (iv) Shares are issued under any Award and the Company subsequently reacquires them pursuant to rights reserved upon the issuance of the Shares, or (v) Shares are tendered or withheld in payment of the exercise price of an Option or as a result of the net settlement of an outstanding Stock Appreciation Right or (vi) Shares are tendered or withheld to satisfy federal, state or local tax withholding obligations, then such Shares shall be recredited to the Plan’s reserve and may again be used for new Awards under this Plan, but Shares recredited to the Plan’s reserve pursuant to clause (iv), (v) or (vi) may not be issued pursuant to Incentive Stock Options.

(c) Non-Employee Director Award Limitation. Subject to adjustment as provided in Section 7, the maximum number of Shares that may be granted during any fiscal year to any individual Non-Employee Director shall not exceed that number of Shares that has a grant date fair value of, when added to any cash compensation received by such Non-Employee Director, $300,000.

7. Options. Subject to the terms of this Plan, the Administrator will determine all terms and conditions of each Option, including but not limited to: (a) whether the Option is an Incentive Stock Option that meets the requirements of Code Section 422, or a Nonqualified Stock Option that does not meet the requirements of Code Section 422; (b) the grant date, which may not be any day prior to the date that the Administrator approves the grant; (c) the number of Shares subject to the Option; (d) the exercise price, which may never be less than the Fair Market Value of the Shares subject to the Option as determined on the date of grant, (e) the terms and conditions of vesting and exercise; (f) the term, except that an Option must terminate no later than ten (10) years after the date of grant; and (g) the manner of payment of the exercise price. In all other respects, the terms of any Incentive Stock Option should comply with the provisions of Code Section 422 except to the extent the Administrator determines otherwise. If an Option that is intended to be an Incentive Stock Option fails to meet the requirements thereof, the Option shall automatically be treated as a Nonqualified Stock Option to the extent of such failure. To the extent permitted by the Administrator, and subject to such procedures as the Administrator may specify, the payment of the exercise price of Options may be made by (w) delivery of cash or other Shares or other securities of the Company (including by attestation) having a then Fair Market Value equal to the purchase price of such Shares, (x) by delivery (including by fax) to the Company or its designated agent of an executed irrevocable option exercise form together with irrevocable instructions to a broker-dealer to sell or margin a sufficient portion of the Shares and deliver the sale or margin loan proceeds directly to the Company to pay for the exercise price, (y) by surrendering the right to receive Shares otherwise deliverable to the Participant upon exercise of the Award having a Fair Market Value at the time of exercise equal to the total exercise price, or (z) by any combination of the methods set forth in clauses (w), (x) and/or (y). Except to the extent otherwise set forth in an Award agreement, a Participant shall have no rights as a holder of Stock as a result of the grant of an Option until the Option is exercised, the exercise price and applicable withholding taxes are paid and the Shares subject to the Option are issued thereunder.

8. Stock Appreciation Rights. Subject to the terms of this Plan, the Administrator will determine all terms and conditions of each SAR, including but not limited to: (a) whether the SAR is granted independently of an Option or relates to an Option; (b) the grant date, which may not be any day prior to the date that the Administrator approves the grant; (c) the number of Shares to which the SAR relates; (d) the grant price, which may never be less than the Fair Market Value of the Shares subject to the SAR as determined on the date of grant; (e) the terms and conditions of exercise or maturity, including vesting; (f) the term, provided that an SAR must terminate no later than ten (10) years after the date of grant; and (g) whether the SAR will be settled in cash, Shares or a combination thereof.

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9. Performance and Stock Awards. Subject to the terms of this Plan, the Administrator will determine all terms and conditions of each award of Shares, Restricted Stock, Restricted Stock Units, Performance Shares or Performance Units, including, but not limited to: (a) the number of Shares and/or units to which such Award relates; (b) whether, as a condition for the Participant to realize all or a portion of the benefit provided under the Award, one or more Performance Goals must be achieved during such period as the Administrator specifies; (c) the length of the vesting and/or performance period and, if different, the date on which payment of the benefit provided under the Award will be made; (d) with respect to Performance Units, whether to measure the value of each unit in relation to a designated dollar value or the Fair Market Value of one or more Shares; and (e) with respect to Restricted Stock Units and Performance Units, whether to settle such Awards in cash, in Shares (including Restricted Stock), or in a combination of cash and Shares; provided that no dividends or Dividend Equivalent Units shall be paid on Performance Shares or Performance Units prior to their vesting.

10. Annual Incentive Awards. Subject to the terms of this Plan, the Administrator will determine all terms and conditions of an Annual Incentive Award, including but not limited to the Performance Goals, performance period, the potential amount payable, and the timing of payment; provided that the Administrator must require that payment of all or any portion of the amount subject to the Annual Incentive Award is contingent on the achievement or partial achievement of one or more Performance Goals during the period the Administrator specifies, although the Administrator may specify that all or a portion of the Performance Goals subject to an Award are deemed achieved upon a Participant’s death, Disability, or such other circumstances as the Administrator may specify; and provided further that any performance period applicable to an Annual Incentive Award must relate to a period of at least one year.

11. Long-Term Incentive Awards. Subject to the terms of this Plan, the Administrator will determine all terms and conditions of a Long-Term Incentive Award, including, but not limited to, the Performance Goals, performance period (which must be more than one year), the potential amount payable, and the timing of payment; provided that the Administrator must require that payment of all or any portion of the amount subject to the Long-Term Incentive Award is contingent on the achievement or partial achievement of one or more Performance Goals during the period the Administrator specifies, although the Administrator may specify that all or a portion of the Performance Goals subject to an Award are deemed achieved upon a Participant’s death, Disability or retirement (as defined by the Administrator), or such other circumstances as the Administrator may specify.

12. Dividend Equivalent Units. Subject to the terms of this Plan, the Administrator will determine all terms and conditions of each award of Dividend Equivalent Units, including but not limited to whether: (a) such Award will be granted in tandem with another Award; (b) payment of the Award will be made concurrently with dividend payments or credited to an account for the Participant which provides for the deferral of such amounts until a stated time; (c) the Award will be settled in cash or Shares; and (d) as a condition for the Participant to realize all or a portion of the benefit provided under the Award, one or more Performance Goals must be achieved during such period as the Administrator specifies; provided that Dividend Equivalent Units may not be granted in connection with an Option or Stock Appreciation Right; and provided further that no Dividend Equivalent Unit granted in tandem with another Award shall include vesting provisions more favorable to the Participant than the vesting provisions, if any, to which the tandem Award is subject; and provided further that no Dividend Equivalent Unit relating to another Award shall provide for payment with respect such other Award prior to its vesting.

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13. Other Stock-Based Awards. Subject to the terms of this Plan, the Administrator may grant to a Participant shares of unrestricted Stock as replacement for other compensation to which the Participant is entitled, such as in payment of director fees, in lieu of cash compensation, in exchange for cancellation of a compensation right, or as a bonus.

14. Transferability. Awards are not transferable other than by will or the laws of descent and distribution, unless and to the extent the Administrator allows a Participant to: (a) designate in writing a beneficiary to exercise the Award or receive payment under the Award after the Participant’s death; (b) transfer an Award to the former spouse of the Participant as required by a domestic relations order incident to a divorce; or (c) transfer an Award; provided, however, that with respect to clause (c) above the Participant may not receive consideration for such a transfer of an Award.

15. Termination and Amendment of Plan; Amendment, Modification or Cancellation of Awards.

(a) Term of Plan. Unless the Board earlier terminates this Plan pursuant to Section 15(b), this Plan will terminate on, and no further Awards may be granted under this Plan after, the tenth (10th) anniversary of the Effective Date.

(b) Termination and Amendment. The Board or the Administrator may amend, alter, suspend, discontinue or terminate this Plan at any time, subject to the following limitations:

(i) the Board must approve any amendment of this Plan to the extent the Company determines such approval is required by: (A) prior action of the Board, (B) applicable corporate law, or (C) any other applicable law;

(ii) shareholders must approve any amendment of this Plan to the extent the Company determines such approval is required by: (A) Section 16 of the Exchange Act, (B) the Code, (C) the listing requirements of any principal securities exchange or market on which the Shares are then traded, or (D) any other applicable law; and

(iii) shareholders must approve any of the following Plan amendments: (A) an amendment to materially increase any number of Shares specified in Section 6(a) or the limits set forth in Section 6(b)(except as permitted by Section 17), or (B) an amendment that would diminish the protections afforded by Section 15(e).

(c) Amendment, Modification, Cancellation and Disgorgement of Awards.

(i) Except as provided in Section 15(e) and subject to the requirements of this Plan, the Administrator may modify, amend or cancel any Award; provided that, except as otherwise provided in the Plan or the Award agreement, any modification or amendment that materially diminishes the rights of the Participant, or the cancellation of an Award, shall be effective only if agreed to by the Participant or any other person(s) as may then have an interest in such Award, but the Administrator need not obtain Participant (or other interested party) consent for the modification, amendment or cancellation of an Award pursuant to the provisions of subsection (ii) or Section 17 or as

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follows: (A) to the extent the Administrator deems such action necessary to comply with any applicable law or the listing requirements of any principal securities exchange or market on which the Shares are then traded; (B) to the extent the Administrator deems necessary to preserve favorable accounting or tax treatment of any Award for the Company; or (C) to the extent the Administrator determines that such action does not materially and adversely affect the value of an Award or that such action is in the best interest of the affected Participant (or any other person(s) as may then have an interest in the Award). Notwithstanding the foregoing, unless determined otherwise by the Administrator, any such amendment shall be made in a manner that will enable an Award intended to be exempt from Code Section 409A to continue to be so exempt, or to enable an Award intended to comply with Code Section 409A to continue to so comply.

(ii) Notwithstanding anything to the contrary in an Award agreement, the Administrator shall have full power and authority to terminate or cause the Participant to forfeit the Award, and require the Participant to disgorge to the Company any gains attributable to the Award, if the Participant engages in any action constituting, as determined by the Administrator in its discretion, Cause for termination, or a breach of any Award agreement or any other agreement between the Participant and the Company or an Affiliate concerning noncompetition, nonsolicitation, confidentiality, trade secrets, intellectual property, nondisparagement or similar obligations.

(iii) Any Awards granted pursuant to this Plan, and any Stock issued or cash paid pursuant to an Award, shall be subject to any recoupment or clawback policy that is adopted by, or any recoupment or similar requirement otherwise made applicable by law, regulation or listing standards to, the Company from time to time.

(d) Survival of Authority and Awards. Notwithstanding the foregoing, the authority of the Board and the Administrator under this Section 15 and to otherwise administer the Plan with respect to then-outstanding Awards will extend beyond the date of this Plan’s termination. In addition, termination of this Plan will not affect the rights of Participants with respect to Awards previously granted to them, and all unexpired Awards will continue in force and effect after termination of this Plan except as they may lapse or be terminated by their own terms and conditions.

(e) Repricing and Backdating Prohibited. Notwithstanding anything in this Plan to the contrary, and except for the adjustments provided for in Section 17, neither the Administrator nor any other person may (i) amend the terms of outstanding Options or SARs to reduce the exercise or grant price of such outstanding Options or SARs; (ii) cancel outstanding Options or SARs in exchange for Options or SARs with an exercise or grant price that is less than the exercise or grant price of the original Options or SARs; or (iii) cancel outstanding Options or SARs with an exercise or grant price above the current Fair Market Value of a Share in exchange for cash or other securities. In addition, the Administrator may not make a grant of an Option or SAR with a grant date that is effective prior to the date the Administrator takes action to approve such Award.

(f) Foreign Participation. To assure the viability of Awards granted to Participants employed or residing in foreign countries, the Administrator may provide for such special terms as it may consider necessary or appropriate to accommodate differences in local law, tax policy, accounting or custom. Moreover, the Administrator may approve such supplements to, or amendments, restatements or alternative versions of, this Plan as it determines is necessary or

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appropriate for such purposes. Any such amendment, restatement or alternative versions that the Administrator approves for purposes of using this Plan in a foreign country will not affect the terms of this Plan for any other country. In addition, all such supplements, amendments, restatements or alternative versions must comply with the provisions of Section 15(b)(ii).

16. Taxes.

(a) Withholding. In the event the Company or one of its Affiliates is required to withhold any Federal, state or local taxes or other amounts in respect of any income recognized by a Participant as a result of the grant, vesting, payment or settlement of an Award or disposition of any Shares acquired under an Award, the Company may deduct (or require an Affiliate to deduct) from any payments of any kind otherwise due the Participant cash, or with the consent of the Administrator, Shares otherwise deliverable or vesting under an Award, to satisfy such tax or other obligations. Alternatively, the Company or its Affiliate may require such Participant to pay to the Company or its Affiliate, in cash, promptly on demand, or make other arrangements satisfactory to the Company or its Affiliate regarding the payment to the Company or its Affiliate of the aggregate amount of any such taxes and other amounts. If Shares are deliverable upon exercise or payment of an Award, then the Administrator may permit a Participant to satisfy all or a portion of the Federal, state and local withholding tax obligations arising in connection with such Award by electing to (i) have the Company or its Affiliate withhold Shares otherwise issuable under the Award, (ii) tender back Shares received in connection with such Award or (iii) deliver other previously owned Shares, in each case having a Fair Market Value equal to the amount to be withheld; provided that the amount to be withheld in Shares may not exceed the total maximum statutory tax withholding obligations associated with the transaction to the extent needed for the Company and its Affiliates to avoid an accounting charge. If an election is provided, the election must be made on or before the date as of which the amount of tax to be withheld is determined and otherwise as the Administrator requires. In any case, the Company and its Affiliates may defer making payment or delivery under any Award if any such tax may be pending unless and until indemnified to its satisfaction.

(b) No Guarantee of Tax Treatment. Notwithstanding any provisions of this Plan to the contrary, the Company does not guarantee to any Participant or any other Person with an interest in an Award that (i) any Award intended to be exempt from Code Section 409A shall be so exempt, (ii) any Award intended to comply with Code Section 409A or Code Section 422 shall so comply, or (iii) any Award shall otherwise receive a specific tax treatment under any other applicable tax law, nor in any such case will the Company or any Affiliate be required to indemnify, defend or hold harmless any individual with respect to the tax consequences of any Award.

17. Adjustment and Change of Control Provisions.

(a) Adjustment of Shares. If (i) the Company shall at any time be involved in a merger or other transaction in which the Shares are changed or exchanged; (ii) the Company shall subdivide or combine the Shares or the Company shall declare a dividend payable in Shares, other securities (other than stock purchase rights issued pursuant to a shareholder rights agreement) or other property; (iii) the Company shall effect a cash dividend the amount of which, on a per Share basis, exceeds ten percent (10%) of the Fair Market Value of a Share at the time the dividend is declared, or the Company shall effect any other dividend or other distribution on the Shares in the form of cash, or a repurchase of Shares, that the Board determines by resolution is special or extraordinary in nature or that is in connection with a transaction that the Company characterizes publicly as a recapitalization or reorganization

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involving the Shares; or (iv) any other event shall occur, which, in the case of this clause (iv), in the judgment of the Administrator necessitates an adjustment to prevent dilution or enlargement of the benefits or potential benefits intended to be made available under this Plan, then the Administrator shall, in such manner as it may deem equitable to prevent dilution or enlargement of the benefits or potential benefits intended to be made available under this Plan, adjust any or all of: (A) the number and type of Shares subject to this Plan (including the number and type of Shares described in Sections 6(a) and 6(c)) and which may after the event be made the subject of Awards; (B) the number and type of Shares subject to outstanding Awards; (C) the grant, purchase, or exercise price with respect to any Award; and (D) the Performance Goals of an Award. In any such case, the Administrator may also (or in lieu of the foregoing) make provision for a cash payment to the holder of an outstanding Award in exchange for the cancellation of all or a portion of the Award (without the consent of the holder of an Award) in an amount determined by the Administrator effective at such time as the Administrator specifies (which may be the time such transaction or event is effective). However, in each case, with respect to Awards of Incentive Stock Options, no such adjustment may be authorized to the extent that such authority would cause this Plan to violate Code Section 422(b). Further, the number of Shares subject to any Award payable or denominated in Shares must always be a whole number. In any event, previously granted Options or SARs are subject to only such adjustments as are necessary to maintain the relative proportionate interest the Options and SARs represented immediately prior to any such event and to preserve, without exceeding, the value of such Options or SARs.

Without limitation, in the event of any reorganization, merger, consolidation, combination or other similar corporate transaction or event, whether or not constituting a Change of Control (other than any such transaction in which the Company is the continuing corporation and in which the outstanding Stock is not being converted into or exchanged for different securities, cash or other property, or any combination thereof), the Administrator may substitute, on an equitable basis as the Administrator determines, for each Share then subject to an Award and the Shares subject to this Plan (if the Plan will continue in effect), the number and kind of shares of stock, other securities, cash or other property to which holders of Stock are or will be entitled in respect of each Share pursuant to the transaction.

(b) Issuance or Assumption. Notwithstanding any other provision of this Plan, and without affecting the number of Shares otherwise reserved or available under this Plan, in connection with any merger, consolidation, acquisition of property or stock, or reorganization, the Administrator may authorize the issuance or assumption of awards under this Plan upon such terms and conditions as it may deem appropriate.

(c) Effect of Change of Control.

(i) In order to preserve a Participant’s rights under an Award in the event of a Change of Control, the Administrator in its discretion may, at the time an Award is made or at any time thereafter, take one or more of the following actions: (a) provide for the acceleration of any time period, or the deemed achievement of any Performance Goals, relating to the exercise or realization of the Award; (b) provide for the purchase or cancellation of the Award for an amount of cash or other property that could have been received upon the exercise or realization of the Award had the Award been currently exercisable or payable (or the cancellation of Awards in exchange for no payment to the extent that no cash or other property would be received upon the exercise or realization of the Award in such circumstances); (c) adjust the terms of the Award in the manner determined by the Administrator to reflect the Change of Control; (d) cause the Award to be assumed, or new right substituted therefor, by another entity; or (e) make such other provision as the Administrator may consider equitable and in the best interests of the Company.

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(ii) Except to the extent the Participant has in effect an employment or similar agreement with the Company or any Affiliate or is subject to a policy that provides for a more favorable result to the Participant upon a Change of Control, in the event that the Company’s legal counsel or accounting advisor determines that any payment, benefit or transfer by the Company under this Plan or any other plan, agreement, or arrangement to or for the benefit of the Participant (in the aggregate, the “Total Payments”) would be subject to the tax (“Excise Tax”) imposed by Code Section 4999 but for this subsection (d), then, notwithstanding any other provision of this Plan to the contrary, the Total Payments shall be delivered either (i) in full or (ii) in an amount such that the value of the aggregate Total Payments that the Participant is entitled to receive shall be One Dollar ($1.00) less than the maximum amount that the Participant may receive without being subject to the Excise Tax, whichever of clause (i) or (ii) results in the receipt by the Participant of the greatest benefit on an after-tax basis (taking into account applicable federal, state and local income taxes and the Excise Tax). In the event that clause (ii) results in a greater after-tax benefit to the Participants, payments or benefits included in the Total Payments shall be reduced or eliminated by applying the following principles, in order: (A) the payment or benefit with the higher ratio of the parachute payment value to present economic value (determined using reasonable actuarial assumptions) shall be reduced or eliminated before a payment or benefit with a lower ratio; (B) the payment or benefit with the later possible payment date shall be reduced or eliminated before a payment or benefit with an earlier payment date; and (C) cash payments shall be reduced prior to non-cash benefits; provided that if the foregoing order of reduction or elimination would violate Code Section 409A, then the reduction shall be made pro rata among the payments or benefits included in the Total Payments (on the basis of the relative present value of the parachute payments).

(d) Certain Modifications. Notwithstanding anything contained in this Section 17, the Board may, in its sole and absolute discretion, amend, modify or rescind the provisions of this Section 17 if it determines that the operation of this Section 17 may prevent a transaction in which the Company, a Subsidiary or any Affiliate is a party from receiving desired tax treatment, including without limitation requiring that each Participant receive a replacement or substitute Award issued by the surviving or acquiring corporation.

18. Miscellaneous.

(a) Other Terms and Conditions. The Administrator may provide in any Award agreement such other provisions (whether or not applicable to the Award granted to any other Participant) as the Administrator determines appropriate to the extent not otherwise prohibited by the terms of the Plan.

(b) Employment and Service. The issuance of an Award shall not confer upon a Participant any right with respect to continued employment or service with the Company or any Affiliate, or the right to continue as a Director. Unless determined otherwise by the Administrator, for purposes of the Plan and all Awards, the following rules shall apply:

(i) a Participant who transfers employment between the Company and its Affiliates, or between Affiliates, will not be considered to have terminated employment;

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(ii) a Participant who ceases to be a Non-Employee Director because he or she becomes an employee of the Company or an Affiliate shall not be considered to have ceased service as a Director with respect to any Award until such Participant’s termination of employment with the Company and its Affiliates;

(iii) a Participant who ceases to be employed by the Company or an Affiliate and immediately thereafter becomes a Non-Employee Director, a non-employee director of an Affiliate, or a consultant to the Company or any Affiliate shall not be considered to have terminated employment until such Participant’s service as a director of, or consultant to, the Company and its Affiliates has ceased; and

(iv) a Participant employed by an Affiliate will be considered to have terminated employment when such entity ceases to be an Affiliate.

Notwithstanding the foregoing, for purposes of an Award that constitutes “nonqualified deferred compensation” subject to Code Section 409A, if a Participant’s termination of employment or service triggers the payment of such nonqualified deferred compensation under such Award, then the Participant will be deemed to have terminated employment or service upon his or her “separation from service” within the meaning of Code Section 409A. Notwithstanding any other provision in this Plan or an Award to the contrary, if any Participant is a “specified employee” within the meaning of Code Section 409A as of the date of his or her “separation from service” within the meaning of Code Section 409A, then, to the extent required to avoid the imposition of additional taxes under Code Section 409A, any payment of nonqualified deferred compensation made to the Participant on account of such separation from service shall not be made before a date that is six (6) months after the date of the separation from service.

(c) No Fractional Shares. No fractional Shares or other securities may be issued or delivered pursuant to this Plan, and the Administrator may determine whether cash, other securities or other property will be paid or transferred in lieu of any fractional Shares or other securities, or whether such fractional Shares or other securities or any rights to fractional Shares or other securities will be canceled, terminated or otherwise eliminated.

(d) Unfunded Plan; Awards Not Includable for Benefits Purposes. This Plan is unfunded and does not create, and should not be construed to create, a trust or separate fund with respect to this Plan’s benefits. This Plan does not establish any fiduciary relationship between the Company and any Participant or other person. To the extent any person holds any rights by virtue of an Award granted under this Plan, such rights are no greater than the rights of the Company’s general unsecured creditors. Income recognized by a Participant pursuant to an Award shall not be included in the determination of benefits under any employee pension benefit plan (as such term is defined in Section 3(2) of the Employee Retirement Income Security Act of 1974, as amended) or group insurance or other benefit plans applicable to the Participant which are maintained by the Company or any Affiliate, except as may be provided under the terms of such plans or determined by resolution of the Board.

(e) Requirements of Law and Securities Exchange. The granting of Awards and the issuance of Shares in connection with an Award are subject to all applicable laws, rules and regulations and to such approvals by any governmental agencies or national securities exchanges as may be required. Notwithstanding any other provision of this Plan or any award agreement, the Company has no liability to deliver any Shares under this Plan or make any payment unless such delivery or payment would comply with all applicable laws and the

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applicable requirements of any securities exchange or similar entity, and unless and until the Participant has taken all actions required by the Company in connection therewith. The Company may impose such restrictions on any Shares issued under the Plan as the Company determines necessary or desirable to comply with all applicable laws, rules and regulations or the requirements of any national securities exchanges.

(f) Governing Law; Venue. This Plan, and all agreements under this Plan, will be construed in accordance with and governed by the laws of the State of Florida, without reference to any conflict of law principles. Any legal action or proceeding with respect to this Plan, any Award or any award agreement, or for recognition and enforcement of any judgment in respect of this Plan, any Award or any award agreement, may only be brought and determined in a court sitting in the State of Florida.

(g) Limitations on Actions. Any legal action or proceeding with respect to this Plan, any Award or any award agreement, must be brought within one (1) year after the day the complaining party first knew or should have known of the events giving rise to the complaint.

(h) Construction. Whenever any words are used herein in the masculine, they shall be construed as though they were used in the feminine in all cases where they would so apply; and wherever any words are used in the singular or plural, they shall be construed as though they were used in the plural or singular, as the case may be, in all cases where they would so apply. Titles of sections are for general information only, and this Plan is not to be construed with reference to such titles. The title, label or characterization of an Award in an award agreement or in the Company’s public filings or other disclosures shall not be determinative as to which specific Award type is represented by the award agreement. Instead, the Administrator may determine which specific type(s) of Award(s) is (are) represented by any award agreement, at the time such Award is granted or at any time thereafter. Except to the extent otherwise provided in the applicable award agreement, in the case of any Award that includes a “series of installment payments” (within the meaning of Section 1.409A-2(b)(2)(iii) of the Treasury Regulations), the Award holder’s right to the series of installment payments shall be treated as a right to a series of separate payments and not as a right to a single payment.

(i) Severability. If any provision of this Plan or any award agreement or any Award (a) is or becomes or is deemed to be invalid, illegal or unenforceable in any jurisdiction, or as to any person or Award, or (b) would cause this Plan, any award agreement or any Award to violate or be disqualified under any law the Administrator deems applicable, then such provision should be construed or deemed amended to conform to applicable laws, or if it cannot be so construed or deemed amended without, in the determination of the Administrator, materially altering the intent of this Plan, award agreement or Award, then such provision should be stricken as to such jurisdiction, person or Award, and the remainder of this Plan, such award agreement and such Award will remain in full force and effect.

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EX-10.4

Exhibit 10.4

TYPTAP INSURANCE GROUP, INC.

2021 OMNIBUS INCENTIVE PLAN

STOCK OPTION AWARD

[PARTICIPANTID]

[FIRSTNAME] [LASTNAME]

You have been granted an option (your “Option”) to purchase shares (“Shares”) of Common Stock of TypTap Insurance Group, Inc. (the “Company”) under the TypTap Insurance Group, Inc. 2021 Omnibus Incentive Plan (the “Plan”), effective as of the Grant Date, with the following terms and conditions:

Grant Date:	[_____________], [___]
Vesting Commencement Date	[_________], 20[____]
Type of Option:	[Nonqualified Stock Option] [Incentive Stock Option]
Number of Option Shares:	[SHARES GRANTED]
Exercise Price per Share:	U.S. $[______]
Vesting:	The Option will vest and become exercisable as follows [____________], provided that you remain in continuous employment or service with the Company or an Affiliate until the applicable vesting date. Notwithstanding the foregoing, the unvested portion of the Option will vest in full upon a Change of Control, if you are continuously employed with, or in the service of, the Company or an Affiliate thereof through the day preceding the date of the Change of Control. Upon your termination of employment, or cessation of services to, the Company and its Affiliates prior to the date the Option is fully vested, you will forfeit the unvested portion of the Option.
Termination Date:	Your Option expires at, and cannot be exercised after, the earliest to occur of: •  The tenth (10th) anniversary of the Grant Date; •  12 months after your termination of employment or service as a result of death or disability (as determined by the Administrator); •  Your termination of employment or service for Cause; or

	•  90 days after your termination of employment or service for any other reason, provided that if you die during this 90-day period, the exercise period will be extended until 12 months after the date of your death. If the date this Option terminates as specified above falls on a day on which the stock market is not open for trading or on a date on which you are prohibited by Company policy (such as an insider trading policy) from exercising the Option, the termination date shall be automatically extended to the first available trading day following the original termination date, but not beyond the tenth (10th) anniversary of the Grant Date.
Manner of Exercise:	You may exercise your Option only to the extent vested and only if it has not terminated. To exercise your Option, you must complete the “Notice of Stock Option Exercise” form provided by the Company and return it to the address or send it via facsimile or email as indicated on the form, or use the equity platform or other exercise procedure prescribed by the Company. The exercise will not be completed until you pay the total exercise price and all applicable withholding taxes due as a result of the exercise to the Company and, to the extent prescribed by the Company, until you have executed a joinder agreement to any stockholders agreement or similar agreement maintained by the Company and provided any investment representation required by the Company. If someone else wants to exercise your Option after your death, that person must contact the Company and prove to the Company’s satisfaction that he or she is entitled to do so. Your ability to exercise your Option may be restricted by the Company if required by applicable law. No fractional Shares shall be issued pursuant to the grant or exercise of this Option. The Administrator shall determine whether the cash value of such fraction shall be paid or whether the fraction shall be canceled for no consideration.
Market Stand-Off:	In connection with any underwritten public offering by the Company of its equity securities pursuant to an effective registration statement filed under the Securities Act of 1933, as amended, you agree that you shall not directly or indirectly sell, make any short sale of, loan, hypothecate, pledge, offer, grant or sell any option or other contract for the purchase of, purchase any option or other contract for the sale of, or otherwise dispose of or transfer or agree to engage in any of the foregoing transactions with respect to, any Shares acquired under this Stock Option Award without the prior written consent of the Company. Such restriction shall be in effect for such period of time following the date of the final prospectus for the offering as may be determined by the Company. In no event, however, shall such period exceed one hundred eighty (180) days.

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Restrictions on Transfer:	Your Option and all rights hereunder shall be non-assignable and non-transferable other than by will or the laws of descent and distribution and shall be exercisable during your lifetime only by you or your guardian or legal representative.
Taxes:	You (and not the Company or any Affiliate) shall be responsible for your federal, state, local or foreign tax liability and any of your other tax consequences that may arise as a result of the transactions contemplated by this Option. You shall rely solely on the determinations of your own tax advisors or your own determinations, and not on any statements or representations by the Company or any of its agents, with regard to all such tax matters. To the extent that the receipt, vesting or exercise of this Option, or other event, results in income to you for federal, state or local income tax purposes, you shall deliver to the Company or its Affiliate at the time the Company or its Affiliate is obligated to withhold taxes in connection with such receipt, vesting, exercise or other event, as the case may be, such amount as the Company or its Affiliate requires to meet its withholding obligation under applicable tax laws or regulations, and if you fail to do so, the Company shall not be obligated to deliver any Shares to you and shall have the right and authority to deduct or withhold from other compensation payable to you an amount sufficient to satisfy its withholding obligations. To the extent permitted by the Company at the time a tax withholding requirement arises, you may satisfy the withholding requirement in whole or in part, by electing to have the Company withhold for its own account that number of Shares otherwise deliverable to you upon exercise having an aggregate Fair Market Value on the date the tax is to be determined equal to the tax that the Company must withhold in connection with the exercise; provided that the amount so withheld shall not exceed the maximum statutory rate to the extent necessary to avoid an accounting charge. The Fair Market Value of any fractional Share not used to satisfy the withholding obligation (as determined on the date the tax is determined) will be paid to you in cash.
Miscellaneous:	•  Neither the Plan nor the grant of the Option shall constitute or be evidence of any agreement or understanding, express or implied, that you have a right to continue as an employee of the Company or any of its Affiliates for any period of time, or at any particular rate of compensation.

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•  The Plan and this Option constitute the entire understanding of the parties with respect to the subject matter hereof and supersede in their entirety all prior undertakings and agreements between you and the Company with respect to the subject matter hereof. You expressly warrant that you are not accepting this Option in reliance on any promises, representations, or inducements other than those contained herein.

•  By accepting the grant of your Option, you agree not to sell any Shares acquired in connection with your Option other than as set forth in the Plan and at a time when applicable laws, Company policies or an agreement between the Company and its underwriters do not prohibit a sale.

•  As a condition of the granting of your Option, you agree, for yourself and your legal representatives or guardians, that this Stock Option Award shall be interpreted by the Committee and that any interpretation by the Committee of the terms of this Stock Option Award or the Plan and any determination made by the Committee pursuant to this Stock Option Award or the Plan shall be final, binding and conclusive.

•  Subject to the terms of the Plan, the Committee may modify or amend this Stock Option Award without your consent as permitted by Section 15(c) of the Plan or: (i) to the extent such action is deemed necessary by the Committee to comply with any applicable law or the listing requirements of any principal securities exchange or market on which Shares are then traded; (ii) to the extent the action is deemed necessary by the Committee to preserve favorable accounting or tax treatment of any award for the Company; or (iii) to the extent the Committee determines that such action does not materially and adversely affect the value of this Stock Option Award or that such action is in the best interest of you or any other person who may then have an interest in this Stock Option Award.

•  This Stock Option Award may be executed in counterparts.

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Your Option is granted under and governed by the terms and conditions of the Plan, including provisions of the Plan relating to the right of the Company to repurchase Shares issued pursuant to the Plan. The terms of the Plan to the extent not stated herein are expressly incorporated herein by reference and in the event of any conflict between this Option and the Plan, the terms of the Plan shall govern, control and supersede over the provisions of this Option. Capitalized terms used in this Option and not defined shall have the meanings given in the Plan.

BY ACCEPTING THIS STOCK OPTION AWARD, YOU AGREE TO ALL OF THE TERMS AND CONDITIONS DESCRIBED HEREIN AND IN THE PLAN. YOU ALSO ACKNOWLEDGE RECEIPT OF THE PLAN.

TYPTAP INSURANCE GROUP, INC.		OPTIONEE
By:
	[EXECUTIVE]	[OPTIONEE]
	[POSITION]

Date:

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TYPTAP INSURANCE GROUP, INC.

NOTICE OF STOCK OPTION EXERCISE

Your completed form should be delivered to: _________________________, ____________________________.

Phone: _________________ Fax: ____________________ Email: _____________________

Incomplete forms may cause a delay in processing your option exercise.

  OPTIONEE INFORMATION

Please complete the following. PLEASE WRITE YOUR FULL LEGAL NAME SINCE THIS NAME MAY BE ON YOUR SHARES.

Name:

Street Address:

City: State: Zip Code:

Work Phone #: (                    ) -                          -                          Home Phone #: (                    ) -                          -                                 

Social Security #:                      -                  -                     

  DESCRIPTION OF OPTION(S) BEING EXERCISED

Please complete the following for each option that you wish to exercise.

Grant Date	Exercise Price Per Share	Number of Option Shares Being Purchased	Total Exercise Price (multiply Exercise Price Per Share by Number of Option Shares Being Purchased)
	$		$
	$		$
	$		$
	$		$
	$		$
Aggregate Exercise Price			$

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EX-10.5

Exhibit 10.5

EXECUTIVE EMPLOYMENT AGREEMENT

THIS AGREEMENT, dated June 14, 2021, is by and between TypTap Insurance Group, Inc. (the “Company”), a Florida corporation having its principal place of business at 5300 West Cypress Street, Suite 100, Tampa, Florida 33607, and Ankur Bhanderi (the “Executive”).

BACKGROUND STATEMENT

The Company is a subsidiary of HCI Group, Inc., which is publicly held. HCI’s common shares trade on the New York Stock Exchange. The Company, primarily through its Affiliated Entities (as defined in this Agreement), is engaged in numerous business-related activities, including insurance, investments and software technology. As of the date of this Agreement the Company is principally engaged in the business of providing property and casualty insurance to Florida homeowners. The Company is currently in the process of expanding its technology-driven insurance business beyond Florida and nationwide. (All such business and investment activities, present and future, whether engaged in by the Company or an Affiliated Entity are referred to in this Agreement as the “Business”). The Company has developed and expects to develop trade secrets, methods of doing business, business plans, computer software and other items, all of which are worthy of protection. The Company considers it to be in its best interests to have the benefit of the Executive’s services as provided in this Agreement and the Executive is willing to render such services to the Company in accordance with the provisions of this Agreement.

NOW THEREFORE, in consideration of and reliance upon the foregoing background statement and the representations and warranties contained in this Agreement, the Company and the Executive agree to the following terms and conditions:

TERMS AND CONDITIONS

1. Employment and Title. The Company agrees to employ the Executive, and the Executive agrees to serve, as the Company’s chief financial officer, upon the terms and conditions set forth in this Agreement.

2. Duties, Responsibilities and Authority. During the term of his employment under this Agreement, the Executive will have the duties, responsibilities and authorities set forth in the Company’s bylaws and as otherwise assigned to him by the Company’s board of directors and its president. The Executive agrees to devote his best efforts and substantially all his business time, energies and skills, diligently and in good faith, to perform his duties, fulfill his responsibilities, and exercise his authority hereunder for the exclusive benefit of the Company. In promoting the interests of the Company and without additional compensation, the Executive will serve any of the

Affiliated Entities, in such capacities as the Company’s board of directors may from time to time direct. The Executive will cooperate fully with the Company’s president in advancing the best interests of the Company. The Executive will read and use reasonable efforts to abide by any policy, code or practice the Company has or may hereafter adopt that is applicable to executives or executive officers in general, including policies and rules contained in the Company’s employee handbook and code of conduct.

3. Location. The Executive’s principal place of employment will be the Company’s offices at 5300 West Cypress Street in Tampa, Florida or such other place to which the parties agree, but in no event more than 50 miles from Tampa, Florida.

4. Term. The initial term of the Executive’s employment hereunder will commence on or about July 14, 2021, and continue for a period of four years, unless earlier terminated pursuant to the terms of this Agreement. The Executive’s employment hereunder will continue and automatically renew for additional one-year terms unless either party delivers written notice of non-renewal at least 90 days before expiration of the initial term or any renewal term. The initial term and any renewal term are hereinafter collectively referred to as the “Term.”

5. Compensation.

5.1. Base Salary. As compensation for the services to be rendered by the Executive hereunder, the Company will pay the Executive, during the Term, an annual base salary of $400,000 (or a higher amount as may be set from time to time by the Company’s board of directors), which base salary will accrue and be paid in accordance with the Company’s standard payroll practices.

5.2. Bonus Compensation. Solely in exchange for signing this Agreement, the Executive will be entitled to a bonus of $25,000 upon signing this Agreement and $50,000 one month after his employment commences. Provided he remains employed by the Company, the Executive will be entitled to participate in any senior executive bonus plan to the same extent as all other senior executives of the Company (other than the chief executive officer). The Executive will be entitled to any additional compensation provided by resolution of the Company’s board of directors or applicable committee of the board of directors or any bonus compensation plan adopted by the board of directors or applicable committee of the board of directors.

5.3. Restricted Stock. The Company will award to the Executive 300,000 shares of restricted stock of the Company under terms substantially as set forth on the restricted stock award contract appearing as Exhibit A to this Agreement.

5.4. Benefits. During the Term, the Executive will be entitled to (i) medical, dental, life, vision, disability and retirement benefits, if any, upon substantially the same terms and conditions generally applicable to all the Company’s senior executive officers; and (ii) 20 days paid time off annually, which will accrue and be paid in accordance with the Company’s standard payroll practices.

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5.4. Reimbursement of Expenses. The Company will reimburse the Executive for all reasonable travel and other business expenses incurred by the Executive in the performance of the Executive’s duties hereunder, subject to, and in accordance with, any expense reimbursement policies and expense documentation requirements of the Company that may be in effect from time to time.

5.6. Withholding. Any and all amounts payable under this Agreement will be subject to any federal, state and local tax and other withholdings or deductions required by applicable law, rule or regulation.

6. Working Facilities. The Company will provide the Executive with an office at the Executive’s principal work location or at such other location as agreed to by the Executive and the Company. The Executive is expected to report daily to this location unless travelling on behalf of the Company or on leave.

7. Incapacity.

7.1 Right to Terminate. Notwithstanding anything else to the contrary contained in this Agreement, except as provided by this Section 7 the Company will have no right to terminate the Executive’s employment while the Executive suffers Incapacity (as defined below). If the Executive suffers Incapacity for a period exceeding six consecutive months, then the Company will have the right to terminate the Executive’s employment hereunder 30 days after delivery of written notice of termination. A termination of employment under this Section 7 will be deemed a termination without “Good Cause” as described in Section 8.4 hereof.

7.2 Right to Replace. If the Executive suffers Incapacity for 30 or more consecutive days, the Company will have the right to designate a person to temporarily perform the Executive’s duties.

7.3 Rights Prior to Termination. During a period of Incapacity, the Executive will be entitled to his full base salary under Section 5.1 hereof and full benefits under Section 5.3 hereof until employment is terminated as described in Section 8.1. The Executive will be entitled to reasonable accommodations from the Company so that the Executive is not prevented from performing his duties by illness or injury.

7.4 Incapacity Defined. For purposes of this Section 7, the term “Incapacity” means the Executive’s inability to perform his duties hereunder substantially on a full-time basis because of physical or mental illness or physical injury as determined by the Company’s board of directors, in its reasonable discretion, based upon competent medical evidence. Upon the Company’s written request, the Executive will submit to reasonable medical and other examinations to provide the evidence required hereunder.

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8. Termination of Employment.

8.1 Termination by the Company. The Company may terminate the Executive’s employment under this Agreement without Good Cause anytime not fewer than 30 days nor more than 45 days after delivering written notice of termination to the Executive. The Company may terminate the Executive’s employment hereunder for Good Cause anytime by delivery of written notice of termination. Termination will be effective upon the date set forth in the notice of termination. Good Cause will be limited to the following circumstances:

(i) The Executive commits any fraud, dishonesty, misappropriation or similar act against the Company or others;

(ii) The Executive materially defaults in the performance of his obligations, services or duties hereunder;

(iii) The Executive is grossly negligent or commits willful misconduct in the performance of his duties hereunder;

(iv) The Executive has been adjudicated guilty by, or enters a plea of guilty or no contest before, a court of competent jurisdiction of illegal activities or found by a court of competent jurisdiction to have engaged in other wrongful conduct and such illegal activities or wrongful conduct, individually or in the aggregate, has (or could be reasonably expected to have) a material adverse effect on the Company, its prospects, earnings or financial condition; and

(v) Any federal or state regulatory authority determines that the Executive is not qualified to serve as the chief financial officer of the Company or an Affiliated Entity. If, at any time during the Executive’s service, the Company is required to seek the approval of the Florida Office of Insurance Regulation (“FLOIR”) or the insurance regulatory authority of another state regarding the appointment or continued service of the Executive; and FLOIR or such insurance regulatory authority disapproves or fails to approve within 90 days from application therefor the Executive’s appointment or continuing service, such disapproval or lack of approval will be grounds for termination under this Section 8.1(v).

8.2 Effect of Termination for Good Cause. If the Executive’s employment is terminated by the Company for Good Cause—

(i) the Executive will be entitled to accrued base salary under Section 5.1 and accrued paid time off, each through the date of termination; and

(ii) the Executive will be entitled to reimbursement for expenses accrued through the date of termination in accordance with the provisions of Section 5.4 hereof; and

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8.3 Effect of Termination without Good Cause. If the Company terminates the Executive’s employment without Good Cause—

(i) the Executive will be entitled to accrued base salary under Section 5.1 and accrued paid time off, each through the date of termination;

(ii) the Executive will be entitled to reimbursement for expenses accrued through the date of termination in accordance with the provisions of Section 5.4 hereof;

(iii) if such termination is due to the Executive’s death or Incapacity as set forth in Section 7.1 the Executive will be entitled to 6 months’ base salary as described at Section 5.1. Otherwise, the Executive will be entitled to 12 months’ base salary as described at Section 5.1. In any case, such salary will accrue and be paid in accordance with Company’s normal payroll practices as if the Executive’s employment had not been terminated;

(iv) the Executive will be entitled to an amount equal to the bonus the Executive would have been entitled to under any senior bonus plan in effect for the year of termination had termination not occurred, which amount will be paid at the time and in the manner bonuses are paid to other senior executives (other than the chief executive officer): and

(v) The provisions of Section 12 will no longer apply to the Executive.

8.4 Deemed Termination without Good Cause. The Executive’s death will be deemed a termination without Good Cause as of the date of death. Termination by reason of the Executive’s Incapacity as set forth in Section 7.1 will be deemed a termination without Good Cause. The expiration of the Term after the Company delivers written notice of non-renewal as described in Section 5 will be deemed a termination without Good Cause. In addition, after the occurrence of any of the following events, the Executive, at his sole option, may declare by 30 days’ written notice to the Company that his employment hereunder has been terminated by the Company, and such termination will for all purposes of this Agreement be deemed a termination by the Company without Good Cause:

(i) The Company materially changes the Executive’s reporting requirements;

(iii) The Company fails to afford the Executive the power and authority generally commensurate with the position of chief financial officer.

(iv) The Company moves the Executive’s principal place of employment beyond 50 miles from Tampa, Florida; or

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(v) The Company breaches any material provision of this Agreement.

8.5 Termination by Executive. The Executive may terminate his employment hereunder by delivery of not less than 30 days’ written notice to the Company.

8.6 Effect of Termination by Executive. If the Executive terminates his employment pursuant to Section 8.5 hereof —

(i) the Executive will be entitled to accrued base salary under Section 5.1 and accrued paid time off, each through the date of termination; and

(ii) the Executive will be entitled to reimbursement for expenses accrued through the date of termination in accordance with the provisions of Section 5.4 hereof.

9. Board Approval. This Agreement and the obligations it contains are contingent upon and subject to approval by the Company’s board of directors. If the Board of Directors fails to approve this Agreement on or before the date the Executive commences his employment, then the Executive’s employment will be deemed terminated without Good Cause, except Section 8.3 (iii) will not apply, the Executive will be entitled to retain the $25,000 signing bonus described at Section 5.2, and the Executive will be entitled to receive $50,000 signing bonus described at Section 5.2.

10. Trade Secrets.

10.1. Confidential Information. For the purposes of this Agreement, “Confidential Information” means information or materials that, in the Company’s view, provide advantage to the Company (or an Affiliated Entity) over others not having such information or materials and includes (i) customer information, supplier information, sales channel and distributor information, material terms of any contracts, marketing philosophies, strategies, techniques and objectives (including service roll-out dates and volume estimates), legal and regulatory positions and strategies, advertising and promotional copy, competitive advantages and disadvantages, non-published financial data, network configurations, product or service plans, designs, costs, prices and names, inventions, discoveries, improvements, technological developments, know-how, software code, business opportunities (including planned or proposed financings, mergers, acquisitions, ventures and partnerships) and methodologies and processes (including the look and feel of computer screens and reports) for customer assistance, order acceptance and tracking, repairs, and commissions; (ii) information designated in writing or conspicuously marked as “confidential” or “proprietary” or likewise designated or marked with words of similar import; (iii) information for which the Company has an obligation of confidentiality so long as such obligation is known to the Executive; and (iv) information that by its nature or the circumstances of its delivery or disclosure a reasonable person would conclude that it is confidential or proprietary. The Executive is specifically aware of the legal obligations of confidentiality afforded to customers of financial institutions, including obligations to insurance policyholders.

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10.2. Confidentiality. The Executive will hold Confidential Information in confidence and trust and limit disclosure of Confidential Information strictly to persons who have a need to know such Confidential Information in connection with the Business. The Executive will not disclose, use, or permit the use or disclosure of Confidential Information, except in satisfying his obligations under this Agreement. The Executive will use reasonable care to protect Confidential Information from inappropriate disclosure, whether inadvertent or intentional. The Executive understands that the misappropriation of a trade secret is a criminal offense under state and federal laws. Notwithstanding the foregoing, the Executive may disclose Confidential Information if such disclosure is required by a court order or an order of a similar judicial or administrative body; provided, however, that the Executive notifies the Company of such requirement immediately and in writing, and cooperates reasonably with the Company in obtaining a protective or similar order with respect thereto.

10.3. Notification of Third Party Disclosure Requests. If the Executive receives any written or oral third party request, order, instruction or solicitation for the disclosure of Confidential Information not in conformance with this Agreement or if the Executive becomes aware of any attempt by a third party to improperly gain Confidential Information, the Executive will immediately notify the Company’s general counsel and the Company’s board of directors of such request, order, instruction or solicitation or of such attempt and fully disclose the details surrounding such request, order, instruction or solicitation or such attempt.

10.4. Non-Removal of Records. All documents, files, records, data, papers, materials, notes, books, correspondence, drawings and other written, graphic or electronic records of the Business and all computer software of the Company which the Executive will prepare or use, or come into contact with, will be and remain the exclusive property of the Company, in its discretion, and will not be physically, electronically, telephonically or otherwise removed from the Company’s premises without the Company’s prior written consent.

10.5. Return or Destruction of Confidential Information. Confidential Information gained, received or developed by the Executive or in which the Executive participated in developing will remain the exclusive property of the Company, in its sole discretion. The Executive will promptly return to the Company or destroy or erase all records, books, documents or any other materials whatsoever (including all copies thereof) containing such Confidential Information in his possession or control upon the earlier of (i) the receipt of a written request from the Company for return or destruction of Confidential Information or (ii) the termination of the Executive’s employment hereunder.

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10.6. Trade Secrets of Others. In the course of his employment hereunder the Executive will not use any information or materials that belong to any former employer or any other person or entity and for which he has a duty of confidentiality; nor will the Executive use or allow the use of any illegally obtained confidential or secret information or materials.

11. Intellectual Property. All Confidential Information, computer software, video and sound recordings, scripts, creations, inventions, improvements, designs and discoveries conceived, created, invented, authored, developed, produced or discovered by the Executive while employed by the Company, whether alone or with others, whether during or after regular work hours, whether before or during the term of employment under this Agreement, are and will be the Company’s property exclusively, in its sole discretion. All such items were and will be produced as “work for hire.” The Executive hereby assigns to the Company all copyrights, trademarks and other rights of authorship or ownership he may have with respect to such items. Moreover, at any time, without additional consideration, the Executive will execute and deliver any documents or instruments that the Company may request in order to effectively convey and transfer good title and right to, and put the Company in possession of, such items.

12. Restrictions on Competition and Solicitation.

12.1. Noncompetition. The Executive agrees that during the course of his employment with the Company and for a period of one year after his employment ends, the Executive will not, directly or indirectly, as an executive, agent, independent contractor, consultant, partner, joint venturer or otherwise, within any state in the United States within which the Company or an Affiliated Entity has conducted the Business within the 12 months preceding the date of the termination of the Executive’s employment with the Company, enter into, engage in, be employed by or consult with (or solicit to enter into, engage in, be employed by or consult with) any business which competes with the Company or an Affiliated Entity by providing property, casualty or flood insurance to homeowners within the 12 month period preceding the termination of the Executive’s employment with the Company, including (a) participating as an officer, director, stockholder, member, employee, agent, independent contractor, consultant, representative or partner of, or having any direct or indirect financial interest (including the interest of a creditor) in, any such competitor or (b) assisting any other individual or business entity, of whatever type or description, in providing any such competing services. The provisions of this section will not apply to the ownership by the Executive of less than 5% of any publicly held corporation or other business entity solely as an investor and under circumstances in which the Executive neither provides services nor assists anyone else to provide any services to or on behalf of any such entity. The Executive further agrees that upon a violation of this section of this Agreement, the period during which the Executive’s covenants in this section apply will be extended by the number of days equal to the period of such violation.

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12.2. Non-Solicitation/Non-Acceptance. The Executive agrees, during the course of his employment with the Company and for a period of one year after termination of that employment, the Executive will refrain from and will not, directly or indirectly, as employee, agent, independent contractor, consultant, partner, joint venturer or otherwise (a) solicit or counsel any third person, partnership, joint venture, company, corporation, association, or other organization that is or was a current or prospective customer of the Company or an Affiliated Entity within the 12 months preceding the termination of the Executive’s employment with the Company and with which the Executive had a substantial relationship within such preceding 12 month period, regardless of such person’s or entity’s location, to terminate any existing or prospective business relationship with the Company or an Affiliated Entity or commence a similar business relationship with any other individual or business entity; (b) accept, with or without solicitation, any business from any third person, partnership, joint venture, company, corporation, association or other organization that is or was a current or prospective customer of the Company or an Affiliated Entity with which the Executive had a substantial relationship within the preceding 12 month period, regardless of such person’s or entity’s location; or (c) solicit any of the employees, agents, independent contractors or consultants of the Company or an Affiliated Entity, regardless of such person’s or entity’s location, to terminate any business relationship with the Company or an Affiliated Entity. The Executive further agrees that upon a violation of this section of this Agreement, the period during which the Executive’s covenants in this section apply will be extended by the number of days equal to the period of such violation.

12.3. No Circumvention. The Executive will not make any attempt, or use any artifice, scheme or device, including the use of any agent, representative, associate, advisor, relative or business entity, to circumvent the purposes of the restrictive covenants contained in Section 12.

12.4. Acknowledgements. The Executive acknowledges that the foregoing restrictive covenants are reasonable and necessary in light of the circumstances, including the Company’s interest in protecting the Confidential Information to which he has been exposed and the business relationships with the customers, partners, and others he has helped develop. The Executive further acknowledges that the foregoing restrictive covenants are a material inducement for the Company to enter into this Agreement, and that the covenants are given as an integral part of this Agreement.

12.5. Counterclaims. The existence of any claim or cause of action the Executive may have against the Company will not at any time constitute a defense to the enforcement by the Company of the restrictions or rights provided by this Section 12.

13. Equitable Remedies. The Executive and the Company agree that the services to be rendered by the Executive pursuant to this Agreement, and the rights and interests granted and the obligations to be performed by the Executive to the Company pursuant to this Agreement, are of a special, unique, extraordinary and intellectual character, which gives them a peculiar value, the loss of which cannot be reasonably or adequately compensated in damages in any action at law, and that a breach by the Executive of any of the terms of this Agreement will cause the Company great and irreparable injury and damage. The Executive hereby expressly recognizes and agrees that the Company has the right to seek entry of a temporary restraining order, preliminary injunction and permanent injunction, and that such orders and injunctions may be issued against the Executive, to prevent or address a breach of Sections 10 through 12 of this Agreement. The existence of any claim or cause of action the Executive may have against the Company will not at any time constitute a defense to the request for such relief.

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14. Compliance with Other Agreements. The Executive represents and warrants to the Company that he is free to enter this Agreement and that the execution of this Agreement and the performance of the obligations under this Agreement will not, as of the date of this Agreement or with the passage of time, conflict with, cause a breach of or constitute a default under any agreement to which the Executive is a party or by which he may be bound.

15. Severability. Every provision of this Agreement is intended to be severable. If any provision or portion of a provision is illegal, invalid or unenforceable, including as to geographic or temporal scope, then the remainder of this Agreement will not be affected. Moreover, any provision or portion of a provision of this Agreement which is determined to be unreasonable, arbitrary or against public policy, including as to geographic or temporal scope, will be modified by a court or arbitrator as appropriate so that it is not unreasonable, arbitrary or against public policy.

16. Rights and Remedies Preserved. Nothing in this Agreement will limit any right or remedy the Company or the Executive may have under this Agreement or pursuant to law for any breach of this Agreement by the other party. The rights granted to the parties herein are cumulative, and the election of one will not constitute a waiver of such party’s right to assert all other legal remedies available under the circumstances.

17. Waiver. No failure or delay on the of part either party to this Agreement in the exercise of any right, power or remedy the party may have will operate as a waiver, nor will any single or partial exercise of any right, power or remedy by either party preclude any other or further exercise of that right, power or remedy or the exercise of any other right, power or remedy. No express waiver or assent by any party to any breach of or default in any term or condition of this Agreement will constitute a waiver of or assent to any succeeding breach of or default in the same or any other term or conditions of this Agreement.

18. Notices. Any notices or deliveries permitted or required by this Agreement will be deemed given (i) when delivered in person or by messenger, if a receipt is obtained for delivery, (ii) when delivered by Federal Express, United Parcel Service, Airborne Express, U.S. Express Mail or similar nationally recognized overnight delivery service, if a confirmation of delivery is obtained, or (iii) five days after mailing, if mailed via certified or registered U.S. mail, return receipt requested, provided the notice is delivered or mailed to the party’s address as set forth below:

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If to the Company:

TypTap Insurance Group

Suite 100

5300 West Cypress Street

Tampa, FL 33607

ATT: General Counsel

If to the Executive:

The Executive’s most recent address on file with the Company.

The parties may change addresses to which notices are to be delivered by giving notice of the change of address in the manner set forth above; except, however, that notwithstanding the foregoing provision, notice of a change of address will be deemed made upon actual receipt of the notice by the other party. Notices deemed given or delivered as set forth above on a Saturday, Sunday, or legal holiday will instead be deemed given or delivered on the next succeeding day which is not a Saturday, Sunday or legal holiday.

19. Successors and Assigns. The rights and obligations of the Company under this Agreement will inure to the benefit of and be binding upon the successors and assigns of the Company, including the survivor upon any merger, consolidation, share exchange or combination of the Company. The Executive will not have the right to assign this Agreement or to assign, delegate or otherwise transfer any duty or obligation to be performed by him hereunder.

20. Entire Agreement. With respect to its subject matter, this Agreement contains all the understandings and agreements of the parties and supersedes all previous and all contemporaneous agreements, understandings, discussions and negotiations between the parties, whether written or oral. The parties agree that no previous drafts of this Agreement will be admissible as evidence (whether in any arbitration or court of law) in any proceeding which involves the interpretation of any provisions of this Agreement.

21. Amendments. Except as otherwise provided herein as to terms that are unreasonable, arbitrary or against public policy, this Agreement will not be modified or amended except by an instrument in writing signed by the parties.

22. Governing Law. This Agreement will be governed by and construed in accordance with the internal laws of the State of Florida without reference to conflicts of law principles.

23. Further Assurances. Each party hereto will cooperate and will take such further action and will execute and deliver such further documents as may be reasonably requested by the other party in order to carry out the provisions and purposes of this Agreement.

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24. Construction. This Agreement was negotiated at arm’s-length, with each party having the assistance of independent legal counsel. No court, arbitrator or finder of fact should construe this Agreement more strongly against either party on the basis of which party was responsible for the Agreement’s preparation. Wherever from the context it appears appropriate, each term stated in either the singular or the plural will include the singular and the plural, and pronouns stated in the masculine, feminine or neuter gender will include the other genders. The words “Agreement,” “hereof,” “herein” and “hereunder” and words of similar import referring to this Agreement refer to this Agreement as a whole, including Exhibits, and not to any particular provision of this Agreement. Whenever the word “include,” “includes” or “including” is used in this Agreement, it will be deemed to be followed by the words “without limitation.” The various headings contained in this Agreement are inserted only as a matter of convenience and in no way define, limit or extend the scope or intent of any of the provisions of this Agreement.

25. Counterparts. This Agreement may be executed in one or more counterparts, all of which taken together will be deemed one original.

26. Affiliated Entities. For the purposes of this Agreement, the capitalized term “Affiliated Entity” means any association or entity, including any corporation, partnership, joint venture, or limited liability company, controlled by or under common control with the Company.

27. Confidential Arbitration. The parties hereto agree that any dispute concerning or arising out of the provisions of this Agreement, the Executive’s employment or the termination of the Executive’s employment will be resolved by confidential arbitration in accordance with the rules of the American Arbitration Association. Such confidential arbitration will be held in Tampa, Florida and the decision of the arbitrator or arbitrators will be conclusive and binding on the parties and will be enforceable in any court of competent jurisdiction. In rendering a decision, the arbitrator will have the discretion to award attorneys’ fees and costs. Notwithstanding the foregoing, if any dispute arises hereunder as to which a party desires to exercise any equitable rights or remedies under this Agreement, such party may, in its discretion, in lieu of submitting the matter to arbitration, bring an action thereon in any court of competent jurisdiction in Florida, which court may grant any and all relief available in equity or at law for any and all claims made by such party based on or arising from the provisions of this Agreement. In any such action, the prevailing party will be entitled to reasonable attorneys’ fees and costs as may be awarded by the court.

28. Survival. The warranties and representations in this Agreement will survive the execution of this Agreement and continue without limitation. The Executive has incurred the obligations set forth in Sections 10 through 12 solely in consideration of the Company’s execution of this Agreement and such obligations and this Section 28 will survive and continue notwithstanding the termination, rescission or expiration of this Agreement or any provision of this Agreement.

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29. Exhibits. All exhibits, schedules and other attachments to this Agreement are hereby incorporated by this reference as integral parts of this Agreement.

30. Saturday, Sunday or Legal Holiday. When the last day of a period during which an act may be performed under this Agreement falls on a Saturday, Sunday, or legal holiday that period will be deemed to end on the next succeeding day which is not a Saturday, Sunday or legal holiday.

31. Electronic Signatures. Signed copies of this Agreement, addenda, attachments and exhibits delivered electronically via Internet (e-mail) or telephone (fax) will legally bind the parties to the same extent as original documents.

IN WITNESS WHEREOF, the parties have executed this Agreement effective as of the date first set forth above.

EXECUTIVE

/s/ Ankur Bhandari

Ankur Bhandari

TYPTAP INSURANCE GROUP, INC.

By:	/s/ Paresh Patel
	Paresh Patel, as Chief’ Executive Officer

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EX-10.7

Exhibit 10.7

TYPTAP INSURANCE GROUP, INC.

SHAREHOLDERS AGREEMENT

February 26, 2021

TABLE OF CONTENTS

		Page
Section 1.	Certain Definitions		1
Section 2.	Corporate Governance.		8
2.01	Governing Documents		9
2.02	Board of Directors		9
2.03	Key Man Event		11
2.04	Subsidiaries		12
2.05	Parent Board Nomination Rights		12
2.06	Corporate Opportunities		15
Section 3.	Transfers of Securities		16
3.01	Restrictions on Transfer		16
3.02	Tag-Along Rights		19
3.03	Drag-Along Rights		20
3.04	Legend		23
3.05	Market Standstill		23
Section 4.	Periodic Information Reporting Requirements.		24
4.01	Information Rights		24
4.02	Books and Records		25
4.03	Confidentiality		25
Section 5.	Registration Rights		26
5.01	Company Registration Rights		26
5.02	Parent Registration Rights		26
Section 6.	Other Covenants		26
6.01	Preemptive Rights		26
6.02	Certain Parent Agreements		28
6.03	Further Assurances		29
6.04	Tax Matters.		29
Section 7.	Representations and Warranties		30
7.01	Authority; Enforceability		30
7.02	No Breach		30
7.03	Consents		31
7.04	Spousal Consent		31
Section 8.	Miscellaneous		31
8.01	Amendments and Waivers		31
8.02	Entire Agreement		32
8.03	Term and Termination		32
8.04	Notices		32
8.05	Successors and Assigns; Assignment		33

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8.06	Specific Performance	34
8.07	Submission to Jurisdiction; No Jury Trial	34
8.08	Counterparts	35
8.09	Governing Law	35
8.10	Headings	35
8.11	Construction	35
8.12	Severability	35
8.13	Conflicts With Company Organizational Documents	35
ANNEX A	Registration Rights
ANNEX B	Officers
EXHIBIT A	Form of Joinder to Shareholders Agreement
EXHIBIT B	Spousal Consent

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This SHAREHOLDERS AGREEMENT (this “Agreement”) is made as of February 26, 2021 (the “Effective Date”), by and among TypTap Insurance Group, Inc., a Florida corporation (the “Company”), CB Snowbird Holdings, L.P., a Delaware limited partnership (“Centerbridge”), HCI Group Inc., a Florida corporation (“Parent”), the Management Shareholders (as defined below) and each other Person who becomes a Shareholder (as defined below) in accordance with the terms of this Agreement. Parent, Centerbridge and any other shareholder of the Company who agrees in writing to become bound by this Agreement following the Effective Date, and each of their respective successors and permitted assignees, are collectively referred to herein as the “Shareholders” and each individually as a “Shareholder.”

RECITALS

WHEREAS, pursuant to the Stock Purchase Agreement, dated as of February 26, 2021, by and among Parent, the Company and Centerbridge (the “Purchase Agreement”), on the date hereof, Centerbridge acquired 10,000,000 shares of Preferred Stock (as defined below) of the Company, comprising 9,000,000 shares of Series A-1 Preferred Stock of the Company, $0.001 par value per share (the “Voting Senior Preferred Shares”) and 1,000,000 shares of Series A-2 Preferred Stock of the Company, $0.001 par value per share (the “Non-Voting Senior Preferred Shares” and, together with the Voting Senior Preferred Shares, the “Senior Preferred Shares”);

WHEREAS, upon the closing of the transactions contemplated by the Purchase Agreement and concurrently with the execution and delivery of this Agreement and the acquisition of the Senior Preferred Shares by Centerbridge, Parent has issued to Centerbridge warrants to purchase 750,000 shares of common stock of Parent on the terms, and subject to the conditions, set forth therein (the “Parent Warrants”) and Parent and Centerbridge have executed and delivered a Guarantee Agreement, dated as of the date hereof, pursuant to which, among other things, Parent has agreed to guarantee certain of the Company’s obligations with respect to the Senior Preferred Shares, on the terms and subject to the conditions set forth therein (the “Guarantee”);

WHEREAS, concurrently with the execution and delivery of this Agreement, pursuant to the Purchase Agreement, the Company has adopted the TypTap Insurance Group, Inc. 2021 Equity Incentive Plan (the “TypTap Equity Incentive Plan”); and

WHEREAS, Parent, the Company and Centerbridge each desire to enter into this Agreement, among other things, to establish certain rights and obligations among them relating to the governance of the Company and to the Equity Securities (as defined below), all as set forth herein;

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

Section 1. Certain Definitions. As used in this Agreement, the following terms shall have the meanings set forth below:

“Affiliate” of any Person means any other Person controlling, controlled by or under common control with such Person. As used in this definition, “control” (including, with its correlative meanings, “controlled by” and “under common control with”) means, with respect to

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any Person, the possession, directly or indirectly, of the power to direct or cause the direction of management or policies (whether through ownership of securities or partnership or other ownership interests, by contract or otherwise) of such Person. Notwithstanding the foregoing, the portfolio companies (including Parent, the Company and their respective Subsidiaries) of investment funds or accounts organized, managed or advised by Centerbridge Partners, L.P. or any of its Affiliates will not be deemed to be Affiliates of Centerbridge for purposes of this Agreement.

“Affiliate Transfer” means a Transfer of Equity Securities from a Shareholder that is not a natural person to an Affiliate of such Shareholder, and “Affiliate Transferee” shall have the corresponding meaning.

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

“Articles of Incorporation” means the certificate of formation of the Company, as amended from time to time.

“Beneficially Own”, “Beneficially Owned” or “Beneficial Ownership” shall have the meaning set forth in Rule 13d-3 of the rules and regulations promulgated under the Exchange Act, except that for purposes of this Agreement the words “within sixty days” in Rule 13d-3(d)(1)(i) shall not apply, to the effect that a person shall be deemed to be the Beneficial Owner of a security if that person has the right to acquire beneficial ownership of such security at any time.

“Board” means the Board of Directors of the Company.

“Business Day” means any day other than a Saturday, a Sunday or any day on which banks located in the State of New York or the State of Florida are authorized or obliged to close.

“Bylaws” means the Bylaws of the Company, as amended from time to time.

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

“Centerbridge Director” has the meaning set forth in Section 2.02(c).

“Centerbridge Parent Board Designee” means any individual designated by Centerbridge for appointment or nomination by Parent for election as a director on the Parent Board pursuant to clauses (a), (b) or (f) of Section 2.4, whether such individual has been proposed or designated for such appointment or nomination, is standing for election as director on the Parent Board, or is then serving on the Parent Board. For the avoidance of doubt, only one individual may be a Centerbridge Parent Board Designee at any particular time, and the Centerbridge Parent Board Designee and the Centerbridge Director (i.e., Centerbridge’s appointee to serve as a director on the Company’s Board of Directors) may be the same individual or different individuals.

“Charitable Gifting Event” means any Transfer by a Shareholder, or any subsequent Transfer by such Shareholder’s members, partners or other employees, in connection with a bona fide gift to any Charitable Organization on the date of, but prior to, the execution of the underwriting agreement entered into in connection with any underwritten offering.

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“Charitable Organization” means a charitable organization as described in Section 501(c)(3) of the Code.

“Code” means the Internal Revenue Code of 1986, as in effect from time to time.

“Combined Returns” has the meaning set forth in Section 6.04(c).

“Commission” means the United States Securities and Exchange Commission.

“Common Shares” means the Common Shares of the Company, $0.001 par value per share.

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

“Company Registrable Securities” means (i) any Senior Preferred Shares held (directly or indirectly) by Centerbridge or any of its Affiliates, (ii) any Common Shares issued or issuable upon the conversion of the Senior Preferred Shares and (iii) any equity securities of the Company or any Subsidiary of the Company issued or issuable with respect to the securities referred to in clauses (i) and (ii) above by way of dividend, distribution, split or combination of securities, or any recapitalization, merger, consolidation or other reorganization.

“Conflicted Action” has the meaning set forth in Section 2.02(g)(iii)(B).

“Convertible Security” has the meaning set forth in Section 6.01(b).

“Covered Persons” has the meaning set forth in Section 2.07.

“Deemed Liquidation Event” has the meaning set forth in the Articles of Incorporation.

“Director” means any member of the Board.

“Disqualified Designee” means any director designee to whom any Disqualification Event is applicable, except for a Disqualification Event as to which Rule 506(d)(2)(ii) or (iii) or (d)(3) is applicable.

“Disqualification Event” means a “bad actor” disqualifying event described in Rule 506(d)(1)(i)-(viii) promulgated under the Securities Act.

“Drag-Along Shareholder” has the meaning set forth in Section 3.03(a).

“Drag-Along Transaction” has the meaning set forth in Section 3.03(a).

“Drag-Along Transaction Notice” has the meaning set forth in Section 3.03(d).

“Drag-Along Transaction Period” has the meaning set forth in Section 3.03(e).

“Dragged Shareholder” has the meaning set forth in Section 3.03(a).

“Effective Date” has the meaning set forth in the preamble.

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“Employer” means, with respect to any Management Shareholder or Officer, Parent, the Company or any of their respective Affiliates by which such Management Shareholder or Officer is principally employed or to which such Management Shareholder or Officer provides services, as applicable.

“Equity Securities” means any equity securities of the Company, including the Common Shares, the Voting Senior Preferred Shares, the Non-Voting Senior Preferred Shares and any other Preferred Stock.

“Exchange Act” means the Securities Exchange Act of 1934, as amended from time to time, or any successor federal law then in force, together with all rules and regulations promulgated thereunder.

“Family Limited Liability Company” means, with respect to any individual, any limited liability company created for the sole benefit of one or more of such individual’s Related Persons and controlled by such individual.

“Family Limited Partnership” means, with respect to any individual, any limited partnership created for the sole benefit of one or more of such individual’s Related Persons and controlled by such individual.

“Family Member” means, with respect to any individual, any Related Person, Family Trust, Family Limited Liability Company or Family Limited Partnership of such individual.

“Family Trust” means, with respect to any individual, any trust created for the sole benefit of such individual or one or more of such individual’s Related Persons.

“Federal Combined Return” has the meaning set forth in Section 6.04(c).

“FINRA” means the Financial Industry Regulatory Authority.

“Free Writing Prospectus” means a free-writing prospectus, as defined in Rule 405.

“GAAP” means United States generally accepted accounting principles.

“Guarantee” has the meaning set forth in the Recitals.

“Investment Company Act” means the United States Investment Company Act of 1940, as amended, or any similar federal statute, and the rules and regulations of the Commission promulgated thereunder, as the same may be amended from time to time.

“IPO” means the first underwritten public offering and sale of Equity Securities for cash pursuant to an effective registration statement (other than Form S-4, S-8 or a comparable form) under the Securities Act.

“Key Man Event” has the meaning set forth in Section 2.03.

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“Liquidation Amount” has the meaning given to such term with respect to the Senior Preferred Shares in the Articles of Incorporation.

“Management Shareholder” means any Shareholder that is a current or former employee of the Company, including any employee who receives Common Shares under the TypTap Equity Incentive Plan, and holds issued Equity Securities equal to or exceeding 1% or more of the Company’s issued capital stock.

“Minimum Ownership Threshold” means that Centerbridge and its Affiliates collectively continue to Beneficially Own at least 3,300,000, in aggregate, of Equity Securities comprising either, or a mixture of, (i) Senior Preferred Shares or (ii) Common Shares issued upon conversion of the Senior Preferred Shares, in each case as equitably adjusted for any stock split, reverse stock split, recapitalization or similar event.

“New Company Securities” has the meaning set forth in Section 6.01(b).

“New Issue Notice” has the meaning set forth in Section 6.01(c).

“Notice of Acceptance” has the meaning set forth in Section 6.01(c).

“Officer” means any officer of the Company.

“Order” means any decision, decree, order, writ, judgment, stipulation, award, injunction (whether temporary, preliminary, or permanent), temporary restraining order or other order in any suit or proceeding by any Regulatory Agency.

“Original Meeting Agenda” has the meaning set forth in Section 2.02(g)(ii).

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

“Parent Board” means the Board of Directors of Parent.

“Parent Board Designation Condition” means that Centerbridge and its Affiliates continue to meet the Minimum Ownership Threshold.

“Parent Registrable Securities” means (i) any common shares of Parent issued or issuable upon the conversion of the Parent Warrants and (ii) any equity securities of Parent or any Subsidiary of Parent issued or issuable with respect to the securities referred to in clause (i) above by way of divided, distribution, split or combination of securities, or any recapitalization, merger, consolidation or other registration.

“Parent Warrants” has the meaning set forth in the Recitals.

“Permitted Transfer” has the meaning set forth in Section 3.01(b).

“Permitted Transferee” has the meaning set forth in Section 3.01(b).

“Person” means an individual, a partnership, a company, a corporation, a limited liability company, an association, a joint stock company, a trust, a joint venture, an unincorporated organization or a governmental or quasi-governmental entity or any department, agency or political subdivision thereof.

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“Personal Representative” means the successor or legal representative (including a guardian, executor, administrator or conservator) of a dead or incompetent Shareholder.

“Preferred Stock” means shares of the Company’s preferred stock, without par value per share.

“Prime Rate” means the rate from time to time published in the “Money Rates” section of The Wall Street Journal as being the “Prime Rate” (or, if more than one rate is published as the Prime Rate, then the highest of such rates).

“Proposed Purchaser” has the meaning set forth in Section 3.01(d).

“Proposed Tag Transfer” has the meaning set forth in Section 3.02(a).

“Public Offering” means any sale or distribution by the Registrant, one of its Subsidiaries or Centerbridge to the public of common equity or other securities convertible into or exchangeable for common equity of the Registrant pursuant to an offering registered under the Securities Act.

“Purchase Agreement” has the meaning set forth in the Recitals.

“Qualified Public Offering” means an underwritten public offering of Common Shares listed on an international stock exchange with gross proceeds (from unaffiliated parties) to the Company or selling Shareholders of not less than $250 million with a price per share equal to or greater than 1.50 times the Original Purchase Price of a Senior Preferred Share, as defined in the Articles of Incorporation (and subject to the adjustments set forth therein).

“Registrable Securities” means the Company Registrable Securities. Any Registrable Security shall cease to be a Registrable Security at the earliest of the following: (a) when a registration statement covering such Registrable Security becomes or has been declared effective by the SEC and such Registrable Security has been sold or disposed of pursuant to such effective registration statement; (b) when such Registrable Security has been sold or disposed of (excluding Transfers by Centerbridge to an Affiliate of Centerbridge) pursuant to Rule 144 under the Securities Act (or any successor or similar provision adopted by the SEC then in effect); or (c) when such Registrable Security is held by the Registrant or one of its Affiliates (other than Centerbridge and its Affiliates).

“Registrant” means the Company.

“Regulatory Agency” means any nation, government, court, regulatory, taxing or administrative agency, commission or authority or other legislative, executive or judicial governmental entity, body, agency, official or instrumentality, domestic or foreign, whether federal, national, provincial, state, local or multinational or self-regulatory organization or agency or other similar quasi-governmental regulatory body or arbitration panel, tribunal or arbitrator.

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“Related Person” means, with respect to any individual, such individual’s parents, spouse, siblings, children and grandchildren.

“ROFR Authorization Date” has the meaning set forth in Section 3.01(d)(i).

“ROFR Shares” has the meaning set forth in Section 3.01(d)(i).

“ROFR Transfer Notice” has the meaning set forth in Section 3.01(d)(i).

“Rule 144”, “Rule 158”, “Rule 405”, and “Rule 415” mean, in each case, such rule promulgated under the Securities Act (or any successor provision) by the SEC, as the same will be amended from time to time, or any successor rule then in force.

“Rule 506(d) Related Party” means, with respect to any Person, any other Person that is a beneficial owner of such first Person’s securities for purposes of Rule 506(d) under the Securities Act.

“Sale Transaction” means a sale to a third party of a majority of the equity, or all or substantially all of the assets, of the Company, including by means of a merger, consolidation, recapitalization or any other means.

“SAP” means means statutory accounting principles prescribed or permitted by the Regulatory Agency charged with the supervision of insurance companies in the state of domicile of the applicable insurance company Subsidiary of the Company.

“SEC” means the United States Securities and Exchange Commission.

“Securities Act” means the United States Securities Act of 1933, as amended, or any similar federal statute and the rules and regulations of the Commission promulgated thereunder, as the same may be amended from time to time.

“Selling Shareholder” has the meaning set forth in Section 3.01(d)(i).

“Senior Preferred Shares” has the meaning set forth in the Recitals.

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

“Spousal Consent” has the meaning set forth in Section 8.04.

“State Combined Return” has the meaning set forth in Section 6.04(b).

“Subsidiary” means, with respect to any Person, any entity of which (a) a majority of the total voting power of shares of stock or equivalent ownership interests entitled (without regard to the occurrence of any contingency) to vote in the election of directors, managers, trustees or other members of the applicable governing body thereof is at the time owned or Controlled, directly or indirectly, by that Person or one or more of the Subsidiaries of that Person or a combination thereof, or (b) if no such governing body exists at such entity, a majority of the total voting power of shares of stock or equivalent ownership interests of the entity is at the time owned or Controlled,

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directly or indirectly, by that Person or one or more Subsidiaries of that Person or a combination thereof. For purposes hereof, a Person or Persons shall be deemed to have a majority ownership interest in a limited liability company, partnership, association or other business entity if such Person or Persons has been allocated a majority of limited liability company, partnership, association or other business entity gains or losses or shall be or Control the managing member or general partner of such limited liability company, partnership, association or other business entity.

“Tagging Notice” has the meaning set forth in Section 3.02(b).

“Tagging Shareholder” has the meaning set forth in Section 3.02(b).

“Tax” or “Taxes” means any and all taxes, including any interest, penalties or other additions to tax that may become payable in respect thereof, imposed by any Regulatory Agency, which taxes shall include all income, profits, alternative minimum, estimated, payroll, employee withholding, social security, sales, use, ad valorem, value added, excise, franchise, premium, gross receipts, stamp, transfer, net worth, and other taxes, fees, duties, levies, customs, tariffs, imposts, assessments, obligations and charges of the same or of a similar nature to any of the foregoing.

“Tax Allocation Agreement” means that certain Tax Allocation Agreement, dated May 10, 2017, among Parent and certain of its Subsidiaries.

“Transfer” means any direct or indirect sale, exchange, transfer (including any transfer by gift), assignment, pledge, hypothecation, mortgage, distribution or other disposition, or issuance or creation of any option or any voting proxy, voting trust or other transfer of legal or equitable interest in a security, in whole or in part, whether voluntarily or involuntarily or by operation of law or at a judicial sale or otherwise; and “Transferred” and “Transferring” shall have a correlative meaning.

“Transfer Notice” has the meaning set forth in Section 3.02(b).

“Transferee” has the meaning set forth in Section 3.01(a).

“TypTap Equity Incentive Plan” has the meaning set forth in the Recitals.

“TypTap Group” has the meaning set forth in Section 6.04(b).

“Voting Senior Preferred Shares” has the meaning set forth in the Recitals.

“WKSI” means a “well-known seasoned issuer” as defined under Rule 405.

Section 2. Corporate Governance.

2.01 Governing Documents. Each Shareholder agrees to vote its voting Equity Securities or execute proxies or written consents, as the case may be, and to take all other actions necessary to ensure that the Articles of Incorporation and Bylaws (and, as applicable and subject to applicable law and any shareholder approval requirements (which Parent shall use commercially reasonable efforts to obtain, if necessary), the articles of incorporation and bylaws of Parent) (a) facilitate, and do not at any time conflict with, any provision of this Agreement and (b) permit

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each Shareholder to receive the benefits to which each such Shareholder is entitled under this Agreement. The Company agrees to vote the voting securities of all Subsidiaries of the Company and to take all other necessary actions necessary to ensure that the organizational documents of each Subsidiary (i) facilitate, and do not at any time conflict with, any provision of this Agreement and (ii) permit each Shareholder to receive the benefits to which each such Shareholder is entitled under this Agreement.

2.02 Board of Directors.

(a) Board Matters; Size of Board; Initial Board of Directors. Each Shareholder agrees to vote its voting Equity Securities or execute proxies or written consents, as the case may be, and use its commercially reasonable efforts to take all other necessary action, including amending the Articles of Incorporation and Bylaws, so as to establish the size, composition and governance of the Board as set forth in this Section 2. As of the Effective Date, the Board shall consist of eight (8) Directors comprised of the individuals set forth on Schedule 1 hereto.

(b) Appointment of Directors. For so long as Centerbridge continues to hold at least the Minimum Ownership Threshold, Centerbridge shall be entitled to designate one (1) individual to serve as a Director (the “Centerbridge Director”) and Centerbridge and Parent, acting reasonably and in good faith, shall jointly be entitled to designate one (1) individual, on whom they mutually agree. The remaining Directors shall be the Chief Executive Officer and five (5) other individuals designated by Parent (the “Parent Directors”).

(c) Bad Actor Covenants. Each Shareholder with the right to designate or participate in the designation of a director pursuant to this Agreement covenants and agrees (i) not to designate or participate in the designation of any director designee who, to such Shareholder’s knowledge, is a Disqualified Designee, (ii) to exercise reasonable care to determine whether any director designee designated by such person is a Disqualified Designee, (iii) that in the event such Shareholder becomes aware that any individual previously designated by any such Shareholder is or has become a Disqualified Designee, such Shareholder shall as promptly as practicable take such actions as are necessary to remove such Disqualified Designee from the Board and designate a replacement designee who is not a Disqualified Designee, and (iv) to notify the Company promptly in writing in the event a Disqualification Event becomes applicable to such Shareholder’s designee, except, if applicable, for a Disqualification Event as to which Rule 506(d)(2)(ii) or (iii) or (d)(3) is applicable.

(d) Removal of Directors. A Director may be removed at any time in accordance with the Bylaws only upon the written request or approval of the Shareholder who designated such Director in accordance with Section 2.02(b). Upon receipt of such a written request from the designating Shareholder, each Shareholder agrees to vote all voting Equity Securities owned by such Shareholder, and shall take all other actions necessary or desirable within its control, and the Company shall take all necessary or desirable actions within its control, in order to remove such Director in accordance with such written request.

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(e) Resignation. A Director may resign at any time from the Board by delivering a written resignation to the Board. Any such resignation shall be effective upon receipt thereof unless it is specified to be effective at some other time or upon the occurrence of some other event. The Board’s acceptance of a resignation shall not be necessary to make it effective.

(f) Vacancies. Upon the death, resignation or removal of a Director, the Shareholder who designated such Director shall be entitled to designate a new Director to fill such office in accordance with Sections 2.02(b) and (c).

(g) Board Procedures. The Board shall follow the following procedures:

(i) Notice. The Company shall give prior written notice to each Director of any meeting of the Board at least two (2) Business Days prior to such meeting. Attendance of a Person at a meeting shall constitute a waiver of notice of such meeting, except where the Person attends such meeting for the express purpose of objecting, at the beginning of such meeting, to the transaction of business at such meeting because such meeting is not properly called or convened.

(ii) Quorum. Except as otherwise required by applicable law, the presence of the Centerbridge Director is required for a quorum for any meeting of the Board or any of its committees; provided, however, that unless a matter that requires the affirmative vote of the Centerbridge Director pursuant to Section 2.02(k) below is on the agenda for such meeting (the “Original Meeting Agenda”), if there is a failure of quorum at such meeting for which notice was given in accordance with Section 2.02(g)(i) as a result of the absence of the Centerbridge Director, the Directors in attendance may adjourn such meeting and re-call it for a time (unless otherwise agreed to by the Centerbridge Director) not less than 48 hours after the scheduled start of such meeting, and at such recalled meeting the presence of such absent Centerbridge Director shall not be required for the purpose of establishing a quorum in respect of any matters set forth in the Original Meeting Agenda. No Director may intentionally refuse to appear at any meeting of the Board in order to frustrate the establishment of a quorum.

(iii) Voting.

(A) Except as otherwise provided in the Bylaws or in this Agreement, (A) the approval by a vote of a majority of the Board or (B) the written consent of all of the Directors then in office shall be required for all actions requiring approval of the Board.

(B) Notwithstanding Section 2.02(f)(iii)(A), if any Director is conflicted with respect to any action requiring approval of the Board (each such action, a “Conflicted Action”), such Director shall be required to disclose the conflict to the other current Directors serving on the Board promptly; provided that in no event shall an issuance of New Company Securities that is subject to the preemptive rights in Section 6.01 be deemed to be a Conflicted Action.

(h) Insurance. The Company shall maintain directors’ and officers’ liability insurance and fiduciary liability insurance with insurers of recognized financial responsibility in such amounts as the Board determines to be prudent and customary for the Company’s business and operations. In addition, the Articles of Incorporation and Bylaws shall at all times provide for indemnification, exculpation and advancement of expenses to the fullest extent permitted under applicable law.

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(i) Compensation; Expenses. The Board shall set Director compensation; provided that a Director who is also an employee of the Company or a Shareholder or one of their respective Affiliates shall not be compensated for service as a Director. The Company shall reimburse each Director for his or her reasonable and documented out-of-pocket expenses incurred by each such Director in connection with attending regular and special meetings of the Board and any committee thereof.

(j) Board Committees. There shall at all times be an audit committee and a compensation committee of the Board, and the Board may designate one or more committees on a standing or ad hoc basis. Each committee of the Board shall consist of one or more of the Directors and may include members on such committee that are not Directors. If not otherwise restricted by applical law or the rules or regulations of the SEC or Nasdaq, if Centerbridge so elects, the Director designated by Centerbridge will serve on each committee of the Board with respect to which such an election has been made.

(k) The Company shall not, and shall not permit any of its Subsidiaries to, directly or indirectly, take any of the following actions without the approval of a majority of the Board that includes the affirmative vote of the Centerbridge Director:

(i) repurchase, or authorize the repurchase or redemption of, Equity Securities held by any Shareholder that (A) is also the present or former Chief Executive Officer of the Company or (B) is also an employee or former employee of the Company or any of its Subsidiaries (other than any present or former Chief Executive Officer of the Company) to the extent that the aggregate purchase price for such repurchase or redemption, together with the purchase price of all prior repurchases and redemptions effected pursuant to this clause (i)(B), would exceed $5,000,000 in any single year; or

(ii) (A) amend any compensation arrangement of, or issue any securities (including any Equity Securities or any securities that are convertible into or exercisable for Equity Securities), or any incentive compensation or other similar rights or interests to, any current or former Chief Executive Officer of the Company, (B) adopt any incentive compensation plans that, in the aggregate, would reasonably be expected to increase costs to the Company and its Subsidiaries by more than $10,000,000 relative to the compensation plans in effect (or adopted) as of the date of this Agreement or (C) issue or authorize the issuance of any securities (including any Equity Securities or any securities that are convertible into or exercisable for Equity Securities but excluding all Equity Securities granted or issued pursuant to the 2021 TypTap Insurance Group, Inc. Equity Incentive Plan, as amended) to employees or independent contractors other than any current or former Chief Executive Officer of the Company that, when combined with all other issuances of the type contemplated by this clause (C), would have an aggregate fair market value as of the date of such issuance of more than $10,000,000 in any one year or increase the number of Equity Securities issuable under the 2021 TypTap Insurance Group, Inc. Equity Incentive Plan.

2.03 Key Man Event. From and after the Effective Date for so long as Centerbridge continues to hold at least the Minimum Ownership Threshold, in the event that the Chief Executive Officer or President of the Company, TypTap Insurance Company or Exzeo USA, Inc. as of the date hereof ceases to be the Chief Executive Officer or President of the Company, TypTap Insurance Company or Exzeo USA, Inc., as applicable (the “Key Man Event”), then his successor will be identified and selected by a special committee of the Board, which committee shall include the Centerbridge Director.

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2.04 Subsidiaries.

(a) General. The Company agrees to vote the voting securities of all Subsidiaries of the Company and to take all other necessary actions in respect of such Subsidiaries consistent with the provisions of this Agreement.

(b) Directors of Subsidiaries. The Company and each Shareholder shall take, and each Shareholder shall cause each Director designated by such Shareholder to take, such corporate actions as may be reasonably required to ensure that the composition of the board of directors of each Subsidiary includes at least one (1) Centerbridge Director. Such designee(s) shall have the same right to participate on committees of the board of directors of each Subsidiary of the Company as designee(s) have pursuant to Section 2.02(i).

2.05 Parent Board Nomination Rights.

(a) As of the Effective Date, the Parent Board either (i) has a vacancy as a result of a resignation, removal from office or death of a director or (ii) has a vacancy as a result of an increase in the size of the Parent Board effective as of the Effective Time pursuant to Section 9 of Article III of Parent’s bylaws. Eric Hoffman (or, at the option of Centerbridge, another individual identified by Centerbridge in a written notice to Parent) shall be deemed to be the initial Centerbridge Parent Board Designee and Parent shall ensure that on the Effective Date and immediately after the execution and delivery of this Agreement, the Parent Board appoint him to fill such vacancy until the next election of directors on the Parent Board by the shareholders of Parent. At the first annual meeting of Parent’s shareholders after the Effective Time, Parent shall nominate the Centerbridge Parent Board Designee for election by Parent’s shareholders as a director on the Parent Board to serve a three-year term (starting from such annual meeting, and as part of the applicable class of directors being elected at such meeting).

(b) Subject to the terms and conditions of this Section 2.06 and applicable law, for so long as the Parent Board Designation Condition continues to be met, Parent agrees to include the Centerbridge Parent Board Designee in its slate of nominees for election as directors of Parent at each annual meeting of Parent’s shareholders and each adjournment or postponement thereof (or action by written consent in lieu of such meeting) following the Effective Date at which the Centerbridge Parent Board Designee’s term as a director expires (or, if the shareholders of Parent fail to elect any Centerbridge Parent Board Designee standing for election to the Parent Board, the next annual meeting of Parent’s shareholders at which the directors will be elected to the Parent Board) and to use its reasonable efforts to cause the election of the Centerbridge Parent Board Designee to the Parent Board (for clarity, Parent will be required to use substantially the same level of efforts and provide substantially the same level of support as is used and provided for the other director nominees of Parent with respect to the applicable annual meeting of shareholders or action by written consent in lieu of such meeting). Failure of the shareholders of Parent to elect any Centerbridge Parent Board Designee to the Parent Board shall not affect the right of Centerbridge to nominate directors for election pursuant to this Section 2.06

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in any future election of directors. If the Centerbridge Parent Board Designee is not appointed or elected to the Parent Board for any reason, or if the Centerbridge Parent Board Designee is otherwise unavailable or unable to serve on the Parent Board, including as a result of such person’s death, disability, disqualification, withdrawal as a nominee or for any other reason, Centerbridge shall be entitled to designate another nominee promptly and the director position for which the original Centerbridge Parent Board Designee was nominated shall not be filled pending such designation and the Parent Board shall fill any such vacancy on the Parent Board only in accordance with Section 2.06(f) below.

(c) Each Centerbridge Parent Board Designee will be (x) Eric Hoffman or (y) another individual designated by Centerbridge who meets in all material respects all of the requirements of a director of Parent described in this Section 2.06. As a condition to any Centerbridge Parent Board Designee’s appointment to the Parent Board and nomination for election as a director of Parent pursuant to this Section 2.06, (i) Centerbridge and the Centerbridge Parent Board Designee shall provide to Parent (A) all information reasonably requested by Parent that is required to be or is customarily disclosed for directors, candidates for directors, and their Affiliates and representatives in a proxy statement or other filings under applicable law or regulation or stock exchange rules or listing standards, in each case, relating to their nomination or election as a director of Parent or Parent’s operations in the ordinary course of business and (B) information reasonably requested by Parent in connection with assessing eligibility, independence and other criteria applicable to directors or satisfying compliance and legal or regulatory obligations, in each case, relating to their nomination or election as a director of Parent or Parent’s operations in the ordinary course of business and (ii) the Centerbridge Parent Board Designee must be qualified to serve as a director of Parent under the Florida Business Corporation Act and the SEC rules and regulations to the same extent as all other directors of Parent (for the avoidance of doubt, the Centerbridge Parent Board Designee shall not be required to qualify as an independent director under applicable stock exchange rules and federal securities laws and regulations). Parent will make all information requests pursuant to this Section 2.06(c) in good faith in a timely manner that allows Centerbridge and the Centerbridge Parent Board Designee a reasonable amount of time to provide such information, and will cooperate in good faith with Centerbridge and the Centerbridge Parent Board Designee in connection with their efforts to provide the requested information.

(d) Parent acknowledges and agrees that (i) under no circumstances will any policies, procedures, processes, codes, rules, standards and guidelines applicable to service on the Parent Board be violated by the Centerbridge Parent Board Designee (A) receiving compensation from Centerbridge or any of its Affiliates or (B) failing to notify an officer or director of Parent prior to accepting an invitation to serve on another board of directors, and (ii) any share ownership requirement for the Centerbridge Parent Board Designees serving on the Parent Board will be deemed satisfied by the securities owned by Centerbridge and its Affiliates, and under no circumstance shall any policies, procedures, processes, codes, rules, standards and guidelines applicable to service on the Parent Board impose any restrictions on the ability of Centerbridge or its Affiliates to Transfer any securities.

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(e) For so long as the Centerbridge Parent Board Designee is on the Parent Board, Parent shall not implement any trading policy or similar guideline or policy with respect to the trading of securities of Parent that is targeted at Centerbridge or its Affiliates (other than a policy applicable to all directors and their respective Affiliates that (and solely to the extent that it) (i) limits, prohibits or restricts the trading of securities of Parent by such Centerbridge Parent Board Designee in his or her personal capacity, (ii) generally restricts the trading of securities of Parent while in possession of material non-public information concerning Parent or its Subsidiaries and (iii) requires compliance with applicable federal securities or other laws).

(f) Subject to the terms and conditions of this Section 2.06, if a vacancy on the Parent Board is created as a result of the Centerbridge Parent Board Designee’s death, resignation, disqualification or removal (in each case, except with respect to a removal or resignation contemplated by Sections 2.06(g)), or if Centerbridge desires to nominate a different individual to replace the then-existing Centerbridge Parent Board Designee, then, at the request of Centerbridge, Centerbridge and Parent shall work together in good faith to fill such vacancy or replace such nominee as promptly as reasonably practicable with a replacement Centerbridge Parent Board Designee subject to the terms and conditions hereof, and thereafter such individual shall as promptly as reasonably practicable be appointed to the Parent Board to fill such vacancy or be nominated by Parent for election to the Parent Board as a “Centerbridge Parent Board Designee” pursuant to this Section 2.06.

(g) Parent’s obligations under this Section 2.06 with respect to any Centerbridge Parent Board Designee shall terminate, and Centerbridge shall have no designation or nomination rights hereunder with respect to the Centerbridge Parent Board Designee if, Centerbridge and its Affiliates no longer continue to meet the Parent Board Designation Condition, and in such case the Centerbridge Parent Board Designee shall promptly offer to resign from the Parent Board (and, if requested by Parent, promptly deliver his written resignation to the Parent Board).

(h) If any Centerbridge Parent Board Designee ceases to satisfy in all material respects the conditions and obligations set forth in Section 2.06(c), Parent may notify Centerbridge thereof and, promptly following such notification, (i) the Centerbridge Parent Board Designee shall promptly offer to resign from the Parent Board (and, if requested by Parent, promptly deliver his written resignation to the Parent Board) and (ii) Centerbridge shall be entitled to fill the vacancy created thereby in accordance with Section 2.06(f).

(i) For so long as Centerbridge shall have the right to designate the Centerbridge Parent Board Designee for appointment or nomination by Parent for election to the Parent Board pursuant to this Section 2.06, Parent shall provide to Centerbridge access to (i) any materials or documents provided generally by Parent to the Parent Board or any committee of the Parent Board on which any Centerbridge Parent Board Designee then serves, in each case, substantially concurrently with the time such materials or documents are provide to the Parent Board or such committee and (ii) access to the officers of Parent to discuss Parent’s affairs, finances, and accounts, during normal business hours, as may be reasonably requested by such Persons; provided that Parent shall not be obligated to provide materials, documents or information that it reasonably and in good faith considers to be a trade secret or the disclosure of which would reasonably be likely to jeopardize the attorney-client privilege between Parent and its counsel or violate applicable law (but in such case Parent shall use commercially reasonable efforts to share such materials, documents or information in a manner, and to the extent, that it would not violate such privilege or violate applicable law).

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(j) The Centerbridge Parent Board Designee shall at all times be entitled to compensation and reimbursement in connection with his or her service on the Parent Board consistent with the policies and practices of Parent generally applicable to independent members of the Parent Board.

(k) For so long as Centerbridge shall have the right to designate the Centerbridge Parent Board Designee for appointment or nomination by Parent for election to the Parent Board pursuant to this Section 2.06, Parent shall maintain in effect at all times directors and officers indemnity insurance coverage that is reasonably satisfactory to Centerbridge, and Parent’s articles of incorporation and bylaws shall at all times provide for indemnification, exculpation and advancement of expenses to the fullest extent permitted under applicable law.

(l) For so long as Centerbridge shall have the right to designate the Centerbridge Parent Board Designee for appointment or nomination by Parent for election to the Parent Board pursuant to this Section 2.06, Parent shall not take any action, including making or recommending any amendment to Parent’s articles of incorporation or bylaws, that would reasonably be expected to affect adversely Centerbridge’s rights under this Agreement (including this Section 2.06), without the prior written consent of Centerbridge.

(m) Parent recognizes that the Centerbridge Parent Board Designee will from time to time receive non-public information relating to Parent and its Affiliates and may share such information with other individuals associated with Centerbridge and its Affiliates. Parent hereby irrevocably consents to such sharing. The terms of Section 4.03 shall apply to such information.

2.06 Corporate Opportunities. To the fullest extent permitted by applicable law, Parent agrees that the Centerbridge Director, the Centerbridge Parent Board Designee, Centerbridge, any Affiliate of Centerbridge, or any portfolio company or Centerbridge or any Affiliate of such portfolio company (collectively, “Covered Persons”) may, and shall have no duty not to, (i) invest in, carry on and conduct, whether directly, or as a partner in any partnership, or as a joint venturer in any joint venture, or as an officer, director, stockholder, equityholder or investor in any Person, or as a participant in any syndicate, pool, trust or association, any business of any kind, nature or description, whether or not such business is competitive with or in the same or similar lines of business as Parent or any of its Affiliates, (ii) do business with any client, customer, vendor, policyholder, reinsurer or lessor of any of Parent or its Affiliates; or (iii) make investments in any kind of property in which Parent may make investments. To the fullest extent permitted by applicable law, Parent and the Company, on behalf of themselves and their respective Affiliates, renounce any interest or expectation to participate in any business or investments of any Covered Person as currently conducted or as may be conducted in the future, and waive any claim against a Covered Person, and shall, jointly and severally, indemnify each Covered Person against any and all losses, claims, damages, liabilities, costs, expenses (including reasonable expenses of investigation and reasonable attorneys’ fees and expenses), judgments, fines, penalties, charges and amounts paid in settlement (collectively, “Losses”), in each case to which such Covered Person may become subject, as a result of, arising in connection with or relating to a Covered Person’s breach of any fiduciary duty by reason of such Person’s participation in any such business or investment. Parent shall pay in advance any reasonable out-of-pocket expenses incurred by a Covered Person in the defense of any claim for which such Covered Person is, or would reasonably

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be expected to be, entitled to indemnification under this Section 2.07. Parent and the Company each agree that, in the event that a Covered Person acquires knowledge of a potential transaction or matter that may constitute a corporate opportunity for both (x) the Covered Person and (y) Parent, the Company or any of their respective Subsidiaries, the Covered Person shall not have any duty to offer or communicate information regarding such corporate opportunity to Parent, the Company or their respective Subsidiaries. To the fullest extent permitted by applicable law, Parent and the Company hereby renounce any interest or expectation in any potential transaction or matter of which the Covered Person acquires knowledge, except for any corporate opportunity which is expressly offered to a Covered Person in writing solely in his or her capacity as a member of the Board or the Parent Board, and waives any claim against each Covered Person, and shall indemnify each Covered Person against any Losses incurred by such Covered Person, and any and all Losses to which such Covered Person may become subject, as a result of, arising in connection with or relating to a Covered Person’s breach of any fiduciary duty solely by reason of the fact that such Covered Person (A) pursues or acquires any corporate opportunity for its own account or the account of any Affiliate or other Person, (B) directs, recommends, sells, assigns or otherwise transfers such corporate opportunity to another Person or (C) does not communicate information regarding such corporate opportunity to Parent, the Company, or any of their respective Affiliates; provided, that, in each such case, any corporate opportunity that is expressly offered to a Covered Person in writing solely in his or her capacity as a member of the Board or the Parent Board shall belong to the Company or to Parent, as applicable.

Section 3. Transfers of Securities.

3.01 Restrictions on Transfer.

(a) General. Prior to a Qualified Public Offering, and, in the case of any Shareholder other than Parent, for so long as no Key Man Event has occurred, each Shareholder agrees that, except for any Transfer permitted by Section 3.01(b), a Proposed Tag Transfer permitted by Section 3.02, a Drag-Along Transaction permitted by Section 3.03, and any indirect Transfer of Equity Securities solely by and among the members or partners of such Shareholder, such Shareholder shall not Transfer any Equity Securities now or hereafter at any time owned by such Shareholder (or any interest therein) to another Person (any such Person, a “Transferee”) without first complying with the terms of Section 3.01(c). Prior to a Qualified Public Offering, Parent agrees that, except in the case of (i) an IPO, (ii) a Drag-Along Transaction, (iii) a Transfer of up to 5,000,000 shares (in the aggregate for all such Transfers considered together) of Common Stock by Parent (as adjusted for stock splits, combinations or similar equitable events) or (iv) with Centerbridge’s prior written consent, it shall not, nor shall it permit any of its Affiliates to, Transfer any Equity Securities now or hereafter at any time owned by it or any such Affiliate (or any interest therein) to any Transferee. The restrictions on transferability set forth in this Section 3 are in addition to any other restrictions on Transfer to which a Shareholder’s Equity Securities may be subject (including, in the case of the Management Shareholders, under the terms of the applicable equity plan pursuant to which they were issued).

(b) Permitted Transfers. Notwithstanding Section 3.01(a), Shareholders shall be permitted to Transfer Equity Securities: (i) to an Affiliate that agrees to be bound by the terms and conditions of this Agreement; (ii) in connection with the repurchase of Equity Securities by the Company; (iii) pursuant to an IPO or in connection with the exercise of registration rights

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as contemplated by Annex A; (iv) in the case of any Management Shareholder, to the Company in exchange for amounts needed for the satisfaction of Taxes related to such shares or to such Management Shareholder’s Family Members or Personal Representative; provided that such Management Shareholder or Personal Representative retains exclusive voting control over the Transferred Equity Securities and such transferee agrees to be bound by repurchase rights in favor of the Company identical to those contained in any applicable Management Repurchase Agreement; and (v) in the case of Centerbridge, as a distribution on a relative basis in accordance with the applicable governing documents of Centerbridge to its partners entitled to receive such distribution provided each such partner agrees to be bound by the terms and conditions of this Agreement, or alternatively appoints Centerbridge as its representative and attorney-in-fact with respect to this Agreement (each of (i)-(v), a “Permitted Transfer” and “Permitted Transferee” shall have the corresponding meaning).

(c) Right of First Refusal.

(i) Prior to a Qualified Public Offering, for so long as no Key Man Event has occurred, any Shareholder (other than Parent) wishing to Transfer all or part of such Shareholder’s Equity Securities (the “Selling Shareholder”) (except Affiliate Transfers) shall deliver written notice of such Transfer to the Parent and the Company, disclosing in reasonable detail the identity of the prospective transferee(s) (the “Proposed Purchaser”), the number and type of Equity Securities to be transferred (the “ROFR Shares”) and all material terms and conditions of the proposed Transfer (the “ROFR Transfer Notice”), and the ROFR Transfer Notice shall constitute a binding offer to sell the ROFR Shares on such terms and conditions to Parent or the Company. If Parent or the Company have elected to purchase all or any portion of the ROFR Shares pursuant to this Section 3.01(c), the closing of the purchase and sale of such ROFR Shares shall be consummated as soon as practical after the delivery of the election notice(s) to the Selling Shareholder but no later than 60 days after the ROFR Transfer Notice, subject to clause (d) below. In the event of competing elections to purchase ROFR Shares by Parent and the Company, the election of Parent shall take precedence over the election of the Company.

(ii) In the event of a proposed Transfer described in Section 3.01(c)(i), Parent or the Company may elect to purchase all or any portion of the ROFR Shares to be transferred upon the same economic terms and conditions as those set forth in the ROFR Transfer Notice by delivering a written notice of such election to the Selling Shareholder within 30 days after the ROFR Transfer Notice has been delivered pursuant to Section 3.01(c)(i). If neither Parent nor the Company elects to purchase all of the ROFR Shares specified in the ROFR Transfer Notice in accordance with this Section 3.01(c), the Selling Shareholder may Transfer any ROFR Shares not being purchased by the Parent or the Company to the Proposed Purchaser, subject to the provisions of Section 3.01(c), on the same terms as set forth in the ROFR Transfer Notice and such other terms that are no more favorable to the Proposed Purchaser than those specified in the ROFR Transfer Notice, during the 60 day period immediately following the ROFR Transfer Notice, with the purchase and sale of all shares subject to the ROFR Transfer Notice being consummated to the Parent, the Company and any Proposed Purchaser in such 60 day period. Any ROFR Shares not transferred within such 60 day period (as extended pursuant to clause (d) below) shall be subject to the provisions of Section 3.01(a) and this Section 3.01(c) upon any subsequently proposed Transfer.

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(d) Regulatory and Tax Matters. No Transfer of Equity Securities by any Shareholder shall be permitted unless such Transfer: (i) has been approved, if necessary, by all applicable Regulatory Agencies; (ii) would not cause the Company to become subject to registration as an investment company under the Investment Company Act; and (iii) would not have any other material adverse legal, Tax or regulatory effect on the Company. The 60 day period for the Transfer or shares subject to the ROFR Transfer Notice shall be extended as necessary to obtain any approvals required by clause (i) and such purchase and sale shall be consummated within five (5) Business days after receipt of such approvals.

(e) Compliance with Securities Laws. In addition to any other restrictions provided herein, no Shareholder shall Transfer any Equity Securities, and the Company shall not transfer on its books any Equity Securities, unless (i) the Company determines, upon the advice of counsel, that the Company would not be required to file periodic reports under the Exchange Act and (ii) the transferring Shareholder first delivers to the Company, at the transferring Shareholder’s sole cost and expenses, evidence reasonably satisfactory to the Company (such as an opinion of counsel) to the effect that such Transfer is not required to be registered under the Securities Act.

(f) Improper Transfer. In the event of any purported or attempted Transfer by a Shareholder that does not comply with the provisions of this Agreement, such attempted Transfer shall be null and void ab initio and will confer no rights whatsoever on the purported Transferee as against the Company or any other Shareholder of the Company, including the Shareholders, and the Company shall not record such Transfer on its books or treat any purported Transferee of such Equity Securities as the owner of such Equity Securities for any purpose.

(g) Joinder. Notwithstanding anything contained herein to the contrary, any Transferee who is not a Shareholder (other than the Company) and has acquired such Equity Securities from a Shareholder shall upon the consummation of, and as a condition to, such Transfer execute and deliver to the Company a transfer agreement and an instrument substantially in the form attached hereto as Exhibit A (or a counterpart to this Agreement) pursuant to which such Transferee agrees to be bound by the terms of this Agreement as a Shareholder, with such rights of the transferor that are assigned by the transferor in compliance with this Section 3.01; provided, however, that the foregoing shall not apply to Transferees who acquire Equity Securities in a Permitted Transfer pursuant to clause (ii) of the definition thereof.

(h) Expenses of Transfer. The transferring Shareholder agrees that it will pay all reasonable out-of-pocket expenses incurred by the Company in connection with any attempted or realized Transfer of all or any portion of its Equity Securities. Such costs generally will include the amount of any transfer Taxes due as a result of a Shareholder’s Transfer and the costs of accounting for such Transfers, including for applicable Tax purposes.

(i) Deemed Liquidation Event. Notwithstanding anything to the contrary contained in this Agreement, no Shareholder shall knowingly Transfer any Equity Securities or participate in any transaction constituting a Deemed Liquidation Event unless Centerbridge receives the full amounts that it is entitled to receive pursuant to the Articles of Incorporation in connection with such Deemed Liquidation Event.

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3.02 Tag-Along Rights.

(a) If any Shareholder (or any Transferee of Shareholder) holding Equity Securities representing 5% or more of the outstanding Equity Securities of the Company (calculated on an as-converted basis) proposes to Transfer any or all of its Equity Securities to a third party (except for Permitted Transfers), the provisions of this Section 3.02 shall apply (a “Proposed Tag Transfer”); provided, that if any such Shareholder proposes to Transfer any or all of its Senior Preferred Shares to a third party (except for Permitted Transfers), the provisions of this Section 3.02 shall only apply to such Transfer if such Shareholder is selling its Senior Preferred Shares for a price per share that is greater than the Liquidation Amount, and any Transfer of Senior Preferred Shares for a price per share that is below the Liquidation Amount will not constitute a “Proposed Tag Transfer” hereunder.

(b) Prior to any Proposed Tag Transfer, the Transferring Shareholder shall deliver a notice (the “Transfer Notice”) to the other Shareholders and to the Company of its intention to make a Proposed Tag Transfer. The Transfer Notice shall specify the terms and conditions on which the Transferring Shareholder proposes to Transfer Equity Securities, including the number of shares proposed to be Transferred and the price therefor. Within ten (10) days after receipt of a Transfer Notice, each other Shareholder may give written notice (the “Tagging Notice”) to the Transferring Shareholder and the Company that it desires to sell Equity Securities owned by it on the same terms and conditions as set forth in the Transfer Notice, which Tagging Notice shall specify the number of Equity Securities as to which such right is being exercised. The maximum number of Equity Securities which any Shareholder delivering a Tagging Notice (each such Shareholder, a “Tagging Shareholder,” and collectively with any other Tagging Shareholder, the “Tagging Shareholders”) may include in the proposed Transfer shall be equal to the product obtained by multiplying (i) the number of Equity Securities proposed to be Transferred by the Transferring Shareholder by (ii) the pro rata portion of the number of Equity Securities held by such Tagging Shareholder relative to the number of Equity Securities held by all Shareholders participating in such Transfer (including the Transferring Shareholder), for all purposes considering all Derivative Securities on an as-converted basis. For the avoidance of doubt, the number of Equity Securities the Transferring Shareholder would otherwise be entitled to sell shall be reduced by the number of Equity Securities sold by the Tagging Shareholders pursuant to this Section 3.02(b).

(c) If the Transferring Shareholder receives one or more Tagging Notices in a timely manner, the Tagging Shareholder(s) shall be entitled to sell the lesser of (i) the number of Equity Securities that a Tagging Shareholder is entitled to sell, determined as provided in Section 3.02(b), and (ii) the number of Equity Securities a Tagging Shareholder has requested to sell in its Tagging Notice; provided that in the event any Shareholder entitled to deliver a Tagging Notice does not provide a Tagging Notice or elects in its Tagging Notice to sell less than the maximum provided for under the preceding sentence, the Transferring Shareholder and each Tagging Shareholder that provided a Tagging Notice in which such Tagging Shareholder included a number of Equity Securities available for sale that exceeds the amount allotted under Section 3.02(b) shall have the right to include additional Equity Securities in the Transfer in proportion to each such Shareholder’s relative ownership interests in the Company until full allotment in accordance with this Section 3.02. The costs and expenses of the Transfer incurred for the benefit of all of the Shareholders will be paid by all such Shareholders on a pro rata basis according to the relative number of Equity Securities being sold by each such Shareholder.

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(d) Any sale of Equity Securities by a Tagging Shareholder pursuant to this Section 3.02 will be at the same price (except that any accrued but unpaid dividends on any Senior Preferred Shares being sold in such sale shall be paid only to the Shareholders of such Senior Preferred Shares and then the remaining portion of the aggregate consideration to be paid by the buyer(s) in such sale will then be allocated to Equity Securities to be sold in such sale ratably on an as-converted basis) and on the same terms and conditions as the Transfer by the Transferring Shareholder that is the subject matter of the Transfer Notice; provided that, notwithstanding the foregoing, (i) any representations and warranties or indemnities given by each of the Transferring Shareholder and the Tagging Shareholders shall be several and not joint, (ii) the indemnity obligations shall be (x) apportioned pro rata among each of the Transferring Shareholder and the Tagging Shareholders based on the relative proportion of Equity Securities being sold in the applicable Proposed Tag Transfer (with Derivative Securities considered on an as-converted basis) and (y) limited in respect of each Shareholder to the proceeds received by such Shareholder in such Proposed Tag Transfer (except in connection with claims relating to such Shareholder’s fraud), (iii) Centerbridge and its Affiliates, and any Person to which Centerbridge or any of its Affiliates Transfers Equity Securities, shall not be required to agree to any restrictive covenants (such as non-competition or non-solicitation) other than a customary confidentiality covenant, and (iv) each of the Transferring Shareholder and the Tagging Shareholders will receive the same form of consideration and the same portion of the aggregate consideration that such Shareholders would have received if such aggregate consideration had been distributed by the Company in a complete liquidation or Deemed Liquidation Event pursuant to the rights and preferences set forth in the Articles of Incorporation as in effect immediately prior to such Proposed Tag Transfer.

(e) If a Shareholder does not deliver a Tagging Notice pursuant to this Section 3.02, then the Transferring Shareholder and any other Tagging Shareholder shall be free to sell the Equity Securities that are the subject of the Transfer Notice in strict accordance with the terms and conditions stated in the Transfer Notice. The Equity Securities that are the subject of such proposed Transfer may not be Transferred if the Transferring Shareholder and proposed Transferee shall have failed to consummate the Transfer on the terms and conditions stated in the Transfer Notice within ninety (90) days following the date of delivery of the Transfer Notice.

3.03 Drag-Along Rights.

(a) If, prior to a Qualified Public Offering, the Company’s Board of Directors or group of Shareholders that, in the aggregate, owns a majority of the voting power of the Company, receives an offer in a transaction or series of transactions pursuant to which a third party (which, for the avoidance of doubt, shall not include Parent or any of its Affiliates, or any other Person in which Parent or any of its Affiliates invests or has agreed to make an investment) proposes to acquire all of the Equity Securities of the Company, and, at the closing of such transaction, the holders of the Senior Preferred Shares and any Common Shares that were issued upon the prior conversion of the Senior Preferred Shares shall, in the aggregate, receive cash consideration at the closing of such transaction (not including any cash subject to a holdback or escrow arrangement on the closing date) equal to or greater than 1.5x the Original Purchase Price with respect to all Senior Preferred Shares that are then issued (as adjusted for any stock splits,

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dividends, combinations, subdivisions, recapitalizations and the like) (a “Drag-Along Transaction”), then such Shareholder or group of Shareholders that, in the aggregate, owns a majority of the voting power of the Company (collectively, the “Drag-Along Shareholder”) shall have the right, at its option, to require all of the other Shareholders (each such other Shareholder, a “Dragged Shareholder,” and collectively with any other Dragged Shareholder, the “Dragged Shareholders”), and each Dragged Shareholder hereby agrees, whether such Drag-Along Transaction is structured as a Transfer of Equity Securities, merger, consolidation, combination, reorganization, recapitalization, reclassification or otherwise, to Transfer all of such Dragged Shareholder’s Equity Securities on substantially the same terms and conditions as are applicable to the Drag-Along Shareholder; provided that (i) the terms of any Drag-Along Transaction may not contemplate any agreement or arrangement in which the Drag-Along Shareholder or any of its Affiliates will receive any consideration, payment or any other thing of value apart from the consideration to be paid to all selling Shareholders in the sale (including all Dragged Shareholders) other than repayment of indebtedness, reimbursement of customary expenses, payments related to services previously provided and ordinary course arrangements for services from Management Shareholders consistent with market terms or prior practices, and (ii) the price per share for each Equity Security to be sold in such Drag-Along Transaction shall be determined by allocating consideration pursuant to the terms of the Articles of Incorporation.

(b) Each Dragged Shareholder shall reasonably cooperate in, and shall take all actions requested by the Drag-Along Shareholder that are reasonably necessary or desirable to consummate, the Drag-Along Transaction, including: (i) to the extent applicable, voting its Equity Securities (or executing and delivering any written consents in lieu thereof) in favor of the Drag-Along Transaction and against all competing transactions, and all actions deemed reasonably necessary by the Drag- Along Shareholder in connection with the Drag-Along Transaction; (ii) if applicable, taking all actions necessary to cause the Board to approve the Drag-Along Transaction; and (iii) entering into all definitive and ancillary agreements with respect to the proposed Drag-Along Transaction, and using commercially reasonable efforts to cause the transactions contemplated by such definitive agreements and ancillary agreements to be consummated; provided that (A) such definitive agreements shall contain representations and warranties and indemnity obligations of such Dragged Shareholder only if the Drag-Along Shareholder has also made such representations and warranties, (B) any representations and warranties or indemnities given by each of the Dragging Shareholder and the Dragged Shareholders shall be several and not joint, (C) the indemnity obligations thereunder are (x) apportioned pro rata among each of the Drag-Along Shareholder and the Dragged Shareholders based on the relative proportion of Common Shares being sold in such Drag-Along Transaction (with Equity Securities convertible or exchangeable into Common Shares considered on an as-converted basis), (y) limited to breaches of fundamental representations and warranties regarding matters such as ownership, capacity and authorization (but under no circumstances will the Shareholders have any post-closing liability for operational matters or Company liabilities other than their pro rata share of any indemnity, escrow or holdback) and (z) limited in respect of each Shareholder to the proceeds received by such Shareholder in such Drag-Along Transaction (except in connection with claims relating to such Shareholder’s fraud), (D) no Dragged Shareholder that is not otherwise an employee of the Company shall be required to agree to any restrictive post-closing covenants (such as non-competition or non-solicitation) other than a customary confidentiality covenant, and (E) each of the Dragging Shareholder and the Dragged Shareholders that are not otherwise employees of the Company will receive the same form of consideration and

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the same portion of the aggregate consideration that such Shareholders would have received if such aggregate consideration had been distributed by the Company as a Deemed Liquidation Event pursuant to the rights and preferences set forth in the Articles of Incorporation as in effect immediately prior to such Drag-Along Transaction.

(c) Without limitation of the foregoing, each Shareholder waives any dissenters, appraisal or other similar rights it may have in connection with any sale of the Company under applicable law that is approved or instituted pursuant to this Section 3.03 and agrees not to assert any claims challenging the validity of such sale of the Company that is approved or instituted pursuant to this Section 3.03.

(d) The Drag-Along Shareholder shall provide written notice of such Drag-Along Transaction to each Dragged Shareholder (a “Drag-Along Transaction Notice”) not later than ten (10) days prior to the proposed Drag-Along Transaction. The Drag-Along Transaction Notice shall identify the proposed Transferee, the consideration for which a Transfer is proposed to be made and all other material terms and conditions of the Drag-Along Transaction. Except as otherwise set forth herein, such Dragged Shareholder shall be required to participate in the Drag-Along Transaction on the terms and conditions set forth in the Drag-Along Transaction Notice.

(e) The Drag-Along Shareholder shall have a period of thirty (30) days from the date of delivery of the Drag-Along Transaction Notice to enter into definitive transaction agreements with respect to, and six (6) months from the date of delivery of the Drag-Along Transaction Notice to consummate, the Drag-Along Transaction on the terms and conditions set forth in such Drag-Along Transaction Notice; provided, however, that such six (6) month period shall be extended by the time necessary (but in no event to exceed three hundred sixty-five (365) days from the date of delivery of the Drag- Along Transaction Notice) to obtain any required approvals of any Regulatory Agency under any applicable laws (the “Drag-Along Transaction Period”). If the Drag-Along Transaction shall not have been consummated during the Drag-Along Transaction Period, the Drag-Along Shareholder shall promptly return any documents in the possession of the Drag-Along Shareholder executed by the Dragged Shareholders in connection with the Drag-Along Transaction, and all the restrictions on Transfer contained in this Agreement or otherwise applicable at such time with respect to any Equity Securities owned by each of the Shareholders shall continue to be in effect.

(f) Notwithstanding anything to the contrary in this Section 3.03, there shall be no liability on the part of the Drag-Along Shareholder to the Company or the Dragged Shareholders if the Drag-Along Transaction is not consummated for whatever reason, regardless of whether the Drag-Along Shareholder has delivered a Drag-Along Transaction Notice, except as may be agreed between the applicable parties in a separate written agreement. The decision to effect a Drag-Along Transaction is in the sole and absolute discretion of the Drag-Along Shareholder.

(g) Notwithstanding anything to the contrary herein, no Dragged Shareholder may Transfer any of its Equity Securities (except in connection with the Drag-Along Transaction) during the period beginning on the date of receipt of the Drag-Along Transaction Notice and ending at such earlier time as the Drag-Along Transaction (x) is consummated, (y) is abandoned or terminated (with notice of such abandonment or termination having been provided by the Drag-Along Shareholder), or (z) fails to be consummated within the Drag-Along Transaction Period.

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3.04 Legend. In addition to any other legend that may be required by applicable law, each certificate for Equity Securities, if any, issued to any Shareholder shall bear a legend in substantially the following form:

THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), UNDER APPLICABLE U.S. STATE SECURITIES LAWS OR UNDER THE LAWS OF ANY OTHER JURISDICTION AND MAY NOT BE OFFERED OR SOLD EXCEPT IN COMPLIANCE THEREWITH. THE SHARES REPRESENTED BY THIS CERTIFICATE ARE ALSO SUBJECT TO THE CORPORATION’S BYLAWS AND THE PROVISIONS OF A SHAREHOLDERS AGREEMENT DATED [●] [●], 2021 (AS MAY BE AMENDED FROM TIME TO TIME) THAT MAY PROVIDE FOR MANAGEMENT OF THE CORPORATION IN A MANNER DIFFERENT THAN IN OTHER CORPORATIONS AND MAY SUBJECT A SHAREHOLDER TO CERTAIN OBLIGATIONS OR LIABILITIES NOT IMPOSED IN SHAREHOLDERS IN OTHER CORPORATIONS. A COPY OF SUCH BYLAWS AND SHAREHOLDERS AGREEMENT WILL BE FURNISHED WITHOUT CHARGE BY THE CORPORATION TO THE HOLDER HEREOF UPON WRITTEN REQUEST.

If any Equity Securities are certificated and cease to be subject to any and all restrictions on Transfer set forth in this Agreement, the Company, upon the written request of the holder thereof, shall issue to such holder a new certificate evidencing such Equity Securities without reference in the above legend to this Agreement, as the case may be.

3.05 Market Standstill. Each Shareholder hereby agrees that he, she or it will not, without the prior written consent of the managing underwriter, during the period commencing on the date of the final prospectus relating to the registration by the Company of shares of its Common Stock or any other equity securities under the Securities Act on a registration statement on Form S-1 or Form S-3, and ending on the date specified by the Company and the managing underwriter (such period not to exceed one hundred eighty (180) days in the case of the IPO or ninety (90) days in the case of any registration other than the IPO, or such other period as may be requested by the Company or an underwriter to accommodate regulatory restrictions on (1) the publication or other distribution of research reports and (2) analyst recommendations and opinions, including, but not limited to, the restrictions contained in applicable FINRA rules, or any successor provisions or amendments thereto), (i) lend; offer; pledge; sell; contract to sell; sell any option or contract to purchase; purchase any option or contract to sell; grant any option, right, or warrant to purchase; or otherwise transfer or dispose of, directly or indirectly, any shares of Common Stock of the Company or any securities convertible into or exercisable or exchangeable (directly or indirectly) for Common Stock of the Company held immediately before the effective date of the registration statement for such offering or (ii) enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of such

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securities, whether any such transaction described in clause (i) or (ii) above is to be settled by delivery of Common Stock or other securities, in cash, or otherwise. The foregoing provisions of this Section 3.06 shall not apply to the sale of any shares to an underwriter pursuant to an underwriting agreement or to the establishment of a trading plan pursuant to Rule 10b5-1, provided that such plan does not permit transfers during the restricted period, or the transfer of any shares to any trust for the direct or indirect benefit of the Shareholder or the immediate family of the Shareholder, provided that the trustee of the trust agrees to be bound in writing by the restrictions set forth herein, and provided further that any such transfer shall not involve a disposition for value, and shall be applicable to the Shareholders only if all officers and directors are subject to the same restrictions and the Company uses commercially reasonable efforts to obtain a similar agreement from all stockholders individually owning more than five percent (5%) of the Company’s outstanding Common Stock (after giving effect to conversion into Common Stock of all outstanding Preferred Stock), including Parent. Each Shareholder further agrees to execute such agreements as may be reasonably requested by the underwriters in connection with such registration that are consistent with this Section 3.06 or that are necessary to give further effect thereto.

Section 4. Periodic Information Reporting Requirements.

4.01 Information Rights. On a confidential basis, the Company shall provide to each Shareholder for so long as such Shareholder owns, either individually or together with its Affiliates, the Minimum Ownership Threshold, the following:

(a) Within one-hundred and twenty (120) days after the end of each fiscal year of the Company, the audited annual financial statements of the Company and its Subsidiaries in accordance with GAAP or SAP, as applicable.

(b) Within forty-five (45) days after the end of each fiscal quarter of the Company, the unaudited quarterly financial statements of the Company and its Subsidiaries.

(c) Within ninety (90) days after the end of each fiscal year of the Company, a copy of of the annual budget and business plans of the Company and its Subsidiaries for each fiscal year, in such form and containing such information as approved by the Board.

(d) Any information reasonably requested by a Shareholder in writing to permit such Shareholder (or its direct or indirect owners) to comply with applicable United States federal income and other relevant tax laws and reporting requirements, or other regulatory obligations, with respect to its investment in the Company or to help facilitate any Transfer or proposed Transfer of Equity Securities by such Shareholder in a manner consistent with the terms of this Agreement (and the Company shall otherwise cooperate with the efforts of such Shareholder in connection with such Transfer or Proposed Transfer).

(e) As promptly as practical following the end of each fiscal quarter of the Company and if requested by a Shareholder in writing, a copy of the Company’s capitalization table as of date within ten (10) Business Days of the date of the request.

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(f) The Company shall permit each Shareholder (provided that the Board of Directors has not reasonably determined that such Shareholder is a competitor of the Company), at such Shareholder’s expense, to visit and inspect the Company’s properties; examine its books of account and records; and discuss the Company’s affairs, finances, and accounts with its officers, during normal business hours of the Company as may be reasonably requested by the Shareholder; provided, however, that the Company shall not be obligated pursuant to this Section Section 4.01(e) to provide access to any information that it reasonably and in good faith considers to be a trade secret or to the extent the disclosure of such information would adversely affect the attorney-client privilege between the Company and its counsel; provided that the Company will use commercially reasonable efforts to provide such information in a way that would not violate such privilege.

4.02 Books and Records. The Company shall maintain, at its principal place of business, separate books of account for the Company that shall show a true and accurate record, in all material respects, of all costs and expenses incurred, all charges made, all credits made and received and all income derived in connection with the operation of the Company’s business in accordance with GAAP (or SAP, in the case of the Company’s insurance company Subsidiaries).

4.03 Confidentiality. Except as authorized in writing by the Company, each of the Shareholders shall not disclose any of the information provided to such Shareholder pursuant to this Section 4 to any Person that is not an Affiliate of such Shareholder or a director, officer, partner, member, trustee, employee, representative (including any accountant, attorney or other professional), agent or consultant of such Shareholder or such Affiliate, or a party to this Agreement, and each Shareholder shall use its commercially reasonable efforts to cause its Affiliates, and the directors, officers, partners, members, trustees, employees, representatives, agents and consultant of such Shareholder and such Affiliates, not to disclose such information to any Person that is not a party to this Agreement; provided, however, that, notwithstanding anything to the contrary set forth herein, (i) such Shareholder and each Affiliate of such Shareholder shall not be prohibited from disclosing any such information if such information (w) becomes publicly available through no breach of this Agreement by such Shareholder or such Affiliate, or the directors, officers, partners, members, trustees, employees, representatives, agents or consultants of such Shareholder and such Affiliate, (x) is required to be disclosed by law or the rules of a national securities exchange, (y) is required to be furnished to or filed with any governmental authority or self-regulatory organization that has jurisdiction over such Shareholder and/or such Affiliate or in any filings or applications made by such Shareholder and/or such Affiliate to such governmental authority or self-regulatory organization, to the extent such filings or applications require the disclosure of such information, including the SEC, or (z) the information is requested by a prospective transferee or purchaser of Equity Securities in circumstances in which Equity Securities are permitted to be sold pursuant to the terms hereof (including pursuant to a Drag-Along Transaction or a Sale Transaction) so long as such third party enters into a confidentiality agreement with the Company reasonably satisfactory to the Company and such Shareholder has not otherwise breached any of its obligations under this Agreement, and (ii) neither Centerbridge nor any Affiliate of Centerbridge shall be prohibited from disclosing any such information (w) in connection with financial or operating reports or other information made available to the current, former or prospective limited partners, investors, managers, members, representatives and advisors of Centerbridge and/or such Affiliate, (x) in compliance with the terms of the limited partnership or other organizational documents of Centerbridge and/or such Affiliate, (y) in connection with the marketing of investment funds managed or advised, directly or indirectly, by the Centerbridge and/or such Affiliate, (z) to any Person to whom Centerbridge and/or such Affiliate is contractually

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obligated or required to provide such information. Notwithstanding the foregoing, prospective investors (and their agents) are authorized, without restriction of any kind, to disclose the Tax treatment and Tax structure of the transactions set forth or contemplated herein. Each Shareholder shall be responsible for any breach of this Section 4 by its Affiliates or the directors, officers, partners, members, trustees, employees, representatives, agents or consultants of such Shareholder and such Affiliate.

Section 5. Registration Rights.

5.01 Company Registration Rights. Parent, the Company and Centerbridge hereby make the agreements and covenants with respect to the marketing and registration of the Equity Securities that are set forth on Annex A to this Agreement, which is hereby incorporated into this Agreement by this reference. Any Shareholder to which Centerbridge Transfers any Senior Preferred Shares shall be entitled to registration rights for its Company Registrable Securities on the same terms as Centerbridge.

5.02 Parent Registration Rights. In addition, whenever Parent proposes to register any of its equity securities under the Securities Act (including primary and secondary registrations, and other than in connection with registrations on Form S-4 or S-8 promulgated by the SEC or any successor or similar forms), Parent hereby covenants and agrees to give prompt written notice to Centerbridge of its intention to effect such registration and will include in such registration (and in all related registrations or qualifications under blue sky laws and in any related underwriting) all Parent Registrable Securities with respect to which Parent has received written requests for inclusion therein within ten (10) days after delivery of Parent’s notice, subject to the opinion of the managing underwriters on whether the number of securities requested to be included in such registration can be sold in such offering without adversely affecting the marketability, proposed offering price, timing or method of distribution of the offering. Parent shall be responsible for all out-of-pocket expenses incurred by Parent or Centerbridge in connection with the performance of or compliance with this Section 5.02; provided that Centerbridge will bear and pay all underwriting discounts and commissions applicable to the Parent Registrable Securities sold for Centerbridge’s account and all transfer taxes (if any) attributable to the sale of Parent Registrable Securities.

Section 6. Other Covenants.

6.01 Preemptive Rights.

(a) The Company hereby grants to each Shareholder the right to purchase an amount up to such Shareholder’s pro rata share on an as converted basis of all New Company Securities that the Company or any Subsidiary of the Company may from time to time propose to issue, offer or sell. The “pro rata share” for purposes of this Section 6.01(a) with respect to any given Shareholder shall be expressed as a fraction, (i) the numerator of which is the number of Common Shares Beneficially Owned by such Shareholder on the date of the Company’s written notice pursuant to Section 6.01(c) hereof, and (ii) the denominator of which is the number of Common Shares outstanding on the date of the Company’s written notice pursuant to Section 6.01(c) hereof, assuming for this purpose conversion of all outstanding Derivative Securities (including, for the avoidance of doubt, the Senior Preferred Shares).

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(b) For purposes of this Section 6.01, “New Company Securities” means (A) any shares of capital stock (of any class) of the Company or any of its Subsidiaries, including Common Shares, shares of Preferred Stock or other Equity Securities, whether now authorized or not, issued after the Effective Date, or (B) any options, warrants, convertible notes, securities of any type or similar rights issued by the Company or any of its Subsidiaries after the Effective Date that are or may become convertible into or exercisable or exchangeable for, or that carry rights to subscribe for, any shares of capital stock (of any class), including Common Shares, shares of Preferred Stock or other Equity Securities (each of the foregoing reference in such clause (B), a “Convertible Security”); provided, however, that the term “New Company Securities” does not include any securities (1) issued as consideration to effect the acquisition of another entity by the Company or any of its Subsidiaries pursuant to a merger, consolidation, amalgamation, exchange of shares, the purchase of all or substantially all of the assets, or otherwise; (2) issued to any directors or employees of the Company or any of its Subsidiaries pursuant to any incentive stock plan or other form of incentive compensation approved and adopted by the Company, and any Common Shares or other equity issued upon the exercise thereof; (3) issued upon the exercise of or conversion of the Senior Preferred Shares; (4) issued to the Shareholders upon any stock split, stock dividend, combination or other similar event with respect to the Common Shares or other capital stock; (5) issued pursuant to the Purchase Agreement, or (6) issued as “kickers” to lenders or otherwise in connection with any financing arrangements which are entered into in a manner consistent with the provisions of the Articles of Incorporation.

(c) In the event that the Company proposes to undertake an issuance of New Company Securities, the Company will give the Shareholders written notice (a “New Issue Notice”) of its intention, describing the type of New Company Securities, the price and amount proposed to be issued and the other material terms and conditions upon which the Company proposes to issue New Company Securities. Such New Issue Notice shall be delivered to each Shareholder prior to the proposed issue date of such New Company Securities and each Shareholder shall have ten (10) days from the date of receipt of each New Issue Notice to deliver to the Company a written notice (a “Notice of Acceptance”) of the amount of the applicable New Company Securities that it intends to purchase. If no Notice of Acceptance is timely given it will be deemed a decline to purchase the Company New Securities by such Shareholder. The closing and funding of all New Company Securities pursuant to the Notices of Acceptances shall take place no later than ninety (90) days after the date of the New Issue Notice and the preparation, execution and delivery by the Company and such Shareholder of definitive documentation relating to the acquisition of such New Company Securities shall occur within such time frame and shall be in form and substance reasonably satisfactory to such Shareholder and the Company.

(d) If no Shareholder has delivered a Notice of Acceptance or if less than all of the New Company Securities set forth in such New Issue Notice are subject to Notices of Acceptance, the Company shall have one hundred twenty (120) days (or, if such issuance is subject to regulatory approval, two hundred ten (210) days) from the date of a New Issue Notice to consummate the issuance, sale or exchange in whole or in part of the New Company Securities described in such New Issue Notice that are not agreed to be purchased by Shareholders pursuant to Notices of Acceptance on terms and conditions that are either the same as the terms and conditions described in the New Issue Notice or less favorable to the purchaser of such New Company Securities than the terms and conditions described in the New Issue Notice. For avoidance of doubt, (i) upon expiration of such one hundred twenty (120) day (or, if such issuance

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is subject to regulatory approval, two hundred ten (210) day) period, or (ii) if no Shareholder delivered a Notice of Acceptance and the terms and conditions of the proposed issuance of New Company Securities are more favorable to the purchaser of such New Company Securities than those set forth in the initial New Issue Notice, the Company shall be required to deliver another New Issue Notice in connection with the proposed issuance of New Company Securities. At the option of any Shareholder acquiring New Company Securities pursuant to this Section 6.01, such New Company Securities shall be non-voting pending exchange for voting securities with the same terms, which exchange shall be effected by the Company on demand at the subsequent option of such Shareholder.

(e) The Company shall be under no obligation to consummate any proposed sale of New Company Securities, nor shall there be any liability on the part of the Company to any Shareholder if the Company does not consummate a proposed sale of New Company Securities for whatever reason, whether or not the Company shall have delivered a notice in respect thereof to the Shareholders.

(f) Notwithstanding any provision hereof to the contrary, in lieu of complying with the provisions of this Section 6.01, the Company may elect to give notice to the Shareholders within thirty (30) days after the issuance of New Company Securities. Such notice shall describe the type, price, and terms of the New Company Securities. Each Shareholder shall have twenty (20) days from the date notice is given to elect to purchase up to the number of New Company Securities that would, if purchased by such Shareholder, maintain such Shareholder’s percentage-ownership position, calculated as set forth in Section 6.1(a) before giving effect to the issuance of such New Company Securities. From the date on which the New Company Securities are issued through the earlier of (a) the date on which the 20-day period contemplated above has expired and (b) the date on which each Shareholder has purchased all the New Company Securities it is entitled to purchase hereunder, neither Parent nor the Company or any of its Subsidiaries shall (i) initiate or consummate any IPO, Drag-Along Transaction, Proposed Tag Transfer or Sale of the Company, (ii) otherwise take or authorize, or set any record date for, any action that would result in any payment or distribution being made to the Shareholders of the Company or (iii) otherwise make any material change to the management or governance of the Company or any of its Subsidiaries that would adversely affect the rights, preferences or privileges of the Series A Preferred Shares in a material way.

6.02 Certain Parent Agreements. The parties acknowledge and agree that any business opportunities that develop or arise in the management or operation of the business of the Company and its Subsidiaries or by the actions or activities of the personnel or through the intellectual property of the Company and its Subsidiaries shall be owned by the Company and not by Parent or any of its Affiliates (other than the Company and its Subsidiaries). Parent shall not, and shall cause its Affiliates not to, take any action the purpose or intent of which is to divert such business opportunities or the economic benefits of any such businesses opportunities to Parent or any of its Affiliates (other than the Company and its Subsidiaries) or otherwise to divert value relating to such business opportunities (or the associated economic benefits) away from the Company and its Subsidiaries (including by writing insurance business developed or sourced by the Company or any of its Subsidiaries or by using their intellectual property or assets out of any insurance company owned by Parent or any of its Affiliates (other than the Company and its Subsidiaries)). Notwithstanding anything herein to the contrary, the business opportunities

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described in the first sentence of this Section 6.02 shall not include opportunities directly relating to or arising from the historical businesses of Parent or its Affiliates, including, without limitation, insurance business in states where any one of them is, as of the date hereof, authorized to transact insurance, insurance agency services, claims handling and management and real estate operation and management, and shall not include insurance business to be transitioned from United Property & Casualty Insurance Company. Furthermore, it shall not be a violation of this Section 6.02 for Parent and its Affiliates (other than the Company and its Subsidiaries) to continue to operate and grow their respective historical businesses in a manner that is materially consistent with how such businesses have been historically operated. In addition, neither the Company or any of its Subsidiaries, on the one hand, nor Parent or any of its Subsidiaries (other than the Company and its Subsidiaries), on the other hand, may permit or effect any amendment in any material respect of any agreement between the Company or any of its Subsidiaries, on the one hand, and Parent or any of its Subsidiaries (other than the Company and its Subsidiaries), on the other hand, without the prior written consent of Centerbridge.

6.03 Further Assurances. Each party hereto agrees to use, and cause its Affiliates to use, its commercially reasonable and good faith efforts to execute and deliver, at no cost to the other parties hereto, such other documents, certificates, agreements and other writings, and to take such other actions as may be necessary or desirable in order to, consummate or implement expeditiously the transactions contemplated by this Agreement.

6.04 Tax Matters.

(a) The Company and the Shareholders agree (a) to treat the Senior Preferred Shares as stock that is not “preferred stock” within the meaning of Section 305(b)(4) of the Code and Treasury Regulation § 1.305-5 promulgated thereunder. The Company shall not take any position or action inconsistent with such intended treatment (including on any IRS Form 1099), unless otherwise required by either (A) a change in applicable law after the date hereof (or official interpretation thereof) or (B), a contrary “determination” (as defined in Section 1313(a) of the Code). If the Company determines to report, pursuant to Section 305 of the Code, any dividends in any year in excess of actual cash dividends paid in such year, the Company will notify Centerbridge not less than 20 days prior to the last day for reporting such dividends to the Internal Revenue Service, consult with Centerbridge in good faith regarding the need to report such dividend and, not report such dividends if the Company’s accountants advise that, more likely than not, such excess dividends are not required to be reported.

(b) To the extent that the District of Columbia, a U.S. state or any political subdivision thereof requires any Tax Return of or with respect to the Company or any of its Subsidiaries (the “TypTap Group”) to be filed on a combined basis with Parent or its Affiliates (other than the TypTap Group) (a “State Combined Return”) and the Company is not able to opt out of such filing, the Tax Allocation Agreement shall apply mutatis mutandis for purposes of such State Combined Returns, treating for such purpose the Parent Group and the TypTap Group as the only members of the group filing such State Combined Return.

(c) Notwithstanding anything to the contrary in this Agreement or the Tax Allocation Agreement, Parent and the members of the Parent Group shall be responsible for and shall indemnify and hold harmless the Company and its Subsidiaries from and against any

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Losses relating to any Taxes imposed with respect to any consolidated federal income tax return that includes Parent and any member of the TypTap Group (a “Federal Combined Return”) or any State Combined Return (collectively, the “Combined Returns”) except to the extent that the TypTap Group is responsible for such Taxes pursuant to the Tax Allocation Agreement; provided the TypTap Group shall not be deemed responsible for (i) any Taxes arising from or attributable to the contributions or other transactions pursuant to which the stock of Subsidiaries of the Company was transferred to the Company on or prior to the date hereof, and (ii) any Taxes attributable to the acceleration of income or gain from deferred intercompany transactions that occurred on or prior to the date hereof pursuant to Section 1.1502-13 of the Treasury Regulations (or any similar provision of state or local law). The Company shall be entitled to all refunds of income Taxes (including credits in lieu of a refund and any interest thereon received from the applicable taxing authority) to the extent that any member of the TypTap Group is entitled to such refunds pursuant to the Tax Allocation Agreement and Parent shall pay all such refunds to the Company within fifteen (15) days after receipt thereof. Parent shall notify the Company in writing of any communication with respect to any pending or threatened audit or other proceeding by a taxing authority related to a Combined Return to the extent any member of the TypTap Group may be responsible pursuant to the Tax Allocation Agreement or Section 6.04(b); shall keep the Company reasonably informed regarding the progress of any such audit or other proceeding and shall not settle or otherwise resolve any such audit or proceeding without the prior written consent of the Company (not to be unreasonably withheld, conditioned or delayed) to the extent such settlement or resolution would give rise solely to Taxes for which the TypTap Group would be liable.

Section 7. Representations and Warranties.

7.01 Authority; Enforceability. Each of the parties hereto hereby severally represents and warrants to each of the other parties hereto that such party has, as applicable, the legal capacity or power and authority, corporate or otherwise, to enter into this Agreement. Such party is duly organized, validly existing and in good standing under the laws of its jurisdiction of organization, and the execution of this Agreement has been duly authorized by all necessary action. No other act or proceeding, corporate or otherwise, on its part is necessary to authorize the execution of this Agreement. This Agreement has been duly executed by such party and constitutes its legal, valid and binding obligation, enforceable against it in accordance with the terms of this Agreement, except to the extent that such enforceability may be limited by bankruptcy, insolvency, reorganization or other laws and judicial decisions of general application relating to or affecting the enforcement of creditors’ rights generally or by general equitable principles.

7.02 No Breach. Each of the parties hereto severally represents and warrants to each of the other parties hereto that the execution of this Agreement does not:

(a) conflict with or violate its certificate of formation, bylaws or other applicable organizational documents;

(b) violate, conflict with or result in the termination of, or otherwise give any other Person the right to accelerate, renegotiate or terminate or receive any payment or constitute a default or any event of default, with or without notice, lapse of time, or both, under the terms of, any contract or agreement to which it is a party or by which it or any of its assets or operations are bound or affected; or

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(c) constitute a violation by such party of any law, ruling, writ, injunction, award, determination or decree of any arbitral body or court or any agency, commission, department or body of any local, state, federal or foreign governmental, regulatory, administrative, judicial or quasi-governmental unit, entity or authority.

7.03 Consents. Each of the parties hereto hereby severally represents and warrants to each of the other parties hereto that no consent, waiver, approval, authorization, exemption, registration, license or declaration is required to be made or obtained by such party, other than those which have been made or obtained, in connection with the execution or enforceability of this Agreement.

7.04 Spousal Consent. Spouses of the Shareholders who are natural persons are not Shareholders as a result of such marital relationship. Each spouse of a Shareholder, as applicable, acknowledges and agrees to the foregoing by executing the Spousal Consent set forth as Exhibit B attached hereto (the “Spousal Consent”). If this Agreement is executed and delivered by a Shareholder without also delivering a copy of the Spousal Consent executed by the spouse of such Shareholder at such time of execution and delivery or promptly thereafter, then such Shareholder hereby represents and warrants to the Company and the other Shareholders that he or she is not married and does not have a common law spouse as of the date of such delivery. Each Shareholder shall promptly notify the Company whenever there is a change in such Shareholder’s marital status. If a Shareholder marries or remarries after the date of such delivery, such Shareholder shall promptly provide the Company with the name and address of his or her spouse. Each Shareholder shall use his or her best efforts to cause his or her current or future spouse to execute and deliver to the Company the Spousal Consent or an instrument substantially in the form of the Spousal Consent.

Section 8. Miscellaneous.

8.01 Amendments and Waivers. This Agreement may not be amended, modified, supplemented or restated, nor may any provisions of this Agreement be waived, in each case without the prior written consent of Parent and Centerbridge. Any and all amendments, modifications, supplements or waivers may be made to this Agreement from time to time thereafter by the Company or Parent, on the one hand, and Centerbridge, on the other hand, without the consent of any other Shareholder, including amendments, modifications, supplements or waivers to: (a) cure any ambiguity or correct or supplement any provision herein which may be inconsistent with any other provision herein; and (b) make any other provisions with respect to matters or questions arising under this Agreement that are not inconsistent with the provisions of this Agreement; provided, in the case of each of (a) and (b), that no right or benefit specifically provided to a Shareholder under any provision of this Agreement may be amended, modified or waived without the approval of such Shareholder; and provided, further, that any amendment, modification, supplement or waiver of this Agreement shall require the approval of a Shareholder in any case where such Shareholder’s rights or obligations hereunder are materially adversely affected by such amendment, modification, supplement or waiver. Any amendment, modification, supplement or waiver effected in accordance with this Section 8.01 shall be binding upon the

31

Company, the Shareholders and their successors and assigns. Notwithstanding anything to the contrary contained herein, if the Company issues additional shares of its capital stock after the date hereof and, upon such issuance, the holder thereof will hold shares of capital stock in the Company representing 1% or more of the issued capital stock of the Company, then (x) such holder shall become a party to this Agreement by executing and delivering a counterpart signature page hereto as a “Shareholder” and thereafter shall be deemed a “Shareholder” for all purposes hereunder and (y) no action or consent by the parties hereto shall be required for such joinder to this Agreement so long as such acquirer has agreed in writing to be bound by all of the obligations as a “Shareholder” hereunder.

8.02 Entire Agreement. This Agreement, the Purchase Agreement, the Guarantee, the Parent Warrants and the Articles of Incorporation constitute the entire agreement and understanding of the parties in respect of the subject matters hereof and they together supersede all prior understandings, agreements, or representations by or among the parties, written or oral, to the extent they relate in any way to such subject matter hereof. Except as expressly contemplated hereby, there are no third party beneficiaries having rights under or with respect to this Agreement.

8.03 Term and Termination. This Agreement shall terminate automatically as to any Shareholder that Transfers all of its Equity Securities; provided, that this Agreement shall not terminate as to Centerbridge for so long as the Parent Board Designation Condition continues to be met and that the terms of this Agreement that relate to the Parent Registrable Securities (including Section 5.02 and Annex A) shall not terminate and shall continue in effect for so long as Centerbridge or any of its Affiliates holds any Warrants or Parent Registrable Securities.

8.04 Notices. All notices and other communications provided for hereunder shall be made in writing by hand-delivery, first-class mail, facsimile, e-mail, or air courier guaranteeing overnight delivery:

(i) if to the Company:

TypTap Insurance Group, Inc.

5300 West Cypress Street, Suite 100

Tampa, Florida 33607

Attention: Andrew J. Graham, General Counsel

Email: agraham@hcigroup.com

with a copy (which shall not constitute notice) to:

Foley & Lardner LLP

100 North Tampa Street, Suite 2700

Tampa, Florida 33602

Attention: Curt P. Creely

Email: ccreely@foley.com

32

(ii) if to Parent:

HCI Group, Inc.

5300 West Cypress Street, Suite 100

Tampa, Florida 33607

Attention: Andrew J. Graham, General Counsel

Email: agraham@hcigroup.com

with a copy to (which copy shall not constitute notice):

Foley & Lardner LLP

100 North Tampa Street, Suite 2700

Tampa, Florida 33602

Attention: Curt P. Creely

Email: ccreely@foley.com

and

(iii) if to Centerbridge:

c/o Centerbridge Partners, L.P.

375 Park Avenue, 11th Floor

New York, NY 10152

Facsimile: (212) 672-5001

Attention: The Office of the General Counsel; Eric Hoffman

Email: legalnotices@centerbridge.com;

ehoffman@centerbridge.com

with a copy to (which copy shall not constitute notice):

Kirkland & Ellis LLP

601 Lexington Avenue

New York, NY 10022

Facsimile: (212) 446-4900

Attention: Rajab S. Abbassi, P.C.

All such notices and communications shall be deemed to have been duly given when delivered by hand, if personally delivered; five (5) Business Days after being deposited in the United States mail, if being mailed by first class mail; two (2) Business Days after being delivered via a next-day air courier; when receipt is acknowledged by the recipient’s fax machine, if faxed; and on the date sent by e-mail (with confirmation of delivery) if sent during normal business hours of the recipient, and on the next Business Day if sent after normal business hours of the recipient.

8.05 Successors and Assigns; Assignment. This Agreement shall be binding upon and inure to the benefit of and be enforceable by the parties hereto and their respective successors and permitted assigns. Except pursuant to a Transfer effected in a manner consistent with this Agreement, no Shareholder may assign (including by operation of law or otherwise) either this Agreement or any of its rights, interests, or obligations hereunder without the prior

33

written consent of the Company and the other Shareholder. The Company may not, other than by operation of law, assign any or all of its rights, interests or obligations hereunder without the written consent of each Shareholder (in any or all of which cases the Company nonetheless will remain responsible for the performance of all of its obligations hereunder).

8.06 Specific Performance. Each party hereto acknowledges and agrees that irreparable damage would occur to the other parties hereto, and that the other parties hereto will not have an adequate remedy at law, in the event that any of the provisions of this Agreement to be performed by such party are not performed in accordance with their specific terms or are otherwise breached. Therefore, each party hereto is entitled to an injunction or injunctions to prevent breaches of this Agreement by the other parties and to enforce specifically the terms a provisions of this Agreement against such other parties hereto in any court of competent jurisdiction, without bond or other security being required, and appropriate injunctive relief may be applied for by such parties and granted in connection therewith. Such remedies are, however, cumulative and not exclusive and are in addition to any other remedies which any party may have under this Agreement or otherwise.

8.07 Submission to Jurisdiction; No Jury Trial.

(a) Each party submits to the jurisdiction of any state or federal court located in Hillsborough County or the Middle District, Tampa Division, in the state of Florida in any action arising out of or relating to this Agreement and agrees that all claims in respect of the action may be heard and determined in any such court. Each party agrees that a final judgment in any action so brought will be conclusive and may be enforced by action on the judgment or in any other manner provided at law or in equity. Each party waives any defense of inconvenient forum to the maintenance of any action so brought and waives any bond, surety, or other security that might be required of any other party with respect thereto.

(b) THE PARTIES EACH HEREBY AGREE TO WAIVE THEIR RESPECTIVE RIGHTS TO JURY TRIAL OF ANY DISPUTE BASED UPON OR ARISING OUT OF THIS AGREEMENT OR ANY OTHER AGREEMENTS RELATING HERETO OR ANY DEALINGS AMONG THEM RELATING TO THE TRANSACTIONS. The scope of this waiver is intended to be all encompassing of any and all action that may be filed in any court and that relate to the subject matter of the transactions contemplated hereby, including, contract claims, tort claims, breach of duty claims and all other common law and statutory claims. The parties each acknowledge that this waiver is a material inducement to enter into a business relationship and that they will continue to rely on the waiver in their related future dealings. Each party further represents and warrants that it has reviewed this waiver with its legal counsel, and that each knowingly and voluntarily waives its jury trial rights following consultation with legal counsel. NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED HEREIN, THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED ORALLY OR IN WRITING, AND THE WAIVER WILL APPLY TO ANY AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT OR TO ANY OTHER DOCUMENTS OR AGREEMENTS RELATING HERETO. In the event of an action, this Agreement may be filed as a written consent to trial by a court.

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8.08 Counterparts. This Agreement may be executed in two or more counterparts (including by facsimile or PDF), each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

8.09 Governing Law. This Agreement shall be governed by the laws of the State of Florida, without giving effect to any choice of law or conflict of law provision or rule that would cause the application of the law of any jurisdiction other than the State of Florida.

8.10 Headings. The headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning hereof.

8.11 Construction. The parties have participated jointly in the negotiation and drafting of this Agreement. If an ambiguity or question of intent or interpretation arises, this Agreement will be construed as if drafted jointly by the parties and no presumption or burden of proof will arise favoring or disfavoring any party because of the authorship of any provision of this Agreement. Any reference to any federal, state, local, or foreign law will be deemed also to refer to law as amended and all rules and regulations promulgated thereunder, unless the context requires otherwise. The word “including” means “including without limitation. “ Pronouns in masculine, feminine, and neuter genders will be construed to include any other gender, and words in the singular form will be construed to include the plural and vice versa, unless the context otherwise requires. The words “this Agreement,” “herein,” “hereof,” “hereby,” “hereunder,” and words of similar import refer to this Agreement as a whole and not to any particular subdivision unless expressly so limited. The parties intend that each representation, warranty, and covenant contained herein will have independent significance. If any party has breached any representation, warranty, or covenant contained herein in any respect, the fact that there exists another representation, warranty or covenant relating to the same subject matter (regardless of the relative levels of specificity) which the party has not breached will not detract from or mitigate the fact that the party is in breach of the first representation, warranty, or covenant.

8.12 Severability. The remedies provided herein are cumulative and not exclusive of any remedies provided by law. If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction to be invalid, illegal, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions set forth herein shall remain in full force and effect and shall in no way be affected, impaired or invalidated, and the parties hereto shall use their reasonable efforts to find and employ an alternative means to achieve the same or substantially the same result as that contemplated by such term, provision, covenant or restriction. It is hereby stipulated and declared to be the intention of the parties that they would have executed the remaining terms, provisions, covenants and restrictions without including any of such that may be hereafter declared invalid, illegal, void or unenforceable.

8.13 Conflicts With Company Organizational Documents. To the extent that any of the provisions of this Agreement conflict with any of the provisions of the Articles of Incorporation or the Bylaws, the provisions of this Agreement shall prevail and the Shareholders, the Board and the Company shall take such steps as are necessary to amend the Articles of Incorporation or the Bylaws, as the case may be.

[remainder of page intentionally left blank]

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

TYPTAP INSURANCE GROUP, INC.
By:	/s/ Paresh Patel
Name:	Paresh Patel
Title:	Chief Executive Officer
HCI GROUP, INC.
By:	/s/ Andrew L. Graham
Name:	Andrew L. Graham
Title:	Secretary and General Counsel
CB SNOWBIRD HOLDINGS, L.P.
By: CSCP III Cayman GP Ltd., its General Partner
By:	/s/ Gavin Baiera
Name:	Gavin Baiera
Title:	Authorized Signatory

[Shareholders Agreement Signature Page]

Schedule 1

Initial Directors

Paresh Patel

Eric Hoffman (Centerbridge appointment)

Kevin Mitchell

Loreen Spencer

Jim Macchiarola

Martin Dolan

[TBD (HCI appointment)]

[TBD (Joint appointment)]

Annex A

REGISTRATION RIGHTS

In consideration of the mutual covenants contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Company and Centerbridge hereby agree with respect to the Company Registrable Securities, as follows:

Section 1. Demand Registrations.

1.01 Requests for Registration. At any time and from after the fourth (4^th) anniversary of the Effective Date, Centerbridge may request (x) one registration under the Securities Act of all or any portion of its Company Registrable Securities resulting in anticipated proceeds to Centerbridge of at least $40 million on Form S-1 or any similar long-form registration statement (“Long-Form Registrations”) or (y) registration (not more than two times in a twelve month period) of its Company Registrable Securities on Form S-3 or any similar short-form registration statement (“Short-Form Registrations”), if available, if such Short-Form Registration would result in anticipated proceeds to Centerbridge of at least $5 million (any such requested registration, a “Demand Registration”). If Form S-3 is then available to the Registrant, Centerbridge may request that any Demand Registration be made pursuant to Rule 415 under the Securities Act (a “Shelf Registration”) and (if the Registrant is a WKSI at the time any such request is submitted to the Registrant or will become one by the time of the filing of such Shelf Registration) that such Shelf Registration be an automatic shelf registration statement (as defined in Rule 405 under the Securities Act) (an “Automatic Shelf Registration Statement”). Each request for a Demand Registration must specify the approximate number or dollar value of Registrable Securities requested to be registered by Centerbridge and (if known) the intended method of distribution.

1.02 Form of Registrations; Selection of Underwriters. Any Long-Form Registration will be an underwritten registration unless otherwise approved by Centerbridge, such approval not to be unreasonably withheld. The Company shall, with the consent of Centerbridge, not to be unreasonably withheld, select the legal counsel, the investment banker(s) and manager(s) to administer any underwritten offering in connection with any Demand Registration or Shelf Offering.

1.03 Shelf Registrations.

(a) For so long as a registration statement for a Shelf Registration (a “Shelf Registration Statement”) is and remains effective, Centerbridge will have the right at any time or from time to time to elect to sell pursuant to an offering (including an underwritten offering) Registrable Securities pursuant to such registration statement (“Shelf Registrable Securities”). If Centerbridge desires to sell Registrable Securities pursuant to an underwritten offering, then Centerbridge may deliver to the Registrant a written notice (a “Shelf Offering Notice”) specifying the number of Shelf Registrable Securities that Centerbridge desires to sell pursuant to such underwritten offering (the “Shelf Offering”). The Registrant will, as expeditiously as possible (and in any event within fourteen (14) days after the receipt of a Shelf Offering Notice), but subject to Section 1.04, use its commercially reasonable efforts to consummate such Shelf Offering.

Annex B-1

(b) If Centerbridge desires to engage in an underwritten block trade or bought deal pursuant to a Shelf Registration Statement (either through filing an Automatic Shelf Registration Statement or through a take-down from an already existing Shelf Registration Statement) (each, an “Underwritten Block Trade”) then Centerbridge may notify the Registrant of the Underwritten Block Trade not less than two (2) Business Days prior to the day such offering is first anticipated to commence.

(c) All determinations as to whether to complete any Shelf Offering and as to the timing, manner, price and other terms of any Shelf Offering contemplated by this Section 1.03 shall be determined by Centerbridge, and the Registrant shall use its commercially reasonable efforts to cause any Shelf Offering to occur in accordance with such determinations as promptly as practicable. At any time prior to the effective date of the registration statement relating to a Demand Registration or the “pricing” of any offering relating to a Shelf Offering Notice, Centerbridge may revoke or withdraw such notice of a Demand Registration or Shelf Offering Notice without liability to Centerbridge by providing written notice to the Registrant.

1.04 Priority on Demand Registrations and Shelf Offerings. The Registrant will not include in any Demand Registration any securities which are not Registrable Securities without the prior written consent of Centerbridge unless all Registrable Securities requested to be included by Centerbridge in such Demand Registration are included therein. If a Demand Registration or a Shelf Offering is an underwritten offering and the managing underwriters advise the Registrant in writing that in their opinion the number of Registrable Securities and (if permitted hereunder) other securities requested to be included in such offering exceeds the number of Registrable Securities and other securities (if any), which can be sold therein without adversely affecting the marketability, proposed offering price, timing or method of distribution of the offering, then the Registrant will include in such offering (prior to the inclusion of any securities which are not Registrable Securities) the number of Registrable Securities requested to be included by Centerbridge.

1.05 Restrictions on Demand Registration and Shelf Offerings. The Registrant may postpone, by notice in writing to Centerbridge, for up to 60 days (or with the consent of Centerbridge, a longer period) from the date of the request (the “Suspension Period”), the filing or the effectiveness of a registration statement for a Demand Registration or suspend the use of a prospectus that is part of a Shelf Registration Statement (and therefore suspend sales of the Shelf Registrable Securities) by providing written notice to Centerbridge if the following conditions are met: (A) the Registrant determines that the offer or sale of Registrable Securities would reasonably be expected to have a material adverse effect on any proposal or plan by the Registrant or any Subsidiary of the Registrant to engage in any material acquisition of assets or stock (other than in the ordinary course of business) or any material merger, consolidation, tender offer, recapitalization, reorganization, financing or other transaction involving the Registrant or (B) upon advice of counsel, the sale of Registrable Securities pursuant to the registration statement would require disclosure of material non-public information not otherwise required to be disclosed under applicable law, and either (x) the Registrant has a bona fide business purpose for preserving

Annex B-1

the confidentiality of such information, or (y) disclosure would have a material adverse effect on the Registrant or the Registrant’s ability to consummate a transaction. The Registrant may delay or suspend the effectiveness of a Demand Registration or Shelf Registration Statement pursuant to this Section 1.05 only two times in any twelve (12)-month period.

1.06 Other Registration Rights. From and after the date of this Agreement, the Company shall not, without the prior written consent of Centerbridge, which consent shall not be unreasonably withheld, enter into any agreement with any holder or prospective holder of any securities of the Company that would (i) provide to such holder or prospective holder the right to include securities in any registration on other than either a pro rata basis or on a subordinate basis to the Registrable Securities in the Company held by Centerbridge; or (ii) allow such holder or prospective holder to initiate a demand for registration of any securities of the Company held by such holder or prospective holder.

Section 2. Piggyback Registrations. Whenever the Registrant proposes to register any of its equity securities under the Securities Act (including primary and secondary registrations, and other than in connection with registrations on Form S-4 or S-8 promulgated by the SEC or any successor or similar forms) (a “Piggyback Registration”), the Registrant will give prompt written notice to Centerbridge of its intention to effect such Piggyback Registration and, subject to the following sentence, will include in such Piggyback Registration (and in all related registrations or qualifications under blue sky laws and in any related underwriting) all Registrable Securities with respect to which the Registrant has received written requests for inclusion therein within ten (10) days after delivery of the Registrant’s notice. Centerbridge’s Registrable Securities requested to be included in such registration shall be included if, in the opinion of the managing underwriters, the number of securities requested to be included in such registration can be sold in such offering without adversely affecting the marketability, proposed offering price, timing or method of distribution of the offering. Centerbridge may withdraw its request for inclusion at any time prior to executing the underwriting agreement, or if none, prior to the applicable registration statement becoming effective. The Registrant will have the right to terminate or withdraw any registration initiated by it under this Section 2, whether or not any holder of Registrable Securities has elected to include securities in such registration.

Section 3. Registration Procedures.

3.01 Registrant Obligations. Whenever Centerbridge has requested that any Registrable Securities be registered pursuant to this Agreement or have initiated a Shelf Offering, the Registrant will use its reasonable commercial 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 Registrant will as expeditiously as possible:

(a) prepare and file with (or submit confidentially to) the SEC a registration statement, and all amendments and supplements thereto and related prospectuses, with respect to such Registrable Securities and use its commercially reasonable efforts to cause such registration statement to become effective, all in accordance with the Securities Act and all applicable rules and regulations promulgated thereunder (provided that before filing or confidentially submitting a registration statement or prospectus or any amendments or supplements thereto, the Registrant will furnish to the

Annex B-1

counsel selected by Centerbridge covered by such registration statement copies of all such documents proposed to be filed or submitted, which documents will be subject to the review and comment of such counsel to be considered by Registrant in good faith);

(b) notify Centerbridge of (A) the issuance by the SEC of any stop order suspending the effectiveness of any registration statement or the initiation of any proceedings for that purpose, (B) the receipt by the Registrant or its counsel of any notification with respect to the suspension of the qualification of the Registrable Securities for sale in any jurisdiction or the initiation or threatening of any proceeding for such purpose, and (C) the effectiveness of each registration statement filed hereunder;

(c) prepare and file with the SEC such 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 ending when all of the securities covered by such registration statement have been disposed of in accordance with the intended methods of distribution by the sellers thereof set forth in such registration statement (but not in any event before the expiration of any longer period required under the Securities Act or, if such registration statement relates to an underwritten Public Offering, such longer period as in the opinion of counsel for the underwriters a prospectus is required by law to be delivered in connection with sale of Registrable Securities by an underwriter or dealer) and comply with the provisions of the Securities Act with respect to the disposition of all securities covered by such registration statement during such period in accordance with the intended methods of disposition by the sellers thereof set forth in such registration statement;

(d) furnish, without charge, to Centerbridge and each underwriter, if any, such number of copies of such registration statement, each amendment and supplement thereto, the prospectus included in such registration statement (including each preliminary prospectus) (in each case including all exhibits and documents incorporated by reference therein), each amendment and supplement thereto, each Free Writing Prospectus and such other documents as such seller or underwriter, if any, may reasonably request in order to facilitate the disposition of the Registrable Securities owned by Centerbridge (the Registrant hereby consenting to the use in accordance with all applicable laws of each such registration statement, each such amendment and supplement thereto, and each such prospectus (or preliminary prospectus or supplement thereto) or Free Writing Prospectus and the underwriters, if any, in connection with the offering and sale of the Registrable Securities covered by such registration statement or prospectus);

(e) use its commercially reasonable efforts to register or qualify such Registrable Securities under such other securities or blue sky laws of such jurisdictions as any seller reasonably requests and do any and all other acts and things which may be reasonably necessary or advisable to enable such seller to consummate the disposition in such jurisdictions of the Registrable Securities owned by such seller (provided that the Registrant will not be required to (A) qualify generally to do business in any jurisdiction where it would not otherwise be required to qualify but for this subparagraph or (B) consent to general service of process in any such jurisdiction or (C) subject itself to taxation in any such jurisdiction);

Annex B-1

(f) notify in writing Centerbridge (A) promptly after it receives written notice thereof, of the date and time when such registration statement and each post-effective amendment thereto has become effective or a prospectus or supplement to any prospectus relating to a registration statement has been filed and when any registration or qualification has become effective under a state securities or blue sky law or any exemption thereunder has been obtained, (B) promptly after receipt thereof, of any request by the SEC for the amendment or supplementing of such registration statement or prospectus or for additional information, and (C) at any time when a prospectus relating thereto is required to be delivered under the Securities Act, of the happening of any event or of any information or circumstances 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, if required by applicable law or to the extent requested by Centerbridge, such Shareholder will use its commercially reasonable efforts to promptly prepare and file a supplement or amendment to such prospectus so that, as thereafter delivered to the purchasers of such Registrable Securities, such prospectus will not contain an untrue statement of a material fact or omit to state any fact necessary to make the statements therein not misleading and (D) if at any time the representations and warranties of the Registrant in any underwriting agreement, securities sale agreement, or other similar agreement, relating to the offering shall cease to be true and correct;

(g) (A) use commercially reasonable efforts to cause all such Registrable Securities to be listed on each securities exchange on which similar securities issued by the Registrant are then listed and, if not so listed, to be listed on a securities exchange;

(h) use commercially reasonable efforts to provide a transfer agent and registrar for all such Registrable Securities not later than the effective date of such registration statement;

(i) enter into and perform such customary agreements (including, as applicable, underwriting agreements in customary form) and take all such other actions as Centerbridge or the underwriters, if any, reasonably request in order to expedite or facilitate the disposition of such Registrable Securities;

(j) make available for inspection by Centerbridge, any underwriter participating in any disposition or sale pursuant to such registration statement and any attorney, accountant or other agent retained by any such seller or underwriter, all financial and other records, pertinent corporate and business documents and properties of the Registrant as will be necessary to enable them to exercise their due diligence responsibility, and cause the Registrant’s officers, directors, employees, agents, representatives and independent accountants to supply all information reasonably requested by any such seller, underwriter, attorney, accountant or agent in connection with such registration statement and the disposition of such Registrable Securities pursuant thereto;

Annex B-1

(k) take commercially reasonable actions to ensure that any Free-Writing Prospectus utilized in connection with any Demand Registration or Piggyback Registration or Shelf Offering hereunder complies in all material respects with the Securities Act, is filed in accordance with the Securities Act to the extent required thereby, is retained in accordance with the Securities Act to the extent required thereby and, when taken together with the related prospectus, prospectus supplement and related documents, will not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading;

(l) otherwise use its commercially reasonable efforts to comply in all material respects with all applicable rules and regulations of the SEC, and make available to its security holders, as soon as reasonably practicable, an earnings statement covering the period of at least twelve (12) months beginning with the first day of the Registrant’s first full calendar quarter after the effective date of the registration statement, which earnings statement will satisfy the provisions of Section 11(a) of the Securities Act and Rule 158 thereunder;

(m) use commercially reasonable efforts to (A) make Short-Form Registration available for the sale of Registrable Securities and (B) prevent the issuance of any stop order suspending the effectiveness of a registration statement, or the issuance of any order suspending or preventing the use of any related prospectus or suspending the qualification of any common equity included in such registration statement for sale in any jurisdiction use, and in the event any such order is issued, commercially reasonable efforts to obtain promptly the withdrawal of such order;

(n) use its commercially reasonable efforts to cause such Registrable Securities covered by such registration statement to be registered with or approved by such other governmental agencies or authorities as may be necessary to enable the sellers thereof to consummate the disposition of such Registrable Securities;

(o) cooperate with the managing underwriter or agent, if any, to facilitate the timely preparation and delivery of certificates (not bearing any restrictive legends) representing securities to be sold under the registration statement, or the removal of any restrictive legends associated with any account at which such securities are held, and enable such securities to be in such denominations and registered in such names as the managing underwriter, or agent, if any;

(p) if requested by any managing underwriter, include in any prospectus or prospectus supplement updated financial or business information for the Registrant’s most recent period or current quarterly period (including estimated results or ranges of results) if required for purposes of marketing the offering in the view of the managing underwriter;

(q) take no direct or indirect action prohibited by Regulation M under the Exchange Act; provided, however, that to the extent that any prohibition is applicable to the Registrant, the Registrant will take such action as is necessary to make any such prohibition inapplicable;

Annex B-1

(r) cooperate with each underwriter or agent participating in the disposition of such Registrable Securities and their respective counsel in connection with the preparation and filing of applications, notices, registrations and responses to requests for additional information with FINRA, the New York Stock Exchange, Nasdaq or any other national securities exchange on which the shares of common equity of the Registrant are or are to be listed, and (B) to the extent required by the rules and regulations of FINRA, retain a Qualified Independent Underwriter acceptable to the managing underwriter;

(s) in the case of any underwritten offering, use its commercially reasonable efforts to obtain, and deliver to the underwriter(s), in the manner and to the extent provided for in the applicable underwriting agreement, one or more cold comfort letters from such Registrant’s independent public accountants in customary form and covering such matters of the type customarily covered by cold comfort letters;

(t) use its commercially reasonable efforts to provide (A) a legal opinion of the Registrant’s outside counsel, dated the effective date of such registration statement addressed to the Registrant, (B) on the date that the Registrable Securities are delivered to the underwriters for sale in connection with a Demand Registration or Shelf Offering, if such securities are being sold through underwriters, or, if such securities are not being sold through underwriters, on the closing date of the applicable sale, (1) one or more legal opinions of the Registrant’s outside counsel, dated such date, in form and substance as customarily given to underwriters in an underwritten public offering or, in the case of a non-underwritten offering, to the broker, placement agent or other agent of the Holders assisting in the sale of the Registrable Securities and (2) one or more “negative assurances letters” of the Registrant’s outside counsel, dated such date, in form and substance as is customarily given to underwriters in an underwritten public offering or, in the case of a non-underwritten offering, to the broker, placement agent or other agent assisting in the sale of the Registrable Securities, in each case, addressed to the underwriters, if any, or, if requested, in the case of a non-underwritten offering, to the broker, placement agent or other agent assisting in the sale of the Registrable Securities and (3) customary certificates executed by authorized officers of the Registrant as may be requested by Centerbridge or any underwriter of such Registrable Securities;

(u) if the Registrant files an Automatic Shelf Registration Statement covering any Registrable Securities, use its commercially reasonable efforts to remain a WKSI (and not become an ineligible issuer (as defined in Rule 405 under the Securities Act)) during the period during which such Automatic Shelf Registration Statement is required to remain effective;

(v) if the Registrant does not pay the filing fee covering the Registrable Securities at the time an Automatic Shelf Registration Statement is filed, pay such fee at such time or times as the Registrable Securities are to be sold;

(w) if the Automatic Shelf Registration Statement has been outstanding for at least three (3) years, at the end of the third year, refile a new Automatic Shelf Registration Statement covering the Registrable Securities, and, if at any time when the Registrant is required to re-evaluate its WKSI status the Registrant determines that it is not

Annex B-1

a WKSI, use its commercially reasonable efforts to refile the Shelf Registration Statement on Form S-3 and, if such form is not available, Form S-1 and keep such registration statement effective during the period during which such registration statement is required to be kept effective.

Section 4. Registration Expenses.

Except as expressly provided herein, all out-of-pocket expenses incurred by Centerbridge, not to exceed $150,000 per registration in the event that Registrant is also registering shares in such registration or $500,000 per registration in the event that Centerbridge is the only party registering shares in such registration, in connection with the performance of or compliance with this Agreement or in connection with any Demand Registration, Piggyback Registration or Shelf Offering, whether or not the same shall become effective, shall be paid by the Registrant, including, without limitation: (i) all registration and filing fees, and any other fees and expenses associated with filings required to be made with the SEC or FINRA, (ii) all fees and expenses in connection with compliance with any securities or “blue sky” laws, (iii) all printing, duplicating, word processing, messenger, telephone, facsimile and delivery expenses (including expenses of printing certificates for the Registrable Securities in a form eligible for deposit with The Depository Trust Company or other depositary and of printing prospectuses and Free Writing Prospectuses), (iv) all fees and disbursements of counsel for the Registrant and of all independent certified public accountants of the Registrant (including the expenses of any special audit and cold comfort letters required by or incident to such performance), (v) Securities Act liability insurance or similar insurance if the Registrant so desires or the underwriters so require in accordance with then-customary underwriting practice, (vi) all fees and expenses incurred in connection with the listing of the Registrable Securities on any securities exchange on which similar securities of the Registrant are then listed (or on which exchange the Registrable Securities are proposed to be listed in the case of the initial Public Offering), (vii) all applicable rating agency fees with respect to the Registrable Securities, (viii) all fees and disbursements of legal counsel for the Registrant, (ix) all reasonable fees and disbursements of one legal counsel for Centerbridge together with any necessary local counsel as may be required by Centerbridge, (x) any fees and disbursements of underwriters customarily paid by issuers or sellers of securities, (xi) all fees and expenses of any special experts or other Persons retained by the Registrant or Centerbridge in connection with any Registration (xii) all of the Registrant’s internal expenses (including all salaries and expenses of its officers and employees performing legal or accounting duties) and (xiii) all expenses related to the “road-show” for any underwritten offering, including all travel, meals and lodging. All such expenses are referred to herein as “Registration Expenses.” The Registrant shall not be required to pay, and each Person that sells securities pursuant to a Demand Registration, Shelf Offering or Piggyback Registration hereunder will bear and pay, all underwriting discounts and commissions applicable to the Registrable Securities sold for Centerbridge’s account and all transfer taxes (if any) attributable to the sale of Registrable Securities.

Annex B-1

Exhibit A

FORM OF JOINDER TO SHAREHOLDERS AGREEMENT

This Joinder Agreement (this “Joinder Agreement”) is made as of the date written below by the undersigned (the “Joining Party”) in accordance with the Shareholders Agreement dated as of [DATE] (the “Shareholders Agreement”) among TypTap Insurance Group, Inc. and certain other parties, as the same may be amended from time to time. Capitalized terms used, but not defined, herein shall have the meaning ascribed to such terms in the Shareholders Agreement.

The Joining Party hereby acknowledges, agrees and confirms that, by its execution of this Joinder Agreement, the Joining Party shall be deemed to be a party to the Shareholders Agreement as of the date hereof and shall have all of the rights and obligations of, and shall be deemed to have made all of the representations and warranties of a “Shareholder” thereunder as if it had executed the Shareholders Agreement (including, without limitation, the representations and warranties contained in Section 8 of the Shareholders Agreement) and all of such representations and warranties are true and correct as of the date hereof as if such representations and warranties were made by the Joining Party. The Joining Party hereby ratifies, as of the date hereof, and agrees to be bound by, all of the terms, provisions and conditions contained in the Shareholders Agreement.

IN WITNESS WHEREOF, the undersigned has executed this Joinder Agreement as of the date written below.

Date:            ,             

[NAME OF JOINING PARTY]
By:
	Name:
	Title:
	Address for Notices:

B-1

Exhibit B

FORM OF SPOUSAL CONSENT

I, _______________, am the spouse of ______________________, a holder of [identify securities], without par value per share, of TypTap Insurance Group, Inc., a Florida corporation (the “Company”). I understand that my spouse is a party to the Shareholders Agreement of the Company, dated [●], 2021 (as amended, amended and restated or otherwise modified from time to time, the “Shareholders Agreement”). Capitalized terms used but not defined herein shall have the meanings ascribed to such terms in the Shareholders Agreement.

I understand that the Shareholders Agreement contains certain provisions regarding my acquiring or retaining any equity Equity securities Securities of the Company and regarding my rights to receive equity Equity securities Securities of the Company. I agree that I may not acquire any such equity Equity securities Securities of the Company (whether by gift, purchase, will, intestate succession, operation of law or decree, order or injunction of any court, division of community or marital property, or otherwise), except in compliance with the terms of the Stockholders Shareholders Agreement. I acknowledge and understand that if I ever propose to acquire any such equity Equity securities Securities of the Company in compliance with the Shareholders Agreement, I must first agree to become a party to the Shareholders Agreement. I further acknowledge and agree that any interest I may have in equity Equity securities Securities of the Company issued by the Company (whether as a result of community property rights or otherwise) as of the date hereof is subject to the provisions of the Shareholders Agreement. Executed as of the ______ day of ______, ______.

Name:

Address:

C-1

EX-10.9

Exhibit 10.9

CERTAIN CONFIDENTIAL INFORMATION, IDENTIFIED BY BRACKETED ASTERISKS "[*****]", HAS BEEN OMITTED FROM THIS EXHIBIT BECAUSE IT IS BOTH (I) NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED.













PROPERTY CATASTROPHE FIRST EXCESS OF LOSS

REINSURANCE CONTRACT

issued to

Typtap insurance company

Ocala, Florida

including any and/or all companies that are or may hereafter become affiliated therewith

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UBWP0005	1 of 39

PROPERTY CATASTROPHE FIRST EXCESS OF LOSS REINSURANCE CONTRACT TABLE OF CONTENTS
Article		Page
	Preamble	4
1	Business Covered	4
2	Retention and Limit	4
3	Florida Hurricane Catastrophe Fund	5
4	Term	5
5	Special Termination	6
6	Territory	7
7	Exclusions	8
8	Special Acceptance	9
9	Premium	10
10	Reinstatement	10
11	Definitions	10
12	Extra Contractual Obligations/Excess of Policy Limits	13
13	Net Retained Liability	14
14	Other Reinsurance	15
15	Original Conditions	15
16	No Third Party Rights	15
17	Notice of Loss and Loss Settlements	15
18	Late Payments	16
19	Offset	17
20	Currency	17
21	Unauthorized Reinsurance	17
22	Taxes	19
23	Access to Records	20
24	Confidentiality	21
25	Indemnification and Errors and Omissions	22
26	Insolvency	22
27	Run-Off Reinsurer	23
28	Arbitration	24
29	Expedited Arbitration	25
30	Service of Suit	26
31	Governing Law	27
32	Entire Agreement	27
33	Non-Waiver	27
34	Intermediary	28
35	Mode of Execution	28
	Company Signing Block	29

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PROPERTY CATASTROPHE FIRST EXCESS OF LOSS REINSURANCE CONTRACT TABLE OF CONTENTS
Attachments		Page
	Pools, Associations & Syndicates Exclusions Clause	30
	Nuclear Incident Exclusion Clause - Physical Damage - Reinsurance - U.S.A.	33
	Terrorism Exclusion	35
	Communicable Disease Exclusion (Property Reinsurance)	36
	Cyber Loss Limited Exclusion Clause (Property Treaty Reinsurance)	37
	Trust Agreement Requirements Clause	38

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UBWP0005	3 of 39

PROPERTY CATASTROPHE FIRST EXCESS OF LOSS

REINSURANCE CONTRACT

(the “Contract”)

issued to

Typtap insurance company

Ocala, Florida

including any and/or all companies that are or may hereafter become affiliated therewith

(collectively, the “Company”)

by

THE SUBSCRIBING REINSURER(S) IDENTIFIED IN THE
INTERESTS AND LIABILITIES AGREEMENT(S) ATTACHED TO
AND FORMING PART OF THIS CONTRACT

(the “Reinsurer”)

ARTICLE 1

BUSINESS COVERED

This Contract is to indemnify the Company in respect of its net excess liability as a result of any loss or losses which may occur during the term of this Contract under any Policies in force at the effective date hereof or issued or renewed on or after that date, covering direct and assumed business classified by the Company as the property perils of Homeowners, Condominium Owners, Renters and Dwelling, subject to the terms and conditions herein contained.

ARTICLE 2

Retention and Limit

A. The Reinsurer shall be liable in respect of each Loss Occurrence for the Ultimate Net Loss over and above the initial Ultimate Net Loss of [$*****] each Loss Occurrence, subject to a limit of liability to the Reinsurer of [$*****] each Loss Occurrence, and subject further to a limit of liability of [$*****] for all Loss Occurrences commencing during the term of this Contract.

B. No Loss Occurrence shall be covered hereunder unless it involves two or more risks subject to this Contract.  The Company shall be the sole judge of what constitutes one risk for purposes of this Contract.

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ARTICLE 3

FLORIDA HURRICANE CATASTROPHE FUND

A. As respects Loss Occurrences subject to this Contract, any loss reimbursement recoverable by the Company under the Florida Hurricane Catastrophe Fund (FHCF), shall be deducted in determining Ultimate Net Loss under this Contract, subject to the following:

1. The full reimbursement amount due from the FHCF, based on statutory limits of coverage as of June 1, shall be deemed recovered by the Company, whether or not actually received from the FHCF and whether or not reduced because of the FHCF’s inability to pay.

2. For purposes of allocating recoveries from the FHCF with respect to each Loss Occurrence, only amounts recoverable by applying the pay-out and retention multiples for the FHCF prior to any reduction in retention due to multiple Loss Occurrences in the same annual period shall be included in calculating the deduction from Ultimate Net Loss.

3. If the Company’s aggregate limit of FHCF reimbursement coverage is exhausted from Loss Occurrences commencing during the term of this Contract, and the FHCF does not designate the portion of said limit allocable to each Loss Occurrence, the total FHCF reimbursement received shall be allocated to the each individual Loss Occurrence in the proportion that the Company’s losses in that Loss Occurrence bear to the Company’s total losses arising out of all Loss Occurrences to which the reimbursement applies.

4. For purposes of loss recoveries under this Contract prior to the final determination of the Company’s retention and limit under the FHCF, FHCF coverage shall be calculated using the Company’s “Projected Payout Multiple” under the FHCF.  Upon determination of the Company’s retention and limit under the FHCF, losses will be adjusted, recognizing any adjustment to the “Projected Payout Multiple” caused by a change in the Aggregate Mandatory FHCF Premium but disregarding any change due to a decrease in the statutory limit.  

B. Any FHCF reimbursement premiums paid by the Company for FHCF layers that inure to the benefit of this Contract shall be deemed to be premiums paid for inuring reinsurance.

C. The Company has opted for a 90% coverage selection from the FHCF.

ARTICLE 4

Term

This Contract shall take effect at 12:01 a.m., Standard Time, June 1, 2021, and unless terminated prior to that time and date as provided in the Special Termination Article, shall remain in effect until 12:01 a.m., Standard Time, June 1, 2022, applying to Loss Occurrences commencing during

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the term of this Contract.  For purposes of this Contract, “Standard Time” shall mean the time as described in the original Policy.

ARTICLE 5

SPECIAL TERMINATION

A. The Company may terminate a Subscribing Reinsurer’s percentage share in this Contract at any time by giving written notice to the Subscribing Reinsurer in the event of any of the following circumstances:

1. The Subscribing Reinsurer ceases underwriting operations.

2. A state insurance department or other legal authority orders the Subscribing Reinsurer to cease writing business, or the Subscribing Reinsurer is placed under regulatory supervision.

3. The Subscribing Reinsurer has become insolvent or has been placed into liquidation or receivership (whether voluntary or involuntary), or there have been instituted against it proceedings for the appointment of a receiver, liquidator, rehabilitator, conservator, trustee in bankruptcy, or other agent known by whatever name, to take possession of its assets or control of its operations.

4. The Subscribing Reinsurer’s policyholders’ surplus (or the equivalent under the Subscribing Reinsurer’s accounting system) as reported in such financial statements of the Subscribing Reinsurer as designated by the Company, has been reduced by 20% of the amount thereof at any date during the prior 12-month period (including the period prior to the inception of this Contract).

5. The Subscribing Reinsurer has become, or has announced its intention to become, merged with or acquired or controlled by any company, corporation, or individual(s) not controlling the Subscribing Reinsurer’s operations at the inception of this Contract.

6. The Subscribing Reinsurer has retroceded its entire liability under this Contract without the Company’s prior written consent, except for retrocessions to members of the Subscribing Reinsurer’s holding company group.

7. The Subscribing Reinsurer has been assigned an A.M. Best’s rating of less than “A-” and/or an S&P rating of less than “BBB+.”  However, as respects Underwriting Members of Lloyd’s, London, a Lloyd’s Market Rating of less than “A-” by A.M. Best and/or less than “BBB+” by S&P shall apply.

8. The Subscribing Reinsurer has hired an unaffiliated runoff claims manager that is compensated on a contingent basis or is otherwise provided with financial incentives based on the quantum of claims paid.

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9. The Subscribing Reinsurer has in any other way assigned its interests or delegated its obligations under this Contract to an unaffiliated entity.

10. The Subscribing Reinsurer has failed to post or maintain required collateral to secure its obligations as required under this Contract, and has not cured such deficiency within 30 days following written notice thereof from the Company.

Notwithstanding the foregoing, agreement by a Lloyd’s syndicate to follow claim settlements procedures under Lloyd’s Claims Scheme (Combined) shall not constitute a transfer of its claims-paying authority, for purposes of subparagraphs (8) and (9) of this paragraph.

B. Termination shall be effected on a cut-off basis and the Subscribing Reinsurer shall have no liability for Loss Occurrences commencing after the date of termination.  The reinsurance premium due the Subscribing Reinsurer hereunder (including any minimum reinsurance premium) shall be prorated based on the period of the Subscribing Reinsurer’s participation hereon, and the Subscribing Reinsurer shall immediately return any excess reinsurance premium received.  Reinstatement premium, if any, shall be calculated based on the Subscribing Reinsurer’s reinsurance premium earned during the period of the Subscribing Reinsurer’s participation hereon.

C. Additionally, in the event of any of the circumstances listed in paragraph A of this Article, the Company shall have the option to commute the Subscribing Reinsurer’s liability for losses on Policies covered by this Contract.  In the event the Company and the Subscribing Reinsurer cannot agree on the commutation amount, they shall appoint an actuary and/or appraiser to assess such amount and shall share equally any expense of the actuary and/or appraiser.  If the Company and the Subscribing Reinsurer cannot agree on an actuary and/or appraiser, the Company and the Subscribing Reinsurer each shall nominate three individuals, of whom the other shall decline two, and the final appointment shall be made by drawing lots.  Payment by the Subscribing Reinsurer of the amount of liability ascertained shall constitute a complete and final release of both parties in respect of liability arising from the Subscribing Reinsurer’s participation under this Contract.

D. The Company’s option to require commutation under paragraph C above shall survive the termination or expiration of this Contract.

ARTICLE 6

Territory

This Contract shall apply to Policies issued in the State of Florida.

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ARTICLE 7

Exclusions

A. This Contract shall not apply to and specifically excludes:

1. Policies covered by the Company’s Flood Tower.

2. Flood when written as such.

3. Earthquake for standalone Policies where earthquake is the only named peril.

4. Hail damage to an insured’s growing or standing crops.

5. Reinsurance assumed by the Company under obligatory reinsurance agreements, except intercompany reinsurance between the Company and its affiliates and reinsurance where the Policies involved are to be re-underwritten in accordance with the underwriting standards of the Company and reissued as Policies of the Company in due course.

6. Pools, Associations & Syndicates, per the attached exclusion.

7. Liability of the Company arising by contract, operation of law, or otherwise, from its participation or membership, whether voluntary or involuntary, in any Insolvency Fund.  “Insolvency Fund” includes any guaranty fund, insolvency fund, plan, pool, association, fund or other arrangement, howsoever denominated, established or governed, that provides for any assessment of or payment or assumption by the Company of part or all of any claim, debt, charge, fee, or other obligation of an insurer, or its successors or assigns, that has been declared by any competent authority to be insolvent, or that is otherwise deemed unable to meet any claim, debt, charge, fee or other obligation in whole or in part.

8. Loss or damage occasioned by war, invasion, hostilities, acts of foreign enemies, civil war, rebellion, insurrection, military or usurped power, martial law, or confiscation by order of any government or public authority, but not excluding loss or damage that would be covered under a standard form of Policy containing a standard war exclusion clause.

9. Losses excluded by the attached Nuclear Incident Exclusion Clause – Physical Damage – Reinsurance – U.S.A.

10. Terrorism as defined in the attached Terrorism Exclusion.

11. Mold unless directly resulting from an otherwise covered peril.

12. Loss and/or damage and/or costs and/or expenses arising from seepage and/or pollution and/or contamination, other than contamination from smoke.  Nevertheless, this exclusion does not preclude payment of the cost of removing debris of property

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damaged by a loss otherwise covered hereunder, subject always to a limit of 25.0% of the Company’s property loss under the applicable original Policy.

13. Financial guarantee and insolvency.

14. Loss or damage to overhead transmission and distribution lines, including supporting structures, of electrical companies, telephone companies, and cable companies.  This exclusion shall not apply, however, to transmission and distribution lines and their supporting structures located on the property of any original insured or within 1,000 feet thereof.

15. Losses excluded by the attached Communicable Disease Exclusion (Property Reinsurance).

16. Loss Excluded by the attached Cyber Loss Limited Exclusion Clause (Property Treaty Reinsurance).

17. Policies written by Homeowners Choice Property & Casualty Insurance Company, Inc.

B. With the exception of subparagraphs A(8), A(9), A(10) and A(13) above, should any judicial, regulatory or legislative entity having legal jurisdiction invalidate any exclusion on the Company's Policy, any amount of loss for which the Company is liable because of such invalidation will not be excluded hereunder.

C. With the exception of subparagraphs A(8), A(9), A(10) and A(13) above, if the Company inadvertently issues a Policy falling within the scope of one or more of the exclusions, such Policy shall be covered hereunder, provided that the Company issues, or causes to be issued, the required notice of cancellation within 30 days after a member of the executive or managerial staff at the Company’s home office having underwriting authority in the class of business involved becomes aware that the Policy applies to excluded classes, unless the Company is prevented from canceling said Policy within such period by applicable statute or regulation, in which case such Policy shall be covered hereunder until the earliest date on which the Company may cancel.

ARTICLE 8

SPECIAL ACCEPTANCE

Business that is not within the scope of this Contract may be submitted to the Reinsurer for special acceptance hereunder, and such business, if accepted by the Reinsurer shall be covered hereunder, subject to the terms and conditions of this Contract, except as modified by the special acceptance.  The Reinsurer shall be deemed to have accepted a risk, if it has not responded within five business days after receiving the underwriting information on such risk.  Any renewal of a special acceptance agreed to for a predecessor contract to this Contract, shall automatically be covered hereunder.

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ARTICLE 9

Premium

A. The Company shall pay the Reinsurer a premium of [$*****] for the term of this Contract.  

B. The premium in paragraph A above shall be payable to the Reinsurer by the Company in four equal installments of [$*****] on June 1, 2021, September 1, 2021, January 1, 2022 and April 1, 2022.

C. The Company shall furnish the Reinsurer with such reasonably available information as may be reasonably required by the Reinsurer for completion of the Reinsurer’s financial statements.

ARTICLE 10

Reinstatement

Loss payments under this Contract shall reduce the limit of coverage afforded by the amounts paid, but the limit of coverage shall be reinstated from the time of the occurrence of the loss, and for each amount so reinstated, the Company agrees to pay, simultaneously with the Reinsurer’s loss payment, an additional premium calculated at pro rata of the Reinsurer’s premium for the term of this Contract, being pro rata only as to the fraction of the Reinsurer’s limit of liability hereunder (i.e., the fraction of $28,000,000) so reinstated.  Nevertheless, the Reinsurer’s liability shall not exceed such limit(s) in respect of any one Loss Occurrence, nor the applicable limit(s) in respect of all Loss Occurrences commencing during the term of this Contract, as set forth in the Retention and Limit Article.

ARTICLE 11

Definitions

A. 1.“Ultimate Net Loss” means the actual loss paid by the Company or which the Company becomes liable to pay, such loss to include Loss Adjustment Expense, 100% of any Extra Contractual Obligation and 100% of any Loss in Excess of Policy Limits as defined in the Extra Contractual Obligations/Excess of Policy Limits Article.  In no event, however, shall more than 25% of “Ultimate Net Loss” for any one Loss Occurrence be comprised of Extra Contractual Obligations and Loss in Excess of Policy Limits.

2. Salvages and all recoveries (including amounts due from all reinsurances that inure to the benefit of this Contract, whether recovered or not), shall be first deducted from such loss to arrive at the amount of liability attaching hereunder.

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3. All salvages, recoveries or payments recovered or received subsequent to loss settlement hereunder shall be applied as if recovered or received prior to the aforesaid settlement, and all necessary adjustments shall be made by the parties hereto.

4. The Company shall be deemed to be “liable to pay” a loss when a judgment has been rendered that the Company does not plan to appeal, and/or the Company has obtained a release, and/or the Company has accepted a proof of loss, and/or the Company has made a commitment to pay, and/or the Company has scheduled the payment of a loss.

5. Nothing in this clause shall be construed to mean that losses are not recoverable hereunder until the Company’s “Ultimate Net Loss” has been ascertained.

B. “Loss Adjustment Expense” means costs and expenses incurred by the Company in connection with the investigation, appraisal, adjustment, settlement, litigation, defense or appeal of a specific claim or loss, or alleged loss, including but not limited to:

1. court costs;

2. costs of supersedeas and appeal bonds;

3. monitoring counsel expenses;

4. legal expenses and costs incurred in connection with coverage questions and legal actions connected thereto, including but not limited to declaratory judgment actions;

5. post-judgment interest;

6. pre-judgment interest, unless included as part of an award or judgment;

7. a pro rata share of salaries and expenses of Company field employees, calculated in accordance with the time occupied in adjusting such loss, and expenses of other Company employees who have been temporarily diverted from their normal and customary duties and assigned to the field adjustment of losses covered by this Contract; and

8. subrogation, salvage and recovery expenses.

“Loss Adjustment Expense” does not include salaries and expenses of the Company’s employees, except as provided in subparagraph (7) above, and office and other overhead expenses.

C. 1.“Loss Occurrence” means the sum of all individual losses directly occasioned by any one disaster, accident or loss or series of disasters, accidents or losses arising out of one event.  However, the duration and extent of any one “Loss Occurrence” shall be limited to all individual losses sustained by the Company occurring during any period of 168 consecutive hours arising out of and directly occasioned by the same event except that the term “Loss Occurrence” shall be further defined as follows:

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a. As regards any “Named Storm,” all individual losses sustained by the Company arising out of and directly occasioned by such “Named Storm,” without regard to the limitations of duration and extent set forth above.  “Named Storm” means any storm or storm system declared by the US National Hurricane Center, US Central Pacific Hurricane Center, US Weather Prediction Center, or their successor organizations, all being  divisions of the US National Weather Service to be a tropical storm or hurricane, and any successors thereof.  A storm or storm system that merges with a “Named Storm” shall be considered part of that “Named Storm,” once it has merged.  A “Named Storm” shall be deemed to begin at the effective time and date of the first watch, warning or other official advisory applicable to such tropical storm or hurricane issued by the above referenced governmental meteorological agencies.  A “Named Storm” shall be deemed to end 72 hours after the cancellation of the last watch, warning or other official advisory applicable to such tropical storm, hurricane or successor, issued by the above referenced governmental meteorological agencies irrespective of the duration of the timing or spacing between such watches, warnings or other official advisories.  If two or more storms are assigned different names by the above referenced governmental meteorological agencies, each of those storms shall constitute a separate event for purposes of this definition.

b. As regards windstorm, hail, tornado, cyclone, including ensuing collapse and water damage other than “Named Storm,” all individual losses sustained by the Company occurring during any period of 96 consecutive hours arising out of and directly occasioned by the same event.

c. As regards riot, riot attending a strike, civil commotion, vandalism and malicious mischief, all individual losses sustained by the Company occurring during any period of 96 consecutive hours arising out of and directly occasioned by the same event. The maximum duration of 96 consecutive hours may be extended in respect of individual losses that occur beyond such 96 consecutive hours during the continued occupation of an assured’s premises by strikers, provided such occupation commenced during the aforesaid period.

d. As regards earthquake and fire following directly occasioned by the earthquake, those earthquake losses and individual fire losses that commence during the period of 168 consecutive hours may be included in the Company’s “Loss Occurrence.”

e. As regards any related weather conditions involving snow, sleet, freezing rain, freeze, ice, winter weather, and wind losses related to such conditions, all individual losses sustained by the Company, that occur during any period of 168 consecutive hours arising out of and directly occasioned by the same event.

f. As regards firestorms, brush fires and other fires or series of fires, irrespective of origin (except for fires covered in subparagraphs (c) and (d) above) which spread through trees, grassland or other vegetation, all individual losses sustained by the

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Company occurring during any period of 168 consecutive hours within a 150-mile radius of any fixed point selected by the Company may be included in the Company’s “Loss Occurrence.” However, an individual loss subject to this subparagraph cannot be included in more than one “Loss Occurrence.”

2. Except as provided in subparagraph (1)(a) above:

a. The Company may choose the date and time when any such period of consecutive hours commences provided that it is not earlier than the date and time of the occurrence of the first recorded individual loss sustained by the Company arising out of that disaster, accident or loss.

b. Only one period of consecutive hours shall apply with respect to one event, except that, as respects those “Loss Occurrences” referred to in subparagraph (1)(c) above, if the disaster, accident or loss occasioned by the event is of greater duration than 96 consecutive hours, then the Company may divide that disaster, accident or loss into two or more “Loss Occurrences” provided no two periods overlap and no individual loss is included in more than one such period and provided that no period commences earlier than the date and time of the occurrence of the first recorded individual loss sustained by the Company arising out of that disaster, accident or loss.

3. Losses arising from a combination of two or more perils as a result of the same event shall be considered as having arisen from one “Loss Occurrence.”  Furthermore, all losses arising from an event involving a combination of losses described in subparagraphs (1)(a) and (1)(b) may be considered as having arisen from one “Loss Occurrence.”  Notwithstanding the foregoing, the hourly limitations as stated above shall not be exceeded as respects the applicable perils, and, except as respects those “Loss Occurrences” involving a “Named Storm” referred to in subparagraph (1)(a) above, no single “Loss Occurrence” shall encompass a time period greater than 168 consecutive hours.

D. “Policy” means any binder, policy, or contract of insurance or reinsurance issued, accepted or held covered provisionally or otherwise, by or on behalf of the Company.

ARTICLE 12

EXTRA CONTRACTUAL OBLIGATIONS/EXCESS OF POLICY LIMITS

A. This Contract shall cover Extra Contractual Obligations, as provided in the definition of Ultimate Net Loss.  “Extra Contractual Obligations” shall be defined as those liabilities not covered under any other provision of this Contract and that arise from the handling of any claim on business covered hereunder, such liabilities arising because of, but not limited to, the following:  failure by the Company to settle within the Policy limit, or by reason of alleged or actual negligence, fraud or bad faith in rejecting an offer of settlement or in the

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preparation of the defense or in the trial of any action against its insured or reinsured or in the preparation or prosecution of an appeal consequent upon such action.

B. This Contract shall cover Loss in Excess of Policy Limits, as provided in the definition of Ultimate Net Loss.  “Loss in Excess of Policy Limits” shall be defined as Loss in excess of the Policy limit, having been incurred because of, but not limited to, failure by the Company to settle within the Policy limit or by reason of alleged or actual negligence, fraud or bad faith in rejecting an offer of settlement or in the preparation of the defense or in the trial of any action against its insured or reinsured or in the preparation or prosecution of an appeal consequent upon such action.

C. An Extra Contractual Obligation and/or Loss in Excess of Policy Limits shall be deemed to have occurred on the same date as the loss covered under the Company’s Policy, and shall constitute part of the original loss.

D. For the purposes of the Loss in Excess of Policy Limits coverage hereunder, the word “Loss” shall mean any amounts for which the Company would have been contractually liable to pay had it not been for the limit of the original Policy.

E. Loss Adjustment Expense in respect of Extra Contractual Obligations and/or Loss in Excess of Policy Limits shall be covered hereunder in the same manner as other Loss Adjustment Expense.

F. However, this Article shall not apply where the loss has been incurred due to final legal adjudication of fraud of a member of the Board of Directors or a corporate officer of the Company acting individually or collectively or in collusion with any individual or corporation or any other organization or party involved in the presentation, defense or settlement of any claim covered hereunder.

G. In no event shall coverage be provided to the extent not permitted under law.

ARTICLE 13

NET RETAINED LIABILITY

A. This Contract applies only to that portion of any loss that the Company retains net for its own account (prior to deduction of any reinsurance that inures solely to the benefit of the Company).

B. The amount of the Reinsurer’s liability hereunder in respect of any loss or losses shall not be increased by reason of the inability of the Company to collect from any other reinsurer(s), whether specific or general, any amounts that may have become due from such reinsurer(s), whether such inability arises from the insolvency of such other reinsurer(s) or otherwise.

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ARTICLE 14

OTHER REINSURANCE

The Company shall be permitted to carry in force other reinsurance, recoveries under which shall inure to the benefit of this Contract.

ARTICLE 15

Original Conditions

All reinsurance under this Contract shall be subject to the same terms, conditions, waivers and interpretations, and to the same modifications and alterations as the respective Policies of the Company.  However, in no event shall this be construed in any way to provide coverage outside the terms and conditions set forth in this Contract.

ARTICLE 16

NO THIRD PARTY RIGHTS

This Contract is solely between the Company and the Reinsurer, and in no instance shall any insured, claimant or other third party have any rights under this Contract except as may be expressly provided otherwise herein.

ARTICLE 17

Notice of Loss and Loss Settlements

A. The Company shall advise the Reinsurer promptly if paid and estimated Ultimate Net Loss is in excess of 75% of the Company’s retention, or if, in the opinion of the Company, such Ultimate Net Loss may result in a claim hereunder.  Thereafter, the Company shall advise the Reinsurer, at least monthly, of all subsequent developments thereto that may materially affect the position of the Reinsurer.

B. The Company alone and at its full discretion shall adjust, settle or compromise all claims and losses.

C. As respects losses subject to this Contract, all loss settlements made by the Company, whether under strict Policy terms or by way of compromise, and any Extra Contractual Obligations and/or Loss in Excess of Policy Limits, shall be binding upon the Reinsurer.  The Reinsurer agrees to pay or allow, as the case may be, its share of each such settlement immediately upon receipt of reasonable evidence of the amount paid by the Company or that the Company estimates it will pay within the next 14 days.  Within 30 days after receipt of the Reinsurer’s payment, the Company shall report to the Reinsurer the Reinsurer’s payment, minus the Reinsurer’s share of losses subject to this Contract that the Company has paid, or

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become liable to pay, as of the date of the report.  Any positive difference shall be remitted to the Reinsurer with the Company’s report.

ARTICLE 18

LATE PAYMENTS

A. In the event any payment due either party is not received by the Intermediary by the payment due date, the party to whom payment is due may, by notifying the Intermediary in writing, require the debtor party to pay, and the debtor party agrees to pay, an interest penalty on the amount past due calculated for each such payment on the last business day of each month as follows:

1. The number of full days that have expired since the overdue date or the last monthly calculation, whichever the lesser; times

2. 1/365th of the sum of the six-month United States Treasury Bill rate as quoted in The Wall Street Journal on the first business day of the month for which the calculation is made, plus 1%; times

3. The amount past due, including accrued interest.

Interest shall accumulate until payment of the original amount due plus interest penalties have been received by the Intermediary.

B. The due date shall, for purposes of this Article, be determined as follows:

1. Payments from the Reinsurer to the Company shall be due on the date on which the demand for payment (including delivery of bordereaux or quarterly or monthly reports) is received by the Reinsurer, and shall be overdue 30 days thereafter.

2. Payments from the Company to the Reinsurer shall be due on the dates specified within this Contract.  Payments shall be overdue 30 days thereafter except for the first installment of premium, if applicable, which shall be overdue 60 days from inception or 30 days from final line-signing, whichever the later.  Reinstatement premium, if applicable, shall have as a due date the date when the Company receives payment for the claim giving rise to such reinstatement premium, and payment shall be overdue 30 days thereafter. In the event a due date is not specifically stated for a given payment, the overdue date shall be 30 days following the date of billing.

C. If the information contained in the Company’s demand for payment is insufficient or not in accordance with the conditions of this Contract, then within 30 days the Reinsurer shall request from the Company all additional information necessary to validate its claim and the payment due date as defined in paragraph B shall be deemed to be the date upon which the Reinsurer received the requested additional information.  This paragraph is only for the purpose of establishing when a payment is overdue, and shall not alter the provisions of the Notice of Loss and Loss Settlements Article or other pertinent contractual stipulations.

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D. In the event arbitration is necessary to settle a dispute, the panel shall have the authority to make a determination awarding interest to the prevailing party.  Interest, if any, awarded by the panel shall supersede the interest amounts outlined herein.

E. Any interest owed pursuant to this Article may be waived by the party to which it is owed.  Waiver of such interest, however, shall not affect the waiving party’s rights to other interest amounts due as a result of this Article.

ARTICLE 19

OFFSET

Each party hereto shall have, and may exercise at any time and from time to time, the right to offset any and all balances due from a party to the other arising under this Contract.  In the event of the insolvency of a party hereto, offsets shall only be allowed in accordance with the provisions of any applicable law governing offset entitlement.

ARTICLE 20

Currency

A. Where the word “Dollars” and/or the sign “$” appear in this Contract, they shall mean United States Dollars, and all payments hereunder shall be in United States Dollars.

B. For purposes of this Contract, where the Company receives premiums or pays losses in currencies other than United States Dollars, such premiums or losses shall be converted into United States Dollars at the actual rates of exchange at which these premiums or losses are entered in the Company’s books.

ARTICLE 21

Unauthorized Reinsurance

A. This Article applies only to the extent a Subscribing Reinsurer does not qualify for credit with any insurance regulatory authority having jurisdiction over the Company’s reserves.

B. The Company agrees, in respect of its Policies or bonds falling within the scope of this Contract, that when it files with its insurance regulatory authority, or sets up on its books liabilities as required by law, it shall forward to the Reinsurer a statement showing the proportion of such liabilities applicable to the Reinsurer.  The “Reinsurer’s Obligations” shall be defined as follows:

1. unearned premium (if applicable);

2. known outstanding losses that have been reported to the Reinsurer and Loss Adjustment Expense relating thereto;

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3. losses and Loss Adjustment Expense paid by the Company but not recovered from the Reinsurer;

4. losses incurred but not reported and Loss Adjustment Expense relating thereto;

5. all other amounts for which the Company cannot take credit on its financial statements unless funding is provided by the Reinsurer.

C. The Reinsurer’s Obligations shall be funded by funds withheld, cash advances, Trust Agreement or a Letter of Credit (LOC).  The Reinsurer shall have the option of determining the method of funding provided it is acceptable to the insurance regulatory authorities having jurisdiction over the Company’s reserves.

D. When funding by Trust Agreement, the Reinsurer shall ensure that the Trust Agreement complies with the provisions of the “Trust Agreement Requirements Clause” attached hereto.  When funding by an LOC, the Reinsurer agrees to apply for and secure timely delivery to the Company of a clean, irrevocable and unconditional LOC issued by a bank and containing provisions acceptable to the insurance regulatory authorities having jurisdiction over the Company’s reserves in an amount equal to the Reinsurer’s Obligations.  Such LOC shall be issued for a period of not less than one year, and shall be automatically extended for one year from its date of expiration or any future expiration date unless 30 days (or such other time period as may be required by insurance regulatory authorities), prior to any expiration date the issuing bank shall notify the Company by certified or registered mail that the issuing bank elects not to consider the LOC extended for any additional period.

E. The Reinsurer and the Company agree that any funding provided by the Reinsurer pursuant to the provisions of this Contract may be drawn upon at any time, notwithstanding any other provision of this Contract, and be utilized by the Company or any successor, by operation of law, of the Company including, without limitation, any liquidator, rehabilitator, receiver or conservator of the Company, for the following purposes, unless otherwise provided for in a separate Trust Agreement:

1. to reimburse the Company for the Reinsurer’s Obligations, the payment of which is due under the terms of this Contract and that has not been otherwise paid;

2. to make refund of any sum that is in excess of the actual amount required to pay the Reinsurer’s Obligations under this Contract (or in excess of 102% of the Reinsurer’s Obligations, if funding is provided by a Trust Agreement);

3. to fund an account with the Company for the Reinsurer’s Obligations.  Such cash deposit shall be held in an interest bearing account separate from the Company’s other assets, and interest thereon not in excess of the prime rate shall accrue to the benefit of the Reinsurer.  Any taxes payable on accrued interest shall be paid out of the assets in the account that are in excess of the Reinsurer’s Obligations (or in excess of 102% of the Reinsurer’s Obligations, if funding is provided by a Trust Agreement).  If the assets are inadequate to pay taxes, any taxes due shall be paid or reimbursed by the Reinsurer;

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4. to pay the Reinsurer’s share of any other amounts the Company claims are due under this Contract.

F. If the amount drawn by the Company is in excess of the actual amount required for E(1) or E(3), or in the case of E(4), the actual amount determined to be due, the Company shall promptly return to the Reinsurer the excess amount so drawn.  All of the foregoing shall be applied without diminution because of insolvency on the part of the Company or the Reinsurer.

G. The issuing bank shall have no responsibility whatsoever in connection with the propriety of withdrawals made by the Company or the disposition of funds withdrawn, except to ensure that withdrawals are made only upon the order of properly authorized representatives of the Company.

H. At annual intervals, or more frequently at the discretion of the Company, but never more frequently than quarterly, the Company shall prepare a specific statement of the Reinsurer’s Obligations for the sole purpose of amending the LOC or other method of funding, in the following manner:

1. If the statement shows that the Reinsurer’s Obligations exceed the balance of the LOC as of the statement date, the Reinsurer shall, within 30 days after receipt of the statement, secure delivery to the Company of an amendment to the LOC increasing the amount of credit by the amount of such difference.  Should another method of funding be used, the Reinsurer shall, within the time period outlined above, increase such funding by the amount of such difference.

2. If, however, the statement shows that the Reinsurer’s Obligations are less than the balance of the LOC (or that 102% of the Reinsurer’s Obligations are less than the trust account balance if funding is provided by a Trust Agreement), as of the statement date, the Company shall, within 30 days after receipt of written request from the Reinsurer, release such excess credit by agreeing to secure an amendment to the LOC reducing the amount of credit available by the amount of such excess credit.  Should another method of funding be used, the Company shall, within the time period outlined above, decrease such funding by the amount of such excess.

ARTICLE 22

TAXES

A. In consideration of the terms under which this Contract is issued, the Company undertakes not to claim any deduction of the premium hereon when making Canadian tax returns or when making tax returns, other than Income or Profits Tax returns, to any state or territory of the United States of America or to the District of Columbia.

B. 1.Each Subscribing Reinsurer has agreed to allow, for the purpose of paying the Federal Excise Tax, the applicable percentage of the premium payable hereon (as

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imposed under the Internal Revenue Code) to the extent such premium is subject to Federal Excise Tax.

2. In the event of any return of premium becoming due hereunder, the Subscribing Reinsurer shall deduct the applicable percentage of the premium from the amount of the return, and the Company or its agent should take steps to recover the Tax from the U.S. Government.

ARTICLE 23

ACCESS TO RECORDS

A. The Reinsurer or its duly authorized representatives shall have the right to visit the offices of the Company to inspect, examine, audit, and verify any of the policy, accounting or claim files (“Records”) relating to business reinsured under this Contract during regular business hours after giving five working days’ prior notice.  This right shall be exercisable during the term of this Contract or after the expiration of this Contract.  Notwithstanding the above, the Reinsurer shall not have any right of access to the Records of the Company if it is not current in all undisputed payments due the Company.

B. Notwithstanding the above, the Company reserves the right to withhold from the Reinsurer any Privileged Documents.  However, the Company shall permit and not object to the Reinsurer’s access to Privileged Documents in connection with the underlying claim reinsured hereunder following final settlement or final adjudication of the case or cases involving such claim, with prejudice against all claimants and all parties to such adjudications; the Company may defer release of such Privileged Documents if there are subrogation, contribution, or other third party actions with respect to that claim or case, and the Company’s defense might be jeopardized by release of such Privileged Documents.  In the event that the Company seeks to defer release of such Privileged Documents, it shall, in consultation with the Reinsurer, take other steps as reasonably necessary to provide the Reinsurer with the information it reasonably requires to indemnify the Company without causing a loss of such privileges or protections.  The Reinsurer shall not have access to Privileged Documents relating to any dispute between the Company and the Reinsurer.

C. For purposes of this Article:

1. “Privileged Documents” means any documents that are Attorney-Client Privilege Documents and/or Work Product Privilege Documents.

2. “Attorney-Client Privilege Documents” means communications of a confidential nature between (a) the Company, or anyone retained by or at the direction of the Company, or its in‑house or outside legal counsel, or anyone in the control of such legal counsel, and (b) any in-house or outside legal counsel, if such communications relate to legal advice being sought by the Company and/or contain legal advice being provided to the Company.

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3. “Work Product Privilege Documents” means communications, written materials and tangible things prepared by or for in-house or outside counsel, or prepared by or for the Company, in anticipation of or in connection with litigation, arbitration, or other dispute resolution proceedings.

ARTICLE 24

CONFIDENTIALITY

A. The Reinsurer hereby acknowledges that the documents, information and data provided to it by the Company, whether directly or through an authorized agent, in connection with the placement and execution of this Contract (“Confidential Information”) are proprietary and confidential to the Company.  Confidential Information shall not include documents, information or data that the Reinsurer can show:

1. are publicly known or have become publicly known through no unauthorized act of the Reinsurer;

2. have been rightfully received from a third person without obligation of confidentiality; or

3. were known by the Reinsurer prior to the placement of this Contract without an obligation of confidentiality.

B. Absent the written consent of the Company, the Reinsurer shall not disclose any Confidential Information to any third parties, including any affiliated companies (except to the extent necessary to enable affiliated companies or third parties engaged by the Reinsurer to perform services related to this Contract on behalf of the Reinsurer), except:

1. when required by retrocessionaires as respects business ceded to this Contract;

2. when required by regulators performing an audit of the Reinsurer’s records and/or financial condition; or

3. when required by external auditors performing an audit of the Reinsurer’s records in the normal course of business.

Further, the Reinsurer agrees not to use any Confidential Information for any purpose not related to the performance of its obligations or enforcement of its rights under this Contract.

C. Notwithstanding the above, in the event that the Reinsurer is required by court order, other legal process or any regulatory authority to release or disclose any or all of the Confidential Information, the Reinsurer agrees to provide the Company with written notice of same at least 10 days prior to such release or disclosure and to use its best efforts to assist the Company in maintaining the confidentiality provided for in this Article.

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D. The provisions of this Article shall extend to the officers, directors and employees of the Reinsurer and its affiliates, and shall be binding upon their successors and assigns.

ARTICLE 25

Indemnification and Errors and Omissions

A. The Reinsurer is reinsuring, subject to the terms and conditions of this Contract, the obligations of the Company under any Policy.  The Company shall be the sole judge as to:

1. what shall constitute a claim or loss covered under any Policy;

2. the Company’s liability thereunder; and

3. the amount or amounts that it shall be proper for the Company to pay thereunder.

B. The Reinsurer shall be bound by the judgment of the Company as to the obligation(s) and liability(ies) of the Company under any Policy.

C. Any inadvertent error, omission or delay in complying with the terms and conditions of this Contract shall not be held to relieve either party hereto from any liability that would attach to it hereunder if such error, omission or delay had not been made, provided such error, omission or delay is rectified immediately upon discovery.

D. Nothing in this Article shall be construed to override any of the other terms and conditions of this Contract.

ARTICLE 26

Insolvency

A. If more than one reinsured company is referenced within the definition of “Company” in the Preamble to this Contract, this Article shall apply severally to each such company.  Further, this Article and the laws of the domiciliary state shall apply in the event of the insolvency of any company covered hereunder.  In the event of a conflict between any provision of this Article and the laws of the domiciliary state of any company covered hereunder, that domiciliary state’s laws shall prevail.

B. In the event of the insolvency of the Company, this reinsurance (or the portion of any risk or obligation assumed by the Reinsurer, if required by applicable law) shall be payable directly to the Company, or to its liquidator, receiver, conservator or statutory successor, either:  (1) on the basis of the liability of the Company, or (2) on the basis of claims filed and allowed in the liquidation proceeding, whichever may be required by applicable statute, without diminution because of the insolvency of the Company or because the liquidator, receiver, conservator or statutory successor of the Company has failed to pay all or a portion of any claim.  It is agreed, however, that the liquidator, receiver, conservator or statutory successor of the Company shall give written notice to the Reinsurer of the pendency of a claim against

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the Company indicating the Policy or bond reinsured, which claim would involve a possible liability on the part of the Reinsurer within a reasonable time after such claim is filed in the conservation or liquidation proceeding or in the receivership, and that during the pendency of such claim, the Reinsurer may investigate such claim and interpose, at its own expense, in the proceeding where such claim is to be adjudicated any defense or defenses that it may deem available to the Company or its liquidator, receiver, conservator or statutory successor.  The expense thus incurred by the Reinsurer shall be chargeable, subject to the approval of the court, against the Company as part of the expense of conservation or liquidation to the extent of a pro rata share of the benefit that may accrue to the Company solely as a result of the defense undertaken by the Reinsurer.

C. Where two or more reinsurers are involved in the same claim and a majority in interest elect to interpose defense to such claim, the expense shall be apportioned in accordance with the terms of this reinsurance Contract as though such expense had been incurred by the Company.

D. As to all reinsurance made, ceded, renewed or otherwise becoming effective under this Contract, the reinsurance shall be payable as set forth above by the Reinsurer to the Company or to its liquidator, receiver, conservator or statutory successor, (except as provided by Section 4118(a)(1)(A) of the New York Insurance Law, provided the conditions of 1114(c) of such law have been met, if New York law applies) or except (1) where the Contract specifically provides another payee in the event of the insolvency of the Company, or (2) where the Reinsurer, with the consent of the direct insured or insureds, has assumed such Policy obligations of the Company as direct obligations of the Reinsurer to the payees under such Policies and in substitution for the obligations of the Company to such payees.  Then, and in that event only, the Company, with the prior approval of the certificate of assumption on New York risks by the Superintendent of Financial Services of the State of New York, or with the prior approval of such other regulatory authority as may be applicable, is entirely released from its obligation and the Reinsurer shall pay any loss directly to payees under such Policy.

ARTICLE 27

RUN-OFF REINSURER

A. “Run-off Reinsurer” means any Subscribing Reinsurer that:

1. has been ordered by a state insurance department or other legal authority to cease writing business, or has been placed under regulatory supervision or in rehabilitation; or

2. has ceased reinsurance underwriting operations; or

3. has transferred its claims-paying authority to an unaffiliated entity; or

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4. engages in a process of Scheme of Arrangement or similar procedure related to this Contract, including but not limited to an insurance business transfer scheme pursuant to Part VII of the Financial Services and Markets Act 2000 (U.K.), as may be amended from time to time; or

5. in any other way has assigned its interests or delegated its obligations under this Contract to an unaffiliated entity.

Notwithstanding the foregoing, agreement by a Lloyd’s syndicate to follow claim settlements procedures under Lloyd’s Claims Scheme (Combined) shall not constitute a transfer of its claims-paying authority, for purposes of subparagraphs (3) and (5) of this paragraph.

B. Notwithstanding any other provision of this Contract, in the event that a Subscribing Reinsurer becomes a Run-off Reinsurer at any time, the Company may elect, by giving written notice to the Run-off Reinsurer at any time thereafter, that all or any of the following shall apply to the Run-off Reinsurer’s participation hereunder:

1. Should the Run-off Reinsurer fail to pay amounts due hereunder, the interest penalty specified in the Late Payments Article shall be increased by 0.5% for each 30 days that a payment is past due, subject to a maximum increase of 7.0%.

2. The Run-off Reinsurer’s liability for losses for Policies covered by this Contract shall be commuted.  In the event the Company and the Run-off Reinsurer cannot agree on the commutation amount of the Run-off Reinsurer’s liability under such Policies, they shall appoint an actuary and/or appraiser to assess such liability and shall share equally any expense of the actuary and/or appraiser.  If the Company and the Run-off Reinsurer cannot agree on an actuary and/or appraiser, the Company and the Run-off Reinsurer each shall nominate three individuals, of whom the other shall decline two, and the final appointment shall be made by drawing lots.  Payment by the Run-off Reinsurer of the amount of liability ascertained shall constitute a complete and final release of both parties under this Contract.

3. The Run-off Reinsurer shall have no right of access to the Records of the Company if the Run-off Reinsurer has denied payment of any claim hereunder or there is a pending arbitration between the Company and the Run-off Reinsurer regarding any claim hereunder.  A reservation of rights shall be considered a denial of a claim.  Notwithstanding the above, the Run-off Reinsurer shall continue to have access to Records of the Company for any claim for which it has raised a query within 30 days of its receipt of a billing, but any inspection of Records must be completed within 90 days of receipt of billing or access will be deemed waived.

4. The provisions of the Arbitration Article shall not apply.  

C. The Company’s waiver of any rights provided in this Article is not a waiver of that right or other rights at a later date.

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ARTICLE 28

Arbitration

A. Any dispute arising out of the interpretation, performance or breach of this Contract, including the formation or validity thereof, shall be submitted for decision to a panel of three arbitrators.  Notice requesting arbitration shall be in writing and sent certified or registered mail, return receipt requested.

B. One arbitrator shall be chosen by each party and the two arbitrators shall then choose an impartial third arbitrator who shall preside at the hearing.  If either party fails to appoint its arbitrator within 30 days after being requested to do so by the other party, the latter, after 10 days’ prior notice by certified or registered mail of its intention to do so, may appoint the second arbitrator.

C. If the two arbitrators do not agree on a third arbitrator within 60 days of their appointment, the third arbitrator shall be chosen in accordance with the procedures for selecting the third arbitrator in force on the date the arbitration is demanded, established by the AIDA Reinsurance and Insurance Arbitration Society – U.S. (ARIAS).  The arbitrators shall be persons knowledgeable about insurance and reinsurance who have no personal or financial interest in the result of the arbitration.  If a member of the panel dies, becomes disabled or is otherwise unwilling or unable to serve, a substitute shall be selected in the same manner as the departing member was chosen and the arbitration shall continue.

D. Within 30 days after all arbitrators have been appointed, the panel shall meet and determine timely periods for briefs, discovery procedures and schedules of hearings.

E. The panel shall be relieved of all judicial formality and shall not be bound by the strict rules of procedure and evidence.  Notwithstanding anything to the contrary in this Contract, the arbitrators may at their discretion, consider underwriting and placement information provided by the Company to the Reinsurer, as well as any correspondence exchanged by the parties that is related to this Contract.  The arbitration shall take place in Tampa, Florida, or at such other place as the parties shall agree.  The decision of any two arbitrators shall be in writing and shall be final and binding.  The panel is empowered to grant interim relief as it may deem appropriate.

F. The panel shall interpret this Contract as an honorable engagement rather than as merely a legal obligation and shall make its decision considering the custom and practice of the applicable insurance and reinsurance business as promptly as possible after the hearings.  Judgment upon an award may be entered in any court having jurisdiction thereof.

G. Each party shall bear the expense of its own arbitrator and shall jointly and equally bear with the other party the cost of the third arbitrator.  The remaining costs of the arbitration shall be allocated by the panel.  The panel may, at its discretion, award such further costs and expenses as it considers appropriate, including but not limited to attorneys’ fees, to the extent permitted by law.

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ARTICLE 29

Expedited Arbitration

A. Notwithstanding the provisions of the Arbitration Article, in the event an amount in dispute hereunder $1,000,000 or less, the parties will submit to an expedited arbitration process with the use of a single arbitrator.  The arbitrator will be chosen in accordance with the procedures for selecting an arbitrator in force on the date the arbitration is demanded, established by the AIDA Reinsurance and Insurance Arbitration Society - U.S. (ARIAS).

B. Each party’s case will be submitted to the arbitrator within 100 calendar days of the date of determination of the arbitrator.  Discovery will be limited to exchanging only those documents directly relating to the issue in dispute, subject to a limit of two discovery depositions from each party, unless otherwise authorized by the arbitrator upon a showing of good cause.

C. Within 120 calendar days of the date of determination of the arbitrator, the hearing will be completed and a written award will be issued by the arbitrator.  As the parties agree that time is of the essence, the sole arbitrator does not have the authority to lengthen the schedule, absent agreement of both parties.  The arbitrator will have all the powers conferred on the arbitration panel as provided in the Arbitration Article, and said Article will apply to all matters not specifically addressed above.

ARTICLE 30

SERVICE OF SUIT

A. This Article applies only to those Subscribing Reinsurers not domiciled in the United States of America, and/or not authorized in any state, territory and/or district of the United States of America where authorization is required by insurance regulatory authorities.

B. This Article shall not be read to conflict with or override the obligations of the parties to arbitrate their disputes as provided for in the Arbitration Article.  This Article is intended as an aid to compelling arbitration or enforcing such arbitration or arbitral award, not as an alternative to the Arbitration Article for resolving disputes arising out of this Contract.

C. In the event of the failure of the Reinsurer to perform its obligations hereunder, the Reinsurer, at the request of the Company, shall submit to the jurisdiction of a court of competent jurisdiction within the United States.  Nothing in this Article constitutes or should be understood to constitute a waiver of the Reinsurer’s rights to commence an action in any court of competent jurisdiction in the United States, to remove an action to a United States District Court, or to seek a transfer of a case to another court as permitted by the laws of the United States or of any state in the United States.  The Reinsurer, once the appropriate court is selected, whether such court is the one originally chosen by the Company and accepted by the Reinsurer or is determined by removal, transfer, or otherwise, as provided for above, shall comply with all requirements necessary to give said court jurisdiction and, in any suit

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instituted against the Reinsurer upon this Contract, shall abide by the final decision of such court or of any appellate court in the event of an appeal.

D. Service of process in such suit may be made upon:

1. as respects Underwriting Members of Lloyd’s, London: Lloyd’s America, Inc., Attention: Legal Department, 280 Park Avenue, East Tower, 25^th Floor, New York, New York 10017;

2. as respects any other Subscribing Reinsurer: Messrs. Mendes and Mount, 750 Seventh Avenue, New York, New York 10019-6829, or another party specifically designated in the Subscribing Reinsurer’s Interests and Liabilities Agreement attached hereto.  

The above-named are authorized and directed to accept service of process on behalf of the Reinsurer in any such suit.

E. Further, pursuant to any statute of any state, territory or district of the United States that makes provision therefor, the Reinsurer hereby designates the Superintendent, Commissioner or Director of Insurance, or other officer specified for that purpose in the statute, or his successor or successors in office, as its true and lawful attorney upon whom may be served any lawful process in any action, suit or proceeding instituted by or on behalf of the Company or any beneficiary hereunder arising out of this Contract, and hereby designates the above-named as the person to whom the said officer is authorized to mail such process or a true copy thereof.

ARTICLE 31

GOVERNING LAW

This Contract shall be governed as to performance, administration and interpretation by the laws of the State of Florida, exclusive of conflict of law rules.  However, with respect to credit for reinsurance, the rules of all applicable states shall apply.

ARTICLE 32

ENTIRE AGREEMENT

This Contract sets forth all of the duties and obligations between the Company and the Reinsurer and supersedes any and all prior or contemporaneous written agreements with respect to matters referred to in this Contract.  This Contract may not be modified or changed except by an amendment to this Contract in writing signed by both parties.  However, this Article shall not be construed as limiting the admissibility of evidence regarding the formation, interpretation, purpose or intent of this Contract.

ARTICLE 33

NON-WAIVER

The failure of the Company or the Reinsurer to insist on compliance with this Contract or to exercise any right or remedy hereunder shall not constitute a waiver of any rights contained in this

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Contract nor prevent either party from thereafter demanding full and complete compliance nor prevent either party from exercising such remedy in the future.

ARTICLE 34

Intermediary

Guy Carpenter & Company, LLC, is hereby recognized as the Intermediary negotiating this Contract for all business hereunder.  All communications (including notices, statements, premiums, return premiums, commissions, taxes, losses, Loss Adjustment Expenses, salvages, and loss settlements) relating thereto shall be transmitted to the Company or the Reinsurer through the Intermediary.  Payments by the Company to the Intermediary shall be deemed payment to the Reinsurer.  Payments by the Reinsurer to the Intermediary shall be deemed payment to the Company only to the extent that such payments are actually received by the Company.

ARTICLE 35

MODE OF EXECUTION

A. This Contract may be executed by:

1. an original written ink signature of paper documents;

2. an exchange of facsimile copies showing the original written ink signature of paper documents;

3. electronic signature technology employing computer software and a digital signature or digitizer pen pad to capture a person’s handwritten signature in such a manner that the signature is unique to the person signing, is under the sole control of the person signing, is capable of verification to authenticate the signature and is linked to the document signed in such a manner that if the data is changed, such signature is invalidated.

B. The use of any one or a combination of these methods of execution shall constitute a legally binding and valid signing of this Contract.  This Contract may be executed in one or more counterparts, each of which, when duly executed, shall be deemed an original.

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IN WITNESS WHEREOF, the Company has caused this Contract to be executed by its duly authorized representative(s), who also confirms the Company’s review of and agreement to be bound by the terms and conditions of the Interests and Liabilities Agreements attached to and forming part of this Contract;

On this _____ day of __________, in the year of 2021.

Typtap insurance company

Signature:	Title:
Print Name:

Property Catastrophe First Excess of Loss

REINSURANCE CONTRACT

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POOLS, ASSOCIATIONS & SYNDICATES EXCLUSIONS CLAUSE

Section A:

This Contract excludes:

a. All business derived directly or indirectly from any Pool, Association or Syndicate which maintains its own reinsurance facilities.

b. Any Pool or Scheme (whether voluntary or mandatory) formed after March 1, 1968 for the purpose of insuring property, whether on a country-wide basis or in respect of designated areas.  This exclusion shall not apply to so-called Automobile Insurance Plans or other Pools formed to provide coverage for Automobile Physical Damage.

Section B:

1. This Contract excludes business written by the Company for the same perils, which is known at the time to be insured by, or in excess of underlying amounts placed in, any Pool, Association or Syndicate, whether by way of insurance or reinsurance, formed for the purpose of writing any of the following:

Oil, Gas or Petro-Chemical Plants

Oil or Gas Drilling Rigs and/or

Aviation Risks

2. The exclusion under paragraph 1 of this Section B does not apply:

a. Where the Total Insured Value over all interests of the risk in question is less than $250,000,000.

b. To interests traditionally underwritten as Inland Marine and/or Stock and/or Contents written on a Blanket basis.

c. To Contingent Business Interruption, except when the Company is aware that the key location is known at the time to be insured in any Pool, Association or Syndicate named above, other than as provided for under subparagraph (a).

Section C:

1. Nevertheless the Reinsurer specifically agrees that liability accruing to the Company from its participation in Residual Market Mechanisms, including but not limited to the following, for all perils otherwise protected hereunder shall not be excluded herefrom:

a. So-called “Beach and Windstorm Plans” and so-called “Coastal Pools”;

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b. All “FAIR Plan” and “Rural Risk Plan” business;

c. Louisiana Citizens Property Insurance Corporation;

d. California Earthquake Authority (“CEA”) or any similar entity.

Notwithstanding the above, assessments related to the Florida Hurricane Catastrophe Fund and Citizens Property Insurance Corporation (Florida) shall be excluded hereunder.

2. However, this reinsurance does not include any increase in such liability resulting from:

a. The inability of any other participant in such Residual Market Mechanisms to meet its liability;

b. Any claim against a Residual Market Mechanism or any participant therein, including the Company, whether by way of subrogation or otherwise, brought by or on behalf of any insolvency fund (as defined in the Exclusions Article);

c. Any assessment or surcharge levied on the policyholder and therefore not a liability of the Company;

d. The Company’s initial capital contribution to the CEA;

e. Any assessments, other than interim and regular assessments, from a Residual Market Mechanism included in subparagraph 1(c) above;

f. Any expenditure to purchase or retire bonds.

3. The Company may include in Ultimate Net Loss for any Loss Occurrence covered hereunder only the liability attributable to that Loss Occurrence.  If the relevant entity does not specify what portion of an assessment is attributable to each Loss Occurrence, the Company may include in Ultimate Net Loss in respect of each Loss Occurrence a percentage of the Company’s assessments from the relevant entity related to the calendar year in which the Loss Occurrence commenced, regardless of when assessed, such percentage to be determined by dividing the relevant entity’s losses arising from the Loss Occurrence by its total losses for the calendar year.

4. The Company will deduct from Ultimate Net Loss amounts received as recoupment of any assessment that has been included in the Ultimate Net Loss, provided the recoupment is directly allocable to the assessment (“itemized recoupment”).  The Company shall use commercially reasonable efforts to recoup such assessment.  Any amount received as an itemized recoupment of any assessment (whether under this Contract or any predecessor contract), and therefore deductible from Ultimate Net Loss, shall not be included in the subject premium of this Contract.

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However, if a state levies assessments but does not allow itemized recoupment from policyholders, instead allowing the Company to file an overall increased rate, any such premium increased thereby shall not be deemed to be a recoupment that is deductible from Ultimate Net Loss.  Any recoupment received as part of a general premium rate increase, not specifically itemized, shall be included as part of the subject premium of this Contract or a successor contract, as applicable.

NOTES: Wherever used herein the terms:

“Company” shall be understood to mean “Company”, “Reinsured”, “Reassured” or whatever other term is used in the attached reinsurance document to designate the reinsured company or companies.

“Contract” shall be understood to mean “Agreement,” “Contract,” “Policy” or whatever other term is used to designate the attached reinsurance document.

“Reinsurer” shall be understood to mean “Reinsurer,” “Reinsurers,” “Underwriters” or whatever other term is used in the attached reinsurance document to designate the reinsurer or reinsurers.

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Nuclear Incident Exclusion Clause - Physical Damage - Reinsurance - U.S.A.

1. This Reinsurance does not cover any loss or liability accruing to the Reassured, directly or indirectly, and whether as Insurer or Reinsurer, from any Pool of Insurers or Reinsurers formed for the purpose of covering Atomic or Nuclear Energy risks.

2. Without in any way restricting the operation of paragraph (1) of this clause, this Reinsurance does not cover any loss or liability accruing to the Reassured, directly or indirectly and whether as Insurer or Reinsurer, from any insurance against Physical Damage (including business interruption or consequential loss arising out of such Physical Damage) to:

I. Nuclear reactor power plants including all auxiliary property on the site, or

II. Any other nuclear reactor installation, including laboratories handling radioactive materials in connection with reactor installations, and “critical facilities” as such, or

III. Installations for fabricating complete fuel elements or for processing substantial quantities of “special nuclear material”, and for reprocessing, salvaging, chemically separating, storing or disposing of “spent” nuclear fuel or waste materials, or

IV. Installations other than those listed in paragraph (2) III above using substantial quantities of radioactive isotopes or other products of nuclear fission.

3. Without in any way restricting the operations of paragraphs (1) and (2) hereof, this Reinsurance does not cover any loss or liability by radioactive contamination accruing to the Reassured, directly or indirectly, and whether as Insurer or Reinsurer, from any insurance on property which is on the same site as a nuclear reactor power plant or other nuclear installation and which normally would be insured therewith except that this paragraph (3) shall not operate

(a) where Reassured does not have knowledge of such nuclear reactor power plant or nuclear installation, or

(b) where said insurance contains a provision excluding coverage for damage to property caused by or resulting from radioactive contamination, however caused. However on and after 1st January 1960 this sub-paragraph (b) shall only apply provided the said radioactive contamination exclusion provision has been approved by the Governmental Authority having jurisdiction thereof.

4. Without in any way restricting the operations of paragraphs (1), (2) and (3) hereof, this Reinsurance does not cover any loss or liability by radioactive contamination accruing to the Reassured, directly or indirectly, and whether as Insurer or Reinsurer, when such radioactive contamination is a named hazard specifically insured against.

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5. It is understood and agreed that this clause shall not extend to risks using radioactive isotopes in any form where the nuclear exposure is not considered by the Reassured to be the primary hazard.

6. The term “special nuclear material” shall have the meaning given it in the Atomic Energy Act of 1954 or by any law amendatory thereof.

7. Reassured to be sole judge of what constitutes:

(a) substantial quantities, and

(b) the extent of installation, plant or site.

Note:  Without in any way restricting the operation of paragraph (1) hereof, it is understood and agreed that

(a) all policies issued by the Reassured on or before 31st December 1957 shall be free from the application of the other provisions of this Clause until expiry date or 31st December 1960 whichever first occurs whereupon all the provisions of this Clause shall apply.

(b) with respect to any risk located in Canada policies issued by the Reassured on or before 31st December 1958 shall be free from the application of the other provisions of this Clause until expiry date or 31st December 1960 whichever first occurs whereupon all the provisions of this Clause shall apply.

12/12/57

NMA 1119

NOTES: Wherever used herein the terms:

“Reassured” shall be understood to mean “Company”, “Reinsured”, “Reassured” or whatever other term is used in the attached reinsurance document to designate the reinsured company or companies.

“Agreement” shall be understood to mean “Agreement”, “Contract”, “Policy” or whatever other term is used to designate the attached reinsurance document.

“Reinsurers” shall be understood to mean “Reinsurers”, “Underwriters” or whatever other term is used in the attached reinsurance document to designate the reinsurer or reinsurers.

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TERRORISM EXCLUSION

A. Notwithstanding any provision to the contrary within this Contract or any endorsement thereto, it is agreed that this Contract excludes loss, damage, cost, or expense directly or indirectly caused by, contributed to by, resulting from, or arising out of or in connection with any Act of Terrorism, as defined herein, regardless of any other cause or event contributing concurrently or in any other sequence to the loss.

B. An “Act of Terrorism” includes any act, or preparation in respect of action, or threat of action designed to influence the government de jure or de facto of any nation or any political division thereof, or in pursuit of political, religious, ideological, or similar purposes to intimidate the public or a section of the public of any nation by any person or group(s) of persons whether acting alone or on behalf of or in connection with any organization(s) or government(s) de jure or de facto, and which:

a. involves violence against one or more persons; or

b. involves damage to property; or

c. endangers life other than that of the person committing the action; or

d. creates a risk to health or safety of the public or a section of the public; or

e. is designed to interfere with or to disrupt an electronic system.

C. This Contract also excludes loss, damage, cost, or expense directly or indirectly caused by, contributed to by, resulting from, or arising out of or in connection with any action in controlling, preventing, suppressing, retaliating against, or responding to any Act of Terrorism.

D. Notwithstanding the above and subject otherwise to the terms, conditions, and limitations of this Contract, in respect only of personal lines, this Contract shall pay actual loss or damage (but not related cost or expense) caused by any Act of Terrorism, provided such act is not directly or indirectly caused by, contributed to by, resulting from, or arising out of or in connection with biological, chemical, radiological or nuclear pollution or contamination.

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Communicable Disease Exclusion (Property Reinsurance)

A. This Contract excludes any loss, damage, liability, claim, cost or expense of whatsoever nature, directly or indirectly caused by, contributed to by, resulting from, arising out of, or in connection with a Communicable Disease or the fear or threat (whether actual or perceived) of a Communicable Disease regardless of any other cause or event contributing concurrently or in any other sequence thereto.

B. As used herein, a Communicable Disease means any disease which can be transmitted by means of any substance or agent from any organism to another organism where:

1. the substance or agent includes, but is not limited to, a virus, bacterium, parasite or other organism or any variation thereof, whether deemed living or not, and

2. the method of transmission, whether direct or indirect, includes but is not limited to, airborne transmission, bodily fluid transmission, transmission from or to any surface or object, solid, liquid or gas or between organisms, and

3. the disease, substance or agent can cause or threaten damage to human health or human welfare or can cause or threaten damage to, deterioration of, loss of value of, marketability of or loss of use of property.

C. Notwithstanding the foregoing, losses directly or indirectly caused by, contributed to by, resulting from, arising out of, or in connection with any otherwise covered peril under subject Policies and not otherwise excluded under this Contract shall be covered.

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CYBER LOSS LIMITED EXCLUSION CLAUSE (PROPERTY TREATY REINSURANCE)

1. Notwithstanding any provision to the contrary within this reinsurance agreement or any endorsement thereto, this reinsurance agreement excludes all loss, damage, liability, cost or expense of whatsoever nature directly or indirectly caused by, contributed to by, resulting from, arising out of or in connection with:

1.2. any loss of, alteration of, or damage to or a reduction in the functionality, availability or operation of a Computer System, unless subject to the provisions of paragraph 2;

1.3. any loss of use, reduction in functionality, repair, replacement, restoration or reproduction of any Data, including any amount pertaining to the value of such Data.

2. Subject to the other terms, conditions and exclusions contained in this reinsurance agreement, this reinsurance agreement will cover physical damage to property insured under the original policies and any Time Element Loss directly resulting therefrom where such physical damage is directly occasioned by any of the following perils:

fire, lightning, explosion, aircraft or vehicle impact, falling objects, windstorm, hail, tornado, cyclone, hurricane, earthquake, volcano, tsunami, flood, freeze or weight of snow

Definitions

3. Computer System means any computer, hardware, software, communications system, electronic device (including, but not limited to, smart phone, laptop, tablet, wearable device), server, cloud or microcontroller including any similar system or any configuration of the aforementioned and including any associated input, output, data storage device, networking equipment or back up facility.

4. Data means information, facts, concepts, code or any other information of any kind that is recorded or transmitted in a form to be used, accessed, processed, transmitted or stored by a Computer System.

5. Time Element Loss means business interruption, contingent business interruption or any other consequential losses.

LMA5410

06 March 2020

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TRUST AGREEMENT REQUIREMENTS CLAUSE

A. Except as provided in paragraph B of this Clause, if the Reinsurer satisfies its funding obligations under the Unauthorized Reinsurance Article by providing a Trust Agreement, the Reinsurer shall ensure that the Trust Agreement:

1. Requires the Reinsurer to establish a trust account for the benefit of the Company, and specifies what the Trust Agreement is to cover;

2. Stipulates that assets deposited in the trust account shall be valued according to their current fair market value and shall consist only of cash (United States legal tender), and certificates of deposit (issued by a United States bank and payable in United States legal tender), or any combination of the two, provided that the investments are issued by an institution that is not the parent, subsidiary or affiliate of either the Reinsurer or the Company;

3. Requires the Reinsurer, prior to depositing assets with the trustee, to execute assignments or endorsements in blank, or to transfer legal title to the trustee of all shares, obligations or any other assets requiring assignments, in order that the Company, or the trustee upon the direction of the Company, may whenever necessary negotiate these assets without consent or signature from the Reinsurer or any other entity;

4. Requires that all settlements of account between the Company and the Reinsurer be made in cash or its equivalent; and

5. Provides that assets in the trust account shall be withdrawn only as permitted in this Contract, without diminution because of the insolvency of the Company or the Reinsurer.

B. If a ceding insurer is domiciled in California and the Reinsurer satisfies its funding obligations under the Unauthorized Reinsurance Article by providing a Trust Agreement, the Reinsurer shall ensure that the Trust Agreement:

1. Provides that assets deposited in the trust account shall be valued according to their current fair market value and shall consist only of cash in United States dollars, certificates of deposit issued by a United States financial institution as defined in California Insurance Code Section 922.7(a) and payable in United States dollars, and investments permitted by the California Insurance Code, or any combination of the above.

2. Provides that investments in or issued by an entity controlling, controlled by or under common control with either the grantor or the beneficiary of the trust shall not exceed 5% of total investments.

3. Requires the Reinsurer, prior to depositing assets with the trustee, to execute assignments or endorsements in blank, or to transfer legal title to the trustee of all

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shares, obligations or any other assets requiring assignments, in order that the ceding insurer, or the trustee upon the direction of the ceding insurer, may, whenever necessary, negotiate these assets without consent or signature from the Reinsurer or any other entity.

4. Provides that assets in the trust account shall be withdrawn only as permitted in this Contract, without diminution because of the insolvency of the ceding insurer or the Reinsurer.

C. If there are multiple ceding insurers that collectively comprise the Company, “regulatory authorities” as referenced in subparagraph A(2) above, shall mean the individual ceding insurer’s domestic regulator.  

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EX-10.10

Exhibit 10.10

CERTAIN CONFIDENTIAL INFORMATION, IDENTIFIED BY BRACKETED ASTERISKS "[*****]", HAS BEEN OMITTED FROM THIS EXHIBIT BECAUSE IT IS BOTH (I) NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED.REINSTATEMENT PREMIUM PROTECTION REINSURANCE CONTRACT

(FOR FIRST EXCESS CAT)

issued to

Typtap insurance company

Ocala, Florida

including any and/or all companies that are or may hereafter become affiliated therewith

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REINSTATEMENT PREMIUM PROTECTION REINSURANCE CONTRACT

(FOR FIRST EXCESS CAT)

TABLE OF CONTENTS

Article		Page
	Preamble	3
1	Business Covered	3
2	Coverage	3
3	Term	4
4	Special Termination	4
5	Territory	5
6	Exclusions	5
7	Premium	5
8	Definitions	6
9	Original Conditions	6
10	No Third Party Rights	6
11	Notice of Loss and Loss Settlements	7
12	Late Payments	7
13	Offset	8
14	Currency	8
15	Unauthorized Reinsurance	9
16	Taxes	11
17	Access to Records	11
18	Confidentiality	12
19	Errors and Omissions	13
20	Insolvency	13
21	Run-Off Reinsurer	14
22	Arbitration	15
23	Expedited Arbitration	16
24	Service of Suit	17
25	Governing Law	18
26	Entire Agreement	18
27	Non-Waiver	18
28	Intermediary	18
29	Mode of Execution	19
	Company Signing Block	20
Attachments
	Trust Agreement Requirements Clause	21

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REINSTATEMENT PREMIUM PROTECTION REINSURANCE CONTRACT

(FOR FIRST EXCESS CAT)

(the “Contract”)

issued to

Typtap insurance company

Ocala, Florida

including any and/or all companies that are or may hereafter become affiliated therewith

(collectively, the “Company”)

by

THE SUBSCRIBING REINSURER(S) IDENTIFIED

IN THE INTERESTS AND LIABILITIES AGREEMENT(S)

ATTACHED TO AND FORMING PART OF THIS CONTRACT

(the “Reinsurer”)

article 1

Business Covered

This Contract is to indemnify the Company in respect of the liability that may accrue to the Company as a result of Reinstatement Premium the Company may become liable to pay under the reinstatement provisions of the Property Catastrophe First Excess of Loss Reinsurance Contract, effective at 12:01 a.m., Standard Time, June 1, 2021 and expiring 12:01 a.m., Standard Time, June 1, 2022, Document Number:  UBWP0005 (the “Original Contract”), subject to the terms and conditions herein contained.  The Original Contract covers losses under Policies covering direct and assumed business classified by the Company as the property perils of Homeowners, Condominium Owners, Renters and Dwelling, in force at the inception of this Contract, or issued or renewed during the term of this Contract.  A copy of the Original Contract is attached to and forms part of this Contract.

article 2

coverage

The Reinsurer shall be liable to pay the Reinstatement Premium obligations under the Original Contract.

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article 3

Term

This Contract shall take effect at 12:01 a.m., Standard Time, June 1, 2021, and unless terminated prior to that time and date as provided in the Special Termination Article, shall remain in effect until 12:01 a.m., Standard Time, June 1, 2022, applying to Loss Occurrences commencing during the term of this Contract.  For purposes of this Contract, “Standard Time” shall mean the time as described in the original Policy.

ARTICLE 4

SPECIAL TERMINATION

A. The Company may terminate a Subscribing Reinsurer’s percentage share in this Contract at any time by giving written notice to the Subscribing Reinsurer in the event of any of the following circumstances:

1. The Subscribing Reinsurer ceases underwriting operations.

2. A state insurance department or other legal authority orders the Subscribing Reinsurer to cease writing business, or the Subscribing Reinsurer is placed under regulatory supervision.

3. The Subscribing Reinsurer has become insolvent or has been placed into liquidation or receivership (whether voluntary or involuntary), or there have been instituted against it proceedings for the appointment of a receiver, liquidator, rehabilitator, conservator, trustee in bankruptcy, or other agent known by whatever name, to take possession of its assets or control of its operations.

4. The Subscribing Reinsurer’s policyholders’ surplus (or the equivalent under the Subscribing Reinsurer’s accounting system) as reported in such financial statements of the Subscribing Reinsurer as designated by the Company, has been reduced by 20% of the amount thereof at any date during the prior 12-month period (including the period prior to the inception of this Contract).

5. The Subscribing Reinsurer has become, or has announced its intention to become, merged with or acquired or controlled by any company, corporation, or individual(s) not controlling the Subscribing Reinsurer’s operations at the inception of this Contract.

6. The Subscribing Reinsurer has retroceded its entire liability under this Contract without the Company’s prior written consent, except for retrocessions to members of the Subscribing Reinsurer’s holding company group.

7. The Subscribing Reinsurer has been assigned an A.M. Best’s rating of less than “A-” and/or an S&P rating of less than “BBB+.”  However, as respects Underwriting

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Members of Lloyd’s, London, a Lloyd’s Market Rating of less than “A-” by A.M. Best and/or less than “BBB+” by S&P shall apply.

8. The Subscribing Reinsurer has hired an unaffiliated runoff claims manager that is compensated on a contingent basis or is otherwise provided with financial incentives based on the quantum of claims paid.

9. The Subscribing Reinsurer has in any other way assigned its interests or delegated its obligations under this Contract to an unaffiliated entity.

10. The Subscribing Reinsurer has failed to post or maintain required collateral to secure its obligations as required under this Contract, and has not cured such deficiency within 30 days following written notice thereof from the Company.

Notwithstanding the foregoing, agreement by a Lloyd’s syndicate to follow claim settlements procedures under Lloyd’s Claims Scheme (Combined) shall not constitute a transfer of its claims-paying authority, for purposes of subparagraphs (8) and (9) of this paragraph.

B. The Subscribing Reinsurer shall have no liability for Reinstatement Premium arising from Loss Occurrences commencing after termination.  The premium due the Subscribing Reinsurer hereunder (including any minimum premium) shall be prorated based on the period of the Subscribing Reinsurer’s participation hereon, and the Subscribing Reinsurer shall immediately return any excess premium received.

article 5

Territory

The territorial limits of this Contract shall be identical with those of the Original Contract.

article 6

exclusions

This Contract shall follow the exclusions set forth in the Original Contract.

ARTICLE 7

Premium

A. The Company shall pay the Reinsurer a premium of [$*****] for the term of this Contract.  

B. The premium in paragraph A above shall be payable to the Reinsurer by the Company in four equal installments of [$*****] on June 1, 2021, September 1, 2021, January 1, 2022, and April 1, 2022.

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C. The Company shall furnish the Reinsurer with such reasonably available information as may be reasonably required by the Reinsurer for completion of the Reinsurer’s financial statements.

article 8

definitions

A. “Reinstatement Premium” means premium paid by the Company under the provisions of the Reinstatement Article of the Original Contract.  Reinstatement Premium shall be calculated at pro rata of the original reinsurance premium, being pro rata only for the amount being reinstated.  If, at the time of a loss settlement under the Original Contract, the reinsurance premium thereunder is not yet known, Reinstatement Premium shall be based upon the deposit premium, subject to adjustment when said reinsurance premium is finally established.  Nothing in this clause shall be construed to mean that amounts are not recoverable hereunder until the Company’s final Reinstatement Premium has been ascertained.  All recoveries received subsequent to reimbursement hereunder shall be applied as if received prior to the aforesaid settlement, and all necessary adjustments shall be made by the parties hereto.

B. “Loss Occurrence” shall follow the definition set forth in the Original Contract.

C. “Policy” means any binder, policy, or contract of insurance or reinsurance issued, accepted or held covered provisionally or otherwise, by or on behalf of the Company.

ARTICLE 9

ORIGINAL CONDITIONS

All reinsurance under this Contract shall be subject to the same terms, conditions, waivers and interpretations, and to the same modifications and alterations as the Original Contract.  However, in no event shall this be construed in any way to provide coverage outside the terms and conditions set forth in this Contract.

article 10

No Third Party Rights

This Contract is solely between the Company and the Reinsurer, and in no instance shall any insured, claimant or other third party have any rights under this Contract except as may be expressly provided otherwise herein.

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article 11

NOTICE OF LOSS AND LOSS settlements

A. The Company shall advise the Reinsurer promptly of all losses that, in the opinion of the Company, may result in a claim hereunder and of all subsequent developments thereto that may materially affect the position of the Reinsurer.

B. The Company alone and at its full discretion shall adjust, settle or compromise all claims and losses.

C. As respects losses subject to the Original Contract, all loss settlements made by the Company, whether under strict Policy terms or by way of compromise, shall be binding upon the Reinsurer, and the Reinsurer agrees to pay or allow, as the case may be, its share of each such settlement immediately upon receipt of reasonable evidence of the amount paid by the Company or that the Company estimates it will pay within the next 14 days.  Within 30 days after receipt of the Reinsurer’s payment, the Company shall report to the Reinsurer the positive difference, if any, of the Reinsurer’s payment, minus the Reinsurer’s share of losses subject to this Contract that the Company has paid, or becomes liable to pay, as of the date of the report.  Any such positive difference shall be remitted to the Reinsurer with the Company’s report.

ARTICLE 12

LATE PAYMENTS

A. In the event any payment due either party is not received by the Intermediary by the payment due date, the party to whom payment is due may, by notifying the Intermediary in writing, require the debtor party to pay, and the debtor party agrees to pay, an interest penalty on the amount past due calculated for each such payment on the last business day of each month as follows:

1. The number of full days that have expired since the overdue date or the last monthly calculation, whichever the lesser; times

2. 1/365th of the sum of the six-month United States Treasury Bill rate as quoted in The Wall Street Journal on the first business day of the month for which the calculation is made, plus 1%; times

3. The amount past due, including accrued interest.

Interest shall accumulate until payment of the original amount due plus interest penalties have been received by the Intermediary.

B. The due date shall, for purposes of this Article, be determined as follows:

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1. Payments from the Reinsurer to the Company shall be due on the date on which the demand for payment (including delivery of bordereaux or quarterly or monthly reports) is received by the Reinsurer, and shall be overdue 30 days thereafter.

2. Payments from the Company to the Reinsurer shall be due on the dates specified within this Contract.  Payments shall be overdue 30 days thereafter except for the first installment of premium, if applicable, which shall be overdue 60 days from inception or 30 days from final line-signing, whichever the later.  Reinstatement Premium, if applicable, shall have as a due date the date when the Company receives payment for the claim giving rise to such Reinstatement Premium, and payment shall be overdue 30 days thereafter. In the event a due date is not specifically stated for a given payment, the overdue date shall be 30 days following the date of billing.

C. If the information contained in the Company’s demand for payment is insufficient or not in accordance with the conditions of this Contract, then within 30 days the Reinsurer shall request from the Company all additional information necessary to validate its claim and the payment due date as defined in paragraph B shall be deemed to be the date upon which the Reinsurer received the requested additional information.  This paragraph is only for the purpose of establishing when a payment is overdue, and shall not alter the provisions of the Notice of Loss and Loss Settlements Article or other pertinent contractual stipulations.

D. In the event arbitration is necessary to settle a dispute, the panel shall have the authority to make a determination awarding interest to the prevailing party.  Interest, if any, awarded by the panel shall supersede the interest amounts outlined herein.

E. Any interest owed pursuant to this Article may be waived by the party to which it is owed.  Waiver of such interest, however, shall not affect the waiving party’s rights to other interest amounts due as a result of this Article.

ARTICLE 13

OFFSET

Each party hereto shall have, and may exercise at any time and from time to time, the right to offset any and all balances due from a party to the other arising under this Contract.  In the event of the insolvency of a party hereto, offsets shall only be allowed in accordance with the provisions of any applicable law governing offset entitlement.

ARTICLE 14

Currency

A. Where the word “Dollars” and/or the sign “$” appear in this Contract, they shall mean United States Dollars, and all payments hereunder shall be in United States Dollars.

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B. For purposes of this Contract, where the Company receives or pays amounts in currencies other than United States Dollars, such amounts shall be converted into United States Dollars at the actual rates of exchange at which these amounts are entered in the Company’s books.

ARTICLE 15

UNAUTHORIZED REINSURANCE

A. This Article applies only to the extent a Subscribing Reinsurer does not qualify for credit with any insurance regulatory authority having jurisdiction over the Company’s reserves.

B. The Company agrees, in respect of business falling within the scope of this Contract, that when it files with its insurance regulatory authority, or sets up on its books liabilities as required by law, it shall forward to the Reinsurer a statement showing the proportion of such liabilities applicable to the Reinsurer.  The “Reinsurer’s Obligations” shall be defined as any amounts due the Company under this Contract, as set up on the Company’s books.

C. The Reinsurer’s Obligations shall be funded by funds withheld, cash advances, Trust Agreement or a Letter of Credit (LOC).  The Reinsurer shall have the option of determining the method of funding provided it is acceptable to the insurance regulatory authorities having jurisdiction over the Company’s reserves.

D. When funding by Trust Agreement, the Reinsurer shall ensure that the Trust Agreement complies with the provisions of the “Trust Agreement Requirements Clause” attached hereto.  When funding by an LOC, the Reinsurer agrees to apply for and secure timely delivery to the Company of a clean, irrevocable and unconditional LOC issued by a bank and containing provisions acceptable to the insurance regulatory authorities having jurisdiction over the Company’s reserves in an amount equal to the Reinsurer’s Obligations.  Such LOC shall be issued for a period of not less than one year, and shall be automatically extended for one year from its date of expiration or any future expiration date unless 30 days (or such other time period as may be required by insurance regulatory authorities), prior to any expiration date the issuing bank shall notify the Company by certified or registered mail that the issuing bank elects not to consider the LOC extended for any additional period.

E. The Reinsurer and the Company agree that any funding provided by the Reinsurer pursuant to the provisions of this Contract may be drawn upon at any time, notwithstanding any other provision of this Contract, and be utilized by the Company or any successor, by operation of law, of the Company including, without limitation, any liquidator, rehabilitator, receiver or conservator of the Company, for the following purposes, unless otherwise provided for in a separate Trust Agreement:

1. to reimburse the Company for the Reinsurer’s Obligations, the payment of which is due under the terms of this Contract and that has not been otherwise paid;

2. to make refund of any sum that is in excess of the actual amount required to pay the Reinsurer’s Obligations under this Contract (or in excess of 102% of the Reinsurer’s Obligations, if funding is provided by a Trust Agreement);

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3. to fund an account with the Company for the Reinsurer’s Obligations.  Such cash deposit shall be held in an interest bearing account separate from the Company’s other assets, and interest thereon not in excess of the prime rate shall accrue to the benefit of the Reinsurer.  Any taxes payable on accrued interest shall be paid out of the assets in the account that are in excess of the Reinsurer’s Obligations (or in excess of 102% of the Reinsurer’s Obligations, if funding is provided by a Trust Agreement).  If the assets are inadequate to pay taxes, any taxes due shall be paid or reimbursed by the Reinsurer;

4. to pay the Reinsurer’s share of any other amounts the Company claims are due under this Contract.

F. If the amount drawn by the Company is in excess of the actual amount required for E(1) or E(3), or in the case of E(4), the actual amount determined to be due, the Company shall promptly return to the Reinsurer the excess amount so drawn.  All of the foregoing shall be applied without diminution because of insolvency on the part of the Company or the Reinsurer.

G. The issuing bank shall have no responsibility whatsoever in connection with the propriety of withdrawals made by the Company or the disposition of funds withdrawn, except to ensure that withdrawals are made only upon the order of properly authorized representatives of the Company.

H. At annual intervals, or more frequently at the discretion of the Company, but never more frequently than quarterly, the Company shall prepare a specific statement of the Reinsurer’s Obligations for the sole purpose of amending the LOC or other method of funding, in the following manner:

1. If the statement shows that the Reinsurer’s Obligations exceed the balance of the LOC as of the statement date, the Reinsurer shall, within 30 days after receipt of the statement, secure delivery to the Company of an amendment to the LOC increasing the amount of credit by the amount of such difference.  Should another method of funding be used, the Reinsurer shall, within the time period outlined above, increase such funding by the amount of such difference.

2. If, however, the statement shows that the Reinsurer’s Obligations are less than the balance of the LOC (or that 102% of the Reinsurer’s Obligations are less than the trust account balance if funding is provided by a Trust Agreement), as of the statement date, the Company shall, within 30 days after receipt of written request from the Reinsurer, release such excess credit by agreeing to secure an amendment to the LOC reducing the amount of credit available by the amount of such excess credit.  Should another method of funding be used, the Company shall, within the time period outlined above, decrease such funding by the amount of such excess.

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ARTICLE 16

Taxes

A. In consideration of the terms under which this Contract is issued, the Company undertakes not to claim any deduction of the premium hereon when making Canadian tax returns or when making tax returns, other than Income or Profits Tax returns, to any state or territory of the United States of America or to the District of Columbia.

B. 1.Each Subscribing Reinsurer has agreed to allow, for the purpose of paying the Federal Excise Tax, the applicable percentage of the premium payable hereon (as imposed under the Internal Revenue Code) to the extent such premium is subject to Federal Excise Tax.

2. In the event of any return of premium becoming due hereunder, the Subscribing Reinsurer shall deduct the applicable percentage of the premium from the amount of the return, and the Company or its agent should take steps to recover the Tax from the U.S. Government.

ARTICLE 17

access to records

A. The Reinsurer or its duly authorized representatives shall have the right to visit the offices of the Company to inspect, examine, audit, and verify any of the policy, accounting or claim files (“Records”) relating to business reinsured under this Contract during regular business hours after giving five working days’ prior notice.  This right shall be exercisable during the term of this Contract or after the expiration of this Contract.  Notwithstanding the above, the Reinsurer shall not have any right of access to the Records of the Company if it is not current in all undisputed payments due the Company.

B. Notwithstanding the above, the Company reserves the right to withhold from the Reinsurer any Privileged Documents.  However, the Company shall permit and not object to the Reinsurer’s access to Privileged Documents in connection with the underlying claim reinsured hereunder following final settlement or final adjudication of the case or cases involving such claim, with prejudice against all claimants and all parties to such adjudications; the Company may defer release of such Privileged Documents if there are subrogation, contribution, or other third party actions with respect to that claim or case, and the Company’s defense might be jeopardized by release of such Privileged Documents.  In the event that the Company seeks to defer release of such Privileged Documents, it shall, in consultation with the Reinsurer, take other steps as reasonably necessary to provide the Reinsurer with the information it reasonably requires to indemnify the Company without causing a loss of such privileges or protections.  The Reinsurer shall not have access to Privileged Documents relating to any dispute between the Company and the Reinsurer.

C. For purposes of this Article:

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1. “Privileged Documents” means any documents that are Attorney-Client Privilege Documents and/or Work Product Privilege Documents.

2. “Attorney-Client Privilege Documents” means communications of a confidential nature between (a) the Company, or anyone retained by or at the direction of the Company, or its in‑house or outside legal counsel, or anyone in the control of such legal counsel, and (b) any in-house or outside legal counsel, if such communications relate to legal advice being sought by the Company and/or contain legal advice being provided to the Company.

3. “Work Product Privilege Documents” means communications, written materials and tangible things prepared by or for in-house or outside counsel, or prepared by or for the Company, in anticipation of or in connection with litigation, arbitration, or other dispute resolution proceedings.

ARTICLE 18

confidentiality

A. The Reinsurer hereby acknowledges that the documents, information and data provided to it by the Company, whether directly or through an authorized agent, in connection with the placement and execution of this Contract (“Confidential Information”) are proprietary and confidential to the Company. Confidential Information shall not include documents, information or data that the Reinsurer can show:

1. are publicly known or have become publicly known through no unauthorized act of the Reinsurer;

2. have been rightfully received from a third person without obligation of confidentiality; or

3. were known by the Reinsurer prior to the placement of this Contract without an obligation of confidentiality.

B. Absent the written consent of the Company, the Reinsurer shall not disclose any Confidential Information to any third parties, including any affiliated companies (except to the extent necessary to enable affiliated companies or third parties engaged by the Reinsurer to perform services related to this Contract on behalf of the Reinsurer), except:

1. when required by retrocessionaires as respects business ceded to this Contract;

2. when required by regulators performing an audit of the Reinsurer’s records and/or financial condition; or

3. when required by external auditors performing an audit of the Reinsurer’s records in the normal course of business.

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Further, the Reinsurer agrees not to use any Confidential Information for any purpose not related to the performance of its obligations or enforcement of its rights under this Contract.

C. Notwithstanding the above, in the event that the Reinsurer is required by court order, other legal process or any regulatory authority to release or disclose any or all of the Confidential Information, the Reinsurer agrees to provide the Company with written notice of same at least 10 days prior to such release or disclosure and to use its best efforts to assist the Company in maintaining the confidentiality provided for in this Article.

D. The provisions of this Article shall extend to the officers, directors and employees of the Reinsurer and its affiliates, and shall be binding upon their successors and assigns.

ARTICLE 19

Errors and Omissions

Any inadvertent error, omission or delay in complying with the terms and conditions of this Contract shall not be held to relieve either party hereto from any liability that would attach to it hereunder if such error, omission or delay had not been made, provided such error, omission or delay is rectified immediately upon discovery.

ARTICLE 20

insolvency

A. If more than one company is referenced within the definition of “Company” in the Preamble to this Contract, this Article shall apply severally to each such company.  Further, this Article and the laws of the domiciliary state shall apply in the event of the insolvency of any company covered hereunder.  In the event of a conflict between any provision of this Article and the laws of the domiciliary state of any company covered hereunder, that domiciliary state’s laws shall prevail.

B. In the event of the insolvency of the Company, this coverage (or the portion of any risk or obligation assumed by the Reinsurer, if required by applicable law) shall be payable directly to the Company, or to its liquidator, receiver, conservator or statutory successor, either:  (1) on the basis of the liability of the Company, or (2) on the basis of claims filed and allowed in the liquidation proceeding, whichever may be required by applicable statute, without diminution because of the insolvency of the Company or because the liquidator, receiver, conservator or statutory successor of the Company has failed to pay all or a portion of any claim.  It is agreed, however, that the liquidator, receiver, conservator or statutory successor of the Company shall give written notice to the Reinsurer of the pendency of a claim against the Company indicating the Policy or bond reinsured, which claim would involve a possible liability on the part of the Reinsurer within a reasonable time after such claim is filed in the conservation or liquidation proceeding or in the receivership, and that during the pendency of such claim, the Reinsurer may investigate such claim and interpose, at its own expense, in the proceeding where such claim is to be adjudicated any defense or defenses that it may

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deem available to the Company or its liquidator, receiver, conservator or statutory successor.  The expense thus incurred by the Reinsurer shall be chargeable, subject to the approval of the court, against the Company as part of the expense of conservation or liquidation to the extent of a pro rata share of the benefit that may accrue to the Company solely as a result of the defense undertaken by the Reinsurer.

C. Where two or more reinsurers are involved in the same claim and a majority in interest elect to interpose defense to such claim, the expense shall be apportioned in accordance with the terms of this reinsurance Contract as though such expense had been incurred by the Company.

ARTICLE 21

RUN-OFF REINSURER

A. “Run-off Reinsurer” means any Subscribing Reinsurer that:

1. has been ordered by a state insurance department or other legal authority to cease writing business, or has been placed under regulatory supervision or in rehabilitation; or

2. has ceased reinsurance underwriting operations; or

3. has transferred its claims-paying authority to an unaffiliated entity; or

4. engages in a process of Scheme of Arrangement or similar procedure related to this Contract, including but not limited to an insurance business transfer scheme pursuant to Part VII of the Financial Services and Markets Act 2000 (U.K.), as may be amended from time to time; or

5. in any other way has assigned its interests or delegated its obligations under this Contract to an unaffiliated entity.

Notwithstanding the foregoing, agreement by a Lloyd’s syndicate to follow claim settlements procedures under Lloyd’s Claims Scheme (Combined) shall not constitute a transfer of its claims-paying authority, for purposes of subparagraphs (3) and (5) of this paragraph.

B. Notwithstanding any other provision of this Contract, in the event that a Subscribing Reinsurer becomes a Run-off Reinsurer at any time, the Company may elect, by giving written notice to the Run-off Reinsurer at any time thereafter, that all or any of the following shall apply to the Run-off Reinsurer’s participation hereunder:

1. Should the Run-off Reinsurer fail to pay amounts due hereunder, the interest penalty specified in the Late Payments Article shall be increased by 0.5% for each 30 days that a payment is past due, subject to a maximum increase of 7.0%.

2. The Run-off Reinsurer’s liability for losses for Policies covered by this Contract shall be commuted.  In the event the Company and the Run-off Reinsurer cannot agree on

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the commutation amount of the Run-off Reinsurer’s liability under such Policies, they shall appoint an actuary and/or appraiser to assess such liability and shall share equally any expense of the actuary and/or appraiser.  If the Company and the Run-off Reinsurer cannot agree on an actuary and/or appraiser, the Company and the Run-off Reinsurer each shall nominate three individuals, of whom the other shall decline two, and the final appointment shall be made by drawing lots.  Payment by the Run-off Reinsurer of the amount of liability ascertained shall constitute a complete and final release of both parties under this Contract.

3. The Run-off Reinsurer shall have no right of access to the Records of the Company if the Run-off Reinsurer has denied payment of any claim hereunder or there is a pending arbitration between the Company and the Run-off Reinsurer regarding any claim hereunder.  A reservation of rights shall be considered a denial of a claim.  Notwithstanding the above, the Run-off Reinsurer shall continue to have access to Records of the Company for any claim for which it has raised a query within 30 days of its receipt of a billing, but any inspection of Records must be completed within 90 days of receipt of billing or access will be deemed waived.

4. The provisions of the Arbitration Article shall not apply.  

C. The Company’s waiver of any rights provided in this Article is not a waiver of that right or other rights at a later date.

ARTICLE 22

arbitration

A. Any dispute arising out of the interpretation, performance or breach of this Contract, including the formation or validity thereof, shall be submitted for decision to a panel of three arbitrators.  Notice requesting arbitration shall be in writing and sent certified or registered mail, return receipt requested.

B. One arbitrator shall be chosen by each party and the two arbitrators shall then choose an impartial third arbitrator who shall preside at the hearing.  If either party fails to appoint its arbitrator within 30 days after being requested to do so by the other party, the latter, after 10 days’ prior notice by certified or registered mail of its intention to do so, may appoint the second arbitrator.

C. If the two arbitrators do not agree on a third arbitrator within 60 days of their appointment, the third arbitrator shall be chosen in accordance with the procedures for selecting the third arbitrator in force on the date the arbitration is demanded, established by the AIDA Reinsurance and Insurance Arbitration Society – U.S. (ARIAS).  The arbitrators shall be persons knowledgeable about insurance and reinsurance who have no personal or financial interest in the result of the arbitration.  If a member of the panel dies, becomes disabled or is otherwise unwilling or unable to serve, a substitute shall be selected in the same manner as the departing member was chosen and the arbitration shall continue.

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D. Within 30 days after all arbitrators have been appointed, the panel shall meet and determine timely periods for briefs, discovery procedures and schedules of hearings.

E. The panel shall be relieved of all judicial formality and shall not be bound by the strict rules of procedure and evidence.  Notwithstanding anything to the contrary in this Contract, the arbitrators may at their discretion, consider underwriting and placement information provided by the Company to the Reinsurer, as well as any correspondence exchanged by the parties that is related to this Contract.  The arbitration shall take place in Tampa, Florida, or at such other place as the parties shall agree. The decision of any two arbitrators shall be in writing and shall be final and binding.  The panel is empowered to grant interim relief as it may deem appropriate.

F. The panel shall interpret this Contract as an honorable engagement rather than as merely a legal obligation and shall make its decision considering the custom and practice of the applicable insurance and reinsurance business as promptly as possible after the hearings.  Judgment upon an award may be entered in any court having jurisdiction thereof.

G. Each party shall bear the expense of its own arbitrator and shall jointly and equally bear with the other party the cost of the third arbitrator.  The remaining costs of the arbitration shall be allocated by the panel.  The panel may, at its discretion, award such further costs and expenses as it considers appropriate, including but not limited to attorneys’ fees, to the extent permitted by law.

ARTICLE 23

Expedited Arbitration

A. Notwithstanding the provisions of the Arbitration Article, in the event an amount in dispute hereunder $1,000,000 or less, the parties will submit to an expedited arbitration process with the use of a single arbitrator.  The arbitrator will be chosen in accordance with the procedures for selecting an arbitrator in force on the date the arbitration is demanded, established by the AIDA Reinsurance and Insurance Arbitration Society – U.S. (ARIAS).

B. Each party’s case will be submitted to the arbitrator within 100 calendar days of the date of determination of the arbitrator.  Discovery will be limited to exchanging only those documents directly relating to the issue in dispute, subject to a limit of two discovery depositions from each party, unless otherwise authorized by the arbitrator upon a showing of good cause.

C. Within 120 calendar days of the date of determination of the arbitrator, the hearing will be completed and a written award will be issued by the arbitrator.  As the parties agree that time is of the essence, the sole arbitrator does not have the authority to lengthen the schedule, absent agreement of both parties.  The arbitrator will have all the powers conferred on the arbitration panel as provided in the Arbitration Article, and said Article will apply to all matters not specifically addressed above.

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ARTICLE 24

service of suit

A. This Article applies only to those Subscribing Reinsurers not domiciled in the United States of America, and/or not authorized in any state, territory and/or district of the United States of America where authorization is required by insurance regulatory authorities.

B. This Article shall not be read to conflict with or override the obligations of the parties to arbitrate their disputes as provided for in the Arbitration Article.  This Article is intended as an aid to compelling arbitration or enforcing such arbitration or arbitral award, not as an alternative to the Arbitration Article for resolving disputes arising out of this Contract.

C. In the event of the failure of the Reinsurer to perform its obligations hereunder, the Reinsurer, at the request of the Company, shall submit to the jurisdiction of a court of competent jurisdiction within the United States.  Nothing in this Article constitutes or should be understood to constitute a waiver of the Reinsurer’s rights to commence an action in any court of competent jurisdiction in the United States, to remove an action to a United States District Court, or to seek a transfer of a case to another court as permitted by the laws of the United States or of any state in the United States.  The Reinsurer, once the appropriate court is selected, whether such court is the one originally chosen by the Company and accepted by the Reinsurer or is determined by removal, transfer, or otherwise, as provided for above, shall comply with all requirements necessary to give said court jurisdiction and, in any suit instituted against the Reinsurer upon this Contract, shall abide by the final decision of such court or of any appellate court in the event of an appeal.

D. Service of process in such suit may be made upon:

1. as respects Underwriting Members of Lloyd’s, London: Lloyd’s America, Inc., Attention: Legal Department, 280 Park Avenue, East Tower, 25^th Floor, New York, New York 10017;

2. as respects any other Subscribing Reinsurer: Messrs. Mendes and Mount, 750 Seventh Avenue, New York, New York 10019-6829, or another party specifically designated in the Subscribing Reinsurer’s Interests and Liabilities Agreement attached hereto.  

The above-named are authorized and directed to accept service of process on behalf of the Reinsurer in any such suit.

E. Further, pursuant to any statute of any state, territory or district of the United States that makes provision therefor, the Reinsurer hereby designates the Superintendent, Commissioner or Director of Insurance, or other officer specified for that purpose in the statute, or his successor or successors in office, as its true and lawful attorney upon whom may be served any lawful process in any action, suit or proceeding instituted by or on behalf of the Company or any beneficiary hereunder arising out of this Contract, and hereby designates the above-named as the person to whom the said officer is authorized to mail such process or a true copy thereof.

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ARTICLE 25

GOVERNING LAW

This Contract shall be governed as to performance, administration and interpretation by the laws of the State of Florida, exclusive of conflict of law rules.  However, with respect to credit for reinsurance, the rules of all applicable states shall apply.

ARTICLE 26

Entire Agreement

This Contract sets forth all of the duties and obligations between the Company and the Reinsurer and supersedes any and all prior or contemporaneous written agreements with respect to matters referred to in this Contract.  This Contract may not be modified or changed except by an amendment to this Contract in writing signed by both parties.  However, this Article shall not be construed as limiting the admissibility of evidence regarding the formation, interpretation, purpose or intent of this Contract.

ARTICLE 27

NON-WAIVER

The failure of the Company or the Reinsurer to insist on compliance with this Contract or to exercise any right or remedy hereunder shall not constitute a waiver of any rights contained in this Contract nor prevent either party from thereafter demanding full and complete compliance nor prevent either party from exercising such remedy in the future.

ARTICLE 28

Intermediary

Guy Carpenter & Company, LLC, is hereby recognized as the Intermediary negotiating this Contract for all business hereunder.  All communications (including notices, statements, premiums, return premiums, commissions, taxes, losses, Loss Adjustment Expenses, salvages, and loss settlements) relating thereto shall be transmitted to the Company or the Reinsurer through the Intermediary.  Payments by the Company to the Intermediary shall be deemed payment to the Reinsurer.  Payments by the Reinsurer to the Intermediary shall be deemed payment to the Company only to the extent that such payments are actually received by the Company.

ARTICLE 29

mode of execution

A. This Contract may be executed by:

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1. an original written ink signature of paper documents;

2. an exchange of facsimile copies showing the original written ink signature of paper documents;

3. electronic signature technology employing computer software and a digital signature or digitizer pen pad to capture a person’s handwritten signature in such a manner that the signature is unique to the person signing, is under the sole control of the person signing, is capable of verification to authenticate the signature and is linked to the document signed in such a manner that if the data is changed, such signature is invalidated.

B. The use of any one or a combination of these methods of execution shall constitute a legally binding and valid signing of this Contract.  This Contract may be executed in one or more counterparts, each of which, when duly executed, shall be deemed an original.

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IN WITNESS WHEREOF, the Company has caused this Contract to be executed by its duly authorized representative(s), who also confirms the Company’s review of and agreement to be bound by the terms and conditions of the Interests and Liabilities Agreements attached to and forming part of this Contract;

On this _____ day of __________, in the year of 2021.

Typtap insurance company

Signature:	Title:
Print Name:

Reinstatement Premium Protection Reinsurance Contract

(FOR FIRST EXCESS CAT)

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TRUST AGREEMENT REQUIREMENTS CLAUSE

A. Except as provided in paragraph B of this Clause, if the Reinsurer satisfies its funding obligations under the Unauthorized Reinsurance Article by providing a Trust Agreement, the Reinsurer shall ensure that the Trust Agreement:

1. Requires the Reinsurer to establish a trust account for the benefit of the Company, and specifies what the Trust Agreement is to cover;

2. Stipulates that assets deposited in the trust account shall be valued according to their current fair market value and shall consist only of cash (United States legal tender), and certificates of deposit (issued by a United States bank and payable in United States legal tender), or any combination of the two, provided that the investments are issued by an institution that is not the parent, subsidiary or affiliate of either the Reinsurer or the Company;

3. Requires the Reinsurer, prior to depositing assets with the trustee, to execute assignments or endorsements in blank, or to transfer legal title to the trustee of all shares, obligations or any other assets requiring assignments, in order that the Company, or the trustee upon the direction of the Company, may whenever necessary negotiate these assets without consent or signature from the Reinsurer or any other entity;

4. Requires that all settlements of account between the Company and the Reinsurer be made in cash or its equivalent; and

5. Provides that assets in the trust account shall be withdrawn only as permitted in this Contract, without diminution because of the insolvency of the Company or the Reinsurer.

B. If a ceding insurer is domiciled in California and the Reinsurer satisfies its funding obligations under the Unauthorized Reinsurance Article by providing a Trust Agreement, the Reinsurer shall ensure that the Trust Agreement:

1. Provides that assets deposited in the trust account shall be valued according to their current fair market value and shall consist only of cash in United States dollars, certificates of deposit issued by a United States financial institution as defined in California Insurance Code Section 922.7(a) and payable in United States dollars, and investments permitted by the California Insurance Code, or any combination of the above.

2. Provides that investments in or issued by an entity controlling, controlled by or under common control with either the grantor or the beneficiary of the trust shall not exceed 5% of total investments.

3. Requires the Reinsurer, prior to depositing assets with the trustee, to execute assignments or endorsements in blank, or to transfer legal title to the trustee of all

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UBWP0006	21 of 22

shares, obligations or any other assets requiring assignments, in order that the ceding insurer, or the trustee upon the direction of the ceding insurer, may, whenever necessary, negotiate these assets without consent or signature from the Reinsurer or any other entity.

4. Provides that assets in the trust account shall be withdrawn only as permitted in this Contract, without diminution because of the insolvency of the ceding insurer or the Reinsurer.

C. If there are multiple ceding insurers that collectively comprise the Company, “regulatory authorities” as referenced in subparagraph A(2) above, shall mean the individual ceding insurer’s domestic regulator.  

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UBWP0006	22 of 22

EX-10.11

Exhibit 10.11

CERTAIN CONFIDENTIAL INFORMATION, IDENTIFIED BY BRACKETED ASTERISKS "[*****]", HAS BEEN OMITTED FROM THIS EXHIBIT BECAUSE IT IS BOTH (I) NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED.













7TH LAYER NON-FLORIDA PROPERTY CATASTROPHE

EXCESS OF LOSS REINSURANCE CONTRACT

issued to

TypTap Insurance Company

Ocala, Florida

Homeowners Choice Property & Casualty Insurance Company, Inc.

Tampa, Florida

including any and/or all companies that are or may hereafter become affiliated therewith

Effective: June 1, 2021		DOC:  July 8, 2021
UBWP000B	1 of 39	Contract Draft with Firm Order Terms

7TH LAYER NON-FLORIDA PROPERTY CATASTROPHE EXCESS OF LOSS REINSURANCE CONTRACT TABLE OF CONTENTS
Article		Page
	Preamble
1	Business Covered	4
2	Retention and Limit	4
3	Term	5
4	Special Termination	5
5	Territory	6
6	Exclusions	7
7	Special Acceptance	8
8	Premium	9
9	Definitions	9
10	Extra Contractual Obligations/Excess of Policy Limits	12
11	Net Retained Liability	13
12	Other Reinsurance	14
13	Original Conditions	14
14	No Third Party Rights	14
15	Notice of Loss and Loss Settlements	14
16	Late Payments	15
17	Offset	16
18	Currency	16
19	Unauthorized Reinsurance	16
20	Taxes	18
21	Access to Records	19
22	Confidentiality	20
23	Indemnification and Errors and Omissions	21
24	Insolvency	21
25	Run-Off Reinsurer	22
26	Arbitration	23
27	Expedited Arbitration	24
28	Service of Suit	25
29	Governing Law	26
30	Entire Agreement	26
31	Non-Waiver	26
32	Agency	27
33	Intermediary	27
34	Mode of Execution	27
	Company Signing Block	28

Effective: June 1, 2021		DOC:  July 8, 2021
UBWP000B	2 of 39	Contract Draft with Firm Order Terms

7TH LAYER NON-FLORIDA PROPERTY CATASTROPHE EXCESS OF LOSS REINSURANCE CONTRACT TABLE OF CONTENTS
Attachments		Page
	Pools, Associations & Syndicates Exclusions Clause	29
	Nuclear Incident Exclusion Clause - Physical Damage - Reinsurance - U.S.A.	32
	Terrorism Exclusion	34
	Communicable Disease Exclusion (Property Reinsurance)	35
	Cyber Loss Limited Exclusion Clause (Property Treaty Reinsurance)	36
	Trust Agreement Requirements Clause	37

Effective: June 1, 2021		DOC:  July 8, 2021
UBWP000B	3 of 39	Contract Draft with Firm Order Terms

7TH LAYER NON-FLORIDA PROPERTY CATASTROPHE

EXCESS OF LOSS REINSURANCE CONTRACT

(the “Contract”)

issued to

TypTap Insurance Company

Ocala, Florida

Homeowners Choice Property & Casualty Insurance Company, Inc.

Tampa, Florida

including any and/or all companies that are or may hereafter become affiliated therewith

(collectively, the “Company”)

by

THE SUBSCRIBING REINSURER(S) IDENTIFIED IN THE
INTERESTS AND LIABILITIES AGREEMENT(S) ATTACHED TO
AND FORMING PART OF THIS CONTRACT

(the “Reinsurer”)

ARTICLE 1

BUSINESS COVERED

This Contract is to indemnify the Company in respect of its net excess liability as a result of any loss or losses which may occur during the term of this Contract under any Policies in force at the effective date hereof or issued or renewed on or after that date, covering direct and assumed business classified by the Company as the property perils of Homeowners, Condominium Owners, Renters and Dwelling, subject to the terms and conditions herein contained.

ARTICLE 2

Retention and Limit

A. The Reinsurer shall be liable in respect of each Loss Occurrence for the Ultimate Net Loss over and above the initial Ultimate Net Loss of [$*****] each Loss Occurrence, subject to a limit of liability to the Reinsurer of [$*****] each Loss Occurrence, and subject further to a limit of liability of [$*****] for all Loss Occurrences commencing during the term of this Contract.

B. No Loss Occurrence shall be covered hereunder unless it involves two or more risks subject to this Contract.  The Company shall be the sole judge of what constitutes one risk for purposes of this Contract.

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ARTICLE 3

Term

This Contract shall take effect at 12:01 a.m., Standard Time, June 1, 2021, and unless terminated prior to that time and date as provided in the Special Termination Article, shall remain in effect until 12:01 a.m., Standard Time, June 1, 2022, applying to Loss Occurrences commencing during the term of this Contract.  For purposes of this Contract, “Standard Time” shall mean the time as described in the original Policy.

ARTICLE 4

SPECIAL TERMINATION

A. The Company may terminate a Subscribing Reinsurer’s percentage share in this Contract at any time by giving written notice to the Subscribing Reinsurer in the event of any of the following circumstances:

1. The Subscribing Reinsurer ceases underwriting operations.

2. A state insurance department or other legal authority orders the Subscribing Reinsurer to cease writing business, or the Subscribing Reinsurer is placed under regulatory supervision.

3. The Subscribing Reinsurer has become insolvent or has been placed into liquidation or receivership (whether voluntary or involuntary), or there have been instituted against it proceedings for the appointment of a receiver, liquidator, rehabilitator, conservator, trustee in bankruptcy, or other agent known by whatever name, to take possession of its assets or control of its operations.

4. The Subscribing Reinsurer’s policyholders’ surplus (or the equivalent under the Subscribing Reinsurer’s accounting system) as reported in such financial statements of the Subscribing Reinsurer as designated by the Company, has been reduced by 20% of the amount thereof at any date during the prior 12-month period (including the period prior to the inception of this Contract).

5. The Subscribing Reinsurer has become, or has announced its intention to become, merged with or acquired or controlled by any company, corporation, or individual(s) not controlling the Subscribing Reinsurer’s operations at the inception of this Contract.

6. The Subscribing Reinsurer has retroceded its entire liability under this Contract without the Company’s prior written consent, except for retrocessions to members of the Subscribing Reinsurer’s holding company group.

7. The Subscribing Reinsurer has been assigned an A.M. Best’s rating of less than “A-” and/or an S&P rating of less than “BBB+.”  However, as respects Underwriting Members of Lloyd’s, London, a Lloyd’s Market Rating of less than “A-” by A.M. Best and/or less than “BBB+” by S&P shall apply.

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8. The Subscribing Reinsurer has hired an unaffiliated runoff claims manager that is compensated on a contingent basis or is otherwise provided with financial incentives based on the quantum of claims paid.

9. The Subscribing Reinsurer has in any other way assigned its interests or delegated its obligations under this Contract to an unaffiliated entity.

10. The Subscribing Reinsurer has failed to post or maintain required collateral to secure its obligations as required under this Contract, and has not cured such deficiency within 30 days following written notice thereof from the Company.

Notwithstanding the foregoing, agreement by a Lloyd’s syndicate to follow claim settlements procedures under Lloyd’s Claims Scheme (Combined) shall not constitute a transfer of its claims-paying authority, for purposes of subparagraphs (8) and (9) of this paragraph.

B. Termination shall be effected on a cut-off basis and the Subscribing Reinsurer shall have no liability for Loss Occurrences commencing after the date of termination.  The reinsurance premium due the Subscribing Reinsurer hereunder (including any minimum reinsurance premium) shall be prorated based on the period of the Subscribing Reinsurer’s participation hereon, and the Subscribing Reinsurer shall immediately return any excess reinsurance premium received.  

C. Additionally, in the event of any of the circumstances listed in paragraph A of this Article, the Company shall have the option to commute the Subscribing Reinsurer’s liability for losses on Policies covered by this Contract.  In the event the Company and the Subscribing Reinsurer cannot agree on the commutation amount, they shall appoint an actuary and/or appraiser to assess such amount and shall share equally any expense of the actuary and/or appraiser.  If the Company and the Subscribing Reinsurer cannot agree on an actuary and/or appraiser, the Company and the Subscribing Reinsurer each shall nominate three individuals, of whom the other shall decline two, and the final appointment shall be made by drawing lots.  Payment by the Subscribing Reinsurer of the amount of liability ascertained shall constitute a complete and final release of both parties in respect of liability arising from the Subscribing Reinsurer’s participation under this Contract.

D. The Company’s option to require commutation under paragraph C above shall survive the termination or expiration of this Contract.

ARTICLE 5

Territory

The territorial limits of this Contract shall be identical with those of the Company’s Policies, with the exception of the State of Florida.

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ARTICLE 6

Exclusions

A. This Contract shall not apply to and specifically excludes:

1. Policies covered by the Company’s Flood Tower.

2. Flood when written as such.

3. Earthquake for standalone Policies where earthquake is the only named peril.

4. Hail damage to an insured’s growing or standing crops.

5. Reinsurance assumed by the Company under obligatory reinsurance agreements, except intercompany reinsurance between the Company and its affiliates and reinsurance where the Policies involved are to be re-underwritten in accordance with the underwriting standards of the Company and reissued as Policies of the Company in due course.

6. Pools, Associations & Syndicates, per the attached exclusion.

7. Liability of the Company arising by contract, operation of law, or otherwise, from its participation or membership, whether voluntary or involuntary, in any Insolvency Fund.  “Insolvency Fund” includes any guaranty fund, insolvency fund, plan, pool, association, fund or other arrangement, howsoever denominated, established or governed, that provides for any assessment of or payment or assumption by the Company of part or all of any claim, debt, charge, fee, or other obligation of an insurer, or its successors or assigns, that has been declared by any competent authority to be insolvent, or that is otherwise deemed unable to meet any claim, debt, charge, fee or other obligation in whole or in part.

8. Loss or damage occasioned by war, invasion, hostilities, acts of foreign enemies, civil war, rebellion, insurrection, military or usurped power, martial law, or confiscation by order of any government or public authority, but not excluding loss or damage that would be covered under a standard form of Policy containing a standard war exclusion clause.

9. Losses excluded by the attached Nuclear Incident Exclusion Clause – Physical Damage – Reinsurance – U.S.A.

10. Terrorism as defined in the attached Terrorism Exclusion.

11. Mold unless directly resulting from an otherwise covered peril.

12. Loss and/or damage and/or costs and/or expenses arising from seepage and/or pollution and/or contamination, other than contamination from smoke.  Nevertheless, this exclusion does not preclude payment of the cost of removing debris of property damaged by a loss otherwise covered hereunder, subject always to a limit of 25.0% of the Company’s property loss under the applicable original Policy.

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13. Financial guarantee and insolvency.

14. Loss or damage to overhead transmission and distribution lines, including supporting structures, of electrical companies, telephone companies, and cable companies.  This exclusion shall not apply, however, to transmission and distribution lines and their supporting structures located on the property of any original insured or within 1,000 feet thereof.

15. Losses excluded by the attached Communicable Disease Exclusion (Property Reinsurance).

16. Loss Excluded by the attached Cyber Loss Limited Exclusion Clause (Property Treaty Reinsurance).

17. Policies issued covering risks located in the state of Florida.

B. With the exception of subparagraphs A(8), A(9), A(10) and A(13) above, should any judicial, regulatory or legislative entity having legal jurisdiction invalidate any exclusion on the Company's Policy, any amount of loss for which the Company is liable because of such invalidation will not be excluded hereunder.

C. With the exception of subparagraphs A(8), A(9), A(10) and A(13) above, if the Company inadvertently issues a Policy falling within the scope of one or more of the exclusions, such Policy shall be covered hereunder, provided that the Company issues, or causes to be issued, the required notice of cancellation within 30 days after a member of the executive or managerial staff at the Company’s home office having underwriting authority in the class of business involved becomes aware that the Policy applies to excluded classes, unless the Company is prevented from canceling said Policy within such period by applicable statute or regulation, in which case such Policy shall be covered hereunder until the earliest date on which the Company may cancel.

ARTICLE 7

SPECIAL ACCEPTANCE

Business that is not within the scope of this Contract may be submitted to the Reinsurer for special acceptance hereunder, and such business, if accepted by the Reinsurer shall be covered hereunder, subject to the terms and conditions of this Contract, except as modified by the special acceptance.  The Reinsurer shall be deemed to have accepted a risk, if it has not responded within five business days after receiving the underwriting information on such risk.  Any renewal of a special acceptance agreed to for a predecessor contract to this Contract, shall automatically be covered hereunder.

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ARTICLE 8

Premium

A. The Company shall pay the Reinsurer a deposit premium of [$*****] for the term of this Contract.  The reinsurance premium to be paid to the Reinsurer shall be calculated at a rate of [*****%] multiplied by the Company’s final Total Insured Value.

B. The deposit premium in paragraph A above shall be payable to the Reinsurer by the Company in four equal installments of [$*****] on June 1, 2021, September 1, 2021, January 1, 2022 and April 1, 2022.

C. Within 45 days following the expiration of this Contract, the Company shall provide the Reinsurer with a report showing the Company’s final Total Insured Value.  This final Total Insured Value shall be multiplied by the rate as stated in paragraph A above.  Should this amount be greater than or equal to [*****%] and less than or equal to [*****%] of the deposit premium as set forth above, there shall be no additional or return premium due.  Should the amount so calculated exceed [*****%] of the deposit premium paid in accordance with paragraph A above, the Company shall immediately pay the Reinsurer the difference in excess of [*****%] of the deposit premium.  Should the amount so calculated be less than [*****%] of the deposit premium paid in accordance with paragraph A of this Article, the Reinsurer shall immediately pay the Company the difference below [*****%] of the deposit premium, subject to a minimum premium of [$*****].

D. “Total Insured Value” means the Company’s aggregate wind exposures on September 30, 2021 for business covered hereunder.

E. The estimated Total Insured Value is [$*****].

F. The Company shall furnish the Reinsurer with such reasonably available information as may be reasonably required by the Reinsurer for completion of the Reinsurer’s financial statements.

ARTICLE 9

Definitions

A. 1.“Ultimate Net Loss” means the actual loss paid by the Company or which the Company becomes liable to pay, such loss to include Loss Adjustment Expense, 100% of any Extra Contractual Obligation and 100% of any Loss in Excess of Policy Limits as defined in the Extra Contractual Obligations/Excess of Policy Limits Article.  In no event, however, shall more than 25% of “Ultimate Net Loss” for any one Loss Occurrence be comprised of Extra Contractual Obligations and Loss in Excess of Policy Limits.

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2. Salvages and all recoveries (including amounts due from all reinsurances that inure to the benefit of this Contract, whether recovered or not), shall be first deducted from such loss to arrive at the amount of liability attaching hereunder.

3. All salvages, recoveries or payments recovered or received subsequent to loss settlement hereunder shall be applied as if recovered or received prior to the aforesaid settlement, and all necessary adjustments shall be made by the parties hereto.

4. The Company shall be deemed to be “liable to pay” a loss when a judgment has been rendered that the Company does not plan to appeal, and/or the Company has obtained a release, and/or the Company has accepted a proof of loss, and/or the Company has made a commitment to pay, and/or the Company has scheduled the payment of a loss.

5. Nothing in this clause shall be construed to mean that losses are not recoverable hereunder until the Company’s “Ultimate Net Loss” has been ascertained.

B. “Loss Adjustment Expense” means costs and expenses incurred by the Company in connection with the investigation, appraisal, adjustment, settlement, litigation, defense or appeal of a specific claim or loss, or alleged loss, including but not limited to:

1. court costs;

2. costs of supersedeas and appeal bonds;

3. monitoring counsel expenses;

4. legal expenses and costs incurred in connection with coverage questions and legal actions connected thereto, including but not limited to declaratory judgment actions;

5. post-judgment interest;

6. pre-judgment interest, unless included as part of an award or judgment;

7. a pro rata share of salaries and expenses of Company field employees, calculated in accordance with the time occupied in adjusting such loss, and expenses of other Company employees who have been temporarily diverted from their normal and customary duties and assigned to the field adjustment of losses covered by this Contract; and

8. subrogation, salvage and recovery expenses.

“Loss Adjustment Expense” does not include salaries and expenses of the Company’s employees, except as provided in subparagraph (7) above, and office and other overhead expenses.

C. 1.“Loss Occurrence” means the sum of all individual losses directly occasioned by any one disaster, accident or loss or series of disasters, accidents or losses arising out of one event.  However, the duration and extent of any one “Loss Occurrence” shall be

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limited to all individual losses sustained by the Company occurring during any period of 168 consecutive hours arising out of and directly occasioned by the same event except that the term “Loss Occurrence” shall be further defined as follows:

a. As regards any “Named Storm,” all individual losses sustained by the Company arising out of and directly occasioned by such “Named Storm,” without regard to the limitations of duration and extent set forth above.  “Named Storm” means any storm or storm system declared by the US National Hurricane Center, US Central Pacific Hurricane Center, US Weather Prediction Center, or their successor organizations, all being  divisions of the US National Weather Service to be a tropical storm or hurricane, and any successors thereof.  A storm or storm system that merges with a “Named Storm” shall be considered part of that “Named Storm,” once it has merged.  A “Named Storm” shall be deemed to begin at the effective time and date of the first watch, warning or other official advisory applicable to such tropical storm or hurricane issued by the above referenced governmental meteorological agencies.  A “Named Storm” shall be deemed to end 72 hours after the cancellation of the last watch, warning or other official advisory applicable to such tropical storm, hurricane or successor, issued by the above referenced governmental meteorological agencies irrespective of the duration of the timing or spacing between such watches, warnings or other official advisories.  If two or more storms are assigned different names by the above referenced governmental meteorological agencies, each of those storms shall constitute a separate event for purposes of this definition.

b. As regards windstorm, hail, tornado, cyclone, including ensuing collapse and water damage other than “Named Storm,” all individual losses sustained by the Company occurring during any period of 96 consecutive hours arising out of and directly occasioned by the same event.

c. As regards riot, riot attending a strike, civil commotion, vandalism and malicious mischief, all individual losses sustained by the Company occurring during any period of 96 consecutive hours arising out of and directly occasioned by the same event. The maximum duration of 96 consecutive hours may be extended in respect of individual losses that occur beyond such 96 consecutive hours during the continued occupation of an assured’s premises by strikers, provided such occupation commenced during the aforesaid period.

d. As regards earthquake and fire following directly occasioned by the earthquake, those earthquake losses and individual fire losses that commence during the period of 168 consecutive hours may be included in the Company’s “Loss Occurrence.”

e. As regards any related weather conditions involving snow, sleet, freezing rain, freeze, ice, winter weather, and wind losses related to such conditions, all individual losses sustained by the Company, that occur during any period of 168 consecutive hours arising out of and directly occasioned by the same event.

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f. As regards firestorms, brush fires and other fires or series of fires, irrespective of origin (except for fires covered in subparagraphs (c) and (d) above) which spread through trees, grassland or other vegetation, all individual losses sustained by the Company occurring during any period of 168 consecutive hours within a 150-mile radius of any fixed point selected by the Company may be included in the Company’s “Loss Occurrence.” However, an individual loss subject to this subparagraph cannot be included in more than one “Loss Occurrence.”

2. Except as provided in subparagraph (1)(a) above:

a. The Company may choose the date and time when any such period of consecutive hours commences provided that it is not earlier than the date and time of the occurrence of the first recorded individual loss sustained by the Company arising out of that disaster, accident or loss.

b. Only one period of consecutive hours shall apply with respect to one event, except that, as respects those “Loss Occurrences” referred to in subparagraph (1)(c) above, if the disaster, accident or loss occasioned by the event is of greater duration than 96 consecutive hours, then the Company may divide that disaster, accident or loss into two or more “Loss Occurrences” provided no two periods overlap and no individual loss is included in more than one such period and provided that no period commences earlier than the date and time of the occurrence of the first recorded individual loss sustained by the Company arising out of that disaster, accident or loss.

3. Losses arising from a combination of two or more perils as a result of the same event shall be considered as having arisen from one “Loss Occurrence.”  Furthermore, all losses arising from an event involving a combination of losses described in subparagraphs (1)(a) and (1)(b) may be considered as having arisen from one “Loss Occurrence.”  Notwithstanding the foregoing, the hourly limitations as stated above shall not be exceeded as respects the applicable perils, and, except as respects those “Loss Occurrences” involving a “Named Storm” referred to in subparagraph (1)(a) above, no single “Loss Occurrence” shall encompass a time period greater than 168 consecutive hours.

D. “Policy” means any binder, policy, or contract of insurance or reinsurance issued, accepted or held covered provisionally or otherwise, by or on behalf of the Company.

ARTICLE 10

EXTRA CONTRACTUAL OBLIGATIONS/EXCESS OF POLICY LIMITS

A. This Contract shall cover Extra Contractual Obligations, as provided in the definition of Ultimate Net Loss.  “Extra Contractual Obligations” shall be defined as those liabilities not covered under any other provision of this Contract and that arise from the handling of any claim on business covered hereunder, such liabilities arising because of, but not limited to, the following:  failure by the Company to settle within the Policy limit, or by reason of

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alleged or actual negligence, fraud or bad faith in rejecting an offer of settlement or in the preparation of the defense or in the trial of any action against its insured or reinsured or in the preparation or prosecution of an appeal consequent upon such action.

B. This Contract shall cover Loss in Excess of Policy Limits, as provided in the definition of Ultimate Net Loss.  “Loss in Excess of Policy Limits” shall be defined as Loss in excess of the Policy limit, having been incurred because of, but not limited to, failure by the Company to settle within the Policy limit or by reason of alleged or actual negligence, fraud or bad faith in rejecting an offer of settlement or in the preparation of the defense or in the trial of any action against its insured or reinsured or in the preparation or prosecution of an appeal consequent upon such action.

C. An Extra Contractual Obligation and/or Loss in Excess of Policy Limits shall be deemed to have occurred on the same date as the loss covered under the Company’s Policy, and shall constitute part of the original loss.

D. For the purposes of the Loss in Excess of Policy Limits coverage hereunder, the word “Loss” shall mean any amounts for which the Company would have been contractually liable to pay had it not been for the limit of the original Policy.

E. Loss Adjustment Expense in respect of Extra Contractual Obligations and/or Loss in Excess of Policy Limits shall be covered hereunder in the same manner as other Loss Adjustment Expense.

F. However, this Article shall not apply where the loss has been incurred due to final legal adjudication of fraud of a member of the Board of Directors or a corporate officer of the Company acting individually or collectively or in collusion with any individual or corporation or any other organization or party involved in the presentation, defense or settlement of any claim covered hereunder.

G. In no event shall coverage be provided to the extent not permitted under law.

ARTICLE 11

NET RETAINED LIABILITY

A. This Contract applies only to that portion of any loss that the Company retains net for its own account (prior to deduction of any reinsurance that inures solely to the benefit of the Company).

B. The amount of the Reinsurer’s liability hereunder in respect of any loss or losses shall not be increased by reason of the inability of the Company to collect from any other reinsurer(s), whether specific or general, any amounts that may have become due from such reinsurer(s), whether such inability arises from the insolvency of such other reinsurer(s) or otherwise.

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ARTICLE 12

OTHER REINSURANCE

The Company shall be permitted to carry in force other reinsurance, recoveries under which shall inure to the benefit of this Contract.

ARTICLE 13

Original Conditions

All reinsurance under this Contract shall be subject to the same terms, conditions, waivers and interpretations, and to the same modifications and alterations as the respective Policies of the Company.  However, in no event shall this be construed in any way to provide coverage outside the terms and conditions set forth in this Contract.

ARTICLE 14

NO THIRD PARTY RIGHTS

This Contract is solely between the Company and the Reinsurer, and in no instance shall any insured, claimant or other third party have any rights under this Contract except as may be expressly provided otherwise herein.

ARTICLE 15

Notice of Loss and Loss Settlements

A. The Company shall advise the Reinsurer promptly if paid and estimated Ultimate Net Loss is in excess of 75% of the Company’s retention, or if, in the opinion of the Company, such Ultimate Net Loss may result in a claim hereunder.  Thereafter, the Company shall advise the Reinsurer, at least monthly, of all subsequent developments thereto that may materially affect the position of the Reinsurer.

B. The Company alone and at its full discretion shall adjust, settle or compromise all claims and losses.

C. As respects losses subject to this Contract, all loss settlements made by the Company, whether under strict Policy terms or by way of compromise, and any Extra Contractual Obligations and/or Loss in Excess of Policy Limits, shall be binding upon the Reinsurer.  The Reinsurer agrees to pay or allow, as the case may be, its share of each such settlement immediately upon receipt of reasonable evidence of the amount paid by the Company or that the Company estimates it will pay within the next 14 days.  Within 30 days after receipt of the Reinsurer’s payment, the Company shall report to the Reinsurer the Reinsurer’s payment, minus the Reinsurer’s share of losses subject to this Contract that the Company has paid, or become liable to pay, as of the date of the report.  Any positive difference shall be remitted to the Reinsurer with the Company’s report.

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ARTICLE 16

LATE PAYMENTS

A. In the event any payment due either party is not received by the Intermediary by the payment due date, the party to whom payment is due may, by notifying the Intermediary in writing, require the debtor party to pay, and the debtor party agrees to pay, an interest penalty on the amount past due calculated for each such payment on the last business day of each month as follows:

1. The number of full days that have expired since the overdue date or the last monthly calculation, whichever the lesser; times

2. 1/365th of the sum of the six-month United States Treasury Bill rate as quoted in The Wall Street Journal on the first business day of the month for which the calculation is made, plus 1%; times

3. The amount past due, including accrued interest.

Interest shall accumulate until payment of the original amount due plus interest penalties have been received by the Intermediary.

B. The due date shall, for purposes of this Article, be determined as follows:

1. Payments from the Reinsurer to the Company shall be due on the date on which the demand for payment (including delivery of bordereaux or quarterly or monthly reports) is received by the Reinsurer, and shall be overdue 30 days thereafter.

2. Payments from the Company to the Reinsurer shall be due on the dates specified within this Contract.  Payments shall be overdue 30 days thereafter except for the first installment of premium, if applicable, which shall be overdue 60 days from inception or 30 days from final line-signing, whichever the later.  Reinstatement premium, if applicable, shall have as a due date the date when the Company receives payment for the claim giving rise to such reinstatement premium, and payment shall be overdue 30 days thereafter. In the event a due date is not specifically stated for a given payment, the overdue date shall be 30 days following the date of billing.

C. If the information contained in the Company’s demand for payment is insufficient or not in accordance with the conditions of this Contract, then within 30 days the Reinsurer shall request from the Company all additional information necessary to validate its claim and the payment due date as defined in paragraph B shall be deemed to be the date upon which the Reinsurer received the requested additional information.  This paragraph is only for the purpose of establishing when a payment is overdue, and shall not alter the provisions of the Notice of Loss and Loss Settlements Article or other pertinent contractual stipulations.

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D. In the event arbitration is necessary to settle a dispute, the panel shall have the authority to make a determination awarding interest to the prevailing party.  Interest, if any, awarded by the panel shall supersede the interest amounts outlined herein.

E. Any interest owed pursuant to this Article may be waived by the party to which it is owed.  Waiver of such interest, however, shall not affect the waiving party’s rights to other interest amounts due as a result of this Article.

ARTICLE 17

OFFSET

Each party hereto shall have, and may exercise at any time and from time to time, the right to offset any and all balances due from a party to the other arising under this Contract.  In the event of the insolvency of a party hereto, offsets shall only be allowed in accordance with the provisions of any applicable law governing offset entitlement.

ARTICLE 18

Currency

A. Where the word “Dollars” and/or the sign “$” appear in this Contract, they shall mean United States Dollars, and all payments hereunder shall be in United States Dollars.

B. For purposes of this Contract, where the Company receives premiums or pays losses in currencies other than United States Dollars, such premiums or losses shall be converted into United States Dollars at the actual rates of exchange at which these premiums or losses are entered in the Company’s books.

ARTICLE 19

Unauthorized Reinsurance

A. This Article applies only to the extent a Subscribing Reinsurer does not qualify for credit with any insurance regulatory authority having jurisdiction over the Company’s reserves.

B. The Company agrees, in respect of its Policies or bonds falling within the scope of this Contract, that when it files with its insurance regulatory authority, or sets up on its books liabilities as required by law, it shall forward to the Reinsurer a statement showing the proportion of such liabilities applicable to the Reinsurer.  The “Reinsurer’s Obligations” shall be defined as follows:

1. unearned premium (if applicable);

2. known outstanding losses that have been reported to the Reinsurer and Loss Adjustment Expense relating thereto;

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3. losses and Loss Adjustment Expense paid by the Company but not recovered from the Reinsurer;

4. losses incurred but not reported and Loss Adjustment Expense relating thereto;

5. all other amounts for which the Company cannot take credit on its financial statements unless funding is provided by the Reinsurer.

C. The Reinsurer’s Obligations shall be funded by funds withheld, cash advances, Trust Agreement or a Letter of Credit (LOC).  The Reinsurer shall have the option of determining the method of funding provided it is acceptable to the insurance regulatory authorities having jurisdiction over the Company’s reserves.

D. When funding by Trust Agreement, the Reinsurer shall ensure that the Trust Agreement complies with the provisions of the “Trust Agreement Requirements Clause” attached hereto.  When funding by an LOC, the Reinsurer agrees to apply for and secure timely delivery to the Company of a clean, irrevocable and unconditional LOC issued by a bank and containing provisions acceptable to the insurance regulatory authorities having jurisdiction over the Company’s reserves in an amount equal to the Reinsurer’s Obligations.  Such LOC shall be issued for a period of not less than one year, and shall be automatically extended for one year from its date of expiration or any future expiration date unless 30 days (or such other time period as may be required by insurance regulatory authorities), prior to any expiration date the issuing bank shall notify the Company by certified or registered mail that the issuing bank elects not to consider the LOC extended for any additional period.

E. The Reinsurer and the Company agree that any funding provided by the Reinsurer pursuant to the provisions of this Contract may be drawn upon at any time, notwithstanding any other provision of this Contract, and be utilized by the Company or any successor, by operation of law, of the Company including, without limitation, any liquidator, rehabilitator, receiver or conservator of the Company, for the following purposes, unless otherwise provided for in a separate Trust Agreement:

1. to reimburse the Company for the Reinsurer’s Obligations, the payment of which is due under the terms of this Contract and that has not been otherwise paid;

2. to make refund of any sum that is in excess of the actual amount required to pay the Reinsurer’s Obligations under this Contract (or in excess of 102% of the Reinsurer’s Obligations, if funding is provided by a Trust Agreement);

3. to fund an account with the Company for the Reinsurer’s Obligations.  Such cash deposit shall be held in an interest bearing account separate from the Company’s other assets, and interest thereon not in excess of the prime rate shall accrue to the benefit of the Reinsurer.  Any taxes payable on accrued interest shall be paid out of the assets in the account that are in excess of the Reinsurer’s Obligations (or in excess of 102% of the Reinsurer’s Obligations, if funding is provided by a Trust Agreement).  If the assets are inadequate to pay taxes, any taxes due shall be paid or reimbursed by the Reinsurer;

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4. to pay the Reinsurer’s share of any other amounts the Company claims are due under this Contract.

F. If the amount drawn by the Company is in excess of the actual amount required for E(1) or E(3), or in the case of E(4), the actual amount determined to be due, the Company shall promptly return to the Reinsurer the excess amount so drawn.  All of the foregoing shall be applied without diminution because of insolvency on the part of the Company or the Reinsurer.

G. The issuing bank shall have no responsibility whatsoever in connection with the propriety of withdrawals made by the Company or the disposition of funds withdrawn, except to ensure that withdrawals are made only upon the order of properly authorized representatives of the Company.

H. At annual intervals, or more frequently at the discretion of the Company, but never more frequently than quarterly, the Company shall prepare a specific statement of the Reinsurer’s Obligations for the sole purpose of amending the LOC or other method of funding, in the following manner:

1. If the statement shows that the Reinsurer’s Obligations exceed the balance of the LOC as of the statement date, the Reinsurer shall, within 30 days after receipt of the statement, secure delivery to the Company of an amendment to the LOC increasing the amount of credit by the amount of such difference.  Should another method of funding be used, the Reinsurer shall, within the time period outlined above, increase such funding by the amount of such difference.

2. If, however, the statement shows that the Reinsurer’s Obligations are less than the balance of the LOC (or that 102% of the Reinsurer’s Obligations are less than the trust account balance if funding is provided by a Trust Agreement), as of the statement date, the Company shall, within 30 days after receipt of written request from the Reinsurer, release such excess credit by agreeing to secure an amendment to the LOC reducing the amount of credit available by the amount of such excess credit.  Should another method of funding be used, the Company shall, within the time period outlined above, decrease such funding by the amount of such excess.

ARTICLE 20

TAXES

A. In consideration of the terms under which this Contract is issued, the Company undertakes not to claim any deduction of the premium hereon when making Canadian tax returns or when making tax returns, other than Income or Profits Tax returns, to any state or territory of the United States of America or to the District of Columbia.

B. 1.Each Subscribing Reinsurer has agreed to allow, for the purpose of paying the Federal Excise Tax, the applicable percentage of the premium payable hereon (as imposed under the Internal Revenue Code) to the extent such premium is subject to Federal Excise Tax.

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2. In the event of any return of premium becoming due hereunder, the Subscribing Reinsurer shall deduct the applicable percentage of the premium from the amount of the return, and the Company or its agent should take steps to recover the Tax from the U.S. Government.

ARTICLE 21

ACCESS TO RECORDS

A. The Reinsurer or its duly authorized representatives shall have the right to visit the offices of the Company to inspect, examine, audit, and verify any of the policy, accounting or claim files (“Records”) relating to business reinsured under this Contract during regular business hours after giving five working days’ prior notice.  This right shall be exercisable during the term of this Contract or after the expiration of this Contract.  Notwithstanding the above, the Reinsurer shall not have any right of access to the Records of the Company if it is not current in all undisputed payments due the Company.

B. Notwithstanding the above, the Company reserves the right to withhold from the Reinsurer any Privileged Documents.  However, the Company shall permit and not object to the Reinsurer’s access to Privileged Documents in connection with the underlying claim reinsured hereunder following final settlement or final adjudication of the case or cases involving such claim, with prejudice against all claimants and all parties to such adjudications; the Company may defer release of such Privileged Documents if there are subrogation, contribution, or other third party actions with respect to that claim or case, and the Company’s defense might be jeopardized by release of such Privileged Documents.  In the event that the Company seeks to defer release of such Privileged Documents, it shall, in consultation with the Reinsurer, take other steps as reasonably necessary to provide the Reinsurer with the information it reasonably requires to indemnify the Company without causing a loss of such privileges or protections.  The Reinsurer shall not have access to Privileged Documents relating to any dispute between the Company and the Reinsurer.

C. For purposes of this Article:

1. “Privileged Documents” means any documents that are Attorney-Client Privilege Documents and/or Work Product Privilege Documents.

2. “Attorney-Client Privilege Documents” means communications of a confidential nature between (a) the Company, or anyone retained by or at the direction of the Company, or its in‑house or outside legal counsel, or anyone in the control of such legal counsel, and (b) any in-house or outside legal counsel, if such communications relate to legal advice being sought by the Company and/or contain legal advice being provided to the Company.

3. “Work Product Privilege Documents” means communications, written materials and tangible things prepared by or for in-house or outside counsel, or prepared by or for the Company, in anticipation of or in connection with litigation, arbitration, or other dispute resolution proceedings.

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ARTICLE 22

CONFIDENTIALITY

A. The Reinsurer hereby acknowledges that the documents, information and data provided to it by the Company, whether directly or through an authorized agent, in connection with the placement and execution of this Contract (“Confidential Information”) are proprietary and confidential to the Company.  Confidential Information shall not include documents, information or data that the Reinsurer can show:

1. are publicly known or have become publicly known through no unauthorized act of the Reinsurer;

2. have been rightfully received from a third person without obligation of confidentiality; or

3. were known by the Reinsurer prior to the placement of this Contract without an obligation of confidentiality.

B. Absent the written consent of the Company, the Reinsurer shall not disclose any Confidential Information to any third parties, including any affiliated companies (except to the extent necessary to enable affiliated companies or third parties engaged by the Reinsurer to perform services related to this Contract on behalf of the Reinsurer), except:

1. when required by retrocessionaires as respects business ceded to this Contract;

2. when required by regulators performing an audit of the Reinsurer’s records and/or financial condition; or

3. when required by external auditors performing an audit of the Reinsurer’s records in the normal course of business.

Further, the Reinsurer agrees not to use any Confidential Information for any purpose not related to the performance of its obligations or enforcement of its rights under this Contract.

C. Notwithstanding the above, in the event that the Reinsurer is required by court order, other legal process or any regulatory authority to release or disclose any or all of the Confidential Information, the Reinsurer agrees to provide the Company with written notice of same at least 10 days prior to such release or disclosure and to use its best efforts to assist the Company in maintaining the confidentiality provided for in this Article.

D. The provisions of this Article shall extend to the officers, directors and employees of the Reinsurer and its affiliates, and shall be binding upon their successors and assigns.

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ARTICLE 23

Indemnification and Errors and Omissions

A. The Reinsurer is reinsuring, subject to the terms and conditions of this Contract, the obligations of the Company under any Policy.  The Company shall be the sole judge as to:

1. what shall constitute a claim or loss covered under any Policy;

2. the Company’s liability thereunder; and

3. the amount or amounts that it shall be proper for the Company to pay thereunder.

B. The Reinsurer shall be bound by the judgment of the Company as to the obligation(s) and liability(ies) of the Company under any Policy.

C. Any inadvertent error, omission or delay in complying with the terms and conditions of this Contract shall not be held to relieve either party hereto from any liability that would attach to it hereunder if such error, omission or delay had not been made, provided such error, omission or delay is rectified immediately upon discovery.

D. Nothing in this Article shall be construed to override any of the other terms and conditions of this Contract.

ARTICLE 24

Insolvency

A. If more than one reinsured company is referenced within the definition of “Company” in the Preamble to this Contract, this Article shall apply severally to each such company.  Further, this Article and the laws of the domiciliary state shall apply in the event of the insolvency of any company covered hereunder.  In the event of a conflict between any provision of this Article and the laws of the domiciliary state of any company covered hereunder, that domiciliary state’s laws shall prevail.

B. In the event of the insolvency of the Company, this reinsurance (or the portion of any risk or obligation assumed by the Reinsurer, if required by applicable law) shall be payable directly to the Company, or to its liquidator, receiver, conservator or statutory successor, either:  (1) on the basis of the liability of the Company, or (2) on the basis of claims filed and allowed in the liquidation proceeding, whichever may be required by applicable statute, without diminution because of the insolvency of the Company or because the liquidator, receiver, conservator or statutory successor of the Company has failed to pay all or a portion of any claim.  It is agreed, however, that the liquidator, receiver, conservator or statutory successor of the Company shall give written notice to the Reinsurer of the pendency of a claim against the Company indicating the Policy or bond reinsured, which claim would involve a possible liability on the part of the Reinsurer within a reasonable time after such claim is filed in the conservation or liquidation proceeding or in the receivership, and that during the pendency

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of such claim, the Reinsurer may investigate such claim and interpose, at its own expense, in the proceeding where such claim is to be adjudicated any defense or defenses that it may deem available to the Company or its liquidator, receiver, conservator or statutory successor.  The expense thus incurred by the Reinsurer shall be chargeable, subject to the approval of the court, against the Company as part of the expense of conservation or liquidation to the extent of a pro rata share of the benefit that may accrue to the Company solely as a result of the defense undertaken by the Reinsurer.

C. Where two or more reinsurers are involved in the same claim and a majority in interest elect to interpose defense to such claim, the expense shall be apportioned in accordance with the terms of this reinsurance Contract as though such expense had been incurred by the Company.

D. As to all reinsurance made, ceded, renewed or otherwise becoming effective under this Contract, the reinsurance shall be payable as set forth above by the Reinsurer to the Company or to its liquidator, receiver, conservator or statutory successor, (except as provided by Section 4118(a)(1)(A) of the New York Insurance Law, provided the conditions of 1114(c) of such law have been met, if New York law applies) or except (1) where the Contract specifically provides another payee in the event of the insolvency of the Company, or (2) where the Reinsurer, with the consent of the direct insured or insureds, has assumed such Policy obligations of the Company as direct obligations of the Reinsurer to the payees under such Policies and in substitution for the obligations of the Company to such payees.  Then, and in that event only, the Company, with the prior approval of the certificate of assumption on New York risks by the Superintendent of Financial Services of the State of New York, or with the prior approval of such other regulatory authority as may be applicable, is entirely released from its obligation and the Reinsurer shall pay any loss directly to payees under such Policy.

ARTICLE 25

RUN-OFF REINSURER

A. “Run-off Reinsurer” means any Subscribing Reinsurer that:

1. has been ordered by a state insurance department or other legal authority to cease writing business, or has been placed under regulatory supervision or in rehabilitation; or

2. has ceased reinsurance underwriting operations; or

3. has transferred its claims-paying authority to an unaffiliated entity; or

4. engages in a process of Scheme of Arrangement or similar procedure related to this Contract, including but not limited to an insurance business transfer scheme pursuant to Part VII of the Financial Services and Markets Act 2000 (U.K.), as may be amended from time to time; or

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5. in any other way has assigned its interests or delegated its obligations under this Contract to an unaffiliated entity.

Notwithstanding the foregoing, agreement by a Lloyd’s syndicate to follow claim settlements procedures under Lloyd’s Claims Scheme (Combined) shall not constitute a transfer of its claims-paying authority, for purposes of subparagraphs (3) and (5) of this paragraph.

B. Notwithstanding any other provision of this Contract, in the event that a Subscribing Reinsurer becomes a Run-off Reinsurer at any time, the Company may elect, by giving written notice to the Run-off Reinsurer at any time thereafter, that all or any of the following shall apply to the Run-off Reinsurer’s participation hereunder:

1. Should the Run-off Reinsurer fail to pay amounts due hereunder, the interest penalty specified in the Late Payments Article shall be increased by 0.5% for each 30 days that a payment is past due, subject to a maximum increase of 7.0%.

2. The Run-off Reinsurer’s liability for losses for Policies covered by this Contract shall be commuted.  In the event the Company and the Run-off Reinsurer cannot agree on the commutation amount of the Run-off Reinsurer’s liability under such Policies, they shall appoint an actuary and/or appraiser to assess such liability and shall share equally any expense of the actuary and/or appraiser.  If the Company and the Run-off Reinsurer cannot agree on an actuary and/or appraiser, the Company and the Run-off Reinsurer each shall nominate three individuals, of whom the other shall decline two, and the final appointment shall be made by drawing lots.  Payment by the Run-off Reinsurer of the amount of liability ascertained shall constitute a complete and final release of both parties under this Contract.

3. The Run-off Reinsurer shall have no right of access to the Records of the Company if the Run-off Reinsurer has denied payment of any claim hereunder or there is a pending arbitration between the Company and the Run-off Reinsurer regarding any claim hereunder.  A reservation of rights shall be considered a denial of a claim.  Notwithstanding the above, the Run-off Reinsurer shall continue to have access to Records of the Company for any claim for which it has raised a query within 30 days of its receipt of a billing, but any inspection of Records must be completed within 90 days of receipt of billing or access will be deemed waived.

4. The provisions of the Arbitration Article shall not apply.  

C. The Company’s waiver of any rights provided in this Article is not a waiver of that right or other rights at a later date.

ARTICLE 26

Arbitration

A. Any dispute arising out of the interpretation, performance or breach of this Contract, including the formation or validity thereof, shall be submitted for decision to a panel of three arbitrators.  Notice requesting arbitration shall be in writing and sent certified or registered mail, return receipt requested.

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B. One arbitrator shall be chosen by each party and the two arbitrators shall then choose an impartial third arbitrator who shall preside at the hearing.  If either party fails to appoint its arbitrator within 30 days after being requested to do so by the other party, the latter, after 10 days’ prior notice by certified or registered mail of its intention to do so, may appoint the second arbitrator.

C. If the two arbitrators do not agree on a third arbitrator within 60 days of their appointment, the third arbitrator shall be chosen in accordance with the procedures for selecting the third arbitrator in force on the date the arbitration is demanded, established by the AIDA Reinsurance and Insurance Arbitration Society – U.S. (ARIAS).  The arbitrators shall be persons knowledgeable about insurance and reinsurance who have no personal or financial interest in the result of the arbitration.  If a member of the panel dies, becomes disabled or is otherwise unwilling or unable to serve, a substitute shall be selected in the same manner as the departing member was chosen and the arbitration shall continue.

D. Within 30 days after all arbitrators have been appointed, the panel shall meet and determine timely periods for briefs, discovery procedures and schedules of hearings.

E. The panel shall be relieved of all judicial formality and shall not be bound by the strict rules of procedure and evidence.  Notwithstanding anything to the contrary in this Contract, the arbitrators may at their discretion, consider underwriting and placement information provided by the Company to the Reinsurer, as well as any correspondence exchanged by the parties that is related to this Contract.  The arbitration shall take place in Tampa, Florida, or at such other place as the parties shall agree.  The decision of any two arbitrators shall be in writing and shall be final and binding.  The panel is empowered to grant interim relief as it may deem appropriate.

F. The panel shall interpret this Contract as an honorable engagement rather than as merely a legal obligation and shall make its decision considering the custom and practice of the applicable insurance and reinsurance business as promptly as possible after the hearings.  Judgment upon an award may be entered in any court having jurisdiction thereof.

G. Each party shall bear the expense of its own arbitrator and shall jointly and equally bear with the other party the cost of the third arbitrator.  The remaining costs of the arbitration shall be allocated by the panel.  The panel may, at its discretion, award such further costs and expenses as it considers appropriate, including but not limited to attorneys’ fees, to the extent permitted by law.

ARTICLE 27

Expedited Arbitration

A. Notwithstanding the provisions of the Arbitration Article, in the event an amount in dispute hereunder $1,000,000 or less, the parties will submit to an expedited arbitration process with the use of a single arbitrator.  The arbitrator will be chosen in accordance with the procedures for selecting an arbitrator in force on the date the arbitration is demanded, established by the AIDA Reinsurance and Insurance Arbitration Society - U.S. (ARIAS).

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B. Each party’s case will be submitted to the arbitrator within 100 calendar days of the date of determination of the arbitrator.  Discovery will be limited to exchanging only those documents directly relating to the issue in dispute, subject to a limit of two discovery depositions from each party, unless otherwise authorized by the arbitrator upon a showing of good cause.

C. Within 120 calendar days of the date of determination of the arbitrator, the hearing will be completed and a written award will be issued by the arbitrator.  As the parties agree that time is of the essence, the sole arbitrator does not have the authority to lengthen the schedule, absent agreement of both parties.  The arbitrator will have all the powers conferred on the arbitration panel as provided in the Arbitration Article, and said Article will apply to all matters not specifically addressed above.

ARTICLE 28

SERVICE OF SUIT

A. This Article applies only to those Subscribing Reinsurers not domiciled in the United States of America, and/or not authorized in any state, territory and/or district of the United States of America where authorization is required by insurance regulatory authorities.

B. This Article shall not be read to conflict with or override the obligations of the parties to arbitrate their disputes as provided for in the Arbitration Article.  This Article is intended as an aid to compelling arbitration or enforcing such arbitration or arbitral award, not as an alternative to the Arbitration Article for resolving disputes arising out of this Contract.

C. In the event of the failure of the Reinsurer to perform its obligations hereunder, the Reinsurer, at the request of the Company, shall submit to the jurisdiction of a court of competent jurisdiction within the United States.  Nothing in this Article constitutes or should be understood to constitute a waiver of the Reinsurer’s rights to commence an action in any court of competent jurisdiction in the United States, to remove an action to a United States District Court, or to seek a transfer of a case to another court as permitted by the laws of the United States or of any state in the United States.  The Reinsurer, once the appropriate court is selected, whether such court is the one originally chosen by the Company and accepted by the Reinsurer or is determined by removal, transfer, or otherwise, as provided for above, shall comply with all requirements necessary to give said court jurisdiction and, in any suit instituted against the Reinsurer upon this Contract, shall abide by the final decision of such court or of any appellate court in the event of an appeal.

D. Service of process in such suit may be made upon:

1. as respects Underwriting Members of Lloyd’s, London: Lloyd’s America, Inc., Attention: Legal Department, 280 Park Avenue, East Tower, 25^th Floor, New York, New York 10017;

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2. as respects any other Subscribing Reinsurer: Messrs. Mendes and Mount, 750 Seventh Avenue, New York, New York 10019-6829, or another party specifically designated in the Subscribing Reinsurer’s Interests and Liabilities Agreement attached hereto.  

The above-named are authorized and directed to accept service of process on behalf of the Reinsurer in any such suit.

E. Further, pursuant to any statute of any state, territory or district of the United States that makes provision therefor, the Reinsurer hereby designates the Superintendent, Commissioner or Director of Insurance, or other officer specified for that purpose in the statute, or his successor or successors in office, as its true and lawful attorney upon whom may be served any lawful process in any action, suit or proceeding instituted by or on behalf of the Company or any beneficiary hereunder arising out of this Contract, and hereby designates the above-named as the person to whom the said officer is authorized to mail such process or a true copy thereof.

ARTICLE 29

GOVERNING LAW

This Contract shall be governed as to performance, administration and interpretation by the laws of the State of Florida, exclusive of conflict of law rules.  However, with respect to credit for reinsurance, the rules of all applicable states shall apply.

ARTICLE 30

ENTIRE AGREEMENT

This Contract sets forth all of the duties and obligations between the Company and the Reinsurer and supersedes any and all prior or contemporaneous written agreements with respect to matters referred to in this Contract.  This Contract may not be modified or changed except by an amendment to this Contract in writing signed by both parties.  However, this Article shall not be construed as limiting the admissibility of evidence regarding the formation, interpretation, purpose or intent of this Contract.

ARTICLE 31

NON-WAIVER

The failure of the Company or the Reinsurer to insist on compliance with this Contract or to exercise any right or remedy hereunder shall not constitute a waiver of any rights contained in this Contract nor prevent either party from thereafter demanding full and complete compliance nor prevent either party from exercising such remedy in the future.

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ARTICLE 32

AGENCY

For purposes of sending and receiving notices and payments required by this Contract, the reinsured company that is set forth first in the Preamble to this Contract shall be deemed the agent of all other reinsured companies referenced in the Preamble.  In no event, however, shall any reinsured company be deemed the agent of another with respect to the terms of the Insolvency Article.

ARTICLE 33

Intermediary

Guy Carpenter & Company, LLC, is hereby recognized as the Intermediary negotiating this Contract for all business hereunder.  All communications (including notices, statements, premiums, return premiums, commissions, taxes, losses, Loss Adjustment Expenses, salvages, and loss settlements) relating thereto shall be transmitted to the Company or the Reinsurer through the Intermediary.  Payments by the Company to the Intermediary shall be deemed payment to the Reinsurer.  Payments by the Reinsurer to the Intermediary shall be deemed payment to the Company only to the extent that such payments are actually received by the Company.

ARTICLE 34

MODE OF EXECUTION

A. This Contract may be executed by:

1. an original written ink signature of paper documents;

2. an exchange of facsimile copies showing the original written ink signature of paper documents;

3. electronic signature technology employing computer software and a digital signature or digitizer pen pad to capture a person’s handwritten signature in such a manner that the signature is unique to the person signing, is under the sole control of the person signing, is capable of verification to authenticate the signature and is linked to the document signed in such a manner that if the data is changed, such signature is invalidated.

B. The use of any one or a combination of these methods of execution shall constitute a legally binding and valid signing of this Contract.  This Contract may be executed in one or more counterparts, each of which, when duly executed, shall be deemed an original.

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IN WITNESS WHEREOF, the Company has caused this Contract to be executed by its duly authorized representative(s), who also confirms the Company’s review of and agreement to be bound by the terms and conditions of the Interests and Liabilities Agreements attached to and forming part of this Contract;

On this _____ day of __________, in the year of 2021.

Typtap insurance company

Homeowners Choice Property & Casualty
Insurance Company, INC.

Signature:	Title:
Print Name:

7TH LAYER NON-FLORIDA PROPERTY CATASTROPHE

EXCESS OF LOSS REINSURANCE CONTRACT

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POOLS, ASSOCIATIONS & SYNDICATES EXCLUSIONS CLAUSE

Section A:

This Contract excludes:

a. All business derived directly or indirectly from any Pool, Association or Syndicate which maintains its own reinsurance facilities.

b. Any Pool or Scheme (whether voluntary or mandatory) formed after March 1, 1968 for the purpose of insuring property, whether on a country-wide basis or in respect of designated areas.  This exclusion shall not apply to so-called Automobile Insurance Plans or other Pools formed to provide coverage for Automobile Physical Damage.

Section B:

1. This Contract excludes business written by the Company for the same perils, which is known at the time to be insured by, or in excess of underlying amounts placed in, any Pool, Association or Syndicate, whether by way of insurance or reinsurance, formed for the purpose of writing any of the following:

Oil, Gas or Petro-Chemical Plants

Oil or Gas Drilling Rigs and/or

Aviation Risks

2. The exclusion under paragraph 1 of this Section B does not apply:

a. Where the Total Insured Value over all interests of the risk in question is less than $250,000,000.

b. To interests traditionally underwritten as Inland Marine and/or Stock and/or Contents written on a Blanket basis.

c. To Contingent Business Interruption, except when the Company is aware that the key location is known at the time to be insured in any Pool, Association or Syndicate named above, other than as provided for under subparagraph (a).

Section C:

1. Nevertheless the Reinsurer specifically agrees that liability accruing to the Company from its participation in Residual Market Mechanisms, including but not limited to the following, for all perils otherwise protected hereunder shall not be excluded herefrom:

a. So-called “Beach and Windstorm Plans” and so-called “Coastal Pools”;

b. All “FAIR Plan” and “Rural Risk Plan” business;

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c. Louisiana Citizens Property Insurance Corporation;

d. California Earthquake Authority (“CEA”) or any similar entity.

Notwithstanding the above, assessments related to the Florida Hurricane Catastrophe Fund and Citizens Property Insurance Corporation (Florida) shall be excluded hereunder.

2. However, this reinsurance does not include any increase in such liability resulting from:

a. The inability of any other participant in such Residual Market Mechanisms to meet its liability;

b. Any claim against a Residual Market Mechanism or any participant therein, including the Company, whether by way of subrogation or otherwise, brought by or on behalf of any insolvency fund (as defined in the Exclusions Article);

c. Any assessment or surcharge levied on the policyholder and therefore not a liability of the Company;

d. The Company’s initial capital contribution to the CEA;

e. Any assessments, other than interim and regular assessments, from a Residual Market Mechanism included in subparagraph 1(c) above;

f. Any expenditure to purchase or retire bonds.

3. The Company may include in Ultimate Net Loss for any Loss Occurrence covered hereunder only the liability attributable to that Loss Occurrence.  If the relevant entity does not specify what portion of an assessment is attributable to each Loss Occurrence, the Company may include in Ultimate Net Loss in respect of each Loss Occurrence a percentage of the Company’s assessments from the relevant entity related to the calendar year in which the Loss Occurrence commenced, regardless of when assessed, such percentage to be determined by dividing the relevant entity’s losses arising from the Loss Occurrence by its total losses for the calendar year.

4. The Company will deduct from Ultimate Net Loss amounts received as recoupment of any assessment that has been included in the Ultimate Net Loss, provided the recoupment is directly allocable to the assessment (“itemized recoupment”).  The Company shall use commercially reasonable efforts to recoup such assessment.  Any amount received as an itemized recoupment of any assessment (whether under this Contract or any predecessor contract), and therefore deductible from Ultimate Net Loss, shall not be included in the subject premium of this Contract.

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However, if a state levies assessments but does not allow itemized recoupment from policyholders, instead allowing the Company to file an overall increased rate, any such premium increased thereby shall not be deemed to be a recoupment that is deductible from Ultimate Net Loss.  Any recoupment received as part of a general premium rate increase, not specifically itemized, shall be included as part of the subject premium of this Contract or a successor contract, as applicable.

NOTES: Wherever used herein the terms:

“Company” shall be understood to mean “Company”, “Reinsured”, “Reassured” or whatever other term is used in the attached reinsurance document to designate the reinsured company or companies.

“Contract” shall be understood to mean “Agreement,” “Contract,” “Policy” or whatever other term is used to designate the attached reinsurance document.

“Reinsurer” shall be understood to mean “Reinsurer,” “Reinsurers,” “Underwriters” or whatever other term is used in the attached reinsurance document to designate the reinsurer or reinsurers.

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Nuclear Incident Exclusion Clause - Physical Damage - Reinsurance - U.S.A.

1. This Reinsurance does not cover any loss or liability accruing to the Reassured, directly or indirectly, and whether as Insurer or Reinsurer, from any Pool of Insurers or Reinsurers formed for the purpose of covering Atomic or Nuclear Energy risks.

2. Without in any way restricting the operation of paragraph (1) of this clause, this Reinsurance does not cover any loss or liability accruing to the Reassured, directly or indirectly and whether as Insurer or Reinsurer, from any insurance against Physical Damage (including business interruption or consequential loss arising out of such Physical Damage) to:

I. Nuclear reactor power plants including all auxiliary property on the site, or

II. Any other nuclear reactor installation, including laboratories handling radioactive materials in connection with reactor installations, and “critical facilities” as such, or

III. Installations for fabricating complete fuel elements or for processing substantial quantities of “special nuclear material”, and for reprocessing, salvaging, chemically separating, storing or disposing of “spent” nuclear fuel or waste materials, or

IV. Installations other than those listed in paragraph (2) III above using substantial quantities of radioactive isotopes or other products of nuclear fission.

3. Without in any way restricting the operations of paragraphs (1) and (2) hereof, this Reinsurance does not cover any loss or liability by radioactive contamination accruing to the Reassured, directly or indirectly, and whether as Insurer or Reinsurer, from any insurance on property which is on the same site as a nuclear reactor power plant or other nuclear installation and which normally would be insured therewith except that this paragraph (3) shall not operate

(a) where Reassured does not have knowledge of such nuclear reactor power plant or nuclear installation, or

(b) where said insurance contains a provision excluding coverage for damage to property caused by or resulting from radioactive contamination, however caused. However on and after 1st January 1960 this sub-paragraph (b) shall only apply provided the said radioactive contamination exclusion provision has been approved by the Governmental Authority having jurisdiction thereof.

4. Without in any way restricting the operations of paragraphs (1), (2) and (3) hereof, this Reinsurance does not cover any loss or liability by radioactive contamination accruing to the Reassured, directly or indirectly, and whether as Insurer or Reinsurer, when such radioactive contamination is a named hazard specifically insured against.

5. It is understood and agreed that this clause shall not extend to risks using radioactive isotopes in any form where the nuclear exposure is not considered by the Reassured to be the primary hazard.

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6. The term “special nuclear material” shall have the meaning given it in the Atomic Energy Act of 1954 or by any law amendatory thereof.

7. Reassured to be sole judge of what constitutes:

(a) substantial quantities, and

(b) the extent of installation, plant or site.

Note:  Without in any way restricting the operation of paragraph (1) hereof, it is understood and agreed that

(a) all policies issued by the Reassured on or before 31st December 1957 shall be free from the application of the other provisions of this Clause until expiry date or 31st December 1960 whichever first occurs whereupon all the provisions of this Clause shall apply.

(b) with respect to any risk located in Canada policies issued by the Reassured on or before 31st December 1958 shall be free from the application of the other provisions of this Clause until expiry date or 31st December 1960 whichever first occurs whereupon all the provisions of this Clause shall apply.

12/12/57

NMA 1119

NOTES: Wherever used herein the terms:

“Reassured” shall be understood to mean “Company”, “Reinsured”, “Reassured” or whatever other term is used in the attached reinsurance document to designate the reinsured company or companies.

“Agreement” shall be understood to mean “Agreement”, “Contract”, “Policy” or whatever other term is used to designate the attached reinsurance document.

“Reinsurers” shall be understood to mean “Reinsurers”, “Underwriters” or whatever other term is used in the attached reinsurance document to designate the reinsurer or reinsurers.

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TERRORISM EXCLUSION

A. Notwithstanding any provision to the contrary within this Contract or any endorsement thereto, it is agreed that this Contract excludes loss, damage, cost, or expense directly or indirectly caused by, contributed to by, resulting from, or arising out of or in connection with any Act of Terrorism, as defined herein, regardless of any other cause or event contributing concurrently or in any other sequence to the loss.

B. An “Act of Terrorism” includes any act, or preparation in respect of action, or threat of action designed to influence the government de jure or de facto of any nation or any political division thereof, or in pursuit of political, religious, ideological, or similar purposes to intimidate the public or a section of the public of any nation by any person or group(s) of persons whether acting alone or on behalf of or in connection with any organization(s) or government(s) de jure or de facto, and which:

a. involves violence against one or more persons; or

b. involves damage to property; or

c. endangers life other than that of the person committing the action; or

d. creates a risk to health or safety of the public or a section of the public; or

e. is designed to interfere with or to disrupt an electronic system.

C. This Contract also excludes loss, damage, cost, or expense directly or indirectly caused by, contributed to by, resulting from, or arising out of or in connection with any action in controlling, preventing, suppressing, retaliating against, or responding to any Act of Terrorism.

D. Notwithstanding the above and subject otherwise to the terms, conditions, and limitations of this Contract, in respect only of personal lines, this Contract shall pay actual loss or damage (but not related cost or expense) caused by any Act of Terrorism, provided such act is not directly or indirectly caused by, contributed to by, resulting from, or arising out of or in connection with biological, chemical, radiological or nuclear pollution or contamination.

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Communicable Disease Exclusion (Property Reinsurance)

A. This Contract excludes any loss, damage, liability, claim, cost or expense of whatsoever nature, directly or indirectly caused by, contributed to by, resulting from, arising out of, or in connection with a Communicable Disease or the fear or threat (whether actual or perceived) of a Communicable Disease regardless of any other cause or event contributing concurrently or in any other sequence thereto.

B. As used herein, a Communicable Disease means any disease which can be transmitted by means of any substance or agent from any organism to another organism where:

1. the substance or agent includes, but is not limited to, a virus, bacterium, parasite or other organism or any variation thereof, whether deemed living or not, and

2. the method of transmission, whether direct or indirect, includes but is not limited to, airborne transmission, bodily fluid transmission, transmission from or to any surface or object, solid, liquid or gas or between organisms, and

3. the disease, substance or agent can cause or threaten damage to human health or human welfare or can cause or threaten damage to, deterioration of, loss of value of, marketability of or loss of use of property.

C. Notwithstanding the foregoing, losses directly or indirectly caused by, contributed to by, resulting from, arising out of, or in connection with any otherwise covered peril under subject Policies and not otherwise excluded under this Contract shall be covered.

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CYBER LOSS LIMITED EXCLUSION CLAUSE (PROPERTY TREATY REINSURANCE)

1. Notwithstanding any provision to the contrary within this reinsurance agreement or any endorsement thereto, this reinsurance agreement excludes all loss, damage, liability, cost or expense of whatsoever nature directly or indirectly caused by, contributed to by, resulting from, arising out of or in connection with:

1.2. any loss of, alteration of, or damage to or a reduction in the functionality, availability or operation of a Computer System, unless subject to the provisions of paragraph 2;

1.3. any loss of use, reduction in functionality, repair, replacement, restoration or reproduction of any Data, including any amount pertaining to the value of such Data.

2. Subject to the other terms, conditions and exclusions contained in this reinsurance agreement, this reinsurance agreement will cover physical damage to property insured under the original policies and any Time Element Loss directly resulting therefrom where such physical damage is directly occasioned by any of the following perils:

fire, lightning, explosion, aircraft or vehicle impact, falling objects, windstorm, hail, tornado, cyclone, hurricane, earthquake, volcano, tsunami, flood, freeze or weight of snow

Definitions

3. Computer System means any computer, hardware, software, communications system, electronic device (including, but not limited to, smart phone, laptop, tablet, wearable device), server, cloud or microcontroller including any similar system or any configuration of the aforementioned and including any associated input, output, data storage device, networking equipment or back up facility.

4. Data means information, facts, concepts, code or any other information of any kind that is recorded or transmitted in a form to be used, accessed, processed, transmitted or stored by a Computer System.

5. Time Element Loss means business interruption, contingent business interruption or any other consequential losses.

LMA5410

06 March 2020

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TRUST AGREEMENT REQUIREMENTS CLAUSE

A. Except as provided in paragraph B of this Clause, if the Reinsurer satisfies its funding obligations under the Unauthorized Reinsurance Article by providing a Trust Agreement, the Reinsurer shall ensure that the Trust Agreement:

1. Requires the Reinsurer to establish a trust account for the benefit of the Company, and specifies what the Trust Agreement is to cover;

2. Stipulates that assets deposited in the trust account shall be valued according to their current fair market value and shall consist only of cash (United States legal tender), and certificates of deposit (issued by a United States bank and payable in United States legal tender), or any combination of the two, provided that the investments are issued by an institution that is not the parent, subsidiary or affiliate of either the Reinsurer or the Company;

3. Requires the Reinsurer, prior to depositing assets with the trustee, to execute assignments or endorsements in blank, or to transfer legal title to the trustee of all shares, obligations or any other assets requiring assignments, in order that the Company, or the trustee upon the direction of the Company, may whenever necessary negotiate these assets without consent or signature from the Reinsurer or any other entity;

4. Requires that all settlements of account between the Company and the Reinsurer be made in cash or its equivalent; and

5. Provides that assets in the trust account shall be withdrawn only as permitted in this Contract, without diminution because of the insolvency of the Company or the Reinsurer.

B. If a ceding insurer is domiciled in California and the Reinsurer satisfies its funding obligations under the Unauthorized Reinsurance Article by providing a Trust Agreement, the Reinsurer shall ensure that the Trust Agreement:

1. Provides that assets deposited in the trust account shall be valued according to their current fair market value and shall consist only of cash in United States dollars, certificates of deposit issued by a United States financial institution as defined in California Insurance Code Section 922.7(a) and payable in United States dollars, and investments permitted by the California Insurance Code, or any combination of the above.

2. Provides that investments in or issued by an entity controlling, controlled by or under common control with either the grantor or the beneficiary of the trust shall not exceed 5% of total investments.

3. Requires the Reinsurer, prior to depositing assets with the trustee, to execute assignments or endorsements in blank, or to transfer legal title to the trustee of all

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shares, obligations or any other assets requiring assignments, in order that the ceding insurer, or the trustee upon the direction of the ceding insurer, may, whenever necessary, negotiate these assets without consent or signature from the Reinsurer or any other entity.

4. Provides that assets in the trust account shall be withdrawn only as permitted in this Contract, without diminution because of the insolvency of the ceding insurer or the Reinsurer.

C. If there are multiple ceding insurers that collectively comprise the Company, “regulatory authorities” as referenced in subparagraph A(2) above, shall mean the individual ceding insurer’s domestic regulator.  

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EX-10.12

Exhibit 10.12

CERTAIN CONFIDENTIAL INFORMATION, IDENTIFIED BY BRACKETED ASTERISKS "[*****]", HAS BEEN OMITTED FROM THIS EXHIBIT BECAUSE IT IS BOTH (I) NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED.













FLOOD PROPERTY CATASTROPHE EXCESS OF LOSS

REINSURANCE CONTRACT

issued to

TypTap Insurance Company

Ocala, Florida

Homeowners Choice Property & Casualty Insurance Company, Inc.

Tampa, Florida

including any and/or all companies that are or may hereafter become affiliated therewith

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FLOOD PROPERTY CATASTROPHE EXCESS OF LOSS

REINSURANCE CONTRACT

TABLE OF CONTENTS

Article		Page
	Preamble	4
1	Business Covered	4
2	Retention and Limit	4
3	Term	5
4	Special Termination	5
5	Territory	7
6	Exclusions	7
7	Special Acceptance	8
8	Premium	9
9	Reinstatement	9
10	Definitions	10
11	Extra Contractual Obligations/Excess of Policy Limits	11
12	Net Retained Liability	12
13	Other Reinsurance	12
14	Original Conditions	12
15	No Third Party Rights	13
16	Notice of Loss and Loss Settlements	13
17	Late Payments	13
18	Offset	14
19	Currency	15
20	Unauthorized Reinsurance	15
21	Taxes	17
22	Access to Records	17
23	Confidentiality	18
24	Indemnification and Errors and Omissions	19
25	Insolvency	20
26	Run-Off Reinsurer	21
27	Arbitration	22
28	Expedited Arbitration	23
29	Service of Suit	23
30	Governing Law	24
31	Entire Agreement	25
32	Non-Waiver	25
33	Agency	25
34	Intermediary	25
35	Mode of Execution	26
	Company Signing Block	27

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FLOOD PROPERTY CATASTROPHE EXCESS OF LOSS

REINSURANCE CONTRACT

TABLE OF CONTENTS

Attachments		Page
	Pools, Associations & Syndicates Exclusions Clause	28
	Nuclear Incident Exclusion Clause - Physical Damage - Reinsurance - U.S.A.	31
	Communicable Disease Exclusion (Property Reinsurance)	33
	Cyber Loss Limited Exclusion Clause (Property Treaty Reinsurance)	34
	Trust Agreement Requirements Clause	35

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FLOOD PROPERTY CATASTROPHE EXCESS OF LOSS

REINSURANCE CONTRACT

(the “Contract”)

issued to

TypTap Insurance Company

Ocala, Florida

Homeowners Choice Property & Casualty Insurance Company, Inc.

Tampa, Florida

including any and/or all companies that are or may hereafter become affiliated therewith

(collectively, the “Company”)

by

THE SUBSCRIBING REINSURER(S) IDENTIFIED IN THE
INTERESTS AND LIABILITIES AGREEMENT(S) ATTACHED TO
AND FORMING PART OF THIS CONTRACT

(the “Reinsurer”)

ARTICLE 1

BUSINESS COVERED

This Contract is to indemnify the Company in respect of its net excess liability as a result of any loss or losses which may occur during the term of this Contract under any Policies, in force at the effective date hereof or issued or renewed on or after that date, covering direct and assumed business classified by the Company as standalone Flood Zone A or V, including Policies designated as Flood Zone A or V and subsequently reclassified as Flood Zone X until the next anniversary of such Policies, subject to the terms and conditions herein contained.  

ARTICLE 2

Retention and Limit

A. The Reinsurer shall be liable in respect of each Loss Occurrence for the Ultimate Net Loss over and above the initial Ultimate Net Loss of [$*****], each Loss Occurrence, subject to a limit of liability to the Reinsurer of [$*****], each Loss Occurrence.

B. The liability of the Reinsurer hereunder as respects all Loss Occurrences commencing during the term of this Contract shall not exceed [$*****].

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C. No Loss Occurrence shall be covered hereunder unless it involves two or more risks subject to this Contract.  The Company shall be the sole judge of what constitutes one risk for purposes of this Contract.

ARTICLE 3

Term

This Contract shall take effect at 12:01 a.m., Standard Time, July 1, 2021, and unless terminated prior to that time and date as provided in the Special Termination Article, shall remain in effect until 12:01 a.m., Standard Time, June 1, 2022, applying to Loss Occurrences commencing during the term of this Contract.  For purposes of this Contract, “Standard Time” shall mean the time as described in the original Policy.

ARTICLE 4

SPECIAL TERMINATION

A. The Company may terminate a Subscribing Reinsurer’s percentage share in this Contract at any time by giving written notice to the Subscribing Reinsurer in the event of any of the following circumstances:

1. The Subscribing Reinsurer ceases underwriting operations.

2. A state insurance department or other legal authority orders the Subscribing Reinsurer to cease writing business, or the Subscribing Reinsurer is placed under regulatory supervision.

3. The Subscribing Reinsurer has become insolvent or has been placed into liquidation or receivership (whether voluntary or involuntary), or there have been instituted against it proceedings for the appointment of a receiver, liquidator, rehabilitator, conservator, trustee in bankruptcy, or other agent known by whatever name, to take possession of its assets or control of its operations.

4. The Subscribing Reinsurer’s policyholders’ surplus (or the equivalent under the Subscribing Reinsurer’s accounting system) as reported in such financial statements of the Subscribing Reinsurer as designated by the Company, has been reduced by 20% of the amount thereof at any date during the prior 12-month period (including the period prior to the inception of this Contract).

5. The Subscribing Reinsurer has become, or has announced its intention to become, merged with or acquired or controlled by any company, corporation, or individual(s) not controlling the Subscribing Reinsurer’s operations at the inception of this Contract.

6. The Subscribing Reinsurer has retroceded its entire liability under this Contract without the Company’s prior written consent, except for retrocessions to members of the Subscribing Reinsurer’s holding company group.

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7. The Subscribing Reinsurer has been assigned an A.M. Best’s rating of less than “A-” and/or an S&P rating of less than “BBB+.”  However, as respects Underwriting Members of Lloyd’s, London, a Lloyd’s Market Rating of less than “A-” by A.M. Best and/or less than “BBB+” by S&P shall apply.

8. The Subscribing Reinsurer has hired an unaffiliated runoff claims manager that is compensated on a contingent basis or is otherwise provided with financial incentives based on the quantum of claims paid.

9. The Subscribing Reinsurer has in any other way assigned its interests or delegated its obligations under this Contract to an unaffiliated entity.

10. The Subscribing Reinsurer has failed to post or maintain required collateral to secure its obligations as required under this Contract, and has not cured such deficiency within 30 days following written notice thereof from the Company.

Notwithstanding the foregoing, agreement by a Lloyd’s syndicate to follow claim settlements procedures under Lloyd’s Claims Scheme (Combined) shall not constitute a transfer of its claims-paying authority, for purposes of subparagraphs (8) and (9) of this paragraph.

B. Termination shall be effected on a cut-off basis and the Subscribing Reinsurer shall have no liability for Loss Occurrences commencing after the date of termination.  The reinsurance premium due the Subscribing Reinsurer hereunder (including any minimum reinsurance premium) shall be prorated based on the period of the Subscribing Reinsurer’s participation hereon, and the Subscribing Reinsurer shall immediately return any excess reinsurance premium received.  Reinstatement premium, if any, shall be calculated based on the Subscribing Reinsurer’s reinsurance premium earned during the period of the Subscribing Reinsurer’s participation hereon.

C. Additionally, in the event of any of the circumstances listed in paragraph A of this Article, the Company shall have the option to commute the Subscribing Reinsurer’s liability for losses on Policies covered by this Contract.  In the event the Company and the Subscribing Reinsurer cannot agree on the commutation amount, they shall appoint an actuary and/or appraiser to assess such amount and shall share equally any expense of the actuary and/or appraiser.  If the Company and the Subscribing Reinsurer cannot agree on an actuary and/or appraiser, the Company and the Subscribing Reinsurer each shall nominate three individuals, of whom the other shall decline two, and the final appointment shall be made by drawing lots.  Payment by the Subscribing Reinsurer of the amount of liability ascertained shall constitute a complete and final release of both parties in respect of liability arising from the Subscribing Reinsurer’s participation under this Contract.

D. The Company’s option to require commutation under paragraph C above shall survive the termination or expiration of this Contract.

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ARTICLE 5

Territory

The territorial limits of this Contract shall be identical with those of the Company’s Policies.

ARTICLE 6

Exclusions

A. This Contract shall not apply to and specifically excludes:

1. Earthquake for standalone Policies where earthquake is the only named peril.

2. Liability of the Company arising by contract, operation of law, or otherwise, from its participation or membership, whether voluntary or involuntary, in any Insolvency Fund.  “Insolvency Fund” includes any guaranty fund, insolvency fund, plan, pool, association, fund or other arrangement, howsoever denominated, established or governed, that provides for any assessment of or payment or assumption by the Company of part or all of any claim, debt, charge, fee, or other obligation of an insurer, or its successors or assigns, that has been declared by any competent authority to be insolvent, or that is otherwise deemed unable to meet any claim, debt, charge, fee or other obligation in whole or in part.

3. Loss or damage occasioned by war, invasion, hostilities, acts of foreign enemies, civil war, rebellion, insurrection, military or usurped power, martial law, or confiscation by order of any government or public authority, but not excluding loss or damage that would be covered under a standard form of Policy containing a standard war exclusion clause.

4. Losses excluded by the attached Nuclear Incident Exclusion Clause – Physical Damage – Reinsurance – U.S.A.

5. Financial guarantee and insolvency.

6. Losses excluded by the attached Communicable Disease Exclusion (Property Reinsurance).

7. Losses excluded by the attached Cyber Loss Limited Exclusion Clause (Property Treaty Reinsurance).

8. All reinsurance assumed by the Company; provided that quota share reinsurance between the reinsured companies shall not be excluded.

9. Insurance policies classified by the Company as Accident and Health, Fidelity and Surety, Boiler and Machinery, Workers' Compensation, and Credit business.

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10. Homeowners or any other property insurance policies written on an all risk basis and/or wind only basis.

11. Loss or liability from any Pool, Association or Syndicate and any assessment or similar demand for payment related to the Florida Hurricane Catastrophe Fund, Citizens Property Insurance Corporation or any other regulatory assessment.

12. Loss and/or damage and/or costs and/or expenses arising from seepage and/or pollution and/or contamination.  Nevertheless, this exclusion does not preclude payment of the cost of removing debris of property damaged by a loss otherwise covered hereunder, subject always to the limit of Company's property loss under the applicable original policy.

13. Loss, damage, cost or expense arising out of an act of terrorism involving the use of any biological, chemical, nuclear or radioactive agent, material, device or weapon.

14. All liability arising out of mold, spores and/or fungus, but this exclusion shall not apply to those losses which follow as a direct result of a loss caused by a peril otherwise covered hereunder.

B. With the exception of subparagraphs A(4), A(5), A(10), A(12) and A(13) above, should any judicial, regulatory or legislative entity having legal jurisdiction invalidate any exclusion on the Company's Policy, any amount of loss for which the Company is liable because of such invalidation will not be excluded hereunder.

C. With the exception of subparagraphs A(4), A(5) and A(6), if the Company inadvertently issues a Policy falling within the scope of one or more of the exclusions, such Policy shall be covered hereunder, provided that the Company issues, or causes to be issued, the required notice of cancellation within 30 days after a member of the executive or managerial staff at the Company’s home office having underwriting authority in the class of business involved becomes aware that the Policy applies to excluded classes, unless the Company is prevented from canceling said Policy within such period by applicable statute or regulation, in which case such Policy shall be covered hereunder until the earliest date on which the Company may cancel.

ARTICLE 7

SPECIAL ACCEPTANCE

Business that is not within the scope of this Contract may be submitted to the Reinsurer for special acceptance hereunder, and such business, if accepted by the Reinsurer shall be covered hereunder, subject to the terms and conditions of this Contract, except as modified by the special acceptance.  The Reinsurer shall be deemed to have accepted a risk, if it has not responded within five business days after receiving the underwriting information on such risk.  Any renewal of a special acceptance agreed to for a predecessor contract to this Contract, shall automatically be covered hereunder.

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ARTICLE 8

Premium

A. The Company shall pay the Reinsurer a deposit premium of [$*****] for the term of this Contract.  The reinsurance premium to be paid to the Reinsurer shall be calculated at a rate of [*****%] multiplied by the Company’s final Flood Total Insured Value.

B. The deposit premium in paragraph A above shall be payable to the Reinsurer by the Company in four equal installments of [$*****] on July 1, 2021, September 1, 2021, January 1, 2022 and April 1, 2022.

C. Within 45 days following the expiration of this Contract, the Company shall provide the Reinsurer with a report showing the Company’s final Flood Total Insured Value.  This final Flood Total Insured Value shall be multiplied by the rate as stated in paragraph A above.  Should this amount be greater than or equal to [*****%] and less than or equal to [*****%] of the deposit premium as set forth above, there shall be no additional or return premium due.  Should the amount so calculated exceed [*****%] of the deposit premium paid in accordance with paragraph A above, the Company shall immediately pay the Reinsurer the difference in excess of [*****%] of the deposit premium.  Should the amount so calculated be less than [*****%] of the deposit premium paid in accordance with paragraph A of this Article, the Reinsurer shall immediately pay the Company the difference below [*****%] of the deposit premium, subject to a minimum premium of [$*****].

D. The estimated Flood Total Insured Value is [$*****].  The final Flood Total Insured Value will be based on exposures inforce on September 30, 2021.

E. The Company shall furnish the Reinsurer with such reasonably available information as may be reasonably required by the Reinsurer for completion of the Reinsurer’s financial statements.

ARTICLE 9

REINSTATEMENT

A. Loss payments under this Contract shall reduce the limit of coverage afforded by the amounts paid, but the limit of coverage shall be reinstated from the time of the occurrence of the loss, and for each amount so reinstated, the Company agrees to pay, simultaneously with the Reinsurer’s loss payment, an additional premium calculated at pro rata of the Reinsurer’s premium for the applicable layer(s) for the term of this Contract, being pro rata only as to the fraction of the Reinsurer’s limit of liability hereunder (i.e., the fraction of $30,000,000) so reinstated.  Nevertheless, the Reinsurer’s liability shall not exceed such limit(s) in respect of any one Loss Occurrence, nor the applicable limit(s) in respect of all Loss Occurrences commencing during the term of this Contract, as set forth in the Retention and Limit Article.

B. If at the time of a loss settlement hereon the reinsurance premium, as calculated in accordance with the Premium Article, is unknown, the above calculation of reinstatement premium shall be based upon the deposit premium, subject to adjustment when the reinsurance premium is finally established.

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ARTICLE 10

Definitions

A. 1.“Ultimate Net Loss” means the actual loss paid by the Company or which the Company becomes liable to pay, such loss to include Loss Adjustment Expense, 100% of any Extra Contractual Obligation and 100% of any Loss in Excess of Policy Limits as defined in the Extra Contractual Obligations/Excess of Policy Limits Article.  In no event, however, shall more than 25% of “Ultimate Net Loss” for any one Loss Occurrence be comprised of Extra Contractual Obligations and Loss in Excess of Policy Limits.

2. Salvages and all recoveries (including amounts due from all reinsurances that inure to the benefit of this Contract, whether recovered or not), shall be first deducted from such loss to arrive at the amount of liability attaching hereunder.

3. All salvages, recoveries or payments recovered or received subsequent to loss settlement hereunder shall be applied as if recovered or received prior to the aforesaid settlement, and all necessary adjustments shall be made by the parties hereto.

4. The Company shall be deemed to be “liable to pay” a loss when a judgment has been rendered that the Company does not plan to appeal, and/or the Company has obtained a release, and/or the Company has accepted a proof of loss, and/or the Company has made a commitment to pay, and/or the Company has scheduled the payment of a loss.

5. Nothing in this clause shall be construed to mean that losses are not recoverable hereunder until the Company’s “Ultimate Net Loss” has been ascertained.

B. “Loss Adjustment Expense” means costs and expenses incurred by the Company in connection with the investigation, appraisal, adjustment, settlement, litigation, defense or appeal of a specific claim or loss, or alleged loss, including but not limited to:

1. court costs;

2. costs of supersedeas and appeal bonds;

3. monitoring counsel expenses;

4. legal expenses and costs incurred in connection with coverage questions and legal actions connected thereto, including but not limited to declaratory judgment actions;

5. post-judgment interest;

6. pre-judgment interest, unless included as part of an award or judgment;

7. a pro rata share of salaries and expenses of Company field employees, calculated in accordance with the time occupied in adjusting such loss, and expenses of other Company employees who have been temporarily diverted from their normal and customary duties and assigned to the field adjustment of losses covered by this Contract; and

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8. subrogation, salvage and recovery expenses.

“Loss Adjustment Expense” does not include salaries and expenses of the Company’s employees, except as provided in subparagraph (7) above, and office and other overhead expenses.

C. “Loss Occurrence” means the sum of all related individual losses caused by a flood in accordance with subject Policies, arising out of one event.  However, the duration and extent of any one “Loss Occurrence” shall be limited to all individual losses sustained by the Company occurring during any period of 504 consecutive hours arising out of and directly occasioned by the same event, subject to the following:

1. The Company may choose the date and time when any such period of 504 consecutive hours commences.  Only one period of 504 consecutive hours shall apply with respect to one event.

2. If more than one event occurs during the above period of 504 consecutive hours, each event shall be considered a separate Loss Occurrence.

D. “Policy” means any binder, policy, or contract of insurance or reinsurance issued, accepted or held covered provisionally or otherwise, by or on behalf of the Company.

E. “Flood Total Insured Value” means the Company’s total inforce Policy flood limits.

ARTICLE 11

EXTRA CONTRACTUAL OBLIGATIONS/EXCESS OF POLICY LIMITS

A. This Contract shall cover Extra Contractual Obligations, as provided in the definition of Ultimate Net Loss.  “Extra Contractual Obligations” shall be defined as those liabilities not covered under any other provision of this Contract and that arise from the handling of any claim on business covered hereunder, such liabilities arising because of, but not limited to, the following:  failure by the Company to settle within the Policy limit, or by reason of alleged or actual negligence, fraud or bad faith in rejecting an offer of settlement or in the preparation of the defense or in the trial of any action against its insured or reinsured or in the preparation or prosecution of an appeal consequent upon such action.

B. This Contract shall cover Loss in Excess of Policy Limits, as provided in the definition of Ultimate Net Loss.  “Loss in Excess of Policy Limits” shall be defined as Loss in excess of the Policy limit, having been incurred because of, but not limited to, failure by the Company to settle within the Policy limit or by reason of alleged or actual negligence, fraud or bad faith in rejecting an offer of settlement or in the preparation of the defense or in the trial of any action against its insured or reinsured or in the preparation or prosecution of an appeal consequent upon such action.

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C. An Extra Contractual Obligation and/or Loss in Excess of Policy Limits shall be deemed to have occurred on the same date as the loss covered under the Company’s Policy, and shall constitute part of the original loss.

D. For the purposes of the Loss in Excess of Policy Limits coverage hereunder, the word “Loss” shall mean any amounts for which the Company would have been contractually liable to pay had it not been for the limit of the original Policy.

E. Loss Adjustment Expense in respect of Extra Contractual Obligations and/or Loss in Excess of Policy Limits shall be covered hereunder in the same manner as other Loss Adjustment Expense.

F. However, this Article shall not apply where the loss has been incurred due to final legal adjudication of fraud of a member of the Board of Directors or a corporate officer of the Company acting individually or collectively or in collusion with any individual or corporation or any other organization or party involved in the presentation, defense or settlement of any claim covered hereunder.

G. In no event shall coverage be provided to the extent not permitted under law.

ARTICLE 12

NET RETAINED LIABILITY

A. This Contract applies only to that portion of any loss that the Company retains net for its own account (prior to deduction of any reinsurance that inures solely to the benefit of the Company).

B. The amount of the Reinsurer’s liability hereunder in respect of any loss or losses shall not be increased by reason of the inability of the Company to collect from any other reinsurer(s), whether specific or general, any amounts that may have become due from such reinsurer(s), whether such inability arises from the insolvency of such other reinsurer(s) or otherwise.

ARTICLE 13

OTHER REINSURANCE

The Company shall be permitted to carry in force other reinsurance, recoveries under which shall inure to the benefit of this Contract.

ARTICLE 14

Original Conditions

All reinsurance under this Contract shall be subject to the same terms, conditions, waivers and interpretations, and to the same modifications and alterations as the respective Policies of the Company.  However, in no event shall this be construed in any way to provide coverage outside the terms and conditions set forth in this Contract.

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ARTICLE 15

NO THIRD PARTY RIGHTS

This Contract is solely between the Company and the Reinsurer, and in no instance shall any insured, claimant or other third party have any rights under this Contract except as may be expressly provided otherwise herein.

ARTICLE 16

Notice of Loss and Loss Settlements

A. The Company shall advise the Reinsurer promptly if paid and estimated Ultimate Net Loss is in excess of 75% of the Company’s retention, or if, in the opinion of the Company, such Ultimate Net Loss may result in a claim hereunder.  Thereafter, the Company shall advise the Reinsurer, at least monthly, of all subsequent developments thereto that may materially affect the position of the Reinsurer.

B. The Company alone and at its full discretion shall adjust, settle or compromise all claims and losses.

C. As respects losses subject to this Contract, all loss settlements made by the Company, whether under strict Policy terms or by way of compromise, and any Extra Contractual Obligations and/or Loss in Excess of Policy Limits, shall be binding upon the Reinsurer.  The Reinsurer agrees to pay or allow, as the case may be, its share of each such settlement immediately upon receipt of reasonable evidence of the amount paid by the Company or that the Company estimates it will pay within the next 14 days.  Within 30 days after receipt of the Reinsurer’s payment, the Company shall report to the Reinsurer the Reinsurer’s payment, minus the Reinsurer’s share of losses subject to this Contract that the Company has paid, or become liable to pay, as of the date of the report.  Any positive difference shall be remitted to the Reinsurer with the Company’s report.

ARTICLE 17

LATE PAYMENTS

A. In the event any payment due either party is not received by the Intermediary by the payment due date, the party to whom payment is due may, by notifying the Intermediary in writing, require the debtor party to pay, and the debtor party agrees to pay, an interest penalty on the amount past due calculated for each such payment on the last business day of each month as follows:

1. The number of full days that have expired since the overdue date or the last monthly calculation, whichever the lesser; times

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2. 1/365th of the sum of the six-month United States Treasury Bill rate as quoted in The Wall Street Journal on the first business day of the month for which the calculation is made, plus 1%; times

3. The amount past due, including accrued interest.

Interest shall accumulate until payment of the original amount due plus interest penalties have been received by the Intermediary.

B. The due date shall, for purposes of this Article, be determined as follows:

1. Payments from the Reinsurer to the Company shall be due on the date on which the demand for payment (including delivery of bordereaux or quarterly or monthly reports) is received by the Reinsurer, and shall be overdue 30 days thereafter.

2. Payments from the Company to the Reinsurer shall be due on the dates specified within this Contract.  Payments shall be overdue 30 days thereafter except for the first installment of premium, if applicable, which shall be overdue 60 days from inception or 30 days from final line-signing, whichever the later.  Reinstatement premium, if applicable, shall have as a due date the date when the Company receives payment for the claim giving rise to such reinstatement premium, and payment shall be overdue 30 days thereafter. In the event a due date is not specifically stated for a given payment, the overdue date shall be 30 days following the date of billing.

C. If the information contained in the Company’s demand for payment is insufficient or not in accordance with the conditions of this Contract, then within 30 days the Reinsurer shall request from the Company all additional information necessary to validate its claim and the payment due date as defined in paragraph B shall be deemed to be the date upon which the Reinsurer received the requested additional information.  This paragraph is only for the purpose of establishing when a payment is overdue, and shall not alter the provisions of the Notice of Loss and Loss Settlements Article or other pertinent contractual stipulations.

D. In the event arbitration is necessary to settle a dispute, the panel shall have the authority to make a determination awarding interest to the prevailing party.  Interest, if any, awarded by the panel shall supersede the interest amounts outlined herein.

E. Any interest owed pursuant to this Article may be waived by the party to which it is owed.  Waiver of such interest, however, shall not affect the waiving party’s rights to other interest amounts due as a result of this Article.

ARTICLE 18

OFFSET

Each party hereto shall have, and may exercise at any time and from time to time, the right to offset any and all balances due from a party to the other arising under this Contract.  In the event of the insolvency of a party hereto, offsets shall only be allowed in accordance with the provisions of any applicable law governing offset entitlement.

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ARTICLE 19

Currency

A. Where the word “Dollars” and/or the sign “$” appear in this Contract, they shall mean United States Dollars, and all payments hereunder shall be in United States Dollars.

B. For purposes of this Contract, where the Company receives premiums or pays losses in currencies other than United States Dollars, such premiums or losses shall be converted into United States Dollars at the actual rates of exchange at which these premiums or losses are entered in the Company’s books.

ARTICLE 20

Unauthorized Reinsurance

A. This Article applies only to the extent a Subscribing Reinsurer does not qualify for credit with any insurance regulatory authority having jurisdiction over the Company’s reserves.

B. The Company agrees, in respect of its Policies or bonds falling within the scope of this Contract, that when it files with its insurance regulatory authority, or sets up on its books liabilities as required by law, it shall forward to the Reinsurer a statement showing the proportion of such liabilities applicable to the Reinsurer.  The “Reinsurer’s Obligations” shall be defined as follows:

1. unearned premium (if applicable);

2. known outstanding losses that have been reported to the Reinsurer and Loss Adjustment Expense relating thereto;

3. losses and Loss Adjustment Expense paid by the Company but not recovered from the Reinsurer;

4. losses incurred but not reported and Loss Adjustment Expense relating thereto;

5. all other amounts for which the Company cannot take credit on its financial statements unless funding is provided by the Reinsurer.

C. The Reinsurer’s Obligations shall be funded by funds withheld, cash advances, Trust Agreement or a Letter of Credit (LOC).  The Reinsurer shall have the option of determining the method of funding provided it is acceptable to the insurance regulatory authorities having jurisdiction over the Company’s reserves.

D. When funding by Trust Agreement, the Reinsurer shall ensure that the Trust Agreement complies with the provisions of the “Trust Agreement Requirements Clause” attached hereto.  When funding by an LOC, the Reinsurer agrees to apply for and secure timely delivery to the Company of a clean, irrevocable and unconditional LOC issued by a bank and containing provisions acceptable to the insurance regulatory authorities having jurisdiction over the

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Company’s reserves in an amount equal to the Reinsurer’s Obligations.  Such LOC shall be issued for a period of not less than one year, and shall be automatically extended for one year from its date of expiration or any future expiration date unless 30 days (or such other time period as may be required by insurance regulatory authorities), prior to any expiration date the issuing bank shall notify the Company by certified or registered mail that the issuing bank elects not to consider the LOC extended for any additional period.

E. The Reinsurer and the Company agree that any funding provided by the Reinsurer pursuant to the provisions of this Contract may be drawn upon at any time, notwithstanding any other provision of this Contract, and be utilized by the Company or any successor, by operation of law, of the Company including, without limitation, any liquidator, rehabilitator, receiver or conservator of the Company, for the following purposes, unless otherwise provided for in a separate Trust Agreement:

1. to reimburse the Company for the Reinsurer’s Obligations, the payment of which is due under the terms of this Contract and that has not been otherwise paid;

2. to make refund of any sum that is in excess of the actual amount required to pay the Reinsurer’s Obligations under this Contract (or in excess of 102% of the Reinsurer’s Obligations, if funding is provided by a Trust Agreement);

3. to fund an account with the Company for the Reinsurer’s Obligations.  Such cash deposit shall be held in an interest bearing account separate from the Company’s other assets, and interest thereon not in excess of the prime rate shall accrue to the benefit of the Reinsurer.  Any taxes payable on accrued interest shall be paid out of the assets in the account that are in excess of the Reinsurer’s Obligations (or in excess of 102% of the Reinsurer’s Obligations, if funding is provided by a Trust Agreement).  If the assets are inadequate to pay taxes, any taxes due shall be paid or reimbursed by the Reinsurer;

4. to pay the Reinsurer’s share of any other amounts the Company claims are due under this Contract.

F. If the amount drawn by the Company is in excess of the actual amount required for E(1) or E(3), or in the case of E(4), the actual amount determined to be due, the Company shall promptly return to the Reinsurer the excess amount so drawn.  All of the foregoing shall be applied without diminution because of insolvency on the part of the Company or the Reinsurer.

G. The issuing bank shall have no responsibility whatsoever in connection with the propriety of withdrawals made by the Company or the disposition of funds withdrawn, except to ensure that withdrawals are made only upon the order of properly authorized representatives of the Company.

H. At annual intervals, or more frequently at the discretion of the Company, but never more frequently than quarterly, the Company shall prepare a specific statement of the Reinsurer’s Obligations for the sole purpose of amending the LOC or other method of funding, in the following manner:

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1. If the statement shows that the Reinsurer’s Obligations exceed the balance of the LOC as of the statement date, the Reinsurer shall, within 30 days after receipt of the statement, secure delivery to the Company of an amendment to the LOC increasing the amount of credit by the amount of such difference.  Should another method of funding be used, the Reinsurer shall, within the time period outlined above, increase such funding by the amount of such difference.

2. If, however, the statement shows that the Reinsurer’s Obligations are less than the balance of the LOC (or that 102% of the Reinsurer’s Obligations are less than the trust account balance if funding is provided by a Trust Agreement), as of the statement date, the Company shall, within 30 days after receipt of written request from the Reinsurer, release such excess credit by agreeing to secure an amendment to the LOC reducing the amount of credit available by the amount of such excess credit.  Should another method of funding be used, the Company shall, within the time period outlined above, decrease such funding by the amount of such excess.

ARTICLE 21

TAXES

A. In consideration of the terms under which this Contract is issued, the Company undertakes not to claim any deduction of the premium hereon when making Canadian tax returns or when making tax returns, other than Income or Profits Tax returns, to any state or territory of the United States of America or to the District of Columbia.

B. 1.Each Subscribing Reinsurer has agreed to allow, for the purpose of paying the Federal Excise Tax, the applicable percentage of the premium payable hereon (as imposed under the Internal Revenue Code) to the extent such premium is subject to Federal Excise Tax.

2. In the event of any return of premium becoming due hereunder, the Subscribing Reinsurer shall deduct the applicable percentage of the premium from the amount of the return, and the Company or its agent should take steps to recover the Tax from the U.S. Government.

ARTICLE 22

ACCESS TO RECORDS

A. The Reinsurer or its duly authorized representatives shall have the right to visit the offices of the Company to inspect, examine, audit, and verify any of the policy, accounting or claim files (“Records”) relating to business reinsured under this Contract during regular business hours after giving five working days’ prior notice.  This right shall be exercisable during the term of this Contract or after the expiration of this Contract.  Notwithstanding the above, the Reinsurer shall not have any right of access to the Records of the Company if it is not current in all undisputed payments due the Company.

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B. Notwithstanding the above, the Company reserves the right to withhold from the Reinsurer any Privileged Documents.  However, the Company shall permit and not object to the Reinsurer’s access to Privileged Documents in connection with the underlying claim reinsured hereunder following final settlement or final adjudication of the case or cases involving such claim, with prejudice against all claimants and all parties to such adjudications; the Company may defer release of such Privileged Documents if there are subrogation, contribution, or other third party actions with respect to that claim or case, and the Company’s defense might be jeopardized by release of such Privileged Documents.  In the event that the Company seeks to defer release of such Privileged Documents, it shall, in consultation with the Reinsurer, take other steps as reasonably necessary to provide the Reinsurer with the information it reasonably requires to indemnify the Company without causing a loss of such privileges or protections.  The Reinsurer shall not have access to Privileged Documents relating to any dispute between the Company and the Reinsurer.

C. For purposes of this Article:

1. “Privileged Documents” means any documents that are Attorney-Client Privilege Documents and/or Work Product Privilege Documents.

2. “Attorney-Client Privilege Documents” means communications of a confidential nature between (a) the Company, or anyone retained by or at the direction of the Company, or its in‑house or outside legal counsel, or anyone in the control of such legal counsel, and (b) any in-house or outside legal counsel, if such communications relate to legal advice being sought by the Company and/or contain legal advice being provided to the Company.

3. “Work Product Privilege Documents” means communications, written materials and tangible things prepared by or for in-house or outside counsel, or prepared by or for the Company, in anticipation of or in connection with litigation, arbitration, or other dispute resolution proceedings.

ARTICLE 23

CONFIDENTIALITY

A. The Reinsurer hereby acknowledges that the documents, information and data provided to it by the Company, whether directly or through an authorized agent, in connection with the placement and execution of this Contract (“Confidential Information”) are proprietary and confidential to the Company.  Confidential Information shall not include documents, information or data that the Reinsurer can show:

1. are publicly known or have become publicly known through no unauthorized act of the Reinsurer;

2. have been rightfully received from a third person without obligation of confidentiality; or

3. were known by the Reinsurer prior to the placement of this Contract without an obligation of confidentiality.

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B. Absent the written consent of the Company, the Reinsurer shall not disclose any Confidential Information to any third parties, including any affiliated companies (except to the extent necessary to enable affiliated companies or third parties engaged by the Reinsurer to perform services related to this Contract on behalf of the Reinsurer), except:

1. when required by retrocessionaires as respects business ceded to this Contract;

2. when required by regulators performing an audit of the Reinsurer’s records and/or financial condition; or

3. when required by external auditors performing an audit of the Reinsurer’s records in the normal course of business.

Further, the Reinsurer agrees not to use any Confidential Information for any purpose not related to the performance of its obligations or enforcement of its rights under this Contract.

C. Notwithstanding the above, in the event that the Reinsurer is required by court order, other legal process or any regulatory authority to release or disclose any or all of the Confidential Information, the Reinsurer agrees to provide the Company with written notice of same at least 10 days prior to such release or disclosure and to use its best efforts to assist the Company in maintaining the confidentiality provided for in this Article.

D. The provisions of this Article shall extend to the officers, directors and employees of the Reinsurer and its affiliates, and shall be binding upon their successors and assigns.

ARTICLE 24

Indemnification and Errors and Omissions

A. The Reinsurer is reinsuring, subject to the terms and conditions of this Contract, the obligations of the Company under any Policy.  The Company shall be the sole judge as to:

1. what shall constitute a claim or loss covered under any Policy;

2. the Company’s liability thereunder; and

3. the amount or amounts that it shall be proper for the Company to pay thereunder.

B. The Reinsurer shall be bound by the judgment of the Company as to the obligation(s) and liability(ies) of the Company under any Policy.

C. Any inadvertent error, omission or delay in complying with the terms and conditions of this Contract shall not be held to relieve either party hereto from any liability that would attach to it hereunder if such error, omission or delay had not been made, provided such error, omission or delay is rectified immediately upon discovery.

D. Nothing in this Article shall be construed to override any of the other terms and conditions of this Contract.

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ARTICLE 25

Insolvency

A. If more than one reinsured company is referenced within the definition of “Company” in the Preamble to this Contract, this Article shall apply severally to each such company.  Further, this Article and the laws of the domiciliary state shall apply in the event of the insolvency of any company covered hereunder.  In the event of a conflict between any provision of this Article and the laws of the domiciliary state of any company covered hereunder, that domiciliary state’s laws shall prevail.

B. In the event of the insolvency of the Company, this reinsurance (or the portion of any risk or obligation assumed by the Reinsurer, if required by applicable law) shall be payable directly to the Company, or to its liquidator, receiver, conservator or statutory successor, either:  (1) on the basis of the liability of the Company, or (2) on the basis of claims filed and allowed in the liquidation proceeding, whichever may be required by applicable statute, without diminution because of the insolvency of the Company or because the liquidator, receiver, conservator or statutory successor of the Company has failed to pay all or a portion of any claim.  It is agreed, however, that the liquidator, receiver, conservator or statutory successor of the Company shall give written notice to the Reinsurer of the pendency of a claim against the Company indicating the Policy or bond reinsured, which claim would involve a possible liability on the part of the Reinsurer within a reasonable time after such claim is filed in the conservation or liquidation proceeding or in the receivership, and that during the pendency of such claim, the Reinsurer may investigate such claim and interpose, at its own expense, in the proceeding where such claim is to be adjudicated any defense or defenses that it may deem available to the Company or its liquidator, receiver, conservator or statutory successor.  The expense thus incurred by the Reinsurer shall be chargeable, subject to the approval of the court, against the Company as part of the expense of conservation or liquidation to the extent of a pro rata share of the benefit that may accrue to the Company solely as a result of the defense undertaken by the Reinsurer.

C. Where two or more reinsurers are involved in the same claim and a majority in interest elect to interpose defense to such claim, the expense shall be apportioned in accordance with the terms of this reinsurance Contract as though such expense had been incurred by the Company.

D. As to all reinsurance made, ceded, renewed or otherwise becoming effective under this Contract, the reinsurance shall be payable as set forth above by the Reinsurer to the Company or to its liquidator, receiver, conservator or statutory successor, (except as provided by Section 4118(a)(1)(A) of the New York Insurance Law, provided the conditions of 1114(c) of such law have been met, if New York law applies) or except (1) where the Contract specifically provides another payee in the event of the insolvency of the Company, or (2) where the Reinsurer, with the consent of the direct insured or insureds, has assumed such Policy obligations of the Company as direct obligations of the Reinsurer to the payees under such Policies and in substitution for the obligations of the Company to such payees.  Then, and in that event only, the Company, with the prior approval of the certificate of assumption on New York risks by the Superintendent of Financial Services of the State of New York, or with the prior approval of such other regulatory authority as may be applicable, is entirely released from its obligation and the Reinsurer shall pay any loss directly to payees under such Policy.

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ARTICLE 26

RUN-OFF REINSURER

A. “Run-off Reinsurer” means any Subscribing Reinsurer that:

1. has been ordered by a state insurance department or other legal authority to cease writing business, or has been placed under regulatory supervision or in rehabilitation; or

2. has ceased reinsurance underwriting operations; or

3. has transferred its claims-paying authority to an unaffiliated entity; or

4. engages in a process of Scheme of Arrangement or similar procedure related to this Contract, including but not limited to an insurance business transfer scheme pursuant to Part VII of the Financial Services and Markets Act 2000 (U.K.), as may be amended from time to time; or

5. in any other way has assigned its interests or delegated its obligations under this Contract to an unaffiliated entity.

Notwithstanding the foregoing, agreement by a Lloyd’s syndicate to follow claim settlements procedures under Lloyd’s Claims Scheme (Combined) shall not constitute a transfer of its claims-paying authority, for purposes of subparagraphs (3) and (5) of this paragraph.

B. Notwithstanding any other provision of this Contract, in the event that a Subscribing Reinsurer becomes a Run-off Reinsurer at any time, the Company may elect, by giving written notice to the Run-off Reinsurer at any time thereafter, that all or any of the following shall apply to the Run-off Reinsurer’s participation hereunder:

1. Should the Run-off Reinsurer fail to pay amounts due hereunder, the interest penalty specified in the Late Payments Article shall be increased by 0.5% for each 30 days that a payment is past due, subject to a maximum increase of 7.0%.

2. The Run-off Reinsurer’s liability for losses for Policies covered by this Contract shall be commuted.  In the event the Company and the Run-off Reinsurer cannot agree on the commutation amount of the Run-off Reinsurer’s liability under such Policies, they shall appoint an actuary and/or appraiser to assess such liability and shall share equally any expense of the actuary and/or appraiser.  If the Company and the Run-off Reinsurer cannot agree on an actuary and/or appraiser, the Company and the Run-off Reinsurer each shall nominate three individuals, of whom the other shall decline two, and the final appointment shall be made by drawing lots.  Payment by the Run-off Reinsurer of the amount of liability ascertained shall constitute a complete and final release of both parties under this Contract.

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3. The Run-off Reinsurer shall have no right of access to the Records of the Company if the Run-off Reinsurer has denied payment of any claim hereunder or there is a pending arbitration between the Company and the Run-off Reinsurer regarding any claim hereunder.  A reservation of rights shall be considered a denial of a claim.  Notwithstanding the above, the Run-off Reinsurer shall continue to have access to Records of the Company for any claim for which it has raised a query within 30 days of its receipt of a billing, but any inspection of Records must be completed within 90 days of receipt of billing or access will be deemed waived.

4. The provisions of the Arbitration Article shall not apply.  

C. The Company’s waiver of any rights provided in this Article is not a waiver of that right or other rights at a later date.

ARTICLE 27

Arbitration

A. Any dispute arising out of the interpretation, performance or breach of this Contract, including the formation or validity thereof, shall be submitted for decision to a panel of three arbitrators.  Notice requesting arbitration shall be in writing and sent certified or registered mail, return receipt requested.

B. One arbitrator shall be chosen by each party and the two arbitrators shall then choose an impartial third arbitrator who shall preside at the hearing.  If either party fails to appoint its arbitrator within 30 days after being requested to do so by the other party, the latter, after 10 days’ prior notice by certified or registered mail of its intention to do so, may appoint the second arbitrator.

C. If the two arbitrators do not agree on a third arbitrator within 60 days of their appointment, the third arbitrator shall be chosen in accordance with the procedures for selecting the third arbitrator in force on the date the arbitration is demanded, established by the AIDA Reinsurance and Insurance Arbitration Society – U.S. (ARIAS).  The arbitrators shall be persons knowledgeable about insurance and reinsurance who have no personal or financial interest in the result of the arbitration.  If a member of the panel dies, becomes disabled or is otherwise unwilling or unable to serve, a substitute shall be selected in the same manner as the departing member was chosen and the arbitration shall continue.

D. Within 30 days after all arbitrators have been appointed, the panel shall meet and determine timely periods for briefs, discovery procedures and schedules of hearings.

E. The panel shall be relieved of all judicial formality and shall not be bound by the strict rules of procedure and evidence.  Notwithstanding anything to the contrary in this Contract, the arbitrators may at their discretion, consider underwriting and placement information provided by the Company to the Reinsurer, as well as any correspondence exchanged by the parties that is related to this Contract.  The arbitration shall take place in Tampa, Florida, or at such other place as the parties shall agree.  The decision of any two arbitrators shall be in writing and shall be final and binding.  The panel is empowered to grant interim relief as it may deem appropriate.

Effective: July 1, 2021		DOC:  July 8, 2021
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F. The panel shall interpret this Contract as an honorable engagement rather than as merely a legal obligation and shall make its decision considering the custom and practice of the applicable insurance and reinsurance business as promptly as possible after the hearings.  Judgment upon an award may be entered in any court having jurisdiction thereof.

G. Each party shall bear the expense of its own arbitrator and shall jointly and equally bear with the other party the cost of the third arbitrator.  The remaining costs of the arbitration shall be allocated by the panel.  The panel may, at its discretion, award such further costs and expenses as it considers appropriate, including but not limited to attorneys’ fees, to the extent permitted by law.

ARTICLE 28

Expedited Arbitration

A. Notwithstanding the provisions of the Arbitration Article, in the event an amount in dispute hereunder $1,000,000 or less, the parties will submit to an expedited arbitration process with the use of a single arbitrator.  The arbitrator will be chosen in accordance with the procedures for selecting an arbitrator in force on the date the arbitration is demanded, established by the AIDA Reinsurance and Insurance Arbitration Society - U.S. (ARIAS).

B. Each party’s case will be submitted to the arbitrator within 100 calendar days of the date of determination of the arbitrator.  Discovery will be limited to exchanging only those documents directly relating to the issue in dispute, subject to a limit of two discovery depositions from each party, unless otherwise authorized by the arbitrator upon a showing of good cause.

C. Within 120 calendar days of the date of determination of the arbitrator, the hearing will be completed and a written award will be issued by the arbitrator.  As the parties agree that time is of the essence, the sole arbitrator does not have the authority to lengthen the schedule, absent agreement of both parties.  The arbitrator will have all the powers conferred on the arbitration panel as provided in the Arbitration Article, and said Article will apply to all matters not specifically addressed above.

ARTICLE 29

SERVICE OF SUIT

A. This Article applies only to those Subscribing Reinsurers not domiciled in the United States of America, and/or not authorized in any state, territory and/or district of the United States of America where authorization is required by insurance regulatory authorities.

B. This Article shall not be read to conflict with or override the obligations of the parties to arbitrate their disputes as provided for in the Arbitration Article.  This Article is intended as an aid to compelling arbitration or enforcing such arbitration or arbitral award, not as an alternative to the Arbitration Article for resolving disputes arising out of this Contract.

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C. In the event of the failure of the Reinsurer to perform its obligations hereunder, the Reinsurer, at the request of the Company, shall submit to the jurisdiction of a court of competent jurisdiction within the United States.  Nothing in this Article constitutes or should be understood to constitute a waiver of the Reinsurer’s rights to commence an action in any court of competent jurisdiction in the United States, to remove an action to a United States District Court, or to seek a transfer of a case to another court as permitted by the laws of the United States or of any state in the United States.  The Reinsurer, once the appropriate court is selected, whether such court is the one originally chosen by the Company and accepted by the Reinsurer or is determined by removal, transfer, or otherwise, as provided for above, shall comply with all requirements necessary to give said court jurisdiction and, in any suit instituted against the Reinsurer upon this Contract, shall abide by the final decision of such court or of any appellate court in the event of an appeal.

D. Service of process in such suit may be made upon:

1. as respects Underwriting Members of Lloyd’s, London: Lloyd’s America, Inc., Attention: Legal Department, 280 Park Avenue, East Tower, 25^th Floor, New York, New York 10017;

2. as respects any other Subscribing Reinsurer: Messrs. Mendes and Mount, 750 Seventh Avenue, New York, New York 10019-6829, or another party specifically designated in the Subscribing Reinsurer’s Interests and Liabilities Agreement attached hereto.  

The above-named are authorized and directed to accept service of process on behalf of the Reinsurer in any such suit.

E. Further, pursuant to any statute of any state, territory or district of the United States that makes provision therefor, the Reinsurer hereby designates the Superintendent, Commissioner or Director of Insurance, or other officer specified for that purpose in the statute, or his successor or successors in office, as its true and lawful attorney upon whom may be served any lawful process in any action, suit or proceeding instituted by or on behalf of the Company or any beneficiary hereunder arising out of this Contract, and hereby designates the above-named as the person to whom the said officer is authorized to mail such process or a true copy thereof.

ARTICLE 30

GOVERNING LAW

This Contract shall be governed as to performance, administration and interpretation by the laws of the State of Florida, exclusive of conflict of law rules.  However, with respect to credit for reinsurance, the rules of all applicable states shall apply.

Effective: July 1, 2021		DOC:  July 8, 2021
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ARTICLE 31

ENTIRE AGREEMENT

This Contract sets forth all of the duties and obligations between the Company and the Reinsurer and supersedes any and all prior or contemporaneous written agreements with respect to matters referred to in this Contract.  This Contract may not be modified or changed except by an amendment to this Contract in writing signed by both parties.  However, this Article shall not be construed as limiting the admissibility of evidence regarding the formation, interpretation, purpose or intent of this Contract.

ARTICLE 32

NON-WAIVER

The failure of the Company or the Reinsurer to insist on compliance with this Contract or to exercise any right or remedy hereunder shall not constitute a waiver of any rights contained in this Contract nor prevent either party from thereafter demanding full and complete compliance nor prevent either party from exercising such remedy in the future.

ARTICLE 33

AGENCY

For purposes of sending and receiving notices and payments required by this Contract, the reinsured company that is set forth first in the Preamble to this Contract shall be deemed the agent of all other reinsured companies referenced in the Preamble.  In no event, however, shall any reinsured company be deemed the agent of another with respect to the terms of the Insolvency Article.

ARTICLE 34

Intermediary

Guy Carpenter & Company, LLC, is hereby recognized as the Intermediary negotiating this Contract for all business hereunder.  All communications (including notices, statements, premiums, return premiums, commissions, taxes, losses, Loss Adjustment Expenses, salvages, and loss settlements) relating thereto shall be transmitted to the Company or the Reinsurer through the Intermediary.  Payments by the Company to the Intermediary shall be deemed payment to the Reinsurer.  Payments by the Reinsurer to the Intermediary shall be deemed payment to the Company only to the extent that such payments are actually received by the Company.

Effective: July 1, 2021		DOC:  July 8, 2021
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ARTICLE 35

MODE OF EXECUTION

A. This Contract may be executed by:

1. an original written ink signature of paper documents;

2. an exchange of facsimile copies showing the original written ink signature of paper documents;

3. electronic signature technology employing computer software and a digital signature or digitizer pen pad to capture a person’s handwritten signature in such a manner that the signature is unique to the person signing, is under the sole control of the person signing, is capable of verification to authenticate the signature and is linked to the document signed in such a manner that if the data is changed, such signature is invalidated.

B. The use of any one or a combination of these methods of execution shall constitute a legally binding and valid signing of this Contract.  This Contract may be executed in one or more counterparts, each of which, when duly executed, shall be deemed an original.

Effective: July 1, 2021		DOC:  July 8, 2021
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IN WITNESS WHEREOF, the Company has caused this Contract to be executed by its duly authorized representative(s), who also confirms the Company’s review of and agreement to be bound by the terms and conditions of the Interests and Liabilities Agreements attached to and forming part of this Contract;

On this _____ day of __________, in the year of 2021.

Typtap insurance company

Homeowners Choice Property & Casualty
Insurance Company, INC.

Signature:	Title:
Print Name:

FLOOD PROPERTY CATASTROPHE EXCESS OF LOSS
REINSURANCE CONTRACT

Effective: July 1, 2021		DOC:  July 8, 2021
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POOLS, ASSOCIATIONS & SYNDICATES EXCLUSIONS CLAUSE

Section A:

This Contract excludes:

a. All business derived directly or indirectly from any Pool, Association or Syndicate which maintains its own reinsurance facilities.

b. Any Pool or Scheme (whether voluntary or mandatory) formed after March 1, 1968 for the purpose of insuring property, whether on a country-wide basis or in respect of designated areas.  This exclusion shall not apply to so-called Automobile Insurance Plans or other Pools formed to provide coverage for Automobile Physical Damage.

Section B:

1. This Contract excludes business written by the Company for the same perils, which is known at the time to be insured by, or in excess of underlying amounts placed in, any Pool, Association or Syndicate, whether by way of insurance or reinsurance, formed for the purpose of writing any of the following:

Oil, Gas or Petro-Chemical Plants

Oil or Gas Drilling Rigs and/or

Aviation Risks

2. The exclusion under paragraph 1 of this Section B does not apply:

a. Where the Total Insured Value over all interests of the risk in question is less than $250,000,000.

b. To interests traditionally underwritten as Inland Marine and/or Stock and/or Contents written on a Blanket basis.

c. To Contingent Business Interruption, except when the Company is aware that the key location is known at the time to be insured in any Pool, Association or Syndicate named above, other than as provided for under subparagraph (a).

Section C:

1. Nevertheless the Reinsurer specifically agrees that liability accruing to the Company from its participation in Residual Market Mechanisms, including but not limited to the following, for all perils otherwise protected hereunder shall not be excluded herefrom:

a. So-called “Beach and Windstorm Plans” and so-called “Coastal Pools”;

b. All “FAIR Plan” and “Rural Risk Plan” business;

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c. Louisiana Citizens Property Insurance Corporation;

d. California Earthquake Authority (“CEA”) or any similar entity.

Notwithstanding the above, assessments related to the Florida Hurricane Catastrophe Fund and Citizens Property Insurance Corporation (Florida) shall be excluded hereunder.

2. However, this reinsurance does not include any increase in such liability resulting from:

a. The inability of any other participant in such Residual Market Mechanisms to meet its liability;

b. Any claim against a Residual Market Mechanism or any participant therein, including the Company, whether by way of subrogation or otherwise, brought by or on behalf of any insolvency fund (as defined in the Exclusions Article);

c. Any assessment or surcharge levied on the policyholder and therefore not a liability of the Company;

d. The Company’s initial capital contribution to the CEA;

e. Any assessments, other than interim and regular assessments, from a Residual Market Mechanism included in subparagraph 1(c) above;

f. Any expenditure to purchase or retire bonds.

3. The Company may include in Ultimate Net Loss for any Loss Occurrence covered hereunder only the liability attributable to that Loss Occurrence.  If the relevant entity does not specify what portion of an assessment is attributable to each Loss Occurrence, the Company may include in Ultimate Net Loss in respect of each Loss Occurrence a percentage of the Company’s assessments from the relevant entity related to the calendar year in which the Loss Occurrence commenced, regardless of when assessed, such percentage to be determined by dividing the relevant entity’s losses arising from the Loss Occurrence by its total losses for the calendar year.

4. The Company will deduct from Ultimate Net Loss amounts received as recoupment of any assessment that has been included in the Ultimate Net Loss, provided the recoupment is directly allocable to the assessment (“itemized recoupment”).  The Company shall use commercially reasonable efforts to recoup such assessment.  Any amount received as an itemized recoupment of any assessment (whether under this Contract or any predecessor contract), and therefore deductible from Ultimate Net Loss, shall not be included in the subject premium of this Contract.

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However, if a state levies assessments but does not allow itemized recoupment from policyholders, instead allowing the Company to file an overall increased rate, any such premium increased thereby shall not be deemed to be a recoupment that is deductible from Ultimate Net Loss.  Any recoupment received as part of a general premium rate increase, not specifically itemized, shall be included as part of the subject premium of this Contract or a successor contract, as applicable.

NOTES: Wherever used herein the terms:

“Company” shall be understood to mean “Company”, “Reinsured”, “Reassured” or whatever other term is used in the attached reinsurance document to designate the reinsured company or companies.

“Contract” shall be understood to mean “Agreement,” “Contract,” “Policy” or whatever other term is used to designate the attached reinsurance document.

“Reinsurer” shall be understood to mean “Reinsurer,” “Reinsurers,” “Underwriters” or whatever other term is used in the attached reinsurance document to designate the reinsurer or reinsurers.

Effective: July 1, 2021		DOC:  July 8, 2021
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Nuclear Incident Exclusion Clause - Physical Damage - Reinsurance - U.S.A.

1. This Reinsurance does not cover any loss or liability accruing to the Reassured, directly or indirectly, and whether as Insurer or Reinsurer, from any Pool of Insurers or Reinsurers formed for the purpose of covering Atomic or Nuclear Energy risks.

2. Without in any way restricting the operation of paragraph (1) of this clause, this Reinsurance does not cover any loss or liability accruing to the Reassured, directly or indirectly and whether as Insurer or Reinsurer, from any insurance against Physical Damage (including business interruption or consequential loss arising out of such Physical Damage) to:

I. Nuclear reactor power plants including all auxiliary property on the site, or

II. Any other nuclear reactor installation, including laboratories handling radioactive materials in connection with reactor installations, and “critical facilities” as such, or

III. Installations for fabricating complete fuel elements or for processing substantial quantities of “special nuclear material”, and for reprocessing, salvaging, chemically separating, storing or disposing of “spent” nuclear fuel or waste materials, or

IV. Installations other than those listed in paragraph (2) III above using substantial quantities of radioactive isotopes or other products of nuclear fission.

3. Without in any way restricting the operations of paragraphs (1) and (2) hereof, this Reinsurance does not cover any loss or liability by radioactive contamination accruing to the Reassured, directly or indirectly, and whether as Insurer or Reinsurer, from any insurance on property which is on the same site as a nuclear reactor power plant or other nuclear installation and which normally would be insured therewith except that this paragraph (3) shall not operate

(a) where Reassured does not have knowledge of such nuclear reactor power plant or nuclear installation, or

(b) where said insurance contains a provision excluding coverage for damage to property caused by or resulting from radioactive contamination, however caused. However on and after 1st January 1960 this sub-paragraph (b) shall only apply provided the said radioactive contamination exclusion provision has been approved by the Governmental Authority having jurisdiction thereof.

4. Without in any way restricting the operations of paragraphs (1), (2) and (3) hereof, this Reinsurance does not cover any loss or liability by radioactive contamination accruing to the Reassured, directly or indirectly, and whether as Insurer or Reinsurer, when such radioactive contamination is a named hazard specifically insured against.

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5. It is understood and agreed that this clause shall not extend to risks using radioactive isotopes in any form where the nuclear exposure is not considered by the Reassured to be the primary hazard.

6. The term “special nuclear material” shall have the meaning given it in the Atomic Energy Act of 1954 or by any law amendatory thereof.

7. Reassured to be sole judge of what constitutes:

(a) substantial quantities, and

(b) the extent of installation, plant or site.

Note:  Without in any way restricting the operation of paragraph (1) hereof, it is understood and agreed that

(a) all policies issued by the Reassured on or before 31st December 1957 shall be free from the application of the other provisions of this Clause until expiry date or 31st December 1960 whichever first occurs whereupon all the provisions of this Clause shall apply.

(b) with respect to any risk located in Canada policies issued by the Reassured on or before 31st December 1958 shall be free from the application of the other provisions of this Clause until expiry date or 31st December 1960 whichever first occurs whereupon all the provisions of this Clause shall apply.

12/12/57

NMA 1119

NOTES: Wherever used herein the terms:

“Reassured” shall be understood to mean “Company”, “Reinsured”, “Reassured” or whatever other term is used in the attached reinsurance document to designate the reinsured company or companies.

“Agreement” shall be understood to mean “Agreement”, “Contract”, “Policy” or whatever other term is used to designate the attached reinsurance document.

“Reinsurers” shall be understood to mean “Reinsurers”, “Underwriters” or whatever other term is used in the attached reinsurance document to designate the reinsurer or reinsurers.

Effective: July 1, 2021		DOC:  July 8, 2021
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Communicable Disease Exclusion (Property Reinsurance)

A. This Contract excludes any loss, damage, liability, claim, cost or expense of whatsoever nature, directly or indirectly caused by, contributed to by, resulting from, arising out of, or in connection with a Communicable Disease or the fear or threat (whether actual or perceived) of a Communicable Disease regardless of any other cause or event contributing concurrently or in any other sequence thereto.

B. As used herein, a Communicable Disease means any disease which can be transmitted by means of any substance or agent from any organism to another organism where:

1. the substance or agent includes, but is not limited to, a virus, bacterium, parasite or other organism or any variation thereof, whether deemed living or not, and

2. the method of transmission, whether direct or indirect, includes but is not limited to, airborne transmission, bodily fluid transmission, transmission from or to any surface or object, solid, liquid or gas or between organisms, and

3. the disease, substance or agent can cause or threaten damage to human health or human welfare or can cause or threaten damage to, deterioration of, loss of value of, marketability of or loss of use of property.

C. Notwithstanding the foregoing, losses directly or indirectly caused by, contributed to by, resulting from, arising out of, or in connection with any otherwise covered peril under subject Policies and not otherwise excluded under this Contract shall be covered.

Effective: July 1, 2021		DOC:  July 8, 2021
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CYBER LOSS LIMITED EXCLUSION CLAUSE (PROPERTY TREATY REINSURANCE)

1. Notwithstanding any provision to the contrary within this reinsurance agreement or any endorsement thereto, this reinsurance agreement excludes all loss, damage, liability, cost or expense of whatsoever nature directly or indirectly caused by, contributed to by, resulting from, arising out of or in connection with:

1.2. any loss of, alteration of, or damage to or a reduction in the functionality, availability or operation of a Computer System, unless subject to the provisions of paragraph 2;

1.3. any loss of use, reduction in functionality, repair, replacement, restoration or reproduction of any Data, including any amount pertaining to the value of such Data.

2. Subject to the other terms, conditions and exclusions contained in this reinsurance agreement, this reinsurance agreement will cover physical damage to property insured under the original policies and any Time Element Loss directly resulting therefrom where such physical damage is directly occasioned by any of the following perils:

fire, lightning, explosion, aircraft or vehicle impact, falling objects, windstorm, hail, tornado, cyclone, hurricane, earthquake, volcano, tsunami, flood, freeze or weight of snow

Definitions

3. Computer System means any computer, hardware, software, communications system, electronic device (including, but not limited to, smart phone, laptop, tablet, wearable device), server, cloud or microcontroller including any similar system or any configuration of the aforementioned and including any associated input, output, data storage device, networking equipment or back up facility.

4. Data means information, facts, concepts, code or any other information of any kind that is recorded or transmitted in a form to be used, accessed, processed, transmitted or stored by a Computer System.

5. Time Element Loss means business interruption, contingent business interruption or any other consequential losses.

LMA5410

06 March 2020

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TRUST AGREEMENT REQUIREMENTS CLAUSE

A. Except as provided in paragraph B of this Clause, if the Reinsurer satisfies its funding obligations under the Unauthorized Reinsurance Article by providing a Trust Agreement, the Reinsurer shall ensure that the Trust Agreement:

1. Requires the Reinsurer to establish a trust account for the benefit of the Company, and specifies what the Trust Agreement is to cover;

2. Stipulates that assets deposited in the trust account shall be valued according to their current fair market value and shall consist only of cash (United States legal tender), and certificates of deposit (issued by a United States bank and payable in United States legal tender), or any combination of the two, provided that the investments are issued by an institution that is not the parent, subsidiary or affiliate of either the Reinsurer or the Company;

3. Requires the Reinsurer, prior to depositing assets with the trustee, to execute assignments or endorsements in blank, or to transfer legal title to the trustee of all shares, obligations or any other assets requiring assignments, in order that the Company, or the trustee upon the direction of the Company, may whenever necessary negotiate these assets without consent or signature from the Reinsurer or any other entity;

4. Requires that all settlements of account between the Company and the Reinsurer be made in cash or its equivalent; and

5. Provides that assets in the trust account shall be withdrawn only as permitted in this Contract, without diminution because of the insolvency of the Company or the Reinsurer.

B. If a ceding insurer is domiciled in California and the Reinsurer satisfies its funding obligations under the Unauthorized Reinsurance Article by providing a Trust Agreement, the Reinsurer shall ensure that the Trust Agreement:

1. Provides that assets deposited in the trust account shall be valued according to their current fair market value and shall consist only of cash in United States dollars, certificates of deposit issued by a United States financial institution as defined in California Insurance Code Section 922.7(a) and payable in United States dollars, and investments permitted by the California Insurance Code, or any combination of the above.

2. Provides that investments in or issued by an entity controlling, controlled by or under common control with either the grantor or the beneficiary of the trust shall not exceed 5% of total investments.

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3. Requires the Reinsurer, prior to depositing assets with the trustee, to execute assignments or endorsements in blank, or to transfer legal title to the trustee of all shares, obligations or any other assets requiring assignments, in order that the ceding insurer, or the trustee upon the direction of the ceding insurer, may, whenever necessary, negotiate these assets without consent or signature from the Reinsurer or any other entity.

4. Provides that assets in the trust account shall be withdrawn only as permitted in this Contract, without diminution because of the insolvency of the ceding insurer or the Reinsurer.

C. If there are multiple ceding insurers that collectively comprise the Company, “regulatory authorities” as referenced in subparagraph A(2) above, shall mean the individual ceding insurer’s domestic regulator.  

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EX-10.13

Exhibit 10.13

CERTAIN CONFIDENTIAL INFORMATION, IDENTIFIED BY BRACKETED ASTERISKS "[*****]", HAS BEEN OMITTED FROM THIS EXHIBIT BECAUSE IT IS BOTH (I) NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED.













Property Catastrophe Excess of Loss Reinsurance Contract

issued to

Typtap insurance company

Ocala, Florida

including any and/or all companies that are or may hereafter become affiliated therewith

Effective: June 1, 2021		DOC:   July 8, 2021
UBWP0001	1 of 41

PROPERTY CATASTROPHE EXCESS OF LOSS REINSURANCE CONTRACT TABLE OF CONTENTS
Article		Page
	Preamble		4
1	Business Covered		4
2	Retention and Limit		4
3	Florida Hurricane Catastrophe Fund		5
4	Term		6
5	Special Termination		6
6	Territory		8
7	Exclusions		8
8	Special Acceptance		10
9	Premium		10
10	Reinstatement		11
11	Definitions		12
12	Extra Contractual Obligations/Excess of Policy Limits		15
13	Net Retained Liability		16
14	Other Reinsurance		17
15	Original Conditions		17
16	No Third Party Rights		17
17	Notice of Loss and Loss Settlements		17
18	Late Payments		18
19	Offset		19
20	Currency		19
21	Unauthorized Reinsurance		19
22	Taxes		21
23	Access to Records		22
24	Confidentiality		23
25	Indemnification and Errors and Omissions		24
26	Insolvency		24
27	Run-Off Reinsurer		25
28	Arbitration		27
29	Expedited Arbitration		28
30	Service of Suit		28
31	Governing Law		29
32	Entire Agreement		29
33	Non-Waiver		30
34	Intermediary		30
35	Mode of Execution		30
	Company Signing Block		31

Effective: June 1, 2021		DOC:   July 8, 2021
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PROPERTY CATASTROPHE EXCESS OF LOSS REINSURANCE CONTRACT TABLE OF CONTENTS
Attachments		Page
	Pools, Associations & Syndicates Exclusions Clause		32
	Nuclear Incident Exclusion Clause - Physical Damage - Reinsurance - U.S.A.		35
	Terrorism Exclusion		37
	Communicable Disease Exclusion (Property Reinsurance)		38
	Cyber Loss Limited Exclusion Clause (Property Treaty Reinsurance)		39
	Trust Agreement Requirements Clause		40

Effective: June 1, 2021		DOC:   July 8, 2021
UBWP0001	3 of 41

Property Catastrophe Excess of Loss Reinsurance Contract

(the “Contract”)

issued to

Typtap insurance company

Ocala, Florida

including any and/or all companies that are or may hereafter become affiliated therewith

(collectively, the “Company”)

by

THE SUBSCRIBING REINSURER(S) IDENTIFIED IN THE
INTERESTS AND LIABILITIES AGREEMENT(S) ATTACHED TO
AND FORMING PART OF THIS CONTRACT

(the “Reinsurer”)

ARTICLE 1

BUSINESS COVERED

This Contract is to indemnify the Company in respect of its net excess liability as a result of any loss or losses which may occur during the term of this Contract under any Policies in force at the effective date hereof or issued or renewed on or after that date, covering direct and assumed business classified by the Company as the property perils of Homeowners, Condominium Owners, Renters and Dwelling, subject to the terms and conditions herein contained.

ARTICLE 2

Retention and Limit

A. For each Layer of reinsurance provided hereunder, the Reinsurer shall be liable in respect of each Loss Occurrence for the Ultimate Net Loss over and above the initial Ultimate Net Loss retention as set forth in the schedule below for the Loss Occurrence, subject to a limit of liability to the Reinsurer for each such Loss Occurrence, and subject further to a limit of liability for all Loss Occurrences commencing during the term of this Contract, as set forth below:

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RETENTION AND LIMIT SCHEDULE
Layer	Company’s Retention	Reinsurer’s Limit of Liability
	Ultimate Net Loss in respect of each Loss Occurrence	Ultimate Net Loss in respect of each Loss Occurrence	Ultimate Net Loss in respect of all Loss Occurrences during the term of this Contract
Second Layer	[$*****]	[$*****]	[$*****]
Third Layer	[$*****]	[$*****]	[$*****]
Fourth Layer	[$*****]	[$*****]	[$*****]

B. No Loss Occurrence shall be covered hereunder unless it involves two or more risks subject to this Contract.  The Company shall be the sole judge of what constitutes one risk for purposes of this Contract.

ARTICLE 3

FLORIDA HURRICANE CATASTROPHE FUND

A. As respects Loss Occurrences subject to this Contract, any loss reimbursement recoverable by the Company under the Florida Hurricane Catastrophe Fund (FHCF), shall be deducted in determining Ultimate Net Loss under this Contract, subject to the following:

1. The full reimbursement amount due from the FHCF, based on statutory limits of coverage as of June 1, shall be deemed recovered by the Company, whether or not actually received from the FHCF and whether or not reduced because of the FHCF’s inability to pay.

2. For purposes of allocating recoveries from the FHCF with respect to each Loss Occurrence, only amounts recoverable by applying the pay-out and retention multiples for the FHCF prior to any reduction in retention due to multiple Loss Occurrences in the same annual period shall be included in calculating the deduction from Ultimate Net Loss.

3. If the Company’s aggregate limit of FHCF reimbursement coverage is exhausted from Loss Occurrences commencing during the term of this Contract, and the FHCF does not designate the portion of said limit allocable to each Loss Occurrence, the total FHCF reimbursement received shall be allocated to the each individual Loss Occurrence in the proportion that the Company’s losses in that Loss Occurrence bear to the Company’s total losses arising out of all Loss Occurrences to which the reimbursement applies.

4. For purposes of loss recoveries under this Contract prior to the final determination of the Company’s retention and limit under the FHCF, FHCF coverage shall be

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calculated using the Company’s “Projected Payout Multiple” under the FHCF.  Upon determination of the Company’s retention and limit under the FHCF, losses will be adjusted, recognizing any adjustment to the “Projected Payout Multiple” caused by a change in the Aggregate Mandatory FHCF Premium but disregarding any change due to a decrease in the statutory limit.  

B. Any FHCF reimbursement premiums paid by the Company for FHCF layers that inure to the benefit of this Contract shall be deemed to be premiums paid for inuring reinsurance.

C. The Company has opted for a 90% coverage selection from the FHCF.

ARTICLE 4

Term

This Contract shall take effect at 12:01 a.m., Standard Time, June 1, 2021, and unless terminated prior to that time and date as provided in the Special Termination Article, shall remain in effect until 12:01 a.m., Standard Time, June 1, 2022, applying to Loss Occurrences commencing during the term of this Contract.  For purposes of this Contract, “Standard Time” shall mean the time as described in the original Policy.

ARTICLE 5

SPECIAL TERMINATION

A. The Company may terminate a Subscribing Reinsurer’s percentage share in this Contract at any time by giving written notice to the Subscribing Reinsurer in the event of any of the following circumstances:

1. The Subscribing Reinsurer ceases underwriting operations.

2. A state insurance department or other legal authority orders the Subscribing Reinsurer to cease writing business, or the Subscribing Reinsurer is placed under regulatory supervision.

3. The Subscribing Reinsurer has become insolvent or has been placed into liquidation or receivership (whether voluntary or involuntary), or there have been instituted against it proceedings for the appointment of a receiver, liquidator, rehabilitator, conservator, trustee in bankruptcy, or other agent known by whatever name, to take possession of its assets or control of its operations.

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4. The Subscribing Reinsurer’s policyholders’ surplus (or the equivalent under the Subscribing Reinsurer’s accounting system) as reported in such financial statements of the Subscribing Reinsurer as designated by the Company, has been reduced by 20% of the amount thereof at any date during the prior 12-month period (including the period prior to the inception of this Contract).

5. The Subscribing Reinsurer has become, or has announced its intention to become, merged with or acquired or controlled by any company, corporation, or individual(s) not controlling the Subscribing Reinsurer’s operations at the inception of this Contract.

6. The Subscribing Reinsurer has retroceded its entire liability under this Contract without the Company’s prior written consent, except for retrocessions to members of the Subscribing Reinsurer’s holding company group.

7. The Subscribing Reinsurer has been assigned an A.M. Best’s rating of less than “A-” and/or an S&P rating of less than “BBB+.”  However, as respects Underwriting Members of Lloyd’s, London, a Lloyd’s Market Rating of less than “A-” by A.M. Best and/or less than “BBB+” by S&P shall apply.

8. The Subscribing Reinsurer has hired an unaffiliated runoff claims manager that is compensated on a contingent basis or is otherwise provided with financial incentives based on the quantum of claims paid.

9. The Subscribing Reinsurer has in any other way assigned its interests or delegated its obligations under this Contract to an unaffiliated entity.

10. The Subscribing Reinsurer has failed to post or maintain required collateral to secure its obligations as required under this Contract, and has not cured such deficiency within 30 days following written notice thereof from the Company.

Notwithstanding the foregoing, agreement by a Lloyd’s syndicate to follow claim settlements procedures under Lloyd’s Claims Scheme (Combined) shall not constitute a transfer of its claims-paying authority, for purposes of subparagraphs (8) and (9) of this paragraph.

B. Termination shall be effected on a cut-off basis and the Subscribing Reinsurer shall have no liability for Loss Occurrences commencing after the date of termination.  The reinsurance premium due the Subscribing Reinsurer hereunder (including any minimum reinsurance premium) shall be prorated based on the period of the Subscribing Reinsurer’s participation hereon, and the Subscribing Reinsurer shall immediately return any excess reinsurance premium received.  Reinstatement premium, if any, shall be calculated based on the Subscribing Reinsurer’s reinsurance premium earned during the period of the Subscribing Reinsurer’s participation hereon.

C. Additionally, in the event of any of the circumstances listed in paragraph A of this Article, the Company shall have the option to commute the Subscribing Reinsurer’s liability for

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losses on Policies covered by this Contract.  In the event the Company and the Subscribing Reinsurer cannot agree on the commutation amount, they shall appoint an actuary and/or appraiser to assess such amount and shall share equally any expense of the actuary and/or appraiser.  If the Company and the Subscribing Reinsurer cannot agree on an actuary and/or appraiser, the Company and the Subscribing Reinsurer each shall nominate three individuals, of whom the other shall decline two, and the final appointment shall be made by drawing lots.  Payment by the Subscribing Reinsurer of the amount of liability ascertained shall constitute a complete and final release of both parties in respect of liability arising from the Subscribing Reinsurer’s participation under this Contract.

D. The Company’s option to require commutation under paragraph C above shall survive the termination or expiration of this Contract.

ARTICLE 6

Territory

This Contract shall apply to Policies issued in the State of Florida.

ARTICLE 7

Exclusions

A. This Contract shall not apply to and specifically excludes:

1. Policies covered by the Company’s Flood Tower.

2. Flood when written as such.

3. Earthquake for standalone Policies where earthquake is the only named peril.

4. Hail damage to an insured’s growing or standing crops.

5. Reinsurance assumed by the Company under obligatory reinsurance agreements, except intercompany reinsurance between the Company and its affiliates and reinsurance where the Policies involved are to be re-underwritten in accordance with the underwriting standards of the Company and reissued as Policies of the Company in due course.

6. Pools, Associations & Syndicates, per the attached exclusion.

7. Liability of the Company arising by contract, operation of law, or otherwise, from its participation or membership, whether voluntary or involuntary, in any Insolvency Fund.  “Insolvency Fund” includes any guaranty fund, insolvency fund, plan, pool, association, fund or other arrangement, howsoever denominated, established or governed, that provides for any assessment of or payment or assumption by the Company of part or all of any claim, debt, charge, fee, or other obligation of an

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insurer, or its successors or assigns, that has been declared by any competent authority to be insolvent, or that is otherwise deemed unable to meet any claim, debt, charge, fee or other obligation in whole or in part.

8. Loss or damage occasioned by war, invasion, hostilities, acts of foreign enemies, civil war, rebellion, insurrection, military or usurped power, martial law, or confiscation by order of any government or public authority, but not excluding loss or damage that would be covered under a standard form of Policy containing a standard war exclusion clause.

9. Losses excluded by the attached Nuclear Incident Exclusion Clause – Physical Damage – Reinsurance – U.S.A.

10. Terrorism as defined in the attached Terrorism Exclusion.

11. Mold unless directly resulting from an otherwise covered peril.

12. Loss and/or damage and/or costs and/or expenses arising from seepage and/or pollution and/or contamination, other than contamination from smoke.  Nevertheless, this exclusion does not preclude payment of the cost of removing debris of property damaged by a loss otherwise covered hereunder, subject always to a limit of 25.0% of the Company’s property loss under the applicable original Policy.

13. Financial guarantee and insolvency.

14. Loss or damage to overhead transmission and distribution lines, including supporting structures, of electrical companies, telephone companies, and cable companies.  This exclusion shall not apply, however, to transmission and distribution lines and their supporting structures located on the property of any original insured or within 1,000 feet thereof.

15. Losses excluded by the attached Communicable Disease Exclusion (Property Reinsurance).

16. Loss Excluded by the attached Cyber Loss Limited Exclusion Clause (Property Treaty Reinsurance).

17. Policies written by Homeowners Choice Property & Casualty Insurance Company, Inc.

B. With the exception of subparagraphs A(8), A(9), A(10) and A(13) above, should any judicial, regulatory or legislative entity having legal jurisdiction invalidate any exclusion on the Company's Policy, any amount of loss for which the Company is liable because of such invalidation will not be excluded hereunder.

C. With the exception of subparagraphs A(8), A(9), A(10) and A(13) above, if the Company inadvertently issues a Policy falling within the scope of one or more of the exclusions, such

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Policy shall be covered hereunder, provided that the Company issues, or causes to be issued, the required notice of cancellation within 30 days after a member of the executive or managerial staff at the Company’s home office having underwriting authority in the class of business involved becomes aware that the Policy applies to excluded classes, unless the Company is prevented from canceling said Policy within such period by applicable statute or regulation, in which case such Policy shall be covered hereunder until the earliest date on which the Company may cancel.

ARTICLE 8

SPECIAL ACCEPTANCE

Business that is not within the scope of this Contract may be submitted to the Reinsurer for special acceptance hereunder, and such business, if accepted by the Reinsurer shall be covered hereunder, subject to the terms and conditions of this Contract, except as modified by the special acceptance.  The Reinsurer shall be deemed to have accepted a risk, if it has not responded within five business days after receiving the underwriting information on such risk.  Any renewal of a special acceptance agreed to for a predecessor contract to this Contract, shall automatically be covered hereunder.

ARTICLE 9

Premium

A. As respects each Layer, the Company shall pay the Reinsurer a Deposit Premium in accordance with the schedule set forth below.  The reinsurance premium to be paid to the Reinsurer for the reinsurance provided under each Layer shall be calculated at the Final Adjusted Premium Rates set out below multiplied by the Company’s final Total Insured Value, subject to the applicable Minimum Premium stated below:

PREMIUM SCHEDULE
Layer	Final Adjusted Premium Rate	Deposit Premium	Minimum Premium
Second Layer	[*****%]	[$*****]	[$*****]
Third Layer	[*****%]	[$*****]	[$*****]
Fourth Layer	[*****%]	[$*****]	[$*****]

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B. The Deposit Premiums set forth in paragraph A above shall be payable to the Reinsurer by the Company in installments as follows:

DEPOSIT INSTALLMENT SCHEDULE
Layer	June 1, 2021	September 1, 2021	January 1, 2022	April 1, 2022
Second Layer	[$*****]	[$*****]	[$*****]	[$*****]
Third Layer	[$*****]	[$*****]	[$*****]	[$*****]
Fourth Layer	[$*****]	[$*****]	[$*****]	[$*****]

C. Within 45 days following the expiration of this Contract, the Company shall provide the Reinsurer with a report showing the Company’s final Total Insured Value.  This final Total Insured Value shall be multiplied by the Final Adjusted Premium Rate for each Layer as stated in paragraph A above.  Should this amount be greater than or equal to [*****%] and less than or equal to [*****%] of the Deposit Premium as set forth above, there shall be no additional or return premium due.  Should the amount so calculated exceed [*****%] of the Deposit Premium paid in accordance with paragraph A above, the Company shall immediately pay the Reinsurer the difference in excess of [*****%] of the Deposit Premium.  Should the amount so calculated be less than [*****%] of the Deposit Premium paid in accordance with paragraph A of this Article, the Reinsurer shall immediately pay the Company the difference below [*****%] of the Deposit Premium, subject to the Minimum Premium as set forth above.

D. “Total Insured Value” means the Company’s aggregate wind exposures on September 30, 2021 for business covered hereunder.

E. The estimated Total Insured Value is [$*****].

F. The Company shall furnish the Reinsurer with such reasonably available information as may be reasonably required by the Reinsurer for completion of the Reinsurer’s financial statements.

ARTICLE 10

Reinstatement

A. Loss payments under any Layer of this Contract shall reduce the limit of coverage afforded by the amounts paid, but the limit of coverage shall be reinstated from the time of the occurrence of the loss, and for each amount so reinstated, the Company agrees to pay, simultaneously with the Reinsurer’s loss payment, an additional premium calculated at pro rata of the Reinsurer’s premium for the applicable layer(s) for the term of this Contract, being pro rata only as to the fraction of the Reinsurer’s limit of liability hereunder (i.e., the fraction of the Reinsurer’s limit of liability for each Loss Occurrence as set forth for the

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Layer in the Retention and Limit Article) so reinstated.  Nevertheless, the Reinsurer’s liability under the applicable layer(s) shall not exceed such limit(s) in respect of any one Loss Occurrence, nor the applicable limit(s) in respect of all Loss Occurrences commencing during the term of this Contract, as set forth in the Retention and Limit Article.

B. If at the time of a loss settlement hereon the reinsurance premium, as calculated in accordance with the Premium Article, is unknown, the above calculation of reinstatement premium shall be based upon the Deposit Premium, subject to adjustment when the reinsurance premium is finally established.

ARTICLE 11

Definitions

A. 1.“Ultimate Net Loss” means the actual loss paid by the Company or which the Company becomes liable to pay, such loss to include Loss Adjustment Expense, 100% of any Extra Contractual Obligation and 100% of any Loss in Excess of Policy Limits as defined in the Extra Contractual Obligations/Excess of Policy Limits Article.  In no event, however, shall more than 25% of “Ultimate Net Loss” for any one Loss Occurrence be comprised of Extra Contractual Obligations and Loss in Excess of Policy Limits.

2. Salvages and all recoveries (including amounts due from all reinsurances that inure to the benefit of this Contract, whether recovered or not), shall be first deducted from such loss to arrive at the amount of liability attaching hereunder.

3. All salvages, recoveries or payments recovered or received subsequent to loss settlement hereunder shall be applied as if recovered or received prior to the aforesaid settlement, and all necessary adjustments shall be made by the parties hereto.

4. The Company shall be deemed to be “liable to pay” a loss when a judgment has been rendered that the Company does not plan to appeal, and/or the Company has obtained a release, and/or the Company has accepted a proof of loss, and/or the Company has made a commitment to pay, and/or the Company has scheduled the payment of a loss.

5. Nothing in this clause shall be construed to mean that losses are not recoverable hereunder until the Company’s “Ultimate Net Loss” has been ascertained.

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B. “Loss Adjustment Expense” means costs and expenses incurred by the Company in connection with the investigation, appraisal, adjustment, settlement, litigation, defense or appeal of a specific claim or loss, or alleged loss, including but not limited to:

1. court costs;

2. costs of supersedeas and appeal bonds;

3. monitoring counsel expenses;

4. legal expenses and costs incurred in connection with coverage questions and legal actions connected thereto, including but not limited to declaratory judgment actions;

5. post-judgment interest;

6. pre-judgment interest, unless included as part of an award or judgment;

7. a pro rata share of salaries and expenses of Company field employees, calculated in accordance with the time occupied in adjusting such loss, and expenses of other Company employees who have been temporarily diverted from their normal and customary duties and assigned to the field adjustment of losses covered by this Contract; and

8. subrogation, salvage and recovery expenses.

“Loss Adjustment Expense” does not include salaries and expenses of the Company’s employees, except as provided in subparagraph (7) above, and office and other overhead expenses.

C. 1.“Loss Occurrence” means the sum of all individual losses directly occasioned by any one disaster, accident or loss or series of disasters, accidents or losses arising out of one event.  However, the duration and extent of any one “Loss Occurrence” shall be limited to all individual losses sustained by the Company occurring during any period of 168 consecutive hours arising out of and directly occasioned by the same event except that the term “Loss Occurrence” shall be further defined as follows:

a. As regards any “Named Storm,” all individual losses sustained by the Company arising out of and directly occasioned by such “Named Storm,” without regard to the limitations of duration and extent set forth above.  “Named Storm” means any storm or storm system declared by the US National Hurricane Center, US Central Pacific Hurricane Center, US Weather Prediction Center, or their successor organizations, all being  divisions of the US National Weather Service to be a tropical storm or hurricane, and any successors thereof.  A storm or storm system that merges with a “Named Storm” shall be considered part of that “Named Storm,” once it has merged.  A “Named Storm” shall be deemed to begin at the effective time and date of the first watch, warning or other official advisory applicable to such tropical storm or hurricane issued by the above

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referenced governmental meteorological agencies.  A “Named Storm” shall be deemed to end 72 hours after the cancellation of the last watch, warning or other official advisory applicable to such tropical storm, hurricane or successor, issued by the above referenced governmental meteorological agencies irrespective of the duration of the timing or spacing between such watches, warnings or other official advisories.  If two or more storms are assigned different names by the above referenced governmental meteorological agencies, each of those storms shall constitute a separate event for purposes of this definition.

b. As regards windstorm, hail, tornado, cyclone, including ensuing collapse and water damage other than “Named Storm,” all individual losses sustained by the Company occurring during any period of 96 consecutive hours arising out of and directly occasioned by the same event.

c. As regards riot, riot attending a strike, civil commotion, vandalism and malicious mischief, all individual losses sustained by the Company occurring during any period of 96 consecutive hours arising out of and directly occasioned by the same event. The maximum duration of 96 consecutive hours may be extended in respect of individual losses that occur beyond such 96 consecutive hours during the continued occupation of an assured’s premises by strikers, provided such occupation commenced during the aforesaid period.

d. As regards earthquake and fire following directly occasioned by the earthquake, those earthquake losses and individual fire losses that commence during the period of 168 consecutive hours may be included in the Company’s “Loss Occurrence.”

e. As regards any related weather conditions involving snow, sleet, freezing rain, freeze, ice, winter weather, and wind losses related to such conditions, all individual losses sustained by the Company, that occur during any period of 168 consecutive hours arising out of and directly occasioned by the same event.

f. As regards firestorms, brush fires and other fires or series of fires, irrespective of origin (except for fires covered in subparagraphs (c) and (d) above) which spread through trees, grassland or other vegetation, all individual losses sustained by the Company occurring during any period of 168 consecutive hours within a 150-mile radius of any fixed point selected by the Company may be included in the Company’s “Loss Occurrence.” However, an individual loss subject to this subparagraph cannot be included in more than one “Loss Occurrence.”

2. Except as provided in subparagraph (1)(a) above:

a. The Company may choose the date and time when any such period of consecutive hours commences provided that it is not earlier than the date and

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time of the occurrence of the first recorded individual loss sustained by the Company arising out of that disaster, accident or loss.

b. Only one period of consecutive hours shall apply with respect to one event, except that, as respects those “Loss Occurrences” referred to in subparagraph (1)(c) above, if the disaster, accident or loss occasioned by the event is of greater duration than 96 consecutive hours, then the Company may divide that disaster, accident or loss into two or more “Loss Occurrences” provided no two periods overlap and no individual loss is included in more than one such period and provided that no period commences earlier than the date and time of the occurrence of the first recorded individual loss sustained by the Company arising out of that disaster, accident or loss.

3. Losses arising from a combination of two or more perils as a result of the same event shall be considered as having arisen from one “Loss Occurrence.”  Furthermore, all losses arising from an event involving a combination of losses described in subparagraphs (1)(a) and (1)(b) may be considered as having arisen from one “Loss Occurrence.”  Notwithstanding the foregoing, the hourly limitations as stated above shall not be exceeded as respects the applicable perils, and, except as respects those “Loss Occurrences” involving a “Named Storm” referred to in subparagraph (1)(a) above, no single “Loss Occurrence” shall encompass a time period greater than 168 consecutive hours.

D. “Policy” means any binder, policy, or contract of insurance or reinsurance issued, accepted or held covered provisionally or otherwise, by or on behalf of the Company.

ARTICLE 12

EXTRA CONTRACTUAL OBLIGATIONS/EXCESS OF POLICY LIMITS

A. This Contract shall cover Extra Contractual Obligations, as provided in the definition of Ultimate Net Loss.  “Extra Contractual Obligations” shall be defined as those liabilities not covered under any other provision of this Contract and that arise from the handling of any claim on business covered hereunder, such liabilities arising because of, but not limited to, the following:  failure by the Company to settle within the Policy limit, or by reason of alleged or actual negligence, fraud or bad faith in rejecting an offer of settlement or in the preparation of the defense or in the trial of any action against its insured or reinsured or in the preparation or prosecution of an appeal consequent upon such action.

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B. This Contract shall cover Loss in Excess of Policy Limits, as provided in the definition of Ultimate Net Loss.  “Loss in Excess of Policy Limits” shall be defined as Loss in excess of the Policy limit, having been incurred because of, but not limited to, failure by the Company to settle within the Policy limit or by reason of alleged or actual negligence, fraud or bad faith in rejecting an offer of settlement or in the preparation of the defense or in the trial of any action against its insured or reinsured or in the preparation or prosecution of an appeal consequent upon such action.

C. An Extra Contractual Obligation and/or Loss in Excess of Policy Limits shall be deemed to have occurred on the same date as the loss covered under the Company’s Policy, and shall constitute part of the original loss.

D. For the purposes of the Loss in Excess of Policy Limits coverage hereunder, the word “Loss” shall mean any amounts for which the Company would have been contractually liable to pay had it not been for the limit of the original Policy.

E. Loss Adjustment Expense in respect of Extra Contractual Obligations and/or Loss in Excess of Policy Limits shall be covered hereunder in the same manner as other Loss Adjustment Expense.

F. However, this Article shall not apply where the loss has been incurred due to final legal adjudication of fraud of a member of the Board of Directors or a corporate officer of the Company acting individually or collectively or in collusion with any individual or corporation or any other organization or party involved in the presentation, defense or settlement of any claim covered hereunder.

G. In no event shall coverage be provided to the extent not permitted under law.

ARTICLE 13

NET RETAINED LIABILITY

A. This Contract applies only to that portion of any loss that the Company retains net for its own account (prior to deduction of any reinsurance that inures solely to the benefit of the Company).

B. The amount of the Reinsurer’s liability hereunder in respect of any loss or losses shall not be increased by reason of the inability of the Company to collect from any other reinsurer(s), whether specific or general, any amounts that may have become due from such reinsurer(s), whether such inability arises from the insolvency of such other reinsurer(s) or otherwise.

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ARTICLE 14

OTHER REINSURANCE

The Company shall be permitted to carry in force other reinsurance, recoveries under which shall inure to the benefit of this Contract.

ARTICLE 15

Original Conditions

All reinsurance under this Contract shall be subject to the same terms, conditions, waivers and interpretations, and to the same modifications and alterations as the respective Policies of the Company.  However, in no event shall this be construed in any way to provide coverage outside the terms and conditions set forth in this Contract.

ARTICLE 16

NO THIRD PARTY RIGHTS

This Contract is solely between the Company and the Reinsurer, and in no instance shall any insured, claimant or other third party have any rights under this Contract except as may be expressly provided otherwise herein.

ARTICLE 17

Notice of Loss and Loss Settlements

A. The Company shall advise the Reinsurer promptly if paid and estimated Ultimate Net Loss is in excess of 75% of the Company’s retention, or if, in the opinion of the Company, such Ultimate Net Loss may result in a claim hereunder.  Thereafter, the Company shall advise the Reinsurer, at least monthly, of all subsequent developments thereto that may materially affect the position of the Reinsurer.

B. The Company alone and at its full discretion shall adjust, settle or compromise all claims and losses.

C. As respects losses subject to this Contract, all loss settlements made by the Company, whether under strict Policy terms or by way of compromise, and any Extra Contractual Obligations and/or Loss in Excess of Policy Limits, shall be binding upon the Reinsurer.  The Reinsurer agrees to pay or allow, as the case may be, its share of each such settlement immediately upon receipt of reasonable evidence of the amount paid by the Company or that the Company estimates it will pay within the next 14 days.  Within 30 days after receipt of the Reinsurer’s payment, the Company shall report to the Reinsurer the Reinsurer’s payment, minus the Reinsurer’s share of losses subject to this Contract that the

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Company has paid, or become liable to pay, as of the date of the report.  Any positive difference shall be remitted to the Reinsurer with the Company’s report.

ARTICLE 18

LATE PAYMENTS

A. In the event any payment due either party is not received by the Intermediary by the payment due date, the party to whom payment is due may, by notifying the Intermediary in writing, require the debtor party to pay, and the debtor party agrees to pay, an interest penalty on the amount past due calculated for each such payment on the last business day of each month as follows:

1. The number of full days that have expired since the overdue date or the last monthly calculation, whichever the lesser; times

2. 1/365th of the sum of the six-month United States Treasury Bill rate as quoted in The Wall Street Journal on the first business day of the month for which the calculation is made, plus 1%; times

3. The amount past due, including accrued interest.

Interest shall accumulate until payment of the original amount due plus interest penalties have been received by the Intermediary.

B. The due date shall, for purposes of this Article, be determined as follows:

1. Payments from the Reinsurer to the Company shall be due on the date on which the demand for payment (including delivery of bordereaux or quarterly or monthly reports) is received by the Reinsurer, and shall be overdue 30 days thereafter.

2. Payments from the Company to the Reinsurer shall be due on the dates specified within this Contract.  Payments shall be overdue 30 days thereafter except for the first installment of premium, if applicable, which shall be overdue 60 days from inception or 30 days from final line-signing, whichever the later.  Reinstatement premium, if applicable, shall have as a due date the date when the Company receives payment for the claim giving rise to such reinstatement premium, and payment shall be overdue 30 days thereafter. In the event a due date is not specifically stated for a given payment, the overdue date shall be 30 days following the date of billing.

C. If the information contained in the Company’s demand for payment is insufficient or not in accordance with the conditions of this Contract, then within 30 days the Reinsurer shall request from the Company all additional information necessary to validate its claim and the payment due date as defined in paragraph B shall be deemed to be the date upon which the Reinsurer received the requested additional information.  This paragraph is only for the purpose of establishing when a payment is overdue, and shall not alter the provisions of the Notice of Loss and Loss Settlements Article or other pertinent contractual stipulations.

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D. In the event arbitration is necessary to settle a dispute, the panel shall have the authority to make a determination awarding interest to the prevailing party.  Interest, if any, awarded by the panel shall supersede the interest amounts outlined herein.

E. Any interest owed pursuant to this Article may be waived by the party to which it is owed.  Waiver of such interest, however, shall not affect the waiving party’s rights to other interest amounts due as a result of this Article.

ARTICLE 19

OFFSET

Each party hereto shall have, and may exercise at any time and from time to time, the right to offset any and all balances due from a party to the other arising under this Contract.  In the event of the insolvency of a party hereto, offsets shall only be allowed in accordance with the provisions of any applicable law governing offset entitlement.

ARTICLE 20

Currency

A. Where the word “Dollars” and/or the sign “$” appear in this Contract, they shall mean United States Dollars, and all payments hereunder shall be in United States Dollars.

B. For purposes of this Contract, where the Company receives premiums or pays losses in currencies other than United States Dollars, such premiums or losses shall be converted into United States Dollars at the actual rates of exchange at which these premiums or losses are entered in the Company’s books.

ARTICLE 21

Unauthorized Reinsurance

A. This Article applies only to the extent a Subscribing Reinsurer does not qualify for credit with any insurance regulatory authority having jurisdiction over the Company’s reserves.

B. The Company agrees, in respect of its Policies or bonds falling within the scope of this Contract, that when it files with its insurance regulatory authority, or sets up on its books liabilities as required by law, it shall forward to the Reinsurer a statement showing the proportion of such liabilities applicable to the Reinsurer.  The “Reinsurer’s Obligations” shall be defined as follows:

1. unearned premium (if applicable);

2. known outstanding losses that have been reported to the Reinsurer and Loss Adjustment Expense relating thereto;

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3. losses and Loss Adjustment Expense paid by the Company but not recovered from the Reinsurer;

4. losses incurred but not reported and Loss Adjustment Expense relating thereto;

5. all other amounts for which the Company cannot take credit on its financial statements unless funding is provided by the Reinsurer.

C. The Reinsurer’s Obligations shall be funded by funds withheld, cash advances, Trust Agreement or a Letter of Credit (LOC).  The Reinsurer shall have the option of determining the method of funding provided it is acceptable to the insurance regulatory authorities having jurisdiction over the Company’s reserves.

D. When funding by Trust Agreement, the Reinsurer shall ensure that the Trust Agreement complies with the provisions of the “Trust Agreement Requirements Clause” attached hereto.  When funding by an LOC, the Reinsurer agrees to apply for and secure timely delivery to the Company of a clean, irrevocable and unconditional LOC issued by a bank and containing provisions acceptable to the insurance regulatory authorities having jurisdiction over the Company’s reserves in an amount equal to the Reinsurer’s Obligations.  Such LOC shall be issued for a period of not less than one year, and shall be automatically extended for one year from its date of expiration or any future expiration date unless 30 days (or such other time period as may be required by insurance regulatory authorities), prior to any expiration date the issuing bank shall notify the Company by certified or registered mail that the issuing bank elects not to consider the LOC extended for any additional period.

E. The Reinsurer and the Company agree that any funding provided by the Reinsurer pursuant to the provisions of this Contract may be drawn upon at any time, notwithstanding any other provision of this Contract, and be utilized by the Company or any successor, by operation of law, of the Company including, without limitation, any liquidator, rehabilitator, receiver or conservator of the Company, for the following purposes, unless otherwise provided for in a separate Trust Agreement:

1. to reimburse the Company for the Reinsurer’s Obligations, the payment of which is due under the terms of this Contract and that has not been otherwise paid;

2. to make refund of any sum that is in excess of the actual amount required to pay the Reinsurer’s Obligations under this Contract (or in excess of 102% of the Reinsurer’s Obligations, if funding is provided by a Trust Agreement);

3. to fund an account with the Company for the Reinsurer’s Obligations.  Such cash deposit shall be held in an interest bearing account separate from the Company’s other assets, and interest thereon not in excess of the prime rate shall accrue to the benefit of the Reinsurer.  Any taxes payable on accrued interest shall be paid out of the assets in the account that are in excess of the Reinsurer’s Obligations (or in excess of 102% of the Reinsurer’s Obligations, if funding is provided by a Trust Agreement).  

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If the assets are inadequate to pay taxes, any taxes due shall be paid or reimbursed by the Reinsurer;

4. to pay the Reinsurer’s share of any other amounts the Company claims are due under this Contract.

F. If the amount drawn by the Company is in excess of the actual amount required for E(1) or E(3), or in the case of E(4), the actual amount determined to be due, the Company shall promptly return to the Reinsurer the excess amount so drawn.  All of the foregoing shall be applied without diminution because of insolvency on the part of the Company or the Reinsurer.

G. The issuing bank shall have no responsibility whatsoever in connection with the propriety of withdrawals made by the Company or the disposition of funds withdrawn, except to ensure that withdrawals are made only upon the order of properly authorized representatives of the Company.

H. At annual intervals, or more frequently at the discretion of the Company, but never more frequently than quarterly, the Company shall prepare a specific statement of the Reinsurer’s Obligations for the sole purpose of amending the LOC or other method of funding, in the following manner:

1. If the statement shows that the Reinsurer’s Obligations exceed the balance of the LOC as of the statement date, the Reinsurer shall, within 30 days after receipt of the statement, secure delivery to the Company of an amendment to the LOC increasing the amount of credit by the amount of such difference.  Should another method of funding be used, the Reinsurer shall, within the time period outlined above, increase such funding by the amount of such difference.

2. If, however, the statement shows that the Reinsurer’s Obligations are less than the balance of the LOC (or that 102% of the Reinsurer’s Obligations are less than the trust account balance if funding is provided by a Trust Agreement), as of the statement date, the Company shall, within 30 days after receipt of written request from the Reinsurer, release such excess credit by agreeing to secure an amendment to the LOC reducing the amount of credit available by the amount of such excess credit.  Should another method of funding be used, the Company shall, within the time period outlined above, decrease such funding by the amount of such excess.

ARTICLE 22

TAXES

A. In consideration of the terms under which this Contract is issued, the Company undertakes not to claim any deduction of the premium hereon when making Canadian tax returns or when making tax returns, other than Income or Profits Tax returns, to any state or territory of the United States of America or to the District of Columbia.

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B. 1.Each Subscribing Reinsurer has agreed to allow, for the purpose of paying the Federal Excise Tax, the applicable percentage of the premium payable hereon (as imposed under the Internal Revenue Code) to the extent such premium is subject to Federal Excise Tax.

2. In the event of any return of premium becoming due hereunder, the Subscribing Reinsurer shall deduct the applicable percentage of the premium from the amount of the return, and the Company or its agent should take steps to recover the Tax from the U.S. Government.

ARTICLE 23

ACCESS TO RECORDS

A. The Reinsurer or its duly authorized representatives shall have the right to visit the offices of the Company to inspect, examine, audit, and verify any of the policy, accounting or claim files (“Records”) relating to business reinsured under this Contract during regular business hours after giving five working days’ prior notice.  This right shall be exercisable during the term of this Contract or after the expiration of this Contract.  Notwithstanding the above, the Reinsurer shall not have any right of access to the Records of the Company if it is not current in all undisputed payments due the Company.

B. Notwithstanding the above, the Company reserves the right to withhold from the Reinsurer any Privileged Documents.  However, the Company shall permit and not object to the Reinsurer’s access to Privileged Documents in connection with the underlying claim reinsured hereunder following final settlement or final adjudication of the case or cases involving such claim, with prejudice against all claimants and all parties to such adjudications; the Company may defer release of such Privileged Documents if there are subrogation, contribution, or other third party actions with respect to that claim or case, and the Company’s defense might be jeopardized by release of such Privileged Documents.  In the event that the Company seeks to defer release of such Privileged Documents, it shall, in consultation with the Reinsurer, take other steps as reasonably necessary to provide the Reinsurer with the information it reasonably requires to indemnify the Company without causing a loss of such privileges or protections.  The Reinsurer shall not have access to Privileged Documents relating to any dispute between the Company and the Reinsurer.

C. For purposes of this Article:

1. “Privileged Documents” means any documents that are Attorney-Client Privilege Documents and/or Work Product Privilege Documents.

2. “Attorney-Client Privilege Documents” means communications of a confidential nature between (a) the Company, or anyone retained by or at the direction of the Company, or its in‑house or outside legal counsel, or anyone in the control of such legal counsel, and (b) any in-house or outside legal counsel, if such communications

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relate to legal advice being sought by the Company and/or contain legal advice being provided to the Company.

3. “Work Product Privilege Documents” means communications, written materials and tangible things prepared by or for in-house or outside counsel, or prepared by or for the Company, in anticipation of or in connection with litigation, arbitration, or other dispute resolution proceedings.

ARTICLE 24

CONFIDENTIALITY

A. The Reinsurer hereby acknowledges that the documents, information and data provided to it by the Company, whether directly or through an authorized agent, in connection with the placement and execution of this Contract (“Confidential Information”) are proprietary and confidential to the Company.  Confidential Information shall not include documents, information or data that the Reinsurer can show:

1. are publicly known or have become publicly known through no unauthorized act of the Reinsurer;

2. have been rightfully received from a third person without obligation of confidentiality; or

3. were known by the Reinsurer prior to the placement of this Contract without an obligation of confidentiality.

B. Absent the written consent of the Company, the Reinsurer shall not disclose any Confidential Information to any third parties, including any affiliated companies (except to the extent necessary to enable affiliated companies or third parties engaged by the Reinsurer to perform services related to this Contract on behalf of the Reinsurer), except:

1. when required by retrocessionaires as respects business ceded to this Contract;

2. when required by regulators performing an audit of the Reinsurer’s records and/or financial condition; or

3. when required by external auditors performing an audit of the Reinsurer’s records in the normal course of business.

Further, the Reinsurer agrees not to use any Confidential Information for any purpose not related to the performance of its obligations or enforcement of its rights under this Contract.

C. Notwithstanding the above, in the event that the Reinsurer is required by court order, other legal process or any regulatory authority to release or disclose any or all of the Confidential Information, the Reinsurer agrees to provide the Company with written notice of same at

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least 10 days prior to such release or disclosure and to use its best efforts to assist the Company in maintaining the confidentiality provided for in this Article.

D. The provisions of this Article shall extend to the officers, directors and employees of the Reinsurer and its affiliates, and shall be binding upon their successors and assigns.

ARTICLE 25

Indemnification and Errors and Omissions

A. The Reinsurer is reinsuring, subject to the terms and conditions of this Contract, the obligations of the Company under any Policy.  The Company shall be the sole judge as to:

1. what shall constitute a claim or loss covered under any Policy;

2. the Company’s liability thereunder; and

3. the amount or amounts that it shall be proper for the Company to pay thereunder.

B. The Reinsurer shall be bound by the judgment of the Company as to the obligation(s) and liability(ies) of the Company under any Policy.

C. Any inadvertent error, omission or delay in complying with the terms and conditions of this Contract shall not be held to relieve either party hereto from any liability that would attach to it hereunder if such error, omission or delay had not been made, provided such error, omission or delay is rectified immediately upon discovery.

D. Nothing in this Article shall be construed to override any of the other terms and conditions of this Contract.

ARTICLE 26

Insolvency

A. If more than one reinsured company is referenced within the definition of “Company” in the Preamble to this Contract, this Article shall apply severally to each such company.  Further, this Article and the laws of the domiciliary state shall apply in the event of the insolvency of any company covered hereunder.  In the event of a conflict between any provision of this Article and the laws of the domiciliary state of any company covered hereunder, that domiciliary state’s laws shall prevail.

B. In the event of the insolvency of the Company, this reinsurance (or the portion of any risk or obligation assumed by the Reinsurer, if required by applicable law) shall be payable directly to the Company, or to its liquidator, receiver, conservator or statutory successor, either:  (1) on the basis of the liability of the Company, or (2) on the basis of claims filed and allowed in the liquidation proceeding, whichever may be required by applicable statute, without diminution because of the insolvency of the Company or because the liquidator,

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receiver, conservator or statutory successor of the Company has failed to pay all or a portion of any claim.  It is agreed, however, that the liquidator, receiver, conservator or statutory successor of the Company shall give written notice to the Reinsurer of the pendency of a claim against the Company indicating the Policy or bond reinsured, which claim would involve a possible liability on the part of the Reinsurer within a reasonable time after such claim is filed in the conservation or liquidation proceeding or in the receivership, and that during the pendency of such claim, the Reinsurer may investigate such claim and interpose, at its own expense, in the proceeding where such claim is to be adjudicated any defense or defenses that it may deem available to the Company or its liquidator, receiver, conservator or statutory successor.  The expense thus incurred by the Reinsurer shall be chargeable, subject to the approval of the court, against the Company as part of the expense of conservation or liquidation to the extent of a pro rata share of the benefit that may accrue to the Company solely as a result of the defense undertaken by the Reinsurer.

C. Where two or more reinsurers are involved in the same claim and a majority in interest elect to interpose defense to such claim, the expense shall be apportioned in accordance with the terms of this reinsurance Contract as though such expense had been incurred by the Company.

D. As to all reinsurance made, ceded, renewed or otherwise becoming effective under this Contract, the reinsurance shall be payable as set forth above by the Reinsurer to the Company or to its liquidator, receiver, conservator or statutory successor, (except as provided by Section 4118(a)(1)(A) of the New York Insurance Law, provided the conditions of 1114(c) of such law have been met, if New York law applies) or except (1) where the Contract specifically provides another payee in the event of the insolvency of the Company, or (2) where the Reinsurer, with the consent of the direct insured or insureds, has assumed such Policy obligations of the Company as direct obligations of the Reinsurer to the payees under such Policies and in substitution for the obligations of the Company to such payees.  Then, and in that event only, the Company, with the prior approval of the certificate of assumption on New York risks by the Superintendent of Financial Services of the State of New York, or with the prior approval of such other regulatory authority as may be applicable, is entirely released from its obligation and the Reinsurer shall pay any loss directly to payees under such Policy.

ARTICLE 27

RUN-OFF REINSURER

A. “Run-off Reinsurer” means any Subscribing Reinsurer that:

1. has been ordered by a state insurance department or other legal authority to cease writing business, or has been placed under regulatory supervision or in rehabilitation; or

2. has ceased reinsurance underwriting operations; or

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3. has transferred its claims-paying authority to an unaffiliated entity; or

4. engages in a process of Scheme of Arrangement or similar procedure related to this Contract, including but not limited to an insurance business transfer scheme pursuant to Part VII of the Financial Services and Markets Act 2000 (U.K.), as may be amended from time to time; or

5. in any other way has assigned its interests or delegated its obligations under this Contract to an unaffiliated entity.

Notwithstanding the foregoing, agreement by a Lloyd’s syndicate to follow claim settlements procedures under Lloyd’s Claims Scheme (Combined) shall not constitute a transfer of its claims-paying authority, for purposes of subparagraphs (3) and (5) of this paragraph.

B. Notwithstanding any other provision of this Contract, in the event that a Subscribing Reinsurer becomes a Run-off Reinsurer at any time, the Company may elect, by giving written notice to the Run-off Reinsurer at any time thereafter, that all or any of the following shall apply to the Run-off Reinsurer’s participation hereunder:

1. Should the Run-off Reinsurer fail to pay amounts due hereunder, the interest penalty specified in the Late Payments Article shall be increased by 0.5% for each 30 days that a payment is past due, subject to a maximum increase of 7.0%.

2. The Run-off Reinsurer’s liability for losses for Policies covered by this Contract shall be commuted.  In the event the Company and the Run-off Reinsurer cannot agree on the commutation amount of the Run-off Reinsurer’s liability under such Policies, they shall appoint an actuary and/or appraiser to assess such liability and shall share equally any expense of the actuary and/or appraiser.  If the Company and the Run-off Reinsurer cannot agree on an actuary and/or appraiser, the Company and the Run-off Reinsurer each shall nominate three individuals, of whom the other shall decline two, and the final appointment shall be made by drawing lots.  Payment by the Run-off Reinsurer of the amount of liability ascertained shall constitute a complete and final release of both parties under this Contract.

3. The Run-off Reinsurer shall have no right of access to the Records of the Company if the Run-off Reinsurer has denied payment of any claim hereunder or there is a pending arbitration between the Company and the Run-off Reinsurer regarding any claim hereunder.  A reservation of rights shall be considered a denial of a claim.  Notwithstanding the above, the Run-off Reinsurer shall continue to have access to Records of the Company for any claim for which it has raised a query within 30 days of its receipt of a billing, but any inspection of Records must be completed within 90 days of receipt of billing or access will be deemed waived.

4. The provisions of the Arbitration Article shall not apply.  

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C. The Company’s waiver of any rights provided in this Article is not a waiver of that right or other rights at a later date.

ARTICLE 28

Arbitration

A. Any dispute arising out of the interpretation, performance or breach of this Contract, including the formation or validity thereof, shall be submitted for decision to a panel of three arbitrators.  Notice requesting arbitration shall be in writing and sent certified or registered mail, return receipt requested.

B. One arbitrator shall be chosen by each party and the two arbitrators shall then choose an impartial third arbitrator who shall preside at the hearing.  If either party fails to appoint its arbitrator within 30 days after being requested to do so by the other party, the latter, after 10 days’ prior notice by certified or registered mail of its intention to do so, may appoint the second arbitrator.

C. If the two arbitrators do not agree on a third arbitrator within 60 days of their appointment, the third arbitrator shall be chosen in accordance with the procedures for selecting the third arbitrator in force on the date the arbitration is demanded, established by the AIDA Reinsurance and Insurance Arbitration Society – U.S. (ARIAS).  The arbitrators shall be persons knowledgeable about insurance and reinsurance who have no personal or financial interest in the result of the arbitration.  If a member of the panel dies, becomes disabled or is otherwise unwilling or unable to serve, a substitute shall be selected in the same manner as the departing member was chosen and the arbitration shall continue.

D. Within 30 days after all arbitrators have been appointed, the panel shall meet and determine timely periods for briefs, discovery procedures and schedules of hearings.

E. The panel shall be relieved of all judicial formality and shall not be bound by the strict rules of procedure and evidence.  Notwithstanding anything to the contrary in this Contract, the arbitrators may at their discretion, consider underwriting and placement information provided by the Company to the Reinsurer, as well as any correspondence exchanged by the parties that is related to this Contract.  The arbitration shall take place in Tampa, Florida, or at such other place as the parties shall agree.  The decision of any two arbitrators shall be in writing and shall be final and binding.  The panel is empowered to grant interim relief as it may deem appropriate.

F. The panel shall interpret this Contract as an honorable engagement rather than as merely a legal obligation and shall make its decision considering the custom and practice of the applicable insurance and reinsurance business as promptly as possible after the hearings.  Judgment upon an award may be entered in any court having jurisdiction thereof.

G. Each party shall bear the expense of its own arbitrator and shall jointly and equally bear with the other party the cost of the third arbitrator.  The remaining costs of the arbitration

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shall be allocated by the panel.  The panel may, at its discretion, award such further costs and expenses as it considers appropriate, including but not limited to attorneys’ fees, to the extent permitted by law.

ARTICLE 29

Expedited Arbitration

A. Notwithstanding the provisions of the Arbitration Article, in the event an amount in dispute hereunder $1,000,000 or less, the parties will submit to an expedited arbitration process with the use of a single arbitrator.  The arbitrator will be chosen in accordance with the procedures for selecting an arbitrator in force on the date the arbitration is demanded, established by the AIDA Reinsurance and Insurance Arbitration Society - U.S. (ARIAS).

B. Each party’s case will be submitted to the arbitrator within 100 calendar days of the date of determination of the arbitrator.  Discovery will be limited to exchanging only those documents directly relating to the issue in dispute, subject to a limit of two discovery depositions from each party, unless otherwise authorized by the arbitrator upon a showing of good cause.

C. Within 120 calendar days of the date of determination of the arbitrator, the hearing will be completed and a written award will be issued by the arbitrator.  As the parties agree that time is of the essence, the sole arbitrator does not have the authority to lengthen the schedule, absent agreement of both parties.  The arbitrator will have all the powers conferred on the arbitration panel as provided in the Arbitration Article, and said Article will apply to all matters not specifically addressed above.

ARTICLE 30

SERVICE OF SUIT

A. This Article applies only to those Subscribing Reinsurers not domiciled in the United States of America, and/or not authorized in any state, territory and/or district of the United States of America where authorization is required by insurance regulatory authorities.

B. This Article shall not be read to conflict with or override the obligations of the parties to arbitrate their disputes as provided for in the Arbitration Article.  This Article is intended as an aid to compelling arbitration or enforcing such arbitration or arbitral award, not as an alternative to the Arbitration Article for resolving disputes arising out of this Contract.

C. In the event of the failure of the Reinsurer to perform its obligations hereunder, the Reinsurer, at the request of the Company, shall submit to the jurisdiction of a court of competent jurisdiction within the United States.  Nothing in this Article constitutes or should be understood to constitute a waiver of the Reinsurer’s rights to commence an action in any court of competent jurisdiction in the United States, to remove an action to a United States District Court, or to seek a transfer of a case to another court as permitted by

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the laws of the United States or of any state in the United States.  The Reinsurer, once the appropriate court is selected, whether such court is the one originally chosen by the Company and accepted by the Reinsurer or is determined by removal, transfer, or otherwise, as provided for above, shall comply with all requirements necessary to give said court jurisdiction and, in any suit instituted against the Reinsurer upon this Contract, shall abide by the final decision of such court or of any appellate court in the event of an appeal.

D. Service of process in such suit may be made upon:

1. as respects Underwriting Members of Lloyd’s, London: Lloyd’s America, Inc., Attention: Legal Department, 280 Park Avenue, East Tower, 25^th Floor, New York, New York 10017;

2. as respects any other Subscribing Reinsurer: Messrs. Mendes and Mount, 750 Seventh Avenue, New York, New York 10019-6829, or another party specifically designated in the Subscribing Reinsurer’s Interests and Liabilities Agreement attached hereto.  

The above-named are authorized and directed to accept service of process on behalf of the Reinsurer in any such suit.

E. Further, pursuant to any statute of any state, territory or district of the United States that makes provision therefor, the Reinsurer hereby designates the Superintendent, Commissioner or Director of Insurance, or other officer specified for that purpose in the statute, or his successor or successors in office, as its true and lawful attorney upon whom may be served any lawful process in any action, suit or proceeding instituted by or on behalf of the Company or any beneficiary hereunder arising out of this Contract, and hereby designates the above-named as the person to whom the said officer is authorized to mail such process or a true copy thereof.

ARTICLE 31

GOVERNING LAW

This Contract shall be governed as to performance, administration and interpretation by the laws of the State of Florida, exclusive of conflict of law rules.  However, with respect to credit for reinsurance, the rules of all applicable states shall apply.

ARTICLE 32

ENTIRE AGREEMENT

This Contract sets forth all of the duties and obligations between the Company and the Reinsurer and supersedes any and all prior or contemporaneous written agreements with respect to matters referred to in this Contract.  This Contract may not be modified or changed except by an amendment to this Contract in writing signed by both parties.  However, this Article shall not be

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construed as limiting the admissibility of evidence regarding the formation, interpretation, purpose or intent of this Contract.

ARTICLE 33

NON-WAIVER

The failure of the Company or the Reinsurer to insist on compliance with this Contract or to exercise any right or remedy hereunder shall not constitute a waiver of any rights contained in this Contract nor prevent either party from thereafter demanding full and complete compliance nor prevent either party from exercising such remedy in the future.

ARTICLE 34

Intermediary

Guy Carpenter & Company, LLC, is hereby recognized as the Intermediary negotiating this Contract for all business hereunder.  All communications (including notices, statements, premiums, return premiums, commissions, taxes, losses, Loss Adjustment Expenses, salvages, and loss settlements) relating thereto shall be transmitted to the Company or the Reinsurer through the Intermediary.  Payments by the Company to the Intermediary shall be deemed payment to the Reinsurer.  Payments by the Reinsurer to the Intermediary shall be deemed payment to the Company only to the extent that such payments are actually received by the Company.

ARTICLE 35

MODE OF EXECUTION

A. This Contract may be executed by:

1. an original written ink signature of paper documents;

2. an exchange of facsimile copies showing the original written ink signature of paper documents;

3. electronic signature technology employing computer software and a digital signature or digitizer pen pad to capture a person’s handwritten signature in such a manner that the signature is unique to the person signing, is under the sole control of the person signing, is capable of verification to authenticate the signature and is linked to the document signed in such a manner that if the data is changed, such signature is invalidated.

B. The use of any one or a combination of these methods of execution shall constitute a legally binding and valid signing of this Contract.  This Contract may be executed in one or more counterparts, each of which, when duly executed, shall be deemed an original.

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IN WITNESS WHEREOF, the Company has caused this Contract to be executed by its duly authorized representative(s), who also confirms the Company’s review of and agreement to be bound by the terms and conditions of the Interests and Liabilities Agreements attached to and forming part of this Contract;

On this _____ day of __________, in the year of 2021.

Typtap insurance company

Signature:	Title:
Print Name:

PROPERTY CATASTROPHE EXCESS OF LOSS REINSURANCE CONTRACT

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POOLS, ASSOCIATIONS & SYNDICATES EXCLUSIONS CLAUSE

Section A:

This Contract excludes:

a. All business derived directly or indirectly from any Pool, Association or Syndicate which maintains its own reinsurance facilities.

b. Any Pool or Scheme (whether voluntary or mandatory) formed after March 1, 1968 for the purpose of insuring property, whether on a country-wide basis or in respect of designated areas.  This exclusion shall not apply to so-called Automobile Insurance Plans or other Pools formed to provide coverage for Automobile Physical Damage.

Section B:

1. This Contract excludes business written by the Company for the same perils, which is known at the time to be insured by, or in excess of underlying amounts placed in, any Pool, Association or Syndicate, whether by way of insurance or reinsurance, formed for the purpose of writing any of the following:

Oil, Gas or Petro-Chemical Plants

Oil or Gas Drilling Rigs and/or

Aviation Risks

2. The exclusion under paragraph 1 of this Section B does not apply:

a. Where the Total Insured Value over all interests of the risk in question is less than $250,000,000.

b. To interests traditionally underwritten as Inland Marine and/or Stock and/or Contents written on a Blanket basis.

c. To Contingent Business Interruption, except when the Company is aware that the key location is known at the time to be insured in any Pool, Association or Syndicate named above, other than as provided for under subparagraph (a).

Section C:

1. Nevertheless the Reinsurer specifically agrees that liability accruing to the Company from its participation in Residual Market Mechanisms, including but not limited to the following, for all perils otherwise protected hereunder shall not be excluded herefrom:

a. So-called “Beach and Windstorm Plans” and so-called “Coastal Pools”;

b. All “FAIR Plan” and “Rural Risk Plan” business;

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c. Louisiana Citizens Property Insurance Corporation;

d. California Earthquake Authority (“CEA”) or any similar entity.

Notwithstanding the above, assessments related to the Florida Hurricane Catastrophe Fund and Citizens Property Insurance Corporation (Florida) shall be excluded hereunder.

2. However, this reinsurance does not include any increase in such liability resulting from:

a. The inability of any other participant in such Residual Market Mechanisms to meet its liability;

b. Any claim against a Residual Market Mechanism or any participant therein, including the Company, whether by way of subrogation or otherwise, brought by or on behalf of any insolvency fund (as defined in the Exclusions Article);

c. Any assessment or surcharge levied on the policyholder and therefore not a liability of the Company;

d. The Company’s initial capital contribution to the CEA;

e. Any assessments, other than interim and regular assessments, from a Residual Market Mechanism included in subparagraph 1(c) above;

f. Any expenditure to purchase or retire bonds.

3. The Company may include in Ultimate Net Loss for any Loss Occurrence covered hereunder only the liability attributable to that Loss Occurrence.  If the relevant entity does not specify what portion of an assessment is attributable to each Loss Occurrence, the Company may include in Ultimate Net Loss in respect of each Loss Occurrence a percentage of the Company’s assessments from the relevant entity related to the calendar year in which the Loss Occurrence commenced, regardless of when assessed, such percentage to be determined by dividing the relevant entity’s losses arising from the Loss Occurrence by its total losses for the calendar year.

4. The Company will deduct from Ultimate Net Loss amounts received as recoupment of any assessment that has been included in the Ultimate Net Loss, provided the recoupment is directly allocable to the assessment (“itemized recoupment”).  The Company shall use commercially reasonable efforts to recoup such assessment.  Any amount received as an itemized recoupment of any assessment (whether under this Contract or any predecessor contract), and therefore deductible from Ultimate Net Loss, shall not be included in the subject premium of this Contract.

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However, if a state levies assessments but does not allow itemized recoupment from policyholders, instead allowing the Company to file an overall increased rate, any such premium increased thereby shall not be deemed to be a recoupment that is deductible from Ultimate Net Loss.  Any recoupment received as part of a general premium rate increase, not specifically itemized, shall be included as part of the subject premium of this Contract or a successor contract, as applicable.

NOTES: Wherever used herein the terms:

“Company” shall be understood to mean “Company”, “Reinsured”, “Reassured” or whatever other term is used in the attached reinsurance document to designate the reinsured company or companies.

“Contract” shall be understood to mean “Agreement,” “Contract,” “Policy” or whatever other term is used to designate the attached reinsurance document.

“Reinsurer” shall be understood to mean “Reinsurer,” “Reinsurers,” “Underwriters” or whatever other term is used in the attached reinsurance document to designate the reinsurer or reinsurers.

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Nuclear Incident Exclusion Clause - Physical Damage - Reinsurance - U.S.A.

1. This Reinsurance does not cover any loss or liability accruing to the Reassured, directly or indirectly, and whether as Insurer or Reinsurer, from any Pool of Insurers or Reinsurers formed for the purpose of covering Atomic or Nuclear Energy risks.

2. Without in any way restricting the operation of paragraph (1) of this clause, this Reinsurance does not cover any loss or liability accruing to the Reassured, directly or indirectly and whether as Insurer or Reinsurer, from any insurance against Physical Damage (including business interruption or consequential loss arising out of such Physical Damage) to:

I. Nuclear reactor power plants including all auxiliary property on the site, or

II. Any other nuclear reactor installation, including laboratories handling radioactive materials in connection with reactor installations, and “critical facilities” as such, or

III. Installations for fabricating complete fuel elements or for processing substantial quantities of “special nuclear material”, and for reprocessing, salvaging, chemically separating, storing or disposing of “spent” nuclear fuel or waste materials, or

IV. Installations other than those listed in paragraph (2) III above using substantial quantities of radioactive isotopes or other products of nuclear fission.

3. Without in any way restricting the operations of paragraphs (1) and (2) hereof, this Reinsurance does not cover any loss or liability by radioactive contamination accruing to the Reassured, directly or indirectly, and whether as Insurer or Reinsurer, from any insurance on property which is on the same site as a nuclear reactor power plant or other nuclear installation and which normally would be insured therewith except that this paragraph (3) shall not operate

(a) where Reassured does not have knowledge of such nuclear reactor power plant or nuclear installation, or

(b) where said insurance contains a provision excluding coverage for damage to property caused by or resulting from radioactive contamination, however caused. However on and after 1st January 1960 this sub-paragraph (b) shall only apply provided the said radioactive contamination exclusion provision has been approved by the Governmental Authority having jurisdiction thereof.

4. Without in any way restricting the operations of paragraphs (1), (2) and (3) hereof, this Reinsurance does not cover any loss or liability by radioactive contamination accruing to the Reassured, directly or indirectly, and whether as Insurer or Reinsurer, when such radioactive contamination is a named hazard specifically insured against.

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5. It is understood and agreed that this clause shall not extend to risks using radioactive isotopes in any form where the nuclear exposure is not considered by the Reassured to be the primary hazard.

6. The term “special nuclear material” shall have the meaning given it in the Atomic Energy Act of 1954 or by any law amendatory thereof.

7. Reassured to be sole judge of what constitutes:

(a) substantial quantities, and

(b) the extent of installation, plant or site.

Note:  Without in any way restricting the operation of paragraph (1) hereof, it is understood and agreed that

(a) all policies issued by the Reassured on or before 31st December 1957 shall be free from the application of the other provisions of this Clause until expiry date or 31st December 1960 whichever first occurs whereupon all the provisions of this Clause shall apply.

(b) with respect to any risk located in Canada policies issued by the Reassured on or before 31st December 1958 shall be free from the application of the other provisions of this Clause until expiry date or 31st December 1960 whichever first occurs whereupon all the provisions of this Clause shall apply.

12/12/57

NMA 1119

NOTES: Wherever used herein the terms:

“Reassured” shall be understood to mean “Company”, “Reinsured”, “Reassured” or whatever other term is used in the attached reinsurance document to designate the reinsured company or companies.

“Agreement” shall be understood to mean “Agreement”, “Contract”, “Policy” or whatever other term is used to designate the attached reinsurance document.

“Reinsurers” shall be understood to mean “Reinsurers”, “Underwriters” or whatever other term is used in the attached reinsurance document to designate the reinsurer or reinsurers.

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TERRORISM EXCLUSION

A. Notwithstanding any provision to the contrary within this Contract or any endorsement thereto, it is agreed that this Contract excludes loss, damage, cost, or expense directly or indirectly caused by, contributed to by, resulting from, or arising out of or in connection with any Act of Terrorism, as defined herein, regardless of any other cause or event contributing concurrently or in any other sequence to the loss.

B. An “Act of Terrorism” includes any act, or preparation in respect of action, or threat of action designed to influence the government de jure or de facto of any nation or any political division thereof, or in pursuit of political, religious, ideological, or similar purposes to intimidate the public or a section of the public of any nation by any person or group(s) of persons whether acting alone or on behalf of or in connection with any organization(s) or government(s) de jure or de facto, and which:

a. involves violence against one or more persons; or

b. involves damage to property; or

c. endangers life other than that of the person committing the action; or

d. creates a risk to health or safety of the public or a section of the public; or

e. is designed to interfere with or to disrupt an electronic system.

C. This Contract also excludes loss, damage, cost, or expense directly or indirectly caused by, contributed to by, resulting from, or arising out of or in connection with any action in controlling, preventing, suppressing, retaliating against, or responding to any Act of Terrorism.

D. Notwithstanding the above and subject otherwise to the terms, conditions, and limitations of this Contract, in respect only of personal lines, this Contract shall pay actual loss or damage (but not related cost or expense) caused by any Act of Terrorism, provided such act is not directly or indirectly caused by, contributed to by, resulting from, or arising out of or in connection with biological, chemical, radiological or nuclear pollution or contamination.

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Communicable Disease Exclusion (Property Reinsurance)

A. This Contract excludes any loss, damage, liability, claim, cost or expense of whatsoever nature, directly or indirectly caused by, contributed to by, resulting from, arising out of, or in connection with a Communicable Disease or the fear or threat (whether actual or perceived) of a Communicable Disease regardless of any other cause or event contributing concurrently or in any other sequence thereto.

B. As used herein, a Communicable Disease means any disease which can be transmitted by means of any substance or agent from any organism to another organism where:

1. the substance or agent includes, but is not limited to, a virus, bacterium, parasite or other organism or any variation thereof, whether deemed living or not, and

2. the method of transmission, whether direct or indirect, includes but is not limited to, airborne transmission, bodily fluid transmission, transmission from or to any surface or object, solid, liquid or gas or between organisms, and

3. the disease, substance or agent can cause or threaten damage to human health or human welfare or can cause or threaten damage to, deterioration of, loss of value of, marketability of or loss of use of property.

C. Notwithstanding the foregoing, losses directly or indirectly caused by, contributed to by, resulting from, arising out of, or in connection with any otherwise covered peril under subject Policies and not otherwise excluded under this Contract shall be covered.

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CYBER LOSS LIMITED EXCLUSION CLAUSE (PROPERTY TREATY REINSURANCE)

1. Notwithstanding any provision to the contrary within this reinsurance agreement or any endorsement thereto, this reinsurance agreement excludes all loss, damage, liability, cost or expense of whatsoever nature directly or indirectly caused by, contributed to by, resulting from, arising out of or in connection with:

1.2. any loss of, alteration of, or damage to or a reduction in the functionality, availability or operation of a Computer System, unless subject to the provisions of paragraph 2;

1.3. any loss of use, reduction in functionality, repair, replacement, restoration or reproduction of any Data, including any amount pertaining to the value of such Data.

2. Subject to the other terms, conditions and exclusions contained in this reinsurance agreement, this reinsurance agreement will cover physical damage to property insured under the original policies and any Time Element Loss directly resulting therefrom where such physical damage is directly occasioned by any of the following perils:

fire, lightning, explosion, aircraft or vehicle impact, falling objects, windstorm, hail, tornado, cyclone, hurricane, earthquake, volcano, tsunami, flood, freeze or weight of snow

Definitions

3. Computer System means any computer, hardware, software, communications system, electronic device (including, but not limited to, smart phone, laptop, tablet, wearable device), server, cloud or microcontroller including any similar system or any configuration of the aforementioned and including any associated input, output, data storage device, networking equipment or back up facility.

4. Data means information, facts, concepts, code or any other information of any kind that is recorded or transmitted in a form to be used, accessed, processed, transmitted or stored by a Computer System.

5. Time Element Loss means business interruption, contingent business interruption or any other consequential losses.

LMA5410

06 March 2020

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TRUST AGREEMENT REQUIREMENTS CLAUSE

A. Except as provided in paragraph B of this Clause, if the Reinsurer satisfies its funding obligations under the Unauthorized Reinsurance Article by providing a Trust Agreement, the Reinsurer shall ensure that the Trust Agreement:

1. Requires the Reinsurer to establish a trust account for the benefit of the Company, and specifies what the Trust Agreement is to cover;

2. Stipulates that assets deposited in the trust account shall be valued according to their current fair market value and shall consist only of cash (United States legal tender), and certificates of deposit (issued by a United States bank and payable in United States legal tender), or any combination of the two, provided that the investments are issued by an institution that is not the parent, subsidiary or affiliate of either the Reinsurer or the Company;

3. Requires the Reinsurer, prior to depositing assets with the trustee, to execute assignments or endorsements in blank, or to transfer legal title to the trustee of all shares, obligations or any other assets requiring assignments, in order that the Company, or the trustee upon the direction of the Company, may whenever necessary negotiate these assets without consent or signature from the Reinsurer or any other entity;

4. Requires that all settlements of account between the Company and the Reinsurer be made in cash or its equivalent; and

5. Provides that assets in the trust account shall be withdrawn only as permitted in this Contract, without diminution because of the insolvency of the Company or the Reinsurer.

B. If a ceding insurer is domiciled in California and the Reinsurer satisfies its funding obligations under the Unauthorized Reinsurance Article by providing a Trust Agreement, the Reinsurer shall ensure that the Trust Agreement:

1. Provides that assets deposited in the trust account shall be valued according to their current fair market value and shall consist only of cash in United States dollars, certificates of deposit issued by a United States financial institution as defined in California Insurance Code Section 922.7(a) and payable in United States dollars, and investments permitted by the California Insurance Code, or any combination of the above.

2. Provides that investments in or issued by an entity controlling, controlled by or under common control with either the grantor or the beneficiary of the trust shall not exceed 5% of total investments.

3. Requires the Reinsurer, prior to depositing assets with the trustee, to execute assignments or endorsements in blank, or to transfer legal title to the trustee of all

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shares, obligations or any other assets requiring assignments, in order that the ceding insurer, or the trustee upon the direction of the ceding insurer, may, whenever necessary, negotiate these assets without consent or signature from the Reinsurer or any other entity.

4. Provides that assets in the trust account shall be withdrawn only as permitted in this Contract, without diminution because of the insolvency of the ceding insurer or the Reinsurer.

C. If there are multiple ceding insurers that collectively comprise the Company, “regulatory authorities” as referenced in subparagraph A(2) above, shall mean the individual ceding insurer’s domestic regulator.  

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EX-10.14

Exhibit 10.14

CERTAIN CONFIDENTIAL INFORMATION, IDENTIFIED BY BRACKETED ASTERISKS "[*****]", HAS BEEN OMITTED FROM THIS EXHIBIT BECAUSE IT IS BOTH (I) NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED.
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NON-FLORIDA PROPERTY CATASTROPHE

EXCESS OF LOSS REINSURANCE CONTRACT

issued to

TypTap Insurance Company

Ocala, Florida

Homeowners Choice Property & Casualty Insurance Company, Inc.

Tampa, Florida

including any and/or all companies that are or may hereafter become affiliated therewith

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NON-FLORIDA PROPERTY CATASTROPHE

EXCESS OF LOSS REINSURANCE CONTRACT

TABLE OF CONTENTS

Article		Page
	Preamble	4
1	Business Covered	4
2	Retention and Limit	4
3	Term	5
4	Special Termination	5
5	Territory	7
6	Exclusions	7
7	Special Acceptance	9
8	Premium	9
9	Reinstatement	11
10	Definitions	11
11	Extra Contractual Obligations/Excess of Policy Limits	14
12	Net Retained Liability	15
13	Other Reinsurance	15
14	Original Conditions	16
15	No Third Party Rights	16
16	Notice of Loss and Loss Settlements	16
17	Late Payments	17
18	Offset	18
19	Currency	18
20	Unauthorized Reinsurance	18
21	Taxes	20
22	Access to Records	21
23	Confidentiality	22
24	Indemnification and Errors and Omissions	23
25	Insolvency	23
26	Run-Off Reinsurer	24
27	Arbitration	26
28	Expedited Arbitration	27
29	Service of Suit	27
30	Governing Law	28
31	Entire Agreement	28
32	Non-Waiver	29
33	Agency	29
34	Intermediary	29
35	Mode of Execution	29
	Company Signing Block	31

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NON-FLORIDA PROPERTY CATASTROPHE EXCESS OF LOSS REINSURANCE CONTRACT TABLE OF CONTENTS
Attachments		Page
	Pools, Associations & Syndicates Exclusions Clause	32
	Nuclear Incident Exclusion Clause - Physical Damage - Reinsurance - U.S.A.	35
	Terrorism Exclusion	37
	Communicable Disease Exclusion (Property Reinsurance)	38
	Cyber Loss Limited Exclusion Clause (Property Treaty Reinsurance)	39
	Trust Agreement Requirements Clause	40

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NON-FLORIDA PROPERTY CATASTROPHE

EXCESS OF LOSS REINSURANCE CONTRACT

(the “Contract”)

issued to

TypTap Insurance Company

Ocala, Florida

Homeowners Choice Property & Casualty Insurance Company, Inc.

Tampa, Florida

including any and/or all companies that are or may hereafter become affiliated therewith

(collectively, the “Company”)

by

THE SUBSCRIBING REINSURER(S) IDENTIFIED IN THE
INTERESTS AND LIABILITIES AGREEMENT(S) ATTACHED TO
AND FORMING PART OF THIS CONTRACT

(the “Reinsurer”)

ARTICLE 1

BUSINESS COVERED

This Contract is to indemnify the Company in respect of its net excess liability as a result of any loss or losses which may occur during the term of this Contract under any Policies in force at the effective date hereof or issued or renewed on or after that date, covering direct and assumed business classified by the Company as the property perils of Homeowners, Condominium Owners, Renters and Dwelling, subject to the terms and conditions herein contained.

ARTICLE 2

Retention and Limit

A. For each Layer of reinsurance provided hereunder, the Reinsurer shall be liable in respect of each Loss Occurrence for the Ultimate Net Loss over and above the initial Ultimate Net Loss retention as set forth in the schedule below for the Loss Occurrence, subject to a limit of liability to the Reinsurer for each such Loss Occurrence, and subject further to a limit of liability for all Loss Occurrences commencing during the term of this Contract, as set forth below:

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RETENTION AND LIMIT SCHEDULE
Layer	Company’s Retention	Reinsurer’s Limit of Liability
	Ultimate Net Loss in respect of each Loss Occurrence	Ultimate Net Loss in respect of each Loss Occurrence	Ultimate Net Loss in respect of all Loss Occurrences during the term of this Contract
Second Layer	[$*****]	[$*****]	[$*****]
Third Layer	[$*****]	[$*****]	[$*****]
Fourth Layer	[$*****]	[$*****]	[$*****]
Fifth Layer	[$*****]	[$*****]	[$*****]
Sixth Layer	[$*****]	[$*****]	[$*****]

B. No Loss Occurrence shall be covered hereunder unless it involves two or more risks subject to this Contract.  The Company shall be the sole judge of what constitutes one risk for purposes of this Contract.

ARTICLE 3

Term

This Contract shall take effect at 12:01 a.m., Standard Time, June 1, 2021, and unless terminated prior to that time and date as provided in the Special Termination Article, shall remain in effect until 12:01 a.m., Standard Time, June 1, 2022, applying to Loss Occurrences commencing during the term of this Contract.  For purposes of this Contract, “Standard Time” shall mean the time as described in the original Policy.

ARTICLE 4

SPECIAL TERMINATION

A. The Company may terminate a Subscribing Reinsurer’s percentage share in this Contract at any time by giving written notice to the Subscribing Reinsurer in the event of any of the following circumstances:

1. The Subscribing Reinsurer ceases underwriting operations.

2. A state insurance department or other legal authority orders the Subscribing Reinsurer to cease writing business, or the Subscribing Reinsurer is placed under regulatory supervision.

3. The Subscribing Reinsurer has become insolvent or has been placed into liquidation or receivership (whether voluntary or involuntary), or there have been instituted against it proceedings for the appointment of a receiver, liquidator, rehabilitator, conservator,

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trustee in bankruptcy, or other agent known by whatever name, to take possession of its assets or control of its operations.

4. The Subscribing Reinsurer’s policyholders’ surplus (or the equivalent under the Subscribing Reinsurer’s accounting system) as reported in such financial statements of the Subscribing Reinsurer as designated by the Company, has been reduced by 20% of the amount thereof at any date during the prior 12-month period (including the period prior to the inception of this Contract).

5. The Subscribing Reinsurer has become, or has announced its intention to become, merged with or acquired or controlled by any company, corporation, or individual(s) not controlling the Subscribing Reinsurer’s operations at the inception of this Contract.

6. The Subscribing Reinsurer has retroceded its entire liability under this Contract without the Company’s prior written consent, except for retrocessions to members of the Subscribing Reinsurer’s holding company group.

7. The Subscribing Reinsurer has been assigned an A.M. Best’s rating of less than “A-” and/or an S&P rating of less than “BBB+.”  However, as respects Underwriting Members of Lloyd’s, London, a Lloyd’s Market Rating of less than “A-” by A.M. Best and/or less than “BBB+” by S&P shall apply.

8. The Subscribing Reinsurer has hired an unaffiliated runoff claims manager that is compensated on a contingent basis or is otherwise provided with financial incentives based on the quantum of claims paid.

9. The Subscribing Reinsurer has in any other way assigned its interests or delegated its obligations under this Contract to an unaffiliated entity.

10. The Subscribing Reinsurer has failed to post or maintain required collateral to secure its obligations as required under this Contract, and has not cured such deficiency within 30 days following written notice thereof from the Company.

Notwithstanding the foregoing, agreement by a Lloyd’s syndicate to follow claim settlements procedures under Lloyd’s Claims Scheme (Combined) shall not constitute a transfer of its claims-paying authority, for purposes of subparagraphs (8) and (9) of this paragraph.

B. Termination shall be effected on a cut-off basis and the Subscribing Reinsurer shall have no liability for Loss Occurrences commencing after the date of termination.  The reinsurance premium due the Subscribing Reinsurer hereunder (including any minimum reinsurance premium) shall be prorated based on the period of the Subscribing Reinsurer’s participation hereon, and the Subscribing Reinsurer shall immediately return any excess reinsurance premium received.  Reinstatement premium, if any, shall be calculated based on the Subscribing Reinsurer’s reinsurance premium earned during the period of the Subscribing Reinsurer’s participation hereon.

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C. Additionally, in the event of any of the circumstances listed in paragraph A of this Article, the Company shall have the option to commute the Subscribing Reinsurer’s liability for losses on Policies covered by this Contract.  In the event the Company and the Subscribing Reinsurer cannot agree on the commutation amount, they shall appoint an actuary and/or appraiser to assess such amount and shall share equally any expense of the actuary and/or appraiser.  If the Company and the Subscribing Reinsurer cannot agree on an actuary and/or appraiser, the Company and the Subscribing Reinsurer each shall nominate three individuals, of whom the other shall decline two, and the final appointment shall be made by drawing lots.  Payment by the Subscribing Reinsurer of the amount of liability ascertained shall constitute a complete and final release of both parties in respect of liability arising from the Subscribing Reinsurer’s participation under this Contract.

D. The Company’s option to require commutation under paragraph C above shall survive the termination or expiration of this Contract.

ARTICLE 5

Territory

The territorial limits of this Contract shall be identical with those of the Company’s Policies, with the exception of the State of Florida.

ARTICLE 6

Exclusions

A. This Contract shall not apply to and specifically excludes:

1. Policies covered by the Company’s Flood Tower.

2. Flood when written as such.

3. Earthquake for standalone Policies where earthquake is the only named peril.

4. Hail damage to an insured’s growing or standing crops.

5. Reinsurance assumed by the Company under obligatory reinsurance agreements, except intercompany reinsurance between the Company and its affiliates and reinsurance where the Policies involved are to be re-underwritten in accordance with the underwriting standards of the Company and reissued as Policies of the Company in due course.

6. Pools, Associations & Syndicates, per the attached exclusion.

7. Liability of the Company arising by contract, operation of law, or otherwise, from its participation or membership, whether voluntary or involuntary, in any Insolvency Fund.  “Insolvency Fund” includes any guaranty fund, insolvency fund, plan, pool,

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association, fund or other arrangement, howsoever denominated, established or governed, that provides for any assessment of or payment or assumption by the Company of part or all of any claim, debt, charge, fee, or other obligation of an insurer, or its successors or assigns, that has been declared by any competent authority to be insolvent, or that is otherwise deemed unable to meet any claim, debt, charge, fee or other obligation in whole or in part.

8. Loss or damage occasioned by war, invasion, hostilities, acts of foreign enemies, civil war, rebellion, insurrection, military or usurped power, martial law, or confiscation by order of any government or public authority, but not excluding loss or damage that would be covered under a standard form of Policy containing a standard war exclusion clause.

9. Losses excluded by the attached Nuclear Incident Exclusion Clause – Physical Damage – Reinsurance – U.S.A.

10. Terrorism as defined in the attached Terrorism Exclusion.

11. Mold unless directly resulting from an otherwise covered peril.

12. Loss and/or damage and/or costs and/or expenses arising from seepage and/or pollution and/or contamination, other than contamination from smoke.  Nevertheless, this exclusion does not preclude payment of the cost of removing debris of property damaged by a loss otherwise covered hereunder, subject always to a limit of 25.0% of the Company’s property loss under the applicable original Policy.

13. Financial guarantee and insolvency.

14. Loss or damage to overhead transmission and distribution lines, including supporting structures, of electrical companies, telephone companies, and cable companies.  This exclusion shall not apply, however, to transmission and distribution lines and their supporting structures located on the property of any original insured or within 1,000 feet thereof.

15. Losses excluded by the attached Communicable Disease Exclusion (Property Reinsurance).

16. Loss Excluded by the attached Cyber Loss Limited Exclusion Clause (Property Treaty Reinsurance).

17. Policies issued covering risks located in the state of Florida.

B. With the exception of subparagraphs A(8), A(9), A(10) and A(13) above, should any judicial, regulatory or legislative entity having legal jurisdiction invalidate any exclusion on the Company's Policy, any amount of loss for which the Company is liable because of such invalidation will not be excluded hereunder.

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C. With the exception of subparagraphs A(8), A(9), A(10) and A(13) above, if the Company inadvertently issues a Policy falling within the scope of one or more of the exclusions, such Policy shall be covered hereunder, provided that the Company issues, or causes to be issued, the required notice of cancellation within 30 days after a member of the executive or managerial staff at the Company’s home office having underwriting authority in the class of business involved becomes aware that the Policy applies to excluded classes, unless the Company is prevented from canceling said Policy within such period by applicable statute or regulation, in which case such Policy shall be covered hereunder until the earliest date on which the Company may cancel.

ARTICLE 7

SPECIAL ACCEPTANCE

Business that is not within the scope of this Contract may be submitted to the Reinsurer for special acceptance hereunder, and such business, if accepted by the Reinsurer shall be covered hereunder, subject to the terms and conditions of this Contract, except as modified by the special acceptance.  The Reinsurer shall be deemed to have accepted a risk, if it has not responded within five business days after receiving the underwriting information on such risk.  Any renewal of a special acceptance agreed to for a predecessor contract to this Contract, shall automatically be covered hereunder.

ARTICLE 8

Premium

A. As respects the Second Layer only:

The Company shall pay the Reinsurer a flat premium of [$*****], payable in four equal installments of [$*****] on June 1, 2021, September 1, 2021, January 1, 2022 and April 1, 2022.

B As respects the Third Layer through the Sixth Layer only:

1. The Company shall pay the Reinsurer a Deposit Premium in accordance with the schedule set forth below.  The reinsurance premium to be paid to the Reinsurer for the reinsurance provided under each Layer shall be calculated at the Final Adjusted Premium Rates set out below multiplied by the Company’s final Total Insured Value, subject to the applicable Minimum Premium stated below:

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PREMIUM SCHEDULE
Layer	Final Adjusted Premium Rate	Deposit Premium	Minimum Premium
Third Layer	[*****%]	[$*****]	[$*****]
Fourth Layer	[*****%]	[$*****]	[$*****]
Fifth Layer	[*****%]	[$*****]	[$*****]
Sixth Layer	[*****%]	[$*****]	[$*****]

2. The Deposit Premiums set forth in subparagraph B(1) above shall be payable to the Reinsurer by the Company in installments as follows:

DEPOSIT INSTALLMENT SCHEDULE
Layer	June 1, 2021	September 1, 2021	January 1, 2022	April 1, 2022
Third Layer	[$*****]	[$*****]	[$*****]	[$*****]
Fourth Layer	[$*****]	[$*****]	[$*****]	[$*****]
Fifth Layer	[$*****]	[$*****]	[$*****]	[$*****]
Sixth Layer	[$*****]	[$*****]	[$*****]	[$*****]

3. Within 45 days following the expiration of this Contract, the Company shall provide the Reinsurer with a report showing the Company’s final Total Insured Value.  This final Total Insured Value shall be multiplied by the Final Adjusted Premium Rate for each Layer as stated in subparagraph B(1) above.  Should this amount be greater than or equal to [*****%] and less than or equal to [*****%] of the Deposit Premium as set forth above, there shall be no additional or return premium due.  Should the amount so calculated exceed [*****%] of the Deposit Premium paid in accordance with subparagraph B(1) above, the Company shall immediately pay the Reinsurer the difference in excess of [*****%] of the Deposit Premium.  Should the amount so calculated be less than [*****%] of the Deposit Premium paid in accordance with subparagraph B(1) of this Article, the Reinsurer shall immediately pay the Company the difference below [*****%] of the Deposit Premium, subject to the Minimum Premium as set forth above.

C. “Total Insured Value” means the Company’s aggregate wind exposures on September 30, 2021 for business covered hereunder.

D. The estimated Total Insured Value is [$*****].

E. The Company shall furnish the Reinsurer with such reasonably available information as may be reasonably required by the Reinsurer for completion of the Reinsurer’s financial statements.

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ARTICLE 9

Reinstatement

A. Loss payments under any Layer of this Contract shall reduce the limit of coverage afforded by the amounts paid, but the limit of coverage shall be reinstated from the time of the occurrence of the loss, and for each amount so reinstated, the Company agrees to pay, simultaneously with the Reinsurer’s loss payment, an additional premium calculated at pro rata of the Reinsurer’s premium for the applicable layer(s) for the term of this Contract, being pro rata only as to the fraction of the Reinsurer’s limit of liability hereunder (i.e., the fraction of the Reinsurer’s limit of liability for each Loss Occurrence as set forth for the Layer in the Retention and Limit Article) so reinstated.  Nevertheless, the Reinsurer’s liability under the applicable layer(s) shall not exceed such limit(s) in respect of any one Loss Occurrence, nor the applicable limit(s) in respect of all Loss Occurrences commencing during the term of this Contract, as set forth in the Retention and Limit Article.

B. If at the time of a loss settlement hereon the reinsurance premium, as calculated in accordance with the Premium Article, is unknown, the above calculation of reinstatement premium shall be based upon the Deposit Premium, subject to adjustment when the reinsurance premium is finally established.

ARTICLE 10

Definitions

A. 1.“Ultimate Net Loss” means the actual loss paid by the Company or which the Company becomes liable to pay, such loss to include Loss Adjustment Expense, 100% of any Extra Contractual Obligation and 100% of any Loss in Excess of Policy Limits as defined in the Extra Contractual Obligations/Excess of Policy Limits Article.  In no event, however, shall more than 25% of “Ultimate Net Loss” for any one Loss Occurrence be comprised of Extra Contractual Obligations and Loss in Excess of Policy Limits.

2. Salvages and all recoveries (including amounts due from all reinsurances that inure to the benefit of this Contract, whether recovered or not), shall be first deducted from such loss to arrive at the amount of liability attaching hereunder.

3. All salvages, recoveries or payments recovered or received subsequent to loss settlement hereunder shall be applied as if recovered or received prior to the aforesaid settlement, and all necessary adjustments shall be made by the parties hereto.

4. The Company shall be deemed to be “liable to pay” a loss when a judgment has been rendered that the Company does not plan to appeal, and/or the Company has obtained a release, and/or the Company has accepted a proof of loss, and/or the Company has made a commitment to pay, and/or the Company has scheduled the payment of a loss.

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5. Nothing in this clause shall be construed to mean that losses are not recoverable hereunder until the Company’s “Ultimate Net Loss” has been ascertained.

B. “Loss Adjustment Expense” means costs and expenses incurred by the Company in connection with the investigation, appraisal, adjustment, settlement, litigation, defense or appeal of a specific claim or loss, or alleged loss, including but not limited to:

1. court costs;

2. costs of supersedeas and appeal bonds;

3. monitoring counsel expenses;

4. legal expenses and costs incurred in connection with coverage questions and legal actions connected thereto, including but not limited to declaratory judgment actions;

5. post-judgment interest;

6. pre-judgment interest, unless included as part of an award or judgment;

7. a pro rata share of salaries and expenses of Company field employees, calculated in accordance with the time occupied in adjusting such loss, and expenses of other Company employees who have been temporarily diverted from their normal and customary duties and assigned to the field adjustment of losses covered by this Contract; and

8. subrogation, salvage and recovery expenses.

“Loss Adjustment Expense” does not include salaries and expenses of the Company’s employees, except as provided in subparagraph (7) above, and office and other overhead expenses.

C. 1.“Loss Occurrence” means the sum of all individual losses directly occasioned by any one disaster, accident or loss or series of disasters, accidents or losses arising out of one event.  However, the duration and extent of any one “Loss Occurrence” shall be limited to all individual losses sustained by the Company occurring during any period of 168 consecutive hours arising out of and directly occasioned by the same event except that the term “Loss Occurrence” shall be further defined as follows:

a. As regards any “Named Storm,” all individual losses sustained by the Company arising out of and directly occasioned by such “Named Storm,” without regard to the limitations of duration and extent set forth above.  “Named Storm” means any storm or storm system declared by the US National Hurricane Center, US Central Pacific Hurricane Center, US Weather Prediction Center, or their successor organizations, all being  divisions of the US National Weather Service to be a tropical storm or hurricane, and any successors thereof.  A storm or storm system that merges with a “Named Storm” shall be considered part of that “Named

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Storm,” once it has merged.  A “Named Storm” shall be deemed to begin at the effective time and date of the first watch, warning or other official advisory applicable to such tropical storm or hurricane issued by the above referenced governmental meteorological agencies.  A “Named Storm” shall be deemed to end 72 hours after the cancellation of the last watch, warning or other official advisory applicable to such tropical storm, hurricane or successor, issued by the above referenced governmental meteorological agencies irrespective of the duration of the timing or spacing between such watches, warnings or other official advisories.  If two or more storms are assigned different names by the above referenced governmental meteorological agencies, each of those storms shall constitute a separate event for purposes of this definition.

b. As regards windstorm, hail, tornado, cyclone, including ensuing collapse and water damage other than “Named Storm,” all individual losses sustained by the Company occurring during any period of 96 consecutive hours arising out of and directly occasioned by the same event.

c. As regards riot, riot attending a strike, civil commotion, vandalism and malicious mischief, all individual losses sustained by the Company occurring during any period of 96 consecutive hours arising out of and directly occasioned by the same event. The maximum duration of 96 consecutive hours may be extended in respect of individual losses that occur beyond such 96 consecutive hours during the continued occupation of an assured’s premises by strikers, provided such occupation commenced during the aforesaid period.

d. As regards earthquake and fire following directly occasioned by the earthquake, those earthquake losses and individual fire losses that commence during the period of 168 consecutive hours may be included in the Company’s “Loss Occurrence.”

e. As regards any related weather conditions involving snow, sleet, freezing rain, freeze, ice, winter weather, and wind losses related to such conditions, all individual losses sustained by the Company, that occur during any period of 168 consecutive hours arising out of and directly occasioned by the same event.

f. As regards firestorms, brush fires and other fires or series of fires, irrespective of origin (except for fires covered in subparagraphs (c) and (d) above) which spread through trees, grassland or other vegetation, all individual losses sustained by the Company occurring during any period of 168 consecutive hours within a 150-mile radius of any fixed point selected by the Company may be included in the Company’s “Loss Occurrence.” However, an individual loss subject to this subparagraph cannot be included in more than one “Loss Occurrence.”

2. Except as provided in subparagraph (1)(a) above:

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a. The Company may choose the date and time when any such period of consecutive hours commences provided that it is not earlier than the date and time of the occurrence of the first recorded individual loss sustained by the Company arising out of that disaster, accident or loss.

b. Only one period of consecutive hours shall apply with respect to one event, except that, as respects those “Loss Occurrences” referred to in subparagraph (1)(c) above, if the disaster, accident or loss occasioned by the event is of greater duration than 96 consecutive hours, then the Company may divide that disaster, accident or loss into two or more “Loss Occurrences” provided no two periods overlap and no individual loss is included in more than one such period and provided that no period commences earlier than the date and time of the occurrence of the first recorded individual loss sustained by the Company arising out of that disaster, accident or loss.

3. Losses arising from a combination of two or more perils as a result of the same event shall be considered as having arisen from one “Loss Occurrence.”  Furthermore, all losses arising from an event involving a combination of losses described in subparagraphs (1)(a) and (1)(b) may be considered as having arisen from one “Loss Occurrence.”  Notwithstanding the foregoing, the hourly limitations as stated above shall not be exceeded as respects the applicable perils, and, except as respects those “Loss Occurrences” involving a “Named Storm” referred to in subparagraph (1)(a) above, no single “Loss Occurrence” shall encompass a time period greater than 168 consecutive hours.

D. “Policy” means any binder, policy, or contract of insurance or reinsurance issued, accepted or held covered provisionally or otherwise, by or on behalf of the Company.

ARTICLE 11

EXTRA CONTRACTUAL OBLIGATIONS/EXCESS OF POLICY LIMITS

A. This Contract shall cover Extra Contractual Obligations, as provided in the definition of Ultimate Net Loss.  “Extra Contractual Obligations” shall be defined as those liabilities not covered under any other provision of this Contract and that arise from the handling of any claim on business covered hereunder, such liabilities arising because of, but not limited to, the following:  failure by the Company to settle within the Policy limit, or by reason of alleged or actual negligence, fraud or bad faith in rejecting an offer of settlement or in the preparation of the defense or in the trial of any action against its insured or reinsured or in the preparation or prosecution of an appeal consequent upon such action.

B. This Contract shall cover Loss in Excess of Policy Limits, as provided in the definition of Ultimate Net Loss.  “Loss in Excess of Policy Limits” shall be defined as Loss in excess of the Policy limit, having been incurred because of, but not limited to, failure by the Company to settle within the Policy limit or by reason of alleged or actual negligence, fraud or bad faith in rejecting an offer of settlement or in the preparation of the defense or in the trial of

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any action against its insured or reinsured or in the preparation or prosecution of an appeal consequent upon such action.

C. An Extra Contractual Obligation and/or Loss in Excess of Policy Limits shall be deemed to have occurred on the same date as the loss covered under the Company’s Policy, and shall constitute part of the original loss.

D. For the purposes of the Loss in Excess of Policy Limits coverage hereunder, the word “Loss” shall mean any amounts for which the Company would have been contractually liable to pay had it not been for the limit of the original Policy.

E. Loss Adjustment Expense in respect of Extra Contractual Obligations and/or Loss in Excess of Policy Limits shall be covered hereunder in the same manner as other Loss Adjustment Expense.

F. However, this Article shall not apply where the loss has been incurred due to final legal adjudication of fraud of a member of the Board of Directors or a corporate officer of the Company acting individually or collectively or in collusion with any individual or corporation or any other organization or party involved in the presentation, defense or settlement of any claim covered hereunder.

G. In no event shall coverage be provided to the extent not permitted under law.

ARTICLE 12

NET RETAINED LIABILITY

A. This Contract applies only to that portion of any loss that the Company retains net for its own account (prior to deduction of any reinsurance that inures solely to the benefit of the Company).

B. The amount of the Reinsurer’s liability hereunder in respect of any loss or losses shall not be increased by reason of the inability of the Company to collect from any other reinsurer(s), whether specific or general, any amounts that may have become due from such reinsurer(s), whether such inability arises from the insolvency of such other reinsurer(s) or otherwise.

ARTICLE 13

OTHER REINSURANCE

The Company shall be permitted to carry in force other reinsurance, recoveries under which shall inure to the benefit of this Contract.

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ARTICLE 14

Original Conditions

All reinsurance under this Contract shall be subject to the same terms, conditions, waivers and interpretations, and to the same modifications and alterations as the respective Policies of the Company.  However, in no event shall this be construed in any way to provide coverage outside the terms and conditions set forth in this Contract.

ARTICLE 15

NO THIRD PARTY RIGHTS

This Contract is solely between the Company and the Reinsurer, and in no instance shall any insured, claimant or other third party have any rights under this Contract except as may be expressly provided otherwise herein.

ARTICLE 16

Notice of Loss and Loss Settlements

A. The Company shall advise the Reinsurer promptly if paid and estimated Ultimate Net Loss is in excess of 75% of the Company’s retention, or if, in the opinion of the Company, such Ultimate Net Loss may result in a claim hereunder.  Thereafter, the Company shall advise the Reinsurer, at least monthly, of all subsequent developments thereto that may materially affect the position of the Reinsurer.

B. The Company alone and at its full discretion shall adjust, settle or compromise all claims and losses.

C. As respects losses subject to this Contract, all loss settlements made by the Company, whether under strict Policy terms or by way of compromise, and any Extra Contractual Obligations and/or Loss in Excess of Policy Limits, shall be binding upon the Reinsurer.  The Reinsurer agrees to pay or allow, as the case may be, its share of each such settlement immediately upon receipt of reasonable evidence of the amount paid by the Company or that the Company estimates it will pay within the next 14 days.  Within 30 days after receipt of the Reinsurer’s payment, the Company shall report to the Reinsurer the Reinsurer’s payment, minus the Reinsurer’s share of losses subject to this Contract that the Company has paid, or become liable to pay, as of the date of the report.  Any positive difference shall be remitted to the Reinsurer with the Company’s report.

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ARTICLE 17

LATE PAYMENTS

A. In the event any payment due either party is not received by the Intermediary by the payment due date, the party to whom payment is due may, by notifying the Intermediary in writing, require the debtor party to pay, and the debtor party agrees to pay, an interest penalty on the amount past due calculated for each such payment on the last business day of each month as follows:

1. The number of full days that have expired since the overdue date or the last monthly calculation, whichever the lesser; times

2. 1/365th of the sum of the six-month United States Treasury Bill rate as quoted in The Wall Street Journal on the first business day of the month for which the calculation is made, plus 1%; times

3. The amount past due, including accrued interest.

Interest shall accumulate until payment of the original amount due plus interest penalties have been received by the Intermediary.

B. The due date shall, for purposes of this Article, be determined as follows:

1. Payments from the Reinsurer to the Company shall be due on the date on which the demand for payment (including delivery of bordereaux or quarterly or monthly reports) is received by the Reinsurer, and shall be overdue 30 days thereafter.

2. Payments from the Company to the Reinsurer shall be due on the dates specified within this Contract.  Payments shall be overdue 30 days thereafter except for the first installment of premium, if applicable, which shall be overdue 60 days from inception or 30 days from final line-signing, whichever the later.  Reinstatement premium, if applicable, shall have as a due date the date when the Company receives payment for the claim giving rise to such reinstatement premium, and payment shall be overdue 30 days thereafter. In the event a due date is not specifically stated for a given payment, the overdue date shall be 30 days following the date of billing.

C. If the information contained in the Company’s demand for payment is insufficient or not in accordance with the conditions of this Contract, then within 30 days the Reinsurer shall request from the Company all additional information necessary to validate its claim and the payment due date as defined in paragraph B shall be deemed to be the date upon which the Reinsurer received the requested additional information.  This paragraph is only for the purpose of establishing when a payment is overdue, and shall not alter the provisions of the Notice of Loss and Loss Settlements Article or other pertinent contractual stipulations.

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D. In the event arbitration is necessary to settle a dispute, the panel shall have the authority to make a determination awarding interest to the prevailing party.  Interest, if any, awarded by the panel shall supersede the interest amounts outlined herein.

E. Any interest owed pursuant to this Article may be waived by the party to which it is owed.  Waiver of such interest, however, shall not affect the waiving party’s rights to other interest amounts due as a result of this Article.

ARTICLE 18

OFFSET

Each party hereto shall have, and may exercise at any time and from time to time, the right to offset any and all balances due from a party to the other arising under this Contract.  In the event of the insolvency of a party hereto, offsets shall only be allowed in accordance with the provisions of any applicable law governing offset entitlement.

ARTICLE 19

Currency

A. Where the word “Dollars” and/or the sign “$” appear in this Contract, they shall mean United States Dollars, and all payments hereunder shall be in United States Dollars.

B. For purposes of this Contract, where the Company receives premiums or pays losses in currencies other than United States Dollars, such premiums or losses shall be converted into United States Dollars at the actual rates of exchange at which these premiums or losses are entered in the Company’s books.

ARTICLE 20

Unauthorized Reinsurance

A. This Article applies only to the extent a Subscribing Reinsurer does not qualify for credit with any insurance regulatory authority having jurisdiction over the Company’s reserves.

B. The Company agrees, in respect of its Policies or bonds falling within the scope of this Contract, that when it files with its insurance regulatory authority, or sets up on its books liabilities as required by law, it shall forward to the Reinsurer a statement showing the proportion of such liabilities applicable to the Reinsurer.  The “Reinsurer’s Obligations” shall be defined as follows:

1. unearned premium (if applicable);

2. known outstanding losses that have been reported to the Reinsurer and Loss Adjustment Expense relating thereto;

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3. losses and Loss Adjustment Expense paid by the Company but not recovered from the Reinsurer;

4. losses incurred but not reported and Loss Adjustment Expense relating thereto;

5. all other amounts for which the Company cannot take credit on its financial statements unless funding is provided by the Reinsurer.

C. The Reinsurer’s Obligations shall be funded by funds withheld, cash advances, Trust Agreement or a Letter of Credit (LOC).  The Reinsurer shall have the option of determining the method of funding provided it is acceptable to the insurance regulatory authorities having jurisdiction over the Company’s reserves.

D. When funding by Trust Agreement, the Reinsurer shall ensure that the Trust Agreement complies with the provisions of the “Trust Agreement Requirements Clause” attached hereto.  When funding by an LOC, the Reinsurer agrees to apply for and secure timely delivery to the Company of a clean, irrevocable and unconditional LOC issued by a bank and containing provisions acceptable to the insurance regulatory authorities having jurisdiction over the Company’s reserves in an amount equal to the Reinsurer’s Obligations.  Such LOC shall be issued for a period of not less than one year, and shall be automatically extended for one year from its date of expiration or any future expiration date unless 30 days (or such other time period as may be required by insurance regulatory authorities), prior to any expiration date the issuing bank shall notify the Company by certified or registered mail that the issuing bank elects not to consider the LOC extended for any additional period.

E. The Reinsurer and the Company agree that any funding provided by the Reinsurer pursuant to the provisions of this Contract may be drawn upon at any time, notwithstanding any other provision of this Contract, and be utilized by the Company or any successor, by operation of law, of the Company including, without limitation, any liquidator, rehabilitator, receiver or conservator of the Company, for the following purposes, unless otherwise provided for in a separate Trust Agreement:

1. to reimburse the Company for the Reinsurer’s Obligations, the payment of which is due under the terms of this Contract and that has not been otherwise paid;

2. to make refund of any sum that is in excess of the actual amount required to pay the Reinsurer’s Obligations under this Contract (or in excess of 102% of the Reinsurer’s Obligations, if funding is provided by a Trust Agreement);

3. to fund an account with the Company for the Reinsurer’s Obligations.  Such cash deposit shall be held in an interest bearing account separate from the Company’s other assets, and interest thereon not in excess of the prime rate shall accrue to the benefit of the Reinsurer.  Any taxes payable on accrued interest shall be paid out of the assets in the account that are in excess of the Reinsurer’s Obligations (or in excess of 102% of the Reinsurer’s Obligations, if funding is provided by a Trust Agreement).  If the assets are inadequate to pay taxes, any taxes due shall be paid or reimbursed by the Reinsurer;

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4. to pay the Reinsurer’s share of any other amounts the Company claims are due under this Contract.

F. If the amount drawn by the Company is in excess of the actual amount required for E(1) or E(3), or in the case of E(4), the actual amount determined to be due, the Company shall promptly return to the Reinsurer the excess amount so drawn.  All of the foregoing shall be applied without diminution because of insolvency on the part of the Company or the Reinsurer.

G. The issuing bank shall have no responsibility whatsoever in connection with the propriety of withdrawals made by the Company or the disposition of funds withdrawn, except to ensure that withdrawals are made only upon the order of properly authorized representatives of the Company.

H. At annual intervals, or more frequently at the discretion of the Company, but never more frequently than quarterly, the Company shall prepare a specific statement of the Reinsurer’s Obligations for the sole purpose of amending the LOC or other method of funding, in the following manner:

1. If the statement shows that the Reinsurer’s Obligations exceed the balance of the LOC as of the statement date, the Reinsurer shall, within 30 days after receipt of the statement, secure delivery to the Company of an amendment to the LOC increasing the amount of credit by the amount of such difference.  Should another method of funding be used, the Reinsurer shall, within the time period outlined above, increase such funding by the amount of such difference.

2. If, however, the statement shows that the Reinsurer’s Obligations are less than the balance of the LOC (or that 102% of the Reinsurer’s Obligations are less than the trust account balance if funding is provided by a Trust Agreement), as of the statement date, the Company shall, within 30 days after receipt of written request from the Reinsurer, release such excess credit by agreeing to secure an amendment to the LOC reducing the amount of credit available by the amount of such excess credit.  Should another method of funding be used, the Company shall, within the time period outlined above, decrease such funding by the amount of such excess.

ARTICLE 21

TAXES

A. In consideration of the terms under which this Contract is issued, the Company undertakes not to claim any deduction of the premium hereon when making Canadian tax returns or when making tax returns, other than Income or Profits Tax returns, to any state or territory of the United States of America or to the District of Columbia.

B. 1.Each Subscribing Reinsurer has agreed to allow, for the purpose of paying the Federal Excise Tax, the applicable percentage of the premium payable hereon (as imposed

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under the Internal Revenue Code) to the extent such premium is subject to Federal Excise Tax.

2. In the event of any return of premium becoming due hereunder, the Subscribing Reinsurer shall deduct the applicable percentage of the premium from the amount of the return, and the Company or its agent should take steps to recover the Tax from the U.S. Government.

ARTICLE 22

ACCESS TO RECORDS

A. The Reinsurer or its duly authorized representatives shall have the right to visit the offices of the Company to inspect, examine, audit, and verify any of the policy, accounting or claim files (“Records”) relating to business reinsured under this Contract during regular business hours after giving five working days’ prior notice.  This right shall be exercisable during the term of this Contract or after the expiration of this Contract.  Notwithstanding the above, the Reinsurer shall not have any right of access to the Records of the Company if it is not current in all undisputed payments due the Company.

B. Notwithstanding the above, the Company reserves the right to withhold from the Reinsurer any Privileged Documents.  However, the Company shall permit and not object to the Reinsurer’s access to Privileged Documents in connection with the underlying claim reinsured hereunder following final settlement or final adjudication of the case or cases involving such claim, with prejudice against all claimants and all parties to such adjudications; the Company may defer release of such Privileged Documents if there are subrogation, contribution, or other third party actions with respect to that claim or case, and the Company’s defense might be jeopardized by release of such Privileged Documents.  In the event that the Company seeks to defer release of such Privileged Documents, it shall, in consultation with the Reinsurer, take other steps as reasonably necessary to provide the Reinsurer with the information it reasonably requires to indemnify the Company without causing a loss of such privileges or protections.  The Reinsurer shall not have access to Privileged Documents relating to any dispute between the Company and the Reinsurer.

C. For purposes of this Article:

1. “Privileged Documents” means any documents that are Attorney-Client Privilege Documents and/or Work Product Privilege Documents.

2. “Attorney-Client Privilege Documents” means communications of a confidential nature between (a) the Company, or anyone retained by or at the direction of the Company, or its in‑house or outside legal counsel, or anyone in the control of such legal counsel, and (b) any in-house or outside legal counsel, if such communications relate to legal advice being sought by the Company and/or contain legal advice being provided to the Company.

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3. “Work Product Privilege Documents” means communications, written materials and tangible things prepared by or for in-house or outside counsel, or prepared by or for the Company, in anticipation of or in connection with litigation, arbitration, or other dispute resolution proceedings.

ARTICLE 23

CONFIDENTIALITY

A. The Reinsurer hereby acknowledges that the documents, information and data provided to it by the Company, whether directly or through an authorized agent, in connection with the placement and execution of this Contract (“Confidential Information”) are proprietary and confidential to the Company.  Confidential Information shall not include documents, information or data that the Reinsurer can show:

1. are publicly known or have become publicly known through no unauthorized act of the Reinsurer;

2. have been rightfully received from a third person without obligation of confidentiality; or

3. were known by the Reinsurer prior to the placement of this Contract without an obligation of confidentiality.

B. Absent the written consent of the Company, the Reinsurer shall not disclose any Confidential Information to any third parties, including any affiliated companies (except to the extent necessary to enable affiliated companies or third parties engaged by the Reinsurer to perform services related to this Contract on behalf of the Reinsurer), except:

1. when required by retrocessionaires as respects business ceded to this Contract;

2. when required by regulators performing an audit of the Reinsurer’s records and/or financial condition; or

3. when required by external auditors performing an audit of the Reinsurer’s records in the normal course of business.

Further, the Reinsurer agrees not to use any Confidential Information for any purpose not related to the performance of its obligations or enforcement of its rights under this Contract.

C. Notwithstanding the above, in the event that the Reinsurer is required by court order, other legal process or any regulatory authority to release or disclose any or all of the Confidential Information, the Reinsurer agrees to provide the Company with written notice of same at least 10 days prior to such release or disclosure and to use its best efforts to assist the Company in maintaining the confidentiality provided for in this Article.

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D. The provisions of this Article shall extend to the officers, directors and employees of the Reinsurer and its affiliates, and shall be binding upon their successors and assigns.

ARTICLE 24

Indemnification and Errors and Omissions

A. The Reinsurer is reinsuring, subject to the terms and conditions of this Contract, the obligations of the Company under any Policy.  The Company shall be the sole judge as to:

1. what shall constitute a claim or loss covered under any Policy;

2. the Company’s liability thereunder; and

3. the amount or amounts that it shall be proper for the Company to pay thereunder.

B. The Reinsurer shall be bound by the judgment of the Company as to the obligation(s) and liability(ies) of the Company under any Policy.

C. Any inadvertent error, omission or delay in complying with the terms and conditions of this Contract shall not be held to relieve either party hereto from any liability that would attach to it hereunder if such error, omission or delay had not been made, provided such error, omission or delay is rectified immediately upon discovery.

D. Nothing in this Article shall be construed to override any of the other terms and conditions of this Contract.

ARTICLE 25

Insolvency

A. If more than one reinsured company is referenced within the definition of “Company” in the Preamble to this Contract, this Article shall apply severally to each such company.  Further, this Article and the laws of the domiciliary state shall apply in the event of the insolvency of any company covered hereunder.  In the event of a conflict between any provision of this Article and the laws of the domiciliary state of any company covered hereunder, that domiciliary state’s laws shall prevail.

B. In the event of the insolvency of the Company, this reinsurance (or the portion of any risk or obligation assumed by the Reinsurer, if required by applicable law) shall be payable directly to the Company, or to its liquidator, receiver, conservator or statutory successor, either:  (1) on the basis of the liability of the Company, or (2) on the basis of claims filed and allowed in the liquidation proceeding, whichever may be required by applicable statute, without diminution because of the insolvency of the Company or because the liquidator, receiver, conservator or statutory successor of the Company has failed to pay all or a portion of any claim.  It is agreed, however, that the liquidator, receiver, conservator or statutory successor of the Company shall give written notice to the Reinsurer of the pendency of a claim against

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the Company indicating the Policy or bond reinsured, which claim would involve a possible liability on the part of the Reinsurer within a reasonable time after such claim is filed in the conservation or liquidation proceeding or in the receivership, and that during the pendency of such claim, the Reinsurer may investigate such claim and interpose, at its own expense, in the proceeding where such claim is to be adjudicated any defense or defenses that it may deem available to the Company or its liquidator, receiver, conservator or statutory successor.  The expense thus incurred by the Reinsurer shall be chargeable, subject to the approval of the court, against the Company as part of the expense of conservation or liquidation to the extent of a pro rata share of the benefit that may accrue to the Company solely as a result of the defense undertaken by the Reinsurer.

C. Where two or more reinsurers are involved in the same claim and a majority in interest elect to interpose defense to such claim, the expense shall be apportioned in accordance with the terms of this reinsurance Contract as though such expense had been incurred by the Company.

D. As to all reinsurance made, ceded, renewed or otherwise becoming effective under this Contract, the reinsurance shall be payable as set forth above by the Reinsurer to the Company or to its liquidator, receiver, conservator or statutory successor, (except as provided by Section 4118(a)(1)(A) of the New York Insurance Law, provided the conditions of 1114(c) of such law have been met, if New York law applies) or except (1) where the Contract specifically provides another payee in the event of the insolvency of the Company, or (2) where the Reinsurer, with the consent of the direct insured or insureds, has assumed such Policy obligations of the Company as direct obligations of the Reinsurer to the payees under such Policies and in substitution for the obligations of the Company to such payees.  Then, and in that event only, the Company, with the prior approval of the certificate of assumption on New York risks by the Superintendent of Financial Services of the State of New York, or with the prior approval of such other regulatory authority as may be applicable, is entirely released from its obligation and the Reinsurer shall pay any loss directly to payees under such Policy.

ARTICLE 26

RUN-OFF REINSURER

A. “Run-off Reinsurer” means any Subscribing Reinsurer that:

1. has been ordered by a state insurance department or other legal authority to cease writing business, or has been placed under regulatory supervision or in rehabilitation; or

2. has ceased reinsurance underwriting operations; or

3. has transferred its claims-paying authority to an unaffiliated entity; or

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4. engages in a process of Scheme of Arrangement or similar procedure related to this Contract, including but not limited to an insurance business transfer scheme pursuant to Part VII of the Financial Services and Markets Act 2000 (U.K.), as may be amended from time to time; or

5. in any other way has assigned its interests or delegated its obligations under this Contract to an unaffiliated entity.

Notwithstanding the foregoing, agreement by a Lloyd’s syndicate to follow claim settlements procedures under Lloyd’s Claims Scheme (Combined) shall not constitute a transfer of its claims-paying authority, for purposes of subparagraphs (3) and (5) of this paragraph.

B. Notwithstanding any other provision of this Contract, in the event that a Subscribing Reinsurer becomes a Run-off Reinsurer at any time, the Company may elect, by giving written notice to the Run-off Reinsurer at any time thereafter, that all or any of the following shall apply to the Run-off Reinsurer’s participation hereunder:

1. Should the Run-off Reinsurer fail to pay amounts due hereunder, the interest penalty specified in the Late Payments Article shall be increased by 0.5% for each 30 days that a payment is past due, subject to a maximum increase of 7.0%.

2. The Run-off Reinsurer’s liability for losses for Policies covered by this Contract shall be commuted.  In the event the Company and the Run-off Reinsurer cannot agree on the commutation amount of the Run-off Reinsurer’s liability under such Policies, they shall appoint an actuary and/or appraiser to assess such liability and shall share equally any expense of the actuary and/or appraiser.  If the Company and the Run-off Reinsurer cannot agree on an actuary and/or appraiser, the Company and the Run-off Reinsurer each shall nominate three individuals, of whom the other shall decline two, and the final appointment shall be made by drawing lots.  Payment by the Run-off Reinsurer of the amount of liability ascertained shall constitute a complete and final release of both parties under this Contract.

3. The Run-off Reinsurer shall have no right of access to the Records of the Company if the Run-off Reinsurer has denied payment of any claim hereunder or there is a pending arbitration between the Company and the Run-off Reinsurer regarding any claim hereunder.  A reservation of rights shall be considered a denial of a claim.  Notwithstanding the above, the Run-off Reinsurer shall continue to have access to Records of the Company for any claim for which it has raised a query within 30 days of its receipt of a billing, but any inspection of Records must be completed within 90 days of receipt of billing or access will be deemed waived.

4. The provisions of the Arbitration Article shall not apply.  

C. The Company’s waiver of any rights provided in this Article is not a waiver of that right or other rights at a later date.

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ARTICLE 27

Arbitration

A. Any dispute arising out of the interpretation, performance or breach of this Contract, including the formation or validity thereof, shall be submitted for decision to a panel of three arbitrators.  Notice requesting arbitration shall be in writing and sent certified or registered mail, return receipt requested.

B. One arbitrator shall be chosen by each party and the two arbitrators shall then choose an impartial third arbitrator who shall preside at the hearing.  If either party fails to appoint its arbitrator within 30 days after being requested to do so by the other party, the latter, after 10 days’ prior notice by certified or registered mail of its intention to do so, may appoint the second arbitrator.

C. If the two arbitrators do not agree on a third arbitrator within 60 days of their appointment, the third arbitrator shall be chosen in accordance with the procedures for selecting the third arbitrator in force on the date the arbitration is demanded, established by the AIDA Reinsurance and Insurance Arbitration Society – U.S. (ARIAS).  The arbitrators shall be persons knowledgeable about insurance and reinsurance who have no personal or financial interest in the result of the arbitration.  If a member of the panel dies, becomes disabled or is otherwise unwilling or unable to serve, a substitute shall be selected in the same manner as the departing member was chosen and the arbitration shall continue.

D. Within 30 days after all arbitrators have been appointed, the panel shall meet and determine timely periods for briefs, discovery procedures and schedules of hearings.

E. The panel shall be relieved of all judicial formality and shall not be bound by the strict rules of procedure and evidence.  Notwithstanding anything to the contrary in this Contract, the arbitrators may at their discretion, consider underwriting and placement information provided by the Company to the Reinsurer, as well as any correspondence exchanged by the parties that is related to this Contract.  The arbitration shall take place in Tampa, Florida, or at such other place as the parties shall agree.  The decision of any two arbitrators shall be in writing and shall be final and binding.  The panel is empowered to grant interim relief as it may deem appropriate.

F. The panel shall interpret this Contract as an honorable engagement rather than as merely a legal obligation and shall make its decision considering the custom and practice of the applicable insurance and reinsurance business as promptly as possible after the hearings.  Judgment upon an award may be entered in any court having jurisdiction thereof.

G. Each party shall bear the expense of its own arbitrator and shall jointly and equally bear with the other party the cost of the third arbitrator.  The remaining costs of the arbitration shall be allocated by the panel.  The panel may, at its discretion, award such further costs and expenses as it considers appropriate, including but not limited to attorneys’ fees, to the extent permitted by law.

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ARTICLE 28

Expedited Arbitration

A. Notwithstanding the provisions of the Arbitration Article, in the event an amount in dispute hereunder $1,000,000 or less, the parties will submit to an expedited arbitration process with the use of a single arbitrator.  The arbitrator will be chosen in accordance with the procedures for selecting an arbitrator in force on the date the arbitration is demanded, established by the AIDA Reinsurance and Insurance Arbitration Society - U.S. (ARIAS).

B. Each party’s case will be submitted to the arbitrator within 100 calendar days of the date of determination of the arbitrator.  Discovery will be limited to exchanging only those documents directly relating to the issue in dispute, subject to a limit of two discovery depositions from each party, unless otherwise authorized by the arbitrator upon a showing of good cause.

C. Within 120 calendar days of the date of determination of the arbitrator, the hearing will be completed and a written award will be issued by the arbitrator.  As the parties agree that time is of the essence, the sole arbitrator does not have the authority to lengthen the schedule, absent agreement of both parties.  The arbitrator will have all the powers conferred on the arbitration panel as provided in the Arbitration Article, and said Article will apply to all matters not specifically addressed above.

ARTICLE 29

SERVICE OF SUIT

A. This Article applies only to those Subscribing Reinsurers not domiciled in the United States of America, and/or not authorized in any state, territory and/or district of the United States of America where authorization is required by insurance regulatory authorities.

B. This Article shall not be read to conflict with or override the obligations of the parties to arbitrate their disputes as provided for in the Arbitration Article.  This Article is intended as an aid to compelling arbitration or enforcing such arbitration or arbitral award, not as an alternative to the Arbitration Article for resolving disputes arising out of this Contract.

C. In the event of the failure of the Reinsurer to perform its obligations hereunder, the Reinsurer, at the request of the Company, shall submit to the jurisdiction of a court of competent jurisdiction within the United States.  Nothing in this Article constitutes or should be understood to constitute a waiver of the Reinsurer’s rights to commence an action in any court of competent jurisdiction in the United States, to remove an action to a United States District Court, or to seek a transfer of a case to another court as permitted by the laws of the United States or of any state in the United States.  The Reinsurer, once the appropriate court is selected, whether such court is the one originally chosen by the Company and accepted by the Reinsurer or is determined by removal, transfer, or otherwise, as provided for above, shall comply with all requirements necessary to give said court jurisdiction and, in any suit

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instituted against the Reinsurer upon this Contract, shall abide by the final decision of such court or of any appellate court in the event of an appeal.

D. Service of process in such suit may be made upon:

1. as respects Underwriting Members of Lloyd’s, London: Lloyd’s America, Inc., Attention: Legal Department, 280 Park Avenue, East Tower, 25^th Floor, New York, New York 10017;

2. as respects any other Subscribing Reinsurer: Messrs. Mendes and Mount, 750 Seventh Avenue, New York, New York 10019-6829, or another party specifically designated in the Subscribing Reinsurer’s Interests and Liabilities Agreement attached hereto.  

The above-named are authorized and directed to accept service of process on behalf of the Reinsurer in any such suit.

E. Further, pursuant to any statute of any state, territory or district of the United States that makes provision therefor, the Reinsurer hereby designates the Superintendent, Commissioner or Director of Insurance, or other officer specified for that purpose in the statute, or his successor or successors in office, as its true and lawful attorney upon whom may be served any lawful process in any action, suit or proceeding instituted by or on behalf of the Company or any beneficiary hereunder arising out of this Contract, and hereby designates the above-named as the person to whom the said officer is authorized to mail such process or a true copy thereof.

ARTICLE 30

GOVERNING LAW

This Contract shall be governed as to performance, administration and interpretation by the laws of the State of Florida, exclusive of conflict of law rules.  However, with respect to credit for reinsurance, the rules of all applicable states shall apply.

ARTICLE 31

ENTIRE AGREEMENT

This Contract sets forth all of the duties and obligations between the Company and the Reinsurer and supersedes any and all prior or contemporaneous written agreements with respect to matters referred to in this Contract.  This Contract may not be modified or changed except by an amendment to this Contract in writing signed by both parties.  However, this Article shall not be construed as limiting the admissibility of evidence regarding the formation, interpretation, purpose or intent of this Contract.

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ARTICLE 32

NON-WAIVER

The failure of the Company or the Reinsurer to insist on compliance with this Contract or to exercise any right or remedy hereunder shall not constitute a waiver of any rights contained in this Contract nor prevent either party from thereafter demanding full and complete compliance nor prevent either party from exercising such remedy in the future.

ARTICLE 33

AGENCY

For purposes of sending and receiving notices and payments required by this Contract, the reinsured company that is set forth first in the Preamble to this Contract shall be deemed the agent of all other reinsured companies referenced in the Preamble.  In no event, however, shall any reinsured company be deemed the agent of another with respect to the terms of the Insolvency Article.

ARTICLE 34

Intermediary

Guy Carpenter & Company, LLC, is hereby recognized as the Intermediary negotiating this Contract for all business hereunder.  All communications (including notices, statements, premiums, return premiums, commissions, taxes, losses, Loss Adjustment Expenses, salvages, and loss settlements) relating thereto shall be transmitted to the Company or the Reinsurer through the Intermediary.  Payments by the Company to the Intermediary shall be deemed payment to the Reinsurer.  Payments by the Reinsurer to the Intermediary shall be deemed payment to the Company only to the extent that such payments are actually received by the Company.

ARTICLE 35

MODE OF EXECUTION

A. This Contract may be executed by:

1. an original written ink signature of paper documents;

2. an exchange of facsimile copies showing the original written ink signature of paper documents;

3. electronic signature technology employing computer software and a digital signature or digitizer pen pad to capture a person’s handwritten signature in such a manner that the signature is unique to the person signing, is under the sole control of the person signing, is capable of verification to authenticate the signature and is linked to the

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document signed in such a manner that if the data is changed, such signature is invalidated.

B. The use of any one or a combination of these methods of execution shall constitute a legally binding and valid signing of this Contract.  This Contract may be executed in one or more counterparts, each of which, when duly executed, shall be deemed an original.

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IN WITNESS WHEREOF, the Company has caused this Contract to be executed by its duly authorized representative(s), who also confirms the Company’s review of and agreement to be bound by the terms and conditions of the Interests and Liabilities Agreements attached to and forming part of this Contract;

On this _____ day of __________, in the year of 2021.

Typtap insurance company

Homeowners Choice Property & Casualty
Insurance Company, INC.

Signature:	Title:
Print Name:

NON-FLORIDA PROPERTY CATASTROPHE
EXCESS OF LOSS REINSURANCE CONTRACT

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POOLS, ASSOCIATIONS & SYNDICATES EXCLUSIONS CLAUSE

Section A:

This Contract excludes:

a. All business derived directly or indirectly from any Pool, Association or Syndicate which maintains its own reinsurance facilities.

b. Any Pool or Scheme (whether voluntary or mandatory) formed after March 1, 1968 for the purpose of insuring property, whether on a country-wide basis or in respect of designated areas.  This exclusion shall not apply to so-called Automobile Insurance Plans or other Pools formed to provide coverage for Automobile Physical Damage.

Section B:

1. This Contract excludes business written by the Company for the same perils, which is known at the time to be insured by, or in excess of underlying amounts placed in, any Pool, Association or Syndicate, whether by way of insurance or reinsurance, formed for the purpose of writing any of the following:

Oil, Gas or Petro-Chemical Plants

Oil or Gas Drilling Rigs and/or

Aviation Risks

2. The exclusion under paragraph 1 of this Section B does not apply:

a. Where the Total Insured Value over all interests of the risk in question is less than $250,000,000.

b. To interests traditionally underwritten as Inland Marine and/or Stock and/or Contents written on a Blanket basis.

c. To Contingent Business Interruption, except when the Company is aware that the key location is known at the time to be insured in any Pool, Association or Syndicate named above, other than as provided for under subparagraph (a).

Section C:

1. Nevertheless the Reinsurer specifically agrees that liability accruing to the Company from its participation in Residual Market Mechanisms, including but not limited to the following, for all perils otherwise protected hereunder shall not be excluded herefrom:

a. So-called “Beach and Windstorm Plans” and so-called “Coastal Pools”;

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b. All “FAIR Plan” and “Rural Risk Plan” business;

c. Louisiana Citizens Property Insurance Corporation;

d. California Earthquake Authority (“CEA”) or any similar entity.

Notwithstanding the above, assessments related to the Florida Hurricane Catastrophe Fund and Citizens Property Insurance Corporation (Florida) shall be excluded hereunder.

2. However, this reinsurance does not include any increase in such liability resulting from:

a. The inability of any other participant in such Residual Market Mechanisms to meet its liability;

b. Any claim against a Residual Market Mechanism or any participant therein, including the Company, whether by way of subrogation or otherwise, brought by or on behalf of any insolvency fund (as defined in the Exclusions Article);

c. Any assessment or surcharge levied on the policyholder and therefore not a liability of the Company;

d. The Company’s initial capital contribution to the CEA;

e. Any assessments, other than interim and regular assessments, from a Residual Market Mechanism included in subparagraph 1(c) above;

f. Any expenditure to purchase or retire bonds.

3. The Company may include in Ultimate Net Loss for any Loss Occurrence covered hereunder only the liability attributable to that Loss Occurrence.  If the relevant entity does not specify what portion of an assessment is attributable to each Loss Occurrence, the Company may include in Ultimate Net Loss in respect of each Loss Occurrence a percentage of the Company’s assessments from the relevant entity related to the calendar year in which the Loss Occurrence commenced, regardless of when assessed, such percentage to be determined by dividing the relevant entity’s losses arising from the Loss Occurrence by its total losses for the calendar year.

4. The Company will deduct from Ultimate Net Loss amounts received as recoupment of any assessment that has been included in the Ultimate Net Loss, provided the recoupment is directly allocable to the assessment (“itemized recoupment”).  The Company shall use commercially reasonable efforts to recoup such assessment.  Any amount received as an itemized recoupment of any assessment (whether under this Contract or any predecessor contract), and therefore deductible from Ultimate Net Loss, shall not be included in the subject premium of this Contract.

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However, if a state levies assessments but does not allow itemized recoupment from policyholders, instead allowing the Company to file an overall increased rate, any such premium increased thereby shall not be deemed to be a recoupment that is deductible from Ultimate Net Loss.  Any recoupment received as part of a general premium rate increase, not specifically itemized, shall be included as part of the subject premium of this Contract or a successor contract, as applicable.

NOTES: Wherever used herein the terms:

“Company” shall be understood to mean “Company”, “Reinsured”, “Reassured” or whatever other term is used in the attached reinsurance document to designate the reinsured company or companies.

“Contract” shall be understood to mean “Agreement,” “Contract,” “Policy” or whatever other term is used to designate the attached reinsurance document.

“Reinsurer” shall be understood to mean “Reinsurer,” “Reinsurers,” “Underwriters” or whatever other term is used in the attached reinsurance document to designate the reinsurer or reinsurers.

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Nuclear Incident Exclusion Clause - Physical Damage - Reinsurance - U.S.A.

1. This Reinsurance does not cover any loss or liability accruing to the Reassured, directly or indirectly, and whether as Insurer or Reinsurer, from any Pool of Insurers or Reinsurers formed for the purpose of covering Atomic or Nuclear Energy risks.

2. Without in any way restricting the operation of paragraph (1) of this clause, this Reinsurance does not cover any loss or liability accruing to the Reassured, directly or indirectly and whether as Insurer or Reinsurer, from any insurance against Physical Damage (including business interruption or consequential loss arising out of such Physical Damage) to:

I. Nuclear reactor power plants including all auxiliary property on the site, or

II. Any other nuclear reactor installation, including laboratories handling radioactive materials in connection with reactor installations, and “critical facilities” as such, or

III. Installations for fabricating complete fuel elements or for processing substantial quantities of “special nuclear material”, and for reprocessing, salvaging, chemically separating, storing or disposing of “spent” nuclear fuel or waste materials, or

IV. Installations other than those listed in paragraph (2) III above using substantial quantities of radioactive isotopes or other products of nuclear fission.

3. Without in any way restricting the operations of paragraphs (1) and (2) hereof, this Reinsurance does not cover any loss or liability by radioactive contamination accruing to the Reassured, directly or indirectly, and whether as Insurer or Reinsurer, from any insurance on property which is on the same site as a nuclear reactor power plant or other nuclear installation and which normally would be insured therewith except that this paragraph (3) shall not operate

(a) where Reassured does not have knowledge of such nuclear reactor power plant or nuclear installation, or

(b) where said insurance contains a provision excluding coverage for damage to property caused by or resulting from radioactive contamination, however caused. However on and after 1st January 1960 this sub-paragraph (b) shall only apply provided the said radioactive contamination exclusion provision has been approved by the Governmental Authority having jurisdiction thereof.

4. Without in any way restricting the operations of paragraphs (1), (2) and (3) hereof, this Reinsurance does not cover any loss or liability by radioactive contamination accruing to the Reassured, directly or indirectly, and whether as Insurer or Reinsurer, when such radioactive contamination is a named hazard specifically insured against.

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5. It is understood and agreed that this clause shall not extend to risks using radioactive isotopes in any form where the nuclear exposure is not considered by the Reassured to be the primary hazard.

6. The term “special nuclear material” shall have the meaning given it in the Atomic Energy Act of 1954 or by any law amendatory thereof.

7. Reassured to be sole judge of what constitutes:

(a) substantial quantities, and

(b) the extent of installation, plant or site.

Note:  Without in any way restricting the operation of paragraph (1) hereof, it is understood and agreed that

(a) all policies issued by the Reassured on or before 31st December 1957 shall be free from the application of the other provisions of this Clause until expiry date or 31st December 1960 whichever first occurs whereupon all the provisions of this Clause shall apply.

(b) with respect to any risk located in Canada policies issued by the Reassured on or before 31st December 1958 shall be free from the application of the other provisions of this Clause until expiry date or 31st December 1960 whichever first occurs whereupon all the provisions of this Clause shall apply.

12/12/57

NMA 1119

NOTES: Wherever used herein the terms:

“Reassured” shall be understood to mean “Company”, “Reinsured”, “Reassured” or whatever other term is used in the attached reinsurance document to designate the reinsured company or companies.

“Agreement” shall be understood to mean “Agreement”, “Contract”, “Policy” or whatever other term is used to designate the attached reinsurance document.

“Reinsurers” shall be understood to mean “Reinsurers”, “Underwriters” or whatever other term is used in the attached reinsurance document to designate the reinsurer or reinsurers.

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TERRORISM EXCLUSION

A. Notwithstanding any provision to the contrary within this Contract or any endorsement thereto, it is agreed that this Contract excludes loss, damage, cost, or expense directly or indirectly caused by, contributed to by, resulting from, or arising out of or in connection with any Act of Terrorism, as defined herein, regardless of any other cause or event contributing concurrently or in any other sequence to the loss.

B. An “Act of Terrorism” includes any act, or preparation in respect of action, or threat of action designed to influence the government de jure or de facto of any nation or any political division thereof, or in pursuit of political, religious, ideological, or similar purposes to intimidate the public or a section of the public of any nation by any person or group(s) of persons whether acting alone or on behalf of or in connection with any organization(s) or government(s) de jure or de facto, and which:

a. involves violence against one or more persons; or

b. involves damage to property; or

c. endangers life other than that of the person committing the action; or

d. creates a risk to health or safety of the public or a section of the public; or

e. is designed to interfere with or to disrupt an electronic system.

C. This Contract also excludes loss, damage, cost, or expense directly or indirectly caused by, contributed to by, resulting from, or arising out of or in connection with any action in controlling, preventing, suppressing, retaliating against, or responding to any Act of Terrorism.

D. Notwithstanding the above and subject otherwise to the terms, conditions, and limitations of this Contract, in respect only of personal lines, this Contract shall pay actual loss or damage (but not related cost or expense) caused by any Act of Terrorism, provided such act is not directly or indirectly caused by, contributed to by, resulting from, or arising out of or in connection with biological, chemical, radiological or nuclear pollution or contamination.

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Communicable Disease Exclusion (Property Reinsurance)

A. This Contract excludes any loss, damage, liability, claim, cost or expense of whatsoever nature, directly or indirectly caused by, contributed to by, resulting from, arising out of, or in connection with a Communicable Disease or the fear or threat (whether actual or perceived) of a Communicable Disease regardless of any other cause or event contributing concurrently or in any other sequence thereto.

B. As used herein, a Communicable Disease means any disease which can be transmitted by means of any substance or agent from any organism to another organism where:

1. the substance or agent includes, but is not limited to, a virus, bacterium, parasite or other organism or any variation thereof, whether deemed living or not, and

2. the method of transmission, whether direct or indirect, includes but is not limited to, airborne transmission, bodily fluid transmission, transmission from or to any surface or object, solid, liquid or gas or between organisms, and

3. the disease, substance or agent can cause or threaten damage to human health or human welfare or can cause or threaten damage to, deterioration of, loss of value of, marketability of or loss of use of property.

C. Notwithstanding the foregoing, losses directly or indirectly caused by, contributed to by, resulting from, arising out of, or in connection with any otherwise covered peril under subject Policies and not otherwise excluded under this Contract shall be covered.

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CYBER LOSS LIMITED EXCLUSION CLAUSE (PROPERTY TREATY REINSURANCE)

1. Notwithstanding any provision to the contrary within this reinsurance agreement or any endorsement thereto, this reinsurance agreement excludes all loss, damage, liability, cost or expense of whatsoever nature directly or indirectly caused by, contributed to by, resulting from, arising out of or in connection with:

1.2. any loss of, alteration of, or damage to or a reduction in the functionality, availability or operation of a Computer System, unless subject to the provisions of paragraph 2;

1.3. any loss of use, reduction in functionality, repair, replacement, restoration or reproduction of any Data, including any amount pertaining to the value of such Data.

2. Subject to the other terms, conditions and exclusions contained in this reinsurance agreement, this reinsurance agreement will cover physical damage to property insured under the original policies and any Time Element Loss directly resulting therefrom where such physical damage is directly occasioned by any of the following perils:

fire, lightning, explosion, aircraft or vehicle impact, falling objects, windstorm, hail, tornado, cyclone, hurricane, earthquake, volcano, tsunami, flood, freeze or weight of snow

Definitions

3. Computer System means any computer, hardware, software, communications system, electronic device (including, but not limited to, smart phone, laptop, tablet, wearable device), server, cloud or microcontroller including any similar system or any configuration of the aforementioned and including any associated input, output, data storage device, networking equipment or back up facility.

4. Data means information, facts, concepts, code or any other information of any kind that is recorded or transmitted in a form to be used, accessed, processed, transmitted or stored by a Computer System.

5. Time Element Loss means business interruption, contingent business interruption or any other consequential losses.

LMA5410

06 March 2020

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TRUST AGREEMENT REQUIREMENTS CLAUSE

A. Except as provided in paragraph B of this Clause, if the Reinsurer satisfies its funding obligations under the Unauthorized Reinsurance Article by providing a Trust Agreement, the Reinsurer shall ensure that the Trust Agreement:

1. Requires the Reinsurer to establish a trust account for the benefit of the Company, and specifies what the Trust Agreement is to cover;

2. Stipulates that assets deposited in the trust account shall be valued according to their current fair market value and shall consist only of cash (United States legal tender), and certificates of deposit (issued by a United States bank and payable in United States legal tender), or any combination of the two, provided that the investments are issued by an institution that is not the parent, subsidiary or affiliate of either the Reinsurer or the Company;

3. Requires the Reinsurer, prior to depositing assets with the trustee, to execute assignments or endorsements in blank, or to transfer legal title to the trustee of all shares, obligations or any other assets requiring assignments, in order that the Company, or the trustee upon the direction of the Company, may whenever necessary negotiate these assets without consent or signature from the Reinsurer or any other entity;

4. Requires that all settlements of account between the Company and the Reinsurer be made in cash or its equivalent; and

5. Provides that assets in the trust account shall be withdrawn only as permitted in this Contract, without diminution because of the insolvency of the Company or the Reinsurer.

B. If a ceding insurer is domiciled in California and the Reinsurer satisfies its funding obligations under the Unauthorized Reinsurance Article by providing a Trust Agreement, the Reinsurer shall ensure that the Trust Agreement:

1. Provides that assets deposited in the trust account shall be valued according to their current fair market value and shall consist only of cash in United States dollars, certificates of deposit issued by a United States financial institution as defined in California Insurance Code Section 922.7(a) and payable in United States dollars, and investments permitted by the California Insurance Code, or any combination of the above.

2. Provides that investments in or issued by an entity controlling, controlled by or under common control with either the grantor or the beneficiary of the trust shall not exceed 5% of total investments.

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3. Requires the Reinsurer, prior to depositing assets with the trustee, to execute assignments or endorsements in blank, or to transfer legal title to the trustee of all shares, obligations or any other assets requiring assignments, in order that the ceding insurer, or the trustee upon the direction of the ceding insurer, may, whenever necessary, negotiate these assets without consent or signature from the Reinsurer or any other entity.

4. Provides that assets in the trust account shall be withdrawn only as permitted in this Contract, without diminution because of the insolvency of the ceding insurer or the Reinsurer.

C. If there are multiple ceding insurers that collectively comprise the Company, “regulatory authorities” as referenced in subparagraph A(2) above, shall mean the individual ceding insurer’s domestic regulator.  

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EX-10.15

Exhibit 10.15

CERTAIN CONFIDENTIAL INFORMATION, IDENTIFIED BY BRACKETED ASTERISKS "[*****]", HAS BEEN OMITTED FROM THIS EXHIBIT BECAUSE IT IS BOTH (I) NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED.

Reinstatement Premium Protection Reinsurance Contract

issued to

Typtap insurance company

Ocala, Florida

including any and/or all companies that are or may hereafter become affiliated therewith

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REINSTATEMENT PREMIUM PROTECTION REINSURANCE CONTRACT

TABLE OF CONTENTS

Article		Page
	Preamble	3
1	Business Covered	3
2	Coverage	3
3	Term	4
4	Special Termination	4
5	Territory	5
6	Exclusions	5
7	Premium	6
8	Definitions	7
9	Original Conditions	7
10	No Third Party Rights	7
11	Notice of Loss and Loss Settlements	8
12	Late Payments	8
13	Offset	9
14	Currency	9
15	Unauthorized Reinsurance	10
16	Taxes	12
17	Access to Records	12
18	Confidentiality	13
19	Errors and Omissions	14
20	Insolvency	14
21	Run-Off Reinsurer	15
22	Arbitration	16
23	Expedited Arbitration	17
24	Service of Suit	18
25	Governing Law	19
26	Entire Agreement	19
27	Non-Waiver	19
28	Intermediary	19
29	Mode of Execution	20
	Company Signing Block	21
Attachments
	Trust Agreement Requirements Clause	22

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REINSTATEMENT PREMIUM PROTECTION REINSURANCE CONTRACT

(the “Contract”)

issued to

Typtap insurance company

Ocala, Florida

including any and/or all companies that are or may hereafter become affiliated therewith

(collectively, the “Company”)

by

THE SUBSCRIBING REINSURER(S) IDENTIFIED
IN THE INTERESTS AND LIABILITIES AGREEMENT(S)
ATTACHED TO AND FORMING PART OF THIS CONTRACT

(the “Reinsurer”)

article 1

Business Covered

This Contract is to indemnify the Company in respect of the liability that may accrue to the Company as a result of Reinstatement Premium the Company may become liable to pay under the reinstatement provisions of the Property Catastrophe Excess of Loss Reinsurance Contract, effective at 12:01 a.m., Standard Time, June 1, 2021 and expiring 12:01 a.m., Standard Time, June 1, 2022, Document Number:  UBWP0001 (the “Original Contract”), subject to the terms and conditions herein contained.  The Original Contract covers losses under Policies covering direct and assumed business classified by the Company as the property perils of Homeowners, Condominium Owners, Renters and Dwelling, in force at the inception of this Contract, or issued or renewed during the term of this Contract.  A copy of the Original Contract is attached to and forms part of this Contract.

article 2

coverage

The Reinsurer shall be liable to pay the Reinstatement Premium obligations under the Original Contract.

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article 3

Term

This Contract shall take effect at 12:01 a.m., Standard Time, June 1, 2021, and unless terminated prior to that time and date as provided in the Special Termination Article, shall remain in effect until 12:01 a.m., Standard Time, June 1, 2022, applying to Loss Occurrences commencing during the term of this Contract.  For purposes of this Contract, “Standard Time” shall mean the time as described in the original Policy.

ARTICLE 4

SPECIAL TERMINATION

A. The Company may terminate a Subscribing Reinsurer’s percentage share in this Contract at any time by giving written notice to the Subscribing Reinsurer in the event of any of the following circumstances:

1. The Subscribing Reinsurer ceases underwriting operations.

2. A state insurance department or other legal authority orders the Subscribing Reinsurer to cease writing business, or the Subscribing Reinsurer is placed under regulatory supervision.

3. The Subscribing Reinsurer has become insolvent or has been placed into liquidation or receivership (whether voluntary or involuntary), or there have been instituted against it proceedings for the appointment of a receiver, liquidator, rehabilitator, conservator, trustee in bankruptcy, or other agent known by whatever name, to take possession of its assets or control of its operations.

4. The Subscribing Reinsurer’s policyholders’ surplus (or the equivalent under the Subscribing Reinsurer’s accounting system) as reported in such financial statements of the Subscribing Reinsurer as designated by the Company, has been reduced by 20% of the amount thereof at any date during the prior 12-month period (including the period prior to the inception of this Contract).

5. The Subscribing Reinsurer has become, or has announced its intention to become, merged with or acquired or controlled by any company, corporation, or individual(s) not controlling the Subscribing Reinsurer’s operations at the inception of this Contract.

6. The Subscribing Reinsurer has retroceded its entire liability under this Contract without the Company’s prior written consent, except for retrocessions to members of the Subscribing Reinsurer’s holding company group.

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7. The Subscribing Reinsurer has been assigned an A.M. Best’s rating of less than “A-” and/or an S&P rating of less than “BBB+.”  However, as respects Underwriting Members of Lloyd’s, London, a Lloyd’s Market Rating of less than “A-” by A.M. Best and/or less than “BBB+” by S&P shall apply.

8. The Subscribing Reinsurer has hired an unaffiliated runoff claims manager that is compensated on a contingent basis or is otherwise provided with financial incentives based on the quantum of claims paid.

9. The Subscribing Reinsurer has in any other way assigned its interests or delegated its obligations under this Contract to an unaffiliated entity.

10. The Subscribing Reinsurer has failed to post or maintain required collateral to secure its obligations as required under this Contract, and has not cured such deficiency within 30 days following written notice thereof from the Company.

Notwithstanding the foregoing, agreement by a Lloyd’s syndicate to follow claim settlements procedures under Lloyd’s Claims Scheme (Combined) shall not constitute a transfer of its claims-paying authority, for purposes of subparagraphs (8) and (9) of this paragraph.

B. The Subscribing Reinsurer shall have no liability for Reinstatement Premium arising from Loss Occurrences commencing after termination.  The premium due the Subscribing Reinsurer hereunder (including any minimum premium) shall be prorated based on the period of the Subscribing Reinsurer’s participation hereon, and the Subscribing Reinsurer shall immediately return any excess premium received.

article 5

Territory

The territorial limits of this Contract shall be identical with those of the Original Contract.

article 6

exclusions

This Contract shall follow the exclusions set forth in the Original Contract.

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ARTICLE 7

Premium

A. The premium for this Contract shall be based on the Layers of the Original Contract.  The Company shall pay the Reinsurer a deposit premium in accordance with the schedule set forth below.  The adjusted premium to be paid to the Reinsurer for the reinsurance provided under each Layer shall be calculated as the Rate on Line set out below multiplied by the Final Premium for that Layer:

PREMIUM SCHEDULE
Layer	Rate on Line	Deposit Premium
Second Layer	[*****%]	[$*****]
Third Layer	[*****%]	[$*****]
Fourth Layer	[*****%]	[$*****]

B. The deposit premiums set forth in paragraph A above shall be payable to the Reinsurer by the Company in installments as follows:

DEPOSIT INSTALLMENT SCHEDULE
Layer	June 1, 2021	September 1, 2021	January 1, 2022	April 1, 2022
Second Layer	[$*****]	[$*****]	[$*****]	[$*****]
Third Layer	[$*****]	[$*****]	[$*****]	[$*****]
Fourth Layer	[$*****]	[$*****]	[$*****]	[$*****]

C. By April 1, 2022, the Company shall calculate and report the Final Premium in accordance with paragraph A above.  If the Final Premium for a Layer is less than the deposit premium payable hereunder (including the fourth deposit premium installment), the fourth quarterly deposit premium installment shall be waived, and any amount in excess of the sum of the previously paid three deposit premium installments shall be remitted to the Reinsurer with the Company’s report.  If the Final Premium is less than the sum of the previously paid three deposit premium installments, the Reinsurer shall remit the difference to the Company.  Notwithstanding the foregoing, if the Final Premium for a Layer is greater than the deposit premium payable hereunder (including the fourth deposit premium installment), the Company shall remit to the Reinsurer the difference between the Final Premium and the full deposit premium within 45 days after the expiration of this Contract.

D. The Company shall furnish the Reinsurer with such reasonably available information as may be reasonably required by the Reinsurer for completion of the Reinsurer’s financial statements.

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article 8

definitions

A. “Reinstatement Premium” means premium paid by the Company for each Layer under the provisions of the Reinstatement Article of the Original Contract.  Reinstatement Premium shall be calculated at pro rata of the original reinsurance premium, being pro rata only for the amount being reinstated.  If, at the time of a loss settlement under the Original Contract, the reinsurance premium thereunder is not yet known, Reinstatement Premium shall be based upon the deposit premium, subject to adjustment when said reinsurance premium is finally established.  Nothing in this clause shall be construed to mean that amounts are not recoverable hereunder until the Company’s final Reinstatement Premium has been ascertained.  All recoveries received subsequent to reimbursement hereunder shall be applied as if received prior to the aforesaid settlement, and all necessary adjustments shall be made by the parties hereto.

B. “Loss Occurrence” shall follow the definition set forth in the Original Contract.

C. “Final Premium” means the total reinsurance premium except for Reinstatement Premium.

D. “Policy” means any binder, policy, or contract of insurance or reinsurance issued, accepted or held covered provisionally or otherwise, by or on behalf of the Company.

ARTICLE 9

ORIGINAL CONDITIONS

All reinsurance under this Contract shall be subject to the same terms, conditions, waivers and interpretations, and to the same modifications and alterations as the Original Contract.  However, in no event shall this be construed in any way to provide coverage outside the terms and conditions set forth in this Contract.

article 10

No Third Party Rights

This Contract is solely between the Company and the Reinsurer, and in no instance shall any insured, claimant or other third party have any rights under this Contract except as may be expressly provided otherwise herein.

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article 11

NOTICE OF LOSS AND LOSS settlements

A. The Company shall advise the Reinsurer promptly of all losses that, in the opinion of the Company, may result in a claim hereunder and of all subsequent developments thereto that may materially affect the position of the Reinsurer.

B. The Company alone and at its full discretion shall adjust, settle or compromise all claims and losses.

C. As respects losses subject to the Original Contract, all loss settlements made by the Company, whether under strict Policy terms or by way of compromise, shall be binding upon the Reinsurer, and the Reinsurer agrees to pay or allow, as the case may be, its share of each such settlement immediately upon receipt of reasonable evidence of the amount paid by the Company or that the Company estimates it will pay within the next 14 days.  Within 30 days after receipt of the Reinsurer’s payment, the Company shall report to the Reinsurer the positive difference, if any, of the Reinsurer’s payment, minus the Reinsurer’s share of losses subject to this Contract that the Company has paid, or becomes liable to pay, as of the date of the report.  Any such positive difference shall be remitted to the Reinsurer with the Company’s report.

ARTICLE 12

LATE PAYMENTS

A. In the event any payment due either party is not received by the Intermediary by the payment due date, the party to whom payment is due may, by notifying the Intermediary in writing, require the debtor party to pay, and the debtor party agrees to pay, an interest penalty on the amount past due calculated for each such payment on the last business day of each month as follows:

1. The number of full days that have expired since the overdue date or the last monthly calculation, whichever the lesser; times

2. 1/365th of the sum of the six-month United States Treasury Bill rate as quoted in The Wall Street Journal on the first business day of the month for which the calculation is made, plus 1%; times

3. The amount past due, including accrued interest.

Interest shall accumulate until payment of the original amount due plus interest penalties have been received by the Intermediary.

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B. The due date shall, for purposes of this Article, be determined as follows:

1. Payments from the Reinsurer to the Company shall be due on the date on which the demand for payment (including delivery of bordereaux or quarterly or monthly reports) is received by the Reinsurer, and shall be overdue 30 days thereafter.

2. Payments from the Company to the Reinsurer shall be due on the dates specified within this Contract.  Payments shall be overdue 30 days thereafter except for the first installment of premium, if applicable, which shall be overdue 60 days from inception or 30 days from final line-signing, whichever the later.  Reinstatement Premium, if applicable, shall have as a due date the date when the Company receives payment for the claim giving rise to such Reinstatement Premium, and payment shall be overdue 30 days thereafter. In the event a due date is not specifically stated for a given payment, the overdue date shall be 30 days following the date of billing.

C. If the information contained in the Company’s demand for payment is insufficient or not in accordance with the conditions of this Contract, then within 30 days the Reinsurer shall request from the Company all additional information necessary to validate its claim and the payment due date as defined in paragraph B shall be deemed to be the date upon which the Reinsurer received the requested additional information.  This paragraph is only for the purpose of establishing when a payment is overdue, and shall not alter the provisions of the Notice of Loss and Loss Settlements Article or other pertinent contractual stipulations.

D. In the event arbitration is necessary to settle a dispute, the panel shall have the authority to make a determination awarding interest to the prevailing party.  Interest, if any, awarded by the panel shall supersede the interest amounts outlined herein.

E. Any interest owed pursuant to this Article may be waived by the party to which it is owed.  Waiver of such interest, however, shall not affect the waiving party’s rights to other interest amounts due as a result of this Article.

ARTICLE 13

OFFSET

Each party hereto shall have, and may exercise at any time and from time to time, the right to offset any and all balances due from a party to the other arising under this Contract.  In the event of the insolvency of a party hereto, offsets shall only be allowed in accordance with the provisions of any applicable law governing offset entitlement.

ARTICLE 14

Currency

A. Where the word “Dollars” and/or the sign “$” appear in this Contract, they shall mean United States Dollars, and all payments hereunder shall be in United States Dollars.

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B. For purposes of this Contract, where the Company receives or pays amounts in currencies other than United States Dollars, such amounts shall be converted into United States Dollars at the actual rates of exchange at which these amounts are entered in the Company’s books.

ARTICLE 15

UNAUTHORIZED REINSURANCE

A. This Article applies only to the extent a Subscribing Reinsurer does not qualify for credit with any insurance regulatory authority having jurisdiction over the Company’s reserves.

B. The Company agrees, in respect of business falling within the scope of this Contract, that when it files with its insurance regulatory authority, or sets up on its books liabilities as required by law, it shall forward to the Reinsurer a statement showing the proportion of such liabilities applicable to the Reinsurer.  The “Reinsurer’s Obligations” shall be defined as any amounts due the Company under this Contract, as set up on the Company’s books.

C. The Reinsurer’s Obligations shall be funded by funds withheld, cash advances, Trust Agreement or a Letter of Credit (LOC).  The Reinsurer shall have the option of determining the method of funding provided it is acceptable to the insurance regulatory authorities having jurisdiction over the Company’s reserves.

D. When funding by Trust Agreement, the Reinsurer shall ensure that the Trust Agreement complies with the provisions of the “Trust Agreement Requirements Clause” attached hereto.  When funding by an LOC, the Reinsurer agrees to apply for and secure timely delivery to the Company of a clean, irrevocable and unconditional LOC issued by a bank and containing provisions acceptable to the insurance regulatory authorities having jurisdiction over the Company’s reserves in an amount equal to the Reinsurer’s Obligations.  Such LOC shall be issued for a period of not less than one year, and shall be automatically extended for one year from its date of expiration or any future expiration date unless 30 days (or such other time period as may be required by insurance regulatory authorities), prior to any expiration date the issuing bank shall notify the Company by certified or registered mail that the issuing bank elects not to consider the LOC extended for any additional period.

E. The Reinsurer and the Company agree that any funding provided by the Reinsurer pursuant to the provisions of this Contract may be drawn upon at any time, notwithstanding any other provision of this Contract, and be utilized by the Company or any successor, by operation of law, of the Company including, without limitation, any liquidator, rehabilitator, receiver or conservator of the Company, for the following purposes, unless otherwise provided for in a separate Trust Agreement:

1. to reimburse the Company for the Reinsurer’s Obligations, the payment of which is due under the terms of this Contract and that has not been otherwise paid;

2. to make refund of any sum that is in excess of the actual amount required to pay the Reinsurer’s Obligations under this Contract (or in excess of 102% of the Reinsurer’s Obligations, if funding is provided by a Trust Agreement);

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3. to fund an account with the Company for the Reinsurer’s Obligations.  Such cash deposit shall be held in an interest bearing account separate from the Company’s other assets, and interest thereon not in excess of the prime rate shall accrue to the benefit of the Reinsurer.  Any taxes payable on accrued interest shall be paid out of the assets in the account that are in excess of the Reinsurer’s Obligations (or in excess of 102% of the Reinsurer’s Obligations, if funding is provided by a Trust Agreement).  If the assets are inadequate to pay taxes, any taxes due shall be paid or reimbursed by the Reinsurer;

4. to pay the Reinsurer’s share of any other amounts the Company claims are due under this Contract.

F. If the amount drawn by the Company is in excess of the actual amount required for E(1) or E(3), or in the case of E(4), the actual amount determined to be due, the Company shall promptly return to the Reinsurer the excess amount so drawn.  All of the foregoing shall be applied without diminution because of insolvency on the part of the Company or the Reinsurer.

G. The issuing bank shall have no responsibility whatsoever in connection with the propriety of withdrawals made by the Company or the disposition of funds withdrawn, except to ensure that withdrawals are made only upon the order of properly authorized representatives of the Company.

H. At annual intervals, or more frequently at the discretion of the Company, but never more frequently than quarterly, the Company shall prepare a specific statement of the Reinsurer’s Obligations for the sole purpose of amending the LOC or other method of funding, in the following manner:

1. If the statement shows that the Reinsurer’s Obligations exceed the balance of the LOC as of the statement date, the Reinsurer shall, within 30 days after receipt of the statement, secure delivery to the Company of an amendment to the LOC increasing the amount of credit by the amount of such difference.  Should another method of funding be used, the Reinsurer shall, within the time period outlined above, increase such funding by the amount of such difference.

2. If, however, the statement shows that the Reinsurer’s Obligations are less than the balance of the LOC (or that 102% of the Reinsurer’s Obligations are less than the trust account balance if funding is provided by a Trust Agreement), as of the statement date, the Company shall, within 30 days after receipt of written request from the Reinsurer, release such excess credit by agreeing to secure an amendment to the LOC reducing the amount of credit available by the amount of such excess credit.  Should another method of funding be used, the Company shall, within the time period outlined above, decrease such funding by the amount of such excess.

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ARTICLE 16

Taxes

A. In consideration of the terms under which this Contract is issued, the Company undertakes not to claim any deduction of the premium hereon when making Canadian tax returns or when making tax returns, other than Income or Profits Tax returns, to any state or territory of the United States of America or to the District of Columbia.

B.1. Each Subscribing Reinsurer has agreed to allow, for the purpose of paying the Federal Excise Tax, the applicable percentage of the premium payable hereon (as imposed under the Internal Revenue Code) to the extent such premium is subject to Federal Excise Tax.

2. In the event of any return of premium becoming due hereunder, the Subscribing Reinsurer shall deduct the applicable percentage of the premium from the amount of the return, and the Company or its agent should take steps to recover the Tax from the U.S. Government.

ARTICLE 17

access to records

A. The Reinsurer or its duly authorized representatives shall have the right to visit the offices of the Company to inspect, examine, audit, and verify any of the policy, accounting or claim files (“Records”) relating to business reinsured under this Contract during regular business hours after giving five working days’ prior notice.  This right shall be exercisable during the term of this Contract or after the expiration of this Contract.  Notwithstanding the above, the Reinsurer shall not have any right of access to the Records of the Company if it is not current in all undisputed payments due the Company.

B. Notwithstanding the above, the Company reserves the right to withhold from the Reinsurer any Privileged Documents.  However, the Company shall permit and not object to the Reinsurer’s access to Privileged Documents in connection with the underlying claim reinsured hereunder following final settlement or final adjudication of the case or cases involving such claim, with prejudice against all claimants and all parties to such adjudications; the Company may defer release of such Privileged Documents if there are subrogation, contribution, or other third party actions with respect to that claim or case, and the Company’s defense might be jeopardized by release of such Privileged Documents.  In the event that the Company seeks to defer release of such Privileged Documents, it shall, in consultation with the Reinsurer, take other steps as reasonably necessary to provide the Reinsurer with the information it reasonably requires to indemnify the Company without causing a loss of such privileges or protections.  The Reinsurer shall not have access to Privileged Documents relating to any dispute between the Company and the Reinsurer.

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C. For purposes of this Article:

1. “Privileged Documents” means any documents that are Attorney-Client Privilege Documents and/or Work Product Privilege Documents.

2. “Attorney-Client Privilege Documents” means communications of a confidential nature between (a) the Company, or anyone retained by or at the direction of the Company, or its in‑house or outside legal counsel, or anyone in the control of such legal counsel, and (b) any in-house or outside legal counsel, if such communications relate to legal advice being sought by the Company and/or contain legal advice being provided to the Company.

3. “Work Product Privilege Documents” means communications, written materials and tangible things prepared by or for in-house or outside counsel, or prepared by or for the Company, in anticipation of or in connection with litigation, arbitration, or other dispute resolution proceedings.

ARTICLE 18

confidentiality

A. The Reinsurer hereby acknowledges that the documents, information and data provided to it by the Company, whether directly or through an authorized agent, in connection with the placement and execution of this Contract (“Confidential Information”) are proprietary and confidential to the Company.  Confidential Information shall not include documents, information or data that the Reinsurer can show:

1. are publicly known or have become publicly known through no unauthorized act of the Reinsurer;

2. have been rightfully received from a third person without obligation of confidentiality; or

3. were known by the Reinsurer prior to the placement of this Contract without an obligation of confidentiality.

B. Absent the written consent of the Company, the Reinsurer shall not disclose any Confidential Information to any third parties, including any affiliated companies (except to the extent necessary to enable affiliated companies or third parties engaged by the Reinsurer to perform services related to this Contract on behalf of the Reinsurer), except:

1. when required by retrocessionaires as respects business ceded to this Contract;

2. when required by regulators performing an audit of the Reinsurer’s records and/or financial condition; or

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3. when required by external auditors performing an audit of the Reinsurer’s records in the normal course of business.

Further, the Reinsurer agrees not to use any Confidential Information for any purpose not related to the performance of its obligations or enforcement of its rights under this Contract.

C. Notwithstanding the above, in the event that the Reinsurer is required by court order, other legal process or any regulatory authority to release or disclose any or all of the Confidential Information, the Reinsurer agrees to provide the Company with written notice of same at least 10 days prior to such release or disclosure and to use its best efforts to assist the Company in maintaining the confidentiality provided for in this Article.

D. The provisions of this Article shall extend to the officers, directors and employees of the Reinsurer and its affiliates, and shall be binding upon their successors and assigns.

ARTICLE 19

Errors and Omissions

Any inadvertent error, omission or delay in complying with the terms and conditions of this Contract shall not be held to relieve either party hereto from any liability that would attach to it hereunder if such error, omission or delay had not been made, provided such error, omission or delay is rectified immediately upon discovery.

ARTICLE 20

insolvency

A. If more than one company is referenced within the definition of “Company” in the Preamble to this Contract, this Article shall apply severally to each such company.  Further, this Article and the laws of the domiciliary state shall apply in the event of the insolvency of any company covered hereunder.  In the event of a conflict between any provision of this Article and the laws of the domiciliary state of any company covered hereunder, that domiciliary state’s laws shall prevail.

B. In the event of the insolvency of the Company, this coverage (or the portion of any risk or obligation assumed by the Reinsurer, if required by applicable law) shall be payable directly to the Company, or to its liquidator, receiver, conservator or statutory successor, either:  (1) on the basis of the liability of the Company, or (2) on the basis of claims filed and allowed in the liquidation proceeding, whichever may be required by applicable statute, without diminution because of the insolvency of the Company or because the liquidator, receiver, conservator or statutory successor of the Company has failed to pay all or a portion of any claim.  It is agreed, however, that the liquidator, receiver, conservator or statutory successor of the Company shall give written notice to the Reinsurer of the pendency of a claim against the Company indicating the Policy or bond reinsured, which claim would involve a possible liability on the part of the Reinsurer within a reasonable time after such claim is filed in the

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conservation or liquidation proceeding or in the receivership, and that during the pendency of such claim, the Reinsurer may investigate such claim and interpose, at its own expense, in the proceeding where such claim is to be adjudicated any defense or defenses that it may deem available to the Company or its liquidator, receiver, conservator or statutory successor.  The expense thus incurred by the Reinsurer shall be chargeable, subject to the approval of the court, against the Company as part of the expense of conservation or liquidation to the extent of a pro rata share of the benefit that may accrue to the Company solely as a result of the defense undertaken by the Reinsurer.

C. Where two or more reinsurers are involved in the same claim and a majority in interest elect to interpose defense to such claim, the expense shall be apportioned in accordance with the terms of this reinsurance Contract as though such expense had been incurred by the Company.

ARTICLE 21

RUN-OFF REINSURER

A. “Run-off Reinsurer” means any Subscribing Reinsurer that:

1. has been ordered by a state insurance department or other legal authority to cease writing business, or has been placed under regulatory supervision or in rehabilitation; or

2. has ceased reinsurance underwriting operations; or

3. has transferred its claims-paying authority to an unaffiliated entity; or

4. engages in a process of Scheme of Arrangement or similar procedure related to this Contract, including but not limited to an insurance business transfer scheme pursuant to Part VII of the Financial Services and Markets Act 2000 (U.K.), as may be amended from time to time; or

5. in any other way has assigned its interests or delegated its obligations under this Contract to an unaffiliated entity.

Notwithstanding the foregoing, agreement by a Lloyd’s syndicate to follow claim settlements procedures under Lloyd’s Claims Scheme (Combined) shall not constitute a transfer of its claims-paying authority, for purposes of subparagraphs (3) and (5) of this paragraph.

B. Notwithstanding any other provision of this Contract, in the event that a Subscribing Reinsurer becomes a Run-off Reinsurer at any time, the Company may elect, by giving written notice to the Run-off Reinsurer at any time thereafter, that all or any of the following shall apply to the Run-off Reinsurer’s participation hereunder:

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1. Should the Run-off Reinsurer fail to pay amounts due hereunder, the interest penalty specified in the Late Payments Article shall be increased by 0.5% for each 30 days that a payment is past due, subject to a maximum increase of 7.0%.

2. The Run-off Reinsurer’s liability for losses for Policies covered by this Contract shall be commuted.  In the event the Company and the Run-off Reinsurer cannot agree on the commutation amount of the Run-off Reinsurer’s liability under such Policies, they shall appoint an actuary and/or appraiser to assess such liability and shall share equally any expense of the actuary and/or appraiser.  If the Company and the Run-off Reinsurer cannot agree on an actuary and/or appraiser, the Company and the Run-off Reinsurer each shall nominate three individuals, of whom the other shall decline two, and the final appointment shall be made by drawing lots.  Payment by the Run-off Reinsurer of the amount of liability ascertained shall constitute a complete and final release of both parties under this Contract.

3. The Run-off Reinsurer shall have no right of access to the Records of the Company if the Run-off Reinsurer has denied payment of any claim hereunder or there is a pending arbitration between the Company and the Run-off Reinsurer regarding any claim hereunder.  A reservation of rights shall be considered a denial of a claim.  Notwithstanding the above, the Run-off Reinsurer shall continue to have access to Records of the Company for any claim for which it has raised a query within 30 days of its receipt of a billing, but any inspection of Records must be completed within 90 days of receipt of billing or access will be deemed waived.

4. The provisions of the Arbitration Article shall not apply.  

C. The Company’s waiver of any rights provided in this Article is not a waiver of that right or other rights at a later date.

ARTICLE 22

arbitration

A. Any dispute arising out of the interpretation, performance or breach of this Contract, including the formation or validity thereof, shall be submitted for decision to a panel of three arbitrators.  Notice requesting arbitration shall be in writing and sent certified or registered mail, return receipt requested.

B. One arbitrator shall be chosen by each party and the two arbitrators shall then choose an impartial third arbitrator who shall preside at the hearing.  If either party fails to appoint its arbitrator within 30 days after being requested to do so by the other party, the latter, after 10 days’ prior notice by certified or registered mail of its intention to do so, may appoint the second arbitrator.

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C. If the two arbitrators do not agree on a third arbitrator within 60 days of their appointment, the third arbitrator shall be chosen in accordance with the procedures for selecting the third arbitrator in force on the date the arbitration is demanded, established by the AIDA Reinsurance and Insurance Arbitration Society – U.S. (ARIAS).  The arbitrators shall be persons knowledgeable about insurance and reinsurance who have no personal or financial interest in the result of the arbitration.  If a member of the panel dies, becomes disabled or is otherwise unwilling or unable to serve, a substitute shall be selected in the same manner as the departing member was chosen and the arbitration shall continue.

D. Within 30 days after all arbitrators have been appointed, the panel shall meet and determine timely periods for briefs, discovery procedures and schedules of hearings.

E. The panel shall be relieved of all judicial formality and shall not be bound by the strict rules of procedure and evidence.  Notwithstanding anything to the contrary in this Contract, the arbitrators may at their discretion, consider underwriting and placement information provided by the Company to the Reinsurer, as well as any correspondence exchanged by the parties that is related to this Contract.  The arbitration shall take place in Tampa, Florida, or at such other place as the parties shall agree.  The decision of any two arbitrators shall be in writing and shall be final and binding.  The panel is empowered to grant interim relief as it may deem appropriate.

F. The panel shall interpret this Contract as an honorable engagement rather than as merely a legal obligation and shall make its decision considering the custom and practice of the applicable insurance and reinsurance business as promptly as possible after the hearings.  Judgment upon an award may be entered in any court having jurisdiction thereof.

G. Each party shall bear the expense of its own arbitrator and shall jointly and equally bear with the other party the cost of the third arbitrator.  The remaining costs of the arbitration shall be allocated by the panel.  The panel may, at its discretion, award such further costs and expenses as it considers appropriate, including but not limited to attorneys’ fees, to the extent permitted by law.

ARTICLE 23

Expedited Arbitration

A. Notwithstanding the provisions of the Arbitration Article, in the event an amount in dispute hereunder $1,000,000 or less, the parties will submit to an expedited arbitration process with the use of a single arbitrator.  The arbitrator will be chosen in accordance with the procedures for selecting an arbitrator in force on the date the arbitration is demanded, established by the AIDA Reinsurance and Insurance Arbitration Society – U.S. (ARIAS).

B. Each party’s case will be submitted to the arbitrator within 100 calendar days of the date of determination of the arbitrator.  Discovery will be limited to exchanging only those documents directly relating to the issue in dispute, subject to a limit of two discovery depositions from each party, unless otherwise authorized by the arbitrator upon a showing of good cause.

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C. Within 120 calendar days of the date of determination of the arbitrator, the hearing will be completed and a written award will be issued by the arbitrator.  As the parties agree that time is of the essence, the sole arbitrator does not have the authority to lengthen the schedule, absent agreement of both parties.  The arbitrator will have all the powers conferred on the arbitration panel as provided in the Arbitration Article, and said Article will apply to all matters not specifically addressed above.

ARTICLE 24

service of suit

A. This Article applies only to those Subscribing Reinsurers not domiciled in the United States of America, and/or not authorized in any state, territory and/or district of the United States of America where authorization is required by insurance regulatory authorities.

B. This Article shall not be read to conflict with or override the obligations of the parties to arbitrate their disputes as provided for in the Arbitration Article.  This Article is intended as an aid to compelling arbitration or enforcing such arbitration or arbitral award, not as an alternative to the Arbitration Article for resolving disputes arising out of this Contract.

C. In the event of the failure of the Reinsurer to perform its obligations hereunder, the Reinsurer, at the request of the Company, shall submit to the jurisdiction of a court of competent jurisdiction within the United States.  Nothing in this Article constitutes or should be understood to constitute a waiver of the Reinsurer’s rights to commence an action in any court of competent jurisdiction in the United States, to remove an action to a United States District Court, or to seek a transfer of a case to another court as permitted by the laws of the United States or of any state in the United States.  The Reinsurer, once the appropriate court is selected, whether such court is the one originally chosen by the Company and accepted by the Reinsurer or is determined by removal, transfer, or otherwise, as provided for above, shall comply with all requirements necessary to give said court jurisdiction and, in any suit instituted against the Reinsurer upon this Contract, shall abide by the final decision of such court or of any appellate court in the event of an appeal.

D. Service of process in such suit may be made upon:

1. as respects Underwriting Members of Lloyd’s, London: Lloyd’s America, Inc., Attention: Legal Department, 280 Park Avenue, East Tower, 25^th Floor, New York, New York 10017;

2. as respects any other Subscribing Reinsurer: Messrs. Mendes and Mount, 750 Seventh Avenue, New York, New York 10019-6829, or another party specifically designated in the Subscribing Reinsurer’s Interests and Liabilities Agreement attached hereto.  

The above-named are authorized and directed to accept service of process on behalf of the Reinsurer in any such suit.

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E. Further, pursuant to any statute of any state, territory or district of the United States that makes provision therefor, the Reinsurer hereby designates the Superintendent, Commissioner or Director of Insurance, or other officer specified for that purpose in the statute, or his successor or successors in office, as its true and lawful attorney upon whom may be served any lawful process in any action, suit or proceeding instituted by or on behalf of the Company or any beneficiary hereunder arising out of this Contract, and hereby designates the above-named as the person to whom the said officer is authorized to mail such process or a true copy thereof.

ARTICLE 25

GOVERNING LAW

This Contract shall be governed as to performance, administration and interpretation by the laws of the State of Florida, exclusive of conflict of law rules.  However, with respect to credit for reinsurance, the rules of all applicable states shall apply.

ARTICLE 26

Entire Agreement

This Contract sets forth all of the duties and obligations between the Company and the Reinsurer and supersedes any and all prior or contemporaneous written agreements with respect to matters referred to in this Contract.  This Contract may not be modified or changed except by an amendment to this Contract in writing signed by both parties.  However, this Article shall not be construed as limiting the admissibility of evidence regarding the formation, interpretation, purpose or intent of this Contract.

ARTICLE 27

NON-WAIVER

The failure of the Company or the Reinsurer to insist on compliance with this Contract or to exercise any right or remedy hereunder shall not constitute a waiver of any rights contained in this Contract nor prevent either party from thereafter demanding full and complete compliance nor prevent either party from exercising such remedy in the future.

ARTICLE 28

Intermediary

Guy Carpenter & Company, LLC, is hereby recognized as the Intermediary negotiating this Contract for all business hereunder.  All communications (including notices, statements, premiums, return premiums, commissions, taxes, losses, Loss Adjustment Expenses, salvages, and loss settlements) relating thereto shall be transmitted to the Company or the Reinsurer through the

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Intermediary.  Payments by the Company to the Intermediary shall be deemed payment to the Reinsurer.  Payments by the Reinsurer to the Intermediary shall be deemed payment to the Company only to the extent that such payments are actually received by the Company.

ARTICLE 29

mode of execution

A. This Contract may be executed by:

1. an original written ink signature of paper documents;

2. an exchange of facsimile copies showing the original written ink signature of paper documents;

3. electronic signature technology employing computer software and a digital signature or digitizer pen pad to capture a person’s handwritten signature in such a manner that the signature is unique to the person signing, is under the sole control of the person signing, is capable of verification to authenticate the signature and is linked to the document signed in such a manner that if the data is changed, such signature is invalidated.

B. The use of any one or a combination of these methods of execution shall constitute a legally binding and valid signing of this Contract.  This Contract may be executed in one or more counterparts, each of which, when duly executed, shall be deemed an original.

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IN WITNESS WHEREOF, the Company has caused this Contract to be executed by its duly authorized representative(s), who also confirms the Company’s review of and agreement to be bound by the terms and conditions of the Interests and Liabilities Agreements attached to and forming part of this Contract;

On this _____ day of __________, in the year of 2021.

Typtap insurance company

Signature:	Title:
Print Name:

Reinstatement Premium Protection Reinsurance Contract

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TRUST AGREEMENT REQUIREMENTS CLAUSE

A. Except as provided in paragraph B of this Clause, if the Reinsurer satisfies its funding obligations under the Unauthorized Reinsurance Article by providing a Trust Agreement, the Reinsurer shall ensure that the Trust Agreement:

1. Requires the Reinsurer to establish a trust account for the benefit of the Company, and specifies what the Trust Agreement is to cover;

2. Stipulates that assets deposited in the trust account shall be valued according to their current fair market value and shall consist only of cash (United States legal tender), and certificates of deposit (issued by a United States bank and payable in United States legal tender), or any combination of the two, provided that the investments are issued by an institution that is not the parent, subsidiary or affiliate of either the Reinsurer or the Company;

3. Requires the Reinsurer, prior to depositing assets with the trustee, to execute assignments or endorsements in blank, or to transfer legal title to the trustee of all shares, obligations or any other assets requiring assignments, in order that the Company, or the trustee upon the direction of the Company, may whenever necessary negotiate these assets without consent or signature from the Reinsurer or any other entity;

4. Requires that all settlements of account between the Company and the Reinsurer be made in cash or its equivalent; and

5. Provides that assets in the trust account shall be withdrawn only as permitted in this Contract, without diminution because of the insolvency of the Company or the Reinsurer.

B. If a ceding insurer is domiciled in California and the Reinsurer satisfies its funding obligations under the Unauthorized Reinsurance Article by providing a Trust Agreement, the Reinsurer shall ensure that the Trust Agreement:

1. Provides that assets deposited in the trust account shall be valued according to their current fair market value and shall consist only of cash in United States dollars, certificates of deposit issued by a United States financial institution as defined in California Insurance Code Section 922.7(a) and payable in United States dollars, and investments permitted by the California Insurance Code, or any combination of the above.

2. Provides that investments in or issued by an entity controlling, controlled by or under common control with either the grantor or the beneficiary of the trust shall not exceed 5% of total investments.

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3. Requires the Reinsurer, prior to depositing assets with the trustee, to execute assignments or endorsements in blank, or to transfer legal title to the trustee of all shares, obligations or any other assets requiring assignments, in order that the ceding insurer, or the trustee upon the direction of the ceding insurer, may, whenever necessary, negotiate these assets without consent or signature from the Reinsurer or any other entity.

4. Provides that assets in the trust account shall be withdrawn only as permitted in this Contract, without diminution because of the insolvency of the ceding insurer or the Reinsurer.

C. If there are multiple ceding insurers that collectively comprise the Company, “regulatory authorities” as referenced in subparagraph A(2) above, shall mean the individual ceding insurer’s domestic regulator.  

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EX-10.16

Exhibit 10.16

CERTAIN CONFIDENTIAL INFORMATION, IDENTIFIED BY BRACKETED ASTERISKS "[*****]", HAS BEEN OMITTED FROM THIS EXHIBIT BECAUSE IT IS BOTH (I) NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED.NON-FLORIDA REINSTATEMENT PREMIUM PROTECTION

REINSURANCE CONTRACT

issued to

TypTap Insurance Company

Ocala, Florida

Homeowners Choice Property & Casualty Insurance Company, Inc.

Tampa, Florida

including any and/or all companies that are or may hereafter become affiliated therewith

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NON-FLORIDA REINSTATEMENT PREMIUM PROTECTION

REINSURANCE CONTRACT

TABLE OF CONTENTS

Article		Page
	Preamble	3
1	Business Covered	3
2	Coverage	3
3	Term	4
4	Special Termination	4
5	Territory	5
6	Exclusions	5
7	Premium	6
8	Definitions	7
9	Original Conditions	7
10	No Third Party Rights	7
11	Notice of Loss and Loss Settlements	8
12	Late Payments	8
13	Offset	9
14	Currency	9
15	Unauthorized Reinsurance	10
16	Taxes	12
17	Access to Records	12
18	Confidentiality	13
19	Errors and Omissions	14
20	Insolvency	14
21	Run-Off Reinsurer	15
22	Arbitration	16
23	Expedited Arbitration	17
24	Service of Suit	18
25	Governing Law	19
26	Entire Agreement	19
27	Non-Waiver	19
28	Agency	19
29	Intermediary	20
30	Mode of Execution	20
	Company Signing Block	21
Attachments
	Trust Agreement Requirements Clause	22

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NON-FLORIDA REINSTATEMENT PREMIUM PROTECTION

REINSURANCE CONTRACT

(the “Contract”)

issued to

TypTap Insurance Company

Ocala, Florida

Homeowners Choice Property & Casualty Insurance Company, Inc.

Tampa, Florida

including any and/or all companies that are or may hereafter become affiliated therewith

(collectively, the “Company”)

by

THE SUBSCRIBING REINSURER(S) IDENTIFIED
IN THE INTERESTS AND LIABILITIES AGREEMENT(S)
ATTACHED TO AND FORMING PART OF THIS CONTRACT

(the “Reinsurer”)

article 1

Business Covered

This Contract is to indemnify the Company in respect of the liability that may accrue to the Company as a result of Reinstatement Premium the Company may become liable to pay under the reinstatement provisions of the Non-Florida Property Catastrophe Excess of Loss Reinsurance Contract, effective at 12:01 a.m., Standard Time, June 1, 2021 and expiring 12:01 a.m., Standard Time, June 1, 2022, Document Number:  UBWP0003 (the “Original Contract”), subject to the terms and conditions herein contained.  The Original Contract covers losses under Policies covering direct and assumed business classified by the Company as the property perils of Homeowners, Condominium Owners, Renters and Dwelling, in force at the inception of this Contract, or issued or renewed during the term of this Contract.  A copy of the Original Contract is attached to and forms part of this Contract.

article 2

coverage

The Reinsurer shall be liable to pay the Reinstatement Premium obligations under the Original Contract.

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article 3

Term

This Contract shall take effect at 12:01 a.m., Standard Time, June 1, 2021, and unless terminated prior to that time and date as provided in the Special Termination Article, shall remain in effect until 12:01 a.m., Standard Time, June 1, 2022, applying to Loss Occurrences commencing during the term of this Contract.  For purposes of this Contract, “Standard Time” shall mean the time as described in the original Policy.

ARTICLE 4

SPECIAL TERMINATION

A. The Company may terminate a Subscribing Reinsurer’s percentage share in this Contract at any time by giving written notice to the Subscribing Reinsurer in the event of any of the following circumstances:

1. The Subscribing Reinsurer ceases underwriting operations.

2. A state insurance department or other legal authority orders the Subscribing Reinsurer to cease writing business, or the Subscribing Reinsurer is placed under regulatory supervision.

3. The Subscribing Reinsurer has become insolvent or has been placed into liquidation or receivership (whether voluntary or involuntary), or there have been instituted against it proceedings for the appointment of a receiver, liquidator, rehabilitator, conservator, trustee in bankruptcy, or other agent known by whatever name, to take possession of its assets or control of its operations.

4. The Subscribing Reinsurer’s policyholders’ surplus (or the equivalent under the Subscribing Reinsurer’s accounting system) as reported in such financial statements of the Subscribing Reinsurer as designated by the Company, has been reduced by 20% of the amount thereof at any date during the prior 12-month period (including the period prior to the inception of this Contract).

5. The Subscribing Reinsurer has become, or has announced its intention to become, merged with or acquired or controlled by any company, corporation, or individual(s) not controlling the Subscribing Reinsurer’s operations at the inception of this Contract.

6. The Subscribing Reinsurer has retroceded its entire liability under this Contract without the Company’s prior written consent, except for retrocessions to members of the Subscribing Reinsurer’s holding company group.

7. The Subscribing Reinsurer has been assigned an A.M. Best’s rating of less than “A-” and/or an S&P rating of less than “BBB+.”  However, as respects Underwriting

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Members of Lloyd’s, London, a Lloyd’s Market Rating of less than “A-” by A.M. Best and/or less than “BBB+” by S&P shall apply.

8. The Subscribing Reinsurer has hired an unaffiliated runoff claims manager that is compensated on a contingent basis or is otherwise provided with financial incentives based on the quantum of claims paid.

9. The Subscribing Reinsurer has in any other way assigned its interests or delegated its obligations under this Contract to an unaffiliated entity.

10. The Subscribing Reinsurer has failed to post or maintain required collateral to secure its obligations as required under this Contract, and has not cured such deficiency within 30 days following written notice thereof from the Company.

Notwithstanding the foregoing, agreement by a Lloyd’s syndicate to follow claim settlements procedures under Lloyd’s Claims Scheme (Combined) shall not constitute a transfer of its claims-paying authority, for purposes of subparagraphs (8) and (9) of this paragraph.

B. The Subscribing Reinsurer shall have no liability for Reinstatement Premium arising from Loss Occurrences commencing after termination.  The premium due the Subscribing Reinsurer hereunder (including any minimum premium) shall be prorated based on the period of the Subscribing Reinsurer’s participation hereon, and the Subscribing Reinsurer shall immediately return any excess premium received.

article 5

Territory

The territorial limits of this Contract shall be identical with those of the Original Contract.

article 6

exclusions

This Contract shall follow the exclusions set forth in the Original Contract.

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ARTICLE 7

Premium

A. The premium for this Contract shall be based on the Layers of the Original Contract.  The Company shall pay the Reinsurer a deposit premium in accordance with the schedule set forth below.  The adjusted premium to be paid to the Reinsurer for the reinsurance provided under each Layer shall be calculated as the Rate on Line set out below multiplied by the Final Premium for that Layer:

PREMIUM SCHEDULE
Layer	Rate on Line	Deposit Premium
Second Layer	[*****%]	[$*****]
Third Layer	[*****%]	[$*****]
Fourth Layer	[*****%]	[$*****]
Fifth Layer	[*****%]	[$*****]
Sixth Layer	[*****%]	[$*****]

B. The deposit premiums set forth in paragraph A above shall be payable to the Reinsurer by the Company in installments as follows:

DEPOSIT INSTALLMENT SCHEDULE
Layer	June 1, 2021	September 1, 2021	January 1, 2022	April 1, 2022
Second Layer	[$*****]	[$*****]	[$*****]	[$*****]
Third Layer	[$*****]	[$*****]	[$*****]	[$*****]
Fourth Layer	[$*****]	[$*****]	[$*****]	[$*****]
Fifth Layer	[$*****]	[$*****]	[$*****]	[$*****]
Sixth Layer	[$*****]	[$*****]	[$*****]	[$*****]

C. By April 1, 2022, the Company shall calculate and report the Final Premium in accordance with paragraph A above.  If the Final Premium for a Layer is less than the deposit premium payable hereunder (including the fourth deposit premium installment), the fourth quarterly deposit premium installment shall be waived, and any amount in excess of the sum of the previously paid three deposit premium installments shall be remitted to the Reinsurer with the Company’s report.  If the Final Premium is less than the sum of the previously paid three deposit premium installments, the Reinsurer shall remit the difference to the Company.  Notwithstanding the foregoing, if the Final Premium for a Layer is greater than the deposit premium payable hereunder (including the fourth deposit premium installment), the

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Company shall remit to the Reinsurer the difference between the Final Premium and the full deposit premium within 45 days after the expiration of this Contract.

D. The Company shall furnish the Reinsurer with such reasonably available information as may be reasonably required by the Reinsurer for completion of the Reinsurer’s financial statements.

article 8

definitions

A. “Reinstatement Premium” means premium paid by the Company for each Layer under the provisions of the Reinstatement Article of the Original Contract.  Reinstatement Premium shall be calculated at pro rata of the original reinsurance premium, being pro rata only for the amount being reinstated.  If, at the time of a loss settlement under the Original Contract, the reinsurance premium thereunder is not yet known, Reinstatement Premium shall be based upon the deposit premium, subject to adjustment when said reinsurance premium is finally established.  Nothing in this clause shall be construed to mean that amounts are not recoverable hereunder until the Company’s final Reinstatement Premium has been ascertained.  All recoveries received subsequent to reimbursement hereunder shall be applied as if received prior to the aforesaid settlement, and all necessary adjustments shall be made by the parties hereto.

B. “Loss Occurrence” shall follow the definition set forth in the Original Contract.

C. “Final Premium” means the total reinsurance premium except for Reinstatement Premium.

D. “Policy” means any binder, policy, or contract of insurance or reinsurance issued, accepted or held covered provisionally or otherwise, by or on behalf of the Company.

ARTICLE 9

ORIGINAL CONDITIONS

All reinsurance under this Contract shall be subject to the same terms, conditions, waivers and interpretations, and to the same modifications and alterations as the Original Contract.  However, in no event shall this be construed in any way to provide coverage outside the terms and conditions set forth in this Contract.

article 10

No Third Party Rights

This Contract is solely between the Company and the Reinsurer, and in no instance shall any insured, claimant or other third party have any rights under this Contract except as may be expressly provided otherwise herein.

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article 11

NOTICE OF LOSS AND LOSS settlements

A. The Company shall advise the Reinsurer promptly of all losses that, in the opinion of the Company, may result in a claim hereunder and of all subsequent developments thereto that may materially affect the position of the Reinsurer.

B. The Company alone and at its full discretion shall adjust, settle or compromise all claims and losses.

C. As respects losses subject to the Original Contract, all loss settlements made by the Company, whether under strict Policy terms or by way of compromise, shall be binding upon the Reinsurer, and the Reinsurer agrees to pay or allow, as the case may be, its share of each such settlement immediately upon receipt of reasonable evidence of the amount paid by the Company or that the Company estimates it will pay within the next 14 days.  Within 30 days after receipt of the Reinsurer’s payment, the Company shall report to the Reinsurer the positive difference, if any, of the Reinsurer’s payment, minus the Reinsurer’s share of losses subject to this Contract that the Company has paid, or becomes liable to pay, as of the date of the report.  Any such positive difference shall be remitted to the Reinsurer with the Company’s report.

ARTICLE 12

LATE PAYMENTS

A. In the event any payment due either party is not received by the Intermediary by the payment due date, the party to whom payment is due may, by notifying the Intermediary in writing, require the debtor party to pay, and the debtor party agrees to pay, an interest penalty on the amount past due calculated for each such payment on the last business day of each month as follows:

1. The number of full days that have expired since the overdue date or the last monthly calculation, whichever the lesser; times

2. 1/365th of the sum of the six-month United States Treasury Bill rate as quoted in The Wall Street Journal on the first business day of the month for which the calculation is made, plus 1%; times

3. The amount past due, including accrued interest.

Interest shall accumulate until payment of the original amount due plus interest penalties have been received by the Intermediary.

B. The due date shall, for purposes of this Article, be determined as follows:

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1. Payments from the Reinsurer to the Company shall be due on the date on which the demand for payment (including delivery of bordereaux or quarterly or monthly reports) is received by the Reinsurer, and shall be overdue 30 days thereafter.

2. Payments from the Company to the Reinsurer shall be due on the dates specified within this Contract.  Payments shall be overdue 30 days thereafter except for the first installment of premium, if applicable, which shall be overdue 60 days from inception or 30 days from final line-signing, whichever the later.  Reinstatement Premium, if applicable, shall have as a due date the date when the Company receives payment for the claim giving rise to such Reinstatement Premium, and payment shall be overdue 30 days thereafter. In the event a due date is not specifically stated for a given payment, the overdue date shall be 30 days following the date of billing.

C. If the information contained in the Company’s demand for payment is insufficient or not in accordance with the conditions of this Contract, then within 30 days the Reinsurer shall request from the Company all additional information necessary to validate its claim and the payment due date as defined in paragraph B shall be deemed to be the date upon which the Reinsurer received the requested additional information.  This paragraph is only for the purpose of establishing when a payment is overdue, and shall not alter the provisions of the Notice of Loss and Loss Settlements Article or other pertinent contractual stipulations.

D. In the event arbitration is necessary to settle a dispute, the panel shall have the authority to make a determination awarding interest to the prevailing party.  Interest, if any, awarded by the panel shall supersede the interest amounts outlined herein.

E. Any interest owed pursuant to this Article may be waived by the party to which it is owed.  Waiver of such interest, however, shall not affect the waiving party’s rights to other interest amounts due as a result of this Article.

ARTICLE 13

OFFSET

Each party hereto shall have, and may exercise at any time and from time to time, the right to offset any and all balances due from a party to the other arising under this Contract.  In the event of the insolvency of a party hereto, offsets shall only be allowed in accordance with the provisions of any applicable law governing offset entitlement.

ARTICLE 14

Currency

A. Where the word “Dollars” and/or the sign “$” appear in this Contract, they shall mean United States Dollars, and all payments hereunder shall be in United States Dollars.

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B. For purposes of this Contract, where the Company receives or pays amounts in currencies other than United States Dollars, such amounts shall be converted into United States Dollars at the actual rates of exchange at which these amounts are entered in the Company’s books.

ARTICLE 15

UNAUTHORIZED REINSURANCE

A. This Article applies only to the extent a Subscribing Reinsurer does not qualify for credit with any insurance regulatory authority having jurisdiction over the Company’s reserves.

B. The Company agrees, in respect of business falling within the scope of this Contract, that when it files with its insurance regulatory authority, or sets up on its books liabilities as required by law, it shall forward to the Reinsurer a statement showing the proportion of such liabilities applicable to the Reinsurer.  The “Reinsurer’s Obligations” shall be defined as any amounts due the Company under this Contract, as set up on the Company’s books.

C. The Reinsurer’s Obligations shall be funded by funds withheld, cash advances, Trust Agreement or a Letter of Credit (LOC).  The Reinsurer shall have the option of determining the method of funding provided it is acceptable to the insurance regulatory authorities having jurisdiction over the Company’s reserves.

D. When funding by Trust Agreement, the Reinsurer shall ensure that the Trust Agreement complies with the provisions of the “Trust Agreement Requirements Clause” attached hereto.  When funding by an LOC, the Reinsurer agrees to apply for and secure timely delivery to the Company of a clean, irrevocable and unconditional LOC issued by a bank and containing provisions acceptable to the insurance regulatory authorities having jurisdiction over the Company’s reserves in an amount equal to the Reinsurer’s Obligations.  Such LOC shall be issued for a period of not less than one year, and shall be automatically extended for one year from its date of expiration or any future expiration date unless 30 days (or such other time period as may be required by insurance regulatory authorities), prior to any expiration date the issuing bank shall notify the Company by certified or registered mail that the issuing bank elects not to consider the LOC extended for any additional period.

E. The Reinsurer and the Company agree that any funding provided by the Reinsurer pursuant to the provisions of this Contract may be drawn upon at any time, notwithstanding any other provision of this Contract, and be utilized by the Company or any successor, by operation of law, of the Company including, without limitation, any liquidator, rehabilitator, receiver or conservator of the Company, for the following purposes, unless otherwise provided for in a separate Trust Agreement:

1. to reimburse the Company for the Reinsurer’s Obligations, the payment of which is due under the terms of this Contract and that has not been otherwise paid;

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2. to make refund of any sum that is in excess of the actual amount required to pay the Reinsurer’s Obligations under this Contract (or in excess of 102% of the Reinsurer’s Obligations, if funding is provided by a Trust Agreement);

3. to fund an account with the Company for the Reinsurer’s Obligations.  Such cash deposit shall be held in an interest bearing account separate from the Company’s other assets, and interest thereon not in excess of the prime rate shall accrue to the benefit of the Reinsurer.  Any taxes payable on accrued interest shall be paid out of the assets in the account that are in excess of the Reinsurer’s Obligations (or in excess of 102% of the Reinsurer’s Obligations, if funding is provided by a Trust Agreement).  If the assets are inadequate to pay taxes, any taxes due shall be paid or reimbursed by the Reinsurer;

4. to pay the Reinsurer’s share of any other amounts the Company claims are due under this Contract.

F. If the amount drawn by the Company is in excess of the actual amount required for E(1) or E(3), or in the case of E(4), the actual amount determined to be due, the Company shall promptly return to the Reinsurer the excess amount so drawn.  All of the foregoing shall be applied without diminution because of insolvency on the part of the Company or the Reinsurer.

G. The issuing bank shall have no responsibility whatsoever in connection with the propriety of withdrawals made by the Company or the disposition of funds withdrawn, except to ensure that withdrawals are made only upon the order of properly authorized representatives of the Company.

H. At annual intervals, or more frequently at the discretion of the Company, but never more frequently than quarterly, the Company shall prepare a specific statement of the Reinsurer’s Obligations for the sole purpose of amending the LOC or other method of funding, in the following manner:

1. If the statement shows that the Reinsurer’s Obligations exceed the balance of the LOC as of the statement date, the Reinsurer shall, within 30 days after receipt of the statement, secure delivery to the Company of an amendment to the LOC increasing the amount of credit by the amount of such difference.  Should another method of funding be used, the Reinsurer shall, within the time period outlined above, increase such funding by the amount of such difference.

2. If, however, the statement shows that the Reinsurer’s Obligations are less than the balance of the LOC (or that 102% of the Reinsurer’s Obligations are less than the trust account balance if funding is provided by a Trust Agreement), as of the statement date, the Company shall, within 30 days after receipt of written request from the Reinsurer, release such excess credit by agreeing to secure an amendment to the LOC reducing the amount of credit available by the amount of such excess credit.  Should another method of funding be used, the Company shall, within the time period outlined above, decrease such funding by the amount of such excess.

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ARTICLE 16

Taxes

A. In consideration of the terms under which this Contract is issued, the Company undertakes not to claim any deduction of the premium hereon when making Canadian tax returns or when making tax returns, other than Income or Profits Tax returns, to any state or territory of the United States of America or to the District of Columbia.

B. 1.Each Subscribing Reinsurer has agreed to allow, for the purpose of paying the Federal Excise Tax, the applicable percentage of the premium payable hereon (as imposed under the Internal Revenue Code) to the extent such premium is subject to Federal Excise Tax.

2. In the event of any return of premium becoming due hereunder, the Subscribing Reinsurer shall deduct the applicable percentage of the premium from the amount of the return, and the Company or its agent should take steps to recover the Tax from the U.S. Government.

ARTICLE 17

access to records

A. The Reinsurer or its duly authorized representatives shall have the right to visit the offices of the Company to inspect, examine, audit, and verify any of the policy, accounting or claim files (“Records”) relating to business reinsured under this Contract during regular business hours after giving five working days’ prior notice.  This right shall be exercisable during the term of this Contract or after the expiration of this Contract.  Notwithstanding the above, the Reinsurer shall not have any right of access to the Records of the Company if it is not current in all undisputed payments due the Company.

B. Notwithstanding the above, the Company reserves the right to withhold from the Reinsurer any Privileged Documents.  However, the Company shall permit and not object to the Reinsurer’s access to Privileged Documents in connection with the underlying claim reinsured hereunder following final settlement or final adjudication of the case or cases involving such claim, with prejudice against all claimants and all parties to such adjudications; the Company may defer release of such Privileged Documents if there are subrogation, contribution, or other third party actions with respect to that claim or case, and the Company’s defense might be jeopardized by release of such Privileged Documents.  In the event that the Company seeks to defer release of such Privileged Documents, it shall, in consultation with the Reinsurer, take other steps as reasonably necessary to provide the Reinsurer with the information it reasonably requires to indemnify the Company without causing a loss of such privileges or protections.  The Reinsurer shall not have access to Privileged Documents relating to any dispute between the Company and the Reinsurer.

C. For purposes of this Article:

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1. “Privileged Documents” means any documents that are Attorney-Client Privilege Documents and/or Work Product Privilege Documents.

2. “Attorney-Client Privilege Documents” means communications of a confidential nature between (a) the Company, or anyone retained by or at the direction of the Company, or its in‑house or outside legal counsel, or anyone in the control of such legal counsel, and (b) any in-house or outside legal counsel, if such communications relate to legal advice being sought by the Company and/or contain legal advice being provided to the Company.

3. “Work Product Privilege Documents” means communications, written materials and tangible things prepared by or for in-house or outside counsel, or prepared by or for the Company, in anticipation of or in connection with litigation, arbitration, or other dispute resolution proceedings.

ARTICLE 18

confidentiality

A. The Reinsurer hereby acknowledges that the documents, information and data provided to it by the Company, whether directly or through an authorized agent, in connection with the placement and execution of this Contract (“Confidential Information”) are proprietary and confidential to the Company. Confidential Information shall not include documents, information or data that the Reinsurer can show:

1. are publicly known or have become publicly known through no unauthorized act of the Reinsurer;

2. have been rightfully received from a third person without obligation of confidentiality; or

3. were known by the Reinsurer prior to the placement of this Contract without an obligation of confidentiality.

B. Absent the written consent of the Company, the Reinsurer shall not disclose any Confidential Information to any third parties, including any affiliated companies (except to the extent necessary to enable affiliated companies or third parties engaged by the Reinsurer to perform services related to this Contract on behalf of the Reinsurer), except:

1. when required by retrocessionaires as respects business ceded to this Contract;

2. when required by regulators performing an audit of the Reinsurer’s records and/or financial condition; or

3. when required by external auditors performing an audit of the Reinsurer’s records in the normal course of business.

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Further, the Reinsurer agrees not to use any Confidential Information for any purpose not related to the performance of its obligations or enforcement of its rights under this Contract.

C. Notwithstanding the above, in the event that the Reinsurer is required by court order, other legal process or any regulatory authority to release or disclose any or all of the Confidential Information, the Reinsurer agrees to provide the Company with written notice of same at least 10 days prior to such release or disclosure and to use its best efforts to assist the Company in maintaining the confidentiality provided for in this Article.

D. The provisions of this Article shall extend to the officers, directors and employees of the Reinsurer and its affiliates, and shall be binding upon their successors and assigns.

ARTICLE 19

Errors and Omissions

Any inadvertent error, omission or delay in complying with the terms and conditions of this Contract shall not be held to relieve either party hereto from any liability that would attach to it hereunder if such error, omission or delay had not been made, provided such error, omission or delay is rectified immediately upon discovery.

ARTICLE 20

insolvency

A. If more than one company is referenced within the definition of “Company” in the Preamble to this Contract, this Article shall apply severally to each such company.  Further, this Article and the laws of the domiciliary state shall apply in the event of the insolvency of any company covered hereunder.  In the event of a conflict between any provision of this Article and the laws of the domiciliary state of any company covered hereunder, that domiciliary state’s laws shall prevail.

B. In the event of the insolvency of the Company, this coverage (or the portion of any risk or obligation assumed by the Reinsurer, if required by applicable law) shall be payable directly to the Company, or to its liquidator, receiver, conservator or statutory successor, either:  (1) on the basis of the liability of the Company, or (2) on the basis of claims filed and allowed in the liquidation proceeding, whichever may be required by applicable statute, without diminution because of the insolvency of the Company or because the liquidator, receiver, conservator or statutory successor of the Company has failed to pay all or a portion of any claim.  It is agreed, however, that the liquidator, receiver, conservator or statutory successor of the Company shall give written notice to the Reinsurer of the pendency of a claim against the Company indicating the Policy or bond reinsured, which claim would involve a possible liability on the part of the Reinsurer within a reasonable time after such claim is filed in the conservation or liquidation proceeding or in the receivership, and that during the pendency of such claim, the Reinsurer may investigate such claim and interpose, at its own expense, in the proceeding where such claim is to be adjudicated any defense or defenses that it may

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deem available to the Company or its liquidator, receiver, conservator or statutory successor.  The expense thus incurred by the Reinsurer shall be chargeable, subject to the approval of the court, against the Company as part of the expense of conservation or liquidation to the extent of a pro rata share of the benefit that may accrue to the Company solely as a result of the defense undertaken by the Reinsurer.

C. Where two or more reinsurers are involved in the same claim and a majority in interest elect to interpose defense to such claim, the expense shall be apportioned in accordance with the terms of this reinsurance Contract as though such expense had been incurred by the Company.

ARTICLE 21

RUN-OFF REINSURER

A. “Run-off Reinsurer” means any Subscribing Reinsurer that:

1. has been ordered by a state insurance department or other legal authority to cease writing business, or has been placed under regulatory supervision or in rehabilitation; or

2. has ceased reinsurance underwriting operations; or

3. has transferred its claims-paying authority to an unaffiliated entity; or

4. engages in a process of Scheme of Arrangement or similar procedure related to this Contract, including but not limited to an insurance business transfer scheme pursuant to Part VII of the Financial Services and Markets Act 2000 (U.K.), as may be amended from time to time; or

5. in any other way has assigned its interests or delegated its obligations under this Contract to an unaffiliated entity.

Notwithstanding the foregoing, agreement by a Lloyd’s syndicate to follow claim settlements procedures under Lloyd’s Claims Scheme (Combined) shall not constitute a transfer of its claims-paying authority, for purposes of subparagraphs (3) and (5) of this paragraph.

B. Notwithstanding any other provision of this Contract, in the event that a Subscribing Reinsurer becomes a Run-off Reinsurer at any time, the Company may elect, by giving written notice to the Run-off Reinsurer at any time thereafter, that all or any of the following shall apply to the Run-off Reinsurer’s participation hereunder:

1. Should the Run-off Reinsurer fail to pay amounts due hereunder, the interest penalty specified in the Late Payments Article shall be increased by 0.5% for each 30 days that a payment is past due, subject to a maximum increase of 7.0%.

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2. The Run-off Reinsurer’s liability for losses for Policies covered by this Contract shall be commuted.  In the event the Company and the Run-off Reinsurer cannot agree on the commutation amount of the Run-off Reinsurer’s liability under such Policies, they shall appoint an actuary and/or appraiser to assess such liability and shall share equally any expense of the actuary and/or appraiser.  If the Company and the Run-off Reinsurer cannot agree on an actuary and/or appraiser, the Company and the Run-off Reinsurer each shall nominate three individuals, of whom the other shall decline two, and the final appointment shall be made by drawing lots.  Payment by the Run-off Reinsurer of the amount of liability ascertained shall constitute a complete and final release of both parties under this Contract.

3. The Run-off Reinsurer shall have no right of access to the Records of the Company if the Run-off Reinsurer has denied payment of any claim hereunder or there is a pending arbitration between the Company and the Run-off Reinsurer regarding any claim hereunder.  A reservation of rights shall be considered a denial of a claim.  Notwithstanding the above, the Run-off Reinsurer shall continue to have access to Records of the Company for any claim for which it has raised a query within 30 days of its receipt of a billing, but any inspection of Records must be completed within 90 days of receipt of billing or access will be deemed waived.

4. The provisions of the Arbitration Article shall not apply.  

C. The Company’s waiver of any rights provided in this Article is not a waiver of that right or other rights at a later date.

ARTICLE 22

arbitration

A. Any dispute arising out of the interpretation, performance or breach of this Contract, including the formation or validity thereof, shall be submitted for decision to a panel of three arbitrators.  Notice requesting arbitration shall be in writing and sent certified or registered mail, return receipt requested.

B. One arbitrator shall be chosen by each party and the two arbitrators shall then choose an impartial third arbitrator who shall preside at the hearing.  If either party fails to appoint its arbitrator within 30 days after being requested to do so by the other party, the latter, after 10 days’ prior notice by certified or registered mail of its intention to do so, may appoint the second arbitrator.

C. If the two arbitrators do not agree on a third arbitrator within 60 days of their appointment, the third arbitrator shall be chosen in accordance with the procedures for selecting the third arbitrator in force on the date the arbitration is demanded, established by the AIDA Reinsurance and Insurance Arbitration Society – U.S. (ARIAS).  The arbitrators shall be persons knowledgeable about insurance and reinsurance who have no personal or financial interest in the result of the arbitration.  If a member of the panel dies, becomes disabled or is

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otherwise unwilling or unable to serve, a substitute shall be selected in the same manner as the departing member was chosen and the arbitration shall continue.

D. Within 30 days after all arbitrators have been appointed, the panel shall meet and determine timely periods for briefs, discovery procedures and schedules of hearings.

E. The panel shall be relieved of all judicial formality and shall not be bound by the strict rules of procedure and evidence.  Notwithstanding anything to the contrary in this Contract, the arbitrators may at their discretion, consider underwriting and placement information provided by the Company to the Reinsurer, as well as any correspondence exchanged by the parties that is related to this Contract.  The arbitration shall take place in Tampa, Florida, or at such other place as the parties shall agree. The decision of any two arbitrators shall be in writing and shall be final and binding.  The panel is empowered to grant interim relief as it may deem appropriate.

F. The panel shall interpret this Contract as an honorable engagement rather than as merely a legal obligation and shall make its decision considering the custom and practice of the applicable insurance and reinsurance business as promptly as possible after the hearings.  Judgment upon an award may be entered in any court having jurisdiction thereof.

G. Each party shall bear the expense of its own arbitrator and shall jointly and equally bear with the other party the cost of the third arbitrator.  The remaining costs of the arbitration shall be allocated by the panel.  The panel may, at its discretion, award such further costs and expenses as it considers appropriate, including but not limited to attorneys’ fees, to the extent permitted by law.

ARTICLE 23

Expedited Arbitration

A. Notwithstanding the provisions of the Arbitration Article, in the event an amount in dispute hereunder $1,000,000 or less, the parties will submit to an expedited arbitration process with the use of a single arbitrator.  The arbitrator will be chosen in accordance with the procedures for selecting an arbitrator in force on the date the arbitration is demanded, established by the AIDA Reinsurance and Insurance Arbitration Society – U.S. (ARIAS).

B. Each party’s case will be submitted to the arbitrator within 100 calendar days of the date of determination of the arbitrator.  Discovery will be limited to exchanging only those documents directly relating to the issue in dispute, subject to a limit of two discovery depositions from each party, unless otherwise authorized by the arbitrator upon a showing of good cause.

C. Within 120 calendar days of the date of determination of the arbitrator, the hearing will be completed and a written award will be issued by the arbitrator.   As the parties agree that time is of the essence, the sole arbitrator does not have the authority to lengthen the schedule, absent agreement of both parties.   The arbitrator will have all the powers conferred on the

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arbitration panel as provided in the Arbitration Article, and said Article will apply to all matters not specifically addressed above.

ARTICLE 24

service of suit

A. This Article applies only to those Subscribing Reinsurers not domiciled in the United States of America, and/or not authorized in any state, territory and/or district of the United States of America where authorization is required by insurance regulatory authorities.

B. This Article shall not be read to conflict with or override the obligations of the parties to arbitrate their disputes as provided for in the Arbitration Article.  This Article is intended as an aid to compelling arbitration or enforcing such arbitration or arbitral award, not as an alternative to the Arbitration Article for resolving disputes arising out of this Contract.

C. In the event of the failure of the Reinsurer to perform its obligations hereunder, the Reinsurer, at the request of the Company, shall submit to the jurisdiction of a court of competent jurisdiction within the United States.  Nothing in this Article constitutes or should be understood to constitute a waiver of the Reinsurer’s rights to commence an action in any court of competent jurisdiction in the United States, to remove an action to a United States District Court, or to seek a transfer of a case to another court as permitted by the laws of the United States or of any state in the United States.  The Reinsurer, once the appropriate court is selected, whether such court is the one originally chosen by the Company and accepted by the Reinsurer or is determined by removal, transfer, or otherwise, as provided for above, shall comply with all requirements necessary to give said court jurisdiction and, in any suit instituted against the Reinsurer upon this Contract, shall abide by the final decision of such court or of any appellate court in the event of an appeal.

D. Service of process in such suit may be made upon:

1. as respects Underwriting Members of Lloyd’s, London: Lloyd’s America, Inc., Attention: Legal Department, 280 Park Avenue, East Tower, 25^th Floor, New York, New York 10017;

2. as respects any other Subscribing Reinsurer: Messrs. Mendes and Mount, 750 Seventh Avenue, New York, New York 10019-6829, or another party specifically designated in the Subscribing Reinsurer’s Interests and Liabilities Agreement attached hereto.  

The above-named are authorized and directed to accept service of process on behalf of the Reinsurer in any such suit.

E. Further, pursuant to any statute of any state, territory or district of the United States that makes provision therefor, the Reinsurer hereby designates the Superintendent, Commissioner or Director of Insurance, or other officer specified for that purpose in the statute, or his successor or successors in office, as its true and lawful attorney upon whom may be served any lawful process in any action, suit or proceeding instituted by or on behalf

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of the Company or any beneficiary hereunder arising out of this Contract, and hereby designates the above-named as the person to whom the said officer is authorized to mail such process or a true copy thereof.

ARTICLE 25

GOVERNING LAW

This Contract shall be governed as to performance, administration and interpretation by the laws of the State of Florida, exclusive of conflict of law rules.  However, with respect to credit for reinsurance, the rules of all applicable states shall apply.

ARTICLE 26

Entire Agreement

This Contract sets forth all of the duties and obligations between the Company and the Reinsurer and supersedes any and all prior or contemporaneous written agreements with respect to matters referred to in this Contract.  This Contract may not be modified or changed except by an amendment to this Contract in writing signed by both parties.  However, this Article shall not be construed as limiting the admissibility of evidence regarding the formation, interpretation, purpose or intent of this Contract.

ARTICLE 27

NON-WAIVER

The failure of the Company or the Reinsurer to insist on compliance with this Contract or to exercise any right or remedy hereunder shall not constitute a waiver of any rights contained in this Contract nor prevent either party from thereafter demanding full and complete compliance nor prevent either party from exercising such remedy in the future.

ARTICLE 28

AGENCY

For purposes of sending and receiving notices and payments required by this Contract, the reinsured company that is set forth first in the Preamble to this Contract shall be deemed the agent of all other reinsured companies referenced in the Preamble.  In no event, however, shall any reinsured company be deemed the agent of another with respect to the terms of the Insolvency Article.

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ARTICLE 29

Intermediary

Guy Carpenter & Company, LLC, is hereby recognized as the Intermediary negotiating this Contract for all business hereunder.  All communications (including notices, statements, premiums, return premiums, commissions, taxes, losses, Loss Adjustment Expenses, salvages, and loss settlements) relating thereto shall be transmitted to the Company or the Reinsurer through the Intermediary.  Payments by the Company to the Intermediary shall be deemed payment to the Reinsurer.  Payments by the Reinsurer to the Intermediary shall be deemed payment to the Company only to the extent that such payments are actually received by the Company.

ARTICLE 30

mode of execution

A. This Contract may be executed by:

1. an original written ink signature of paper documents;

2. an exchange of facsimile copies showing the original written ink signature of paper documents;

3. electronic signature technology employing computer software and a digital signature or digitizer pen pad to capture a person’s handwritten signature in such a manner that the signature is unique to the person signing, is under the sole control of the person signing, is capable of verification to authenticate the signature and is linked to the document signed in such a manner that if the data is changed, such signature is invalidated.

B. The use of any one or a combination of these methods of execution shall constitute a legally binding and valid signing of this Contract.  This Contract may be executed in one or more counterparts, each of which, when duly executed, shall be deemed an original.

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IN WITNESS WHEREOF, the Company has caused this Contract to be executed by its duly authorized representative(s), who also confirms the Company’s review of and agreement to be bound by the terms and conditions of the Interests and Liabilities Agreements attached to and forming part of this Contract;

On this _____ day of __________, in the year of 2021.

TYPTAP INSURANCE COMPANY

Homeowners Choice Property & Casualty Insurance Company, Inc.

Signature:	Title:
Print Name:

NON-FLORIDA Reinstatement Premium Protection
Reinsurance Contract

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TRUST AGREEMENT REQUIREMENTS CLAUSE

A. Except as provided in paragraph B of this Clause, if the Reinsurer satisfies its funding obligations under the Unauthorized Reinsurance Article by providing a Trust Agreement, the Reinsurer shall ensure that the Trust Agreement:

1. Requires the Reinsurer to establish a trust account for the benefit of the Company, and specifies what the Trust Agreement is to cover;

2. Stipulates that assets deposited in the trust account shall be valued according to their current fair market value and shall consist only of cash (United States legal tender), and certificates of deposit (issued by a United States bank and payable in United States legal tender), or any combination of the two, provided that the investments are issued by an institution that is not the parent, subsidiary or affiliate of either the Reinsurer or the Company;

3. Requires the Reinsurer, prior to depositing assets with the trustee, to execute assignments or endorsements in blank, or to transfer legal title to the trustee of all shares, obligations or any other assets requiring assignments, in order that the Company, or the trustee upon the direction of the Company, may whenever necessary negotiate these assets without consent or signature from the Reinsurer or any other entity;

4. Requires that all settlements of account between the Company and the Reinsurer be made in cash or its equivalent; and

5. Provides that assets in the trust account shall be withdrawn only as permitted in this Contract, without diminution because of the insolvency of the Company or the Reinsurer.

B. If a ceding insurer is domiciled in California and the Reinsurer satisfies its funding obligations under the Unauthorized Reinsurance Article by providing a Trust Agreement, the Reinsurer shall ensure that the Trust Agreement:

1. Provides that assets deposited in the trust account shall be valued according to their current fair market value and shall consist only of cash in United States dollars, certificates of deposit issued by a United States financial institution as defined in California Insurance Code Section 922.7(a) and payable in United States dollars, and investments permitted by the California Insurance Code, or any combination of the above.

2. Provides that investments in or issued by an entity controlling, controlled by or under common control with either the grantor or the beneficiary of the trust shall not exceed 5% of total investments.

3. Requires the Reinsurer, prior to depositing assets with the trustee, to execute assignments or endorsements in blank, or to transfer legal title to the trustee of all

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shares, obligations or any other assets requiring assignments, in order that the ceding insurer, or the trustee upon the direction of the ceding insurer, may, whenever necessary, negotiate these assets without consent or signature from the Reinsurer or any other entity.

4. Provides that assets in the trust account shall be withdrawn only as permitted in this Contract, without diminution because of the insolvency of the ceding insurer or the Reinsurer.

C. If there are multiple ceding insurers that collectively comprise the Company, “regulatory authorities” as referenced in subparagraph A(2) above, shall mean the individual ceding insurer’s domestic regulator.  

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EX-10.17

Exhibit 10.17

CERTAIN CONFIDENTIAL INFORMATION, IDENTIFIED BY BRACKETED ASTERISKS "[*****]", HAS BEEN OMITTED FROM THIS EXHIBIT BECAUSE IT IS BOTH (I) NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED.












Reinstatement Premium Protection Reinsurance Contract

issued to

Typtap insurance company

Ocala, Florida

including any and/or all companies that are or may hereafter become affiliated therewith

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Reinstatement Premium Protection Reinsurance Contract

TABLE OF CONTENTS

Article		Page
	Preamble
1	Business Covered	3
2	Coverage	3
3	Term	4
4	Special Termination	4
5	Territory	5
6	Exclusions	5
7	Premium	5
8	Definitions	7
9	Original Conditions	7
10	No Third Party Rights	8
11	Notice of Loss and Loss Settlements	8
12	Late Payments	8
13	Offset	9
14	Currency	9
15	Unauthorized Reinsurance	10
16	Taxes	12
17	Access to Records	12
18	Confidentiality	13
19	Errors and Omissions	14
20	Insolvency	14
21	Run-Off Reinsurer	15
22	Arbitration	16
23	Expedited Arbitration	17
24	Service of Suit	18
25	Governing Law	19
26	Entire Agreement	19
27	Non-Waiver	19
28	Intermediary	20
29	Mode of Execution	20
	Company Signing Block
Attachments
	Trust Agreement Requirements Clause	22

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Reinstatement Premium Protection Reinsurance Contract

(the “Contract”)

issued to

Typtap insurance company

Ocala, Florida

including any and/or all companies that are or may hereafter become affiliated therewith

(collectively, the “Company”)

by

THE SUBSCRIBING REINSURER(S) IDENTIFIED
IN THE INTERESTS AND LIABILITIES AGREEMENT(S)
ATTACHED TO AND FORMING PART OF THIS CONTRACT

(the “Reinsurer”)

article 1

Business Covered

This Contract is to indemnify the Company in respect of the liability that may accrue to the Company as a result of Reinstatement Premium the Company may become liable to pay under the reinstatement provisions of the Property Catastrophe Excess of Loss Reinsurance Contract, effective at 12:01 a.m., Standard Time, June 1, 2021 and expiring 12:01 a.m., Standard Time, June 1, 2022, Document Number:  UBWP0001 (the “Original Contract”), subject to the terms and conditions herein contained.  The Original Contract covers losses under Policies covering direct and assumed business classified by the Company as the property perils of Homeowners, Condominium Owners, Renters and Dwelling, in force at the inception of this Contract, or issued or renewed during the term of this Contract.  A copy of the Original Contract is attached to and forms part of this Contract.

article 2

coverage

The Reinsurer shall be liable to pay the Reinstatement Premium obligations under the Original Contract.

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article 3

Term

This Contract shall take effect at 12:01 a.m., Standard Time, June 1, 2021, and unless terminated prior to that time and date as provided in the Special Termination Article, shall remain in effect until 12:01 a.m., Standard Time, June 1, 2022, applying to Loss Occurrences commencing during the term of this Contract.  For purposes of this Contract, “Standard Time” shall mean the time as described in the original Policy.

ARTICLE 4

SPECIAL TERMINATION

A. The Company may terminate a Subscribing Reinsurer’s percentage share in this Contract at any time by giving written notice to the Subscribing Reinsurer in the event of any of the following circumstances:

1. The Subscribing Reinsurer ceases underwriting operations.

2. A state insurance department or other legal authority orders the Subscribing Reinsurer to cease writing business, or the Subscribing Reinsurer is placed under regulatory supervision.

3. The Subscribing Reinsurer has become insolvent or has been placed into liquidation or receivership (whether voluntary or involuntary), or there have been instituted against it proceedings for the appointment of a receiver, liquidator, rehabilitator, conservator, trustee in bankruptcy, or other agent known by whatever name, to take possession of its assets or control of its operations.

4. The Subscribing Reinsurer’s policyholders’ surplus (or the equivalent under the Subscribing Reinsurer’s accounting system) as reported in such financial statements of the Subscribing Reinsurer as designated by the Company, has been reduced by 20% of the amount thereof at any date during the prior 12-month period (including the period prior to the inception of this Contract).

5. The Subscribing Reinsurer has become, or has announced its intention to become, merged with or acquired or controlled by any company, corporation, or individual(s) not controlling the Subscribing Reinsurer’s operations at the inception of this Contract.

6. The Subscribing Reinsurer has retroceded its entire liability under this Contract without the Company’s prior written consent, except for retrocessions to members of the Subscribing Reinsurer’s holding company group.

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7. The Subscribing Reinsurer has been assigned an A.M. Best’s rating of less than “A-” and/or an S&P rating of less than “BBB+.”  However, as respects Underwriting Members of Lloyd’s, London, a Lloyd’s Market Rating of less than “A-” by A.M. Best and/or less than “BBB+” by S&P shall apply.

8. The Subscribing Reinsurer has hired an unaffiliated runoff claims manager that is compensated on a contingent basis or is otherwise provided with financial incentives based on the quantum of claims paid.

9. The Subscribing Reinsurer has in any other way assigned its interests or delegated its obligations under this Contract to an unaffiliated entity.

10. The Subscribing Reinsurer has failed to post or maintain required collateral to secure its obligations as required under this Contract, and has not cured such deficiency within 30 days following written notice thereof from the Company.

Notwithstanding the foregoing, agreement by a Lloyd’s syndicate to follow claim settlements procedures under Lloyd’s Claims Scheme (Combined) shall not constitute a transfer of its claims-paying authority, for purposes of subparagraphs (8) and (9) of this paragraph.

B. The Subscribing Reinsurer shall have no liability for Reinstatement Premium arising from Loss Occurrences commencing after termination.  The premium due the Subscribing Reinsurer hereunder (including any minimum premium) shall be prorated based on the period of the Subscribing Reinsurer’s participation hereon, and the Subscribing Reinsurer shall immediately return any excess premium received.

article 5

Territory

The territorial limits of this Contract shall be identical with those of the Original Contract.

article 6

exclusions

This Contract shall follow the exclusions set forth in the Original Contract.

ARTICLE 7

Premium

A. The premium for this Contract shall be based on the Layers of the Original Contract.  The Company shall pay the Reinsurer a deposit premium in accordance with the schedule set forth below.  The adjusted premium to be paid to the Reinsurer for the reinsurance provided

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under each Layer shall be calculated as the Rate on Line set out below multiplied by the Final Premium for that Layer:

PREMIUM SCHEDULE
Layer	Rate on Line	Deposit Premium
Second Layer	[*****%]	[$*****]
Third Layer	[*****%]	[$*****]
Fourth Layer	[*****%]	[$*****]

B. The deposit premiums set forth in paragraph A above shall be payable to the Reinsurer by the Company in installments as follows:

DEPOSIT INSTALLMENT SCHEDULE
Layer	June 1, 2021	September 1, 2021	January 1, 2022	April 1, 2022
Second Layer	[$*****]	[$*****]	[$*****]	[$*****]
Third Layer	[$*****]	[$*****]	[$*****]	[$*****]
Fourth Layer	[$*****]	[$*****]	[$*****]	[$*****]

C. By April 1, 2022, the Company shall calculate and report the Final Premium in accordance with paragraph A above.  If the Final Premium for a Layer is less than the deposit premium payable hereunder (including the fourth deposit premium installment), the fourth quarterly deposit premium installment shall be waived, and any amount in excess of the sum of the previously paid three deposit premium installments shall be remitted to the Reinsurer with the Company’s report.  If the Final Premium is less than the sum of the previously paid three deposit premium installments, the Reinsurer shall remit the difference to the Company.  Notwithstanding the foregoing, if the Final Premium for a Layer is greater than the deposit premium payable hereunder (including the fourth deposit premium installment), the Company shall remit to the Reinsurer the difference between the Final Premium and the full deposit premium within 45 days after the expiration of this Contract.

D. The Company shall furnish the Reinsurer with such reasonably available information as may be reasonably required by the Reinsurer for completion of the Reinsurer’s financial statements.

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article 8

definitions

“Reinstatement Premium” means premium paid by the Company for each Layer under the provisions of the Reinstatement Article of the Original Contract.  Reinstatement Premium shall be calculated at pro rata of the original reinsurance premium, being pro rata only for the amount being reinstated.  If, at the time of a loss settlement under the Original Contract, the reinsurance premium thereunder is not yet known, Reinstatement Premium shall be based upon the deposit premium, subject to adjustment when said reinsurance premium is finally established.  Nothing in this clause shall be construed to mean that amounts are not recoverable hereunder until the Company’s final Reinstatement Premium has been ascertained.  All recoveries received subsequent to reimbursement hereunder shall be applied as if received prior to the aforesaid settlement, and all necessary adjustments shall be made by the parties hereto.

A.“Reinstatement Premium” means premium paid by the Company for each Layer under the provisions of the Reinstatement Article of the Original Contract.  Reinstatement Premium shall be calculated at pro rata of the original reinsurance premium, being pro rata only for the amount being reinstated.  If, at the time of a loss settlement under the Original Contract, the reinsurance premium thereunder is not yet known, Reinstatement Premium shall be based upon the deposit premium, subject to adjustment when said reinsurance premium is finally established.  Nothing in this clause shall be construed to mean that amounts are not recoverable hereunder until the Company’s final Reinstatement Premium has been ascertained.  All recoveries received subsequent to reimbursement hereunder shall be applied as if received prior to the aforesaid settlement, and all necessary adjustments shall be made by the parties hereto.

B. “Loss Occurrence” shall follow the definition set forth in the Original Contract.

C. “Final Premium” means the total reinsurance premium except for Reinstatement Premium.

D. “Policy” means any binder, policy, or contract of insurance or reinsurance issued, accepted or held covered provisionally or otherwise, by or on behalf of the Company.

ARTICLE 9

ORIGINAL CONDITIONS

All reinsurance under this Contract shall be subject to the same terms, conditions, waivers and interpretations, and to the same modifications and alterations as the Original Contract.  However, in no event shall this be construed in any way to provide coverage outside the terms and conditions set forth in this Contract.

article 10

No Third Party Rights

This Contract is solely between the Company and the Reinsurer, and in no instance shall any insured, claimant or other third party have any rights under this Contract except as may be expressly provided otherwise herein.

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article 11

NOTICE OF LOSS AND LOSS settlements

A. The Company shall advise the Reinsurer promptly of all losses that, in the opinion of the Company, may result in a claim hereunder and of all subsequent developments thereto that may materially affect the position of the Reinsurer.

B. The Company alone and at its full discretion shall adjust, settle or compromise all claims and losses.

C. As respects losses subject to the Original Contract, all loss settlements made by the Company, whether under strict Policy terms or by way of compromise, shall be binding upon the Reinsurer, and the Reinsurer agrees to pay or allow, as the case may be, its share of each such settlement immediately upon receipt of reasonable evidence of the amount paid by the Company or that the Company estimates it will pay within the next 14 days.  Within 30 days after receipt of the Reinsurer’s payment, the Company shall report to the Reinsurer the positive difference, if any, of the Reinsurer’s payment, minus the Reinsurer’s share of losses subject to this Contract that the Company has paid, or becomes liable to pay, as of the date of the report.  Any such positive difference shall be remitted to the Reinsurer with the Company’s report.

ARTICLE 12

LATE PAYMENTS

A. In the event any payment due either party is not received by the Intermediary by the payment due date, the party to whom payment is due may, by notifying the Intermediary in writing, require the debtor party to pay, and the debtor party agrees to pay, an interest penalty on the amount past due calculated for each such payment on the last business day of each month as follows:

1. The number of full days that have expired since the overdue date or the last monthly calculation, whichever the lesser; times

2. 1/365th of the sum of the six-month United States Treasury Bill rate as quoted in The Wall Street Journal on the first business day of the month for which the calculation is made, plus 1%; times

3. The amount past due, including accrued interest.

Interest shall accumulate until payment of the original amount due plus interest penalties have been received by the Intermediary.

B. The due date shall, for purposes of this Article, be determined as follows:

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1. Payments from the Reinsurer to the Company shall be due on the date on which the demand for payment (including delivery of bordereaux or quarterly or monthly reports) is received by the Reinsurer, and shall be overdue 30 days thereafter.

2. Payments from the Company to the Reinsurer shall be due on the dates specified within this Contract.  Payments shall be overdue 30 days thereafter except for the first installment of premium, if applicable, which shall be overdue 60 days from inception or 30 days from final line-signing, whichever the later.  Reinstatement Premium, if applicable, shall have as a due date the date when the Company receives payment for the claim giving rise to such Reinstatement Premium, and payment shall be overdue 30 days thereafter. In the event a due date is not specifically stated for a given payment, the overdue date shall be 30 days following the date of billing.

C. If the information contained in the Company’s demand for payment is insufficient or not in accordance with the conditions of this Contract, then within 30 days the Reinsurer shall request from the Company all additional information necessary to validate its claim and the payment due date as defined in paragraph B shall be deemed to be the date upon which the Reinsurer received the requested additional information.  This paragraph is only for the purpose of establishing when a payment is overdue, and shall not alter the provisions of the Notice of Loss and Loss Settlements Article or other pertinent contractual stipulations.

D. In the event arbitration is necessary to settle a dispute, the panel shall have the authority to make a determination awarding interest to the prevailing party.  Interest, if any, awarded by the panel shall supersede the interest amounts outlined herein.

E. Any interest owed pursuant to this Article may be waived by the party to which it is owed.  Waiver of such interest, however, shall not affect the waiving party’s rights to other interest amounts due as a result of this Article.

ARTICLE 13

OFFSET

Each party hereto shall have, and may exercise at any time and from time to time, the right to offset any and all balances due from a party to the other arising under this Contract.  In the event of the insolvency of a party hereto, offsets shall only be allowed in accordance with the provisions of any applicable law governing offset entitlement.

ARTICLE 14

Currency

A. Where the word “Dollars” and/or the sign “$” appear in this Contract, they shall mean United States Dollars, and all payments hereunder shall be in United States Dollars.

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B. For purposes of this Contract, where the Company receives or pays amounts in currencies other than United States Dollars, such amounts shall be converted into United States Dollars at the actual rates of exchange at which these amounts are entered in the Company’s books.

ARTICLE 15

UNAUTHORIZED REINSURANCE

A. This Article applies only to the extent a Subscribing Reinsurer does not qualify for credit with any insurance regulatory authority having jurisdiction over the Company’s reserves.

B. The Company agrees, in respect of business falling within the scope of this Contract, that when it files with its insurance regulatory authority, or sets up on its books liabilities as required by law, it shall forward to the Reinsurer a statement showing the proportion of such liabilities applicable to the Reinsurer.  The “Reinsurer’s Obligations” shall be defined as any amounts due the Company under this Contract, as set up on the Company’s books.

C. The Reinsurer’s Obligations shall be funded by funds withheld, cash advances, Trust Agreement or a Letter of Credit (LOC).  The Reinsurer shall have the option of determining the method of funding provided it is acceptable to the insurance regulatory authorities having jurisdiction over the Company’s reserves.

D. When funding by Trust Agreement, the Reinsurer shall ensure that the Trust Agreement complies with the provisions of the “Trust Agreement Requirements Clause” attached hereto.  When funding by an LOC, the Reinsurer agrees to apply for and secure timely delivery to the Company of a clean, irrevocable and unconditional LOC issued by a bank and containing provisions acceptable to the insurance regulatory authorities having jurisdiction over the Company’s reserves in an amount equal to the Reinsurer’s Obligations.  Such LOC shall be issued for a period of not less than one year, and shall be automatically extended for one year from its date of expiration or any future expiration date unless 30 days (or such other time period as may be required by insurance regulatory authorities), prior to any expiration date the issuing bank shall notify the Company by certified or registered mail that the issuing bank elects not to consider the LOC extended for any additional period.

E. The Reinsurer and the Company agree that any funding provided by the Reinsurer pursuant to the provisions of this Contract may be drawn upon at any time, notwithstanding any other provision of this Contract, and be utilized by the Company or any successor, by operation of law, of the Company including, without limitation, any liquidator, rehabilitator, receiver or conservator of the Company, for the following purposes, unless otherwise provided for in a separate Trust Agreement:

1. to reimburse the Company for the Reinsurer’s Obligations, the payment of which is due under the terms of this Contract and that has not been otherwise paid;

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2. to make refund of any sum that is in excess of the actual amount required to pay the Reinsurer’s Obligations under this Contract (or in excess of 102% of the Reinsurer’s Obligations, if funding is provided by a Trust Agreement);

3. to fund an account with the Company for the Reinsurer’s Obligations.  Such cash deposit shall be held in an interest bearing account separate from the Company’s other assets, and interest thereon not in excess of the prime rate shall accrue to the benefit of the Reinsurer.  Any taxes payable on accrued interest shall be paid out of the assets in the account that are in excess of the Reinsurer’s Obligations (or in excess of 102% of the Reinsurer’s Obligations, if funding is provided by a Trust Agreement).  If the assets are inadequate to pay taxes, any taxes due shall be paid or reimbursed by the Reinsurer;

4. to pay the Reinsurer’s share of any other amounts the Company claims are due under this Contract.

F. If the amount drawn by the Company is in excess of the actual amount required for E(1) or E(3), or in the case of E(4), the actual amount determined to be due, the Company shall promptly return to the Reinsurer the excess amount so drawn.  All of the foregoing shall be applied without diminution because of insolvency on the part of the Company or the Reinsurer.

G. The issuing bank shall have no responsibility whatsoever in connection with the propriety of withdrawals made by the Company or the disposition of funds withdrawn, except to ensure that withdrawals are made only upon the order of properly authorized representatives of the Company.

H. At annual intervals, or more frequently at the discretion of the Company, but never more frequently than quarterly, the Company shall prepare a specific statement of the Reinsurer’s Obligations for the sole purpose of amending the LOC or other method of funding, in the following manner:

1. If the statement shows that the Reinsurer’s Obligations exceed the balance of the LOC as of the statement date, the Reinsurer shall, within 30 days after receipt of the statement, secure delivery to the Company of an amendment to the LOC increasing the amount of credit by the amount of such difference.  Should another method of funding be used, the Reinsurer shall, within the time period outlined above, increase such funding by the amount of such difference.

2. If, however, the statement shows that the Reinsurer’s Obligations are less than the balance of the LOC (or that 102% of the Reinsurer’s Obligations are less than the trust account balance if funding is provided by a Trust Agreement), as of the statement date, the Company shall, within 30 days after receipt of written request from the Reinsurer, release such excess credit by agreeing to secure an amendment to the LOC reducing the amount of credit available by the amount of such excess credit.  Should another

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method of funding be used, the Company shall, within the time period outlined above, decrease such funding by the amount of such excess.

ARTICLE 16

Taxes

A. In consideration of the terms under which this Contract is issued, the Company undertakes not to claim any deduction of the premium hereon when making Canadian tax returns or when making tax returns, other than Income or Profits Tax returns, to any state or territory of the United States of America or to the District of Columbia.

B. 1.Each Subscribing Reinsurer has agreed to allow, for the purpose of paying the Federal Excise Tax, the applicable percentage of the premium payable hereon (as imposed under the Internal Revenue Code) to the extent such premium is subject to Federal Excise Tax.

2. In the event of any return of premium becoming due hereunder, the Subscribing Reinsurer shall deduct the applicable percentage of the premium from the amount of the return, and the Company or its agent should take steps to recover the Tax from the U.S. Government.

ARTICLE 17

access to records

A. The Reinsurer or its duly authorized representatives shall have the right to visit the offices of the Company to inspect, examine, audit, and verify any of the policy, accounting or claim files (“Records”) relating to business reinsured under this Contract during regular business hours after giving five working days’ prior notice.  This right shall be exercisable during the term of this Contract or after the expiration of this Contract.  Notwithstanding the above, the Reinsurer shall not have any right of access to the Records of the Company if it is not current in all undisputed payments due the Company.

B. Notwithstanding the above, the Company reserves the right to withhold from the Reinsurer any Privileged Documents.  However, the Company shall permit and not object to the Reinsurer’s access to Privileged Documents in connection with the underlying claim reinsured hereunder following final settlement or final adjudication of the case or cases involving such claim, with prejudice against all claimants and all parties to such adjudications; the Company may defer release of such Privileged Documents if there are subrogation, contribution, or other third party actions with respect to that claim or case, and the Company’s defense might be jeopardized by release of such Privileged Documents.  In the event that the Company seeks to defer release of such Privileged Documents, it shall, in consultation with the Reinsurer, take other steps as reasonably necessary to provide the

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Reinsurer with the information it reasonably requires to indemnify the Company without causing a loss of such privileges or protections.  The Reinsurer shall not have access to Privileged Documents relating to any dispute between the Company and the Reinsurer.

C. For purposes of this Article:

1. “Privileged Documents” means any documents that are Attorney-Client Privilege Documents and/or Work Product Privilege Documents.

2. “Attorney-Client Privilege Documents” means communications of a confidential nature between (a) the Company, or anyone retained by or at the direction of the Company, or its in‑house or outside legal counsel, or anyone in the control of such legal counsel, and (b) any in-house or outside legal counsel, if such communications relate to legal advice being sought by the Company and/or contain legal advice being provided to the Company.

3. “Work Product Privilege Documents” means communications, written materials and tangible things prepared by or for in-house or outside counsel, or prepared by or for the Company, in anticipation of or in connection with litigation, arbitration, or other dispute resolution proceedings.

ARTICLE 18

confidentiality

A. The Reinsurer hereby acknowledges that the documents, information and data provided to it by the Company, whether directly or through an authorized agent, in connection with the placement and execution of this Contract (“Confidential Information”) are proprietary and confidential to the Company. Confidential Information shall not include documents, information or data that the Reinsurer can show:

1. are publicly known or have become publicly known through no unauthorized act of the Reinsurer;

2. have been rightfully received from a third person without obligation of confidentiality; or

3. were known by the Reinsurer prior to the placement of this Contract without an obligation of confidentiality.

B. Absent the written consent of the Company, the Reinsurer shall not disclose any Confidential Information to any third parties, including any affiliated companies (except to the extent necessary to enable affiliated companies or third parties engaged by the Reinsurer to perform services related to this Contract on behalf of the Reinsurer), except:

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1. when required by retrocessionaires as respects business ceded to this Contract;

2. when required by regulators performing an audit of the Reinsurer’s records and/or financial condition; or

3. when required by external auditors performing an audit of the Reinsurer’s records in the normal course of business.

Further, the Reinsurer agrees not to use any Confidential Information for any purpose not related to the performance of its obligations or enforcement of its rights under this Contract.

C. Notwithstanding the above, in the event that the Reinsurer is required by court order, other legal process or any regulatory authority to release or disclose any or all of the Confidential Information, the Reinsurer agrees to provide the Company with written notice of same at least 10 days prior to such release or disclosure and to use its best efforts to assist the Company in maintaining the confidentiality provided for in this Article.

D. The provisions of this Article shall extend to the officers, directors and employees of the Reinsurer and its affiliates, and shall be binding upon their successors and assigns.

ARTICLE 19

Errors and Omissions

Any inadvertent error, omission or delay in complying with the terms and conditions of this Contract shall not be held to relieve either party hereto from any liability that would attach to it hereunder if such error, omission or delay had not been made, provided such error, omission or delay is rectified immediately upon discovery.

ARTICLE 20

insolvency

A. If more than one company is referenced within the definition of “Company” in the Preamble to this Contract, this Article shall apply severally to each such company.  Further, this Article and the laws of the domiciliary state shall apply in the event of the insolvency of any company covered hereunder.  In the event of a conflict between any provision of this Article and the laws of the domiciliary state of any company covered hereunder, that domiciliary state’s laws shall prevail.

B. In the event of the insolvency of the Company, this coverage (or the portion of any risk or obligation assumed by the Reinsurer, if required by applicable law) shall be payable directly to the Company, or to its liquidator, receiver, conservator or statutory successor, either:  (1) on the basis of the liability of the Company, or (2) on the basis of claims filed and allowed in the liquidation proceeding, whichever may be required by applicable statute, without

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diminution because of the insolvency of the Company or because the liquidator, receiver, conservator or statutory successor of the Company has failed to pay all or a portion of any claim.  It is agreed, however, that the liquidator, receiver, conservator or statutory successor of the Company shall give written notice to the Reinsurer of the pendency of a claim against the Company indicating the Policy or bond reinsured, which claim would involve a possible liability on the part of the Reinsurer within a reasonable time after such claim is filed in the conservation or liquidation proceeding or in the receivership, and that during the pendency of such claim, the Reinsurer may investigate such claim and interpose, at its own expense, in the proceeding where such claim is to be adjudicated any defense or defenses that it may deem available to the Company or its liquidator, receiver, conservator or statutory successor.  The expense thus incurred by the Reinsurer shall be chargeable, subject to the approval of the court, against the Company as part of the expense of conservation or liquidation to the extent of a pro rata share of the benefit that may accrue to the Company solely as a result of the defense undertaken by the Reinsurer.

C. Where two or more reinsurers are involved in the same claim and a majority in interest elect to interpose defense to such claim, the expense shall be apportioned in accordance with the terms of this reinsurance Contract as though such expense had been incurred by the Company.

ARTICLE 21

RUN-OFF REINSURER

A. “Run-off Reinsurer” means any Subscribing Reinsurer that:

1. has been ordered by a state insurance department or other legal authority to cease writing business, or has been placed under regulatory supervision or in rehabilitation; or

2. has ceased reinsurance underwriting operations; or

3. has transferred its claims-paying authority to an unaffiliated entity; or

4. engages in a process of Scheme of Arrangement or similar procedure related to this Contract, including but not limited to an insurance business transfer scheme pursuant to Part VII of the Financial Services and Markets Act 2000 (U.K.), as may be amended from time to time; or

5. in any other way has assigned its interests or delegated its obligations under this Contract to an unaffiliated entity.

Notwithstanding the foregoing, agreement by a Lloyd’s syndicate to follow claim settlements procedures under Lloyd’s Claims Scheme (Combined) shall not constitute a transfer of its claims-paying authority, for purposes of subparagraphs (3) and (5) of this paragraph.

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B. Notwithstanding any other provision of this Contract, in the event that a Subscribing Reinsurer becomes a Run-off Reinsurer at any time, the Company may elect, by giving written notice to the Run-off Reinsurer at any time thereafter, that all or any of the following shall apply to the Run-off Reinsurer’s participation hereunder:

1. Should the Run-off Reinsurer fail to pay amounts due hereunder, the interest penalty specified in the Late Payments Article shall be increased by 0.5% for each 30 days that a payment is past due, subject to a maximum increase of 7.0%.

2. The Run-off Reinsurer’s liability for losses for Policies covered by this Contract shall be commuted.  In the event the Company and the Run-off Reinsurer cannot agree on the commutation amount of the Run-off Reinsurer’s liability under such Policies, they shall appoint an actuary and/or appraiser to assess such liability and shall share equally any expense of the actuary and/or appraiser.  If the Company and the Run-off Reinsurer cannot agree on an actuary and/or appraiser, the Company and the Run-off Reinsurer each shall nominate three individuals, of whom the other shall decline two, and the final appointment shall be made by drawing lots.  Payment by the Run-off Reinsurer of the amount of liability ascertained shall constitute a complete and final release of both parties under this Contract.

3. The Run-off Reinsurer shall have no right of access to the Records of the Company if the Run-off Reinsurer has denied payment of any claim hereunder or there is a pending arbitration between the Company and the Run-off Reinsurer regarding any claim hereunder.  A reservation of rights shall be considered a denial of a claim.  Notwithstanding the above, the Run-off Reinsurer shall continue to have access to Records of the Company for any claim for which it has raised a query within 30 days of its receipt of a billing, but any inspection of Records must be completed within 90 days of receipt of billing or access will be deemed waived.

4. The provisions of the Arbitration Article shall not apply.  

C. The Company’s waiver of any rights provided in this Article is not a waiver of that right or other rights at a later date.

ARTICLE 22

arbitration

A. Any dispute arising out of the interpretation, performance or breach of this Contract, including the formation or validity thereof, shall be submitted for decision to a panel of three arbitrators.  Notice requesting arbitration shall be in writing and sent certified or registered mail, return receipt requested.

B. One arbitrator shall be chosen by each party and the two arbitrators shall then choose an impartial third arbitrator who shall preside at the hearing.  If either party fails to appoint its

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arbitrator within 30 days after being requested to do so by the other party, the latter, after 10days’ prior notice by certified or registered mail of its intention to do so, may appoint the second arbitrator.

C. If the two arbitrators do not agree on a third arbitrator within 60 days of their appointment, the third arbitrator shall be chosen in accordance with the procedures for selecting the third arbitrator in force on the date the arbitration is demanded, established by the AIDA Reinsurance and Insurance Arbitration Society – U.S. (ARIAS).  The arbitrators shall be persons knowledgeable about insurance and reinsurance who have no personal or financial interest in the result of the arbitration.  If a member of the panel dies, becomes disabled or is otherwise unwilling or unable to serve, a substitute shall be selected in the same manner as the departing member was chosen and the arbitration shall continue.

D. Within 30 days after all arbitrators have been appointed, the panel shall meet and determine timely periods for briefs, discovery procedures and schedules of hearings.

E. The panel shall be relieved of all judicial formality and shall not be bound by the strict rules of procedure and evidence.  Notwithstanding anything to the contrary in this Contract, the arbitrators may at their discretion, consider underwriting and placement information provided by the Company to the Reinsurer, as well as any correspondence exchanged by the parties that is related to this Contract.  The arbitration shall take place in Tampa, Florida, or at such other place as the parties shall agree. The decision of any two arbitrators shall be in writing and shall be final and binding.  The panel is empowered to grant interim relief as it may deem appropriate.

F. The panel shall interpret this Contract as an honorable engagement rather than as merely a legal obligation and shall make its decision considering the custom and practice of the applicable insurance and reinsurance business as promptly as possible after the hearings.  Judgment upon an award may be entered in any court having jurisdiction thereof.

G. Each party shall bear the expense of its own arbitrator and shall jointly and equally bear with the other party the cost of the third arbitrator.  The remaining costs of the arbitration shall be allocated by the panel.  The panel may, at its discretion, award such further costs and expenses as it considers appropriate, including but not limited to attorneys’ fees, to the extent permitted by law.

ARTICLE 23

Expedited Arbitration

A. Notwithstanding the provisions of the Arbitration Article, in the event an amount in dispute hereunder $1,000,000 or less, the parties will submit to an expedited arbitration process with the use of a single arbitrator.  The arbitrator will be chosen in accordance with the procedures for selecting an arbitrator in force on the date the arbitration is demanded, established by the AIDA Reinsurance and Insurance Arbitration Society – U.S. (ARIAS).

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B. Each party’s case will be submitted to the arbitrator within 100 calendar days of the date of determination of the arbitrator.  Discovery will be limited to exchanging only those documents directly relating to the issue in dispute, subject to a limit of two discovery depositions from each party, unless otherwise authorized by the arbitrator upon a showing of good cause.

C. Within 120 calendar days of the date of determination of the arbitrator, the hearing will be completed and a written award will be issued by the arbitrator.  As the parties agree that time is of the essence, the sole arbitrator does not have the authority to lengthen the schedule, absent agreement of both parties.  The arbitrator will have all the powers conferred on the arbitration panel as provided in the Arbitration Article, and said Article will apply to all matters not specifically addressed above.

ARTICLE 24

service of suit

A. This Article applies only to those Subscribing Reinsurers not domiciled in the United States of America, and/or not authorized in any state, territory and/or district of the United States of America where authorization is required by insurance regulatory authorities.

B. This Article shall not be read to conflict with or override the obligations of the parties to arbitrate their disputes as provided for in the Arbitration Article.  This Article is intended as an aid to compelling arbitration or enforcing such arbitration or arbitral award, not as an alternative to the Arbitration Article for resolving disputes arising out of this Contract.

C. In the event of the failure of the Reinsurer to perform its obligations hereunder, the Reinsurer, at the request of the Company, shall submit to the jurisdiction of a court of competent jurisdiction within the United States.  Nothing in this Article constitutes or should be understood to constitute a waiver of the Reinsurer’s rights to commence an action in any court of competent jurisdiction in the United States, to remove an action to a United States District Court, or to seek a transfer of a case to another court as permitted by the laws of the United States or of any state in the United States.  The Reinsurer, once the appropriate court is selected, whether such court is the one originally chosen by the Company and accepted by the Reinsurer or is determined by removal, transfer, or otherwise, as provided for above, shall comply with all requirements necessary to give said court jurisdiction and, in any suit instituted against the Reinsurer upon this Contract, shall abide by the final decision of such court or of any appellate court in the event of an appeal.

D. Service of process in such suit may be made upon:

1. as respects Underwriting Members of Lloyd’s, London: Lloyd’s America, Inc., Attention: Legal Department, 280 Park Avenue, East Tower, 25^th Floor, New York, New York 10017;

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2. as respects any other Subscribing Reinsurer: Messrs. Mendes and Mount, 750 Seventh Avenue, New York, New York 10019-6829, or another party specifically designated in the Subscribing Reinsurer’s Interests and Liabilities Agreement attached hereto.  

The above-named are authorized and directed to accept service of process on behalf of the Reinsurer in any such suit.

E. Further, pursuant to any statute of any state, territory or district of the United States that makes provision therefor, the Reinsurer hereby designates the Superintendent, Commissioner or Director of Insurance, or other officer specified for that purpose in the statute, or his successor or successors in office, as its true and lawful attorney upon whom may be served any lawful process in any action, suit or proceeding instituted by or on behalf of the Company or any beneficiary hereunder arising out of this Contract, and hereby designates the above-named as the person to whom the said officer is authorized to mail such process or a true copy thereof.

ARTICLE 25

GOVERNING LAW

This Contract shall be governed as to performance, administration and interpretation by the laws of the State of Florida, exclusive of conflict of law rules.  However, with respect to credit for reinsurance, the rules of all applicable states shall apply.

ARTICLE 26

Entire Agreement

This Contract sets forth all of the duties and obligations between the Company and the Reinsurer and supersedes any and all prior or contemporaneous written agreements with respect to matters referred to in this Contract.  This Contract may not be modified or changed except by an amendment to this Contract in writing signed by both parties.  However, this Article shall not be construed as limiting the admissibility of evidence regarding the formation, interpretation, purpose or intent of this Contract.

ARTICLE 27

NON-WAIVER

The failure of the Company or the Reinsurer to insist on compliance with this Contract or to exercise any right or remedy hereunder shall not constitute a waiver of any rights contained in this Contract nor prevent either party from thereafter demanding full and complete compliance nor prevent either party from exercising such remedy in the future.

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ARTICLE 28

Intermediary

Guy Carpenter & Company, LLC, is hereby recognized as the Intermediary negotiating this Contract for all business hereunder.  All communications (including notices, statements, premiums, return premiums, commissions, taxes, losses, Loss Adjustment Expenses, salvages, and loss settlements) relating thereto shall be transmitted to the Company or the Reinsurer through the Intermediary.  Payments by the Company to the Intermediary shall be deemed payment to the Reinsurer.  Payments by the Reinsurer to the Intermediary shall be deemed payment to the Company only to the extent that such payments are actually received by the Company.

ARTICLE 29

mode of execution

A. This Contract may be executed by:

1. an original written ink signature of paper documents;

2. an exchange of facsimile copies showing the original written ink signature of paper documents;

3. electronic signature technology employing computer software and a digital signature or digitizer pen pad to capture a person’s handwritten signature in such a manner that the signature is unique to the person signing, is under the sole control of the person signing, is capable of verification to authenticate the signature and is linked to the document signed in such a manner that if the data is changed, such signature is invalidated.

B. The use of any one or a combination of these methods of execution shall constitute a legally binding and valid signing of this Contract.  This Contract may be executed in one or more counterparts, each of which, when duly executed, shall be deemed an original.

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IN WITNESS WHEREOF, the Company has caused this Contract to be executed by its duly authorized representative(s), who also confirms the Company’s review of and agreement to be bound by the terms and conditions of the Interests and Liabilities Agreements attached to and forming part of this Contract;

On this _____ day of __________, in the year of 2021.

Typtap insurance company

Signature:	Title:
Print Name:

Reinstatement Premium Protection Reinsurance Contract

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TRUST AGREEMENT REQUIREMENTS CLAUSE

A. Except as provided in paragraph B of this Clause, if the Reinsurer satisfies its funding obligations under the Unauthorized Reinsurance Article by providing a Trust Agreement, the Reinsurer shall ensure that the Trust Agreement:

1. Requires the Reinsurer to establish a trust account for the benefit of the Company, and specifies what the Trust Agreement is to cover;

2. Stipulates that assets deposited in the trust account shall be valued according to their current fair market value and shall consist only of cash (United States legal tender), and certificates of deposit (issued by a United States bank and payable in United States legal tender), or any combination of the two, provided that the investments are issued by an institution that is not the parent, subsidiary or affiliate of either the Reinsurer or the Company;

3. Requires the Reinsurer, prior to depositing assets with the trustee, to execute assignments or endorsements in blank, or to transfer legal title to the trustee of all shares, obligations or any other assets requiring assignments, in order that the Company, or the trustee upon the direction of the Company, may whenever necessary negotiate these assets without consent or signature from the Reinsurer or any other entity;

4. Requires that all settlements of account between the Company and the Reinsurer be made in cash or its equivalent; and

5. Provides that assets in the trust account shall be withdrawn only as permitted in this Contract, without diminution because of the insolvency of the Company or the Reinsurer.

B. If a ceding insurer is domiciled in California and the Reinsurer satisfies its funding obligations under the Unauthorized Reinsurance Article by providing a Trust Agreement, the Reinsurer shall ensure that the Trust Agreement:

1. Provides that assets deposited in the trust account shall be valued according to their current fair market value and shall consist only of cash in United States dollars, certificates of deposit issued by a United States financial institution as defined in California Insurance Code Section 922.7(a) and payable in United States dollars, and investments permitted by the California Insurance Code, or any combination of the above.

2. Provides that investments in or issued by an entity controlling, controlled by or under common control with either the grantor or the beneficiary of the trust shall not exceed 5% of total investments.

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3. Requires the Reinsurer, prior to depositing assets with the trustee, to execute assignments or endorsements in blank, or to transfer legal title to the trustee of all shares, obligations or any other assets requiring assignments, in order that the ceding insurer, or the trustee upon the direction of the ceding insurer, may, whenever necessary, negotiate these assets without consent or signature from the Reinsurer or any other entity.

4. Provides that assets in the trust account shall be withdrawn only as permitted in this Contract, without diminution because of the insolvency of the ceding insurer or the Reinsurer.

C. If there are multiple ceding insurers that collectively comprise the Company, “regulatory authorities” as referenced in subparagraph A(2) above, shall mean the individual ceding insurer’s domestic regulator.  

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EX-10.18

Exhibit 10.18

CERTAIN CONFIDENTIAL INFORMATION, IDENTIFIED BY BRACKETED ASTERISKS "[*****]", HAS BEEN OMITTED FROM THIS EXHIBIT BECAUSE IT IS BOTH (I) NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED.
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Top Layer Flood/Wind Property Catastrophe

Excess of Loss Reinsurance Contract

issued to

TypTap Insurance Company

Ocala, Florida

Homeowners Choice Property & Casualty Insurance Company, Inc.

Tampa, Florida

including any and/or all companies that are or may hereafter become affiliated therewith

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TOP LAYER FLOOD/WIND PROPERTY CATASTROPHE EXCESS OF LOSS REINSURANCE CONTRACT TABLE OF CONTENTS
Article		Page
	Preamble		4
1	Business Covered		4
2	Retention and Limit		4
3	Florida Hurricane Catastrophe Fund		5
4	Term		6
5	Special Termination		6
6	Territory		8
7	Exclusions		8
8	Special Acceptance		10
9	Premium		10
10	Definitions		11
11	Extra Contractual Obligations/Excess of Policy Limits		15
12	Net Retained Liability		16
13	Other Reinsurance		16
14	Original Conditions		16
15	No Third Party Rights		16
16	Notice of Loss and Loss Settlements		17
17	Late Payments		17
18	Offset		18
19	Currency		18
20	Unauthorized Reinsurance		19
21	Taxes		21
22	Access to Records		21
23	Confidentiality		22
24	Indemnification and Errors and Omissions		23
25	Insolvency		24
26	Run-Off Reinsurer		25
27	Arbitration		26
28	Expedited Arbitration		27
29	Service of Suit		28
30	Governing Law		29
31	Entire Agreement		29
32	Non-Waiver		29
33	Agency		29
34	Intermediary		30
35	Mode of Execution		30
	Company Signing Block		31

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TOP LAYER FLOOD/WIND PROPERTY CATASTROPHE EXCESS OF LOSS REINSURANCE CONTRACT TABLE OF CONTENTS
Attachments		Page
	Pools, Associations & Syndicates Exclusions Clause		32
	Nuclear Incident Exclusion Clause - Physical Damage - Reinsurance - U.S.A.		35
	Terrorism Exclusion		37
	Communicable Disease Exclusion (Property Reinsurance)		38
	Cyber Loss Limited Exclusion Clause (Property Treaty Reinsurance)		39
	Trust Agreement Requirements Clause		40

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Top Layer Flood/Wind Property Catastrophe

Excess of Loss Reinsurance Contract

(the “Contract”)

issued to

TypTap Insurance Company

Ocala, Florida

Homeowners Choice Property & Casualty Insurance Company, Inc.

Tampa, Florida

including any and/or all companies that are or may hereafter become affiliated therewith

(collectively, the “Company”)

by

THE SUBSCRIBING REINSURER(S) IDENTIFIED IN THE
INTERESTS AND LIABILITIES AGREEMENT(S) ATTACHED TO
AND FORMING PART OF THIS CONTRACT

(the “Reinsurer”)

ARTICLE 1

BUSINESS COVERED

This Contract is to indemnify the Company in respect of its net excess liability as a result of any loss or losses which may occur during the term of this Contract under any Policies, in force at the effective date hereof or issued or renewed on or after that date, covering direct and assumed business classified by the Company as the property perils of Business Owners, Homeowners, Condominium Owners, Renters and Dwelling, subject to the terms and conditions herein contained.  Notwithstanding the foregoing, the coverage afforded under Section A of the Retention and Limit Article shall apply to business further classified as standalone Flood Zone A or V, including Policies designated as Flood Zone A or V and subsequently reclassified as Flood Zone X until the next anniversary of such Policies.

ARTICLE 2

Retention and Limit

A. Section A:  Standalone Flood Business

The Reinsurer shall be liable in respect of each Loss Occurrence for the Ultimate Net Loss over and above the initial Ultimate Net Loss of [$*****] each Loss Occurrence, subject to a limit of liability to the Reinsurer of [$*****], each Loss Occurrence.

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B. Section B:  All Business Except Standalone Flood Business

The Reinsurer shall be liable in respect of each Loss Occurrence for the Ultimate Net Loss over and above the initial Ultimate Net Loss of [$*****], each Loss Occurrence, subject to a limit of liability to the Reinsurer of [$*****], each Loss Occurrence.  

C. The liability of the Reinsurer hereunder as respects all Loss Occurrences commencing during the term of this Contract shall not exceed [$*****].

D. No Loss Occurrence shall be covered hereunder unless it involves two or more risks subject to this Contract.  The Company shall be the sole judge of what constitutes one risk for purposes of this Contract.

ARTICLE 3

FLORIDA HURRICANE CATASTROPHE FUND

A. As respects Loss Occurrences subject to this Contract, any loss reimbursement recoverable by the Company under the Florida Hurricane Catastrophe Fund (FHCF), shall be deducted in determining Ultimate Net Loss under this Contract, subject to the following:

1. The full reimbursement amount due from the FHCF, based on statutory limits of coverage as of June 1, shall be deemed recovered by the Company, whether or not actually received from the FHCF and whether or not reduced because of the FHCF’s inability to pay.

2. For purposes of allocating recoveries from the FHCF with respect to each Loss Occurrence, only amounts recoverable by applying the pay-out and retention multiples for the FHCF prior to any reduction in retention due to multiple Loss Occurrences in the same annual period shall be included in calculating the deduction from Ultimate Net Loss.

3. If the Company’s aggregate limit of FHCF reimbursement coverage is exhausted from Loss Occurrences commencing during the term of this Contract, and the FHCF does not designate the portion of said limit allocable to each Loss Occurrence, the total FHCF reimbursement received shall be allocated to the each individual Loss Occurrence in the proportion that the Company’s losses in that Loss Occurrence bear to the Company’s total losses arising out of all Loss Occurrences to which the reimbursement applies.

4. For purposes of loss recoveries under this Contract prior to the final determination of the Company’s retention and limit under the FHCF, FHCF coverage shall be calculated using the Company’s “Projected Payout Multiple” under the FHCF.  Upon determination of the Company’s retention and limit under the FHCF, losses will be adjusted, recognizing any adjustment to the “Projected Payout Multiple” caused by a change in the Aggregate Mandatory FHCF Premium but disregarding any change due to a decrease in the statutory limit.  

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B. Any FHCF reimbursement premiums paid by the Company for FHCF layers that inure to the benefit of this Contract shall be deemed to be premiums paid for inuring reinsurance.

C. The Company has opted for a 90% coverage selection from the FHCF.

ARTICLE 4

Term

This Contract shall take effect at 12:01 a.m., Standard Time, June 1, 2021, and unless terminated prior to that time and date as provided in the Special Termination Article, shall remain in effect until 12:01 a.m., Standard Time, June 1, 2022, applying to Loss Occurrences commencing during the term of this Contract.  For purposes of this Contract, “Standard Time” shall mean the time as described in the original Policy.

ARTICLE 5

SPECIAL TERMINATION

A. The Company may terminate a Subscribing Reinsurer’s percentage share in this Contract at any time by giving written notice to the Subscribing Reinsurer in the event of any of the following circumstances:

1. The Subscribing Reinsurer ceases underwriting operations.

2. A state insurance department or other legal authority orders the Subscribing Reinsurer to cease writing business, or the Subscribing Reinsurer is placed under regulatory supervision.

3. The Subscribing Reinsurer has become insolvent or has been placed into liquidation or receivership (whether voluntary or involuntary), or there have been instituted against it proceedings for the appointment of a receiver, liquidator, rehabilitator, conservator, trustee in bankruptcy, or other agent known by whatever name, to take possession of its assets or control of its operations.

4. The Subscribing Reinsurer’s policyholders’ surplus (or the equivalent under the Subscribing Reinsurer’s accounting system) as reported in such financial statements of the Subscribing Reinsurer as designated by the Company, has been reduced by 20% of the amount thereof at any date during the prior 12-month period (including the period prior to the inception of this Contract).

5. The Subscribing Reinsurer has become, or has announced its intention to become, merged with or acquired or controlled by any company, corporation, or individual(s) not controlling the Subscribing Reinsurer’s operations at the inception of this Contract.

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6. The Subscribing Reinsurer has retroceded its entire liability under this Contract without the Company’s prior written consent, except for retrocessions to members of the Subscribing Reinsurer’s holding company group.

7. The Subscribing Reinsurer has been assigned an A.M. Best’s rating of less than “A-” and/or an S&P rating of less than “BBB+.”  However, as respects Underwriting Members of Lloyd’s, London, a Lloyd’s Market Rating of less than “A-” by A.M. Best and/or less than “BBB+” by S&P shall apply.

8. The Subscribing Reinsurer has hired an unaffiliated runoff claims manager that is compensated on a contingent basis or is otherwise provided with financial incentives based on the quantum of claims paid.

9. The Subscribing Reinsurer has in any other way assigned its interests or delegated its obligations under this Contract to an unaffiliated entity.

10. The Subscribing Reinsurer has failed to post or maintain required collateral to secure its obligations as required under this Contract, and has not cured such deficiency within 30 days following written notice thereof from the Company.

Notwithstanding the foregoing, agreement by a Lloyd’s syndicate to follow claim settlements procedures under Lloyd’s Claims Scheme (Combined) shall not constitute a transfer of its claims-paying authority, for purposes of subparagraphs (8) and (9) of this paragraph.

B. Termination shall be effected on a cut-off basis and the Subscribing Reinsurer shall have no liability for Loss Occurrences commencing after the date of termination.  The reinsurance premium due the Subscribing Reinsurer hereunder (including any minimum reinsurance premium) shall be prorated based on the period of the Subscribing Reinsurer’s participation hereon, and the Subscribing Reinsurer shall immediately return any excess reinsurance premium received.  Reinstatement premium, if any, shall be calculated based on the Subscribing Reinsurer’s reinsurance premium earned during the period of the Subscribing Reinsurer’s participation hereon.

C. Additionally, in the event of any of the circumstances listed in paragraph A of this Article, the Company shall have the option to commute the Subscribing Reinsurer’s liability for losses on Policies covered by this Contract.  In the event the Company and the Subscribing Reinsurer cannot agree on the commutation amount, they shall appoint an actuary and/or appraiser to assess such amount and shall share equally any expense of the actuary and/or appraiser.  If the Company and the Subscribing Reinsurer cannot agree on an actuary and/or appraiser, the Company and the Subscribing Reinsurer each shall nominate three individuals, of whom the other shall decline two, and the final appointment shall be made by drawing lots.  Payment by the Subscribing Reinsurer of the amount of liability ascertained shall constitute a complete and final release of both parties in respect of liability arising from the Subscribing Reinsurer’s participation under this Contract.

D. The Company’s option to require commutation under paragraph C above shall survive the termination or expiration of this Contract.

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ARTICLE 6

Territory

A. As respects Section A of the Retention and Limit Article, the territorial limits of this Contract shall be identical with those of the Company’s Policies.

B. As respects Section B of the Retention and Limit Article, the territorial limits of this Contract shall apply to Policies issued in the State of Florida.

ARTICLE 7

Exclusions

This Contract shall not apply to and specifically excludes:

A.As respects Sections A and B:

1. Earthquake for standalone Policies where earthquake is the only named peril.

2. Liability of the Company arising by contract, operation of law, or otherwise, from its participation or membership, whether voluntary or involuntary, in any Insolvency Fund.  “Insolvency Fund” includes any guaranty fund, insolvency fund, plan, pool, association, fund or other arrangement, howsoever denominated, established or governed, that provides for any assessment of or payment or assumption by the Company of part or all of any claim, debt, charge, fee, or other obligation of an insurer, or its successors or assigns, that has been declared by any competent authority to be insolvent, or that is otherwise deemed unable to meet any claim, debt, charge, fee or other obligation in whole or in part.

3. Loss or damage occasioned by war, invasion, hostilities, acts of foreign enemies, civil war, rebellion, insurrection, military or usurped power, martial law, or confiscation by order of any government or public authority, but not excluding loss or damage that would be covered under a standard form of Policy containing a standard war exclusion clause.

4. Losses excluded by the attached Nuclear Incident Exclusion Clause – Physical Damage – Reinsurance – U.S.A.

5. Financial guarantee and insolvency.

6. Losses excluded by the attached Communicable Disease Exclusion (Property Reinsurance).

7. Losses excluded by the attached Cyber Loss Limited Exclusion Clause (Property Treaty Reinsurance).

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B. As respects Section A:

1. All reinsurance assumed by the Company; provided that quota share reinsurance between the reinsured companies shall not be excluded.

2. Insurance policies classified by the Company as Accident and Health, Fidelity and Surety, Boiler and Machinery, Workers' Compensation, and Credit business.

3. Homeowners or any other property insurance policies written on an all risk basis and/or wind only basis.

4. Loss or liability from any Pool, Association or Syndicate and any assessment or similar demand for payment related to the Florida Hurricane Catastrophe Fund, Citizens Property Insurance Corporation or any other regulatory assessment.

5. Loss and/or damage and/or costs and/or expenses arising from seepage and/or pollution and/or contamination.  Nevertheless, this exclusion does not preclude payment of the cost of removing debris of property damaged by a loss otherwise covered hereunder, subject always to the limit of Company's property loss under the applicable original policy.

6. Loss, damage, cost or expense arising out of an act of terrorism involving the use of any biological, chemical, nuclear or radioactive agent, material, device or weapon.

7. All liability arising out of mold, spores and/or fungus, but this exclusion shall not apply to those losses which follow as a direct result of a loss caused by a peril otherwise covered hereunder.

C. As respects Section B:

1. Flood when written as such.

2. Hail damage to an insured’s growing or standing crops.

3. Reinsurance assumed by the Company under obligatory reinsurance agreements, except intercompany reinsurance between the Company and its affiliates and reinsurance where the Policies involved are to be re-underwritten in accordance with the underwriting standards of the Company and reissued as Policies of the Company in due course.

4. Pools, Associations & Syndicates, per the attached exclusion.

5. Terrorism as defined in the attached Terrorism Exclusion.

6. Mold unless directly resulting from an otherwise covered peril.

7. Loss and/or damage and/or costs and/or expenses arising from seepage and/or pollution and/or contamination, other than contamination from smoke.  Nevertheless, this

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exclusion does not preclude payment of the cost of removing debris of property damaged by a loss otherwise covered hereunder, subject always to a limit of 25.0% of the Company’s property loss under the applicable original Policy.

8. Loss or damage to overhead transmission and distribution lines, including supporting structures, of electrical companies, telephone companies, and cable companies.  This exclusion shall not apply, however, to transmission and distribution lines and their supporting structures located on the property of any original insured or within 1,000 feet thereof.

9. Policies written, renewed or assumed by Homeowners Choice Property & Casualty Insurance Company, Inc.

D. With the exception of subparagraphs A(4), A(5), B(3), B(5) and B(6) above, should any judicial, regulatory or legislative entity having legal jurisdiction invalidate any exclusion on the Company's Policy, any amount of loss for which the Company is liable because of such invalidation will not be excluded hereunder.

E. With the exception of subparagraphs A(4), A(5), A(6), and C(5) above, if the Company inadvertently issues a Policy falling within the scope of one or more of the exclusions, such Policy shall be covered hereunder, provided that the Company issues, or causes to be issued, the required notice of cancellation within 30 days after a member of the executive or managerial staff at the Company’s home office having underwriting authority in the class of business involved becomes aware that the Policy applies to excluded classes, unless the Company is prevented from canceling said Policy within such period by applicable statute or regulation, in which case such Policy shall be covered hereunder until the earliest date on which the Company may cancel.

ARTICLE 8

SPECIAL ACCEPTANCE

Business that is not within the scope of this Contract may be submitted to the Reinsurer for special acceptance hereunder, and such business, if accepted by the Reinsurer shall be covered hereunder, subject to the terms and conditions of this Contract, except as modified by the special acceptance.  The Reinsurer shall be deemed to have accepted a risk, if it has not responded within five business days after receiving the underwriting information on such risk.  Any renewal of a special acceptance agreed to for a predecessor contract to this Contract, shall automatically be covered hereunder.

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ARTICLE 9

Premium

A. Section A - Standalone Flood Business

As premium for the reinsurance provided under Section A, the Company shall pay the Reinsurer a flat premium of [$*****], payable in four equal installments of [$*****]on June 1, 2021, September 1, 2021, January 1, 2022 and April 1, 2022.

B. Section B – All Business Except Standalone Flood Business

Premium for the reinsurance provided under Section B shall be determined as follows:

1. The Company shall pay the Reinsurer a deposit premium of [$*****] for the term of this Contract.  The reinsurance premium to be paid to the Reinsurer shall be calculated at a rate of [*****%] multiplied by the Company’s final wind Total Insured Value.

2. The deposit premium in subparagraph B(1) above shall be payable to the Reinsurer by the Company in four equal installments of [$*****]on June 1, 2021, September 1, 2021, January 1, 2022 and April 1, 2022.

3. Within 45 days following the expiration of this Contract, the Company shall provide the Reinsurer with a report showing the Company’s final wind Total Insured Value.  This final wind Total Insured Value shall be multiplied by the rate as stated in subparagraph B(1) above.  Should this amount be greater than or equal to [*****%] and less than or equal to [*****%] of the deposit premium as set forth above, there shall be no additional or return premium due.  Should the amount so calculated exceed [*****%] of the deposit premium paid in accordance with subparagraph B(1) above, the Company shall immediately pay the Reinsurer the difference in excess of [*****%] of the deposit premium.  Should the amount so calculated be less than [*****%] of the deposit premium paid in accordance with subparagraph B(1) of this Article, the Reinsurer shall immediately pay the Company the difference below [*****%] of the deposit premium.

4. The estimated wind Total Insured Value is [$*****].  The final wind Total Insured Value will be based on exposures inforce on September 30, 2021.

C. The Company shall furnish the Reinsurer with such reasonably available information as may be reasonably required by the Reinsurer for completion of the Reinsurer’s financial statements.

ARTICLE 10

Definitions

A. 1.“Ultimate Net Loss” means the actual loss paid by the Company or which the Company becomes liable to pay, such loss to include Loss Adjustment Expense, 100% of any

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Extra Contractual Obligation and 100% of any Loss in Excess of Policy Limits as defined in the Extra Contractual Obligations/Excess of Policy Limits Article.  In no event, however, shall more than 25% of “Ultimate Net Loss” for any one Loss Occurrence be comprised of Extra Contractual Obligations and Loss in Excess of Policy Limits.

2. Salvages and all recoveries (including amounts due from all reinsurances that inure to the benefit of this Contract, whether recovered or not), shall be first deducted from such loss to arrive at the amount of liability attaching hereunder.

3. All salvages, recoveries or payments recovered or received subsequent to loss settlement hereunder shall be applied as if recovered or received prior to the aforesaid settlement, and all necessary adjustments shall be made by the parties hereto.

4. The Company shall be deemed to be “liable to pay” a loss when a judgment has been rendered that the Company does not plan to appeal, and/or the Company has obtained a release, and/or the Company has accepted a proof of loss, and/or the Company has made a commitment to pay, and/or the Company has scheduled the payment of a loss.

5. Nothing in this clause shall be construed to mean that losses are not recoverable hereunder until the Company’s “Ultimate Net Loss” has been ascertained.

B. “Loss Adjustment Expense” means costs and expenses incurred by the Company in connection with the investigation, appraisal, adjustment, settlement, litigation, defense or appeal of a specific claim or loss, or alleged loss, including but not limited to:

1. court costs;

2. costs of supersedeas and appeal bonds;

3. monitoring counsel expenses;

4. legal expenses and costs incurred in connection with coverage questions and legal actions connected thereto, including but not limited to declaratory judgment actions;

5. post-judgment interest;

6. pre-judgment interest, unless included as part of an award or judgment;

7. a pro rata share of salaries and expenses of Company field employees, calculated in accordance with the time occupied in adjusting such loss, and expenses of other Company employees who have been temporarily diverted from their normal and customary duties and assigned to the field adjustment of losses covered by this Contract; and

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8. subrogation, salvage and recovery expenses.

“Loss Adjustment Expense” does not include salaries and expenses of the Company’s employees, except as provided in subparagraph (7) above, and office and other overhead expenses.

C. As respects Section A – Peril of Flood, “Loss Occurrence” means the sum of all related individual losses caused by a flood in accordance with subject Policies, arising out of one event.   However, the duration and extent of any one “Loss Occurrence” as respects Section A shall be limited to all individual losses sustained by the Company occurring during any period of 504 consecutive hours arising out of and directly occasioned by the same event, subject to the following:

1. The Company may choose the date and time when any such period of 504 consecutive hours commences.  Only one period of 504 consecutive hours shall apply with respect to one event.

2. If more than one event occurs during the above period of 504 consecutive hours, each event shall be considered a separate Loss Occurrence.

D. 1.As respects Section B – Perils Other Than Flood, “Loss Occurrence” means the sum of all individual losses directly occasioned by any one disaster, accident or loss or series of disasters, accidents or losses arising out of one event.  However, the duration and extent of any one “Loss Occurrence” shall be limited to all individual losses sustained by the Company occurring during any period of 168 consecutive hours arising out of and directly occasioned by the same event except that the term “Loss Occurrence” shall be further defined as follows:

a. As regards any “Named Storm,” all individual losses sustained by the Company arising out of and directly occasioned by such “Named Storm,” without regard to the limitations of duration and extent set forth above.  “Named Storm” means any storm or storm system declared by the US National Hurricane Center, US Central Pacific Hurricane Center, US Weather Prediction Center, or their successor organizations, all being  divisions of the US National Weather Service to be a tropical storm or hurricane, and any successors thereof.  A storm or storm system that merges with a “Named Storm” shall be considered part of that “Named Storm,” once it has merged.  A “Named Storm” shall be deemed to begin at the effective time and date of the first watch, warning or other official advisory applicable to such tropical storm or hurricane issued by the above referenced governmental meteorological agencies.  A “Named Storm” shall be deemed to end 72 hours after the cancellation of the last watch, warning or other official advisory applicable to such tropical storm, hurricane or successor, issued by the above referenced governmental meteorological agencies irrespective of the duration of the timing or spacing between such watches, warnings or other official advisories.  If two or more storms are assigned different names by the above

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referenced governmental meteorological agencies, each of those storms shall constitute a separate event for purposes of this definition.

b. As regards windstorm, hail, tornado, cyclone, including ensuing collapse and water damage other than “Named Storm,” all individual losses sustained by the Company occurring during any period of 96 consecutive hours arising out of and directly occasioned by the same event.

c. As regards riot, riot attending a strike, civil commotion, vandalism and malicious mischief, all individual losses sustained by the Company occurring during any period of 96 consecutive hours arising out of and directly occasioned by the same event.  The maximum duration of 96 consecutive hours may be extended in respect of individual losses that occur beyond such 96 consecutive hours during the continued occupation of an assured’s premises by strikers, provided such occupation commenced during the aforesaid period.

d. As regards earthquake and fire following directly occasioned by the earthquake, those earthquake losses and individual fire losses that commence during the period of 168 consecutive hours may be included in the Company’s “Loss Occurrence.”

e. As regards any related weather conditions involving snow, sleet, freezing rain, freeze, ice, winter weather, and wind losses related to such conditions, all individual losses sustained by the Company, that occur during any period of 168 consecutive hours arising out of and directly occasioned by the same event.

f. As regards firestorms, brush fires and other fires or series of fires, irrespective of origin (except for fires covered in subparagraphs (c) and (d) above) which spread through trees, grassland or other vegetation, all individual losses sustained by the Company occurring during any period of 168 consecutive hours within a 150-mile radius of any fixed point selected by the Company may be included in the Company’s “Loss Occurrence.”  However, an individual loss subject to this subparagraph cannot be included in more than one “Loss Occurrence.”

2. Except as provided in subparagraph (1)(a) above:

a. The Company may choose the date and time when any such period of consecutive hours commences provided that it is not earlier than the date and time of the occurrence of the first recorded individual loss sustained by the Company arising out of that disaster, accident or loss.

b. Only one period of consecutive hours shall apply with respect to one event, except that, as respects those “Loss Occurrences” referred to in subparagraph (1)(c) above, if the disaster, accident or loss occasioned by the event is of greater duration than 96 consecutive hours, then the Company may divide that disaster, accident or loss into two or more “Loss Occurrences” provided no two periods overlap and no individual loss is included in more than one such period and

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provided that no period commences earlier than the date and time of the occurrence of the first recorded individual loss sustained by the Company arising out of that disaster, accident or loss.

3. Losses arising from a combination of two or more perils as a result of the same event shall be considered as having arisen from one “Loss Occurrence.”  Furthermore, all losses arising from an event involving a combination of losses described in subparagraphs (1)(a) and (1)(b) may be considered as having arisen from one “Loss Occurrence.”  Notwithstanding the foregoing, the hourly limitations as stated above shall not be exceeded as respects the applicable perils, and, except as respects those “Loss Occurrences” involving a “Named Storm” referred to in subparagraph (1)(a) above, no single “Loss Occurrence” shall encompass a time period greater than 168 consecutive hours.

E. “Policy” means any binder, policy, or contract of insurance or reinsurance issued, accepted or held covered provisionally or otherwise, by or on behalf of the Company.

F. “Total Insured Value” means the Company’s total inforce policy limits.

ARTICLE 11

EXTRA CONTRACTUAL OBLIGATIONS/EXCESS OF POLICY LIMITS

A. This Contract shall cover Extra Contractual Obligations, as provided in the definition of Ultimate Net Loss.  “Extra Contractual Obligations” shall be defined as those liabilities not covered under any other provision of this Contract and that arise from the handling of any claim on business covered hereunder, such liabilities arising because of, but not limited to, the following:  failure by the Company to settle within the Policy limit, or by reason of alleged or actual negligence, fraud or bad faith in rejecting an offer of settlement or in the preparation of the defense or in the trial of any action against its insured or reinsured or in the preparation or prosecution of an appeal consequent upon such action.

B. This Contract shall cover Loss in Excess of Policy Limits, as provided in the definition of Ultimate Net Loss.  “Loss in Excess of Policy Limits” shall be defined as Loss in excess of the Policy limit, having been incurred because of, but not limited to, failure by the Company to settle within the Policy limit or by reason of alleged or actual negligence, fraud or bad faith in rejecting an offer of settlement or in the preparation of the defense or in the trial of any action against its insured or reinsured or in the preparation or prosecution of an appeal consequent upon such action.

C. An Extra Contractual Obligation and/or Loss in Excess of Policy Limits shall be deemed to have occurred on the same date as the loss covered under the Company’s Policy, and shall constitute part of the original loss.

D. For the purposes of the Loss in Excess of Policy Limits coverage hereunder, the word “Loss” shall mean any amounts for which the Company would have been contractually liable to pay had it not been for the limit of the original Policy.

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E. Loss Adjustment Expense in respect of Extra Contractual Obligations and/or Loss in Excess of Policy Limits shall be covered hereunder in the same manner as other Loss Adjustment Expense.

F. However, this Article shall not apply where the loss has been incurred due to final legal adjudication of fraud of a member of the Board of Directors or a corporate officer of the Company acting individually or collectively or in collusion with any individual or corporation or any other organization or party involved in the presentation, defense or settlement of any claim covered hereunder.

G. In no event shall coverage be provided to the extent not permitted under law.

ARTICLE 12

NET RETAINED LIABILITY

A. This Contract applies only to that portion of any loss that the Company retains net for its own account (prior to deduction of any reinsurance that inures solely to the benefit of the Company).

B. The amount of the Reinsurer’s liability hereunder in respect of any loss or losses shall not be increased by reason of the inability of the Company to collect from any other reinsurer(s), whether specific or general, any amounts that may have become due from such reinsurer(s), whether such inability arises from the insolvency of such other reinsurer(s) or otherwise.

ARTICLE 13

OTHER REINSURANCE

The Company shall be permitted to carry in force other reinsurance, recoveries under which shall inure to the benefit of this Contract.

ARTICLE 14

Original Conditions

All reinsurance under this Contract shall be subject to the same terms, conditions, waivers and interpretations, and to the same modifications and alterations as the respective Policies of the Company.  However, in no event shall this be construed in any way to provide coverage outside the terms and conditions set forth in this Contract.

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ARTICLE 15

NO THIRD PARTY RIGHTS

This Contract is solely between the Company and the Reinsurer, and in no instance shall any insured, claimant or other third party have any rights under this Contract except as may be expressly provided otherwise herein.

ARTICLE 16

Notice of Loss and Loss Settlements

A. The Company shall advise the Reinsurer promptly if paid and estimated Ultimate Net Loss is in excess of 75% of the Company’s retention, or if, in the opinion of the Company, such Ultimate Net Loss may result in a claim hereunder.  Thereafter, the Company shall advise the Reinsurer, at least monthly, of all subsequent developments thereto that may materially affect the position of the Reinsurer.

B. The Company alone and at its full discretion shall adjust, settle or compromise all claims and losses.

C. As respects losses subject to this Contract, all loss settlements made by the Company, whether under strict Policy terms or by way of compromise, and any Extra Contractual Obligations and/or Loss in Excess of Policy Limits, shall be binding upon the Reinsurer.  The Reinsurer agrees to pay or allow, as the case may be, its share of each such settlement immediately upon receipt of reasonable evidence of the amount paid by the Company or that the Company estimates it will pay within the next 14 days.  Within 30 days after receipt of the Reinsurer’s payment, the Company shall report to the Reinsurer the Reinsurer’s payment, minus the Reinsurer’s share of losses subject to this Contract that the Company has paid, or become liable to pay, as of the date of the report.  Any positive difference shall be remitted to the Reinsurer with the Company’s report.

ARTICLE 17

LATE PAYMENTS

A. In the event any payment due either party is not received by the Intermediary by the payment due date, the party to whom payment is due may, by notifying the Intermediary in writing, require the debtor party to pay, and the debtor party agrees to pay, an interest penalty on the amount past due calculated for each such payment on the last business day of each month as follows:

1. The number of full days that have expired since the overdue date or the last monthly calculation, whichever the lesser; times

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2. 1/365th of the sum of the six-month United States Treasury Bill rate as quoted in The Wall Street Journal on the first business day of the month for which the calculation is made, plus 1%; times

3. The amount past due, including accrued interest.

Interest shall accumulate until payment of the original amount due plus interest penalties have been received by the Intermediary.

B. The due date shall, for purposes of this Article, be determined as follows:

1. Payments from the Reinsurer to the Company shall be due on the date on which the demand for payment (including delivery of bordereaux or quarterly or monthly reports) is received by the Reinsurer, and shall be overdue 30 days thereafter.

2. Payments from the Company to the Reinsurer shall be due on the dates specified within this Contract.  Payments shall be overdue 30 days thereafter except for the first installment of premium, if applicable, which shall be overdue 60 days from inception or 30 days from final line-signing, whichever the later.  Reinstatement premium, if applicable, shall have as a due date the date when the Company receives payment for the claim giving rise to such reinstatement premium, and payment shall be overdue 30 days thereafter. In the event a due date is not specifically stated for a given payment, the overdue date shall be 30 days following the date of billing.

C. If the information contained in the Company’s demand for payment is insufficient or not in accordance with the conditions of this Contract, then within 30 days the Reinsurer shall request from the Company all additional information necessary to validate its claim and the payment due date as defined in paragraph B shall be deemed to be the date upon which the Reinsurer received the requested additional information.  This paragraph is only for the purpose of establishing when a payment is overdue, and shall not alter the provisions of the Notice of Loss and Loss Settlements Article or other pertinent contractual stipulations.

D. In the event arbitration is necessary to settle a dispute, the panel shall have the authority to make a determination awarding interest to the prevailing party.  Interest, if any, awarded by the panel shall supersede the interest amounts outlined herein.

E. Any interest owed pursuant to this Article may be waived by the party to which it is owed.  Waiver of such interest, however, shall not affect the waiving party’s rights to other interest amounts due as a result of this Article.

ARTICLE 18

OFFSET

Each party hereto shall have, and may exercise at any time and from time to time, the right to offset any and all balances due from a party to the other arising under this Contract.  In the event of the

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insolvency of a party hereto, offsets shall only be allowed in accordance with the provisions of any applicable law governing offset entitlement.

ARTICLE 19

Currency

A. Where the word “Dollars” and/or the sign “$” appear in this Contract, they shall mean United States Dollars, and all payments hereunder shall be in United States Dollars.

B. For purposes of this Contract, where the Company receives premiums or pays losses in currencies other than United States Dollars, such premiums or losses shall be converted into United States Dollars at the actual rates of exchange at which these premiums or losses are entered in the Company’s books.

ARTICLE 20

Unauthorized Reinsurance

A. This Article applies only to the extent a Subscribing Reinsurer does not qualify for credit with any insurance regulatory authority having jurisdiction over the Company’s reserves.

B. The Company agrees, in respect of its Policies or bonds falling within the scope of this Contract, that when it files with its insurance regulatory authority, or sets up on its books liabilities as required by law, it shall forward to the Reinsurer a statement showing the proportion of such liabilities applicable to the Reinsurer.  The “Reinsurer’s Obligations” shall be defined as follows:

1. unearned premium (if applicable);

2. known outstanding losses that have been reported to the Reinsurer and Loss Adjustment Expense relating thereto;

3. losses and Loss Adjustment Expense paid by the Company but not recovered from the Reinsurer;

4. losses incurred but not reported and Loss Adjustment Expense relating thereto;

5. all other amounts for which the Company cannot take credit on its financial statements unless funding is provided by the Reinsurer.

C. The Reinsurer’s Obligations shall be funded by funds withheld, cash advances, Trust Agreement or a Letter of Credit (LOC).  The Reinsurer shall have the option of determining the method of funding provided it is acceptable to the insurance regulatory authorities having jurisdiction over the Company’s reserves.

D. When funding by Trust Agreement, the Reinsurer shall ensure that the Trust Agreement complies with the provisions of the “Trust Agreement Requirements Clause” attached hereto.  

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When funding by an LOC, the Reinsurer agrees to apply for and secure timely delivery to the Company of a clean, irrevocable and unconditional LOC issued by a bank and containing provisions acceptable to the insurance regulatory authorities having jurisdiction over the Company’s reserves in an amount equal to the Reinsurer’s Obligations.  Such LOC shall be issued for a period of not less than one year, and shall be automatically extended for one year from its date of expiration or any future expiration date unless 30 days (or such other time period as may be required by insurance regulatory authorities), prior to any expiration date the issuing bank shall notify the Company by certified or registered mail that the issuing bank elects not to consider the LOC extended for any additional period.

E. The Reinsurer and the Company agree that any funding provided by the Reinsurer pursuant to the provisions of this Contract may be drawn upon at any time, notwithstanding any other provision of this Contract, and be utilized by the Company or any successor, by operation of law, of the Company including, without limitation, any liquidator, rehabilitator, receiver or conservator of the Company, for the following purposes, unless otherwise provided for in a separate Trust Agreement:

1. to reimburse the Company for the Reinsurer’s Obligations, the payment of which is due under the terms of this Contract and that has not been otherwise paid;

2. to make refund of any sum that is in excess of the actual amount required to pay the Reinsurer’s Obligations under this Contract (or in excess of 102% of the Reinsurer’s Obligations, if funding is provided by a Trust Agreement);

3. to fund an account with the Company for the Reinsurer’s Obligations.  Such cash deposit shall be held in an interest bearing account separate from the Company’s other assets, and interest thereon not in excess of the prime rate shall accrue to the benefit of the Reinsurer.  Any taxes payable on accrued interest shall be paid out of the assets in the account that are in excess of the Reinsurer’s Obligations (or in excess of 102% of the Reinsurer’s Obligations, if funding is provided by a Trust Agreement).  If the assets are inadequate to pay taxes, any taxes due shall be paid or reimbursed by the Reinsurer;

4. to pay the Reinsurer’s share of any other amounts the Company claims are due under this Contract.

F. If the amount drawn by the Company is in excess of the actual amount required for E(1) or E(3), or in the case of E(4), the actual amount determined to be due, the Company shall promptly return to the Reinsurer the excess amount so drawn.  All of the foregoing shall be applied without diminution because of insolvency on the part of the Company or the Reinsurer.

G. The issuing bank shall have no responsibility whatsoever in connection with the propriety of withdrawals made by the Company or the disposition of funds withdrawn, except to ensure that withdrawals are made only upon the order of properly authorized representatives of the Company.

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H. At annual intervals, or more frequently at the discretion of the Company, but never more frequently than quarterly, the Company shall prepare a specific statement of the Reinsurer’s Obligations for the sole purpose of amending the LOC or other method of funding, in the following manner:

1. If the statement shows that the Reinsurer’s Obligations exceed the balance of the LOC as of the statement date, the Reinsurer shall, within 30 days after receipt of the statement, secure delivery to the Company of an amendment to the LOC increasing the amount of credit by the amount of such difference.  Should another method of funding be used, the Reinsurer shall, within the time period outlined above, increase such funding by the amount of such difference.

2. If, however, the statement shows that the Reinsurer’s Obligations are less than the balance of the LOC (or that 102% of the Reinsurer’s Obligations are less than the trust account balance if funding is provided by a Trust Agreement), as of the statement date, the Company shall, within 30 days after receipt of written request from the Reinsurer, release such excess credit by agreeing to secure an amendment to the LOC reducing the amount of credit available by the amount of such excess credit.  Should another method of funding be used, the Company shall, within the time period outlined above, decrease such funding by the amount of such excess.

ARTICLE 21

TAXES

A. In consideration of the terms under which this Contract is issued, the Company undertakes not to claim any deduction of the premium hereon when making Canadian tax returns or when making tax returns, other than Income or Profits Tax returns, to any state or territory of the United States of America or to the District of Columbia.

B. 1.Each Subscribing Reinsurer has agreed to allow, for the purpose of paying the Federal Excise Tax, the applicable percentage of the premium payable hereon (as imposed under the Internal Revenue Code) to the extent such premium is subject to Federal Excise Tax.

2. In the event of any return of premium becoming due hereunder, the Subscribing Reinsurer shall deduct the applicable percentage of the premium from the amount of the return, and the Company or its agent should take steps to recover the Tax from the U.S. Government.

ARTICLE 22

ACCESS TO RECORDS

A. The Reinsurer or its duly authorized representatives shall have the right to visit the offices of the Company to inspect, examine, audit, and verify any of the policy, accounting or claim files (“Records”) relating to business reinsured under this Contract during regular business

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hours after giving five working days’ prior notice.  This right shall be exercisable during the term of this Contract or after the expiration of this Contract.  Notwithstanding the above, the Reinsurer shall not have any right of access to the Records of the Company if it is not current in all undisputed payments due the Company.

B. Notwithstanding the above, the Company reserves the right to withhold from the Reinsurer any Privileged Documents.  However, the Company shall permit and not object to the Reinsurer’s access to Privileged Documents in connection with the underlying claim reinsured hereunder following final settlement or final adjudication of the case or cases involving such claim, with prejudice against all claimants and all parties to such adjudications; the Company may defer release of such Privileged Documents if there are subrogation, contribution, or other third party actions with respect to that claim or case, and the Company’s defense might be jeopardized by release of such Privileged Documents.  In the event that the Company seeks to defer release of such Privileged Documents, it shall, in consultation with the Reinsurer, take other steps as reasonably necessary to provide the Reinsurer with the information it reasonably requires to indemnify the Company without causing a loss of such privileges or protections.  The Reinsurer shall not have access to Privileged Documents relating to any dispute between the Company and the Reinsurer.

C. For purposes of this Article:

1. “Privileged Documents” means any documents that are Attorney-Client Privilege Documents and/or Work Product Privilege Documents.

2. “Attorney-Client Privilege Documents” means communications of a confidential nature between (a) the Company, or anyone retained by or at the direction of the Company, or its in‑house or outside legal counsel, or anyone in the control of such legal counsel, and (b) any in-house or outside legal counsel, if such communications relate to legal advice being sought by the Company and/or contain legal advice being provided to the Company.

3. “Work Product Privilege Documents” means communications, written materials and tangible things prepared by or for in-house or outside counsel, or prepared by or for the Company, in anticipation of or in connection with litigation, arbitration, or other dispute resolution proceedings.

ARTICLE 23

CONFIDENTIALITY

A. The Reinsurer hereby acknowledges that the documents, information and data provided to it by the Company, whether directly or through an authorized agent, in connection with the placement and execution of this Contract (“Confidential Information”) are proprietary and confidential to the Company.  Confidential Information shall not include documents, information or data that the Reinsurer can show:

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1. are publicly known or have become publicly known through no unauthorized act of the Reinsurer;

2. have been rightfully received from a third person without obligation of confidentiality; or

3. were known by the Reinsurer prior to the placement of this Contract without an obligation of confidentiality.

B. Absent the written consent of the Company, the Reinsurer shall not disclose any Confidential Information to any third parties, including any affiliated companies (except to the extent necessary to enable affiliated companies or third parties engaged by the Reinsurer to perform services related to this Contract on behalf of the Reinsurer), except:

1. when required by retrocessionaires as respects business ceded to this Contract;

2. when required by regulators performing an audit of the Reinsurer’s records and/or financial condition; or

3. when required by external auditors performing an audit of the Reinsurer’s records in the normal course of business.

Further, the Reinsurer agrees not to use any Confidential Information for any purpose not related to the performance of its obligations or enforcement of its rights under this Contract.

C. Notwithstanding the above, in the event that the Reinsurer is required by court order, other legal process or any regulatory authority to release or disclose any or all of the Confidential Information, the Reinsurer agrees to provide the Company with written notice of same at least 10 days prior to such release or disclosure and to use its best efforts to assist the Company in maintaining the confidentiality provided for in this Article.

D. The provisions of this Article shall extend to the officers, directors and employees of the Reinsurer and its affiliates, and shall be binding upon their successors and assigns.

ARTICLE 24

Indemnification and Errors and Omissions

A. The Reinsurer is reinsuring, subject to the terms and conditions of this Contract, the obligations of the Company under any Policy.  The Company shall be the sole judge as to:

1. what shall constitute a claim or loss covered under any Policy;

2. the Company’s liability thereunder; and

3. the amount or amounts that it shall be proper for the Company to pay thereunder.

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B. The Reinsurer shall be bound by the judgment of the Company as to the obligation(s) and liability(ies) of the Company under any Policy.

C. Any inadvertent error, omission or delay in complying with the terms and conditions of this Contract shall not be held to relieve either party hereto from any liability that would attach to it hereunder if such error, omission or delay had not been made, provided such error, omission or delay is rectified immediately upon discovery.

D. Nothing in this Article shall be construed to override any of the other terms and conditions of this Contract.

ARTICLE 25

Insolvency

A. If more than one reinsured company is referenced within the definition of “Company” in the Preamble to this Contract, this Article shall apply severally to each such company.  Further, this Article and the laws of the domiciliary state shall apply in the event of the insolvency of any company covered hereunder.  In the event of a conflict between any provision of this Article and the laws of the domiciliary state of any company covered hereunder, that domiciliary state’s laws shall prevail.

B. In the event of the insolvency of the Company, this reinsurance (or the portion of any risk or obligation assumed by the Reinsurer, if required by applicable law) shall be payable directly to the Company, or to its liquidator, receiver, conservator or statutory successor, either:  (1) on the basis of the liability of the Company, or (2) on the basis of claims filed and allowed in the liquidation proceeding, whichever may be required by applicable statute, without diminution because of the insolvency of the Company or because the liquidator, receiver, conservator or statutory successor of the Company has failed to pay all or a portion of any claim.  It is agreed, however, that the liquidator, receiver, conservator or statutory successor of the Company shall give written notice to the Reinsurer of the pendency of a claim against the Company indicating the Policy or bond reinsured, which claim would involve a possible liability on the part of the Reinsurer within a reasonable time after such claim is filed in the conservation or liquidation proceeding or in the receivership, and that during the pendency of such claim, the Reinsurer may investigate such claim and interpose, at its own expense, in the proceeding where such claim is to be adjudicated any defense or defenses that it may deem available to the Company or its liquidator, receiver, conservator or statutory successor.  The expense thus incurred by the Reinsurer shall be chargeable, subject to the approval of the court, against the Company as part of the expense of conservation or liquidation to the extent of a pro rata share of the benefit that may accrue to the Company solely as a result of the defense undertaken by the Reinsurer.

C. Where two or more reinsurers are involved in the same claim and a majority in interest elect to interpose defense to such claim, the expense shall be apportioned in accordance with the terms of this reinsurance Contract as though such expense had been incurred by the Company.

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D. As to all reinsurance made, ceded, renewed or otherwise becoming effective under this Contract, the reinsurance shall be payable as set forth above by the Reinsurer to the Company or to its liquidator, receiver, conservator or statutory successor, (except as provided by Section 4118(a)(1)(A) of the New York Insurance Law, provided the conditions of 1114(c) of such law have been met, if New York law applies) or except (1) where the Contract specifically provides another payee in the event of the insolvency of the Company, or (2) where the Reinsurer, with the consent of the direct insured or insureds, has assumed such Policy obligations of the Company as direct obligations of the Reinsurer to the payees under such Policies and in substitution for the obligations of the Company to such payees.  Then, and in that event only, the Company, with the prior approval of the certificate of assumption on New York risks by the Superintendent of Financial Services of the State of New York, or with the prior approval of such other regulatory authority as may be applicable, is entirely released from its obligation and the Reinsurer shall pay any loss directly to payees under such Policy.

ARTICLE 26

RUN-OFF REINSURER

A. “Run-off Reinsurer” means any Subscribing Reinsurer that:

1. has been ordered by a state insurance department or other legal authority to cease writing business, or has been placed under regulatory supervision or in rehabilitation; or

2. has ceased reinsurance underwriting operations; or

3. has transferred its claims-paying authority to an unaffiliated entity; or

4. engages in a process of Scheme of Arrangement or similar procedure related to this Contract, including but not limited to an insurance business transfer scheme pursuant to Part VII of the Financial Services and Markets Act 2000 (U.K.), as may be amended from time to time; or

5. in any other way has assigned its interests or delegated its obligations under this Contract to an unaffiliated entity.

Notwithstanding the foregoing, agreement by a Lloyd’s syndicate to follow claim settlements procedures under Lloyd’s Claims Scheme (Combined) shall not constitute a transfer of its claims-paying authority, for purposes of subparagraphs (3) and (5) of this paragraph.

B. Notwithstanding any other provision of this Contract, in the event that a Subscribing Reinsurer becomes a Run-off Reinsurer at any time, the Company may elect, by giving written notice to the Run-off Reinsurer at any time thereafter, that all or any of the following shall apply to the Run-off Reinsurer’s participation hereunder:

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1. Should the Run-off Reinsurer fail to pay amounts due hereunder, the interest penalty specified in the Late Payments Article shall be increased by 0.5% for each 30 days that a payment is past due, subject to a maximum increase of 7.0%.

2. The Run-off Reinsurer’s liability for losses for Policies covered by this Contract shall be commuted.  In the event the Company and the Run-off Reinsurer cannot agree on the commutation amount of the Run-off Reinsurer’s liability under such Policies, they shall appoint an actuary and/or appraiser to assess such liability and shall share equally any expense of the actuary and/or appraiser.  If the Company and the Run-off Reinsurer cannot agree on an actuary and/or appraiser, the Company and the Run-off Reinsurer each shall nominate three individuals, of whom the other shall decline two, and the final appointment shall be made by drawing lots.  Payment by the Run-off Reinsurer of the amount of liability ascertained shall constitute a complete and final release of both parties under this Contract.

3. The Run-off Reinsurer shall have no right of access to the Records of the Company if the Run-off Reinsurer has denied payment of any claim hereunder or there is a pending arbitration between the Company and the Run-off Reinsurer regarding any claim hereunder.  A reservation of rights shall be considered a denial of a claim.  Notwithstanding the above, the Run-off Reinsurer shall continue to have access to Records of the Company for any claim for which it has raised a query within 30 days of its receipt of a billing, but any inspection of Records must be completed within 90 days of receipt of billing or access will be deemed waived.

4. The provisions of the Arbitration Article shall not apply.  

C. The Company’s waiver of any rights provided in this Article is not a waiver of that right or other rights at a later date.

ARTICLE 27

Arbitration

A. Any dispute arising out of the interpretation, performance or breach of this Contract, including the formation or validity thereof, shall be submitted for decision to a panel of three arbitrators.  Notice requesting arbitration shall be in writing and sent certified or registered mail, return receipt requested.

B. One arbitrator shall be chosen by each party and the two arbitrators shall then choose an impartial third arbitrator who shall preside at the hearing.  If either party fails to appoint its arbitrator within 30 days after being requested to do so by the other party, the latter, after 10 days’ prior notice by certified or registered mail of its intention to do so, may appoint the second arbitrator.

C. If the two arbitrators do not agree on a third arbitrator within 60 days of their appointment, the third arbitrator shall be chosen in accordance with the procedures for selecting the third arbitrator in force on the date the arbitration is demanded, established by the AIDA

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Reinsurance and Insurance Arbitration Society – U.S. (ARIAS).  The arbitrators shall be persons knowledgeable about insurance and reinsurance who have no personal or financial interest in the result of the arbitration.  If a member of the panel dies, becomes disabled or is otherwise unwilling or unable to serve, a substitute shall be selected in the same manner as the departing member was chosen and the arbitration shall continue.

D. Within 30 days after all arbitrators have been appointed, the panel shall meet and determine timely periods for briefs, discovery procedures and schedules of hearings.

E. The panel shall be relieved of all judicial formality and shall not be bound by the strict rules of procedure and evidence.  Notwithstanding anything to the contrary in this Contract, the arbitrators may at their discretion, consider underwriting and placement information provided by the Company to the Reinsurer, as well as any correspondence exchanged by the parties that is related to this Contract.  The arbitration shall take place in Tampa, Florida, or at such other place as the parties shall agree.  The decision of any two arbitrators shall be in writing and shall be final and binding.  The panel is empowered to grant interim relief as it may deem appropriate.

F. The panel shall interpret this Contract as an honorable engagement rather than as merely a legal obligation and shall make its decision considering the custom and practice of the applicable insurance and reinsurance business as promptly as possible after the hearings.  Judgment upon an award may be entered in any court having jurisdiction thereof.

G. Each party shall bear the expense of its own arbitrator and shall jointly and equally bear with the other party the cost of the third arbitrator.  The remaining costs of the arbitration shall be allocated by the panel.  The panel may, at its discretion, award such further costs and expenses as it considers appropriate, including but not limited to attorneys’ fees, to the extent permitted by law.

ARTICLE 28

Expedited Arbitration

A. Notwithstanding the provisions of the Arbitration Article, in the event an amount in dispute hereunder $1,000,000 or less, the parties will submit to an expedited arbitration process with the use of a single arbitrator.  The arbitrator will be chosen in accordance with the procedures for selecting an arbitrator in force on the date the arbitration is demanded, established by the AIDA Reinsurance and Insurance Arbitration Society - U.S. (ARIAS).

B. Each party’s case will be submitted to the arbitrator within 100 calendar days of the date of determination of the arbitrator.  Discovery will be limited to exchanging only those documents directly relating to the issue in dispute, subject to a limit of two discovery depositions from each party, unless otherwise authorized by the arbitrator upon a showing of good cause.

C. Within 120 calendar days of the date of determination of the arbitrator, the hearing will be completed and a written award will be issued by the arbitrator.  As the parties agree that time

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is of the essence, the sole arbitrator does not have the authority to lengthen the schedule, absent agreement of both parties.  The arbitrator will have all the powers conferred on the arbitration panel as provided in the Arbitration Article, and said Article will apply to all matters not specifically addressed above.

ARTICLE 29

SERVICE OF SUIT

A. This Article applies only to those Subscribing Reinsurers not domiciled in the United States of America, and/or not authorized in any state, territory and/or district of the United States of America where authorization is required by insurance regulatory authorities.

B. This Article shall not be read to conflict with or override the obligations of the parties to arbitrate their disputes as provided for in the Arbitration Article.  This Article is intended as an aid to compelling arbitration or enforcing such arbitration or arbitral award, not as an alternative to the Arbitration Article for resolving disputes arising out of this Contract.

C. In the event of the failure of the Reinsurer to perform its obligations hereunder, the Reinsurer, at the request of the Company, shall submit to the jurisdiction of a court of competent jurisdiction within the United States.  Nothing in this Article constitutes or should be understood to constitute a waiver of the Reinsurer’s rights to commence an action in any court of competent jurisdiction in the United States, to remove an action to a United States District Court, or to seek a transfer of a case to another court as permitted by the laws of the United States or of any state in the United States.  The Reinsurer, once the appropriate court is selected, whether such court is the one originally chosen by the Company and accepted by the Reinsurer or is determined by removal, transfer, or otherwise, as provided for above, shall comply with all requirements necessary to give said court jurisdiction and, in any suit instituted against the Reinsurer upon this Contract, shall abide by the final decision of such court or of any appellate court in the event of an appeal.

D. Service of process in such suit may be made upon:

1. as respects Underwriting Members of Lloyd’s, London: Lloyd’s America, Inc., Attention: Legal Department, 280 Park Avenue, East Tower, 25^th Floor, New York, New York 10017;

2. as respects any other Subscribing Reinsurer: Messrs. Mendes and Mount, 750 Seventh Avenue, New York, New York 10019-6829, or another party specifically designated in the Subscribing Reinsurer’s Interests and Liabilities Agreement attached hereto.  

The above-named are authorized and directed to accept service of process on behalf of the Reinsurer in any such suit.

E. Further, pursuant to any statute of any state, territory or district of the United States that makes provision therefor, the Reinsurer hereby designates the Superintendent, Commissioner or Director of Insurance, or other officer specified for that purpose in the

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statute, or his successor or successors in office, as its true and lawful attorney upon whom may be served any lawful process in any action, suit or proceeding instituted by or on behalf of the Company or any beneficiary hereunder arising out of this Contract, and hereby designates the above-named as the person to whom the said officer is authorized to mail such process or a true copy thereof.

ARTICLE 30

GOVERNING LAW

This Contract shall be governed as to performance, administration and interpretation by the laws of the State of Florida, exclusive of conflict of law rules.  However, with respect to credit for reinsurance, the rules of all applicable states shall apply.

ARTICLE 31

ENTIRE AGREEMENT

This Contract sets forth all of the duties and obligations between the Company and the Reinsurer and supersedes any and all prior or contemporaneous written agreements with respect to matters referred to in this Contract.  This Contract may not be modified or changed except by an amendment to this Contract in writing signed by both parties.  However, this Article shall not be construed as limiting the admissibility of evidence regarding the formation, interpretation, purpose or intent of this Contract.

ARTICLE 32

NON-WAIVER

The failure of the Company or the Reinsurer to insist on compliance with this Contract or to exercise any right or remedy hereunder shall not constitute a waiver of any rights contained in this Contract nor prevent either party from thereafter demanding full and complete compliance nor prevent either party from exercising such remedy in the future.

ARTICLE 33

AGENCY

For purposes of sending and receiving notices and payments required by this Contract, the reinsured company that is set forth first in the Preamble to this Contract shall be deemed the agent of all other reinsured companies referenced in the Preamble.  In no event, however, shall any reinsured company be deemed the agent of another with respect to the terms of the Insolvency Article.

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ARTICLE 34

Intermediary

Guy Carpenter & Company, LLC, is hereby recognized as the Intermediary negotiating this Contract for all business hereunder.  All communications (including notices, statements, premiums, return premiums, commissions, taxes, losses, Loss Adjustment Expenses, salvages, and loss settlements) relating thereto shall be transmitted to the Company or the Reinsurer through the Intermediary.  Payments by the Company to the Intermediary shall be deemed payment to the Reinsurer.  Payments by the Reinsurer to the Intermediary shall be deemed payment to the Company only to the extent that such payments are actually received by the Company.

ARTICLE 35

MODE OF EXECUTION

A. This Contract may be executed by:

1. an original written ink signature of paper documents;

2. an exchange of facsimile copies showing the original written ink signature of paper documents;

3. electronic signature technology employing computer software and a digital signature or digitizer pen pad to capture a person’s handwritten signature in such a manner that the signature is unique to the person signing, is under the sole control of the person signing, is capable of verification to authenticate the signature and is linked to the document signed in such a manner that if the data is changed, such signature is invalidated.

B. The use of any one or a combination of these methods of execution shall constitute a legally binding and valid signing of this Contract.  This Contract may be executed in one or more counterparts, each of which, when duly executed, shall be deemed an original.

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IN WITNESS WHEREOF, the Company has caused this Contract to be executed by its duly authorized representative(s), who also confirms the Company’s review of and agreement to be bound by the terms and conditions of the Interests and Liabilities Agreements attached to and forming part of this Contract;

On this _____ day of __________, in the year of 2021.

Typtap insurance company

Homeowners Choice Property & Casualty
Insurance Company, INC.

Signature:	Title:
Print Name:

Top Layer Flood/Wind Property Catastrophe

EXCESS OF LOSS REINSURANCE CONTRACT

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POOLS, ASSOCIATIONS & SYNDICATES EXCLUSIONS CLAUSE

Section A:

This Contract excludes:

a. All business derived directly or indirectly from any Pool, Association or Syndicate which maintains its own reinsurance facilities.

b. Any Pool or Scheme (whether voluntary or mandatory) formed after March 1, 1968 for the purpose of insuring property, whether on a country-wide basis or in respect of designated areas.  This exclusion shall not apply to so-called Automobile Insurance Plans or other Pools formed to provide coverage for Automobile Physical Damage.

Section B:

1. This Contract excludes business written by the Company for the same perils, which is known at the time to be insured by, or in excess of underlying amounts placed in, any Pool, Association or Syndicate, whether by way of insurance or reinsurance, formed for the purpose of writing any of the following:

Oil, Gas or Petro-Chemical Plants

Oil or Gas Drilling Rigs and/or

Aviation Risks

2. The exclusion under paragraph 1 of this Section B does not apply:

a. Where the Total Insured Value over all interests of the risk in question is less than $250,000,000.

b. To interests traditionally underwritten as Inland Marine and/or Stock and/or Contents written on a Blanket basis.

c. To Contingent Business Interruption, except when the Company is aware that the key location is known at the time to be insured in any Pool, Association or Syndicate named above, other than as provided for under subparagraph (a).

Section C:

1. Nevertheless the Reinsurer specifically agrees that liability accruing to the Company from its participation in Residual Market Mechanisms, including but not limited to the following, for all perils otherwise protected hereunder shall not be excluded herefrom:

a. So-called “Beach and Windstorm Plans” and so-called “Coastal Pools”;

b. All “FAIR Plan” and “Rural Risk Plan” business;

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c. Louisiana Citizens Property Insurance Corporation;

d. California Earthquake Authority (“CEA”) or any similar entity.

Notwithstanding the above, assessments related to the Florida Hurricane Catastrophe Fund and Citizens Property Insurance Corporation (Florida) shall be excluded hereunder.

2. However, this reinsurance does not include any increase in such liability resulting from:

a. The inability of any other participant in such Residual Market Mechanisms to meet its liability;

b. Any claim against a Residual Market Mechanism or any participant therein, including the Company, whether by way of subrogation or otherwise, brought by or on behalf of any insolvency fund (as defined in the Exclusions Article);

c. Any assessment or surcharge levied on the policyholder and therefore not a liability of the Company;

d. The Company’s initial capital contribution to the CEA;

e. Any assessments, other than interim and regular assessments, from a Residual Market Mechanism included in subparagraph 1(c) above;

f. Any expenditure to purchase or retire bonds.

3. The Company may include in Ultimate Net Loss for any Loss Occurrence covered hereunder only the liability attributable to that Loss Occurrence.  If the relevant entity does not specify what portion of an assessment is attributable to each Loss Occurrence, the Company may include in Ultimate Net Loss in respect of each Loss Occurrence a percentage of the Company’s assessments from the relevant entity related to the calendar year in which the Loss Occurrence commenced, regardless of when assessed, such percentage to be determined by dividing the relevant entity’s losses arising from the Loss Occurrence by its total losses for the calendar year.

4. The Company will deduct from Ultimate Net Loss amounts received as recoupment of any assessment that has been included in the Ultimate Net Loss, provided the recoupment is directly allocable to the assessment (“itemized recoupment”).  The Company shall use commercially reasonable efforts to recoup such assessment.  Any amount received as an itemized recoupment of any assessment (whether under this Contract or any predecessor contract), and therefore deductible from Ultimate Net Loss, shall not be included in the subject premium of this Contract.

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However, if a state levies assessments but does not allow itemized recoupment from policyholders, instead allowing the Company to file an overall increased rate, any such premium increased thereby shall not be deemed to be a recoupment that is deductible from Ultimate Net Loss.  Any recoupment received as part of a general premium rate increase, not specifically itemized, shall be included as part of the subject premium of this Contract or a successor contract, as applicable.

NOTES: Wherever used herein the terms:

“Company” shall be understood to mean “Company”, “Reinsured”, “Reassured” or whatever other term is used in the attached reinsurance document to designate the reinsured company or companies.

“Contract” shall be understood to mean “Agreement,” “Contract,” “Policy” or whatever other term is used to designate the attached reinsurance document.

“Reinsurer” shall be understood to mean “Reinsurer,” “Reinsurers,” “Underwriters” or whatever other term is used in the attached reinsurance document to designate the reinsurer or reinsurers.

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Nuclear Incident Exclusion Clause - Physical Damage - Reinsurance - U.S.A.

1. This Reinsurance does not cover any loss or liability accruing to the Reassured, directly or indirectly, and whether as Insurer or Reinsurer, from any Pool of Insurers or Reinsurers formed for the purpose of covering Atomic or Nuclear Energy risks.

2. Without in any way restricting the operation of paragraph (1) of this clause, this Reinsurance does not cover any loss or liability accruing to the Reassured, directly or indirectly and whether as Insurer or Reinsurer, from any insurance against Physical Damage (including business interruption or consequential loss arising out of such Physical Damage) to:

I. Nuclear reactor power plants including all auxiliary property on the site, or

II. Any other nuclear reactor installation, including laboratories handling radioactive materials in connection with reactor installations, and “critical facilities” as such, or

III. Installations for fabricating complete fuel elements or for processing substantial quantities of “special nuclear material”, and for reprocessing, salvaging, chemically separating, storing or disposing of “spent” nuclear fuel or waste materials, or

IV. Installations other than those listed in paragraph (2) III above using substantial quantities of radioactive isotopes or other products of nuclear fission.

3. Without in any way restricting the operations of paragraphs (1) and (2) hereof, this Reinsurance does not cover any loss or liability by radioactive contamination accruing to the Reassured, directly or indirectly, and whether as Insurer or Reinsurer, from any insurance on property which is on the same site as a nuclear reactor power plant or other nuclear installation and which normally would be insured therewith except that this paragraph (3) shall not operate

(a) where Reassured does not have knowledge of such nuclear reactor power plant or nuclear installation, or

(b) where said insurance contains a provision excluding coverage for damage to property caused by or resulting from radioactive contamination, however caused. However on and after 1st January 1960 this sub-paragraph (b) shall only apply provided the said radioactive contamination exclusion provision has been approved by the Governmental Authority having jurisdiction thereof.

4. Without in any way restricting the operations of paragraphs (1), (2) and (3) hereof, this Reinsurance does not cover any loss or liability by radioactive contamination accruing to the Reassured, directly or indirectly, and whether as Insurer or Reinsurer, when such radioactive contamination is a named hazard specifically insured against.

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5. It is understood and agreed that this clause shall not extend to risks using radioactive isotopes in any form where the nuclear exposure is not considered by the Reassured to be the primary hazard.

6. The term “special nuclear material” shall have the meaning given it in the Atomic Energy Act of 1954 or by any law amendatory thereof.

7. Reassured to be sole judge of what constitutes:

(a) substantial quantities, and

(b) the extent of installation, plant or site.

Note:  Without in any way restricting the operation of paragraph (1) hereof, it is understood and agreed that

(a) all policies issued by the Reassured on or before 31st December 1957 shall be free from the application of the other provisions of this Clause until expiry date or 31st December 1960 whichever first occurs whereupon all the provisions of this Clause shall apply.

(b) with respect to any risk located in Canada policies issued by the Reassured on or before 31st December 1958 shall be free from the application of the other provisions of this Clause until expiry date or 31st December 1960 whichever first occurs whereupon all the provisions of this Clause shall apply.

12/12/57

NMA 1119

NOTES: Wherever used herein the terms:

“Reassured” shall be understood to mean “Company”, “Reinsured”, “Reassured” or whatever other term is used in the attached reinsurance document to designate the reinsured company or companies.

“Agreement” shall be understood to mean “Agreement”, “Contract”, “Policy” or whatever other term is used to designate the attached reinsurance document.

“Reinsurers” shall be understood to mean “Reinsurers”, “Underwriters” or whatever other term is used in the attached reinsurance document to designate the reinsurer or reinsurers.

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TERRORISM EXCLUSION

A. Notwithstanding any provision to the contrary within this Contract or any endorsement thereto, it is agreed that this Contract excludes loss, damage, cost, or expense directly or indirectly caused by, contributed to by, resulting from, or arising out of or in connection with any Act of Terrorism, as defined herein, regardless of any other cause or event contributing concurrently or in any other sequence to the loss.

B. An “Act of Terrorism” includes any act, or preparation in respect of action, or threat of action designed to influence the government de jure or de facto of any nation or any political division thereof, or in pursuit of political, religious, ideological, or similar purposes to intimidate the public or a section of the public of any nation by any person or group(s) of persons whether acting alone or on behalf of or in connection with any organization(s) or government(s) de jure or de facto, and which:

a. involves violence against one or more persons; or

b. involves damage to property; or

c. endangers life other than that of the person committing the action; or

d. creates a risk to health or safety of the public or a section of the public; or

e. is designed to interfere with or to disrupt an electronic system.

C. This Contract also excludes loss, damage, cost, or expense directly or indirectly caused by, contributed to by, resulting from, or arising out of or in connection with any action in controlling, preventing, suppressing, retaliating against, or responding to any Act of Terrorism.

D. Notwithstanding the above and subject otherwise to the terms, conditions, and limitations of this Contract, in respect only of personal lines, this Contract shall pay actual loss or damage (but not related cost or expense) caused by any Act of Terrorism, provided such act is not directly or indirectly caused by, contributed to by, resulting from, or arising out of or in connection with biological, chemical, radiological or nuclear pollution or contamination.

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Communicable Disease Exclusion (Property Reinsurance)

A. This Contract excludes any loss, damage, liability, claim, cost or expense of whatsoever nature, directly or indirectly caused by, contributed to by, resulting from, arising out of, or in connection with a Communicable Disease or the fear or threat (whether actual or perceived) of a Communicable Disease regardless of any other cause or event contributing concurrently or in any other sequence thereto.

B. As used herein, a Communicable Disease means any disease which can be transmitted by means of any substance or agent from any organism to another organism where:

1. the substance or agent includes, but is not limited to, a virus, bacterium, parasite or other organism or any variation thereof, whether deemed living or not, and

2. the method of transmission, whether direct or indirect, includes but is not limited to, airborne transmission, bodily fluid transmission, transmission from or to any surface or object, solid, liquid or gas or between organisms, and

3. the disease, substance or agent can cause or threaten damage to human health or human welfare or can cause or threaten damage to, deterioration of, loss of value of, marketability of or loss of use of property.

C. Notwithstanding the foregoing, losses directly or indirectly caused by, contributed to by, resulting from, arising out of, or in connection with any otherwise covered peril under subject Policies and not otherwise excluded under this Contract shall be covered.

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CYBER LOSS LIMITED EXCLUSION CLAUSE (PROPERTY TREATY REINSURANCE)

1. Notwithstanding any provision to the contrary within this reinsurance agreement or any endorsement thereto, this reinsurance agreement excludes all loss, damage, liability, cost or expense of whatsoever nature directly or indirectly caused by, contributed to by, resulting from, arising out of or in connection with:

1.2. any loss of, alteration of, or damage to or a reduction in the functionality, availability or operation of a Computer System, unless subject to the provisions of paragraph 2;

1.3. any loss of use, reduction in functionality, repair, replacement, restoration or reproduction of any Data, including any amount pertaining to the value of such Data.

2. Subject to the other terms, conditions and exclusions contained in this reinsurance agreement, this reinsurance agreement will cover physical damage to property insured under the original policies and any Time Element Loss directly resulting therefrom where such physical damage is directly occasioned by any of the following perils:

fire, lightning, explosion, aircraft or vehicle impact, falling objects, windstorm, hail, tornado, cyclone, hurricane, earthquake, volcano, tsunami, flood, freeze or weight of snow

Definitions

3. Computer System means any computer, hardware, software, communications system, electronic device (including, but not limited to, smart phone, laptop, tablet, wearable device), server, cloud or microcontroller including any similar system or any configuration of the aforementioned and including any associated input, output, data storage device, networking equipment or back up facility.

4. Data means information, facts, concepts, code or any other information of any kind that is recorded or transmitted in a form to be used, accessed, processed, transmitted or stored by a Computer System.

5. Time Element Loss means business interruption, contingent business interruption or any other consequential losses.

LMA5410

06 March 2020

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TRUST AGREEMENT REQUIREMENTS CLAUSE

A. Except as provided in paragraph B of this Clause, if the Reinsurer satisfies its funding obligations under the Unauthorized Reinsurance Article by providing a Trust Agreement, the Reinsurer shall ensure that the Trust Agreement:

1. Requires the Reinsurer to establish a trust account for the benefit of the Company, and specifies what the Trust Agreement is to cover;

2. Stipulates that assets deposited in the trust account shall be valued according to their current fair market value and shall consist only of cash (United States legal tender), and certificates of deposit (issued by a United States bank and payable in United States legal tender), or any combination of the two, provided that the investments are issued by an institution that is not the parent, subsidiary or affiliate of either the Reinsurer or the Company;

3. Requires the Reinsurer, prior to depositing assets with the trustee, to execute assignments or endorsements in blank, or to transfer legal title to the trustee of all shares, obligations or any other assets requiring assignments, in order that the Company, or the trustee upon the direction of the Company, may whenever necessary negotiate these assets without consent or signature from the Reinsurer or any other entity;

4. Requires that all settlements of account between the Company and the Reinsurer be made in cash or its equivalent; and

5. Provides that assets in the trust account shall be withdrawn only as permitted in this Contract, without diminution because of the insolvency of the Company or the Reinsurer.

B. If a ceding insurer is domiciled in California and the Reinsurer satisfies its funding obligations under the Unauthorized Reinsurance Article by providing a Trust Agreement, the Reinsurer shall ensure that the Trust Agreement:

1. Provides that assets deposited in the trust account shall be valued according to their current fair market value and shall consist only of cash in United States dollars, certificates of deposit issued by a United States financial institution as defined in California Insurance Code Section 922.7(a) and payable in United States dollars, and investments permitted by the California Insurance Code, or any combination of the above.

2. Provides that investments in or issued by an entity controlling, controlled by or under common control with either the grantor or the beneficiary of the trust shall not exceed 5% of total investments.

3. Requires the Reinsurer, prior to depositing assets with the trustee, to execute assignments or endorsements in blank, or to transfer legal title to the trustee of all

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shares, obligations or any other assets requiring assignments, in order that the ceding insurer, or the trustee upon the direction of the ceding insurer, may, whenever necessary, negotiate these assets without consent or signature from the Reinsurer or any other entity.

4. Provides that assets in the trust account shall be withdrawn only as permitted in this Contract, without diminution because of the insolvency of the ceding insurer or the Reinsurer.

C. If there are multiple ceding insurers that collectively comprise the Company, “regulatory authorities” as referenced in subparagraph A(2) above, shall mean the individual ceding insurer’s domestic regulator.  

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EX-10.19

Exhibit 10.19

CERTAIN CONFIDENTIAL INFORMATION, IDENTIFIED BY BRACKETED ASTERISKS "[*****]", HAS BEEN OMITTED FROM THIS EXHIBIT BECAUSE IT IS BOTH (I) NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED.

PROPERTY CATASTROPHE FIRST EXCESS OF LOSS

REINSURANCE CONTRACT

issued to

Typtap insurance company

Ocala, Florida

including any and/or all companies that are or may hereafter become affiliated therewith

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PROPERTY CATASTROPHE FIRST EXCESS OF LOSS

REINSURANCE CONTRACT

TABLE OF CONTENTS

Article		Page
	Preamble	4
1	Business Covered	4
2	Retention and Limit	4
3	Florida Hurricane Catastrophe Fund	5
4	Term	5
5	Special Termination	6
6	Territory	7
7	Exclusions	7
8	Special Acceptance	9
9	Premium	9
10	Reinstatement	9
11	Definitions	10
12	Extra Contractual Obligations/Excess of Policy Limits	13
13	Net Retained Liability	14
14	Other Reinsurance	14
15	Original Conditions	14
16	No Third Party Rights	15
17	Notice of Loss and Loss Settlements	15
18	Late Payments	15
19	Offset	16
20	Currency	17
21	Obligations and Collateral Release	17
22	Taxes	19
23	Access to Records	20
24	Confidentiality	21
25	Indemnification and Errors and Omissions	22
26	Insolvency	22
27	Run-Off Reinsurer	23
28	Arbitration	25
29	Expedited Arbitration	26
30	Service of Suit	26
31	Governing Law	27
32	Entire Agreement	27
33	Non-Waiver	28
34	Mode of Execution	28
35	Limited Recourse	28
	Company Signing Block	30

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	PROPERTY CATASTROPHE FIRST EXCESS OF LOSS REINSURANCE CONTRACT TABLE OF CONTENTS
Attachments		Page
	Pools, Associations & Syndicates Exclusions Clause	31
	Nuclear Incident Exclusion Clause - Physical Damage - Reinsurance - U.S.A.	34
	Terrorism Exclusion	36
	Communicable Disease Exclusion (Property Reinsurance)	37
	Cyber Loss Limited Exclusion Clause (Property Treaty Reinsurance)	38
	Trust Agreement Requirements Clause	39

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PROPERTY CATASTROPHE FIRST EXCESS OF LOSS

REINSURANCE CONTRACT

(the “Contract”)

issued to

Typtap insurance company

Ocala, Florida

including any and/or all companies that are or may hereafter become affiliated therewith

(collectively, the “Company”)

by

THE SUBSCRIBING REINSURER(S) IDENTIFIED IN THE
INTERESTS AND LIABILITIES AGREEMENT(S) ATTACHED TO
AND FORMING PART OF THIS CONTRACT

(the “Reinsurer”)

ARTICLE 1

BUSINESS COVERED

This Contract is to indemnify the Company in respect of its net excess liability as a result of any loss or losses which may occur during the term of this Contract under any Policies in force at the effective date hereof or issued or renewed on or after that date, covering direct and assumed business classified by the Company as the property perils of Homeowners, Condominium Owners, Renters and Dwelling, subject to the terms and conditions herein contained.

ARTICLE 2

Retention and Limit

A. The Reinsurer shall be liable in respect of each Loss Occurrence for the Ultimate Net Loss over and above the initial Ultimate Net Loss of [$*****] each Loss Occurrence, subject to a limit of liability to the Reinsurer of [$*****] each Loss Occurrence, and subject further to a limit of liability of [$*****] for all Loss Occurrences commencing during the term of this Contract.

B. No Loss Occurrence shall be covered hereunder unless it involves two or more risks subject to this Contract.  The Company shall be the sole judge of what constitutes one risk for purposes of this Contract.

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ARTICLE 3

FLORIDA HURRICANE CATASTROPHE FUND

A. As respects Loss Occurrences subject to this Contract, any loss reimbursement recoverable by the Company under the Florida Hurricane Catastrophe Fund (FHCF), shall be deducted in determining Ultimate Net Loss under this Contract, subject to the following:

1. The full reimbursement amount due from the FHCF, based on statutory limits of coverage as of June 1, shall be deemed recovered by the Company, whether or not actually received from the FHCF and whether or not reduced because of the FHCF’s inability to pay.

2. For purposes of allocating recoveries from the FHCF with respect to each Loss Occurrence, only amounts recoverable by applying the pay-out and retention multiples for the FHCF prior to any reduction in retention due to multiple Loss Occurrences in the same annual period shall be included in calculating the deduction from Ultimate Net Loss.

3. If the Company’s aggregate limit of FHCF reimbursement coverage is exhausted from Loss Occurrences commencing during the term of this Contract, and the FHCF does not designate the portion of said limit allocable to each Loss Occurrence, the total FHCF reimbursement received shall be allocated to the each individual Loss Occurrence in the proportion that the Company’s losses in that Loss Occurrence bear to the Company’s total losses arising out of all Loss Occurrences to which the reimbursement applies.

4. For purposes of loss recoveries under this Contract prior to the final determination of the Company’s retention and limit under the FHCF, FHCF coverage shall be calculated using the Company’s “Projected Payout Multiple” under the FHCF.  Upon determination of the Company’s retention and limit under the FHCF, losses will be adjusted, recognizing any adjustment to the “Projected Payout Multiple” caused by a change in the Aggregate Mandatory FHCF Premium but disregarding any change due to a decrease in the statutory limit.

B. Any FHCF reimbursement premiums paid by the Company for FHCF layers that inure to the benefit of this Contract shall be deemed to be premiums paid for inuring reinsurance.

C. The Company has opted for a 90% coverage selection from the FHCF.

ARTICLE 4

Term

This Contract shall take effect at 12:01 a.m., Standard Time, June 1, 2021, and unless terminated prior to that time and date as provided in the Special Termination Article, shall remain in effect until 12:01 a.m., Standard Time, June 1, 2022, applying to Loss Occurrences commencing

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during the term of this Contract.  For purposes of this Contract, “Standard Time” shall mean the time as described in the original Policy.

ARTICLE 5

SPECIAL TERMINATION

A. The Company may terminate a Subscribing Reinsurer’s percentage share in this Contract at any time by giving written notice to the Subscribing Reinsurer in the event of any of the following circumstances:

1. The Subscribing Reinsurer ceases underwriting operations.

2. A state insurance department or other legal authority orders the Subscribing Reinsurer to cease writing business, or the Subscribing Reinsurer is placed under regulatory supervision.

3. The Subscribing Reinsurer has become insolvent or has been placed into liquidation or receivership (whether voluntary or involuntary), or there have been instituted against it proceedings for the appointment of a receiver, liquidator, rehabilitator, conservator, trustee in bankruptcy, or other agent known by whatever name, to take possession of its assets or control of its operations.

4. The Subscribing Reinsurer has become, or has announced its intention to become, merged with or acquired or controlled by any company, corporation, or individual(s) not controlling the Subscribing Reinsurer’s operations at the inception of this Contract.

5. The Subscribing Reinsurer has retroceded its entire liability under this Contract without the Company’s prior written consent, except for retrocessions to members of the Subscribing Reinsurer’s holding company group.

6. The Subscribing Reinsurer has hired an unaffiliated runoff claims manager that is compensated on a contingent basis or is otherwise provided with financial incentives based on the quantum of claims paid.

7. The Subscribing Reinsurer has in any other way assigned its interests or delegated its obligations under this Contract to an unaffiliated entity.

8. The Subscribing Reinsurer has failed to post or maintain required collateral to secure its obligations as required under this Contract, and has not cured such deficiency within 30 days following written notice thereof from the Company.

Notwithstanding the foregoing, agreement by a Lloyd’s syndicate to follow claim settlements procedures under Lloyd’s Claims Scheme (Combined) shall not constitute a transfer of its claims-paying authority, for purposes of subparagraphs (6) and (7) of this paragraph.

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B. Termination shall be effected on a cut-off basis and the Subscribing Reinsurer shall have no liability for Loss Occurrences commencing after the date of termination.  The reinsurance premium due the Subscribing Reinsurer hereunder (including any minimum reinsurance premium) shall be prorated based on the period of the Subscribing Reinsurer’s participation hereon, and the Subscribing Reinsurer shall immediately return any excess reinsurance premium received.  Reinstatement premium, if any, shall be calculated based on the Subscribing Reinsurer’s reinsurance premium earned during the period of the Subscribing Reinsurer’s participation hereon.

C. Additionally, in the event of any of the circumstances listed in paragraph A of this Article, the Company shall have the option to commute the Subscribing Reinsurer’s liability for losses on Policies covered by this Contract.  In the event the Company and the Subscribing Reinsurer cannot agree on the commutation amount, they shall appoint an actuary and/or appraiser to assess such amount and shall share equally any expense of the actuary and/or appraiser.  If the Company and the Subscribing Reinsurer cannot agree on an actuary and/or appraiser, the Company and the Subscribing Reinsurer each shall nominate three individuals, of whom the other shall decline two, and the final appointment shall be made by drawing lots.  Payment by the Subscribing Reinsurer of the amount of liability ascertained shall constitute a complete and final release of both parties in respect of liability arising from the Subscribing Reinsurer’s participation under this Contract.

D. The Company’s option to require commutation under paragraph C above shall survive the termination or expiration of this Contract.

ARTICLE 6

Territory

This Contract shall apply to Policies issued in the State of Florida.

ARTICLE 7

Exclusions

A. This Contract shall not apply to and specifically excludes:

1. Policies covered by the Company’s Flood Tower.

2. Flood when written as such.

3. Earthquake for standalone Policies where earthquake is the only named peril.

4. Hail damage to an insured’s growing or standing crops.

5. Reinsurance assumed by the Company under obligatory reinsurance agreements, except intercompany reinsurance between the Company and its affiliates and reinsurance where the Policies involved are to be re-underwritten in accordance with

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the underwriting standards of the Company and reissued as Policies of the Company in due course.

6. Pools, Associations & Syndicates, per the attached exclusion.

7. Liability of the Company arising by contract, operation of law, or otherwise, from its participation or membership, whether voluntary or involuntary, in any Insolvency Fund.  “Insolvency Fund” includes any guaranty fund, insolvency fund, plan, pool, association, fund or other arrangement, howsoever denominated, established or governed, that provides for any assessment of or payment or assumption by the Company of part or all of any claim, debt, charge, fee, or other obligation of an insurer, or its successors or assigns, that has been declared by any competent authority to be insolvent, or that is otherwise deemed unable to meet any claim, debt, charge, fee or other obligation in whole or in part.

8. Loss or damage occasioned by war, invasion, hostilities, acts of foreign enemies, civil war, rebellion, insurrection, military or usurped power, martial law, or confiscation by order of any government or public authority, but not excluding loss or damage that would be covered under a standard form of Policy containing a standard war exclusion clause.

9. Losses excluded by the attached Nuclear Incident Exclusion Clause – Physical Damage – Reinsurance – U.S.A.

10. Terrorism as defined in the attached Terrorism Exclusion.

11. Mold unless directly resulting from an otherwise covered peril.

12. Loss and/or damage and/or costs and/or expenses arising from seepage and/or pollution and/or contamination, other than contamination from smoke.  Nevertheless, this exclusion does not preclude payment of the cost of removing debris of property damaged by a loss otherwise covered hereunder, subject always to a limit of 25.0% of the Company’s property loss under the applicable original Policy.

13. Financial guarantee and insolvency.

14. Loss or damage to overhead transmission and distribution lines, including supporting structures, of electrical companies, telephone companies, and cable companies.  This exclusion shall not apply, however, to transmission and distribution lines and their supporting structures located on the property of any original insured or within 1,000 feet thereof.

15. Losses excluded by the attached Communicable Disease Exclusion (Property Reinsurance).

16. Loss Excluded by the attached Cyber Loss Limited Exclusion Clause (Property Treaty Reinsurance).

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17. Policies written by Homeowners Choice Property & Casualty Insurance Company, Inc.

B. With the exception of subparagraphs A(8), A(9), A(10) and A(13) above, should any judicial, regulatory or legislative entity having legal jurisdiction invalidate any exclusion on the Company's Policy, any amount of loss for which the Company is liable because of such invalidation will not be excluded hereunder.

C. Except as respects exclusions A(8), A(9), A(10) and A(13), if the Company inadvertently issues a Policy falling within the scope of one or more of the exclusions, such Policy shall be covered hereunder, provided that the Company issues, or causes to be issued, the required notice of cancellation within 30 days after a member of the executive or managerial staff at the Company’s home office having underwriting authority in the class of business involved becomes aware that the Policy applies to excluded classes, unless the Company is prevented from canceling said Policy within such period by applicable statute or regulation, in which case such Policy shall be covered hereunder until the earliest date on which the Company may cancel.

ARTICLE 8

SPECIAL ACCEPTANCE

Business that is not within the scope of this Contract may be submitted to the Reinsurer for special acceptance hereunder, and such business, if accepted by the Reinsurer shall be covered hereunder, subject to the terms and conditions of this Contract, except as modified by the special acceptance.  The Reinsurer shall be deemed to have accepted a risk, if it has not responded within five business days after receiving the underwriting information on such risk.  Any renewal of a special acceptance agreed to for a predecessor contract to this Contract, shall automatically be covered hereunder.

ARTICLE 9

Premium

A. The Company shall pay the Reinsurer a premium of [$*****] for the term of this Contract, payable to the Reinsurer by the Company on June 1, 2021.

B. The Company shall furnish the Reinsurer with such reasonably available information as may be reasonably required by the Reinsurer for completion of the Reinsurer’s financial statements.

ARTICLE 10

Reinstatement

Loss payments under this Contract shall reduce the limit of coverage afforded by the amounts paid, but the limit of coverage shall be reinstated from the time of the occurrence of the loss, and

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for each amount so reinstated, the Company agrees to pay, simultaneously with the Reinsurer’s loss payment, an additional premium calculated at pro rata of the Reinsurer’s premium for the term of this Contract, being pro rata only as to the fraction of the Reinsurer’s limit of liability hereunder (i.e., the fraction of $28,000,000) so reinstated.  Nevertheless, the Reinsurer’s liability shall not exceed such limit(s) in respect of any one Loss Occurrence, nor the applicable limit(s) in respect of all Loss Occurrences commencing during the term of this Contract, as set forth in the Retention and Limit Article.

ARTICLE 11

Definitions

A.1. “Ultimate Net Loss” means the actual loss paid by the Company or which the Company becomes liable to pay, such loss to include Loss Adjustment Expense, 100% of any Extra Contractual Obligation and 100% of any Loss in Excess of Policy Limits as defined in the Extra Contractual Obligations/Excess of Policy Limits Article.  In no event, however, shall more than 25% of “Ultimate Net Loss” for any one Loss Occurrence be comprised of Extra Contractual Obligations and Loss in Excess of Policy Limits.

2. Salvages and all recoveries (including amounts due from all reinsurances that inure to the benefit of this Contract, whether recovered or not), shall be first deducted from such loss to arrive at the amount of liability attaching hereunder.

3. All salvages, recoveries or payments recovered or received subsequent to loss settlement hereunder shall be applied as if recovered or received prior to the aforesaid settlement, and all necessary adjustments shall be made by the parties hereto.

4. The Company shall be deemed to be “liable to pay” a loss when a judgment has been rendered that the Company does not plan to appeal, and/or the Company has obtained a release, and/or the Company has accepted a proof of loss, and/or the Company has made a commitment to pay, and/or the Company has scheduled the payment of a loss.

5. Nothing in this clause shall be construed to mean that losses are not recoverable hereunder until the Company’s “Ultimate Net Loss” has been ascertained.

B. “Loss Adjustment Expense” means costs and expenses incurred by the Company in connection with the investigation, appraisal, adjustment, settlement, litigation, defense or appeal of a specific claim or loss, or alleged loss, including but not limited to:

1. court costs;

2. costs of supersedeas and appeal bonds;

3. monitoring counsel expenses;

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4. legal expenses and costs incurred in connection with coverage questions and legal actions connected thereto, including but not limited to declaratory judgment actions;

5. post-judgment interest;

6. pre-judgment interest, unless included as part of an award or judgment;

7. a pro rata share of salaries and expenses of Company field employees, calculated in accordance with the time occupied in adjusting such loss, and expenses of other Company employees who have been temporarily diverted from their normal and customary duties and assigned to the field adjustment of losses covered by this Contract; and

8. subrogation, salvage and recovery expenses.

“Loss Adjustment Expense” does not include salaries and expenses of the Company’s employees, except as provided in subparagraph (7) above, and office and other overhead expenses.

C.1. “Loss Occurrence” means the sum of all individual losses directly occasioned by any one disaster, accident or loss or series of disasters, accidents or losses arising out of one event.  However, the duration and extent of any one “Loss Occurrence” shall be limited to all individual losses sustained by the Company occurring during any period of 168 consecutive hours arising out of and directly occasioned by the same event except that the term “Loss Occurrence” shall be further defined as follows:

a. As regards any “Named Storm,” all individual losses sustained by the Company arising out of and directly occasioned by such “Named Storm,” without regard to the limitations of duration and extent set forth above.  “Named Storm” means any storm or storm system declared by the US National Hurricane Center, US Central Pacific Hurricane Center, US Weather Prediction Center, or their successor organizations, all being  divisions of the US National Weather Service to be a tropical storm or hurricane, and any successors thereof.  A storm or storm system that merges with a “Named Storm” shall be considered part of that “Named Storm,” once it has merged.  A “Named Storm” shall be deemed to begin at the effective time and date of the first watch, warning or other official advisory applicable to such tropical storm or hurricane issued by the above referenced governmental meteorological agencies.  A “Named Storm” shall be deemed to end 72 hours after the cancellation of the last watch, warning or other official advisory applicable to such tropical storm, hurricane or successor, issued by the above referenced governmental meteorological agencies irrespective of the duration of the timing or spacing between such watches, warnings or other official advisories.  If two or more storms are assigned different names by the above referenced governmental meteorological agencies, each of those storms shall constitute a separate event for purposes of this definition.

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b. As regards windstorm, hail, tornado, cyclone, including ensuing collapse and water damage other than “Named Storm,” all individual losses sustained by the Company occurring during any period of 96 consecutive hours arising out of and directly occasioned by the same event.

c. As regards riot, riot attending a strike, civil commotion, vandalism and malicious mischief, all individual losses sustained by the Company occurring during any period of 96 consecutive hours arising out of and directly occasioned by the same event. The maximum duration of 96 consecutive hours may be extended in respect of individual losses that occur beyond such 96 consecutive hours during the continued occupation of an assured’s premises by strikers, provided such occupation commenced during the aforesaid period.

d. As regards earthquake and fire following directly occasioned by the earthquake, those earthquake losses and individual fire losses that commence during the period of 168 consecutive hours may be included in the Company’s “Loss Occurrence.”

e. As regards any related weather conditions involving snow, sleet, freezing rain, freeze, ice, winter weather, and wind losses related to such conditions, all individual losses sustained by the Company, that occur during any period of 168 consecutive hours arising out of and directly occasioned by the same event.

f. As regards firestorms, brush fires and other fires or series of fires, irrespective of origin (except for fires covered in subparagraphs (c) and (d) above) which spread through trees, grassland or other vegetation, all individual losses sustained by the Company occurring during any period of 168 consecutive hours within a 150-mile radius of any fixed point selected by the Company may be included in the Company’s “Loss Occurrence.” However, an individual loss subject to this subparagraph cannot be included in more than one “Loss Occurrence”.

2. Except as provided in subparagraph (1)(a) above:

a. The Company may choose the date and time when any such period of consecutive hours commences provided that it is not earlier than the date and time of the occurrence of the first recorded individual loss sustained by the Company arising out of that disaster, accident or loss.

b. Only one period of consecutive hours shall apply with respect to one event, except that, as respects those “Loss Occurrences” referred to in subparagraph (1)(c) above, if the disaster, accident or loss occasioned by the event is of greater duration than 96 consecutive hours, then the Company may divide that disaster, accident or loss into two or more “Loss Occurrences” provided no two periods overlap and no individual loss is included in more than one such period and provided that no period commences earlier than the date and time of the

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occurrence of the first recorded individual loss sustained by the Company arising out of that disaster, accident or loss.

3. Losses arising from a combination of two or more perils as a result of the same event shall be considered as having arisen from one “Loss Occurrence.”  Furthermore, all losses arising from an event involving a combination of losses described in subparagraphs (1)(a) and (1)(b) may be considered as having arisen from one “Loss Occurrence.”  Notwithstanding the foregoing, the hourly limitations as stated above shall not be exceeded as respects the applicable perils, and, except as respects those “Loss Occurrences” involving a “Named Storm” referred to in subparagraph (1)(a) above, no single “Loss Occurrence” shall encompass a time period greater than 168 consecutive hours.

D. “Policy” means any binder, policy, or contract of insurance or reinsurance issued, accepted or held covered provisionally or otherwise, by or on behalf of the Company.

ARTICLE 12

EXTRA CONTRACTUAL OBLIGATIONS/EXCESS OF POLICY LIMITS

A. This Contract shall cover Extra Contractual Obligations, as provided in the definition of Ultimate Net Loss.  “Extra Contractual Obligations” shall be defined as those liabilities not covered under any other provision of this Contract and that arise from the handling of any claim on business covered hereunder, such liabilities arising because of, but not limited to, the following:  failure by the Company to settle within the Policy limit, or by reason of alleged or actual negligence, fraud or bad faith in rejecting an offer of settlement or in the preparation of the defense or in the trial of any action against its insured or reinsured or in the preparation or prosecution of an appeal consequent upon such action.

B. This Contract shall cover Loss in Excess of Policy Limits, as provided in the definition of Ultimate Net Loss.  “Loss in Excess of Policy Limits” shall be defined as Loss in excess of the Policy limit, having been incurred because of, but not limited to, failure by the Company to settle within the Policy limit or by reason of alleged or actual negligence, fraud or bad faith in rejecting an offer of settlement or in the preparation of the defense or in the trial of any action against its insured or reinsured or in the preparation or prosecution of an appeal consequent upon such action.

C. An Extra Contractual Obligation and/or Loss in Excess of Policy Limits shall be deemed to have occurred on the same date as the loss covered under the Company’s Policy, and shall constitute part of the original loss.

D. For the purposes of the Loss in Excess of Policy Limits coverage hereunder, the word “Loss” shall mean any amounts for which the Company would have been contractually liable to pay had it not been for the limit of the original Policy.

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E. Loss Adjustment Expense in respect of Extra Contractual Obligations and/or Loss in Excess of Policy Limits shall be covered hereunder in the same manner as other Loss Adjustment Expense.

F. However, this Article shall not apply where the loss has been incurred due to final legal adjudication of fraud of a member of the Board of Directors or a corporate officer of the Company acting individually or collectively or in collusion with any individual or corporation or any other organization or party involved in the presentation, defense or settlement of any claim covered hereunder.

G. In no event shall coverage be provided to the extent not permitted under law.

ARTICLE 13

NET RETAINED LIABILITY

A. This Contract applies only to that portion of any loss that the Company retains net for its own account (prior to deduction of any reinsurance that inures solely to the benefit of the Company).

B. The amount of the Reinsurer’s liability hereunder in respect of any loss or losses shall not be increased by reason of the inability of the Company to collect from any other reinsurer(s), whether specific or general, any amounts that may have become due from such reinsurer(s), whether such inability arises from the insolvency of such other reinsurer(s) or otherwise.

ARTICLE 14

OTHER REINSURANCE

The Company shall be permitted to carry in force other reinsurance, recoveries under which shall inure to the benefit of this Contract.

ARTICLE 15

Original Conditions

All reinsurance under this Contract shall be subject to the same terms, conditions, waivers and interpretations, and to the same modifications and alterations as the respective Policies of the Company.  However, in no event shall this be construed in any way to provide coverage outside the terms and conditions set forth in this Contract.

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ARTICLE 16

NO THIRD PARTY RIGHTS

This Contract is solely between the Company and the Reinsurer, and in no instance shall any insured, claimant or other third party have any rights under this Contract except as may be expressly provided otherwise herein.

ARTICLE 17

Notice of Loss and Loss Settlements

A. The Company shall advise the Reinsurer promptly if paid and estimated Ultimate Net Loss is in excess of 75% of the Company’s retention, or if, in the opinion of the Company, such Ultimate Net Loss may result in a claim hereunder.  Thereafter, the Company shall advise the Reinsurer, at least monthly, of all subsequent developments thereto that may materially affect the position of the Reinsurer.

B. The Company alone and at its full discretion shall adjust, settle or compromise all claims and losses.

C. As respects losses subject to this Contract, all loss settlements made by the Company, whether under strict Policy terms or by way of compromise, and any Extra Contractual Obligations and/or Loss in Excess of Policy Limits, shall be binding upon the Reinsurer.  The Reinsurer agrees to pay or allow, as the case may be, its share of each such settlement immediately upon receipt of reasonable evidence of the amount paid by the Company or that the Company estimates it will pay within the next 14 days.  Within 30 days after receipt of the Reinsurer’s payment, the Company shall report to the Reinsurer the Reinsurer’s payment, minus the Reinsurer’s share of losses subject to this Contract that the Company has paid, or become liable to pay, as of the date of the report.  Any positive difference shall be remitted to the Reinsurer with the Company’s report.

ARTICLE 18

LATE PAYMENTS

A. In the event any payment due either party is not received by the payment due date, the party to whom payment is due may, by written notification, require the debtor party to pay, and the debtor party agrees to pay, an interest penalty on the amount past due calculated for each such payment on the last business day of each month as follows:

1. The number of full days that have expired since the overdue date or the last monthly calculation, whichever the lesser; times

2. 1/365th of the sum of the six-month United States Treasury Bill rate as quoted in The Wall Street Journal on the first business day of the month for which the calculation is made, plus 1%; times

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3. The amount past due, including accrued interest.

Interest shall accumulate until payment of the original amount due plus interest penalties have been received.

B. The due date shall, for purposes of this Article, be determined as follows:

1. Payments from the Reinsurer to the Company shall be due on the date on which the demand for payment (including delivery of bordereaux or quarterly or monthly reports) is received by the Reinsurer, and shall be overdue 30 days thereafter.

2. Payments from the Company to the Reinsurer shall be due on the dates specified within this Contract.  Payments shall be overdue 30 days thereafter except for the first installment of premium, if applicable, which shall be overdue 60 days from inception or 30 days from final line-signing, whichever the later.  Reinstatement premium, if applicable, shall have as a due date the date when the Company receives payment for the claim giving rise to such reinstatement premium, and payment shall be overdue 30 days thereafter. In the event a due date is not specifically stated for a given payment, the overdue date shall be 30 days following the date of billing.

C. If the information contained in the Company’s demand for payment is insufficient or not in accordance with the conditions of this Contract, then within 30 days the Reinsurer shall request from the Company all additional information necessary to validate its claim and the payment due date as defined in paragraph B shall be deemed to be the date upon which the Reinsurer received the requested additional information.  This paragraph is only for the purpose of establishing when a payment is overdue, and shall not alter the provisions of the Notice of Loss and Loss Settlements Article or other pertinent contractual stipulations.

D. In the event arbitration is necessary to settle a dispute, the panel shall have the authority to make a determination awarding interest to the prevailing party.  Interest, if any, awarded by the panel shall supersede the interest amounts outlined herein.

E. Any interest owed pursuant to this Article may be waived by the party to which it is owed.  Waiver of such interest, however, shall not affect the waiving party’s rights to other interest amounts due as a result of this Article.

ARTICLE 19

OFFSET

Each party hereto shall have, and may exercise at any time and from time to time, the right to offset any and all balances due from a party to the other arising under this Contract.  In the event of the insolvency of a party hereto, offsets shall only be allowed in accordance with the provisions of any applicable law governing offset entitlement.

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ARTICLE 20

Currency

A. Where the word “Dollars” and/or the sign “$” appear in this Contract, they shall mean United States Dollars, and all payments hereunder shall be in United States Dollars.

B. For purposes of this Contract, where the Company receives premiums or pays losses in currencies other than United States Dollars, such premiums or losses shall be converted into United States Dollars at the actual rates of exchange at which these premiums or losses are entered in the Company’s books.

ARTICLE 21

OBLIGATIONS AND COLLATERAL RELEASE

A. The Reinsurer will establish a trust fund (“Trust Fund”) for its Obligations (as defined herein) hereunder, pursuant to that certain Trust Agreement by and between the Reinsurer, the Company, and Truist Bank (the “Trust Agreement”).  The Trust Fund shall be funded pursuant to the provisions hereof.  Collateral deposited in the Trust Fund may be withdrawn on the terms set forth herein and in the Trust Agreement.  The Trust Agreement shall be at all times in compliance with the relevant provisions of the Insurance Code of the Company’s state of domicile and the administrative regulations adopted by that state’s insurance department, in order for the Company to receive, full statutory financial statement credit for reinsurance provided under this Contract.  Collateral deposited in the Trust Fund may be withdrawn at any time, notwithstanding the other provisions of this Contract, and utilized and applied by the Company or any successor, by operation of law, of the Company, including, without limitation, any liquidator, rehabilitator, receiver or conservator of the Company, without diminution because of insolvency on the part of the Company or the Reinsurer, for the following purposes:

1. to reimburse the Company for the Reinsurer’s Obligations, the payment of which is due under the terms of this Contract and that has not been otherwise paid;

2. to make refund of any sum that is in excess of 102% of the amount required to pay the Reinsurer’s Obligations under this Contract;

3. to fund an account with the Company for the Reinsurer’s Obligations.  Such cash deposit shall be held in an interest-bearing account separate from the Company’s other assets, and interest thereon not in excess of the prime rate shall accrue to the benefit of the Reinsurer;

4. to pay the Reinsurer’s share of any other amounts the Company claims are due under this Contract.

B. The term “Obligations” shall mean during the term of the Contract, 100% of the limit of the Reinsurer’s liability hereunder less any unpaid minimum premium (net of brokerage and

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Federal Excise Tax as applicable) and aggregate amounts previously paid by the Reinsurer in respect of claims under this Contract.  Upon expiration of the Contract, the term “Obligations” shall mean the amount as determined in accordance with paragraph D below.

C. If, at expiration of this Contract, the Company, in its commercially reasonable judgment, believes that no claims will impact this Contract, the Company will so notify the Reinsurer and shall fully and finally release from the Trust Fund all collateral contained therein.

D. If, at the expiration of this Contract, the Company, in its commercially reasonable judgment, believes that the Company may have a claim hereunder, the Company shall estimate the amount of reinstatement premium due under this Contract based on the reinstatement premium payable under the contract identified in the Business Covered article (the Underlying Contract”) as follows, unless otherwise mutually agreed:

1. The Company shall determine the sum of the following for the Underlying Contract, as of this Contract expiration date:

a. losses and loss adjustment expense paid by the Company;

b. reserves for losses reported and outstanding; and

c. reserves for losses incurred but not reported;

2. The Company shall then calculate the estimated reinstatement premium due on the Underlying Contract and such amount shall constitute the Reinsurer’s Obligations

3. The amount of the estimated reinstatement premium due on the Underlying Contract, measured as of the applicable determination date (as specified in paragraph E below), shall be multiplied by a factor, based upon the number of months, which have elapsed on such determination date since expiration of this Contract, as follows:

a. From 0 to 12 months from expiration of this Contract, [*****%], else;

b. From 13 to 24 months from expiration of this Contract, [*****%], else;

c. From 25 to 36 months from expiration of this Contract, [*****%]; and

d. From 37 to 67 months from expiration of this Contract, [*****%].

As of 67 months after expiration of this Contract (the “Reporting Period”), the amount determined in subparagraphs 1, 2 and 3 above for such date shall be considered the definitive Final Limit for each such Loss Occurrence for which the Company and the Reinsurer agree to commute this Contract with final settlement on that basis. 

E. The procedure for determining the amount of collateral required to fund the Reinsurer’s Obligations as set forth in paragraph D above, shall be followed each and every time, if in the opinion of the Company, there are materially new estimates regarding its losses, and

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each quarter-end, until all the Reinsurer’s Obligations have been extinguished or the Reporting Period is over, whichever is earlier.  The information to be used for the determinations of the Reinsurer’s Obligations shall be as reflected on the Company’s official books and records.

F. The Company agrees to release from the Trust Fund all collateral in excess of 102% of the amount required to pay the Reinsurer’s Obligations for its share of actual and possible claims, as determined in accordance with paragraph A, above within 10 Business Days of the date of such determination.  “Business Day” shall be defined as a day (other than a Saturday or a Sunday) on which banks are open for commercial business in Bermuda and in New York, New York, U.S.A.

G. Notwithstanding the foregoing, if the Reinsurer is licensed as a segregated account company, the Company agrees and acknowledges that there shall only be recourse to the Segregated Trust Account assets, and in the event of the exhaustion of the Segregated Trust Account assets there shall be no recourse by any party for any claims, payments, other expenses or fees whatsoever, howsoever arising pursuant to this Contract, to the assets which are allocated to any other segregated account of the Reinsurer or to the general account of the Reinsurer.

H. At the end of the Reporting Period, this Contract will be commuted based on the Reinsurer’s Obligations at that point.  The Company agrees to terminate the Trust Account, and all remaining collateral will be released to the Company and/or the Reinsurer, as applicable, and both parties shall be released from any further obligations under this Contract.

ARTICLE 22

TAXES

A. In consideration of the terms under which this Contract is issued, the Company undertakes not to claim any deduction of the premium hereon when making Canadian tax returns or when making tax returns, other than Income or Profits Tax returns, to any state or territory of the United States of America or to the District of Columbia.

B.1. Each Subscribing Reinsurer has agreed to allow, for the purpose of paying the Federal Excise Tax, the applicable percentage of the premium payable hereon (as imposed under the Internal Revenue Code) to the extent such premium is subject to Federal Excise Tax.

2. In the event of any return of premium becoming due hereunder, the Subscribing Reinsurer shall deduct the applicable percentage of the premium from the amount of the return, and the Company or its agent should take steps to recover the Tax from the U.S. Government.

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ARTICLE 23

ACCESS TO RECORDS

A. The Reinsurer or its duly authorized representatives shall have the right to visit the offices of the Company to inspect, examine, audit, and verify any of the policy, accounting or claim files (“Records”) relating to business reinsured under this Contract during regular business hours after giving five working days’ prior notice.  This right shall be exercisable during the term of this Contract or after the expiration of this Contract.  Notwithstanding the above, the Reinsurer shall not have any right of access to the Records of the Company if it is not current in all undisputed payments due the Company.

B. Notwithstanding the above, the Company reserves the right to withhold from the Reinsurer any Privileged Documents.  However, the Company shall permit and not object to the Reinsurer’s access to Privileged Documents in connection with the underlying claim reinsured hereunder following final settlement or final adjudication of the case or cases involving such claim, with prejudice against all claimants and all parties to such adjudications; the Company may defer release of such Privileged Documents if there are subrogation, contribution, or other third party actions with respect to that claim or case, and the Company’s defense might be jeopardized by release of such Privileged Documents.  In the event that the Company seeks to defer release of such Privileged Documents, it shall, in consultation with the Reinsurer, take other steps as reasonably necessary to provide the Reinsurer with the information it reasonably requires to indemnify the Company without causing a loss of such privileges or protections.  The Reinsurer shall not have access to Privileged Documents relating to any dispute between the Company and the Reinsurer.

C. For purposes of this Article:

1. “Privileged Documents” means any documents that are Attorney-Client Privilege Documents and/or Work Product Privilege Documents.

2. “Attorney-Client Privilege Documents” means communications of a confidential nature between (a) the Company, or anyone retained by or at the direction of the Company, or its in‑house or outside legal counsel, or anyone in the control of such legal counsel, and (b) any in-house or outside legal counsel, if such communications relate to legal advice being sought by the Company and/or contain legal advice being provided to the Company.

3. “Work Product Privilege Documents” means communications, written materials and tangible things prepared by or for in-house or outside counsel, or prepared by or for the Company, in anticipation of or in connection with litigation, arbitration, or other dispute resolution proceedings.

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ARTICLE 24

CONFIDENTIALITY

A. The Reinsurer hereby acknowledges that the documents, information and data provided to it by the Company, whether directly or through an authorized agent, in connection with the placement and execution of this Contract (“Confidential Information”) are proprietary and confidential to the Company.  Confidential Information shall not include documents, information or data that the Reinsurer can show:

1. are publicly known or have become publicly known through no unauthorized act of the Reinsurer;

2. have been rightfully received from a third person without obligation of confidentiality; or

3. were known by the Reinsurer prior to the placement of this Contract without an obligation of confidentiality.

B. Absent the written consent of the Company, the Reinsurer shall not disclose any Confidential Information to any third parties, including any affiliated companies (except to the extent necessary to enable affiliated companies or third parties engaged by the Reinsurer to perform services related to this Contract on behalf of the Reinsurer), except:

1. when required by retrocessionaires as respects business ceded to this Contract;

2. when required by regulators performing an audit of the Reinsurer’s records and/or financial condition; or

3. when required by external auditors performing an audit of the Reinsurer’s records in the normal course of business.

Further, the Reinsurer agrees not to use any Confidential Information for any purpose not related to the performance of its obligations or enforcement of its rights under this Contract.

C. Notwithstanding the above, in the event that the Reinsurer is required by court order, other legal process or any regulatory authority to release or disclose any or all of the Confidential Information, the Reinsurer agrees to provide the Company with written notice of same at least 10 days prior to such release or disclosure and to use its best efforts to assist the Company in maintaining the confidentiality provided for in this Article.

D. The provisions of this Article shall extend to the officers, directors and employees of the Reinsurer and its affiliates, and shall be binding upon their successors and assigns.

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ARTICLE 25

Indemnification and Errors and Omissions

A. The Reinsurer is reinsuring, subject to the terms and conditions of this Contract, the obligations of the Company under any Policy.  The Company shall be the sole judge as to:

1. what shall constitute a claim or loss covered under any Policy;

2. the Company’s liability thereunder; and

3. the amount or amounts that it shall be proper for the Company to pay thereunder.

B. The Reinsurer shall be bound by the judgment of the Company as to the obligation(s) and liability(ies) of the Company under any Policy.

C. Any inadvertent error, omission or delay in complying with the terms and conditions of this Contract shall not be held to relieve either party hereto from any liability that would attach to it hereunder if such error, omission or delay had not been made, provided such error, omission or delay is rectified immediately upon discovery.

D. Nothing in this Article shall be construed to override any of the other terms and conditions of this Contract.

ARTICLE 26

Insolvency

A. If more than one reinsured company is referenced within the definition of “Company” in the Preamble to this Contract, this Article shall apply severally to each such company.  Further, this Article and the laws of the domiciliary state shall apply in the event of the insolvency of any company covered hereunder.  In the event of a conflict between any provision of this Article and the laws of the domiciliary state of any company covered hereunder, that domiciliary state’s laws shall prevail.

B. In the event of the insolvency of the Company, this reinsurance (or the portion of any risk or obligation assumed by the Reinsurer, if required by applicable law) shall be payable directly to the Company, or to its liquidator, receiver, conservator or statutory successor, either:  (1) on the basis of the liability of the Company, or (2) on the basis of claims filed and allowed in the liquidation proceeding, whichever may be required by applicable statute, without diminution because of the insolvency of the Company or because the liquidator, receiver, conservator or statutory successor of the Company has failed to pay all or a portion of any claim.  It is agreed, however, that the liquidator, receiver, conservator or statutory successor of the Company shall give written notice to the Reinsurer of the pendency of a claim against the Company indicating the Policy or bond reinsured, which claim would involve a possible liability on the part of the Reinsurer within a reasonable time after such claim is filed in the conservation or liquidation proceeding or in the

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receivership, and that during the pendency of such claim, the Reinsurer may investigate such claim and interpose, at its own expense, in the proceeding where such claim is to be adjudicated any defense or defenses that it may deem available to the Company or its liquidator, receiver, conservator or statutory successor.  The expense thus incurred by the Reinsurer shall be chargeable, subject to the approval of the court, against the Company as part of the expense of conservation or liquidation to the extent of a pro rata share of the benefit that may accrue to the Company solely as a result of the defense undertaken by the Reinsurer.

C. Where two or more reinsurers are involved in the same claim and a majority in interest elect to interpose defense to such claim, the expense shall be apportioned in accordance with the terms of this reinsurance Contract as though such expense had been incurred by the Company.

D. As to all reinsurance made, ceded, renewed or otherwise becoming effective under this Contract, the reinsurance shall be payable as set forth above by the Reinsurer to the Company or to its liquidator, receiver, conservator or statutory successor, (except as provided by Section 4118(a)(1)(A) of the New York Insurance Law, provided the conditions of 1114(c) of such law have been met, if New York law applies) or except (1) where the Contract specifically provides another payee in the event of the insolvency of the Company, or (2) where the Reinsurer, with the consent of the direct insured or insureds, has assumed such Policy obligations of the Company as direct obligations of the Reinsurer to the payees under such Policies and in substitution for the obligations of the Company to such payees.  Then, and in that event only, the Company, with the prior approval of the certificate of assumption on New York risks by the Superintendent of Financial Services of the State of New York, or with the prior approval of such other regulatory authority as may be applicable, is entirely released from its obligation and the Reinsurer shall pay any loss directly to payees under such Policy.

ARTICLE 27

RUN-OFF REINSURER

A. “Run-off Reinsurer” means any Subscribing Reinsurer that:

1. has been ordered by a state insurance department or other legal authority to cease writing business, or has been placed under regulatory supervision or in rehabilitation; or

2. has ceased reinsurance underwriting operations; or

3. has transferred its claims-paying authority to an unaffiliated entity; or

4. engages in a process of Scheme of Arrangement or similar procedure related to this Contract, including but not limited to an insurance business transfer scheme pursuant to Part VII of the Financial Services and Markets Act 2000 (U.K.), as may be amended from time to time; or

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5. in any other way has assigned its interests or delegated its obligations under this Contract to an unaffiliated entity.

Notwithstanding the foregoing, agreement by a Lloyd’s syndicate to follow claim settlements procedures under Lloyd’s Claims Scheme (Combined) shall not constitute a transfer of its claims-paying authority, for purposes of subparagraphs (3) and (5) of this paragraph.

B. Notwithstanding any other provision of this Contract, in the event that a Subscribing Reinsurer becomes a Run-off Reinsurer at any time, the Company may elect, by giving written notice to the Run-off Reinsurer at any time thereafter, that all or any of the following shall apply to the Run-off Reinsurer’s participation hereunder:

1. Should the Run-off Reinsurer fail to pay amounts due hereunder, the interest penalty specified in the Late Payments Article shall be increased by 0.5% for each 30 days that a payment is past due, subject to a maximum increase of 7.0%.

2. The Run-off Reinsurer’s liability for losses for Policies covered by this Contract shall be commuted.  In the event the Company and the Run-off Reinsurer cannot agree on the commutation amount of the Run-off Reinsurer’s liability under such Policies, they shall appoint an actuary and/or appraiser to assess such liability and shall share equally any expense of the actuary and/or appraiser.  If the Company and the Run-off Reinsurer cannot agree on an actuary and/or appraiser, the Company and the Run-off Reinsurer each shall nominate three individuals, of whom the other shall decline two, and the final appointment shall be made by drawing lots.  Payment by the Run-off Reinsurer of the amount of liability ascertained shall constitute a complete and final release of both parties under this Contract.

3. The Run-off Reinsurer shall have no right of access to the Records of the Company if the Run-off Reinsurer has denied payment of any claim hereunder or there is a pending arbitration between the Company and the Run-off Reinsurer regarding any claim hereunder.  A reservation of rights shall be considered a denial of a claim.  Notwithstanding the above, the Run-off Reinsurer shall continue to have access to Records of the Company for any claim for which it has raised a query within 30 days of its receipt of a billing, but any inspection of Records must be completed within 90 days of receipt of billing or access will be deemed waived.

4. The provisions of the Arbitration Article shall not apply.  

C. The Company’s waiver of any rights provided in this Article is not a waiver of that right or other rights at a later date.

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ARTICLE 28

Arbitration

A. Any dispute arising out of the interpretation, performance or breach of this Contract, including the formation or validity thereof, shall be submitted for decision to a panel of three arbitrators.  Notice requesting arbitration shall be in writing and sent certified or registered mail, return receipt requested.

B. One arbitrator shall be chosen by each party and the two arbitrators shall then choose an impartial third arbitrator who shall preside at the hearing.  If either party fails to appoint its arbitrator within 30 days after being requested to do so by the other party, the latter, after 10 days’ prior notice by certified or registered mail of its intention to do so, may appoint the second arbitrator.

C. If the two arbitrators do not agree on a third arbitrator within 60 days of their appointment, the third arbitrator shall be chosen in accordance with the procedures for selecting the third arbitrator in force on the date the arbitration is demanded, established by the AIDA Reinsurance and Insurance Arbitration Society – U.S. (ARIAS).  The arbitrators shall be persons knowledgeable about insurance and reinsurance who have no personal or financial interest in the result of the arbitration.  If a member of the panel dies, becomes disabled or is otherwise unwilling or unable to serve, a substitute shall be selected in the same manner as the departing member was chosen and the arbitration shall continue.

D. Within 30 days after all arbitrators have been appointed, the panel shall meet and determine timely periods for briefs, discovery procedures and schedules of hearings.

E. The panel shall be relieved of all judicial formality and shall not be bound by the strict rules of procedure and evidence.  Notwithstanding anything to the contrary in this Contract, the arbitrators may at their discretion, consider underwriting and placement information provided by the Company to the Reinsurer, as well as any correspondence exchanged by the parties that is related to this Contract.  The arbitration shall take place in Tampa, Florida, or at such other place as the parties shall agree.  The decision of any two arbitrators shall be in writing and shall be final and binding.  The panel is empowered to grant interim relief as it may deem appropriate.

F. The panel shall interpret this Contract as an honorable engagement rather than as merely a legal obligation and shall make its decision considering the custom and practice of the applicable insurance and reinsurance business as promptly as possible after the hearings.  Judgment upon an award may be entered in any court having jurisdiction thereof.

G. Each party shall bear the expense of its own arbitrator and shall jointly and equally bear with the other party the cost of the third arbitrator.  The remaining costs of the arbitration shall be allocated by the panel.  The panel may, at its discretion, award such further costs and expenses as it considers appropriate, including but not limited to attorneys’ fees, to the extent permitted by law.

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ARTICLE 29

Expedited Arbitration

A. Notwithstanding the provisions of the Arbitration Article, in the event an amount in dispute hereunder $1,000,000 or less, the parties will submit to an expedited arbitration process with the use of a single arbitrator.  The arbitrator will be chosen in accordance with the procedures for selecting an arbitrator in force on the date the arbitration is demanded, established by the AIDA Reinsurance and Insurance Arbitration Society - U.S. (ARIAS).

B. Each party’s case will be submitted to the arbitrator within 100 calendar days of the date of determination of the arbitrator.  Discovery will be limited to exchanging only those documents directly relating to the issue in dispute, subject to a limit of two discovery depositions from each party, unless otherwise authorized by the arbitrator upon a showing of good cause.

C. Within 120 calendar days of the date of determination of the arbitrator, the hearing will be completed and a written award will be issued by the arbitrator.  As the parties agree that time is of the essence, the sole arbitrator does not have the authority to lengthen the schedule, absent agreement of both parties.  The arbitrator will have all the powers conferred on the arbitration panel as provided in the Arbitration Article, and said Article will apply to all matters not specifically addressed above.

ARTICLE 30

SERVICE OF SUIT

A. This Article applies only to those Subscribing Reinsurers not domiciled in the United States of America, and/or not authorized in any state, territory and/or district of the United States of America where authorization is required by insurance regulatory authorities.

B. This Article shall not be read to conflict with or override the obligations of the parties to arbitrate their disputes as provided for in the Arbitration Article.  This Article is intended as an aid to compelling arbitration or enforcing such arbitration or arbitral award, not as an alternative to the Arbitration Article for resolving disputes arising out of this Contract.

C. In the event of the failure of the Reinsurer to perform its obligations hereunder, the Reinsurer, at the request of the Company, shall submit to the jurisdiction of a court of competent jurisdiction within the United States.  Nothing in this Article constitutes or should be understood to constitute a waiver of the Reinsurer’s rights to commence an action in any court of competent jurisdiction in the United States, to remove an action to a United States District Court, or to seek a transfer of a case to another court as permitted by the laws of the United States or of any state in the United States.  The Reinsurer, once the appropriate court is selected, whether such court is the one originally chosen by the Company and accepted by the Reinsurer or is determined by removal, transfer, or otherwise, as provided for above, shall comply with all requirements necessary to give said

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court jurisdiction and, in any suit instituted against the Reinsurer upon this Contract, shall abide by the final decision of such court or of any appellate court in the event of an appeal.

D. Service of process in such suit may be made upon:

1. as respects Underwriting Members of Lloyd’s, London: Lloyd’s America, Inc., Attention: Legal Department, 280 Park Avenue, East Tower, 25^th Floor, New York, New York 10017;

2. as respects any other Subscribing Reinsurer: Messrs. Mendes and Mount, 750 Seventh Avenue, New York, New York 10019-6829, or another party specifically designated in the Subscribing Reinsurer’s Interests and Liabilities Agreement attached hereto.  

The above-named are authorized and directed to accept service of process on behalf of the Reinsurer in any such suit.

E. Further, pursuant to any statute of any state, territory or district of the United States that makes provision therefor, the Reinsurer hereby designates the Superintendent, Commissioner or Director of Insurance, or other officer specified for that purpose in the statute, or his successor or successors in office, as its true and lawful attorney upon whom may be served any lawful process in any action, suit or proceeding instituted by or on behalf of the Company or any beneficiary hereunder arising out of this Contract, and hereby designates the above-named as the person to whom the said officer is authorized to mail such process or a true copy thereof.

ARTICLE 31

GOVERNING LAW

This Contract shall be governed as to performance, administration and interpretation by the laws of the State of Florida, subject to the Limited Recourse and Bermuda regulations clauses as set out in the Limited Recourse Article, exclusive of conflict of law rules.  However, with respect to credit for reinsurance, the rules of all applicable states shall apply.

ARTICLE 32

ENTIRE AGREEMENT

This Contract sets forth all of the duties and obligations between the Company and the Reinsurer and supersedes any and all prior or contemporaneous written agreements with respect to matters referred to in this Contract.  This Contract may not be modified or changed except by an amendment to this Contract in writing signed by both parties.  However, this Article shall not be construed as limiting the admissibility of evidence regarding the formation, interpretation, purpose or intent of this Contract.

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ARTICLE 33

NON-WAIVER

The failure of the Company or the Reinsurer to insist on compliance with this Contract or to exercise any right or remedy hereunder shall not constitute a waiver of any rights contained in this Contract nor prevent either party from thereafter demanding full and complete compliance nor prevent either party from exercising such remedy in the future.

ARTICLE 34

MODE OF EXECUTION

A. This Contract may be executed by:

1. an original written ink signature of paper documents;

2. an exchange of facsimile copies showing the original written ink signature of paper documents;

3. electronic signature technology employing computer software and a digital signature or digitizer pen pad to capture a person’s handwritten signature in such a manner that the signature is unique to the person signing, is under the sole control of the person signing, is capable of verification to authenticate the signature and is linked to the document signed in such a manner that if the data is changed, such signature is invalidated.

B. The use of any one or a combination of these methods of execution shall constitute a legally binding and valid signing of this Contract.  This Contract may be executed in one or more counterparts, each of which, when duly executed, shall be deemed an original.

ARTICLE 35

LIMITED RECOURSE

A. The liability of the Reinsurer for the performance and discharge of all of its obligations, however they may arise, in relation to this Contract (together “Obligations” for purposes of this Article), shall be limited to and payable solely from the proceeds of realization of the assets of the Trust Fund established in accordance with this Contract, and accordingly there shall be no recourse to any other assets of the Reinsurer whether or not allocated to any other separate account or the general account of the Reinsurer.  In the event that the proceeds of realization of the assets of the Trust Fund are insufficient to meet all Obligations, any Obligations remaining after the application of such proceeds shall be extinguished, and the Company undertakes in such circumstances to take no further action against the Reinsurer in respect of any such Obligations. In particular, neither the Company nor any party acting on its behalf shall petition or take any steps for the winding up or receivership of the Reinsurer.

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B. Notwithstanding any matter referred to herein, the Company understands and accepts that the Reinsurer acts on behalf of one or more separate accounts of Claddaugh Casualty Insurance Company Ltd. and that all corporate matters relating to the creation of the Reinsurer, capacity of the Reinsurer, operation and liquidation of the Reinsurer and any matters relating to the Reinsurer thereof shall be governed by, and construed in accordance with, the laws of Bermuda. The Company has had the opportunity to take advice and to obtain all such additional information that it considers necessary to evaluate the terms, conditions and risks of entering into this Contract with the Reinsurer.

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IN WITNESS WHEREOF, the Company has caused this Contract to be executed by its duly authorized representative(s), who also confirms the Company’s review of and agreement to be bound by the terms and conditions of the Interests and Liabilities Agreements attached to and forming part of this Contract;

On this _____ day of __________, in the year of 2021.

TYPTAP INSURANCE COMPANY

Signature:	Title:
Print Name:

Property Catastrophe First Excess of Loss

REINSURANCE CONTRACT

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POOLS, ASSOCIATIONS & SYNDICATES EXCLUSIONS CLAUSE

Section A:

This Contract excludes:

a. All business derived directly or indirectly from any Pool, Association or Syndicate which maintains its own reinsurance facilities.

b. Any Pool or Scheme (whether voluntary or mandatory) formed after March 1, 1968 for the purpose of insuring property, whether on a country-wide basis or in respect of designated areas.  This exclusion shall not apply to so-called Automobile Insurance Plans or other Pools formed to provide coverage for Automobile Physical Damage.

Section B:

1. This Contract excludes business written by the Company for the same perils, which is known at the time to be insured by, or in excess of underlying amounts placed in, any Pool, Association or Syndicate, whether by way of insurance or reinsurance, formed for the purpose of writing any of the following:

Oil, Gas or Petro-Chemical Plants

Oil or Gas Drilling Rigs and/or

Aviation Risks

2. The exclusion under paragraph 1 of this Section B does not apply:

a. Where the Total Insured Value over all interests of the risk in question is less than $250,000,000.

b. To interests traditionally underwritten as Inland Marine and/or Stock and/or Contents written on a Blanket basis.

c. To Contingent Business Interruption, except when the Company is aware that the key location is known at the time to be insured in any Pool, Association or Syndicate named above, other than as provided for under subparagraph (a).

Section C:

1. Nevertheless the Reinsurer specifically agrees that liability accruing to the Company from its participation in Residual Market Mechanisms, including but not limited to the following, for all perils otherwise protected hereunder shall not be excluded herefrom:

a. So-called “Beach and Windstorm Plans” and so-called “Coastal Pools”;

b. All “FAIR Plan” and “Rural Risk Plan” business;

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c. Louisiana Citizens Property Insurance Corporation;

d. California Earthquake Authority (“CEA”) or any similar entity.

Notwithstanding the above, assessments related to the Florida Hurricane Catastrophe Fund and Citizens Property Insurance Corporation (Florida) shall be excluded hereunder.

2. However, this reinsurance does not include any increase in such liability resulting from:

a. The inability of any other participant in such Residual Market Mechanisms to meet its liability;

b. Any claim against a Residual Market Mechanism or any participant therein, including the Company, whether by way of subrogation or otherwise, brought by or on behalf of any insolvency fund (as defined in the Exclusions Article);

c. Any assessment or surcharge levied on the policyholder and therefore not a liability of the Company;

d. The Company’s initial capital contribution to the CEA;

e. Any assessments, other than interim and regular assessments, from a Residual Market Mechanism included in subparagraph 1(c) above;

f. Any expenditure to purchase or retire bonds.

3. The Company may include in Ultimate Net Loss for any Loss Occurrence covered hereunder only the liability attributable to that Loss Occurrence.  If the relevant entity does not specify what portion of an assessment is attributable to each Loss Occurrence, the Company may include in Ultimate Net Loss in respect of each Loss Occurrence a percentage of the Company’s assessments from the relevant entity related to the calendar year in which the Loss Occurrence commenced, regardless of when assessed, such percentage to be determined by dividing the relevant entity’s losses arising from the Loss Occurrence by its total losses for the calendar year.

4. The Company will deduct from Ultimate Net Loss amounts received as recoupment of any assessment that has been included in the Ultimate Net Loss, provided the recoupment is directly allocable to the assessment (“itemized recoupment”).  The Company shall use commercially reasonable efforts to recoup such assessment.  Any amount received as an itemized recoupment of any assessment (whether under this Contract or any predecessor contract), and therefore deductible from Ultimate Net Loss, shall not be included in the subject premium of this Contract.

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However, if a state levies assessments but does not allow itemized recoupment from policyholders, instead allowing the Company to file an overall increased rate, any such premium increased thereby shall not be deemed to be a recoupment that is deductible from Ultimate Net Loss.  Any recoupment received as part of a general premium rate increase, not specifically itemized, shall be included as part of the subject premium of this Contract or a successor contract, as applicable.

NOTES: Wherever used herein the terms:

“Company” shall be understood to mean “Company”, “Reinsured”, “Reassured” or whatever other term is used in the attached reinsurance document to designate the reinsured company or companies.

“Contract” shall be understood to mean “Agreement,” “Contract,” “Policy” or whatever other term is used to designate the attached reinsurance document.

“Reinsurer” shall be understood to mean “Reinsurer,” “Reinsurers,” “Underwriters” or whatever other term is used in the attached reinsurance document to designate the reinsurer or reinsurers.

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Nuclear Incident Exclusion Clause - Physical Damage - Reinsurance - U.S.A.

1. This Reinsurance does not cover any loss or liability accruing to the Reassured, directly or indirectly, and whether as Insurer or Reinsurer, from any Pool of Insurers or Reinsurers formed for the purpose of covering Atomic or Nuclear Energy risks.

2. Without in any way restricting the operation of paragraph (1) of this clause, this Reinsurance does not cover any loss or liability accruing to the Reassured, directly or indirectly and whether as Insurer or Reinsurer, from any insurance against Physical Damage (including business interruption or consequential loss arising out of such Physical Damage) to:

I. Nuclear reactor power plants including all auxiliary property on the site, or

II. Any other nuclear reactor installation, including laboratories handling radioactive materials in connection with reactor installations, and “critical facilities” as such, or

III. Installations for fabricating complete fuel elements or for processing substantial quantities of “special nuclear material”, and for reprocessing, salvaging, chemically separating, storing or disposing of “spent” nuclear fuel or waste materials, or

IV. Installations other than those listed in paragraph (2) III above using substantial quantities of radioactive isotopes or other products of nuclear fission.

3. Without in any way restricting the operations of paragraphs (1) and (2) hereof, this Reinsurance does not cover any loss or liability by radioactive contamination accruing to the Reassured, directly or indirectly, and whether as Insurer or Reinsurer, from any insurance on property which is on the same site as a nuclear reactor power plant or other nuclear installation and which normally would be insured therewith except that this paragraph (3) shall not operate

(a) where Reassured does not have knowledge of such nuclear reactor power plant or nuclear installation, or

(b) where said insurance contains a provision excluding coverage for damage to property caused by or resulting from radioactive contamination, however caused. However on and after 1st January 1960 this sub-paragraph (b) shall only apply provided the said radioactive contamination exclusion provision has been approved by the Governmental Authority having jurisdiction thereof.

4. Without in any way restricting the operations of paragraphs (1), (2) and (3) hereof, this Reinsurance does not cover any loss or liability by radioactive contamination accruing to the Reassured, directly or indirectly, and whether as Insurer or Reinsurer, when such radioactive contamination is a named hazard specifically insured against.

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5. It is understood and agreed that this clause shall not extend to risks using radioactive isotopes in any form where the nuclear exposure is not considered by the Reassured to be the primary hazard.

6. The term “special nuclear material” shall have the meaning given it in the Atomic Energy Act of 1954 or by any law amendatory thereof.

7. Reassured to be sole judge of what constitutes:

(a) substantial quantities, and

(b) the extent of installation, plant or site.

Note:  Without in any way restricting the operation of paragraph (1) hereof, it is understood and agreed that

(a) all policies issued by the Reassured on or before 31st December 1957 shall be free from the application of the other provisions of this Clause until expiry date or 31st December 1960 whichever first occurs whereupon all the provisions of this Clause shall apply.

(b) with respect to any risk located in Canada policies issued by the Reassured on or before 31st December 1958 shall be free from the application of the other provisions of this Clause until expiry date or 31st December 1960 whichever first occurs whereupon all the provisions of this Clause shall apply.

12/12/57

NMA 1119

NOTES: Wherever used herein the terms:

“Reassured” shall be understood to mean “Company”, “Reinsured”, “Reassured” or whatever other term is used in the attached reinsurance document to designate the reinsured company or companies.

“Agreement” shall be understood to mean “Agreement”, “Contract”, “Policy” or whatever other term is used to designate the attached reinsurance document.

“Reinsurers” shall be understood to mean “Reinsurers”, “Underwriters” or whatever other term is used in the attached reinsurance document to designate the reinsurer or reinsurers.

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TERRORISM EXCLUSION

A. Notwithstanding any provision to the contrary within this Contract or any endorsement thereto, it is agreed that this Contract excludes loss, damage, cost, or expense directly or indirectly caused by, contributed to by, resulting from, or arising out of or in connection with any Act of Terrorism, as defined herein, regardless of any other cause or event contributing concurrently or in any other sequence to the loss.

B. An “Act of Terrorism” includes any act, or preparation in respect of action, or threat of action designed to influence the government de jure or de facto of any nation or any political division thereof, or in pursuit of political, religious, ideological, or similar purposes to intimidate the public or a section of the public of any nation by any person or group(s) of persons whether acting alone or on behalf of or in connection with any organization(s) or government(s) de jure or de facto, and which:

a. involves violence against one or more persons; or

b. involves damage to property; or

c. endangers life other than that of the person committing the action; or

d. creates a risk to health or safety of the public or a section of the public; or

e. is designed to interfere with or to disrupt an electronic system.

C. This Contract also excludes loss, damage, cost, or expense directly or indirectly caused by, contributed to by, resulting from, or arising out of or in connection with any action in controlling, preventing, suppressing, retaliating against, or responding to any Act of Terrorism.

D. Notwithstanding the above and subject otherwise to the terms, conditions, and limitations of this Contract, in respect only of personal lines, this Contract shall pay actual loss or damage (but not related cost or expense) caused by any Act of Terrorism, provided such act is not directly or indirectly caused by, contributed to by, resulting from, or arising out of or in connection with biological, chemical, radiological or nuclear pollution or contamination.

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Communicable Disease Exclusion (Property Reinsurance)

A. This Contract excludes any loss, damage, liability, claim, cost or expense of whatsoever nature, directly or indirectly caused by, contributed to by, resulting from, arising out of, or in connection with a Communicable Disease or the fear or threat (whether actual or perceived) of a Communicable Disease regardless of any other cause or event contributing concurrently or in any other sequence thereto.

B. As used herein, a Communicable Disease means any disease which can be transmitted by means of any substance or agent from any organism to another organism where:

1. the substance or agent includes, but is not limited to, a virus, bacterium, parasite or other organism or any variation thereof, whether deemed living or not, and

2. the method of transmission, whether direct or indirect, includes but is not limited to, airborne transmission, bodily fluid transmission, transmission from or to any surface or object, solid, liquid or gas or between organisms, and

3. the disease, substance or agent can cause or threaten damage to human health or human welfare or can cause or threaten damage to, deterioration of, loss of value of, marketability of or loss of use of property.

C. Notwithstanding the foregoing, losses directly or indirectly caused by, contributed to by, resulting from, arising out of, or in connection with any otherwise covered peril under subject Policies and not otherwise excluded under this Contract shall be covered.

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CYBER LOSS LIMITED EXCLUSION CLAUSE (PROPERTY TREATY REINSURANCE)

1. Notwithstanding any provision to the contrary within this reinsurance agreement or any endorsement thereto, this reinsurance agreement excludes all loss, damage, liability, cost or expense of whatsoever nature directly or indirectly caused by, contributed to by, resulting from, arising out of or in connection with:

1.2. any loss of, alteration of, or damage to or a reduction in the functionality, availability or operation of a Computer System, unless subject to the provisions of paragraph 2;

1.3. any loss of use, reduction in functionality, repair, replacement, restoration or reproduction of any Data, including any amount pertaining to the value of such Data.

2. Subject to the other terms, conditions and exclusions contained in this reinsurance agreement, this reinsurance agreement will cover physical damage to property insured under the original policies and any Time Element Loss directly resulting therefrom where such physical damage is directly occasioned by any of the following perils:

fire, lightning, explosion, aircraft or vehicle impact, falling objects, windstorm, hail, tornado, cyclone, hurricane, earthquake, volcano, tsunami, flood, freeze or weight of snow

Definitions

3. Computer System means any computer, hardware, software, communications system, electronic device (including, but not limited to, smart phone, laptop, tablet, wearable device), server, cloud or microcontroller including any similar system or any configuration of the aforementioned and including any associated input, output, data storage device, networking equipment or back up facility.

4. Data means information, facts, concepts, code or any other information of any kind that is recorded or transmitted in a form to be used, accessed, processed, transmitted or stored by a Computer System.

5. Time Element Loss means business interruption, contingent business interruption or any other consequential losses.

LMA5410

06 March 2020

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TRUST AGREEMENT REQUIREMENTS CLAUSE

A. Except as provided in paragraph B of this Clause, if the Reinsurer satisfies its funding obligations under the Unauthorized Reinsurance Article by providing a Trust Agreement, the Reinsurer shall ensure that the Trust Agreement:

1. Requires the Reinsurer to establish a trust account for the benefit of the Company, and specifies what the Trust Agreement is to cover;

2. Stipulates that assets deposited in the trust account shall be valued according to their current fair market value and shall consist only of cash (United States legal tender), and certificates of deposit (issued by a United States bank and payable in United States legal tender), or any combination of the two, provided that the investments are issued by an institution that is not the parent, subsidiary or affiliate of either the Reinsurer or the Company;

3. Requires the Reinsurer, prior to depositing assets with the trustee, to execute assignments or endorsements in blank, or to transfer legal title to the trustee of all shares, obligations or any other assets requiring assignments, in order that the Company, or the trustee upon the direction of the Company, may whenever necessary negotiate these assets without consent or signature from the Reinsurer or any other entity;

4. Requires that all settlements of account between the Company and the Reinsurer be made in cash or its equivalent; and

5. Provides that assets in the trust account shall be withdrawn only as permitted in this Contract, without diminution because of the insolvency of the Company or the Reinsurer.

B. If a ceding insurer is domiciled in California and the Reinsurer satisfies its funding obligations under the Unauthorized Reinsurance Article by providing a Trust Agreement, the Reinsurer shall ensure that the Trust Agreement:

1. Provides that assets deposited in the trust account shall be valued according to their current fair market value and shall consist only of cash in United States dollars, certificates of deposit issued by a United States financial institution as defined in California Insurance Code Section 922.7(a) and payable in United States dollars, and investments permitted by the California Insurance Code, or any combination of the above.

2. Provides that investments in or issued by an entity controlling, controlled by or under common control with either the grantor or the beneficiary of the trust shall not exceed 5% of total investments.

3. Requires the Reinsurer, prior to depositing assets with the trustee, to execute assignments or endorsements in blank, or to transfer legal title to the trustee of all

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shares, obligations or any other assets requiring assignments, in order that the ceding insurer, or the trustee upon the direction of the ceding insurer, may, whenever necessary, negotiate these assets without consent or signature from the Reinsurer or any other entity.

4. Provides that assets in the trust account shall be withdrawn only as permitted in this Contract, without diminution because of the insolvency of the ceding insurer or the Reinsurer.

C. If there are multiple ceding insurers that collectively comprise the Company, “regulatory authorities” as referenced in subparagraph A(2) above, shall mean the individual ceding insurer’s domestic regulator.  

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EX-10.20

Exhibit 10.20

CERTAIN CONFIDENTIAL INFORMATION, IDENTIFIED BY BRACKETED ASTERISKS "[*****]", HAS BEEN OMITTED FROM THIS EXHIBIT BECAUSE IT IS BOTH (I) NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED.












REINSTATEMENT PREMIUM PROTECTION REINSURANCE CONTRACT

(FOR FIRST EXCESS CAT)

issued to

Typtap insurance company

Ocala, Florida

including any and/or all companies that are or may hereafter become affiliated therewith

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REINSTATEMENT PREMIUM PROTECTION REINSURANCE CONTRACT

(FOR FIRST EXCESS CAT)

TABLE OF CONTENTS

Article		Page
	Preamble	3
1	Business Covered	3
2	Coverage	3
3	Term	4
4	Special Termination	4
5	Territory	5
6	Exclusions	5
7	Premium	5
8	Definitions	5
9	Original Conditions	6
10	No Third Party Rights	6
11	Notice of Loss and Loss Settlements	6
12	Late Payments	7
13	Offset	8
14	Currency	8
15	Obligations and Collateral Release	8
16	Taxes	11
17	Access to Records	11
18	Confidentiality	12
19	Errors and Omissions	13
20	Insolvency	13
21	Run-Off Reinsurer	14
22	Arbitration	15
23	Expedited Arbitration	16
24	Service of Suit	17
25	Governing Law	18
26	Entire Agreement	18
27	Non-Waiver	18
28	Mode of Execution	19
29	Limited Recourse	19
	Company Signing Block	20
Attachments
	Trust Agreement Requirements Clause	21

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REINSTATEMENT PREMIUM PROTECTION REINSURANCE CONTRACT

(FOR FIRST EXCESS CAT)

(the “Contract”)

issued to

Typtap insurance company

Ocala, Florida

including any and/or all companies that are or may hereafter become affiliated therewith

(collectively, the “Company”)

by

THE SUBSCRIBING REINSURER(S) IDENTIFIED
IN THE INTERESTS AND LIABILITIES AGREEMENT(S)
ATTACHED TO AND FORMING PART OF THIS CONTRACT

(the “Reinsurer”)

article 1

Business Covered

This Contract is to indemnify the Company in respect of the liability that may accrue to the Company as a result of Reinstatement Premium the Company may become liable to pay under the reinstatement provisions of the Property Catastrophe First Excess of Loss Reinsurance Contract, effective at 12:01 a.m., Standard Time, June 1, 2021 and expiring 12:01 a.m., Standard Time, June 1, 2022, Document Number:  UBWP0005C (the “Original Contract”), subject to the terms and conditions herein contained.  The Original Contract covers losses under Policies covering direct and assumed business classified by the Company as the property perils of Homeowners, Condominium Owners, Renters and Dwelling, in force at the inception of this Contract, or issued or renewed during the term of this Contract.  A copy of the Original Contract is attached to and forms part of this Contract.

article 2

coverage

The Reinsurer shall be liable to pay the Reinstatement Premium obligations under the Original Contract.

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article 3

Term

This Contract shall take effect at 12:01 a.m., Standard Time, June 1, 2021, and unless terminated prior to that time and date as provided in the Special Termination Article, shall remain in effect until 12:01 a.m., Standard Time, June 1, 2022, applying to Loss Occurrences commencing during the term of this Contract.  For purposes of this Contract, “Standard Time” shall mean the time as described in the original Policy.

ARTICLE 4

SPECIAL TERMINATION

A. The Company may terminate a Subscribing Reinsurer’s percentage share in this Contract at any time by giving written notice to the Subscribing Reinsurer in the event of any of the following circumstances:

1. The Subscribing Reinsurer ceases underwriting operations.

2. A state insurance department or other legal authority orders the Subscribing Reinsurer to cease writing business, or the Subscribing Reinsurer is placed under regulatory supervision.

3. The Subscribing Reinsurer has become insolvent or has been placed into liquidation or receivership (whether voluntary or involuntary), or there have been instituted against it proceedings for the appointment of a receiver, liquidator, rehabilitator, conservator, trustee in bankruptcy, or other agent known by whatever name, to take possession of its assets or control of its operations.

4. The Subscribing Reinsurer has become, or has announced its intention to become, merged with or acquired or controlled by any company, corporation, or individual(s) not controlling the Subscribing Reinsurer’s operations at the inception of this Contract.

5. The Subscribing Reinsurer has retroceded its entire liability under this Contract without the Company’s prior written consent, except for retrocessions to members of the Subscribing Reinsurer’s holding company group.

6. The Subscribing Reinsurer has hired an unaffiliated runoff claims manager that is compensated on a contingent basis or is otherwise provided with financial incentives based on the quantum of claims paid.

7. The Subscribing Reinsurer has in any other way assigned its interests or delegated its obligations under this Contract to an unaffiliated entity.

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8. The Subscribing Reinsurer has failed to post or maintain required collateral to secure its obligations as required under this Contract, and has not cured such deficiency within 30 days following written notice thereof from the Company.

Notwithstanding the foregoing, agreement by a Lloyd’s syndicate to follow claim settlements procedures under Lloyd’s Claims Scheme (Combined) shall not constitute a transfer of its claims-paying authority, for purposes of subparagraphs (6) and (7) of this paragraph.

B. The Subscribing Reinsurer shall have no liability for Reinstatement Premium arising from Loss Occurrences commencing after termination.  The premium due the Subscribing Reinsurer hereunder (including any minimum premium) shall be prorated based on the period of the Subscribing Reinsurer’s participation hereon, and the Subscribing Reinsurer shall immediately return any excess premium received.

article 5

Territory

The territorial limits of this Contract shall be identical with those of the Original Contract.

article 6

exclusions

This Contract shall follow the exclusions set forth in the Original Contract.

ARTICLE 7

Premium

A. The Company shall pay the Reinsurer a premium of [$*****] for the term of this Contract, payable on June 1, 2021.  

B. The Company shall furnish the Reinsurer with such reasonably available information as may be reasonably required by the Reinsurer for completion of the Reinsurer’s financial statements.

article 8

definitions

A. “Reinstatement Premium” means premium paid by the Company under the provisions of the Reinstatement Article of the Original Contract.  Reinstatement Premium shall be calculated at pro rata of the original reinsurance premium, being pro rata only for the amount being reinstated.  If, at the time of a loss settlement under the Original Contract, the reinsurance

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premium thereunder is not yet known, Reinstatement Premium shall be based upon the deposit premium, subject to adjustment when said reinsurance premium is finally established.  Nothing in this clause shall be construed to mean that amounts are not recoverable hereunder until the Company’s final Reinstatement Premium has been ascertained.  All recoveries received subsequent to reimbursement hereunder shall be applied as if received prior to the aforesaid settlement, and all necessary adjustments shall be made by the parties hereto.

B. “Loss Occurrence” shall follow the definition set forth in the Original Contract.

C. “Policy” means any binder, policy, or contract of insurance or reinsurance issued, accepted or held covered provisionally or otherwise, by or on behalf of the Company.

ARTICLE 9

ORIGINAL CONDITIONS

All reinsurance under this Contract shall be subject to the same terms, conditions, waivers and interpretations, and to the same modifications and alterations as the Original Contract.  However, in no event shall this be construed in any way to provide coverage outside the terms and conditions set forth in this Contract.

article 10

No Third Party Rights

This Contract is solely between the Company and the Reinsurer, and in no instance shall any insured, claimant or other third party have any rights under this Contract except as may be expressly provided otherwise herein.

article 11

NOTICE OF LOSS AND LOSS settlements

A. The Company shall advise the Reinsurer promptly of all losses that, in the opinion of the Company, may result in a claim hereunder and of all subsequent developments thereto that may materially affect the position of the Reinsurer.

B. The Company alone and at its full discretion shall adjust, settle or compromise all claims and losses.

C. As respects losses subject to the Original Contract, all loss settlements made by the Company, whether under strict Policy terms or by way of compromise, shall be binding upon the Reinsurer, and the Reinsurer agrees to pay or allow, as the case may be, its share of each such settlement immediately upon receipt of reasonable evidence of the amount paid by the Company or that the Company estimates it will pay within the next 14 days.  Within 30 days

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after receipt of the Reinsurer’s payment, the Company shall report to the Reinsurer the positive difference, if any, of the Reinsurer’s payment, minus the Reinsurer’s share of losses subject to this Contract that the Company has paid, or becomes liable to pay, as of the date of the report.  Any such positive difference shall be remitted to the Reinsurer with the Company’s report.

ARTICLE 12

LATE PAYMENTS

A. In the event any payment due either party is not received by the payment due date, the party to whom payment is due may, by written notification, require the debtor party to pay, and the debtor party agrees to pay, an interest penalty on the amount past due calculated for each such payment on the last business day of each month as follows:

1. The number of full days that have expired since the overdue date or the last monthly calculation, whichever the lesser; times

2. 1/365th of the sum of the six-month United States Treasury Bill rate as quoted in The Wall Street Journal on the first business day of the month for which the calculation is made, plus 1%; times

3. The amount past due, including accrued interest.

Interest shall accumulate until payment of the original amount due plus interest penalties have been received.

B. The due date shall, for purposes of this Article, be determined as follows:

1. Payments from the Reinsurer to the Company shall be due on the date on which the demand for payment (including delivery of bordereaux or quarterly or monthly reports) is received by the Reinsurer, and shall be overdue 30 days thereafter.

2. Payments from the Company to the Reinsurer shall be due on the dates specified within this Contract.  Payments shall be overdue 30 days thereafter except for the first installment of premium, if applicable, which shall be overdue 60 days from inception or 30 days from final line-signing, whichever the later.  Reinstatement Premium, if applicable, shall have as a due date the date when the Company receives payment for the claim giving rise to such Reinstatement Premium, and payment shall be overdue 30 days thereafter. In the event a due date is not specifically stated for a given payment, the overdue date shall be 30 days following the date of billing.

C. If the information contained in the Company’s demand for payment is insufficient or not in accordance with the conditions of this Contract, then within 30 days the Reinsurer shall request from the Company all additional information necessary to validate its claim and the payment due date as defined in paragraph B shall be deemed to be the date upon which the

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Reinsurer received the requested additional information.  This paragraph is only for the purpose of establishing when a payment is overdue, and shall not alter the provisions of the Notice of Loss and Loss Settlements Article or other pertinent contractual stipulations.

D. In the event arbitration is necessary to settle a dispute, the panel shall have the authority to make a determination awarding interest to the prevailing party.  Interest, if any, awarded by the panel shall supersede the interest amounts outlined herein.

E. Any interest owed pursuant to this Article may be waived by the party to which it is owed.  Waiver of such interest, however, shall not affect the waiving party’s rights to other interest amounts due as a result of this Article.

ARTICLE 13

OFFSET

Each party hereto shall have, and may exercise at any time and from time to time, the right to offset any and all balances due from a party to the other arising under this Contract.  In the event of the insolvency of a party hereto, offsets shall only be allowed in accordance with the provisions of any applicable law governing offset entitlement.

ARTICLE 14

Currency

A. Where the word “Dollars” and/or the sign “$” appear in this Contract, they shall mean United States Dollars, and all payments hereunder shall be in United States Dollars.

B. For purposes of this Contract, where the Company receives or pays amounts in currencies other than United States Dollars, such amounts shall be converted into United States Dollars at the actual rates of exchange at which these amounts are entered in the Company’s books.

ARTICLE 15

OBLIGATIONS AND COLLATERAL RELEASE

A. The Reinsurer will establish a trust fund (“Trust Fund”) for its Obligations (as defined herein) hereunder, pursuant to that certain Trust Agreement by and between the Reinsurer, the Company, and Truist Bank (the “Trust Agreement”).  The Trust Fund shall be funded pursuant to the provisions hereof.  Collateral deposited in the Trust Fund may be withdrawn on the terms set forth herein and in the Trust Agreement.  The Trust Agreement shall be at all times in compliance with the relevant provisions of the Insurance Code of the Company’s state of domicile and the administrative regulations adopted by that state’s insurance department, in order for the Company to receive, full statutory financial statement credit for reinsurance provided under this Contract.  Collateral deposited in the Trust Fund may be

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withdrawn at any time, notwithstanding the other provisions of this Contract, and utilized and applied by the Company or any successor, by operation of law, of the Company, including, without limitation, any liquidator, rehabilitator, receiver or conservator of the Company, without diminution because of insolvency on the part of the Company or the Reinsurer, for the following purposes:

1. to reimburse the Company for the Reinsurer’s Obligations, the payment of which is due under the terms of this Contract and that has not been otherwise paid;

2. to make refund of any sum that is in excess of 102% of the amount required to pay the Reinsurer’s Obligations under this Contract;

3. to fund an account with the Company for the Reinsurer’s Obligations.  Such cash deposit shall be held in an interest-bearing account separate from the Company’s other assets, and interest thereon not in excess of the prime rate shall accrue to the benefit of the Reinsurer;

4. to pay the Reinsurer’s share of any other amounts the Company claims are due under this Contract.

B. The term “Obligations” shall mean during the term of the Contract, 100% of the limit of the Reinsurer’s liability hereunder less any unpaid minimum premium (net of brokerage and Federal Excise Tax as applicable) and aggregate amounts previously paid by the Reinsurer in respect of claims under this Contract.  Upon expiration of the Contract, the term “Obligations” shall mean the amount as determined in accordance with paragraph D below.

C. If, at expiration of this Contract, the Company, in its commercially reasonable judgment, believes that no claims will impact this Contract, the Company will so notify the Reinsurer and shall fully and finally release from the Trust Fund all collateral contained therein.

D. If, at the expiration of this Contract, the Company, in its commercially reasonable judgment, believes that the Company may have a claim hereunder, the Company shall estimate the amount of reinstatement premium due under this Contract based on the reinstatement premium payable under the contract identified in the Business Covered article (the Underlying Contract”) as follows, unless otherwise mutually agreed:

1. The Company shall determine the sum of the following for the Underlying Contract, as of this Contract expiration date:

a. losses and loss adjustment expense paid by the Company;

b. reserves for losses reported and outstanding; and

c. reserves for losses incurred but not reported;

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2. The Company shall then calculate the estimated reinstatement premium due on the Underlying Contract and such amount shall constitute the Reinsurer’s Obligations

3. The amount of the estimated reinstatement premium due on the Underlying Contract, measured as of the applicable determination date (as specified in paragraph E below), shall be multiplied by a factor, based upon the number of months, which have elapsed on such determination date since expiration of this Contract, as follows:

a. From 0 to 12 months from expiration of this Contract, [*****%], else;

b. From 13 to 24 months from expiration of this Contract, [*****%], else;

c. From 25 to 36 months from expiration of this Contract, [*****%]; and

d. From 37 to 67 months from expiration of this Contract, [*****%].

As of 67 months after expiration of this Contract (the “Reporting Period”), the amount determined in subparagraphs 1, 2 and 3 above for such date shall be considered the definitive Final Limit for each such Loss Occurrence for which the Company and the Reinsurer agree to commute this Contract with final settlement on that basis. 

E. The procedure for determining the amount of collateral required to fund the Reinsurer’s Obligations as set forth in paragraph D above, shall be followed each and every time, if in the opinion of the Company, there are materially new estimates regarding its losses, and each quarter-end, until all the Reinsurer’s Obligations have been extinguished or the Reporting Period is over, whichever is earlier.  The information to be used for the determinations of the Reinsurer’s Obligations shall be as reflected on the Company’s official books and records.

F. The Company agrees to release from the Trust Fund all collateral in excess of 102% of the amount required to pay the Reinsurer’s Obligations for its share of actual and possible claims, as determined in accordance with paragraph A, above within 10 Business Days of the date of such determination.  “Business Day” shall be defined as a day (other than a Saturday or a Sunday) on which banks are open for commercial business in Bermuda and in New York, New York, U.S.A.

G. Notwithstanding the foregoing, if the Reinsurer is licensed as a segregated account company, the Company agrees and acknowledges that there shall only be recourse to the Segregated Trust Account assets, and in the event of the exhaustion of the Segregated Trust Account assets there shall be no recourse by any party for any claims, payments, other expenses or fees whatsoever, howsoever arising pursuant to this Contract, to the assets which are allocated to any other segregated account of the Reinsurer or to the general account of the Reinsurer.

H. At the end of the Reporting Period, this Contract will be commuted based on the Reinsurer’s Obligations at that point.  The Company agrees to terminate the Trust Account, and all remaining collateral will be released to the Company and/or the Reinsurer, as applicable, and both parties shall be released from any further obligations under this Contract.

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ARTICLE 16

Taxes

A. In consideration of the terms under which this Contract is issued, the Company undertakes not to claim any deduction of the premium hereon when making Canadian tax returns or when making tax returns, other than Income or Profits Tax returns, to any state or territory of the United States of America or to the District of Columbia.

B. 1.Each Subscribing Reinsurer has agreed to allow, for the purpose of paying the Federal Excise Tax, the applicable percentage of the premium payable hereon (as imposed under the Internal Revenue Code) to the extent such premium is subject to Federal Excise Tax.

2. In the event of any return of premium becoming due hereunder, the Subscribing Reinsurer shall deduct the applicable percentage of the premium from the amount of the return, and the Company or its agent should take steps to recover the Tax from the U.S. Government.

ARTICLE 17

access to records

A. The Reinsurer or its duly authorized representatives shall have the right to visit the offices of the Company to inspect, examine, audit, and verify any of the policy, accounting or claim files (“Records”) relating to business reinsured under this Contract during regular business hours after giving five working days’ prior notice.  This right shall be exercisable during the term of this Contract or after the expiration of this Contract.  Notwithstanding the above, the Reinsurer shall not have any right of access to the Records of the Company if it is not current in all undisputed payments due the Company.

B. Notwithstanding the above, the Company reserves the right to withhold from the Reinsurer any Privileged Documents.  However, the Company shall permit and not object to the Reinsurer’s access to Privileged Documents in connection with the underlying claim reinsured hereunder following final settlement or final adjudication of the case or cases involving such claim, with prejudice against all claimants and all parties to such adjudications; the Company may defer release of such Privileged Documents if there are subrogation, contribution, or other third party actions with respect to that claim or case, and the Company’s defense might be jeopardized by release of such Privileged Documents.  In the event that the Company seeks to defer release of such Privileged Documents, it shall, in consultation with the Reinsurer, take other steps as reasonably necessary to provide the Reinsurer with the information it reasonably requires to indemnify the Company without causing a loss of such privileges or protections.  The Reinsurer shall not have access to Privileged Documents relating to any dispute between the Company and the Reinsurer.

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C. For purposes of this Article:

1. “Privileged Documents” means any documents that are Attorney-Client Privilege Documents and/or Work Product Privilege Documents.

2. “Attorney-Client Privilege Documents” means communications of a confidential nature between (a) the Company, or anyone retained by or at the direction of the Company, or its in‑house or outside legal counsel, or anyone in the control of such legal counsel, and (b) any in-house or outside legal counsel, if such communications relate to legal advice being sought by the Company and/or contain legal advice being provided to the Company.

3. “Work Product Privilege Documents” means communications, written materials and tangible things prepared by or for in-house or outside counsel, or prepared by or for the Company, in anticipation of or in connection with litigation, arbitration, or other dispute resolution proceedings.

ARTICLE 18

confidentiality

A. The Reinsurer hereby acknowledges that the documents, information and data provided to it by the Company, whether directly or through an authorized agent, in connection with the placement and execution of this Contract (“Confidential Information”) are proprietary and confidential to the Company. Confidential Information shall not include documents, information or data that the Reinsurer can show:

1. are publicly known or have become publicly known through no unauthorized act of the Reinsurer;

2. have been rightfully received from a third person without obligation of confidentiality; or

3. were known by the Reinsurer prior to the placement of this Contract without an obligation of confidentiality.

B. Absent the written consent of the Company, the Reinsurer shall not disclose any Confidential Information to any third parties, including any affiliated companies (except to the extent necessary to enable affiliated companies or third parties engaged by the Reinsurer to perform services related to this Contract on behalf of the Reinsurer), except:

1. when required by retrocessionaires as respects business ceded to this Contract;

2. when required by regulators performing an audit of the Reinsurer’s records and/or financial condition; or

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3. when required by external auditors performing an audit of the Reinsurer’s records in the normal course of business.

Further, the Reinsurer agrees not to use any Confidential Information for any purpose not related to the performance of its obligations or enforcement of its rights under this Contract.

C. Notwithstanding the above, in the event that the Reinsurer is required by court order, other legal process or any regulatory authority to release or disclose any or all of the Confidential Information, the Reinsurer agrees to provide the Company with written notice of same at least 10 days prior to such release or disclosure and to use its best efforts to assist the Company in maintaining the confidentiality provided for in this Article.

D. The provisions of this Article shall extend to the officers, directors and employees of the Reinsurer and its affiliates, and shall be binding upon their successors and assigns.

ARTICLE 19

Errors and Omissions

Any inadvertent error, omission or delay in complying with the terms and conditions of this Contract shall not be held to relieve either party hereto from any liability that would attach to it hereunder if such error, omission or delay had not been made, provided such error, omission or delay is rectified immediately upon discovery.

ARTICLE 20

insolvency

A. If more than one company is referenced within the definition of “Company” in the Preamble to this Contract, this Article shall apply severally to each such company.  Further, this Article and the laws of the domiciliary state shall apply in the event of the insolvency of any company covered hereunder.  In the event of a conflict between any provision of this Article and the laws of the domiciliary state of any company covered hereunder, that domiciliary state’s laws shall prevail.

B. In the event of the insolvency of the Company, this coverage (or the portion of any risk or obligation assumed by the Reinsurer, if required by applicable law) shall be payable directly to the Company, or to its liquidator, receiver, conservator or statutory successor, either:  (1) on the basis of the liability of the Company, or (2) on the basis of claims filed and allowed in the liquidation proceeding, whichever may be required by applicable statute, without diminution because of the insolvency of the Company or because the liquidator, receiver, conservator or statutory successor of the Company has failed to pay all or a portion of any claim.  It is agreed, however, that the liquidator, receiver, conservator or statutory successor of the Company shall give written notice to the Reinsurer of the pendency of a claim against the Company indicating the Policy or bond reinsured, which claim would involve a possible

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liability on the part of the Reinsurer within a reasonable time after such claim is filed in the conservation or liquidation proceeding or in the receivership, and that during the pendency of such claim, the Reinsurer may investigate such claim and interpose, at its own expense, in the proceeding where such claim is to be adjudicated any defense or defenses that it may deem available to the Company or its liquidator, receiver, conservator or statutory successor.  The expense thus incurred by the Reinsurer shall be chargeable, subject to the approval of the court, against the Company as part of the expense of conservation or liquidation to the extent of a pro rata share of the benefit that may accrue to the Company solely as a result of the defense undertaken by the Reinsurer.

C. Where two or more reinsurers are involved in the same claim and a majority in interest elect to interpose defense to such claim, the expense shall be apportioned in accordance with the terms of this reinsurance Contract as though such expense had been incurred by the Company.

ARTICLE 21

RUN-OFF REINSURER

A. “Run-off Reinsurer” means any Subscribing Reinsurer that:

1. has been ordered by a state insurance department or other legal authority to cease writing business, or has been placed under regulatory supervision or in rehabilitation; or

2. has ceased reinsurance underwriting operations; or

3. has transferred its claims-paying authority to an unaffiliated entity; or

4. engages in a process of Scheme of Arrangement or similar procedure related to this Contract, including but not limited to an insurance business transfer scheme pursuant to Part VII of the Financial Services and Markets Act 2000 (U.K.), as may be amended from time to time; or

5. in any other way has assigned its interests or delegated its obligations under this Contract to an unaffiliated entity.

Notwithstanding the foregoing, agreement by a Lloyd’s syndicate to follow claim settlements procedures under Lloyd’s Claims Scheme (Combined) shall not constitute a transfer of its claims-paying authority, for purposes of subparagraphs (3) and (5) of this paragraph.

B. Notwithstanding any other provision of this Contract, in the event that a Subscribing Reinsurer becomes a Run-off Reinsurer at any time, the Company may elect, by giving written notice to the Run-off Reinsurer at any time thereafter, that all or any of the following shall apply to the Run-off Reinsurer’s participation hereunder:

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1. Should the Run-off Reinsurer fail to pay amounts due hereunder, the interest penalty specified in the Late Payments Article shall be increased by 0.5% for each 30 days that a payment is past due, subject to a maximum increase of 7.0%.

2. The Run-off Reinsurer’s liability for losses for Policies covered by this Contract shall be commuted.  In the event the Company and the Run-off Reinsurer cannot agree on the commutation amount of the Run-off Reinsurer’s liability under such Policies, they shall appoint an actuary and/or appraiser to assess such liability and shall share equally any expense of the actuary and/or appraiser.  If the Company and the Run-off Reinsurer cannot agree on an actuary and/or appraiser, the Company and the Run-off Reinsurer each shall nominate three individuals, of whom the other shall decline two, and the final appointment shall be made by drawing lots.  Payment by the Run-off Reinsurer of the amount of liability ascertained shall constitute a complete and final release of both parties under this Contract.

3. The Run-off Reinsurer shall have no right of access to the Records of the Company if the Run-off Reinsurer has denied payment of any claim hereunder or there is a pending arbitration between the Company and the Run-off Reinsurer regarding any claim hereunder.  A reservation of rights shall be considered a denial of a claim.  Notwithstanding the above, the Run-off Reinsurer shall continue to have access to Records of the Company for any claim for which it has raised a query within 30 days of its receipt of a billing, but any inspection of Records must be completed within 90 days of receipt of billing or access will be deemed waived.

4. The provisions of the Arbitration Article shall not apply.  

C. The Company’s waiver of any rights provided in this Article is not a waiver of that right or other rights at a later date.

ARTICLE 22

arbitration

A. Any dispute arising out of the interpretation, performance or breach of this Contract, including the formation or validity thereof, shall be submitted for decision to a panel of three arbitrators.  Notice requesting arbitration shall be in writing and sent certified or registered mail, return receipt requested.

B. One arbitrator shall be chosen by each party and the two arbitrators shall then choose an impartial third arbitrator who shall preside at the hearing.  If either party fails to appoint its arbitrator within 30 days after being requested to do so by the other party, the latter, after 10 days’ prior notice by certified or registered mail of its intention to do so, may appoint the second arbitrator.

C. If the two arbitrators do not agree on a third arbitrator within 60 days of their appointment, the third arbitrator shall be chosen in accordance with the procedures for selecting the third

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arbitrator in force on the date the arbitration is demanded, established by the AIDA Reinsurance and Insurance Arbitration Society – U.S. (ARIAS).  The arbitrators shall be persons knowledgeable about insurance and reinsurance who have no personal or financial interest in the result of the arbitration.  If a member of the panel dies, becomes disabled or is otherwise unwilling or unable to serve, a substitute shall be selected in the same manner as the departing member was chosen and the arbitration shall continue.

D. Within 30 days after all arbitrators have been appointed, the panel shall meet and determine timely periods for briefs, discovery procedures and schedules of hearings.

E. The panel shall be relieved of all judicial formality and shall not be bound by the strict rules of procedure and evidence.  Notwithstanding anything to the contrary in this Contract, the arbitrators may at their discretion, consider underwriting and placement information provided by the Company to the Reinsurer, as well as any correspondence exchanged by the parties that is related to this Contract.  The arbitration shall take place in Tampa, Florida, or at such other place as the parties shall agree. The decision of any two arbitrators shall be in writing and shall be final and binding.  The panel is empowered to grant interim relief as it may deem appropriate.

F. The panel shall interpret this Contract as an honorable engagement rather than as merely a legal obligation and shall make its decision considering the custom and practice of the applicable insurance and reinsurance business as promptly as possible after the hearings.  Judgment upon an award may be entered in any court having jurisdiction thereof.

G. Each party shall bear the expense of its own arbitrator and shall jointly and equally bear with the other party the cost of the third arbitrator.  The remaining costs of the arbitration shall be allocated by the panel.  The panel may, at its discretion, award such further costs and expenses as it considers appropriate, including but not limited to attorneys’ fees, to the extent permitted by law.

ARTICLE 23

Expedited Arbitration

A. Notwithstanding the provisions of the Arbitration Article, in the event an amount in dispute hereunder $1,000,000 or less, the parties will submit to an expedited arbitration process with the use of a single arbitrator.  The arbitrator will be chosen in accordance with the procedures for selecting an arbitrator in force on the date the arbitration is demanded, established by the AIDA Reinsurance and Insurance Arbitration Society – U.S. (ARIAS).

B. Each party’s case will be submitted to the arbitrator within 100 calendar days of the date of determination of the arbitrator.  Discovery will be limited to exchanging only those documents directly relating to the issue in dispute, subject to a limit of two discovery depositions from each party, unless otherwise authorized by the arbitrator upon a showing of good cause.

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C. Within 120 calendar days of the date of determination of the arbitrator, the hearing will be completed and a written award will be issued by the arbitrator.  As the parties agree that time is of the essence, the sole arbitrator does not have the authority to lengthen the schedule, absent agreement of both parties.  The arbitrator will have all the powers conferred on the arbitration panel as provided in the Arbitration Article, and said Article will apply to all matters not specifically addressed above.

ARTICLE 24

service of suit

A. This Article applies only to those Subscribing Reinsurers not domiciled in the United States of America, and/or not authorized in any state, territory and/or district of the United States of America where authorization is required by insurance regulatory authorities.

B. This Article shall not be read to conflict with or override the obligations of the parties to arbitrate their disputes as provided for in the Arbitration Article.  This Article is intended as an aid to compelling arbitration or enforcing such arbitration or arbitral award, not as an alternative to the Arbitration Article for resolving disputes arising out of this Contract.

C. In the event of the failure of the Reinsurer to perform its obligations hereunder, the Reinsurer, at the request of the Company, shall submit to the jurisdiction of a court of competent jurisdiction within the United States.  Nothing in this Article constitutes or should be understood to constitute a waiver of the Reinsurer’s rights to commence an action in any court of competent jurisdiction in the United States, to remove an action to a United States District Court, or to seek a transfer of a case to another court as permitted by the laws of the United States or of any state in the United States.  The Reinsurer, once the appropriate court is selected, whether such court is the one originally chosen by the Company and accepted by the Reinsurer or is determined by removal, transfer, or otherwise, as provided for above, shall comply with all requirements necessary to give said court jurisdiction and, in any suit instituted against the Reinsurer upon this Contract, shall abide by the final decision of such court or of any appellate court in the event of an appeal.

D. Service of process in such suit may be made upon:

1. as respects Underwriting Members of Lloyd’s, London: Lloyd’s America, Inc., Attention: Legal Department, 280 Park Avenue, East Tower, 25^th Floor, New York, New York 10017;

2. as respects any other Subscribing Reinsurer: Messrs. Mendes and Mount, 750 Seventh Avenue, New York, New York 10019-6829, or another party specifically designated in the Subscribing Reinsurer’s Interests and Liabilities Agreement attached hereto.  

The above-named are authorized and directed to accept service of process on behalf of the Reinsurer in any such suit.

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E. Further, pursuant to any statute of any state, territory or district of the United States that makes provision therefor, the Reinsurer hereby designates the Superintendent, Commissioner or Director of Insurance, or other officer specified for that purpose in the statute, or his successor or successors in office, as its true and lawful attorney upon whom may be served any lawful process in any action, suit or proceeding instituted by or on behalf of the Company or any beneficiary hereunder arising out of this Contract, and hereby designates the above-named as the person to whom the said officer is authorized to mail such process or a true copy thereof.

ARTICLE 25

GOVERNING LAW

This Contract shall be governed as to performance, administration and interpretation by the laws of the State of Florida, subject to the Limited Recourse and Bermuda regulations clauses as set out in the Limited Recourse Article, exclusive of conflict of law rules.  However, with respect to credit for reinsurance, the rules of all applicable states shall apply.

ARTICLE 26

Entire Agreement

This Contract sets forth all of the duties and obligations between the Company and the Reinsurer and supersedes any and all prior or contemporaneous written agreements with respect to matters referred to in this Contract.  This Contract may not be modified or changed except by an amendment to this Contract in writing signed by both parties.  However, this Article shall not be construed as limiting the admissibility of evidence regarding the formation, interpretation, purpose or intent of this Contract.

ARTICLE 27

NON-WAIVER

The failure of the Company or the Reinsurer to insist on compliance with this Contract or to exercise any right or remedy hereunder shall not constitute a waiver of any rights contained in this Contract nor prevent either party from thereafter demanding full and complete compliance nor prevent either party from exercising such remedy in the future.

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ARTICLE 28

mode of execution

A. This Contract may be executed by:

1. an original written ink signature of paper documents;

2. an exchange of facsimile copies showing the original written ink signature of paper documents;

3. electronic signature technology employing computer software and a digital signature or digitizer pen pad to capture a person’s handwritten signature in such a manner that the signature is unique to the person signing, is under the sole control of the person signing, is capable of verification to authenticate the signature and is linked to the document signed in such a manner that if the data is changed, such signature is invalidated.

B. The use of any one or a combination of these methods of execution shall constitute a legally binding and valid signing of this Contract.  This Contract may be executed in one or more counterparts, each of which, when duly executed, shall be deemed an original.

ARTICLE 29

LIMITED RECOURSE

A. The liability of the Reinsurer for the performance and discharge of all of its obligations, however they may arise, in relation to this Contract (together “Obligations” for purposes of this Article), shall be limited to and payable solely from the proceeds of realization of the assets of the Trust Fund established in accordance with this Contract, and accordingly there shall be no recourse to any other assets of the Reinsurer whether or not allocated to any other separate account or the general account of the Reinsurer.  In the event that the proceeds of realization of the assets of the Trust Fund are insufficient to meet all Obligations, any Obligations remaining after the application of such proceeds shall be extinguished, and the Company undertakes in such circumstances to take no further action against the Reinsurer in respect of any such Obligations. In particular, neither the Company nor any party acting on its behalf shall petition or take any steps for the winding up or receivership of the Reinsurer.

B. Notwithstanding any matter referred to herein, the Company understands and accepts that the Reinsurer acts on behalf of one or more separate accounts of Claddaugh Casualty Insurance Company Ltd. and that all corporate matters relating to the creation of the Reinsurer, capacity of the Reinsurer, operation and liquidation of the Reinsurer and any matters relating to the Reinsurer thereof shall be governed by, and construed in accordance with, the laws of Bermuda. The Company has had the opportunity to take advice and to obtain all such additional information that it considers necessary to evaluate the terms, conditions and risks of entering into this Contract with the Reinsurer.

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IN WITNESS WHEREOF, the Company has caused this Contract to be executed by its duly authorized representative(s), who also confirms the Company’s review of and agreement to be bound by the terms and conditions of the Interests and Liabilities Agreements attached to and forming part of this Contract:

On this _____ day of __________, in the year of 2021.

TYPTAP INSURANCE COMPANY

Signature:	Title:
Print Name:

REINSTATEMENT PREMIUM PROTECTION REINSURANCE CONTRACT

(FOR FIRST EXCESS CAT)

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TRUST AGREEMENT REQUIREMENTS CLAUSE

A. Except as provided in paragraph B of this Clause, if the Reinsurer satisfies its funding obligations under the Unauthorized Reinsurance Article by providing a Trust Agreement, the Reinsurer shall ensure that the Trust Agreement:

1. Requires the Reinsurer to establish a trust account for the benefit of the Company, and specifies what the Trust Agreement is to cover;

2. Stipulates that assets deposited in the trust account shall be valued according to their current fair market value and shall consist only of cash (United States legal tender), and certificates of deposit (issued by a United States bank and payable in United States legal tender), or any combination of the two, provided that the investments are issued by an institution that is not the parent, subsidiary or affiliate of either the Reinsurer or the Company;

3. Requires the Reinsurer, prior to depositing assets with the trustee, to execute assignments or endorsements in blank, or to transfer legal title to the trustee of all shares, obligations or any other assets requiring assignments, in order that the Company, or the trustee upon the direction of the Company, may whenever necessary negotiate these assets without consent or signature from the Reinsurer or any other entity;

4. Requires that all settlements of account between the Company and the Reinsurer be made in cash or its equivalent; and

5. Provides that assets in the trust account shall be withdrawn only as permitted in this Contract, without diminution because of the insolvency of the Company or the Reinsurer.

B. If a ceding insurer is domiciled in California and the Reinsurer satisfies its funding obligations under the Unauthorized Reinsurance Article by providing a Trust Agreement, the Reinsurer shall ensure that the Trust Agreement:

1. Provides that assets deposited in the trust account shall be valued according to their current fair market value and shall consist only of cash in United States dollars, certificates of deposit issued by a United States financial institution as defined in California Insurance Code Section 922.7(a) and payable in United States dollars, and investments permitted by the California Insurance Code, or any combination of the above.

2. Provides that investments in or issued by an entity controlling, controlled by or under common control with either the grantor or the beneficiary of the trust shall not exceed 5% of total investments.

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3. Requires the Reinsurer, prior to depositing assets with the trustee, to execute assignments or endorsements in blank, or to transfer legal title to the trustee of all shares, obligations or any other assets requiring assignments, in order that the ceding insurer, or the trustee upon the direction of the ceding insurer, may, whenever necessary, negotiate these assets without consent or signature from the Reinsurer or any other entity.

4. Provides that assets in the trust account shall be withdrawn only as permitted in this Contract, without diminution because of the insolvency of the ceding insurer or the Reinsurer.

C. If there are multiple ceding insurers that collectively comprise the Company, “regulatory authorities” as referenced in subparagraph A(2) above, shall mean the individual ceding insurer’s domestic regulator.  

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EX-10.21

Exhibit 10.21

CERTAIN CONFIDENTIAL INFORMATION, IDENTIFIED BY BRACKETED ASTERISKS "[*****]", HAS BEEN OMITTED FROM THIS EXHIBIT BECAUSE IT IS BOTH (I) NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED.












NON-FLORIDA PROPERTY CATASTROPHE $6MXS$4M

EXCESS OF LOSS REINSURANCE CONTRACT

issued to

TypTap Insurance Company

Ocala, Florida

Homeowners Choice Property & Casualty Insurance Company, Inc.

Tampa, Florida

including any and/or all companies that are or may hereafter become affiliated therewith

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NON-FLORIDA PROPERTY CATASTROPHE $6MXS$4M

EXCESS OF LOSS REINSURANCE CONTRACT

TABLE OF CONTENTS

Article		Page
	Preamble	4
1	Business Covered	4
2	Retention and Limit	4
3	Term	5
4	Special Termination	5
5	Territory	6
6	Exclusions	7
7	Special Acceptance	8
8	Premium	9
9	Reinstatement	9
10	Definitions	9
11	Extra Contractual Obligations/Excess of Policy Limits	12
12	Net Retained Liability	13
13	Other Reinsurance	13
14	Original Conditions	14
15	No Third Party Rights	14
16	Notice of Loss and Loss Settlements	14
17	Late Payments	15
18	Offset	16
19	Currency	16
20	Obligations and Collateral Release	16
21	Taxes	18
22	Access to Records	19
23	Confidentiality	20
24	Indemnification and Errors and Omissions	21
25	Insolvency	21
26	Run-Off Reinsurer	22
27	Arbitration	24
28	Expedited Arbitration	25
29	Service of Suit	25
30	Governing Law	26
31	Entire Agreement	26
32	Non-Waiver	27
33	Agency	27
34	Mode of Execution	27
35	Limited Recourse	28
	Company Signing Block	29

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NON-FLORIDA PROPERTY CATASTROPHE $6MXS$4M
EXCESS OF LOSS REINSURANCE CONTRACT
TABLE OF CONTENTS
Attachments		Page
	Pools, Associations & Syndicates Exclusions Clause	30
	Nuclear Incident Exclusion Clause - Physical Damage - Reinsurance - U.S.A.	33
	Terrorism Exclusion	35
	Communicable Disease Exclusion (Property Reinsurance)	36
	Cyber Loss Limited Exclusion Clause (Property Treaty Reinsurance)	37
	Trust Agreement Requirements Clause	38

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NON-FLORIDA PROPERTY CATASTROPHE $6MXS$4M

EXCESS OF LOSS REINSURANCE CONTRACT

(the “Contract”)

issued to

TypTap Insurance Company

Ocala, Florida

Homeowners Choice Property & Casualty Insurance Company, Inc.

Tampa, Florida

including any and/or all companies that are or may hereafter become affiliated therewith

(collectively, the “Company”)

by

THE SUBSCRIBING REINSURER(S) IDENTIFIED IN THE
INTERESTS AND LIABILITIES AGREEMENT(S) ATTACHED TO
AND FORMING PART OF THIS CONTRACT

(the “Reinsurer”)

ARTICLE 1

BUSINESS COVERED

This Contract is to indemnify the Company in respect of its net excess liability as a result of any loss or losses which may occur during the term of this Contract under any Policies in force at the effective date hereof or issued or renewed on or after that date, covering direct and assumed business classified by the Company as the property perils of Homeowners, Condominium Owners, Renters and Dwelling, subject to the terms and conditions herein contained.

ARTICLE 2

Retention and Limit

A. The Reinsurer shall be liable in respect of each Loss Occurrence for the Ultimate Net Loss over and above the initial Ultimate Net Loss of [$*****] each Loss Occurrence, subject to a limit of liability to the Reinsurer of [$*****] each Loss Occurrence, and subject further to a limit of liability of [$*****] for all Loss Occurrences commencing during the term of this Contract.

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B. No Loss Occurrence shall be covered hereunder unless it involves two or more risks subject to this Contract.  The Company shall be the sole judge of what constitutes one risk for purposes of this Contract.

ARTICLE 3

Term

This Contract shall take effect at 12:01 a.m., Standard Time, June 1, 2021, and unless terminated prior to that time and date as provided in the Special Termination Article, shall remain in effect until 12:01 a.m., Standard Time, June 1, 2022, applying to Loss Occurrences commencing during the term of this Contract.  For purposes of this Contract, “Standard Time” shall mean the time as described in the original Policy.

ARTICLE 4

SPECIAL TERMINATION

A. The Company may terminate a Subscribing Reinsurer’s percentage share in this Contract at any time by giving written notice to the Subscribing Reinsurer in the event of any of the following circumstances:

1. The Subscribing Reinsurer ceases underwriting operations.

2. A state insurance department or other legal authority orders the Subscribing Reinsurer to cease writing business, or the Subscribing Reinsurer is placed under regulatory supervision.

3. The Subscribing Reinsurer has become insolvent or has been placed into liquidation or receivership (whether voluntary or involuntary), or there have been instituted against it proceedings for the appointment of a receiver, liquidator, rehabilitator, conservator, trustee in bankruptcy, or other agent known by whatever name, to take possession of its assets or control of its operations.

4. The Subscribing Reinsurer has become, or has announced its intention to become, merged with or acquired or controlled by any company, corporation, or individual(s) not controlling the Subscribing Reinsurer’s operations at the inception of this Contract.

5. The Subscribing Reinsurer has retroceded its entire liability under this Contract without the Company’s prior written consent, except for retrocessions to members of the Subscribing Reinsurer’s holding company group.

6. The Subscribing Reinsurer has hired an unaffiliated runoff claims manager that is compensated on a contingent basis or is otherwise provided with financial incentives based on the quantum of claims paid.

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7. The Subscribing Reinsurer has in any other way assigned its interests or delegated its obligations under this Contract to an unaffiliated entity.

8. The Subscribing Reinsurer has failed to post or maintain required collateral to secure its obligations as required under this Contract, and has not cured such deficiency within 30 days following written notice thereof from the Company.

Notwithstanding the foregoing, agreement by a Lloyd’s syndicate to follow claim settlements procedures under Lloyd’s Claims Scheme (Combined) shall not constitute a transfer of its claims-paying authority, for purposes of subparagraphs (6) and (7) of this paragraph.

B. Termination shall be effected on a cut-off basis and the Subscribing Reinsurer shall have no liability for Loss Occurrences commencing after the date of termination.  The reinsurance premium due the Subscribing Reinsurer hereunder (including any minimum reinsurance premium) shall be prorated based on the period of the Subscribing Reinsurer’s participation hereon, and the Subscribing Reinsurer shall immediately return any excess reinsurance premium received.  Reinstatement premium, if any, shall be calculated based on the Subscribing Reinsurer’s reinsurance premium earned during the period of the Subscribing Reinsurer’s participation hereon.

C. Additionally, in the event of any of the circumstances listed in paragraph A of this Article, the Company shall have the option to commute the Subscribing Reinsurer’s liability for losses on Policies covered by this Contract.  In the event the Company and the Subscribing Reinsurer cannot agree on the commutation amount, they shall appoint an actuary and/or appraiser to assess such amount and shall share equally any expense of the actuary and/or appraiser.  If the Company and the Subscribing Reinsurer cannot agree on an actuary and/or appraiser, the Company and the Subscribing Reinsurer each shall nominate three individuals, of whom the other shall decline two, and the final appointment shall be made by drawing lots.  Payment by the Subscribing Reinsurer of the amount of liability ascertained shall constitute a complete and final release of both parties in respect of liability arising from the Subscribing Reinsurer’s participation under this Contract.

D. The Company’s option to require commutation under paragraph C above shall survive the termination or expiration of this Contract.

ARTICLE 5

Territory

The territorial limits of this Contract shall be identical with those of the Company’s Policies, with the exception of the State of Florida.

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ARTICLE 6

Exclusions

A. This Contract shall not apply to and specifically excludes:

1. Policies covered by the Company’s Flood Tower.

2. Flood when written as such.

3. Earthquake for standalone Policies where earthquake is the only named peril.

4. Hail damage to an insured’s growing or standing crops.

5. Reinsurance assumed by the Company under obligatory reinsurance agreements, except intercompany reinsurance between the Company and its affiliates and reinsurance where the Policies involved are to be re-underwritten in accordance with the underwriting standards of the Company and reissued as Policies of the Company in due course.

6. Pools, Associations & Syndicates, per the attached exclusion.

7. Liability of the Company arising by contract, operation of law, or otherwise, from its participation or membership, whether voluntary or involuntary, in any Insolvency Fund.  “Insolvency Fund” includes any guaranty fund, insolvency fund, plan, pool, association, fund or other arrangement, howsoever denominated, established or governed, that provides for any assessment of or payment or assumption by the Company of part or all of any claim, debt, charge, fee, or other obligation of an insurer, or its successors or assigns, that has been declared by any competent authority to be insolvent, or that is otherwise deemed unable to meet any claim, debt, charge, fee or other obligation in whole or in part.

8. Loss or damage occasioned by war, invasion, hostilities, acts of foreign enemies, civil war, rebellion, insurrection, military or usurped power, martial law, or confiscation by order of any government or public authority, but not excluding loss or damage that would be covered under a standard form of Policy containing a standard war exclusion clause.

9. Losses excluded by the attached Nuclear Incident Exclusion Clause – Physical Damage – Reinsurance – U.S.A.

10. Terrorism as defined in the attached Terrorism Exclusion.

11. Mold unless directly resulting from an otherwise covered peril.

12. Loss and/or damage and/or costs and/or expenses arising from seepage and/or pollution and/or contamination, other than contamination from smoke.  Nevertheless, this exclusion does not preclude payment of the cost of removing debris of property

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damaged by a loss otherwise covered hereunder, subject always to a limit of 25.0% of the Company’s property loss under the applicable original Policy.

13. Financial guarantee and insolvency.

14. Loss or damage to overhead transmission and distribution lines, including supporting structures, of electrical companies, telephone companies, and cable companies.  This exclusion shall not apply, however, to transmission and distribution lines and their supporting structures located on the property of any original insured or within 1,000 feet thereof.

15. Losses excluded by the attached Communicable Disease Exclusion (Property Reinsurance).

16. Loss Excluded by the attached Cyber Loss Limited Exclusion Clause (Property Treaty Reinsurance).

17. Policies issued covering risks located in the state of Florida.

B. With the exception of subparagraphs A(8), A(9), A(10) and A(13) above, should any judicial, regulatory or legislative entity having legal jurisdiction invalidate any exclusion on the Company's Policy, any amount of loss for which the Company is liable because of such invalidation will not be excluded hereunder.

C. Except as respects exclusions A(8), A(9), A(10) and A(13), if the Company inadvertently issues a Policy falling within the scope of one or more of the exclusions, such Policy shall be covered hereunder, provided that the Company issues, or causes to be issued, the required notice of cancellation within 30 days after a member of the executive or managerial staff at the Company’s home office having underwriting authority in the class of business involved becomes aware that the Policy applies to excluded classes, unless the Company is prevented from canceling said Policy within such period by applicable statute or regulation, in which case such Policy shall be covered hereunder until the earliest date on which the Company may cancel.

ARTICLE 7

SPECIAL ACCEPTANCE

Business that is not within the scope of this Contract may be submitted to the Reinsurer for special acceptance hereunder, and such business, if accepted by the Reinsurer shall be covered hereunder, subject to the terms and conditions of this Contract, except as modified by the special acceptance.  The Reinsurer shall be deemed to have accepted a risk, if it has not responded within five business days after receiving the underwriting information on such risk.  Any renewal of a special acceptance agreed to for a predecessor contract to this Contract, shall automatically be covered hereunder.

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ARTICLE 8

Premium

A. The Company shall pay the Reinsurer a premium of [$*****] for the term of this Contract, payable to the Reinsurer by the Company on June 1, 2021.

B. The Company shall furnish the Reinsurer with such reasonably available information as may be reasonably required by the Reinsurer for completion of the Reinsurer’s financial statements.

ARTICLE 9

Reinstatement

Loss payments under this Contract shall reduce the limit of coverage afforded by the amounts paid, but the limit of coverage shall be reinstated from the time of the occurrence of the loss, and for each amount so reinstated, the Company agrees to pay, simultaneously with the Reinsurer’s loss payment, an additional premium calculated at pro rata of the Reinsurer’s premium for the term of this Contract, being pro rata only as to the fraction of the Reinsurer’s limit of liability hereunder (i.e., the fraction of [$*****]) so reinstated.  Nevertheless, the Reinsurer’s liability shall not exceed such limit(s) in respect of any one Loss Occurrence, nor the applicable limit(s) in respect of all Loss Occurrences commencing during the term of this Contract, as set forth in the Retention and Limit Article.

ARTICLE 10

Definitions

A. 1.“Ultimate Net Loss” means the actual loss paid by the Company or which the Company becomes liable to pay, such loss to include Loss Adjustment Expense, 100% of any Extra Contractual Obligation and 100% of any Loss in Excess of Policy Limits as defined in the Extra Contractual Obligations/Excess of Policy Limits Article.  In no event, however, shall more than 25% of “Ultimate Net Loss” for any one Loss Occurrence be comprised of Extra Contractual Obligations and Loss in Excess of Policy Limits.

2. Salvages and all recoveries (including amounts due from all reinsurances that inure to the benefit of this Contract, whether recovered or not), shall be first deducted from such loss to arrive at the amount of liability attaching hereunder.

3. All salvages, recoveries or payments recovered or received subsequent to loss settlement hereunder shall be applied as if recovered or received prior to the aforesaid settlement, and all necessary adjustments shall be made by the parties hereto.

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4. The Company shall be deemed to be “liable to pay” a loss when a judgment has been rendered that the Company does not plan to appeal, and/or the Company has obtained a release, and/or the Company has accepted a proof of loss, and/or the Company has made a commitment to pay, and/or the Company has scheduled the payment of a loss.

5. Nothing in this clause shall be construed to mean that losses are not recoverable hereunder until the Company’s “Ultimate Net Loss” has been ascertained.

B. “Loss Adjustment Expense” means costs and expenses incurred by the Company in connection with the investigation, appraisal, adjustment, settlement, litigation, defense or appeal of a specific claim or loss, or alleged loss, including but not limited to:

1. court costs;

2. costs of supersedeas and appeal bonds;

3. monitoring counsel expenses;

4. legal expenses and costs incurred in connection with coverage questions and legal actions connected thereto, including but not limited to declaratory judgment actions;

5. post-judgment interest;

6. pre-judgment interest, unless included as part of an award or judgment;

7. a pro rata share of salaries and expenses of Company field employees, calculated in accordance with the time occupied in adjusting such loss, and expenses of other Company employees who have been temporarily diverted from their normal and customary duties and assigned to the field adjustment of losses covered by this Contract; and

8. subrogation, salvage and recovery expenses.

“Loss Adjustment Expense” does not include salaries and expenses of the Company’s employees, except as provided in subparagraph (7) above, and office and other overhead expenses.

C. 1.“Loss Occurrence” means the sum of all individual losses directly occasioned by any one disaster, accident or loss or series of disasters, accidents or losses arising out of one event.  However, the duration and extent of any one “Loss Occurrence” shall be limited to all individual losses sustained by the Company occurring during any period of 168 consecutive hours arising out of and directly occasioned by the same event except that the term “Loss Occurrence” shall be further defined as follows:

a. As regards any “Named Storm,” all individual losses sustained by the Company arising out of and directly occasioned by such “Named Storm,” without regard to the limitations of duration and extent set forth above.  “Named Storm” means any storm or storm system declared by the US National Hurricane Center, US Central

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Pacific Hurricane Center, US Weather Prediction Center, or their successor organizations, all being  divisions of the US National Weather Service to be a tropical storm or hurricane, and any successors thereof.  A storm or storm system that merges with a “Named Storm” shall be considered part of that “Named Storm,” once it has merged.  A “Named Storm” shall be deemed to begin at the effective time and date of the first watch, warning or other official advisory applicable to such tropical storm or hurricane issued by the above referenced governmental meteorological agencies.  A “Named Storm” shall be deemed to end 72 hours after the cancellation of the last watch, warning or other official advisory applicable to such tropical storm, hurricane or successor, issued by the above referenced governmental meteorological agencies irrespective of the duration of the timing or spacing between such watches, warnings or other official advisories.  If two or more storms are assigned different names by the above referenced governmental meteorological agencies, each of those storms shall constitute a separate event for purposes of this definition.

b. As regards windstorm, hail, tornado, cyclone, including ensuing collapse and water damage other than “Named Storm,” all individual losses sustained by the Company occurring during any period of 96 consecutive hours arising out of and directly occasioned by the same event.

c. As regards riot, riot attending a strike, civil commotion, vandalism and malicious mischief, all individual losses sustained by the Company occurring during any period of 96 consecutive hours arising out of and directly occasioned by the same event. The maximum duration of 96 consecutive hours may be extended in respect of individual losses that occur beyond such 96 consecutive hours during the continued occupation of an assured’s premises by strikers, provided such occupation commenced during the aforesaid period.

d. As regards earthquake and fire following directly occasioned by the earthquake, those earthquake losses and individual fire losses that commence during the period of 168 consecutive hours may be included in the Company’s “Loss Occurrence.”

e. As regards any related weather conditions involving snow, sleet, freezing rain, freeze, ice, winter weather, and wind losses related to such conditions, all individual losses sustained by the Company, that occur during any period of 168 consecutive hours arising out of and directly occasioned by the same event.

f. As regards firestorms, brush fires and other fires or series of fires, irrespective of origin (except for fires covered in subparagraphs (c) and (d) above) which spread through trees, grassland or other vegetation, all individual losses sustained by the Company occurring during any period of 168 consecutive hours within a 150-mile radius of any fixed point selected by the Company may be included in the Company’s “Loss Occurrence.” However, an individual loss subject to this subparagraph cannot be included in more than one “Loss Occurrence”.

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2. Except as provided in subparagraph (1)(a) above:

a. The Company may choose the date and time when any such period of consecutive hours commences provided that it is not earlier than the date and time of the occurrence of the first recorded individual loss sustained by the Company arising out of that disaster, accident or loss.

b. Only one period of consecutive hours shall apply with respect to one event, except that, as respects those “Loss Occurrences” referred to in subparagraph (1)(c) above, if the disaster, accident or loss occasioned by the event is of greater duration than 96 consecutive hours, then the Company may divide that disaster, accident or loss into two or more “Loss Occurrences” provided no two periods overlap and no individual loss is included in more than one such period and provided that no period commences earlier than the date and time of the occurrence of the first recorded individual loss sustained by the Company arising out of that disaster, accident or loss.

3. Losses arising from a combination of two or more perils as a result of the same event shall be considered as having arisen from one “Loss Occurrence.”  Furthermore, all losses arising from an event involving a combination of losses described in subparagraphs (1)(a) and (1)(b) may be considered as having arisen from one “Loss Occurrence.”  Notwithstanding the foregoing, the hourly limitations as stated above shall not be exceeded as respects the applicable perils, and, except as respects those “Loss Occurrences” involving a “Named Storm” referred to in subparagraph (1)(a) above, no single “Loss Occurrence” shall encompass a time period greater than 168 consecutive hours.

D. “Policy” means any binder, policy, or contract of insurance or reinsurance issued, accepted or held covered provisionally or otherwise, by or on behalf of the Company.

ARTICLE 11

EXTRA CONTRACTUAL OBLIGATIONS/EXCESS OF POLICY LIMITS

A. This Contract shall cover Extra Contractual Obligations, as provided in the definition of Ultimate Net Loss.  “Extra Contractual Obligations” shall be defined as those liabilities not covered under any other provision of this Contract and that arise from the handling of any claim on business covered hereunder, such liabilities arising because of, but not limited to, the following:  failure by the Company to settle within the Policy limit, or by reason of alleged or actual negligence, fraud or bad faith in rejecting an offer of settlement or in the preparation of the defense or in the trial of any action against its insured or reinsured or in the preparation or prosecution of an appeal consequent upon such action.

B. This Contract shall cover Loss in Excess of Policy Limits, as provided in the definition of Ultimate Net Loss.  “Loss in Excess of Policy Limits” shall be defined as Loss in excess of the Policy limit, having been incurred because of, but not limited to, failure by the Company

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to settle within the Policy limit or by reason of alleged or actual negligence, fraud or bad faith in rejecting an offer of settlement or in the preparation of the defense or in the trial of any action against its insured or reinsured or in the preparation or prosecution of an appeal consequent upon such action.

C. An Extra Contractual Obligation and/or Loss in Excess of Policy Limits shall be deemed to have occurred on the same date as the loss covered under the Company’s Policy, and shall constitute part of the original loss.

D. For the purposes of the Loss in Excess of Policy Limits coverage hereunder, the word “Loss” shall mean any amounts for which the Company would have been contractually liable to pay had it not been for the limit of the original Policy.

E. Loss Adjustment Expense in respect of Extra Contractual Obligations and/or Loss in Excess of Policy Limits shall be covered hereunder in the same manner as other Loss Adjustment Expense.

F. However, this Article shall not apply where the loss has been incurred due to final legal adjudication of fraud of a member of the Board of Directors or a corporate officer of the Company acting individually or collectively or in collusion with any individual or corporation or any other organization or party involved in the presentation, defense or settlement of any claim covered hereunder.

G. In no event shall coverage be provided to the extent not permitted under law.

ARTICLE 12

NET RETAINED LIABILITY

A. This Contract applies only to that portion of any loss that the Company retains net for its own account (prior to deduction of any reinsurance that inures solely to the benefit of the Company).

B. The amount of the Reinsurer’s liability hereunder in respect of any loss or losses shall not be increased by reason of the inability of the Company to collect from any other reinsurer(s), whether specific or general, any amounts that may have become due from such reinsurer(s), whether such inability arises from the insolvency of such other reinsurer(s) or otherwise.

ARTICLE 13

OTHER REINSURANCE

The Company shall be permitted to carry in force other reinsurance, recoveries under which shall inure to the benefit of this Contract.

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ARTICLE 14

Original Conditions

All reinsurance under this Contract shall be subject to the same terms, conditions, waivers and interpretations, and to the same modifications and alterations as the respective Policies of the Company.  However, in no event shall this be construed in any way to provide coverage outside the terms and conditions set forth in this Contract.

ARTICLE 15

NO THIRD PARTY RIGHTS

This Contract is solely between the Company and the Reinsurer, and in no instance shall any insured, claimant or other third party have any rights under this Contract except as may be expressly provided otherwise herein.

ARTICLE 16

Notice of Loss and Loss Settlements

A. The Company shall advise the Reinsurer promptly if paid and estimated Ultimate Net Loss is in excess of 75% of the Company’s retention, or if, in the opinion of the Company, such Ultimate Net Loss may result in a claim hereunder.  Thereafter, the Company shall advise the Reinsurer, at least monthly, of all subsequent developments thereto that may materially affect the position of the Reinsurer.

B. The Company alone and at its full discretion shall adjust, settle or compromise all claims and losses.

C. As respects losses subject to this Contract, all loss settlements made by the Company, whether under strict Policy terms or by way of compromise, and any Extra Contractual Obligations and/or Loss in Excess of Policy Limits, shall be binding upon the Reinsurer.  The Reinsurer agrees to pay or allow, as the case may be, its share of each such settlement immediately upon receipt of reasonable evidence of the amount paid by the Company or that the Company estimates it will pay within the next 14 days.  Within 30 days after receipt of the Reinsurer’s payment, the Company shall report to the Reinsurer the Reinsurer’s payment, minus the Reinsurer’s share of losses subject to this Contract that the Company has paid, or become liable to pay, as of the date of the report.  Any positive difference shall be remitted to the Reinsurer with the Company’s report.

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ARTICLE 17

LATE PAYMENTS

A. In the event any payment due either party is not received by the payment due date, the party to whom payment is due may, by written notification, require the debtor party to pay, and the debtor party agrees to pay, an interest penalty on the amount past due calculated for each such payment on the last business day of each month as follows:

1. The number of full days that have expired since the overdue date or the last monthly calculation, whichever the lesser; times

2. 1/365th of the sum of the six-month United States Treasury Bill rate as quoted in The Wall Street Journal on the first business day of the month for which the calculation is made, plus 1%; times

3. The amount past due, including accrued interest.

Interest shall accumulate until payment of the original amount due plus interest penalties have been received.

B. The due date shall, for purposes of this Article, be determined as follows:

1. Payments from the Reinsurer to the Company shall be due on the date on which the demand for payment (including delivery of bordereaux or quarterly or monthly reports) is received by the Reinsurer, and shall be overdue 30 days thereafter.

2. Payments from the Company to the Reinsurer shall be due on the dates specified within this Contract.  Payments shall be overdue 30 days thereafter except for the first installment of premium, if applicable, which shall be overdue 60 days from inception or 30 days from final line-signing, whichever the later.  Reinstatement premium, if applicable, shall have as a due date the date when the Company receives payment for the claim giving rise to such reinstatement premium, and payment shall be overdue 30 days thereafter. In the event a due date is not specifically stated for a given payment, the overdue date shall be 30 days following the date of billing.

C. If the information contained in the Company’s demand for payment is insufficient or not in accordance with the conditions of this Contract, then within 30 days the Reinsurer shall request from the Company all additional information necessary to validate its claim and the payment due date as defined in paragraph B shall be deemed to be the date upon which the Reinsurer received the requested additional information.  This paragraph is only for the purpose of establishing when a payment is overdue, and shall not alter the provisions of the Notice of Loss and Loss Settlements Article or other pertinent contractual stipulations.

D. In the event arbitration is necessary to settle a dispute, the panel shall have the authority to make a determination awarding interest to the prevailing party.  Interest, if any, awarded by the panel shall supersede the interest amounts outlined herein.

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E. Any interest owed pursuant to this Article may be waived by the party to which it is owed.  Waiver of such interest, however, shall not affect the waiving party’s rights to other interest amounts due as a result of this Article.

ARTICLE 18

OFFSET

Each party hereto shall have, and may exercise at any time and from time to time, the right to offset any and all balances due from a party to the other arising under this Contract.  In the event of the insolvency of a party hereto, offsets shall only be allowed in accordance with the provisions of any applicable law governing offset entitlement.

ARTICLE 19

Currency

A. Where the word “Dollars” and/or the sign “$” appear in this Contract, they shall mean United States Dollars, and all payments hereunder shall be in United States Dollars.

B. For purposes of this Contract, where the Company receives premiums or pays losses in currencies other than United States Dollars, such premiums or losses shall be converted into United States Dollars at the actual rates of exchange at which these premiums or losses are entered in the Company’s books.

ARTICLE 20

OBLIGATIONS AND COLLATERAL RELEASE

A. The Reinsurer will establish a trust fund (“Trust Fund”) for its Obligations (as defined herein) hereunder, pursuant to that certain Trust Agreement by and between the Reinsurer, the Company, and Truist Bank (the “Trust Agreement”).  The Trust Fund shall be funded pursuant to the provisions hereof.  Collateral deposited in the Trust Fund may be withdrawn on the terms set forth herein and in the Trust Agreement.  The Trust Agreement shall be at all times in compliance with the relevant provisions of the Insurance Code of the Company’s state of domicile and the administrative regulations adopted by that state’s insurance department, in order for the Company to receive, full statutory financial statement credit for reinsurance provided under this Contract.  Collateral deposited in the Trust Fund may be withdrawn at any time, notwithstanding the other provisions of this Contract, and utilized and applied by the Company or any successor, by operation of law, of the Company, including, without limitation, any liquidator, rehabilitator, receiver or conservator of the Company, without diminution because of insolvency on the part of the Company or the Reinsurer, for the following purposes:

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1. to reimburse the Company for the Reinsurer’s Obligations, the payment of which is due under the terms of this Contract and that has not been otherwise paid;

2. to make refund of any sum that is in excess of 102% of the amount required to pay the Reinsurer’s Obligations under this Contract;

3. to fund an account with the Company for the Reinsurer’s Obligations.  Such cash deposit shall be held in an interest-bearing account separate from the Company’s other assets, and interest thereon not in excess of the prime rate shall accrue to the benefit of the Reinsurer;

4. to pay the Reinsurer’s share of any other amounts the Company claims are due under this Contract.

B. The term “Obligations” shall mean during the term of the Contract, 100% of the limit of the Reinsurer’s liability hereunder less any unpaid minimum premium (net of brokerage and Federal Excise Tax as applicable) and aggregate amounts previously paid by the Reinsurer in respect of claims under this Contract.  Upon expiration of the Contract, the term “Obligations” shall mean the amount as determined in accordance with paragraph D below.

C. If, at expiration of this Contract, the Company, in its commercially reasonable judgment, believes that no claims will impact this Contract, the Company will so notify the Reinsurer and shall fully and finally release from the Trust Fund all collateral contained therein.

D. If, at the expiration of this Contract, the Company, in its commercially reasonable judgment, believes that the Company may have a claim hereunder, the Company shall estimate the amount of reinstatement premium due under this Contract based on the reinstatement premium payable under the contract identified in the Business Covered article (the Underlying Contract”) as follows, unless otherwise mutually agreed:

1. The Company shall determine the sum of the following for the Underlying Contract, as of this Contract expiration date:

a. losses and loss adjustment expense paid by the Company;

b. reserves for losses reported and outstanding; and

c. reserves for losses incurred but not reported;

2. The Company shall then calculate the estimated reinstatement premium due on the Underlying Contract and such amount shall constitute the Reinsurer’s Obligations

3. The amount of the estimated reinstatement premium due on the Underlying Contract, measured as of the applicable determination date (as specified in paragraph E below), shall be multiplied by a factor, based upon the number of months, which have elapsed on such determination date since expiration of this Contract, as follows:

a. From 0 to 12 months from expiration of this Contract, [*****%], else;

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b. From 13 to 24 months from expiration of this Contract, [*****%], else;

c. From 25 to 36 months from expiration of this Contract, [*****%]; and

d. From 37 to 67 months from expiration of this Contract, [*****%].

As of 67 months after expiration of this Contract (the “Reporting Period”), the amount determined in subparagraphs 1, 2 and 3 above for such date shall be considered the definitive Final Limit for each such Loss Occurrence for which the Company and the Reinsurer agree to commute this Contract with final settlement on that basis. 

E. The procedure for determining the amount of collateral required to fund the Reinsurer’s Obligations as set forth in paragraph D above, shall be followed each and every time, if in the opinion of the Company, there are materially new estimates regarding its losses, and each quarter-end, until all the Reinsurer’s Obligations have been extinguished or the Reporting Period is over, whichever is earlier.  The information to be used for the determinations of the Reinsurer’s Obligations shall be as reflected on the Company’s official books and records.

F. The Company agrees to release from the Trust Fund all collateral in excess of 102% of the amount required to pay the Reinsurer’s Obligations for its share of actual and possible claims, as determined in accordance with paragraph A, above within 10 Business Days of the date of such determination.  “Business Day” shall be defined as a day (other than a Saturday or a Sunday) on which banks are open for commercial business in Bermuda and in New York, New York, U.S.A.

G. Notwithstanding the foregoing, if the Reinsurer is licensed as a segregated account company, the Company agrees and acknowledges that there shall only be recourse to the Segregated Trust Account assets, and in the event of the exhaustion of the Segregated Trust Account assets there shall be no recourse by any party for any claims, payments, other expenses or fees whatsoever, howsoever arising pursuant to this Contract, to the assets which are allocated to any other segregated account of the Reinsurer or to the general account of the Reinsurer.

H. At the end of the Reporting Period, this Contract will be commuted based on the Reinsurer’s Obligations at that point.  The Company agrees to terminate the Trust Account, and all remaining collateral will be released to the Company and/or the Reinsurer, as applicable, and both parties shall be released from any further obligations under this Contract.

ARTICLE 21

TAXES

A. In consideration of the terms under which this Contract is issued, the Company undertakes not to claim any deduction of the premium hereon when making Canadian tax returns or when making tax returns, other than Income or Profits Tax returns, to any state or territory of the United States of America or to the District of Columbia.

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B. 1.Each Subscribing Reinsurer has agreed to allow, for the purpose of paying the Federal Excise Tax, the applicable percentage of the premium payable hereon (as imposed under the Internal Revenue Code) to the extent such premium is subject to Federal Excise Tax.

2. In the event of any return of premium becoming due hereunder, the Subscribing Reinsurer shall deduct the applicable percentage of the premium from the amount of the return, and the Company or its agent should take steps to recover the Tax from the U.S. Government.

ARTICLE 22

ACCESS TO RECORDS

A. The Reinsurer or its duly authorized representatives shall have the right to visit the offices of the Company to inspect, examine, audit, and verify any of the policy, accounting or claim files (“Records”) relating to business reinsured under this Contract during regular business hours after giving five working days’ prior notice.  This right shall be exercisable during the term of this Contract or after the expiration of this Contract.  Notwithstanding the above, the Reinsurer shall not have any right of access to the Records of the Company if it is not current in all undisputed payments due the Company.

B. Notwithstanding the above, the Company reserves the right to withhold from the Reinsurer any Privileged Documents.  However, the Company shall permit and not object to the Reinsurer’s access to Privileged Documents in connection with the underlying claim reinsured hereunder following final settlement or final adjudication of the case or cases involving such claim, with prejudice against all claimants and all parties to such adjudications; the Company may defer release of such Privileged Documents if there are subrogation, contribution, or other third party actions with respect to that claim or case, and the Company’s defense might be jeopardized by release of such Privileged Documents.  In the event that the Company seeks to defer release of such Privileged Documents, it shall, in consultation with the Reinsurer, take other steps as reasonably necessary to provide the Reinsurer with the information it reasonably requires to indemnify the Company without causing a loss of such privileges or protections.  The Reinsurer shall not have access to Privileged Documents relating to any dispute between the Company and the Reinsurer.

C. For purposes of this Article:

1. “Privileged Documents” means any documents that are Attorney-Client Privilege Documents and/or Work Product Privilege Documents.

2. “Attorney-Client Privilege Documents” means communications of a confidential nature between (a) the Company, or anyone retained by or at the direction of the Company, or its in‑house or outside legal counsel, or anyone in the control of such legal counsel, and (b) any in-house or outside legal counsel, if such communications relate

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to legal advice being sought by the Company and/or contain legal advice being provided to the Company.

3. “Work Product Privilege Documents” means communications, written materials and tangible things prepared by or for in-house or outside counsel, or prepared by or for the Company, in anticipation of or in connection with litigation, arbitration, or other dispute resolution proceedings.

ARTICLE 23

CONFIDENTIALITY

A. The Reinsurer hereby acknowledges that the documents, information and data provided to it by the Company, whether directly or through an authorized agent, in connection with the placement and execution of this Contract (“Confidential Information”) are proprietary and confidential to the Company.  Confidential Information shall not include documents, information or data that the Reinsurer can show:

1. are publicly known or have become publicly known through no unauthorized act of the Reinsurer;

2. have been rightfully received from a third person without obligation of confidentiality; or

3. were known by the Reinsurer prior to the placement of this Contract without an obligation of confidentiality.

B. Absent the written consent of the Company, the Reinsurer shall not disclose any Confidential Information to any third parties, including any affiliated companies (except to the extent necessary to enable affiliated companies or third parties engaged by the Reinsurer to perform services related to this Contract on behalf of the Reinsurer), except:

1. when required by retrocessionaires as respects business ceded to this Contract;

2. when required by regulators performing an audit of the Reinsurer’s records and/or financial condition; or

3. when required by external auditors performing an audit of the Reinsurer’s records in the normal course of business.

Further, the Reinsurer agrees not to use any Confidential Information for any purpose not related to the performance of its obligations or enforcement of its rights under this Contract.

C. Notwithstanding the above, in the event that the Reinsurer is required by court order, other legal process or any regulatory authority to release or disclose any or all of the Confidential Information, the Reinsurer agrees to provide the Company with written notice of same at

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least 10 days prior to such release or disclosure and to use its best efforts to assist the Company in maintaining the confidentiality provided for in this Article.

D. The provisions of this Article shall extend to the officers, directors and employees of the Reinsurer and its affiliates, and shall be binding upon their successors and assigns.

ARTICLE 24

Indemnification and Errors and Omissions

A. The Reinsurer is reinsuring, subject to the terms and conditions of this Contract, the obligations of the Company under any Policy.  The Company shall be the sole judge as to:

1. what shall constitute a claim or loss covered under any Policy;

2. the Company’s liability thereunder; and

3. the amount or amounts that it shall be proper for the Company to pay thereunder.

B. The Reinsurer shall be bound by the judgment of the Company as to the obligation(s) and liability(ies) of the Company under any Policy.

C. Any inadvertent error, omission or delay in complying with the terms and conditions of this Contract shall not be held to relieve either party hereto from any liability that would attach to it hereunder if such error, omission or delay had not been made, provided such error, omission or delay is rectified immediately upon discovery.

D. Nothing in this Article shall be construed to override any of the other terms and conditions of this Contract.

ARTICLE 25

Insolvency

A. If more than one reinsured company is referenced within the definition of “Company” in the Preamble to this Contract, this Article shall apply severally to each such company.  Further, this Article and the laws of the domiciliary state shall apply in the event of the insolvency of any company covered hereunder.  In the event of a conflict between any provision of this Article and the laws of the domiciliary state of any company covered hereunder, that domiciliary state’s laws shall prevail.

B. In the event of the insolvency of the Company, this reinsurance (or the portion of any risk or obligation assumed by the Reinsurer, if required by applicable law) shall be payable directly to the Company, or to its liquidator, receiver, conservator or statutory successor, either:  (1) on the basis of the liability of the Company, or (2) on the basis of claims filed and allowed in the liquidation proceeding, whichever may be required by applicable statute, without diminution because of the insolvency of the Company or because the liquidator, receiver,

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conservator or statutory successor of the Company has failed to pay all or a portion of any claim.  It is agreed, however, that the liquidator, receiver, conservator or statutory successor of the Company shall give written notice to the Reinsurer of the pendency of a claim against the Company indicating the Policy or bond reinsured, which claim would involve a possible liability on the part of the Reinsurer within a reasonable time after such claim is filed in the conservation or liquidation proceeding or in the receivership, and that during the pendency of such claim, the Reinsurer may investigate such claim and interpose, at its own expense, in the proceeding where such claim is to be adjudicated any defense or defenses that it may deem available to the Company or its liquidator, receiver, conservator or statutory successor.  The expense thus incurred by the Reinsurer shall be chargeable, subject to the approval of the court, against the Company as part of the expense of conservation or liquidation to the extent of a pro rata share of the benefit that may accrue to the Company solely as a result of the defense undertaken by the Reinsurer.

C. Where two or more reinsurers are involved in the same claim and a majority in interest elect to interpose defense to such claim, the expense shall be apportioned in accordance with the terms of this reinsurance Contract as though such expense had been incurred by the Company.

D. As to all reinsurance made, ceded, renewed or otherwise becoming effective under this Contract, the reinsurance shall be payable as set forth above by the Reinsurer to the Company or to its liquidator, receiver, conservator or statutory successor, (except as provided by Section 4118(a)(1)(A) of the New York Insurance Law, provided the conditions of 1114(c) of such law have been met, if New York law applies) or except (1) where the Contract specifically provides another payee in the event of the insolvency of the Company, or (2) where the Reinsurer, with the consent of the direct insured or insureds, has assumed such Policy obligations of the Company as direct obligations of the Reinsurer to the payees under such Policies and in substitution for the obligations of the Company to such payees.  Then, and in that event only, the Company, with the prior approval of the certificate of assumption on New York risks by the Superintendent of Financial Services of the State of New York, or with the prior approval of such other regulatory authority as may be applicable, is entirely released from its obligation and the Reinsurer shall pay any loss directly to payees under such Policy.

ARTICLE 26

RUN-OFF REINSURER

A. “Run-off Reinsurer” means any Subscribing Reinsurer that:

1. has been ordered by a state insurance department or other legal authority to cease writing business, or has been placed under regulatory supervision or in rehabilitation; or

2. has ceased reinsurance underwriting operations; or

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3. has transferred its claims-paying authority to an unaffiliated entity; or

4. engages in a process of Scheme of Arrangement or similar procedure related to this Contract, including but not limited to an insurance business transfer scheme pursuant to Part VII of the Financial Services and Markets Act 2000 (U.K.), as may be amended from time to time; or

5. in any other way has assigned its interests or delegated its obligations under this Contract to an unaffiliated entity.

Notwithstanding the foregoing, agreement by a Lloyd’s syndicate to follow claim settlements procedures under Lloyd’s Claims Scheme (Combined) shall not constitute a transfer of its claims-paying authority, for purposes of subparagraphs (3) and (5) of this paragraph.

B. Notwithstanding any other provision of this Contract, in the event that a Subscribing Reinsurer becomes a Run-off Reinsurer at any time, the Company may elect, by giving written notice to the Run-off Reinsurer at any time thereafter, that all or any of the following shall apply to the Run-off Reinsurer’s participation hereunder:

1. Should the Run-off Reinsurer fail to pay amounts due hereunder, the interest penalty specified in the Late Payments Article shall be increased by 0.5% for each 30 days that a payment is past due, subject to a maximum increase of 7.0%.

2. The Run-off Reinsurer’s liability for losses for Policies covered by this Contract shall be commuted.  In the event the Company and the Run-off Reinsurer cannot agree on the commutation amount of the Run-off Reinsurer’s liability under such Policies, they shall appoint an actuary and/or appraiser to assess such liability and shall share equally any expense of the actuary and/or appraiser.  If the Company and the Run-off Reinsurer cannot agree on an actuary and/or appraiser, the Company and the Run-off Reinsurer each shall nominate three individuals, of whom the other shall decline two, and the final appointment shall be made by drawing lots.  Payment by the Run-off Reinsurer of the amount of liability ascertained shall constitute a complete and final release of both parties under this Contract.

3. The Run-off Reinsurer shall have no right of access to the Records of the Company if the Run-off Reinsurer has denied payment of any claim hereunder or there is a pending arbitration between the Company and the Run-off Reinsurer regarding any claim hereunder.  A reservation of rights shall be considered a denial of a claim.  Notwithstanding the above, the Run-off Reinsurer shall continue to have access to Records of the Company for any claim for which it has raised a query within 30 days of its receipt of a billing, but any inspection of Records must be completed within 90 days of receipt of billing or access will be deemed waived.

4. The provisions of the Arbitration Article shall not apply.  

C. The Company’s waiver of any rights provided in this Article is not a waiver of that right or other rights at a later date.

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ARTICLE 27

Arbitration

A. Any dispute arising out of the interpretation, performance or breach of this Contract, including the formation or validity thereof, shall be submitted for decision to a panel of three arbitrators.  Notice requesting arbitration shall be in writing and sent certified or registered mail, return receipt requested.

B. One arbitrator shall be chosen by each party and the two arbitrators shall then choose an impartial third arbitrator who shall preside at the hearing.  If either party fails to appoint its arbitrator within 30 days after being requested to do so by the other party, the latter, after 10 days’ prior notice by certified or registered mail of its intention to do so, may appoint the second arbitrator.

C. If the two arbitrators do not agree on a third arbitrator within 60 days of their appointment, the third arbitrator shall be chosen in accordance with the procedures for selecting the third arbitrator in force on the date the arbitration is demanded, established by the AIDA Reinsurance and Insurance Arbitration Society – U.S. (ARIAS).  The arbitrators shall be persons knowledgeable about insurance and reinsurance who have no personal or financial interest in the result of the arbitration.  If a member of the panel dies, becomes disabled or is otherwise unwilling or unable to serve, a substitute shall be selected in the same manner as the departing member was chosen and the arbitration shall continue.

D. Within 30 days after all arbitrators have been appointed, the panel shall meet and determine timely periods for briefs, discovery procedures and schedules of hearings.

E. The panel shall be relieved of all judicial formality and shall not be bound by the strict rules of procedure and evidence.  Notwithstanding anything to the contrary in this Contract, the arbitrators may at their discretion, consider underwriting and placement information provided by the Company to the Reinsurer, as well as any correspondence exchanged by the parties that is related to this Contract.  The arbitration shall take place in Tampa, Florida, or at such other place as the parties shall agree.  The decision of any two arbitrators shall be in writing and shall be final and binding.  The panel is empowered to grant interim relief as it may deem appropriate.

F. The panel shall interpret this Contract as an honorable engagement rather than as merely a legal obligation and shall make its decision considering the custom and practice of the applicable insurance and reinsurance business as promptly as possible after the hearings.  Judgment upon an award may be entered in any court having jurisdiction thereof.

G. Each party shall bear the expense of its own arbitrator and shall jointly and equally bear with the other party the cost of the third arbitrator.  The remaining costs of the arbitration shall be allocated by the panel.  The panel may, at its discretion, award such further costs and expenses as it considers appropriate, including but not limited to attorneys’ fees, to the extent permitted by law.

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ARTICLE 28

Expedited Arbitration

A. Notwithstanding the provisions of the Arbitration Article, in the event an amount in dispute hereunder $1,000,000 or less, the parties will submit to an expedited arbitration process with the use of a single arbitrator.  The arbitrator will be chosen in accordance with the procedures for selecting an arbitrator in force on the date the arbitration is demanded, established by the AIDA Reinsurance and Insurance Arbitration Society - U.S. (ARIAS).

B. Each party’s case will be submitted to the arbitrator within 100 calendar days of the date of determination of the arbitrator.  Discovery will be limited to exchanging only those documents directly relating to the issue in dispute, subject to a limit of two discovery depositions from each party, unless otherwise authorized by the arbitrator upon a showing of good cause.

C. Within 120 calendar days of the date of determination of the arbitrator, the hearing will be completed and a written award will be issued by the arbitrator.  As the parties agree that time is of the essence, the sole arbitrator does not have the authority to lengthen the schedule, absent agreement of both parties.  The arbitrator will have all the powers conferred on the arbitration panel as provided in the Arbitration Article, and said Article will apply to all matters not specifically addressed above.

ARTICLE 29

SERVICE OF SUIT

A. This Article applies only to those Subscribing Reinsurers not domiciled in the United States of America, and/or not authorized in any state, territory and/or district of the United States of America where authorization is required by insurance regulatory authorities.

B. This Article shall not be read to conflict with or override the obligations of the parties to arbitrate their disputes as provided for in the Arbitration Article.  This Article is intended as an aid to compelling arbitration or enforcing such arbitration or arbitral award, not as an alternative to the Arbitration Article for resolving disputes arising out of this Contract.

C. In the event of the failure of the Reinsurer to perform its obligations hereunder, the Reinsurer, at the request of the Company, shall submit to the jurisdiction of a court of competent jurisdiction within the United States.  Nothing in this Article constitutes or should be understood to constitute a waiver of the Reinsurer’s rights to commence an action in any court of competent jurisdiction in the United States, to remove an action to a United States District Court, or to seek a transfer of a case to another court as permitted by the laws of the United States or of any state in the United States.  The Reinsurer, once the appropriate court is selected, whether such court is the one originally chosen by the Company and accepted by the Reinsurer or is determined by removal, transfer, or otherwise, as provided for above, shall comply with all requirements necessary to give said court jurisdiction and, in any suit

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instituted against the Reinsurer upon this Contract, shall abide by the final decision of such court or of any appellate court in the event of an appeal.

D. Service of process in such suit may be made upon:

1. as respects Underwriting Members of Lloyd’s, London: Lloyd’s America, Inc., Attention: Legal Department, 280 Park Avenue, East Tower, 25^th Floor, New York, New York 10017;

2. as respects any other Subscribing Reinsurer: Messrs. Mendes and Mount, 750 Seventh Avenue, New York, New York 10019-6829, or another party specifically designated in the Subscribing Reinsurer’s Interests and Liabilities Agreement attached hereto.  

The above-named are authorized and directed to accept service of process on behalf of the Reinsurer in any such suit.

E. Further, pursuant to any statute of any state, territory or district of the United States that makes provision therefor, the Reinsurer hereby designates the Superintendent, Commissioner or Director of Insurance, or other officer specified for that purpose in the statute, or his successor or successors in office, as its true and lawful attorney upon whom may be served any lawful process in any action, suit or proceeding instituted by or on behalf of the Company or any beneficiary hereunder arising out of this Contract, and hereby designates the above-named as the person to whom the said officer is authorized to mail such process or a true copy thereof.

ARTICLE 30

GOVERNING LAW

This Contract shall be governed as to performance, administration and interpretation by the laws of the State of Florida, subject to the Limited Recourse and Bermuda regulations clauses as set out in the Limited Recourse Article, exclusive of conflict of law rules.  However, with respect to credit for reinsurance, the rules of all applicable states shall apply.

ARTICLE 31

ENTIRE AGREEMENT

This Contract sets forth all of the duties and obligations between the Company and the Reinsurer and supersedes any and all prior or contemporaneous written agreements with respect to matters referred to in this Contract.  This Contract may not be modified or changed except by an amendment to this Contract in writing signed by both parties.  However, this Article shall not be construed as limiting the admissibility of evidence regarding the formation, interpretation, purpose or intent of this Contract.

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ARTICLE 32

NON-WAIVER

The failure of the Company or the Reinsurer to insist on compliance with this Contract or to exercise any right or remedy hereunder shall not constitute a waiver of any rights contained in this Contract nor prevent either party from thereafter demanding full and complete compliance nor prevent either party from exercising such remedy in the future.

ARTICLE 33

AGENCY

For purposes of sending and receiving notices and payments required by this Contract, the reinsured company that is set forth first in the Preamble to this Contract shall be deemed the agent of all other reinsured companies referenced in the Preamble.  In no event, however, shall any reinsured company be deemed the agent of another with respect to the terms of the Insolvency Article.

ARTICLE 34

MODE OF EXECUTION

A. This Contract may be executed by:

1. an original written ink signature of paper documents;

2. an exchange of facsimile copies showing the original written ink signature of paper documents;

3. electronic signature technology employing computer software and a digital signature or digitizer pen pad to capture a person’s handwritten signature in such a manner that the signature is unique to the person signing, is under the sole control of the person signing, is capable of verification to authenticate the signature and is linked to the document signed in such a manner that if the data is changed, such signature is invalidated.

B. The use of any one or a combination of these methods of execution shall constitute a legally binding and valid signing of this Contract.  This Contract may be executed in one or more counterparts, each of which, when duly executed, shall be deemed an original.

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ARTICLE 35

LIMITED RECOURSE

A. The liability of the Reinsurer for the performance and discharge of all of its obligations, however they may arise, in relation to this Contract (together “Obligations” for purposes of this Article), shall be limited to and payable solely from the proceeds of realization of the assets of the Trust Fund established in accordance with this Contract, and accordingly there shall be no recourse to any other assets of the Reinsurer whether or not allocated to any other separate account or the general account of the Reinsurer.  In the event that the proceeds of realization of the assets of the Trust Fund are insufficient to meet all Obligations, any Obligations remaining after the application of such proceeds shall be extinguished, and the Company undertakes in such circumstances to take no further action against the Reinsurer in respect of any such Obligations. In particular, neither the Company nor any party acting on its behalf shall petition or take any steps for the winding up or receivership of the Reinsurer.

B. Notwithstanding any matter referred to herein, the Company understands and accepts that the Reinsurer acts on behalf of one or more separate accounts of Claddaugh Casualty Insurance Company Ltd. and that all corporate matters relating to the creation of the Reinsurer, capacity of the Reinsurer, operation and liquidation of the Reinsurer and any matters relating to the Reinsurer thereof shall be governed by, and construed in accordance with, the laws of Bermuda. The Company has had the opportunity to take advice and to obtain all such additional information that it considers necessary to evaluate the terms, conditions and risks of entering into this Contract with the Reinsurer.

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IN WITNESS WHEREOF, the Company has caused this Contract to be executed by its duly authorized representative(s), who also confirms the Company’s review of and agreement to be bound by the terms and conditions of the Interests and Liabilities Agreements attached to and forming part of this Contract;

On this _____ day of __________, in the year of 2021.

TYPTAP INSURANCE COMPANY

Homeowners Choice Property & Casualty Insurance Company, INC.

Signature:	Title:
Print Name:

NON-FLORIDA PROPERTY CATASTROPHE $6MXS$4M

EXCESS OF LOSS REINSURANCE CONTRACT

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POOLS, ASSOCIATIONS & SYNDICATES EXCLUSIONS CLAUSE

Section A:

This Contract excludes:

a. All business derived directly or indirectly from any Pool, Association or Syndicate which maintains its own reinsurance facilities.

b. Any Pool or Scheme (whether voluntary or mandatory) formed after March 1, 1968 for the purpose of insuring property, whether on a country-wide basis or in respect of designated areas.  This exclusion shall not apply to so-called Automobile Insurance Plans or other Pools formed to provide coverage for Automobile Physical Damage.

Section B:

1. This Contract excludes business written by the Company for the same perils, which is known at the time to be insured by, or in excess of underlying amounts placed in, any Pool, Association or Syndicate, whether by way of insurance or reinsurance, formed for the purpose of writing any of the following:

Oil, Gas or Petro-Chemical Plants

Oil or Gas Drilling Rigs and/or

Aviation Risks

2. The exclusion under paragraph 1 of this Section B does not apply:

a. Where the Total Insured Value over all interests of the risk in question is less than $250,000,000.

b. To interests traditionally underwritten as Inland Marine and/or Stock and/or Contents written on a Blanket basis.

c. To Contingent Business Interruption, except when the Company is aware that the key location is known at the time to be insured in any Pool, Association or Syndicate named above, other than as provided for under subparagraph (a).

Section C:

1. Nevertheless the Reinsurer specifically agrees that liability accruing to the Company from its participation in Residual Market Mechanisms, including but not limited to the following, for all perils otherwise protected hereunder shall not be excluded herefrom:

a. So-called “Beach and Windstorm Plans” and so-called “Coastal Pools”;

b. All “FAIR Plan” and “Rural Risk Plan” business;

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c. Louisiana Citizens Property Insurance Corporation;

d. California Earthquake Authority (“CEA”) or any similar entity.

Notwithstanding the above, assessments related to the Florida Hurricane Catastrophe Fund and Citizens Property Insurance Corporation (Florida) shall be excluded hereunder.

2. However, this reinsurance does not include any increase in such liability resulting from:

a. The inability of any other participant in such Residual Market Mechanisms to meet its liability;

b. Any claim against a Residual Market Mechanism or any participant therein, including the Company, whether by way of subrogation or otherwise, brought by or on behalf of any insolvency fund (as defined in the Exclusions Article);

c. Any assessment or surcharge levied on the policyholder and therefore not a liability of the Company;

d. The Company’s initial capital contribution to the CEA;

e. Any assessments, other than interim and regular assessments, from a Residual Market Mechanism included in subparagraph 1(c) above;

f. Any expenditure to purchase or retire bonds.

3. The Company may include in Ultimate Net Loss for any Loss Occurrence covered hereunder only the liability attributable to that Loss Occurrence.  If the relevant entity does not specify what portion of an assessment is attributable to each Loss Occurrence, the Company may include in Ultimate Net Loss in respect of each Loss Occurrence a percentage of the Company’s assessments from the relevant entity related to the calendar year in which the Loss Occurrence commenced, regardless of when assessed, such percentage to be determined by dividing the relevant entity’s losses arising from the Loss Occurrence by its total losses for the calendar year.

4. The Company will deduct from Ultimate Net Loss amounts received as recoupment of any assessment that has been included in the Ultimate Net Loss, provided the recoupment is directly allocable to the assessment (“itemized recoupment”).  The Company shall use commercially reasonable efforts to recoup such assessment.  Any amount received as an itemized recoupment of any assessment (whether under this Contract or any predecessor contract), and therefore deductible from Ultimate Net Loss, shall not be included in the subject premium of this Contract.

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However, if a state levies assessments but does not allow itemized recoupment from policyholders, instead allowing the Company to file an overall increased rate, any such premium increased thereby shall not be deemed to be a recoupment that is deductible from Ultimate Net Loss.  Any recoupment received as part of a general premium rate increase, not specifically itemized, shall be included as part of the subject premium of this Contract or a successor contract, as applicable.

NOTES: Wherever used herein the terms:

“Company” shall be understood to mean “Company”, “Reinsured”, “Reassured” or whatever other term is used in the attached reinsurance document to designate the reinsured company or companies.

“Contract” shall be understood to mean “Agreement,” “Contract,” “Policy” or whatever other term is used to designate the attached reinsurance document.

“Reinsurer” shall be understood to mean “Reinsurer,” “Reinsurers,” “Underwriters” or whatever other term is used in the attached reinsurance document to designate the reinsurer or reinsurers.

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Nuclear Incident Exclusion Clause - Physical Damage - Reinsurance - U.S.A.

1. This Reinsurance does not cover any loss or liability accruing to the Reassured, directly or indirectly, and whether as Insurer or Reinsurer, from any Pool of Insurers or Reinsurers formed for the purpose of covering Atomic or Nuclear Energy risks.

2. Without in any way restricting the operation of paragraph (1) of this clause, this Reinsurance does not cover any loss or liability accruing to the Reassured, directly or indirectly and whether as Insurer or Reinsurer, from any insurance against Physical Damage (including business interruption or consequential loss arising out of such Physical Damage) to:

I. Nuclear reactor power plants including all auxiliary property on the site, or

II. Any other nuclear reactor installation, including laboratories handling radioactive materials in connection with reactor installations, and “critical facilities” as such, or

III. Installations for fabricating complete fuel elements or for processing substantial quantities of “special nuclear material”, and for reprocessing, salvaging, chemically separating, storing or disposing of “spent” nuclear fuel or waste materials, or

IV. Installations other than those listed in paragraph (2) III above using substantial quantities of radioactive isotopes or other products of nuclear fission.

3. Without in any way restricting the operations of paragraphs (1) and (2) hereof, this Reinsurance does not cover any loss or liability by radioactive contamination accruing to the Reassured, directly or indirectly, and whether as Insurer or Reinsurer, from any insurance on property which is on the same site as a nuclear reactor power plant or other nuclear installation and which normally would be insured therewith except that this paragraph (3) shall not operate

(a) where Reassured does not have knowledge of such nuclear reactor power plant or nuclear installation, or

(b) where said insurance contains a provision excluding coverage for damage to property caused by or resulting from radioactive contamination, however caused. However on and after 1st January 1960 this sub-paragraph (b) shall only apply provided the said radioactive contamination exclusion provision has been approved by the Governmental Authority having jurisdiction thereof.

4. Without in any way restricting the operations of paragraphs (1), (2) and (3) hereof, this Reinsurance does not cover any loss or liability by radioactive contamination accruing to the Reassured, directly or indirectly, and whether as Insurer or Reinsurer, when such radioactive contamination is a named hazard specifically insured against.

5. It is understood and agreed that this clause shall not extend to risks using radioactive isotopes in any form where the nuclear exposure is not considered by the Reassured to be the primary hazard.

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6. The term “special nuclear material” shall have the meaning given it in the Atomic Energy Act of 1954 or by any law amendatory thereof.

7. Reassured to be sole judge of what constitutes:

(a) substantial quantities, and

(b) the extent of installation, plant or site.

Note:  Without in any way restricting the operation of paragraph (1) hereof, it is understood and agreed that

(a) all policies issued by the Reassured on or before 31st December 1957 shall be free from the application of the other provisions of this Clause until expiry date or 31st December 1960 whichever first occurs whereupon all the provisions of this Clause shall apply.

(b) with respect to any risk located in Canada policies issued by the Reassured on or before 31st December 1958 shall be free from the application of the other provisions of this Clause until expiry date or 31st December 1960 whichever first occurs whereupon all the provisions of this Clause shall apply.

12/12/57

NMA 1119

NOTES: Wherever used herein the terms:

“Reassured” shall be understood to mean “Company”, “Reinsured”, “Reassured” or whatever other term is used in the attached reinsurance document to designate the reinsured company or companies.

“Agreement” shall be understood to mean “Agreement”, “Contract”, “Policy” or whatever other term is used to designate the attached reinsurance document.

“Reinsurers” shall be understood to mean “Reinsurers”, “Underwriters” or whatever other term is used in the attached reinsurance document to designate the reinsurer or reinsurers.

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TERRORISM EXCLUSION

A. Notwithstanding any provision to the contrary within this Contract or any endorsement thereto, it is agreed that this Contract excludes loss, damage, cost, or expense directly or indirectly caused by, contributed to by, resulting from, or arising out of or in connection with any Act of Terrorism, as defined herein, regardless of any other cause or event contributing concurrently or in any other sequence to the loss.

B. An “Act of Terrorism” includes any act, or preparation in respect of action, or threat of action designed to influence the government de jure or de facto of any nation or any political division thereof, or in pursuit of political, religious, ideological, or similar purposes to intimidate the public or a section of the public of any nation by any person or group(s) of persons whether acting alone or on behalf of or in connection with any organization(s) or government(s) de jure or de facto, and which:

a. involves violence against one or more persons; or

b. involves damage to property; or

c. endangers life other than that of the person committing the action; or

d. creates a risk to health or safety of the public or a section of the public; or

e. is designed to interfere with or to disrupt an electronic system.

C. This Contract also excludes loss, damage, cost, or expense directly or indirectly caused by, contributed to by, resulting from, or arising out of or in connection with any action in controlling, preventing, suppressing, retaliating against, or responding to any Act of Terrorism.

D. Notwithstanding the above and subject otherwise to the terms, conditions, and limitations of this Contract, in respect only of personal lines, this Contract shall pay actual loss or damage (but not related cost or expense) caused by any Act of Terrorism, provided such act is not directly or indirectly caused by, contributed to by, resulting from, or arising out of or in connection with biological, chemical, radiological or nuclear pollution or contamination.

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Communicable Disease Exclusion (Property Reinsurance)

A. This Contract excludes any loss, damage, liability, claim, cost or expense of whatsoever nature, directly or indirectly caused by, contributed to by, resulting from, arising out of, or in connection with a Communicable Disease or the fear or threat (whether actual or perceived) of a Communicable Disease regardless of any other cause or event contributing concurrently or in any other sequence thereto.

B. As used herein, a Communicable Disease means any disease which can be transmitted by means of any substance or agent from any organism to another organism where:

1. the substance or agent includes, but is not limited to, a virus, bacterium, parasite or other organism or any variation thereof, whether deemed living or not, and

2. the method of transmission, whether direct or indirect, includes but is not limited to, airborne transmission, bodily fluid transmission, transmission from or to any surface or object, solid, liquid or gas or between organisms, and

3. the disease, substance or agent can cause or threaten damage to human health or human welfare or can cause or threaten damage to, deterioration of, loss of value of, marketability of or loss of use of property.

C. Notwithstanding the foregoing, losses directly or indirectly caused by, contributed to by, resulting from, arising out of, or in connection with any otherwise covered peril under subject Policies and not otherwise excluded under this Contract shall be covered.

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CYBER LOSS LIMITED EXCLUSION CLAUSE (PROPERTY TREATY REINSURANCE)

1. Notwithstanding any provision to the contrary within this reinsurance agreement or any endorsement thereto, this reinsurance agreement excludes all loss, damage, liability, cost or expense of whatsoever nature directly or indirectly caused by, contributed to by, resulting from, arising out of or in connection with:

1.2. any loss of, alteration of, or damage to or a reduction in the functionality, availability or operation of a Computer System, unless subject to the provisions of paragraph 2;

1.3. any loss of use, reduction in functionality, repair, replacement, restoration or reproduction of any Data, including any amount pertaining to the value of such Data.

2. Subject to the other terms, conditions and exclusions contained in this reinsurance agreement, this reinsurance agreement will cover physical damage to property insured under the original policies and any Time Element Loss directly resulting therefrom where such physical damage is directly occasioned by any of the following perils:

fire, lightning, explosion, aircraft or vehicle impact, falling objects, windstorm, hail, tornado, cyclone, hurricane, earthquake, volcano, tsunami, flood, freeze or weight of snow

Definitions

3. Computer System means any computer, hardware, software, communications system, electronic device (including, but not limited to, smart phone, laptop, tablet, wearable device), server, cloud or microcontroller including any similar system or any configuration of the aforementioned and including any associated input, output, data storage device, networking equipment or back up facility.

4. Data means information, facts, concepts, code or any other information of any kind that is recorded or transmitted in a form to be used, accessed, processed, transmitted or stored by a Computer System.

5. Time Element Loss means business interruption, contingent business interruption or any other consequential losses.

LMA5410

06 March 2020

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TRUST AGREEMENT REQUIREMENTS CLAUSE

A. Except as provided in paragraph B of this Clause, if the Reinsurer satisfies its funding obligations under the Unauthorized Reinsurance Article by providing a Trust Agreement, the Reinsurer shall ensure that the Trust Agreement:

1. Requires the Reinsurer to establish a trust account for the benefit of the Company, and specifies what the Trust Agreement is to cover;

2. Stipulates that assets deposited in the trust account shall be valued according to their current fair market value and shall consist only of cash (United States legal tender), and certificates of deposit (issued by a United States bank and payable in United States legal tender), or any combination of the two, provided that the investments are issued by an institution that is not the parent, subsidiary or affiliate of either the Reinsurer or the Company;

3. Requires the Reinsurer, prior to depositing assets with the trustee, to execute assignments or endorsements in blank, or to transfer legal title to the trustee of all shares, obligations or any other assets requiring assignments, in order that the Company, or the trustee upon the direction of the Company, may whenever necessary negotiate these assets without consent or signature from the Reinsurer or any other entity;

4. Requires that all settlements of account between the Company and the Reinsurer be made in cash or its equivalent; and

5. Provides that assets in the trust account shall be withdrawn only as permitted in this Contract, without diminution because of the insolvency of the Company or the Reinsurer.

B. If a ceding insurer is domiciled in California and the Reinsurer satisfies its funding obligations under the Unauthorized Reinsurance Article by providing a Trust Agreement, the Reinsurer shall ensure that the Trust Agreement:

1. Provides that assets deposited in the trust account shall be valued according to their current fair market value and shall consist only of cash in United States dollars, certificates of deposit issued by a United States financial institution as defined in California Insurance Code Section 922.7(a) and payable in United States dollars, and investments permitted by the California Insurance Code, or any combination of the above.

2. Provides that investments in or issued by an entity controlling, controlled by or under common control with either the grantor or the beneficiary of the trust shall not exceed 5% of total investments.

3. Requires the Reinsurer, prior to depositing assets with the trustee, to execute assignments or endorsements in blank, or to transfer legal title to the trustee of all

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shares, obligations or any other assets requiring assignments, in order that the ceding insurer, or the trustee upon the direction of the ceding insurer, may, whenever necessary, negotiate these assets without consent or signature from the Reinsurer or any other entity.

4. Provides that assets in the trust account shall be withdrawn only as permitted in this Contract, without diminution because of the insolvency of the ceding insurer or the Reinsurer.

C. If there are multiple ceding insurers that collectively comprise the Company, “regulatory authorities” as referenced in subparagraph A(2) above, shall mean the individual ceding insurer’s domestic regulator.  

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EX-10.22

Exhibit 10.22

CERTAIN CONFIDENTIAL INFORMATION, IDENTIFIED BY BRACKETED ASTERISKS "[*****]", HAS BEEN OMITTED FROM THIS EXHIBIT BECAUSE IT IS BOTH (I) NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED.

NON-FLORIDA REINSTATEMENT PREMIUM PROTECTION

REINSURANCE CONTRACT

(FOR $6MXS$4M EXCESS CAT)

issued to

TypTap Insurance Company

Ocala, Florida

Homeowners Choice Property & Casualty Insurance Company, Inc.

Tampa, Florida

including any and/or all companies that are or may hereafter become affiliated therewith

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NON-FLORIDA REINSTATEMENT PREMIUM PROTECTION REINSURANCE CONTRACT (FOR $6MXS$4M EXCESS CAT) TABLE OF CONTENTS
Article		Page
	Preamble	3
1	Business Covered	3
2	Coverage	3
3	Term	4
4	Special Termination	4
5	Territory	5
6	Exclusions	5
7	Premium	5
8	Definitions	5
9	Original Conditions	6
10	No Third Party Rights	6
11	Notice of Loss and Loss Settlements	6
12	Late Payments	7
13	Offset	8
14	Currency	8
15	Obligations and Collateral Release	8
16	Taxes	11
17	Access to Records	11
18	Confidentiality	12
19	Errors and Omissions	13
20	Insolvency	13
21	Run-Off Reinsurer	14
22	Arbitration	15
23	Expedited Arbitration	16
24	Service of Suit	17
25	Governing Law	18
26	Entire Agreement	18
27	Non-Waiver	18
28	Agency	18
29	Mode of Execution	18
30	Limited Recourse	19
	Company Signing Block	20
Attachments
	Trust Agreement Requirements Clause	21

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NON-FLORIDA REINSTATEMENT PREMIUM PROTECTION

REINSURANCE CONTRACT

(FOR $6MXS$4M EXCESS CAT)

(the “Contract”)

issued to

TypTap Insurance Company

Ocala, Florida

Homeowners Choice Property & Casualty Insurance Company, Inc.

Tampa, Florida

including any and/or all companies that are or may hereafter become affiliated therewith

(collectively, the “Company”)

by

THE SUBSCRIBING REINSURER(S) IDENTIFIED
IN THE INTERESTS AND LIABILITIES AGREEMENT(S)
ATTACHED TO AND FORMING PART OF THIS CONTRACT

(the “Reinsurer”)

article 1

Business Covered

This Contract is to indemnify the Company in respect of the liability that may accrue to the Company as a result of Reinstatement Premium the Company may become liable to pay under the reinstatement provisions of the Non-Florida Property Catastrophe $6Mxs$4M Excess of Loss Reinsurance Contract, effective at 12:01 a.m., Standard Time, June 1, 2021 and expiring 12:01 a.m., Standard Time, June 1, 2022, Document Number:  UBWP0007C (the “Original Contract”), subject to the terms and conditions herein contained.  The Original Contract covers losses under Policies covering direct and assumed business classified by the Company as the property perils of Homeowners, Condominium Owners, Renters and Dwelling, in force at the inception of this Contract, or issued or renewed during the term of this Contract.  A copy of the Original Contract is attached to and forms part of this Contract.

article 2

coverage

The Reinsurer shall be liable to pay the Reinstatement Premium obligations under the Original Contract.

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article 3

Term

This Contract shall take effect at 12:01 a.m., Standard Time, June 1, 2021, and unless terminated prior to that time and date as provided in the Special Termination Article, shall remain in effect until 12:01 a.m., Standard Time, June 1, 2022, applying to Loss Occurrences commencing during the term of this Contract.  For purposes of this Contract, “Standard Time” shall mean the time as described in the original Policy.

ARTICLE 4

SPECIAL TERMINATION

A. The Company may terminate a Subscribing Reinsurer’s percentage share in this Contract at any time by giving written notice to the Subscribing Reinsurer in the event of any of the following circumstances:

1. The Subscribing Reinsurer ceases underwriting operations.

2. A state insurance department or other legal authority orders the Subscribing Reinsurer to cease writing business, or the Subscribing Reinsurer is placed under regulatory supervision.

3. The Subscribing Reinsurer has become insolvent or has been placed into liquidation or receivership (whether voluntary or involuntary), or there have been instituted against it proceedings for the appointment of a receiver, liquidator, rehabilitator, conservator, trustee in bankruptcy, or other agent known by whatever name, to take possession of its assets or control of its operations.

4. The Subscribing Reinsurer has become, or has announced its intention to become, merged with or acquired or controlled by any company, corporation, or individual(s) not controlling the Subscribing Reinsurer’s operations at the inception of this Contract.

5. The Subscribing Reinsurer has retroceded its entire liability under this Contract without the Company’s prior written consent, except for retrocessions to members of the Subscribing Reinsurer’s holding company group.

6. The Subscribing Reinsurer has hired an unaffiliated runoff claims manager that is compensated on a contingent basis or is otherwise provided with financial incentives based on the quantum of claims paid.

7. The Subscribing Reinsurer has in any other way assigned its interests or delegated its obligations under this Contract to an unaffiliated entity.

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8. The Subscribing Reinsurer has failed to post or maintain required collateral to secure its obligations as required under this Contract, and has not cured such deficiency within 30 days following written notice thereof from the Company.

Notwithstanding the foregoing, agreement by a Lloyd’s syndicate to follow claim settlements procedures under Lloyd’s Claims Scheme (Combined) shall not constitute a transfer of its claims-paying authority, for purposes of subparagraphs (6) and (7) of this paragraph.

B. The Subscribing Reinsurer shall have no liability for Reinstatement Premium arising from Loss Occurrences commencing after termination.  The premium due the Subscribing Reinsurer hereunder (including any minimum premium) shall be prorated based on the period of the Subscribing Reinsurer’s participation hereon, and the Subscribing Reinsurer shall immediately return any excess premium received.

article 5

Territory

The territorial limits of this Contract shall be identical with those of the Original Contract.

article 6

exclusions

This Contract shall follow the exclusions set forth in the Original Contract.

ARTICLE 7

Premium

A. The Company shall pay the Reinsurer a premium of [$*****] for the term of this Contract, payable on June 1, 2021.  

B. The Company shall furnish the Reinsurer with such reasonably available information as may be reasonably required by the Reinsurer for completion of the Reinsurer’s financial statements.

article 8

definitions

A. “Reinstatement Premium” means premium paid by the Company under the provisions of the Reinstatement Article of the Original Contract.  Reinstatement Premium shall be calculated at pro rata of the original reinsurance premium, being pro rata only for the amount being reinstated.  If, at the time of a loss settlement under the Original Contract, the reinsurance premium thereunder is not yet known, Reinstatement Premium shall be based upon the deposit premium, subject to adjustment when said reinsurance premium is finally established.  

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Nothing in this clause shall be construed to mean that amounts are not recoverable hereunder until the Company’s final Reinstatement Premium has been ascertained.  All recoveries received subsequent to reimbursement hereunder shall be applied as if received prior to the aforesaid settlement, and all necessary adjustments shall be made by the parties hereto.

B. “Loss Occurrence” shall follow the definition set forth in the Original Contract.

C. “Policy” means any binder, policy, or contract of insurance or reinsurance issued, accepted or held covered provisionally or otherwise, by or on behalf of the Company.

ARTICLE 9

ORIGINAL CONDITIONS

All reinsurance under this Contract shall be subject to the same terms, conditions, waivers and interpretations, and to the same modifications and alterations as the Original Contract.  However, in no event shall this be construed in any way to provide coverage outside the terms and conditions set forth in this Contract.

article 10

No Third Party Rights

This Contract is solely between the Company and the Reinsurer, and in no instance shall any insured, claimant or other third party have any rights under this Contract except as may be expressly provided otherwise herein.

article 11

NOTICE OF LOSS AND LOSS settlements

A. The Company shall advise the Reinsurer promptly of all losses that, in the opinion of the Company, may result in a claim hereunder and of all subsequent developments thereto that may materially affect the position of the Reinsurer.

B. The Company alone and at its full discretion shall adjust, settle or compromise all claims and losses.

C. As respects losses subject to the Original Contract, all loss settlements made by the Company, whether under strict Policy terms or by way of compromise, shall be binding upon the Reinsurer, and the Reinsurer agrees to pay or allow, as the case may be, its share of each such settlement immediately upon receipt of reasonable evidence of the amount paid by the Company or that the Company estimates it will pay within the next 14 days.  Within 30 days after receipt of the Reinsurer’s payment, the Company shall report to the Reinsurer the positive difference, if any, of the Reinsurer’s payment, minus the Reinsurer’s share of losses subject to this Contract that the Company has paid, or becomes liable to pay, as of the date

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of the report.  Any such positive difference shall be remitted to the Reinsurer with the Company’s report.

ARTICLE 12

LATE PAYMENTS

A. In the event any payment due either party is not received by the payment due date, the party to whom payment is due may, by written notification, require the debtor party to pay, and the debtor party agrees to pay, an interest penalty on the amount past due calculated for each such payment on the last business day of each month as follows:

1. The number of full days that have expired since the overdue date or the last monthly calculation, whichever the lesser; times

2. 1/365th of the sum of the six-month United States Treasury Bill rate as quoted in The Wall Street Journal on the first business day of the month for which the calculation is made, plus 1%; times

3. The amount past due, including accrued interest.

Interest shall accumulate until payment of the original amount due plus interest penalties have been received.

B. The due date shall, for purposes of this Article, be determined as follows:

1. Payments from the Reinsurer to the Company shall be due on the date on which the demand for payment (including delivery of bordereaux or quarterly or monthly reports) is received by the Reinsurer, and shall be overdue 30 days thereafter.

2. Payments from the Company to the Reinsurer shall be due on the dates specified within this Contract.  Payments shall be overdue 30 days thereafter except for the first installment of premium, if applicable, which shall be overdue 60 days from inception or 30 days from final line-signing, whichever the later.  Reinstatement Premium, if applicable, shall have as a due date the date when the Company receives payment for the claim giving rise to such Reinstatement Premium, and payment shall be overdue 30 days thereafter. In the event a due date is not specifically stated for a given payment, the overdue date shall be 30 days following the date of billing.

C. If the information contained in the Company’s demand for payment is insufficient or not in accordance with the conditions of this Contract, then within 30 days the Reinsurer shall request from the Company all additional information necessary to validate its claim and the payment due date as defined in paragraph B shall be deemed to be the date upon which the Reinsurer received the requested additional information.  This paragraph is only for the purpose of establishing when a payment is overdue, and shall not alter the provisions of the Notice of Loss and Loss Settlements Article or other pertinent contractual stipulations.

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D. In the event arbitration is necessary to settle a dispute, the panel shall have the authority to make a determination awarding interest to the prevailing party.  Interest, if any, awarded by the panel shall supersede the interest amounts outlined herein.

E. Any interest owed pursuant to this Article may be waived by the party to which it is owed.  Waiver of such interest, however, shall not affect the waiving party’s rights to other interest amounts due as a result of this Article.

ARTICLE 13

OFFSET

Each party hereto shall have, and may exercise at any time and from time to time, the right to offset any and all balances due from a party to the other arising under this Contract.  In the event of the insolvency of a party hereto, offsets shall only be allowed in accordance with the provisions of any applicable law governing offset entitlement.

ARTICLE 14

Currency

A. Where the word “Dollars” and/or the sign “$” appear in this Contract, they shall mean United States Dollars, and all payments hereunder shall be in United States Dollars.

B. For purposes of this Contract, where the Company receives or pays amounts in currencies other than United States Dollars, such amounts shall be converted into United States Dollars at the actual rates of exchange at which these amounts are entered in the Company’s books.

ARTICLE 15

OBLIGATIONS AND COLLATERAL RELEASE

A. The Reinsurer will establish a trust fund (“Trust Fund”) for its Obligations (as defined herein) hereunder, pursuant to that certain Trust Agreement by and between the Reinsurer, the Company, and Truist Bank (the “Trust Agreement”).  The Trust Fund shall be funded pursuant to the provisions hereof.  Collateral deposited in the Trust Fund may be withdrawn on the terms set forth herein and in the Trust Agreement.  The Trust Agreement shall be at all times in compliance with the relevant provisions of the Insurance Code of the Company’s state of domicile and the administrative regulations adopted by that state’s insurance department, in order for the Company to receive, full statutory financial statement credit for reinsurance provided under this Contract.  Collateral deposited in the Trust Fund may be withdrawn at any time, notwithstanding the other provisions of this Contract, and utilized and applied by the Company or any successor, by operation of law, of the Company, including, without limitation, any liquidator, rehabilitator, receiver or conservator of the

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Company, without diminution because of insolvency on the part of the Company or the Reinsurer, for the following purposes:

1. to reimburse the Company for the Reinsurer’s Obligations, the payment of which is due under the terms of this Contract and that has not been otherwise paid;

2. to make refund of any sum that is in excess of 102% of the amount required to pay the Reinsurer’s Obligations under this Contract;

3. to fund an account with the Company for the Reinsurer’s Obligations.  Such cash deposit shall be held in an interest-bearing account separate from the Company’s other assets, and interest thereon not in excess of the prime rate shall accrue to the benefit of the Reinsurer;

4. to pay the Reinsurer’s share of any other amounts the Company claims are due under this Contract.

B. The term “Obligations” shall mean during the term of the Contract, 100% of the limit of the Reinsurer’s liability hereunder less any unpaid minimum premium (net of brokerage and Federal Excise Tax as applicable) and aggregate amounts previously paid by the Reinsurer in respect of claims under this Contract.  Upon expiration of the Contract, the term “Obligations” shall mean the amount as determined in accordance with paragraph D below.

C. If, at expiration of this Contract, the Company, in its commercially reasonable judgment, believes that no claims will impact this Contract, the Company will so notify the Reinsurer and shall fully and finally release from the Trust Fund all collateral contained therein.

D. If, at the expiration of this Contract, the Company, in its commercially reasonable judgment, believes that the Company may have a claim hereunder, the Company shall estimate the amount of reinstatement premium due under this Contract based on the reinstatement premium payable under the contract identified in the Business Covered article (the Underlying Contract”) as follows, unless otherwise mutually agreed:

1. The Company shall determine the sum of the following for the Underlying Contract, as of this Contract expiration date:

a. losses and loss adjustment expense paid by the Company;

b. reserves for losses reported and outstanding; and

c. reserves for losses incurred but not reported;

2. The Company shall then calculate the estimated reinstatement premium due on the Underlying Contract and such amount shall constitute the Reinsurer’s Obligations

3. The amount of the estimated reinstatement premium due on the Underlying Contract, measured as of the applicable determination date (as specified in paragraph E below),

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shall be multiplied by a factor, based upon the number of months, which have elapsed on such determination date since expiration of this Contract, as follows:

a. From 0 to 12 months from expiration of this Contract, [*****%], else;

b. From 13 to 24 months from expiration of this Contract, [*****%], else;

c. From 25 to 36 months from expiration of this Contract, [*****%]; and

d. From 37 to 67 months from expiration of this Contract, [*****%].

As of 67 months after expiration of this Contract (the “Reporting Period”), the amount determined in subparagraphs 1, 2 and 3 above for such date shall be considered the definitive Final Limit for each such Loss Occurrence for which the Company and the Reinsurer agree to commute this Contract with final settlement on that basis. 

E. The procedure for determining the amount of collateral required to fund the Reinsurer’s Obligations as set forth in paragraph D above, shall be followed each and every time, if in the opinion of the Company, there are materially new estimates regarding its losses, and each quarter-end, until all the Reinsurer’s Obligations have been extinguished or the Reporting Period is over, whichever is earlier.  The information to be used for the determinations of the Reinsurer’s Obligations shall be as reflected on the Company’s official books and records.

F. The Company agrees to release from the Trust Fund all collateral in excess of 102% of the amount required to pay the Reinsurer’s Obligations for its share of actual and possible claims, as determined in accordance with paragraph A, above within 10 Business Days of the date of such determination.  “Business Day” shall be defined as a day (other than a Saturday or a Sunday) on which banks are open for commercial business in Bermuda and in New York, New York, U.S.A.

G. Notwithstanding the foregoing, if the Reinsurer is licensed as a segregated account company, the Company agrees and acknowledges that there shall only be recourse to the Segregated Trust Account assets, and in the event of the exhaustion of the Segregated Trust Account assets there shall be no recourse by any party for any claims, payments, other expenses or fees whatsoever, howsoever arising pursuant to this Contract, to the assets which are allocated to any other segregated account of the Reinsurer or to the general account of the Reinsurer.

H. At the end of the Reporting Period, this Contract will be commuted based on the Reinsurer’s Obligations at that point.  The Company agrees to terminate the Trust Account, and all remaining collateral will be released to the Company and/or the Reinsurer, as applicable, and both parties shall be released from any further obligations under this Contract.

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ARTICLE 16

Taxes

A. In consideration of the terms under which this Contract is issued, the Company undertakes not to claim any deduction of the premium hereon when making Canadian tax returns or when making tax returns, other than Income or Profits Tax returns, to any state or territory of the United States of America or to the District of Columbia.

B. 1.Each Subscribing Reinsurer has agreed to allow, for the purpose of paying the Federal Excise Tax, the applicable percentage of the premium payable hereon (as imposed under the Internal Revenue Code) to the extent such premium is subject to Federal Excise Tax.

2. In the event of any return of premium becoming due hereunder, the Subscribing Reinsurer shall deduct the applicable percentage of the premium from the amount of the return, and the Company or its agent should take steps to recover the Tax from the U.S. Government.

ARTICLE 17

access to records

A. The Reinsurer or its duly authorized representatives shall have the right to visit the offices of the Company to inspect, examine, audit, and verify any of the policy, accounting or claim files (“Records”) relating to business reinsured under this Contract during regular business hours after giving five working days’ prior notice.  This right shall be exercisable during the term of this Contract or after the expiration of this Contract.  Notwithstanding the above, the Reinsurer shall not have any right of access to the Records of the Company if it is not current in all undisputed payments due the Company.

B. Notwithstanding the above, the Company reserves the right to withhold from the Reinsurer any Privileged Documents.  However, the Company shall permit and not object to the Reinsurer’s access to Privileged Documents in connection with the underlying claim reinsured hereunder following final settlement or final adjudication of the case or cases involving such claim, with prejudice against all claimants and all parties to such adjudications; the Company may defer release of such Privileged Documents if there are subrogation, contribution, or other third party actions with respect to that claim or case, and the Company’s defense might be jeopardized by release of such Privileged Documents.  In the event that the Company seeks to defer release of such Privileged Documents, it shall, in consultation with the Reinsurer, take other steps as reasonably necessary to provide the Reinsurer with the information it reasonably requires to indemnify the Company without causing a loss of such privileges or protections.  The Reinsurer shall not have access to Privileged Documents relating to any dispute between the Company and the Reinsurer.

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C. For purposes of this Article:

1. “Privileged Documents” means any documents that are Attorney-Client Privilege Documents and/or Work Product Privilege Documents.

2. “Attorney-Client Privilege Documents” means communications of a confidential nature between (a) the Company, or anyone retained by or at the direction of the Company, or its in‑house or outside legal counsel, or anyone in the control of such legal counsel, and (b) any in-house or outside legal counsel, if such communications relate to legal advice being sought by the Company and/or contain legal advice being provided to the Company.

3. “Work Product Privilege Documents” means communications, written materials and tangible things prepared by or for in-house or outside counsel, or prepared by or for the Company, in anticipation of or in connection with litigation, arbitration, or other dispute resolution proceedings.

ARTICLE 18

confidentiality

A. The Reinsurer hereby acknowledges that the documents, information and data provided to it by the Company, whether directly or through an authorized agent, in connection with the placement and execution of this Contract (“Confidential Information”) are proprietary and confidential to the Company. Confidential Information shall not include documents, information or data that the Reinsurer can show:

1. are publicly known or have become publicly known through no unauthorized act of the Reinsurer;

2. have been rightfully received from a third person without obligation of confidentiality; or

3. were known by the Reinsurer prior to the placement of this Contract without an obligation of confidentiality.

B. Absent the written consent of the Company, the Reinsurer shall not disclose any Confidential Information to any third parties, including any affiliated companies (except to the extent necessary to enable affiliated companies or third parties engaged by the Reinsurer to perform services related to this Contract on behalf of the Reinsurer), except:

1. when required by retrocessionaires as respects business ceded to this Contract;

2. when required by regulators performing an audit of the Reinsurer’s records and/or financial condition; or

3. when required by external auditors performing an audit of the Reinsurer’s records in the normal course of business.

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Further, the Reinsurer agrees not to use any Confidential Information for any purpose not related to the performance of its obligations or enforcement of its rights under this Contract.

C. Notwithstanding the above, in the event that the Reinsurer is required by court order, other legal process or any regulatory authority to release or disclose any or all of the Confidential Information, the Reinsurer agrees to provide the Company with written notice of same at least 10 days prior to such release or disclosure and to use its best efforts to assist the Company in maintaining the confidentiality provided for in this Article.

D. The provisions of this Article shall extend to the officers, directors and employees of the Reinsurer and its affiliates, and shall be binding upon their successors and assigns.

ARTICLE 19

Errors and Omissions

Any inadvertent error, omission or delay in complying with the terms and conditions of this Contract shall not be held to relieve either party hereto from any liability that would attach to it hereunder if such error, omission or delay had not been made, provided such error, omission or delay is rectified immediately upon discovery.

ARTICLE 20

insolvency

A. If more than one company is referenced within the definition of “Company” in the Preamble to this Contract, this Article shall apply severally to each such company.  Further, this Article and the laws of the domiciliary state shall apply in the event of the insolvency of any company covered hereunder.  In the event of a conflict between any provision of this Article and the laws of the domiciliary state of any company covered hereunder, that domiciliary state’s laws shall prevail.

B. In the event of the insolvency of the Company, this coverage (or the portion of any risk or obligation assumed by the Reinsurer, if required by applicable law) shall be payable directly to the Company, or to its liquidator, receiver, conservator or statutory successor, either:  (1) on the basis of the liability of the Company, or (2) on the basis of claims filed and allowed in the liquidation proceeding, whichever may be required by applicable statute, without diminution because of the insolvency of the Company or because the liquidator, receiver, conservator or statutory successor of the Company has failed to pay all or a portion of any claim.  It is agreed, however, that the liquidator, receiver, conservator or statutory successor of the Company shall give written notice to the Reinsurer of the pendency of a claim against the Company indicating the Policy or bond reinsured, which claim would involve a possible liability on the part of the Reinsurer within a reasonable time after such claim is filed in the conservation or liquidation proceeding or in the receivership, and that during the pendency of such claim, the Reinsurer may investigate such claim and interpose, at its own expense, in the proceeding where such claim is to be adjudicated any defense or defenses that it may

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deem available to the Company or its liquidator, receiver, conservator or statutory successor.  The expense thus incurred by the Reinsurer shall be chargeable, subject to the approval of the court, against the Company as part of the expense of conservation or liquidation to the extent of a pro rata share of the benefit that may accrue to the Company solely as a result of the defense undertaken by the Reinsurer.

C. Where two or more reinsurers are involved in the same claim and a majority in interest elect to interpose defense to such claim, the expense shall be apportioned in accordance with the terms of this reinsurance Contract as though such expense had been incurred by the Company.

ARTICLE 21

RUN-OFF REINSURER

A. “Run-off Reinsurer” means any Subscribing Reinsurer that:

1. has been ordered by a state insurance department or other legal authority to cease writing business, or has been placed under regulatory supervision or in rehabilitation; or

2. has ceased reinsurance underwriting operations; or

3. has transferred its claims-paying authority to an unaffiliated entity; or

4. engages in a process of Scheme of Arrangement or similar procedure related to this Contract, including but not limited to an insurance business transfer scheme pursuant to Part VII of the Financial Services and Markets Act 2000 (U.K.), as may be amended from time to time; or

5. in any other way has assigned its interests or delegated its obligations under this Contract to an unaffiliated entity.

Notwithstanding the foregoing, agreement by a Lloyd’s syndicate to follow claim settlements procedures under Lloyd’s Claims Scheme (Combined) shall not constitute a transfer of its claims-paying authority, for purposes of subparagraphs (3) and (5) of this paragraph.

B. Notwithstanding any other provision of this Contract, in the event that a Subscribing Reinsurer becomes a Run-off Reinsurer at any time, the Company may elect, by giving written notice to the Run-off Reinsurer at any time thereafter, that all or any of the following shall apply to the Run-off Reinsurer’s participation hereunder:

1. Should the Run-off Reinsurer fail to pay amounts due hereunder, the interest penalty specified in the Late Payments Article shall be increased by 0.5% for each 30 days that a payment is past due, subject to a maximum increase of 7.0%.

2. The Run-off Reinsurer’s liability for losses for Policies covered by this Contract shall be commuted.  In the event the Company and the Run-off Reinsurer cannot agree on

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the commutation amount of the Run-off Reinsurer’s liability under such Policies, they shall appoint an actuary and/or appraiser to assess such liability and shall share equally any expense of the actuary and/or appraiser.  If the Company and the Run-off Reinsurer cannot agree on an actuary and/or appraiser, the Company and the Run-off Reinsurer each shall nominate three individuals, of whom the other shall decline two, and the final appointment shall be made by drawing lots.  Payment by the Run-off Reinsurer of the amount of liability ascertained shall constitute a complete and final release of both parties under this Contract.

3. The Run-off Reinsurer shall have no right of access to the Records of the Company if the Run-off Reinsurer has denied payment of any claim hereunder or there is a pending arbitration between the Company and the Run-off Reinsurer regarding any claim hereunder.  A reservation of rights shall be considered a denial of a claim.  Notwithstanding the above, the Run-off Reinsurer shall continue to have access to Records of the Company for any claim for which it has raised a query within 30 days of its receipt of a billing, but any inspection of Records must be completed within 90 days of receipt of billing or access will be deemed waived.

4. The provisions of the Arbitration Article shall not apply.  

C. The Company’s waiver of any rights provided in this Article is not a waiver of that right or other rights at a later date.

ARTICLE 22

arbitration

A. Any dispute arising out of the interpretation, performance or breach of this Contract, including the formation or validity thereof, shall be submitted for decision to a panel of three arbitrators.  Notice requesting arbitration shall be in writing and sent certified or registered mail, return receipt requested.

B. One arbitrator shall be chosen by each party and the two arbitrators shall then choose an impartial third arbitrator who shall preside at the hearing.  If either party fails to appoint its arbitrator within 30 days after being requested to do so by the other party, the latter, after 10 days’ prior notice by certified or registered mail of its intention to do so, may appoint the second arbitrator.

C. If the two arbitrators do not agree on a third arbitrator within 60 days of their appointment, the third arbitrator shall be chosen in accordance with the procedures for selecting the third arbitrator in force on the date the arbitration is demanded, established by the AIDA Reinsurance and Insurance Arbitration Society – U.S. (ARIAS).  The arbitrators shall be persons knowledgeable about insurance and reinsurance who have no personal or financial interest in the result of the arbitration.  If a member of the panel dies, becomes disabled or is otherwise unwilling or unable to serve, a substitute shall be selected in the same manner as the departing member was chosen and the arbitration shall continue.

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D. Within 30 days after all arbitrators have been appointed, the panel shall meet and determine timely periods for briefs, discovery procedures and schedules of hearings.

E. The panel shall be relieved of all judicial formality and shall not be bound by the strict rules of procedure and evidence.  Notwithstanding anything to the contrary in this Contract, the arbitrators may at their discretion, consider underwriting and placement information provided by the Company to the Reinsurer, as well as any correspondence exchanged by the parties that is related to this Contract.  The arbitration shall take place in Tampa, Florida, or at such other place as the parties shall agree. The decision of any two arbitrators shall be in writing and shall be final and binding.  The panel is empowered to grant interim relief as it may deem appropriate.

F. The panel shall interpret this Contract as an honorable engagement rather than as merely a legal obligation and shall make its decision considering the custom and practice of the applicable insurance and reinsurance business as promptly as possible after the hearings.  Judgment upon an award may be entered in any court having jurisdiction thereof.

G. Each party shall bear the expense of its own arbitrator and shall jointly and equally bear with the other party the cost of the third arbitrator.  The remaining costs of the arbitration shall be allocated by the panel.  The panel may, at its discretion, award such further costs and expenses as it considers appropriate, including but not limited to attorneys’ fees, to the extent permitted by law.

ARTICLE 23

Expedited Arbitration

A. Notwithstanding the provisions of the Arbitration Article, in the event an amount in dispute hereunder $1,000,000 or less, the parties will submit to an expedited arbitration process with the use of a single arbitrator.  The arbitrator will be chosen in accordance with the procedures for selecting an arbitrator in force on the date the arbitration is demanded, established by the AIDA Reinsurance and Insurance Arbitration Society – U.S. (ARIAS).

B. Each party’s case will be submitted to the arbitrator within 100 calendar days of the date of determination of the arbitrator.  Discovery will be limited to exchanging only those documents directly relating to the issue in dispute, subject to a limit of two discovery depositions from each party, unless otherwise authorized by the arbitrator upon a showing of good cause.

C. Within 120 calendar days of the date of determination of the arbitrator, the hearing will be completed and a written award will be issued by the arbitrator.  As the parties agree that time is of the essence, the sole arbitrator does not have the authority to lengthen the schedule, absent agreement of both parties.  The arbitrator will have all the powers conferred on the arbitration panel as provided in the Arbitration Article, and said Article will apply to all matters not specifically addressed above.

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UBWP0008C	16 of 22

ARTICLE 24

service of suit

A. This Article applies only to those Subscribing Reinsurers not domiciled in the United States of America, and/or not authorized in any state, territory and/or district of the United States of America where authorization is required by insurance regulatory authorities.

B. This Article shall not be read to conflict with or override the obligations of the parties to arbitrate their disputes as provided for in the Arbitration Article.  This Article is intended as an aid to compelling arbitration or enforcing such arbitration or arbitral award, not as an alternative to the Arbitration Article for resolving disputes arising out of this Contract.

C. In the event of the failure of the Reinsurer to perform its obligations hereunder, the Reinsurer, at the request of the Company, shall submit to the jurisdiction of a court of competent jurisdiction within the United States.  Nothing in this Article constitutes or should be understood to constitute a waiver of the Reinsurer’s rights to commence an action in any court of competent jurisdiction in the United States, to remove an action to a United States District Court, or to seek a transfer of a case to another court as permitted by the laws of the United States or of any state in the United States.  The Reinsurer, once the appropriate court is selected, whether such court is the one originally chosen by the Company and accepted by the Reinsurer or is determined by removal, transfer, or otherwise, as provided for above, shall comply with all requirements necessary to give said court jurisdiction and, in any suit instituted against the Reinsurer upon this Contract, shall abide by the final decision of such court or of any appellate court in the event of an appeal.

D. Service of process in such suit may be made upon:

1. as respects Underwriting Members of Lloyd’s, London: Lloyd’s America, Inc., Attention: Legal Department, 280 Park Avenue, East Tower, 25^th Floor, New York, New York 10017;

2. as respects any other Subscribing Reinsurer: Messrs. Mendes and Mount, 750 Seventh Avenue, New York, New York 10019-6829, or another party specifically designated in the Subscribing Reinsurer’s Interests and Liabilities Agreement attached hereto.  

The above-named are authorized and directed to accept service of process on behalf of the Reinsurer in any such suit.

E. Further, pursuant to any statute of any state, territory or district of the United States that makes provision therefor, the Reinsurer hereby designates the Superintendent, Commissioner or Director of Insurance, or other officer specified for that purpose in the statute, or his successor or successors in office, as its true and lawful attorney upon whom may be served any lawful process in any action, suit or proceeding instituted by or on behalf of the Company or any beneficiary hereunder arising out of this Contract, and hereby designates the above-named as the person to whom the said officer is authorized to mail such process or a true copy thereof.

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UBWP0008C	17 of 22

ARTICLE 25

GOVERNING LAW

This Contract shall be governed as to performance, administration and interpretation by the laws of the State of Florida, subject to the Limited Recourse and Bermuda regulations clauses as set out in the Limited Recourse Article, exclusive of conflict of law rules.  However, with respect to credit for reinsurance, the rules of all applicable states shall apply.

ARTICLE 26

Entire Agreement

This Contract sets forth all of the duties and obligations between the Company and the Reinsurer and supersedes any and all prior or contemporaneous written agreements with respect to matters referred to in this Contract.  This Contract may not be modified or changed except by an amendment to this Contract in writing signed by both parties.  However, this Article shall not be construed as limiting the admissibility of evidence regarding the formation, interpretation, purpose or intent of this Contract.

ARTICLE 27

NON-WAIVER

The failure of the Company or the Reinsurer to insist on compliance with this Contract or to exercise any right or remedy hereunder shall not constitute a waiver of any rights contained in this Contract nor prevent either party from thereafter demanding full and complete compliance nor prevent either party from exercising such remedy in the future.

ARTICLE 28

AGENCY

For purposes of sending and receiving notices and payments required by this Contract, the reinsured company that is set forth first in the Preamble to this Contract shall be deemed the agent of all other reinsured companies referenced in the Preamble.  In no event, however, shall any reinsured company be deemed the agent of another with respect to the terms of the Insolvency Article.

ARTICLE 29

mode of execution

A. This Contract may be executed by:

1. an original written ink signature of paper documents;

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UBWP0008C	18 of 22

2. an exchange of facsimile copies showing the original written ink signature of paper documents;

3. electronic signature technology employing computer software and a digital signature or digitizer pen pad to capture a person’s handwritten signature in such a manner that the signature is unique to the person signing, is under the sole control of the person signing, is capable of verification to authenticate the signature and is linked to the document signed in such a manner that if the data is changed, such signature is invalidated.

B. The use of any one or a combination of these methods of execution shall constitute a legally binding and valid signing of this Contract.  This Contract may be executed in one or more counterparts, each of which, when duly executed, shall be deemed an original.

ARTICLE 30

LIMITED RECOURSE

A. The liability of the Reinsurer for the performance and discharge of all of its obligations, however they may arise, in relation to this Contract (together “Obligations” for purposes of this Article), shall be limited to and payable solely from the proceeds of realization of the assets of the Trust Fund established in accordance with this Contract, and accordingly there shall be no recourse to any other assets of the Reinsurer whether or not allocated to any other separate account or the general account of the Reinsurer.  In the event that the proceeds of realization of the assets of the Trust Fund are insufficient to meet all Obligations, any Obligations remaining after the application of such proceeds shall be extinguished, and the Company undertakes in such circumstances to take no further action against the Reinsurer in respect of any such Obligations. In particular, neither the Company nor any party acting on its behalf shall petition or take any steps for the winding up or receivership of the Reinsurer.

B. Notwithstanding any matter referred to herein, the Company understands and accepts that the Reinsurer acts on behalf of one or more separate accounts of Claddaugh Casualty Insurance Company Ltd. and that all corporate matters relating to the creation of the Reinsurer, capacity of the Reinsurer, operation and liquidation of the Reinsurer and any matters relating to the Reinsurer thereof shall be governed by, and construed in accordance with, the laws of Bermuda. The Company has had the opportunity to take advice and to obtain all such additional information that it considers necessary to evaluate the terms, conditions and risks of entering into this Contract with the Reinsurer.

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UBWP0008C	19 of 22

IN WITNESS WHEREOF, the Company has caused this Contract to be executed by its duly authorized representative(s), who also confirms the Company’s review of and agreement to be bound by the terms and conditions of the Interests and Liabilities Agreements attached to and forming part of this Contract:

On this _____ day of __________, in the year of 2021.

TYPTAP INSURANCE COMPANY

Homeowners Choice Property & Casualty Insurance Company, Inc.

Signature:	Title:
Print Name:

NON-FLORIDA REINSTATEMENT PREMIUM PROTECTION

REINSURANCE CONTRACT

(FOR $6MXS$4M EXCESS CAT)

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UBWP0008C	20 of 22

TRUST AGREEMENT REQUIREMENTS CLAUSE

A. Except as provided in paragraph B of this Clause, if the Reinsurer satisfies its funding obligations under the Unauthorized Reinsurance Article by providing a Trust Agreement, the Reinsurer shall ensure that the Trust Agreement:

1. Requires the Reinsurer to establish a trust account for the benefit of the Company, and specifies what the Trust Agreement is to cover;

2. Stipulates that assets deposited in the trust account shall be valued according to their current fair market value and shall consist only of cash (United States legal tender), and certificates of deposit (issued by a United States bank and payable in United States legal tender), or any combination of the two, provided that the investments are issued by an institution that is not the parent, subsidiary or affiliate of either the Reinsurer or the Company;

3. Requires the Reinsurer, prior to depositing assets with the trustee, to execute assignments or endorsements in blank, or to transfer legal title to the trustee of all shares, obligations or any other assets requiring assignments, in order that the Company, or the trustee upon the direction of the Company, may whenever necessary negotiate these assets without consent or signature from the Reinsurer or any other entity;

4. Requires that all settlements of account between the Company and the Reinsurer be made in cash or its equivalent; and

5. Provides that assets in the trust account shall be withdrawn only as permitted in this Contract, without diminution because of the insolvency of the Company or the Reinsurer.

B. If a ceding insurer is domiciled in California and the Reinsurer satisfies its funding obligations under the Unauthorized Reinsurance Article by providing a Trust Agreement, the Reinsurer shall ensure that the Trust Agreement:

1. Provides that assets deposited in the trust account shall be valued according to their current fair market value and shall consist only of cash in United States dollars, certificates of deposit issued by a United States financial institution as defined in California Insurance Code Section 922.7(a) and payable in United States dollars, and investments permitted by the California Insurance Code, or any combination of the above.

2. Provides that investments in or issued by an entity controlling, controlled by or under common control with either the grantor or the beneficiary of the trust shall not exceed 5% of total investments.

3. Requires the Reinsurer, prior to depositing assets with the trustee, to execute assignments or endorsements in blank, or to transfer legal title to the trustee of all

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UBWP0008C	21 of 22

shares, obligations or any other assets requiring assignments, in order that the ceding insurer, or the trustee upon the direction of the ceding insurer, may, whenever necessary, negotiate these assets without consent or signature from the Reinsurer or any other entity.

4. Provides that assets in the trust account shall be withdrawn only as permitted in this Contract, without diminution because of the insolvency of the ceding insurer or the Reinsurer.

C. If there are multiple ceding insurers that collectively comprise the Company, “regulatory authorities” as referenced in subparagraph A(2) above, shall mean the individual ceding insurer’s domestic regulator.  

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UBWP0008C	22 of 22

EX-10.23

Exhibit 10.23

Florida Hurricane Catastrophe Fund RON DESANTIS GOVERNOR CHAIR JIMMY PATRONIS CHIEF FINANCIAL OFFICER ASHLEY MOODY ATTORNEY GENERAL ASHBEL C. WILLIAMS EXECUTIVE DIRECTOR & CHIEF INVESTMENT OFFICER

February 1, 2021

ATTENTION Florida Hurricane Catastrophe Fund (FHCF) Participant
Due No Later Than March 1, 2021

Dear FHCF Participant:

The FHCF Reimbursement Contract (‘Contract’) for the 2021/2022 Contract Year is due to be executed no later than Monday, March 1, 2021 via DocuSign. If your company has policies in force that are covered by the FHCF, Florida law requires that you execute and return the Contract. “Covered policy” is defined in Section 215.555(2)(c), Florida Statutes, and in Article V(11) of the Contract.

Failure to fully execute and submit the Contract by this deadline is a violation of the Florida Insurance Code and may result in a referral to the Florida Office of Insurance Regulation. Also, your company will not be in compliance and the FHCF may withhold all payments until your company becomes compliant.

Contract Execution Requirements

Execution of the 2021 Contract is a condition of your company’s writing FHCF “covered policies” in the State of Florida. The Contract has been adopted by Florida Administrative Code Rule and the terms cannot be altered. An officer of your company must:

1. Under Article XX, initial the:

a. NAIC group box if your company is a member of an NAIC group.

b. Box indicating the Coverage Level chosen by your company for the 2021/2022 contract year. The Coverage Level selected by your company for the prior Contract Year (2020/2021) is indicated for your reference. In the event no coverage level selection is made, your company’s Coverage Level will be deemed as stated in the Contract under Article III – Term.

c. Yes or No box under the section entitled Additional Living Expense (ALE) Written as Time Element Coverage.

2. Sign and date Article XXI – Signatures.

Company Contact Information (Form FHCF C-1)

Various FHCF mailings (e.g., Data Call Requests, Premium Invoices, etc.) are sent to participating companies throughout the year. The FHCF maintains a list of your contacts to ensure information reaches the appropriate party at your company in a timely manner. The Company Contact Information

DocuSign Envelope ID: CB9A2BB8-1E85-4C48-8343-7DAD8F8C43F2

ADMINISTERED FOR
THE STATE BOARD OF ADMINISTRATION BY
PARAGON STRATEGIC SOLUTIONS INC.
8200 TOWER • 5600 W. 83^RD STREET, SUITE 1100 • MINNEAPOLIS, MN 55437
PHONE: 800-689-FUND (3863) • FACSIMILE: 800-264-0492

February 1, 2021
Page 2

Form will be sent to you via a separate DocuSign email, which may be forwarded within your company as you deem appropriate. This Form must also be returned via DocuSign (even if your company has no updates) by March 1, 2021.

If you have any questions, please contact me at (800) 689-3863.
Cordially yours,

Holly Bertagnolli

FHCF Administration
Enclosures

1	FHCF-2021K
	Rule 19-8.010 F.A.C.

DocuSign Envelope ID: CB9A2BB8-1E85-4C48-8343-7DAD8F8C43F2

STATE BOARD OF ADMINISTRATION OF FLORIDA 1801 HERMITAGE BOULEVARD, SUITE 100 TALLAHASSEE, FLORIDA 32308 (850) 488-4406 POST OFFICE BOX 13300 32317-3300 RON DESANTIS GOVERNOR CHAIR JIMMY PATRONIS CHIEF FINANCIAL OFFICER ASHLEY MOODY ATTORNEY GENERAL ASHBEL C. WILLIAMS EXECUTIVE DIRECTOR & CHIEF INVESTMENT OFFICER

REIMBURSEMENT CONTRACT

Coverage Effective: June 1, 2021

(“Contract”)

between

Typtap Insurance Company

(“Company”)

NAIC # «NAIC

15885

and

THE STATE BOARD OF ADMINISTRATION OF THE STATE OF FLORIDA (“SBA”) WHICH ADMINISTERS THE FLORIDA HURRICANE CATASTROPHE FUND (“FHCF”) PREAMBLE

Section 215.555, Florida Statutes creates the FHCF and directs the SBA to administer the FHCF. This Contract, consisting of the principal document entitled Reimbursement Contract, addressing the mandatory FHCF coverage, and Addenda, is subject to Section 215.555, Florida Statutes, and to any administrative rule adopted pursuant thereto, and is not intended to be in conflict therewith. All provisions in the principal document are equally applicable to each Addendum unless specifically superseded by one of the Addenda. In consideration of the promises set forth in this Contract, the parties agree as follows:

ARTICLE I - SCOPE OF AGREEMENT

As a condition precedent to the SBA’s obligations under this Contract, the Company shall report to the SBA in a specified format the business it writes which is described in this Contract as Covered Policies. The terms of this Contract shall determine the rights and obligations of the parties. This Contract provides reimbursement to the Company under certain circumstances, as described herein, and does not provide or extend insurance or reinsurance coverage to any person, firm, corporation or other entity. The SBA shall reimburse the Company for its Ultimate Net Loss on Covered Policies, which were in force

2	FHCF-2021K
	Rule 19-8.010 F.A.C.

DocuSign Envelope ID: CB9A2BB8-1E85-4C48-8343-7DAD8F8C43F2

and in effect at the time of the Covered Event causing the Loss, in excess of the Company’s Retention as a result of each Covered Event commencing during the Contract Year, to the extent funds are available, all as hereinafter defined.

ARTICLE II - PARTIES TO THE CONTRACT

This Contract is solely between the Company, an Authorized Insurer or any entity writing Covered Policies under Section 627.351, Florida Statutes, in the State of Florida, and the SBA. In no instance shall any insured of the Company, any claimant against an insured of the Company, or any other third party have any rights under this Contract, except as provided in Article XV. The SBA will disburse funds only to the Company, except as provided for in Article XV. The Company shall not, without the prior approval of the Florida Office of Insurance Regulation, sell, assign, or transfer to any third party, in return for a fee or other consideration any sums the FHCF pays under this Contract or the right to receive such sums.

ARTICLE III – TERM; EXECUTION

(1) Term

This Contract applies to Losses from Covered Events which commence during the period from 12:00:01 a.m., Eastern Time, June 1, 2021, to 12:00 midnight, Eastern Time, May 31, 2022 (the “Contract Year”). The SBA shall not be liable for Losses from Covered Events which commence after the effective time and date of expiration or termination. Should this Contract expire or terminate while a Covered Event is in progress, the SBA shall be responsible for such Covered Event in progress in the same manner and to the same extent it would have been responsible had the Contract expired the day following the conclusion of the Covered Event in progress.

(2) Mandatory Nature of this Contract

(a) Statutory Requirement

This Contract has been adopted as part of Rule 19-8.010, Florida Administrative Code (F.A.C.), in fulfillment of the statutory requirement that the SBA enter into a Contract with each Company writing Covered Policies in Florida. Under Section 215.555(4)(a), Florida Statutes, the SBA must enter into such a Contract with each such Company, and each such Company must enter into the Contract as a condition of doing business in Florida. Under Section 215.555(16)(c), Florida Statutes, Companies writing Covered Policies must execute the Contract by March 1 of the immediately preceding Contract Year.

3	FHCF-2021K
	Rule 19-8.010 F.A.C.

DocuSign Envelope ID: CB9A2BB8-1E85-4C48-8343-7DAD8F8C43F2

(b)Duty to Provide a Fully and Timely Executed Copy of this Contract to the FHCFAdministrator

The Company must provide a fully executed copy of this Contract in electronic form to the Administrator no later than the March 1 statutory deadline for execution, or, in the case of a New Participant, no later than 30 days after the New Participant began writing Covered Policies.

(3) Contract Deemed Executed Notwithstanding Execution Errors

Except with respect to New Participants, this Contract is deemed to have been executed by the Company as of the March 1 statutory deadline, notwithstanding the fact that the Coverage Level election in Article XX(1)(b) may be invalid, and notwithstanding the fact that the person purporting to execute the Contract on the part of the Company may have lacked the requisite authority. With respect to New Participants, this Contract is deemed to have been executed by the New Participant as of the date on which the New Participant began writing Covered Policies; coverage shall be determined as provided in paragraphs (c) and (d). Execution of this Contract by or on behalf of an entity that does not write Covered Policies is void. If the Company failed to timely submit an executed copy of this Contract, or if the executed Contract includes an invalid Coverage Level election under Article XX, the Company’s Coverage Level shall be deemed as follows:

(a) For a Company that is a member of a National Association of Insurance Commissioners (NAIC) group, the same Coverage Level selected by the other Companies of the same NAIC group shall be deemed. If executed Contracts for none of the members of an NAIC group have been received by the FHCF Administrator, the Coverage Level from the prior Contract Year shall be deemed.

(b) For a Company that is not a member of an NAIC group under which other Companies are active participants in the FHCF, the Coverage Level from the prior Contract Year shall be deemed.

(c) For a New Participant that is a member of an NAIC group, the same Coverage Level selected by the other Companies of the same NAIC group shall be deemed.

(d) For a New Participant that is not a member of an NAIC group under which other Companies are active participants in the FHCF, the 45%, 75% or 90% Coverage Levels may be selected if the FHCF Administrator receives executed Contracts within 30 calendar days after the effective date of the first Covered Policy, otherwise, the 45% Coverage Level shall be deemed to have been selected.

4	FHCF-2021K
	Rule 19-8.010 F.A.C.

DocuSign Envelope ID: CB9A2BB8-1E85-4C48-8343-7DAD8F8C43F2

ARTICLE IV - LIABILITY OF THE FHCF

(1) The SBA shall reimburse the Company with respect to each Covered Event commencing during the Contract Year in the amount of Ultimate Net Loss paid by the Company in excess of the Company’s Retention, as adjusted pursuant to the definition of Retention in Article V, multiplied by the applicable Coverage Level, plus 10% of the reimbursed Losses as a Loss Adjustment Expense Allowance, the total of which shall not exceed the Company’s Limit.

(2) Section 215.555(4)(c)1., Florida Statutes, provides that the obligation of the FHCF with respect to all Contracts covering a particular Contract Year shall not exceed the Actual Claims-Paying Capacity of the FHCF up to a specified dollar limit.

(3) In order to assure that reimbursements do not exceed the statutory limit on the obligation of the FHCF provided in Section 215.555(4)(c)1., Florida Statutes, the SBA shall, upon the occurrence of a Covered Event, evaluate the potential Losses to the FHCF and the FHCF’s capacity at the time of the event. The initial Projected Payout Multiple used to reimburse the Company for its Losses shall not exceed the Projected Payout Multiple as calculated based on the capacity needed to provide the FHCF’s coverage. If it appears that the Estimated Claims-Paying Capacity may be exceeded, the SBA shall reduce the projected payout factors or multiples for determining each participating insurer’s projected payout uniformly among all insurers to reflect the Estimated Claims-Paying Capacity.

(4) Reimbursement amounts shall not be reduced by reinsurance paid or payable to the Company from other sources. Once the Company’s Limit has been exhausted, the Company will not be entitled to further reimbursements.

ARTICLE V - DEFINITIONS

As used in this Contract, the following words and phrases are defined to mean:

(1) Actual Claims-Paying Capacity of the FHCF

This term means the sum of the Balance of the Fund as of December 31 of a Contract Year, plus any reinsurance purchased by the FHCF, plus the amount the SBA is able to raise through the issuance of revenue bonds under Section 215.555(6), Florida Statutes.

(2) Actuarially Indicated

This term means an amount determined according to principles of actuarial science to be adequate, but not excessive, in the aggregate, to pay current and future obligations and expenses of the fund, including additional amounts if needed to pay debt service on

5	FHCF-2021K
	Rule 19-8.010 F.A.C.

DocuSign Envelope ID: CB9A2BB8-1E85-4C48-8343-7DAD8F8C43F2

revenue bonds and to provide required debt service coverage in excess of the amounts required to pay actual debt service on revenue bonds, and determined according to principles of actuarial science to reflect each insurer’s relative exposure to hurricane losses.

(3) Additional Living Expense (ALE)

ALE Losses covered by the FHCF are not to exceed 40 percent of the insured value of a Residential Structure or its contents. Fair rental value, loss of rents, or business interruption losses are not covered by the FHCF.

(4) Administrator

This term means the entity with which the SBA contracts to perform administrative tasks associated with the operations of the FHCF. The current Administrator is Paragon Strategic Solutions Inc., 8200 Tower, 5600 West 83^rd Street, Suite 1100, Minneapolis, Minnesota 55437. The telephone number is (800) 689-3863.

(5) Authorized Insurer

This term is defined in Section 624.09(1), Florida Statutes.

(6) Balance of the Fund as of December 31 or Fund Balance

This term means the amount of assets available to pay claims resulting from Covered Events which occurred during the Contract Year, not including any pre-event or post-event bonds, reinsurance, or proceeds from other financing mechanisms.

(7) Borrowing Capacity

This term means the amount of funds which are able to be raised by the issuance of revenue bonds or through other financing mechanisms, less bond issuance expenses and reserves.

(8) Citizens Property Insurance Corporation (Citizens)

This term means Citizens Property Insurance Corporation as created under Section 627.351(6), Florida Statutes. For the purposes of the FHCF, Citizens Property Insurance Corporation incorporates two accounts, (a) the coastal account and (b) the personal lines and commercial lines accounts. Each account is treated by the FHCF as if it were a separate participating insurer with its own reportable exposures, Reimbursement Premium, Retention, and Ultimate Net Loss.

(9) Covered Event

This term means any one storm declared to be a hurricane by the National Hurricane Center which causes insured losses in Florida. A Covered Event begins when a hurricane causes damage in Florida while it is a hurricane and continues throughout any

6	FHCF-2021K
	Rule 19-8.010 F.A.C.

DocuSign Envelope ID: CB9A2BB8-1E85-4C48-8343-7DAD8F8C43F2

subsequent downgrades in storm status by the National Hurricane Center regardless of whether the hurricane makes landfall. Any storm, including a tropical storm, which does not become a hurricane is not a Covered Event.

(10) Coverage Level

This term means the level of reimbursement (90%, 75%, or 45%), as elected by the Company under Article XX or deemed under Article III(3), which is used in determining reimbursement under Article IV.

(11) Covered Policy

(a) Covered Policy, as defined in Section 215.555(2)(c), Florida Statutes, is further clarified to mean only that portion of a binder, policy or contract of insurance that insures real or personal property located in the State of Florida to the extent such policy insures a Residential Structure or the contents of a Residential Structure, located in the State of Florida.

( ) 1. Covered Policy also includes any collateral protection insurance policy covering personal residences which protects both the borrower’s and the lender’s financial interest, in an amount at least equal to the coverage for the dwelling in place under the lapsed homeowner’s policy, if such policy can be accurately reported as required in Section 215.555(5), Florida Statutes. A Company will be deemed to be able to accurately report data if the company submits the required data as specified in the Data Call adopted under Rule 19-8.029, F.A.C.

2. The SBA finds that the replacement cost value of a dwelling is the functional equivalent of the dwelling coverage amount under the lapsed homeowner’s policy and that coverage in the amount of the replacement cost value fulfills the legislative intent that collateral protection policies are to be covered by the FHCF only when they protect the borrower’s interest in the dwelling to the same extent as a traditional residential policy. Therefore, for purposes of this definition of Covered Policy, a collateral protection policy is deemed to be written in an amount at least equal to the coverage for the dwelling in place under the lapsed homeowner’s policy if the dwelling coverage amount is either:

a. Equal to or greater than the amount of dwelling coverage in place under the “lapsed homeowner’s policy,” i.e., the last residential policy placed by the borrower; or

7	FHCF-2021K
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b. Equal to or greater than 100% of the replacement cost value of the dwelling, as determined under a methodology approved in advance as required by the Data Call. For the purpose of this determination, “replacement cost value” means the cost to replace the dwelling on the same premises, without deduction for depreciation, with material of like kind and quality and for like use.

(c) Covered Policy does not include any policy or exposure excluded under Article VI.

(12) Deductible Buy-Back Policy

This term means a specific policy that provides coverage to a policyholder for some portion of the policyholder’s deductible under a policy issued by another insurer.

(13) Estimated Claims-Paying Capacity of the FHCF

This term means the sum of the projected Balance of the Fund as of December 31 of a Contract Year, plus any reinsurance purchased by the FHCF, plus the most recent estimate of the Borrowing Capacity of the FHCF, determined pursuant to Section 215.555(4)(c), Florida Statutes.

(14) Excess Policy

This term means, for the purposes of this Contract, a policy that provides insurance protection for large commercial property risks and that provides a layer of coverage above a primary layer (which is insured by a different insurer) that acts much the same as a very large deductible.

(15) Insurer Group

For purposes of the Coverage Level election in Section 215.555(4)(b), Florida Statutes, Insurer Group means the group designation assigned by the NAIC for regulatory purposes. A Company is a member of a group as designated by the NAIC until such Company is assigned another group designation or is no longer a member of a group.

(16) Limit

This term means the maximum amount that a Company may recover under this Contract, calculated by multiplying the Company’s Reimbursement Premium by the Payout Multiple.

(17) Loss

This term means an incurred loss under a Covered Policy from a Covered Event, including Additional Living Expenses not to exceed 40 percent of the insured value of a Residential Structure or its contents and amounts paid as fees on behalf of or inuring to the benefit of a policyholder. The term Loss does not include allocated or unallocated loss adjustment expenses or any item for which this Contract does not provide reimbursement pursuant to the exclusions in Article VI.

(18) Loss Adjustment Expense Allowance

(a) The Loss Adjustment Expense Allowance is equal to 10% of the reimbursed Losses under this Contract as provided in Article IV, pursuant to Section 215.555(4)(b)1., Florida Statutes.

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(b) The Loss Adjustment Expense Allowance is included in, and not in addition to, the Limit applicable to a Company.

(19) New Participant

This term means a Company that begins writing Covered Policies on or after the beginning of the Contract Year. A Company that removes Covered Policies from Citizens pursuant to an assumption agreement effective on or after June 1 and had written no other Covered Policies before June 1 is also considered a New Participant.

(20) Payout Multiple

This term means the multiple as calculated in accordance with Section 215.555(4)(c), Florida Statutes, which is derived by dividing the actual single season Claims-Paying Capacity of the FHCF by the total aggregate industry Reimbursement Premium for the FHCF for the Contract Year billed as of December 31 of the Contract Year. The final Payout Multiple is determined once Reimbursement Premiums have been billed as of December 31 and the amount of bond proceeds has been determined.

(21) Premium Formula

This term means the Formula developed pursuant to Section 215.555(5)(b), Florida Statutes, and approved by the SBA Trustees for the purpose of determining the Actuarially Indicated Reimbursement Premium to be paid to the FHCF.

(22) Projected Payout Multiple

The Projected Payout Multiple is used to calculate a Company’s projected payout pursuant to Section 215.555(4)(d)2., Florida Statutes. The Projected Payout Multiple is derived by dividing the estimated single season Claims-Paying Capacity of the FHCF by the estimated total aggregate industry Reimbursement Premium for the FHCF for the Contract Year. The Company’s Reimbursement Premium as paid to the SBA for the Contract Year is multiplied by the Projected Payout Multiple to estimate the Company’s coverage from the FHCF for the Contract Year.

(23) Reimbursement Premium or Premium

These terms mean the amount to be paid by the Company, as determined by multiplying each $1,000 of insured value reported by the Company in accordance with Section 215.555(5)(b), Florida Statutes, by the rate as derived from the Premium Formula, as described in Rule 19-8.028, F.A.C.

(24) Residential Structure

In general, this term means a unit or building used exclusively or predominantly for dwelling or habitational occupancies, including the primary structure and appurtenant

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structures insured under the same Covered Policy and any other structures covered under endorsements associated with the Covered Policy covering the Residential Structure.

(a) With respect to a unit or home insured under a personal lines residential policy form, such unit or home is deemed to have a habitational occupancy and to be a Residential Structure regardless of the term of its occupancy.

(b) With respect to a condominium structure or complex insured under a commercial lines policy, such structure is deemed to have a habitational occupancy and to be a Residential Structure, regardless of the term of occupancy of individual units.

(c) A single structure which includes a mix of commercial habitational and commercial non-habitational occupancies, and is insured under a commercial lines policy, is considered a Residential Structure if 50% or more of the total insured value of the structure is used for habitational occupancies.

(d) Residential Structures do not include any structures excluded under Article VI.

(25) Retention

This term means the amount of Losses from a Covered Event which must be incurred by the Company before it is eligible for reimbursement from the FHCF.

(a) When the Company incurs Losses from one or two Covered Events during the Contract Year, the Company’s full Retention shall be applied to each of the Covered Events.

(b) When the Company incurs Losses from more than two Covered Events during the Contract Year, the Company’s full Retention shall be applied to each of the two Covered Events causing the largest Losses for the Company. For each other Covered Event resulting in Losses, the Company’s Retention shall be reduced to one-third of its full Retention.

1. All reimbursement of Losses for each Covered Event shall be based on the Company’s full Retention until December 31 of the Contract Year. Adjustments to reflect a reduction to one-third of the full Retention shall be made on or after January 1 of the Contract Year provided the Company reports its Losses as specified in this Contract.

2.Adjustments to the Company’s Retention shall be based upon its paid and outstanding Losses as reported on the Company’s Proof of Loss Reports, but shall not include incurred but not reported Losses. The Company’s Proof of Loss Reports shall be used to determine which Covered Events constitute the Company’s two

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largest Covered Events. After this initial determination, any subsequent adjustments shall be made quarterly by the SBA only if the Proof of Loss Reports reveal that loss development patterns have resulted in a change in the order of Covered Events entitled to the reduction to one-third of the full Retention.

(c) The Company’s full Retention is established in accordance with the provisions of Section 215.555(2)(e), Florida Statutes, and shall be determined by multiplying the Retention Multiple by the Company’s Reimbursement Premium for the Contract Year.

(26) Retention Multiple

(a) The Retention Multiple is applied to the Company’s Reimbursement Premium to determine the Company’s Retention. The Retention Multiple for the 2021/2022 Contract Year shall be equal to $4.5 billion, adjusted based upon the reported exposure for the 2019/2020 Contract Year to reflect the percentage growth in exposure to the FHCF since 2004, divided by the estimated total industry Reimbursement Premium at the 90% Coverage Level for the Contract Year as determined by the SBA.

(b) The Retention Multiple shall be adjusted to reflect the Coverage Level elected by the Company under this Contract as follows:

1. If the Company elects the 90% Coverage Level, the adjusted Retention Multiple is 100% of the amount determined under paragraph (a);

2. If the Company elects the 75% Coverage Level, the adjusted Retention Multiple is 120% of the amount determined under paragraph (a); or

3. If the Company elects the 45% Coverage Level, the adjusted Retention Multiple is 200% of the amount determined under paragraph (a).

(27) Ultimate Net Loss

(a) This term means all Losses under Covered Policies in force at the time of a Covered Event prior to the application of the Company’s Retention and Coverage Level, and excluding loss adjustment expense and any exclusions under Article VI.

(b) In calculating the Company’s Ultimate Net Loss, the amounts described in paragraph (a) shall be reduced by the deductibles applicable under the policy to the hurricane loss, without recognition of any credit earned or reduction to the deductible under the policy applied by the Company. The deductibles must first be applied to the portion of the Loss covered by the FHCF.

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(c) Salvages and all other recoveries, excluding reinsurance recoveries, shall be first deducted from such Loss to arrive at the amount of liability attaching hereunder.

(d) All salvages, recoveries or payments recovered or received subsequent to a Loss settlement under this Contract shall be applied as if recovered or received prior to the aforesaid settlement and all necessary adjustments shall be made by the parties hereto.

(e) The SBA shall be subrogated to the rights of the Company to the extent of its reimbursement of the Company. The Company agrees to assist and cooperate with the SBA in all respects as regards such subrogation. The Company further agrees to undertake such actions as may be necessary to enforce its rights of salvage and subrogation, and its rights, if any, against other insurers as respects any claim, loss, or payment arising out of a Covered Event.

ARTICLE VI – EXCLUSIONS

This Contract does not provide reimbursement for:

(1) Any losses not defined as being within the scope of a Covered Policy, including any loss other than a loss under the first-party property section of a policy pertaining strictly to the structure, its contents, appurtenant structures, or ALE coverage.

(2) Any policy which excludes wind or hurricane coverage.

(3) Any Excess Policy or Deductible Buy-Back Policy that requires individual ratemaking, as determined by the FHCF.

(4) (a) Any policy for Residential Structures that provides a layer of coverage underneath an Excess Policy issued by a different insurer;

(b) Any policy providing a layer of windstorm or hurricane coverage for a structure(s) above or below a layer of windstorm or hurricane coverage under a separate policy issued by a different insurer, or any other circumstance in which two or more insurers provide primary windstorm or hurricane coverage for a structure(s) using separate policy forms;

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(c) Any other policy providing a layer of windstorm or hurricane coverage for a structure(s) below a layer of self-insured windstorm or hurricane coverage for the same structure(s); or

(d) The exclusions in this subsection do not apply to primary quota share policies written by Citizens Property Insurance Corporation under Section 627.351(6)(c)2., Florida Statutes.

(5) Any liability of the Company attributable to losses for fair rental value, loss of rent or rental income, or business interruption.

(6) Any collateral protection policy that does not meet the definition of Covered Policy as defined in Article V(11)(b).

(7) Any reinsurance assumed by the Company.

(8) Hotels, motels, timeshares, shelters, camps, retreats, or other similar structures. This exclusion does not apply to any policy identified as covering a residential condominium association or to any policy on which the insured is a residential condominium association, unless it is classified and rated as a hotel, motel, timeshare, shelter, camp, retreat or other similar structure.

(9) Retail, office, mercantile, or manufacturing facilities, or other similar structures.

(10) Any exposure for condominium or homeowner associations if no Residential Structures are insured under the policy.

(11) Commercial healthcare facilities and nursing homes; however, a nursing home which is an integral part of a retirement community consisting primarily of habitational structures that are not nursing homes will not be subject to this exclusion.

(12) Any exposure under commercial policies covering only appurtenant structures or structures that do not function as a habitational structure (e.g., a policy covering only the pool of an apartment complex).

(13) Policies covering only Additional Living Expense.

(14) Any exposure for barns or barns with apartments or living quarters.

(15) Any exposure for builders risk coverage or new Residential Structures under construction.

(16) Any exposure for vehicles, recreational vehicles, golf carts, or boats (including boat related equipment) requiring licensing.

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(17) Any liability of the Company for extra contractual obligations or liabilities in excess of original policy limits. This exclusion includes, but is not limited to, amounts paid as bad faith awards, punitive damages awards, or other court-imposed fines, sanctions, or penalties; or other amounts in excess of the coverage limits under the Covered Policy.

(18) Any losses paid in excess of a policy’s hurricane limit in force at the time of the Covered Event, including individual coverage limits (i.e., building, appurtenant structures, contents, and additional living expense), or other amounts paid as the result of a voluntary expansion of coverage by the insurer, including, but not limited to, a discount on or waiver of an applicable deductible. This exclusion includes overpayments of a specific individual coverage limit even if total payments under the policy are within the aggregate policy limit.

(19) Any losses paid under a policy for Additional Living Expense, written as a time element coverage, in excess of the Additional Living Expense exposure reported for that policy under the Data Call for the applicable Contract Year (unless policy limits have changed effective after June 30 of the Contract Year).

(20) Any losses which the Company’s claims files do not adequately support. Claim file support shall be deemed adequate if in compliance with the Records Retention Requirements outlined on the Form FHCF-L1B (Proof of Loss Report) applicable to the Contract Year.

(21) Any exposure for, or amounts paid to reimburse a policyholder for, condominium association loss assessments or under similar coverages for contractual liabilities.

(22) Losses in excess of the aggregate limits of liability specified in Article IV and in Section 215.555(4)(c), Florida Statutes.

(23) Any liability assumed by the Company from Pools, Associations, and Syndicates. Exception: Covered Policies assumed from Citizens under the terms and conditions of an executed assumption agreement between the Company and Citizens are covered by this Contract.

(24) All liability of the Company arising by contract, operation of law, or otherwise, from its participation or membership, whether voluntary or involuntary, in any insolvency fund. “Insolvency fund” includes any guaranty fund, insolvency fund, plan, pool, association, fund or other arrangement, howsoever denominated, established or governed, which provides for any assessment of or payment or assumption by the Company of part or all of any claim, debt, charge, fee, or other obligation of an insurer, or its successors or

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assigns, which has been declared by any competent authority to be insolvent, or which is otherwise deemed unable to meet any claim, debt, charge, fee or other obligation in whole or in part.

(25) Property losses that are proximately caused by any peril other than a Covered Event, including, but not limited to, fire, theft, flood or rising water, or windstorm that does not constitute a Covered Event, or any liability of the Company for loss or damage caused by or resulting from nuclear reaction, nuclear radiation, or radioactive contamination from any cause, whether direct or indirect, proximate or remote, and regardless of any other cause or event contributing concurrently or in any other sequence to the loss.

(26) Losses from water damage including flood, surface water, waves, tidal water, overflow of a body of water, storm surge, or spray from any of these, whether or not driven by wind.

(27) A policy providing personal property coverage separate from coverage of personal property included in a homeowner’s, mobile home owner’s, condominium unit owner’s, or tenant’s policy or other policy covering a Residential Structure, or in an endorsement to such a policy. Also excluded is a personal property endorsement to a policy that excludes windstorm or hurricane coverage or to any other type of policy that does not meet the definition of covered policy.

(28) Endorsements predominantly covering Specialized Fine Arts Risks or collectible types of property meeting the following requirements:

(a) An endorsement predominantly covering Specialized Fine Arts Risks and not covering any Residential Structure if it meets the description in subparagraph 1 and if the conditions in subparagraph 2 are met.

1. For purposes of this exemption, a Specialized Fine Arts Risk endorsement is an endorsement that:

a. Insures works of art, of rarity, or of historic value, such as paintings, works on paper, etchings, art glass windows, pictures, statuary, sculptures, tapestries, antique furniture, antique silver, antique rugs, rare books or manuscripts, jewelry, or other similar items;

b. Charges a minimum premium of $500; and

c. Insures scheduled items valued, in the aggregate, at no less than $100,000.

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2. The insurer offers specialized loss prevention services or other collector services designed to prevent or minimize loss, or to value or inventory the Specialized Fine Arts for insurance purposes, such as:

a. Collection risk assessments;

b. Fire and security loss prevention;

c. Warehouse inspections to protect items stored off-site;

d. Assistance with collection inventory management; or

e. Collection valuation reviews.

(b) An endorsement generally used by the Company to cover personal property which could include property of a collectible nature, including fine arts, as further described in this paragraph, either on a scheduled basis or written under a blanket limit, and not covering anything other than personal property. All such endorsements are subject to the exclusion provided in this paragraph when the endorsement limit equals or exceeds $500,000. Generally such collectible property has unusually high values due to its investible, artistic, or unique intrinsic nature. The class of property covered under such an endorsement represents an unusually high exposure value and such endorsement is intended to provide coverage for a class or classes of property that is not typical for the contents coverage under residential property insurance policies. In many cases property may be located at various locations either in or outside the state of Florida or the location of the property may change from time to time. The investment nature of such property distinguishes this type of exposure from the typical contents associated with a Covered Policy.

(29) Any losses under liability coverages.

ARTICLE VII - MANAGEMENT OF CLAIMS AND LOSSES

The Company shall investigate and settle or defend all claims and Losses. All payments of claims or Losses by the Company within the terms and limits of the appropriate coverage parts of Covered Policies shall be binding on the SBA, subject to the terms of this Contract, including the provisions in Article XIII relating to inspection of records and examinations.

ARTICLE VIII – REIMBURSEMENT ADJUSTMENTS

Section 215.555(4)(d) and (e), Florida Statutes, provides the SBA with the right to seek the return of excess reimbursements which have been paid to the Company along with interest thereon. Excess reimbursements are those payments made to the Company by the SBA that are in excess of the Company’s coverage under the Contract Year. Excess reimbursements

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may result from adjustments to the Projected Payout Multiple or the Payout Multiple, incorrect exposure (Data Call) submissions or resubmissions, incorrect calculation of Reimbursement Premium or Retention, incorrect Proof of Loss Reports, incorrect calculation of reinsurance recoveries, or subsequent readjustment of policyholder claims, including subrogation and salvage, or any combination of the foregoing. The Company will be sent an invoice showing the due date for adjustments along with the interest due thereon through the due date. The applicable interest rate for interest credits, and for interest charges for adjustments beyond the Company’s control, will be the average rate earned by the SBA for the FHCF for the first four months of the Contract Year. The applicable interest rate for interest charges on excess reimbursements due to adjustments resulting from incorrect exposure submissions or Proof of Loss Reports will accrue at this rate plus 5%. All interest will continue to accrue if not paid by the due date.

ARTICLE IX - REIMBURSEMENT PREMIUM

(1) The Company shall, in a timely manner, pay the SBA its Reimbursement Premium for the Contract Year. The Reimbursement Premium for the Contract Year shall be calculated in accordance with Section 215.555, Florida Statutes, with any rules promulgated thereunder, and with Article X(2).

(2) The Company’s Reimbursement Premium is based on its June 30 exposure in accordance with Article X, except as provided for New Participants under Article X, and is not adjusted to reflect an increase or decrease in exposure for Covered Policies effective after June 30 nor is the Reimbursement Premium adjusted when the Company cancels policies or is liquidated or otherwise changes its business status (merger, acquisition, or termination) or stops writing new business (continues in business with its policies in a runoff mode). Similarly, new business written after June 30 will not increase or decrease the Company’s FHCF Reimbursement Premium or impact its FHCF coverage. FHCF Reimbursement Premiums are required of all Companies based on their writing Covered Policies in Florida as of June 30, and each Company’s FHCF coverage as based on the definition in Section 215.555(2)(m), Florida Statutes, shall exist for the entirety of the Contract Year regardless of exposure changes, except as provided for New Participants under Article X.

(3) Since the calculation of the Actuarially Indicated Premium assumes that the Companies will pay their Reimbursement Premiums timely, interest charges will accrue under the following circumstances. A Company may choose to estimate its own Reimbursement

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Premium installments. However, if the Company’s estimation is less than the provisional Reimbursement Premium billed, an interest charge will accrue on the difference between the estimated Reimbursement Premium and the final Reimbursement Premium. If a Company estimates its first installment, the Administrator shall bill that estimated Reimbursement Premium as the second installment as well, which will be considered as an estimate by the Company. No interest will accrue regarding any provisional Reimbursement Premium if paid as billed by the FHCF’s Administrator, except in the case of an estimated second installment as set forth in this Article. Also, if a Company makes an estimation that is higher than the provisional Reimbursement Premium billed but is less than the final Reimbursement Premium, interest will not accrue. If the Reimbursement Premium payment is not received from a Company when it is due, an interest charge will accrue on a daily basis until the payment is received. Interest will also accrue on Reimbursement Premiums resulting from submissions or resubmissions finalized after December 1 of the Contract Year. An interest credit will be applied for any Reimbursement Premium which is overpaid as either an estimate or as a provisional Reimbursement Premium. Interest shall not be credited past December 1 of the Contract Year. The applicable interest rate for interest credits will be the average rate earned by the SBA for the FHCF for the first four months of the Contract Year. The applicable interest rate for interest charges will accrue at this rate plus 5%.

ARTICLE X - REPORTS AND REMITTANCES
(1) Exposures

(a) If the Company writes Covered Policies before June 1 of the Contract Year, the Company shall report to the SBA, unless otherwise provided in Rule 19-8.029, F.A.C., no later than the statutorily required date of September 1 of the Contract Year, by ZIP Code or other limited geographical area as specified by the SBA, its insured values under Covered Policies as of June 30 of the Contract Year as outlined in the annual reporting of insured values form, FHCF-D1A (Data Call) adopted for the Contract Year under Rule 19-8.029, F.A.C., and other data or information in the format specified by the SBA.

(b) If the Company first begins writing Covered Policies on or after June 1 but prior to December 1 of the Contract Year, the Company shall report to the SBA, no later than February 1 of the Contract Year, by ZIP Code or other limited geographical area as specified by the SBA, its insured values under Covered Policies as of November 30 of the Contract Year as outlined in the Supplemental Instructions for New Participants

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section of the Data Call adopted for the Contract Year under Rule 19-8.029, F.A.C., and other data or information in the format specified by the SBA.

(c) If the Company first begins writing Covered Policies on December 1 through and including May 31 of the Contract Year, the Company shall not report its exposure data for the Contract Year to the SBA.

(d) The requirement that a report is due on a certain date means that the report shall be received by the SBA no later than 4 p.m. Eastern Time on the due date. Reports sent to the FHCF Administrator in Minneapolis, Minnesota, will be returned to the sender. Reports not in the physical possession of the SBA by 4 p.m., Eastern Time, on the applicable due date are late.

(2) Reimbursement Premium

(a) If the Company writes Covered Policies before June 1 of the Contract Year, the Company shall pay the FHCF its Reimbursement Premium in installments due on or before August 1, October 1, and December 1 of the Contract Year in amounts to be determined by the FHCF. However, if the Company’s Reimbursement Premium for the prior Contract Year was less than $5,000, the Company’s full provisional Reimbursement Premium, in an amount equal to the Reimbursement Premium paid in the prior year, shall be due in full on or before August 1 of the Contract Year. The Company will be invoiced for amounts due, if any, beyond the provisional Reimbursement Premium payment, on or before December 1 of the Contract Year.

(b) If the Company is under administrative supervision, or if any control or oversight of the Company has been transferred through any legal or regulatory action to a state regulator or court appointed receiver or rehabilitator (referred to in the aggregate as “state action”):

1. The full annual provisional Reimbursement Premium as billed and any outstanding balances will be due and payable on August 1, or the date that such State action occurs after August 1 of the Contract Year.

2. Failure by such Company to pay the full annual provisional Reimbursement Premium as specified in subparagraph 1. by the applicable due date shall result in the 45% Coverage Level being deemed for the complete Contract Year regardless of the level selected for the Company through the execution of this Contract and regardless of whether a Covered Event occurred or triggered coverage.

3. Subparagraphs 1. and 2. do not apply if the state regulator, receiver, or rehabilitator provides a letter of assurance to the FHCF stating that the

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Company will have the resources and will pay the full Reimbursement Premium for the Coverage Level selected through the execution of this Contract.

4. When control or oversight has been transferred, in whole or in part, through a legal or regulatory action, the controlling management of the Company shall specify by August 1 or as soon thereafter as possible (but not to exceed two weeks after any regulatory or legal action) in a letter to the FHCF as to the Company’s intentions to either pay the full FHCF Reimbursement Premium as specified in subparagraph 1., to default to the 45% Coverage Level being deemed as specified in subparagraph 2., or to provide the assurances as specified in subparagraph 3.

(c) A New Participant that first begins writing Covered Policies on or after June 1 but prior to December 1 of the Contract Year shall pay the FHCF a provisional Reimbursement Premium of $1,000 no later than 30 days from the date the New Participant began writing Covered Policies. The Administrator shall calculate the Company's actual Reimbursement Premium for the period based on its actual exposure as of November 30 of the Contract Year, as reported on or before February 1 of the Contract Year. To recognize that New Participants have limited exposure during this period, the actual Reimbursement Premium as determined by processing the Company's exposure data shall then be divided in half, the provisional Reimbursement Premium shall be credited, and the resulting amount shall be the total Reimbursement Premium due for the Company for the remainder of the Contract Year. However, if that amount is less than $1,000, then the Company shall pay $1,000. The Reimbursement Premium payment is due no later than April 1 of the Contract Year. The Company’s Retention and coverage will be determined based on the total Reimbursement Premium due as calculated above.

(d) A New Participant that first begins writing Covered Policies on or after December 1 through and including May 31 of the Contract Year shall pay the FHCF a Reimbursement Premium of $1,000 no later than 30 days from the date the New Participant began writing Covered Policies.

(e) The requirement that the Reimbursement Premium is due on a certain date means that the Reimbursement Premium shall be remitted by wire transfer or ACH and shall have been credited to the FHCF’s account, as set out on the invoice sent to the Company, on the due date applicable to the particular installment.

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(f) Except as required by Section 215.555(7)(c), Florida Statutes, or as described in the following sentence, Reimbursement Premiums, together with earnings thereon, received in a given Contract Year will be used only to pay for Losses attributable to Covered Events occurring in that Contract Year or for Losses attributable to Covered Events in subsequent Contract Years and will not be used to pay for past Losses or for debt service on post-event revenue bonds issued pursuant to Section 215.555(6)(a)1., Florida Statutes. Reimbursement Premiums and earnings thereon may be used for payments relating to such revenue bonds in the event emergency assessments are insufficient. If Reimbursement Premiums or earnings thereon are used for debt service on post-event revenue bonds, then the amount of the Reimbursement Premiums or earnings thereon so used shall be returned, without interest, to the Fund when emergency assessments or other legally available funds remain available after making payment relating to the post-event revenue bonds and any other purposes for which emergency assessments were levied.

(3) Losses

(a)In General

Losses resulting from a Covered Event commencing during the Contract Year shall be reported by the Company and reimbursed by the FHCF as provided herein and in accordance with the Statute, this Contract, and any rules adopted pursuant to the Statute. For a Company participating in a quota share primary insurance agreement(s) with Citizens Property Insurance Corporation Coastal Account, Citizens and the Company shall report only their respective portion of Losses under the quota share primary insurance agreement(s). Pursuant to Section 215.555(4)(c), Florida Statutes, the SBA is obligated to pay for Losses not to exceed the Actual Claims-Paying Capacity of the FHCF, up to the limit in accordance with Section 215.555(4)(c)1., Florida Statutes, for any one Contract Year.

(b)Loss Reports

1. At the direction of the SBA, the Company shall report its projected Ultimate Net Loss from each Covered Event to provide information to the SBA in determining any potential liability for possible reimbursable Losses under the Contract on the Interim Loss Report, Form FHCF-L1A, adopted for the Contract Year under Rule 19-8.029, F.A.C. Interim Loss Reports (including subsequent Interim Loss Reports if required by the SBA) will be due in no less than fourteen days from the date of the notice from the SBA that such a report is required.

21	FHCF-2021K
	Rule 19-8.010 F.A.C.

DocuSign Envelope ID: CB9A2BB8-1E85-4C48-8343-7DAD8F8C43F2

2. FHCF reimbursements will be issued based on Ultimate Net Loss information reported by the Company on the Proof of Loss Report, Form FHCF-L1B, adopted for the Contract Year under Rule 19-8.029, F.A.C.

a. To qualify for reimbursement, the Proof of Loss Report must have the electronic signatures of two executive officers authorized by the Company to sign or submit the report.

b. The Company must also submit a Detailed Claims Listing, Form FHCF-DCL, adopted for the Contract Year under Rule 19-8.029, F.A.C., at the same time it submits its first Proof of Loss Report for a specific Covered Event that qualifies the Company for reimbursement under that Covered Event, and must be prepared to supply a Detailed Claims Listing for any subsequent Proof of Loss Report upon request.

c. While the Company may submit a Proof of Loss Report requesting reimbursement at any time following a Covered Event, the Company shall submit a mandatory Proof of Loss Report for each Covered Event no later than December 31 of the Contract Year during which the Covered Event occurs using the most current data available, regardless of the amount of Ultimate Net Loss or the amount of reimbursements or advances already received.

d. The Company shall submit its Proof of Loss Reports by each quarter-end or year-end using the most current data available, but with an “as of” date not more than sixty days prior to the applicable quarter-end or year-end date.

e. For the Proof of Loss Reports due by December 31 of the Contract Year and the required subsequent annual reports required under subparagraph 4., the Company shall include a Detailed Claims Listing if requested by the SBA.

3. Updated Proof of Loss Reports for each Covered Event are due quarterly thereafter until all Losses resulting from a Covered Event are fully discharged including any adjustments to such Losses due to salvage or other recoveries, or the Company has received its full coverage under the Contract Year in which the Covered Event occurred. Guidelines follow:

a. Quarterly Proof of Loss Reports are due by March 31 from a Company whose Losses exceed, or are expected to exceed, 50% of its Retention for a specific Covered Event.

22	FHCF-2021K
	Rule 19-8.010 F.A.C.

DocuSign Envelope ID: CB9A2BB8-1E85-4C48-8343-7DAD8F8C43F2

b. Quarterly Proof of Loss Reports are due by June 30 from all Companies regardless of the amount of Ultimate Net Loss or the amount of reimbursements or advances already received.

c. Quarterly Proof of Loss Reports are due by September 30 and quarterly thereafter from a Company whose Losses exceed, or are expected to exceed, its Retention for a specific Covered Event, except as required under subparagraph 4.

If the Company’s Retention must be recalculated as the result of an exposure resubmission, and if the recalculated Retention changes the FHCF’s reimbursement obligations, then the Company shall submit additional Proof of Loss Reports for recalculation of the FHCF’s obligations.

4. The Company shall submit a mandatory Proof of Loss Report for each Covered Event by June 30 and December 31 of each calendar year following the end of the Contract Year, regardless of whether the Company’s Losses exceed, or are expected to exceed, its FHCF Retention for a specific Covered Event. This Proof of Loss Report filing requirement shall continue until the earlier of the commutation process described in paragraph (3)(d) or until all Losses resulting from the Covered Event are fully discharged including any adjustments to such Losses due to salvage or other recoveries.

5. The SBA, except as noted below, will determine and pay, within 30 days or as soon as practicable after receiving Proof of Loss Reports, the reimbursement amount due based on Losses paid by the Company to date and adjustments to this amount based on subsequent quarterly information. The adjustments to reimbursement amounts shall require the SBA to pay, or the Company to return, amounts reflecting the most recent determination of Losses.

a. The SBA shall have the right to consult with all relevant regulatory agencies to seek all relevant information, and shall consider any other factors deemed relevant, prior to the issuance of reimbursements.

b. The SBA shall require commercial self-insurance funds established under Section 624.462, Florida Statutes, to submit contractor receipts to support paid Losses reported on a Proof of Loss Report, and the SBA may hire an independent consultant to confirm Losses, prior to the issuance of reimbursements.

23	FHCF-2021K
	Rule 19-8.010 F.A.C.

DocuSign Envelope ID: CB9A2BB8-1E85-4C48-8343-7DAD8F8C43F2

c. The SBA shall have the right to conduct a claims examination prior to the issuance of any advances or reimbursements requested by Companies that have been placed under regulatory supervision by a State or where control has been transferred through any legal or regulatory proceeding to a state regulator or court appointed receiver or rehabilitator.

6. All Proof of Loss Reports received will be compared with the FHCF’s exposure data to establish the facial reasonableness of the reports. The SBA may also review the results of current and prior Contract Year exposure and claims examinations to determine the reasonableness of the reported Losses. Except as noted in subparagraph 5., Companies meeting these tests for reasonableness will be scheduled for reimbursement. Companies not meeting these tests for reasonableness will be handled on a case-by-case basis and will be contacted to provide specific information regarding their individual book of business. The discovery of errors in a Company’s reported exposure under the Data Call may require a resubmission of the current Contract Year Data Call which, as the Data Call impacts the Company’s Reimbursement Premium, Retention, and coverage for the Contract Year, will be required before the Company’s request for reimbursement or an advance will be fully processed by the Administrator.

(c) Loss Reimbursement Calculations

1. In general, the Company’s paid Ultimate Net Losses must exceed its full Retention for a specific Covered Event before any reimbursement is payable from the FHCF for that Covered Event. As described in Article V(25)(b), Retention adjustments will be made on or after January 1 of the Contract Year. No interest is payable on additional payments to the Company due to this type of Retention adjustment. Each Company, including entities created pursuant to Section 627.351(6), Florida Statutes, incurring reimbursable Losses will receive the amount of reimbursement due under the individual Company’s Contract up to the amount of the Company’s payout. If more than one Covered Event occurs in any one Contract Year, any reimbursements due from the FHCF shall take into account the Company’s Retention for each Covered Event. However, the Company’s reimbursements from the FHCF for all Covered Events occurring during the Contract Year shall not exceed, in aggregate, the Projected Payout Multiple or Payout Multiple, as applicable, times the individual Company’s Reimbursement Premium for the Contract Year.

24	FHCF-2021K
	Rule 19-8.010 F.A.C.

DocuSign Envelope ID: CB9A2BB8-1E85-4C48-8343-7DAD8F8C43F2

2. Reserve established. When a Covered Event occurs in a subsequent Contract Year when reimbursable Losses are still being paid for a Covered Event in a previous Contract Year, the SBA will establish a reserve for the outstanding reimbursable Losses for the previous Contract Year, based on the length of time the Losses have been outstanding, the amount of Losses already paid, the percentage of incurred Losses still unpaid, and any other factors specific to the loss development of the Covered Events involved.

(d) Commutation

1. Except as provided in subparagraph 3., not less than 36 months or more than 60 months after the end of the Contract Year, the Company shall file a final Proof of Loss Report(s), with the exception of Companies having no reportable Losses as described in sub-subparagraph a. Otherwise, the final Proof of Loss Report(s) is required as specified in sub-subparagraph b. The Company and SBA may mutually agree to initiate commutation after 36 months and prior to 60 months after the end of the Contract Year. The commutation negotiations shall begin at the later of 60 months after the end of the Contract Year or upon completion of the FHCF claims examination for the Company and the resolution of all outstanding examination issues.

a. If the Company’s most recently submitted Proof of Loss Report(s) indicates that it has no Losses resulting from Covered Events during the Contract Year, the SBA shall after 36 months request that the Company execute a final commutation agreement. The final commutation agreement shall constitute a complete and final release of all obligations of the SBA with respect to Losses. If the Company chooses not to execute a final commutation agreement, the SBA shall be released from all obligations 60 months following the end of the Contract Year if no Proof of Loss Report indicating reimbursable Losses had been filed and the commutation shall be deemed concluded. However, during this time, if the Company determines that it does have Losses to report for FHCF reimbursement, the Company must submit an updated Proof of Loss Report prior to the end of 60 months after the Contract Year and the Company shall be required to follow the commutation provisions and time frames otherwise specified in this section.

25	FHCF-2021K
	Rule 19-8.010 F.A.C.

DocuSign Envelope ID: CB9A2BB8-1E85-4C48-8343-7DAD8F8C43F2

b. If the Company has submitted a Proof of Loss Report indicating that it does have Losses resulting from a Covered Event during the Contract Year, the SBA may require the Company to submit within 30 days an updated, current Proof of Loss Report for each Covered Event during the Contract Year. The Proof of Loss Report must include all paid Losses as well as all outstanding Losses and incurred but not reported Losses, which are not finally settled and which may be reimbursable Losses under this Contract, and must be accompanied by supporting documentation (at a minimum an adjuster’s summary report or equivalent details) and a copy of a written opinion on the present value of the outstanding Losses and incurred but not reported Losses by the Company’s certifying actuary. Failure of the Company to provide an updated current Proof of Loss Report, supporting documentation, and an opinion by the date requested by the SBA may result in referral to the Florida Office of Insurance Regulation for a violation of the Contract. Increases in reported paid, outstanding, or incurred but not reported Losses on original or corrected Proof of Loss Report filings received later than 60 months after the end of the Contract Year shall not be eligible for reimbursement or commutation.

2. Determining the present value of outstanding Losses.

a. If the Company exceeds or expects to exceed its Retention, the Company and the SBA
or their respective representatives shall attempt, by mutual agreement, to agree upon the present value of all outstanding Losses, both reported and incurred but not reported, resulting from Covered Events during the Contract Year. The Loss valuation process under this subparagraph may begin only after all other issues arising under this Contract have been resolved, and shall be suspended pending resolution of any such issues that arise during the Loss valuation process. Payment by the SBA of its portion of any amount or amounts so mutually agreed and certified by the Company’s certifying actuary shall constitute a complete and final release of the SBA in respect of all Losses, both reported and unreported, under this Contract.

26	FHCF-2021K
	Rule 19-8.010 F.A.C.

DocuSign Envelope ID: CB9A2BB8-1E85-4C48-8343-7DAD8F8C43F2

b. If agreement on present value cannot be reached within 90 days of the FHCF’s receipt of the final Proof of Loss Report and supporting documentation, the Company and the SBA may mutually appoint an actuary, adjuster, or appraiser to investigate and determine such Losses. If both parties then agree, the SBA shall pay its portion of the amount so determined to be the present value of such Losses.

c. If the parties fail to agree on the valuation of any Losses, then any difference in valuation of the Loss shall be settled by a panel of three actuaries, as provided in this subparagraph. Either the SBA or the Company may initiate the process under this subparagraph by providing written notice to the other party stating that the parties are at an impasse with respect to valuation of Losses and specifying the dollar amounts in dispute.

i. One actuary shall be chosen by each party, and the third actuary shall be chosen by those two actuaries. If either party does not appoint an actuary within 30 days after the initiation of the process, the other party may appoint two actuaries. If the two actuaries fail to agree on the selection of an independent third actuary within 30 days of their appointment, each of them shall name two, of whom the other shall decline one and the decision shall be made by drawing lots.

ii. All of the actuaries shall be regularly engaged in the valuation of property claims and losses and shall be members of the Casualty Actuarial Society and of the American Academy of Actuaries.

iii. None of the actuaries shall be under the control of either party to this Contract.

iv. Each party shall submit a written statement of its case to the panel of actuaries and the opposing party no later than 30 days after the appointment of the third actuary. Within 15 days after receiving the other party’s submission, a party may submit its written response to the panel of actuaries and the other party. After the appointment of the third actuary, a party may not communicate with the panel or any member of the panel except in writing simultaneously furnished to all members of

27	FHCF-2021K
	Rule 19-8.010 F.A.C.

DocuSign Envelope ID: CB9A2BB8-1E85-4C48-8343-7DAD8F8C43F2

the panel and the opposing party. Any member of the panel may present questions to be answered by both parties, which shall be answered in writing and simultaneously furnished tothe members of the panel and the opposing party or, at the discretion of the panel, may be provided in a meeting or teleconference attended by both parties and all members of the panel.

v. The written decision of a majority of the panel as to the disagreement over the valuation of losses identified in the written notice of impasse, when filed with the parties hereto, shall be final and binding on both parties.

d. The reasonable and customary expense of the actuaries and of the commutation (as a result of sub-subparagraphs 2.b. and c.) shall be equally divided between the two parties. Said commutation shall take place in Tallahassee, Florida, unless some other place is mutually agreed upon by the Company and the SBA.

3. The Company and SBA may mutually agree to initiate and complete a commutation for zero dollars without being subject to the 36-month waiting period provided in subparagraph (d)1. Such early commutation, once completed, eliminates the mandatory Proof of Loss Report requirements required under subparagraphs (b)3. and 4. for all reporting periods subsequent to the completion of the commutation.

4. Upon full execution of the commutation agreement and the issuance of the final reimbursement payment, if any, each party, on behalf of its predecessors, successors, assigns, and its past, present and future officers, directors, shareholders, employees, agents, receivers, trustees, attorneys and its legal representatives, unconditionally and completely releases and forever discharges the other party, its predecessors, successors, assigns, and its past, present and future officers, directors, shareholders, employees, agents, receivers, trustees, attorneys, and its legal representatives from any and all past, present, and future rights, liabilities, and obligations including, but not limited to, payments, claims, debts, demands, causes of action, costs, disbursements, fees, attorneys’ fees, expenses, damages, injuries, or losses of every kind, whether known or unknown, reported or unreported, or fixed or contingent, relating to or arising out of this Reimbursement Contract.

28	FHCF-2021K
	Rule 19-8.010 F.A.C.

DocuSign Envelope ID: CB9A2BB8-1E85-4C48-8343-7DAD8F8C43F2

(4) Advances

(a) The SBA may make advances for loss reimbursements as defined herein, at market interest rates, to the Company in accordance with Section 215.555(4)(e), Florida Statutes. An advance is an early reimbursement which allows the Company to continue to pay claims in a timely manner. Advances will be made based on the Company’s paid and reported outstanding Losses for Covered Policies (excluding all incurred but not reported Losses) as reported on a Proof of Loss Report, and shall include a Loss Adjustment Expense Allowance as calculated by the FHCF. In order to be eligible for an advance, the Company must submit its exposure data for the Contract Year as required under subsection (1) of this Article. Except as noted below, advances, if approved, will be made as soon as practicable after the SBA receives a written request, signed by two officers of the Company, for an advance of a specific amount and any other information required for the specific type of advance under paragraphs (c) and (d). All reimbursements due to the Company shall be offset against any amount of outstanding advances plus the interest due thereon.

(b) For advances or excess advances, which are advances that are in excess of the amount to which the Company is entitled, the market interest rate shall be the prime rate as published in the Wall Street Journal on the first business day of the Contract Year. This rate will be adjusted annually on the first business day of each subsequent Contract Year, regardless of whether the Company executes subsequent Contracts. In addition to the prime rate, an additional 5% interest charge will apply on excess advances. All interest charged will commence on the date the SBA issues a disbursement for an advance and will cease on the date upon which the FHCF has received the Company’s Proof of Loss Report for the Covered Event for which the Company qualifies for reimbursement. If such reimbursement is less than the amount of outstanding advances issued to the Company, interest will continue to accrue on the outstanding balance of the advances until subsequent Proof of Loss Reports qualify the Company for reimbursement under any Covered Event equal to or exceeding the amount of any outstanding advances. Interest shall be billed on a periodic basis. If it is determined that the Company received funds in excess of those to which it was entitled, the interest as to those sums will not cease on the date of the receipt of the Proof of Loss Report but will continue until the Company reimburses the FHCF for the overpayment.

(c) If the Company has an outstanding advance balance as of December 31 of this or any other Contract Year, the Company is required to have an actuary certify

29	FHCF-2021K
	Rule 19-8.010 F.A.C.

DocuSign Envelope ID: CB9A2BB8-1E85-4C48-8343-7DAD8F8C43F2

outstanding and incurred but not reported Losses as reported on the applicable December Proof of Loss Report.

(d) The specific type of advances enumerated in Section 215.555, Florida Statutes, follow.
1. Advances to Companies to prevent insolvency, as defined under Article XV.

a. Section 215.555(4)(e)1., Florida Statutes, provides that the SBA shall advance to the Company amounts necessary to maintain the solvency of the Company, up to 50 percent of the SBA’s estimate of the reimbursement due to the Company.

b. In addition to the requirements outlined in subparagraph (4)(a), the requirements for an advance to a Company to prevent insolvency are that the Company demonstrates it is likely to qualify for reimbursement and that the immediate receipt of moneys from the SBA is likely to prevent the Company from becoming insolvent, and the Company provides the following information:

i. Current assets;

ii. Current liabilities other than liabilities due to the Covered Event;

iii. Current surplus as to policyholders;

iv. Estimate of other expected liabilities not due to the Covered Event; and

v. Amount of reinsurance available to pay claims for the Covered Event under other reinsurance treaties.

c. The SBA’s final decision regarding an application for an advance to prevent insolvency shall be based on whether or not, considering the totality of the circumstances, including the SBA’s obligations to provide reimbursement for all Covered Events occurring during the Contract Year, granting an advance is essential to allowing the entity to continue to pay additional claims for a Covered Event in a timely manner.

2. Advances to entities created pursuant to Section 627.351(6), Florida Statutes.

a. Section 215.555(4)(e)2., Florida Statutes, provides that the SBA may advance to an entity created pursuant to Section 627.351(6), Florida Statutes, up to 90% of the lesser of the SBA’s estimate of the reimbursement due or the entity’s share of the actual aggregate

30	FHCF-2021K
	Rule 19-8.010 F.A.C.

DocuSign Envelope ID: CB9A2BB8-1E85-4C48-8343-7DAD8F8C43F2

Reimbursement Premium for that Contract Year, multiplied by the current available liquid assets of the FHCF.

b. In addition to the requirements outlined in paragraph (4)(a), the requirements for an advance to entities created pursuant to Section 627.351(6), Florida Statutes, are that the entity must demonstrate to the SBA that the advance is essential to allow the entity to pay claims for a Covered Event.

3. Advances to limited apportionment companies.

Section 215.555(4)(e)3., Florida Statutes, provides that the SBA may advance the amount of estimated reimbursement payable to limited apportionment companies.

(e) In determining whether or not to grant an advance and the amount of an advance, the SBA:

1. Shall determine whether its assets available for the payment of obligations are sufficient and sufficiently liquid to fulfill its obligations to other Companies prior to granting an advance;

2. Shall review and consider all the information submitted by such Companies;

3. Shall review such Companies’ compliance with all requirements of Section 215.555, Florida Statutes;

4. Shall consult with all relevant regulatory agencies to seek all relevant information;

5. Shall review the damage caused by the Covered Event and when that Covered Event occurred;

6. Shall consider whether the Company has substantially exhausted amounts previously advanced;

7. Shall consider any other factors deemed relevant; and

8. Shall require commercial self-insurance funds established under section 624.462, Florida Statutes, to submit a copy of written estimates of expenses in support of the amount of advance requested.

(f) Any amount advanced by the SBA shall be used by the Company only to pay claims of its policyholders for the Covered Event which has precipitated the immediate need to continue to pay additional claims as they become due.

31	FHCF-2021K
	Rule 19-8.010 F.A.C.

DocuSign Envelope ID: CB9A2BB8-1E85-4C48-8343-7DAD8F8C43F2

(5)Inadequate Data Submissions

If exposure data or other information required to be reported by the Company under the terms of this Contract are not received by the FHCF in the format specified by the FHCF or is inadequate to the extent that the FHCF requires resubmission of data, the Company will be required to pay the FHCF a resubmission fee of $1,000 for resubmissions that are not a result of an examination by the SBA. If a resubmission is necessary as a result of an examination report issued by the SBA, the first resubmission fee will be $2,000. If the Company’s examination-required resubmission is inadequate and the SBA requires an additional resubmission(s), the resubmission fee for each subsequent resubmission shall be $2,000. A resubmission of exposure data may delay the processing of the Company’s request for reimbursement or an advance.

(6) Confidential Information/Trade Secret Information

Pursuant to the provisions of Section 215.557, Florida Statutes, the reports of insured values under Covered Policies by ZIP Code submitted to the SBA pursuant to Section 215.555, Florida Statutes, are confidential and exempt from the provisions of Section 119.07(1), Florida Statutes, and Section 24(a), Art. I of the State Constitution. If other information submitted by the Company to the FHCF could reasonably be ruled a “trade secret” as defined in Section 812.081, Florida Statutes, such information must be clearly marked “Trade Secret Information.”

ARTICLE XI - TAXES

In consideration of the terms under which this Contract is issued, the Company agrees to make no deduction in respect of the Reimbursement Premium herein when making premium tax returns to the appropriate authorities. Should any taxes be levied on the Company in respect of the Reimbursement Premium herein, the Company agrees to make no claim upon the SBA for reimbursement in respect of such taxes.

ARTICLE XII - ERRORS AND OMISSIONS

Any inadvertent delay, omission, or error on the part of the SBA shall not be held to relieve the Company from any liability which would attach to it hereunder if such delay, omission, or error had not been made.

ARTICLE XIII - INSPECTION OF RECORDS

The Company shall allow the SBA to inspect, examine, and verify, at reasonable times, all records of the Company relating to the Covered Policies under this Contract, including Company files concerning claims, Losses, or legal proceedings regarding subrogation or

32	FHCF-2021K
	Rule 19-8.010 F.A.C.

DocuSign Envelope ID: CB9A2BB8-1E85-4C48-8343-7DAD8F8C43F2

claims recoveries which involve this Contract, including premium, loss records and reports involving exposure data or Losses under Covered Policies. This right by the SBA to inspect, examine, and verify shall survive the completion and closure of an exposure examination or claims examination file and the termination of the Contract. The Company shall have no right to re-open an exposure or claims examination once closed and the findings have been accepted by the Company; any re-opening shall be at the sole discretion of the SBA. If the State Board of Administration Finance Corporation has issued revenue bonds and relied upon the exposure and Loss data submitted and certified by the Company as accurate to determine the amount of bonding needed, the SBA may choose not to require, or accept, a resubmission if the resubmission will result in additional reimbursements to the Company. The SBA may require any discovered errors, inadvertent omissions, and typographical errors associated with the data reporting of insured values, discovered prior to the closing of the file and acceptance of the examination findings by the Company, to be corrected to reflect the proper values. The Company shall retain its records in accordance with the requirements for records retention regarding exposure reports and claims reports outlined herein, and in any administrative rules adopted pursuant to Section 215.555, Florida Statutes. Companies writing covered collateral protection policies, as defined in definition (11)(b) of Article V, must be able to provide documentation that the policy covers personal residences, protects both the borrower’s and lender’s interest, and that the coverage is in an amount at least equal to the coverage for the dwelling in place under the lapsed homeowner’s policy or at least equal to the replacement cost value of the dwelling, as provided in Article V(11)(b).

(1) Purpose of FHCF Examination

The purpose of the examinations conducted by the SBA is to evaluate the accuracy of the FHCF exposure or Loss data reported by the Company. However, due to the limited nature of the examination, it cannot be relied upon as an assurance that a Company’s data is reported accurately or in its entirety. The Company should not rely on the FHCF to identify every type of reporting error in its data. In addition, the reporting requirements are subject to change each Contract Year so it is the Company’s responsibility to be familiar with the applicable Contract Year requirements and to incorporate any changes into its data for that Contract Year. It is also the Company’s responsibility to ensure that its data is reported accurately and to comply with Florida Statutes and any applicable rules when reporting exposure data. The examination report is not intended to provide a legal determination of the Company’s compliance.

(2)Examination Requirements for Exposure Verification

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	Rule 19-8.010 F.A.C.

DocuSign Envelope ID: CB9A2BB8-1E85-4C48-8343-7DAD8F8C43F2

The Company shall retain complete and accurate records, in policy level detail, of all exposure datasubmitted to the SBA in any Contract Year until the SBA has completed its examination of the Company’s exposure submissions. The Company shall also retain complete and accurate records of any completed exposure examination for any Contract Year in which the Company incurred Losses until the completion of the claims examination and commutation for that Contract Year. The records to be retained are outlined in the Data Call adopted for the Contract Year under Rule 19-8.029, F.A.C. A complete list of records to be retained for the exposure examination is set forth in Form FHCF-EAP1, adopted for the Contract Year under Rule 19-8.029, F.A.C.

(3)Examination Requirements for Loss Reports

The Company shall retain complete and accurate records of all reported Losses and/or advances submitted to the SBA until the SBA has completed its examination of the Company’s reimbursable Losses and commutation for the Contract Year (if applicable) has been concluded. The records to be retained are set forth as part of the Proof of Loss Report, Form FHCF-L1B and Form FHCF-LAP1, both adopted for the Contract Year under Rule 19-8.029, F.A.C.

(4)Examination Procedures

(a) The FHCF will send an examination notice letter to the Company providing the commencement date of the examination, the site of the examination, any accommodation requirements of the examiner, and the reports and data which must be assembled by the Company and forwarded to the FHCF. The Company shall be prepared to choose one location in which to be examined, unless otherwise specified by the SBA.

(b) The reports and data are required to be forwarded to the FHCF as set forth in an examination notice letter. The information is then forwarded to the examiner. If the FHCF receives accurate and complete records as requested, the examiner will contact the Company to inform the Company as to what policies or other documentation will be required once the examiner is on site. Any records not required to be provided to the examiner in advance shall be made available at the time the examiner arrives on site. Any records to support reported exposure or Losses which are provided after the examiner has left the work-site will, at the SBA’s discretion, result in an additional

34	FHCF-2021K
	Rule 19-8.010 F.A.C.

DocuSign Envelope ID: CB9A2BB8-1E85-4C48-8343-7DAD8F8C43F2

examination of exposure and/or Loss records or an extension or expansion of the examinationalready in progress. All costs associated with such additional examination or with the extension or expansion of the original examination shall be borne by the Company.

(c) At the conclusion of the examiner’s work and the management review of the examiner’s report, findings, recommendations, and work papers, the FHCF will forward an examination report to the Company.

(d) Within 30 days from the date of the letter accompanying the examination report, the Company must provide a written response to the FHCF. The response must indicate whether the Company agrees with the findings and recommendations of the examination report. If the Company disagrees with any examination findings or recommendations, the reason for the disagreement must be outlined in the response and the Company must provide supporting information to support its objection. An extension of 30 days may be granted if the Company can show that the need for additional time is due to circumstances beyond the reasonable control of the Company. No response is required if the examination report does not include any findings or recommendations.

(e) If the Company accepts the examination findings and recommendations, and there is no recommendation for additional information, the examination report will be finalized and the exam file closed.

(f) If the Company disputes the examiner’s findings, the areas in dispute will be resolved by a meeting or a conference call between the Company and FHCF management.

(g) 1.If the recommendation of the examiner is to resubmit the Company’s exposure data for the Contract Year in question, then the FHCF will send the Company a letter outlining the process for resubmission and including a deadline to resubmit. Once the resubmission is received, the FHCF’s Administrator calculates a revised Reimbursement Premium for the Contract Year which has been examined. The SBA shall then review the resubmission with respect to the examiner’s findings, and accept the resubmission or contact the Company with any questions regarding the resubmission. Once the SBA has accepted the resubmission as a sufficient response to the examiner’s findings, the exam is closed.

35	FHCF-2021K
	Rule 19-8.010 F.A.C.

DocuSign Envelope ID: CB9A2BB8-1E85-4C48-8343-7DAD8F8C43F2

2.If the recommendation of the examiner is to give the Company the option to either resubmitthe exposure data or to pay the estimated Reimbursement Premium difference, then the FHCF will send the Company a letter outlining the process for resubmission or for paying the estimated Reimbursement Premium difference and including a deadline for the resubmission or the payment to be received by the FHCF’s Administrator. If the Company chooses to resubmit, the same procedures outlined in Article XIII(4) apply.

(h) If the recommendation of the examiner is to update the Company’s Proof of Loss Report(s) for the Contract Year under review, the FHCF will send the Company a letter outlining the process for submitting the Proof of Loss Report(s) and including a deadline to file. Once the Proof of Loss Report(s) is received by the FHCF Administrator, the FHCF’s Administrator will calculate a revised reimbursement. The SBA shall then review the submitted Proof of Loss Report(s) with respect to the examiner’s findings, and accept the Proof of Loss Report(s) as filed or contact the Company with any questions. Once the SBA has accepted the corrected Proof of Loss Report(s) as a sufficient response to the examiner’s findings, the exam is closed.

(i) The examiner’s list of errors is made available in the examination report sent to the Company. Given that the examination was based on a sample of the Company’s policies or claims rather than the whole universe of the Company’s Covered Policies or reported claims, the error list is not intended to provide a complete list of errors but is intended to indicate what information needs to be reviewed and corrected throughout the Company’s book of Covered Policy business or claims information to ensure more complete and accurate reporting to the FHCF.

(5) Costs of the Examinations

The costs of the examinations shall be borne by the SBA. However, in order to remove any incentive for a Company to delay preparations for an examination, the SBA shall be reimbursed by the Company for any examination expenses incurred in addition to the usual and customary costs, which additional expenses were incurred as a result of the Company’s failure, despite proper notice, to be prepared for the examination or as a result of a Company’s failure to provide requested information. All requested information must be complete and accurate.

ARTICLE XIV – OFFSETS

36	FHCF-2021K
	Rule 19-8.010 F.A.C.

DocuSign Envelope ID: CB9A2BB8-1E85-4C48-8343-7DAD8F8C43F2

The SBA reserves the right to offset amounts payable to the SBA from the Company, including amounts payable under the Reimbursement Contract for any Contract Year and also including the Company’s full Reimbursement Premium for the current Contract Year (regardless of installment due dates), against any (1) Reimbursement Premium refunds under any Contract Year, (2) reimbursement or advance amounts, or (3) amounts agreed to in a commutation agreement, which are due and payable to the Company from the SBA as a result of the liability of the SBA.

ARTICLE XV - INSOLVENCY OF THE COMPANY

Company shall notify the FHCF immediately upon becoming insolvent. Except as otherwise provided below, no reimbursements will be made until the FHCF has completed and closed its examination of the insolvent Company’s Losses, unless an agreement is entered into by the court appointed receiver specifying that all data and computer systems required for FHCF exposure and claims examinations will be maintained until completion of the Company’s exposure and claims examinations. Except as otherwise provided below, in order to account for potential erroneous reporting, the SBA shall hold back 25% of requested reimbursements until the exposure and claims examinations for the Company are completed. Only those Losses supported by the examination will be reimbursed. Pursuant to Section 215.555(4)(g), Florida Statutes, the FHCF is required to pay the “net amount of all reimbursement moneys” due an insolvent insurer to the Florida Insurance Guaranty Association (FIGA) for the benefit of Florida policyholders. For the purpose of this Contract, a Company is insolvent when an order of liquidation with a finding of insolvency has been entered by a court of competent jurisdiction. In light of the need for an immediate infusion of funds to enable policyholders of insolvent companies to be paid for their claims, the SBA may enter into agreements with FIGA allowing exposure and claims examinations to take place immediately without the usual notice and response time limitations and allowing the FHCF to make reimbursements (net of any amounts payable to the SBA from the Company or FIGA) to FIGA before the examinations are completed. Such agreements must ensure the availability of the necessary records and adequate security must be provided so that if the FHCF determines that it overpaid FIGA on behalf of the Company, that the funds will be repaid to the FHCF by FIGA within a reasonable time.

ARTICLE XVI - TERMINATION

The FHCF and the obligations of both parties under this Contract can be terminated only as may be provided by law or applicable rules.

37	FHCF-2021K
	Rule 19-8.010 F.A.C.

DocuSign Envelope ID: CB9A2BB8-1E85-4C48-8343-7DAD8F8C43F2

ARTICLE XVII – VIOLATIONS

(1) Statutory Provisions

(a) Section 215.555(10), Florida Statutes, provides that any violation of Section 215.555, Florida Statutes, or of rules adopted under that section, constitutes a violation of the Florida Insurance Code. This Contract has been adopted as part of Rule 19-8.010, Florida Administrative Code, under the authority of that section of Florida Statutes.

(b) Section 215.555(11), Florida Statutes, authorizes the SBA to take any action necessary to enforce the rules and the provisions and requirements of this Contract, required by and adopted pursuant to Section 215.555, Florida Statutes.

(2) Noncompliance

(a) As used in this Article, the term “noncompliance” means the failure of the Company to meet any applicable requirement of Section 215.555, Florida Statutes, or of any rule adopted under the authority of that section of Florida Statutes, including, but not limited to, any failure to meet a deadline for an FHCF payment, Data Call submissions or resubmissions, Loss reporting or commutation documentation, or a deadline related to SBA examination requirements. The Company remains in a state of noncompliance as long as the Company fails to meet the applicable requirement(s).

(b) If the Company is in a state of noncompliance, the SBA reserves the right to withhold any payments or advances due to the Company until the SBA determines that the Company is no longer in a state of noncompliance.

ARTICLE XVIII - APPLICABLE LAW

This Contract shall be governed by and construed according to the laws of the State of Florida in respect of any matter relating to or arising out of this Contract.

ARTICLE XIX – DUE DATES

If any due date provided in this Contract is a Saturday, Sunday or a legal State of Florida or federal holiday, then the actual due date will be the day immediately following the applicable due date which is not a Saturday, Sunday or a legal State of Florida or federal holiday.

ARTICLE XX – REIMBURSEMENT CONTRACT ELECTIONS

(1) Coverage Level

For purposes of determining reimbursement (if any) due the Company under this Contract and in accordance with the Statute, the Company has the option to elect a 45% or 75% or

38	FHCF-2021K
	Rule 19-8.010 F.A.C.

DocuSign Envelope ID: CB9A2BB8-1E85-4C48-8343-7DAD8F8C43F2

90% Coverage Level under this Contract. If the Company is a member of an NAIC group, all members must elect the same Coverage Level, and the individual executing this Contract on behalf of the Company, by placing his or her initials in the box under (a) below, affirms that the Company has elected the same Coverage Level as all members of its NAIC group. If the Company is an entity created pursuant to Section 627.351, Florida Statutes, the Company must elect the 90% Coverage Level. The Company shall not be permitted to change its Coverage Level after the March 1 statutory deadline for execution of the Contract. The Company shall be permitted to change its Coverage Level upon timely execution of the Contract for the next Contract Year, but may not reduce its Coverage Level if revenue bonds issued under Section 215.555(6), Florida Statutes, are outstanding.

The Coverage Level elected by the Company for the prior Contract Year effective June 1, 2020 was as follows: «Legal_Name» - «2020 Coverag

Typtap Insurance Company

90%

(a) NAIC Group Affirmation: Initial the following box if the Company is part of an NAIC Group:

Yes /s/ km

(b) Coverage Level Election: The Company hereby elects the following Coverage Level for the Contract Year from 12:00:01 a.m., Eastern Time, June 1, 2021, to 12:00 a.m., Eastern Time, May 31, 2022, (the individual executing this Contract on behalf of the Company shall place his or her initials in the box to the left of the percentage elected for the Company): 90%

45% OR 75% OR /s/ km 90%

(2) Additional Living Expense (ALE) Written as Time Element Coverage

If your Company writes Covered Policies that provide ALE coverage on a time element basis (i.e., coverage is based on a specific period of time as opposed to a stated dollar limit), you must initial the ‘Yes – Time Element ALE’ box below. If your Company does not write time element ALE coverage, initial ‘No – Time Element ALE’ box below.

OR /s/ km

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	Rule 19-8.010 F.A.C.

Yes – Time	No – Time
Element ALE	Element ALE

ARTICLE XXI – SIGNATURES

Approved by:

Paragon Strategic Solutions Inc., on Behalf of the State Board of Administration of the State of Florida and as Administrator of the Florida Hurricane Catastrophe Fund.

By:	/s/ Martin K. Helgestad	2/17/2021
		Date

Authority to sign on behalf of the Company:

The person signing this Contract on behalf of the Company hereby represents that he or she is an officer of the Company, acting within his or her authority to enter into this Contract on behalf of the Company, with the requisite authority to bind the Company and make the representations on behalf of the Company as set forth in this Contract.

Typtap Insurance Company

Kevin Mitchell		President
	Printed Name and Title

By:	/s/ Kevin Mitchell	2/12/2021
	Signature	Date

EX-10.24

EXHIBIT 10.24

CERTAIN CONFIDENTIAL INFORMATION, IDENTIFIED BY BRACKETED ASTERISKS “[*****]”, HAS BEEN OMITTED FROM THIS EXHIBIT BECAUSE IT IS BOTH (I) NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED.

MULTI-YEAR NON-FLORIDA PROPERTY CATASTROPHE

EXCESS OF LOSS REINSURANCE CONTRACT

issued to

TYPTAP INSURANCE COMPANY

Ocala, Florida

HOMEOWNERS CHOICE PROPERTY & CASUALTY INSURANCE COMPANY, INC.

Tampa, Florida

including any and/or all companies that are or may hereafter become affiliated therewith

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MULTI-YEAR NON-FLORIDA PROPERTY CATASTROPHE

	EXCESS OF LOSS REINSURANCE CONTRACT
	TABLE OF CONTENTS
Article		Page
	Preamble		4
1	Business Covered		4
2	Retention and Limit		4
3	Term		5
4	Special Termination		6
5	Territory		8
6	Exclusions		8
7	Special Acceptance		10
8	Premium		10
9	Commutation and Profit Commission		11
10	Reports		12
11	Definitions		13
12	Extra Contractual Obligations/Excess of Policy Limits		17
13	Net Retained Liability		17
14	Other Reinsurance		18
15	Original Conditions		18
16	No Third Party Rights		18
17	Notice of Loss and Loss Settlements		18
18	Late Payments		19
19	Offset		20
20	Currency		20
21	Unauthorized Reinsurance		20
22	Taxes		22
23	Access to Records		23
24	Confidentiality		24
25	Indemnification and Errors and Omissions		25
26	Insolvency		25
27	Run-Off Reinsurer		26
28	Arbitration		28
29	Expedited Arbitration		29
30	Service of Suit		29
31	Governing Law		30
32	Entire Agreement		30
33	Non-Waiver		31
34	Agency		31
35	Intermediary		31
36	Mode of Execution		31
	Company Signing Block		33

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MULTI-YEAR NON-FLORIDA PROPERTY CATASTROPHE EXCESS OF LOSS REINSURANCE CONTRACT

TABLE OF CONTENTS

Attachments		Page
	Pools, Associations & Syndicates Exclusions Clause		35
	Nuclear Incident Exclusion Clause - Physical Damage - Reinsurance - U.S.A.		38
	Terrorism Exclusion		40
	Communicable Disease Exclusion (Property Reinsurance)		41
	Cyber Loss Limited Exclusion Clause (Property Treaty Reinsurance)		42
	Trust Agreement Requirements Clause		43

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MULTI-YEAR NON-FLORIDA PROPERTY CATASTROPHE

EXCESS OF LOSS REINSURANCE CONTRACT

(the “Contract”)

issued to

TYPTAP INSURANCE COMPANY

Ocala, Florida

HOMEOWNERS CHOICE PROPERTY & CASUALTY INSURANCE COMPANY, INC.

Tampa, Florida

including any and/or all companies that are or may hereafter become affiliated therewith

(collectively, the “Company”)

by

THE SUBSCRIBING REINSURER(S) IDENTIFIED IN THE

INTERESTS AND LIABILITIES AGREEMENT(S) ATTACHED TO

AND FORMING PART OF THIS CONTRACT

(the “Reinsurer”)

ARTICLE 1

BUSINESS COVERED

This Contract is to indemnify the Company in respect of its net excess liability as a result of any loss or losses which may occur during the term of this Contract under any Policies in force at the effective date hereof or issued or renewed on or after that date, covering direct and assumed business classified by the Company as the property perils of Homeowners, Condominium Owners, Renters and Dwelling, subject to the terms and conditions herein contained.

ARTICLE 2

RETENTION AND LIMIT

A. Section A: The Reinsurer shall be liable in respect of each Loss Occurrence for the Ultimate Net Loss over and above the initial Ultimate Net Loss of [$*****] each Loss Occurrence, subject to a limit of liability to the Reinsurer of [$*****] (prior to the application of the deductible in paragraph C below) each Loss Occurrence. In no event shall the Reinsurer’s liability hereunder exceed [$*****] (prior to the application of the deductible in paragraph C below) for all Loss Occurrences commencing during each Contract Year for Section A.

B. Section B: In the event that the coverage afforded under Section A is exhausted during any Contract Year, the Reinsurer shall be liable in respect of each Loss Occurrence for the Ultimate Net Loss over and above the initial Ultimate Net Loss of [$*****] each Loss Occurrence, subject to a limit of liability to the Reinsurer of [$*****] each Loss Occurrence. In no event shall the Reinsurer’s liability hereunder exceed [$*****] for all Loss Occurrences subject to this Section B commencing during the Term of this Contract.

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C. As respects each Contract Year, in addition to the retention in paragraph A of this Article, the Company shall retain [$*****] of aggregate excess loss (i.e., Ultimate Net Loss otherwise recoverable under paragraph A of this Article) for Loss Occurrences commencing during each Contract Year during the term of this Contract.

D. The Reinsurer’s aggregate liability shall not exceed [$*****] (prior to the application of the deductible in paragraph C above) for all Loss Occurrences commencing during each Contract Year.

E. In no event shall the Reinsurer’s liability hereunder exceed [$*****] (prior to the application of the deductible in paragraph C above) for all Loss Occurrences commencing during the Term of this Contract.

F. No Loss Occurrence shall be covered hereunder unless it involves two or more risks subject to this Contract. The Company shall be the sole judge of what constitutes one risk for purposes of this Contract.

G. In the event the Initial Total Insured Value for either Contract Year 2 or Contract Year 3 is greater than the Initial Total Insured Value for Contract Year 1, then the Company’s retention under the provisions of paragraphs A and B above, if applicable, for that Contract Year shall be automatically increased and equal to [$*****] multiplied by the ratio of the Initial Total Insured Value for Contract Year 2 or Contract Year 3, as applicable, to the Initial Total Insured Value for Contract Year 1.

ARTICLE 3

TERM

A. This Contract shall take effect at 12:01 a.m., Standard Time, June 1, 2021, and, unless terminated prior to that time and date as provided in the Special Termination Article, or as provided in paragraph C below, shall remain in effect until 12:01 a.m., Standard Time, June 1, 2024, applying to Loss Occurrences commencing during the term of this Contract. For purposes of this Contract, “Standard Time” shall mean the time as described in the original Policy.

B. The Term shall be divided into three Contract Years as follows:

1. “Contract Year 1” incepting at 12:01 a.m., Standard Time, June 1, 2021, and shall remain in effect until 12:01 a.m., Standard Time, June 1, 2022.

2. “Contract Year 2” incepting at 12:01 a.m., Standard Time, June 1, 2022, and shall remain in effect until 12:01 a.m., Standard Time, June 1, 2023.

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3. “Contract Year 3” incepting at 12:01 a.m., Standard Time, June 1, 2023, and shall remain in effect until 12:01 a.m., Standard Time, June 1, 2024.

In the event this Contract is terminated or commuted, the final Contract Year shall be from the beginning of the then current Contract Year through the effective date of termination or commutation.

C. Provided the Experience Account Balance is positive, the Company shall have the option to commute this Contract beginning May 31, 2022, or as of the end of any Contract Quarter thereafter, by providing 60 days’ notice to the Reinsurer. Should this option be elected by the Company, the provisions of the Commutation and Profit Commission Article shall apply.

D. If the Experience Account Balance is negative on May 31, 2022, the Reinsurer shall have the right to terminate this Contract. Termination shall be effected on a cut-off basis and the Reinsurer shall have no liability for Loss Occurrences commencing after the date of termination. Reinsurance premiums (including the Reinsurer’s Annual Margin) for Contract Years 2 and 3 shall not be due the Reinsurer.

ARTICLE 4

SPECIAL TERMINATION

A. The Company may terminate a Subscribing Reinsurer’s percentage share in this Contract at any time by giving written notice to the Subscribing Reinsurer in the event of any of the following circumstances:

1. The Subscribing Reinsurer ceases underwriting operations.

2. A state insurance department or other legal authority orders the Subscribing Reinsurer to cease writing business, or the Subscribing Reinsurer is placed under regulatory supervision.

3. The Subscribing Reinsurer has become insolvent or has been placed into liquidation or receivership (whether voluntary or involuntary), or there have been instituted against it proceedings for the appointment of a receiver, liquidator, rehabilitator, conservator, trustee in bankruptcy, or other agent known by whatever name, to take possession of its assets or control of its operations.

4. The Subscribing Reinsurer’s policyholders’ surplus (or the equivalent under the Subscribing Reinsurer’s accounting system) as reported in such financial statements of the Subscribing Reinsurer as designated by the Company, has been reduced by 20% of the amount thereof at any date during the prior 12-month period (including the period prior to the inception of this Contract).

5. The Subscribing Reinsurer has become, or has announced its intention to become, merged with or acquired or controlled by any company, corporation, or individual(s) not controlling the Subscribing Reinsurer’s operations at the inception of this Contract.

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6. The Subscribing Reinsurer has retroceded its entire liability under this Contract without the Company’s prior written consent, except for retrocessions to members of the Subscribing Reinsurer’s holding company group.

7. The Subscribing Reinsurer has been assigned an A.M. Best’s rating of less than “A-” and/or an S&P rating of less than “BBB+.” However, as respects Underwriting Members of Lloyd’s, London, a Lloyd’s Market Rating of less than “A-” by A.M. Best and/or less than “BBB+” by S&P shall apply.

8. The Subscribing Reinsurer has hired an unaffiliated runoff claims manager that is compensated on a contingent basis or is otherwise provided with financial incentives based on the quantum of claims paid.

9. The Subscribing Reinsurer has in any other way assigned its interests or delegated its obligations under this Contract to an unaffiliated entity.

10. The Subscribing Reinsurer has failed to post or maintain required collateral to secure its obligations as required under this Contract, and has not cured such deficiency within 30 days following written notice thereof from the Company.

Notwithstanding the foregoing, agreement by a Lloyd’s syndicate to follow claim settlements procedures under Lloyd’s Claims Scheme (Combined) shall not constitute a transfer of its claims-paying authority, for purposes of subparagraphs (8) and (9) of this paragraph.

B. Termination shall be effected on a cut-off basis and the Subscribing Reinsurer shall have no liability for Loss Occurrences commencing after the date of termination. The reinsurance premium due the Subscribing Reinsurer hereunder (including the Reinsurer’s Annual Margin) shall be prorated based on the period of the Subscribing Reinsurer’s participation hereon, and the Subscribing Reinsurer shall immediately return any excess reinsurance premium received.

C. Additionally, in the event of any of the circumstances listed in paragraph A of this Article, the Company shall have the option to commute the Subscribing Reinsurer’s liability for losses on Policies covered by this Contract. In the event the Company and the Subscribing Reinsurer cannot agree on the commutation amount, they shall appoint an actuary and/or appraiser to assess such amount and shall share equally any expense of the actuary and/or appraiser. If the Company and the Subscribing Reinsurer cannot agree on an actuary and/or appraiser, the Company and the Subscribing Reinsurer each shall nominate three individuals, of whom the other shall decline two, and the final appointment shall be made by drawing lots. Payment by the Subscribing Reinsurer of the amount of liability ascertained shall constitute a complete and final release of both parties in respect of liability arising from the Subscribing Reinsurer’s participation under this Contract.

D. The Company’s option to require commutation under paragraph C above shall survive the termination or expiration of this Contract.

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ARTICLE 5

TERRITORY

A. This Contract shall apply to Policies issued in the States of Connecticut, New Jersey, Rhode Island and the Commonwealth of Massachusetts.

B. Additionally, this Contract shall apply to Policies issued in the States of Montana, Idaho, South Dakota, Nevada, Utah, New Mexico, Iowa, Illinois, Indiana, Michigan, West Virginia, Arkansas, Mississippi, Georgia and South Carolina.

C. Any state not listed in paragraph A or B of this Article shall be subject to prior approval by the Reinsurer before any Policy written in that state is ceded to this Contract.

ARTICLE 6

EXCLUSIONS

A. This Contract shall not apply to and specifically excludes:

1. Policies covered by the Company’s Flood Tower.

2. Flood when written as such.

3. Earthquake for standalone Policies where earthquake is the only named peril.

4. Hail damage to an insured’s growing or standing crops.

5. Reinsurance assumed by the Company under obligatory reinsurance agreements, except intercompany reinsurance between the Company and its affiliates and reinsurance where the Policies involved are to be re-underwritten in accordance with the underwriting standards of the Company and reissued as Policies of the Company in due course.

6. Pools, Associations & Syndicates, per the attached exclusion.

7. Liability of the Company arising by contract, operation of law, or otherwise, from its participation or membership, whether voluntary or involuntary, in any Insolvency Fund. “Insolvency Fund” includes any guaranty fund, insolvency fund, plan, pool, association, fund or other arrangement, howsoever denominated, established or governed, that provides for any assessment of or payment or assumption by the Company of part or all of any claim, debt, charge, fee, or other obligation of an insurer, or its successors or assigns, that has been declared by any competent authority to be insolvent, or that is otherwise deemed unable to meet any claim, debt, charge, fee or other obligation in whole or in part.

8. Loss or damage occasioned by war, invasion, hostilities, acts of foreign enemies, civil war, rebellion, insurrection, military or usurped power, martial law, or confiscation by order of any government or public authority, but not excluding loss or damage that would be covered under a standard form of Policy containing a standard war exclusion clause.

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9. Losses excluded by the attached Nuclear Incident Exclusion Clause - Physical Damage - Reinsurance - U.S.A.

10. Terrorism as defined in the attached Terrorism Exclusion.

11. Mold unless directly resulting from an otherwise covered peril.

12. Loss and/or damage and/or costs and/or expenses arising from seepage and/or pollution and/or contamination, other than contamination from smoke. Nevertheless, this exclusion does not preclude payment of the cost of removing debris of property damaged by a loss otherwise covered hereunder, subject always to a limit of 25.0% of the Company’s property loss under the applicable original Policy.

13. Financial guarantee and insolvency.

14. Loss or damage to overhead transmission and distribution lines, including supporting structures, of electrical companies, telephone companies, and cable companies. This exclusion shall not apply, however, to transmission and distribution lines and their supporting structures located on the property of any original insured or within 1,000 feet thereof.

15. Losses excluded by the attached Communicable Disease Exclusion (Property Reinsurance).

16. Loss Excluded by the attached Cyber Loss Limited Exclusion Clause (Property Treaty Reinsurance).

17. Policies issued covering risks located in the state of Florida.

B. With the exception of subparagraphs A(8), A(9), A(10) and A(13) above, should any judicial, regulatory or legislative entity having legal jurisdiction invalidate any exclusion on the Company’s Policy, any amount of loss for which the Company is liable because of such invalidation will not be excluded hereunder.

C. With the exception of subparagraphs A(8), A(9), A(10) and A(13) above, if the Company inadvertently issues a Policy falling within the scope of one or more of the exclusions, such Policy shall be covered hereunder, provided that the Company issues, or causes to be issued, the required notice of cancellation within 30 days after a member of the executive or managerial staff at the Company’s home office having underwriting authority in the class of business involved becomes aware that the Policy applies to excluded classes, unless the Company is prevented from canceling said Policy within such period by applicable statute or regulation, in which case such Policy shall be covered hereunder until the earliest date on which the Company may cancel.

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ARTICLE 7

SPECIAL ACCEPTANCE

Business that is not within the scope of this Contract may be submitted to the Reinsurer for special acceptance hereunder, and such business, if accepted by the Reinsurer shall be covered hereunder, subject to the terms and conditions of this Contract, except as modified by the special acceptance. The Reinsurer shall be deemed to have accepted a risk, if it has not responded within five business days after receiving the underwriting information on such risk. Any renewal of a special acceptance agreed to for a predecessor contract to this Contract, shall automatically be covered hereunder.

ARTICLE 8

PREMIUM

A. For each Contract Year covered hereunder, the Company shall pay the Reinsurer the Annual Deposit Premium for the Contract Year. The Annual Deposit Premium is inclusive of the Reinsurer’s Annual Margin, and the Reinsurer’s Annual Margin shall be paid by the Company to the Reinsurer on the first day of each Contract Year. The remaining Annual Deposit Premium due the Reinsurer shall be payable in four equal installments and shall be due on the first day of each Contract Quarter of the applicable Contract Year.

B. The Company shall calculate a Final Annual Premium for each Contract Year on September 30 following the end of each Contract Year. Should the Final Annual Premium so calculated be greater than the Annual Deposit Premium calculated for the Contract Year, the Company shall immediately pay the Reinsurer the difference.

C. “Annual Deposit Premium” means the deposit premium payable to the Reinsurer by the Company for the coverage provided hereunder for each Contract Year. The Annual Deposit Premium for each Contract Year shall be [$*****].

D. “Final Annual Premium” means the reinsurance premium payable to the Reinsurer by the Company for the coverage provided hereunder for each Contract Year. The Final Annual Premium for each Contract Year shall be calculated by:

1. If the ratio of the Contract Year’s Final Total Insured Value to the Contract Year’s Initial Total Insured Value is greater than 110% then the Final Annual Premium shall be calculated by:

a. The Annual Deposit Premium for the Contract Year; plus

b. the Annual Deposit Premium for the Contract Year multiplied by the portion of the ratio of the Contract Year’s Final Total Insured Value to the Contract Year’s Initial Total Insured Value in excess of 110%.

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2. If the ratio of the Contract Year’s Final Total Insured Value to the Contract Year’s Initial Total Insured Value is less than or equal to 110%, then the Final Annual Premium for the Contract Year shall be [$*****].

E. “Reinsurer’s Annual Margin” for each Contract Year shall be [$*****], and shall be non-refundable and fully earned when due, unless this Contract is terminated in accordance with the Special Termination Article or this Contract is commuted in accordance with the Commutation and Profit Commission Article.

F. In the event that Ultimate Net Losses ceded to this Contract for Sections A and B combined exceeds [$*****], for the Term of this Contract, the Company shall pay to the Reinsurer an “Additional Premium” equal to [*****%] of the Ultimate Net Losses ceded to this Contract in excess of [$*****], subject to a maximum Additional Premium of [$*****]. The amount payable shall be due on the respective Settlement Date following the loss report.

G. “Initial Total Insured Value” means the Company’s aggregate wind exposures based on projected data through September 30^th of each Contract Year, for business covered hereunder. The Initial Total Insured Value will be calculated prior to the start of each Contract Year.

H. “Final Total Insured Value” means the Company’s aggregate wind exposure as of May 31 of each Contract Year, for business covered hereunder. The calculation of the Final Total Insured Value shall be done by July 15^thof the applicable Contract Year.

I. In the event the Company provides notice of commutation in accordance with the Term Article, any future Annual Deposit Premium, Final Annual Premium and Reinsurer’s Annual Margin payments shall not be due. In the event the Company rescinds its notice of commutation 60 days prior to the end of that Contract Year, any Annual Deposit Premium, Final Annual Premium and Reinsurer’s Annual Margin that would have been due if not for the commutation notice shall be due and payable in accordance with paragraph A above, and all future Annual Deposit Premiums, Final Annual Premiums and Reinsurer’s Annual Margins will be due when they would have been due if not for the commutation notice.

ARTICLE 9

COMMUTATION AND PROFIT COMMISSION

A. With 60 days’ prior notice, commutation of this Contract in its entirety may be elected by the Company, at its sole option, as of May 31, 2022, provided the Experience Account Balance (as defined in the Reports Article) is positive. If the Company elects commutation, the Company shall receive a Profit Commission equal to the Experience Account Balance, which shall serve as the commutation amount. Additionally, if the Company elects commutation at the end of Contract Year 1, it may rescind its notice of commutation at any time prior to the effective date of commutation. If the amount of the Experience Account Balance is not positive as of the effective date of commutation, any notice of commutation previously received by the Reinsurer shall be deemed rescinded. At May 31, 2022, the Company may commute this Contract and may enter into negotiations with the Reinsurer for another three-year term contract, effective June 1, 2022, at terms and conditions to be mutually agreed between the Company and the Reinsurer.

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B. If this Contract is not commuted at May 31, 2022, then, at the end of any Contract Quarter thereafter, if the Experience Account Balance is zero or positive, the Company may commute this Contract, at its sole option, and receive a Profit Commission equal to the Experience Account Balance as of the effective date of commutation.

C. Payment by the Reinsurer of the commutation amount determined in accordance with this Article shall constitute a complete and final release of both parties in respect of liability arising from this Contract.

ARTICLE 10

REPORTS

A. Within 45 days after the end of each Contract Quarter (the “Settlement Date”), the Company shall report to the Reinsurer the Company’s estimate of Ultimate Net Loss under this Contract. The loss report shall include:

1. Paid Ultimate Net Loss for the Contract Quarter and on a cumulative basis from the effective date of this Contract through the end of that Contract Quarter.

2. The Company’s most recent calculation of outstanding Ultimate Net Loss for each Loss Occurrence, as of the end of that Contract Quarter.

3. The amount of ceded Ultimate Net Loss paid during the previous Contract Quarter and the amount of such paid Ultimate Net Loss due to be reimbursed by the Reinsurer on the Settlement Date immediately following such Contract Quarter.

B. Within 45 days after the end of each Contract Quarter, the Company shall also furnish to the Reinsurer a statement of the Experience Account Balance as of the end of such Contract Quarter, such statements subject to the review and approval of the Reinsurer. The Experience Account Balance shall be calculated as of inception and as of each Settlement Date for the immediately preceding Contract Quarter as follows:

1. The Experience Account Balance at the inception of this Contract shall equal:

a. the portion of the Annual Deposit Premium due the Reinsurer on the effective date of this Contract; less

b. the Reinsurer’s Annual Margin for Contract Year 1.

2. On each subsequent Settlement Date, the Experience Account Balance shall equal:

a. the Experience Account Balance as of the immediately preceding Settlement Date (or at inception, as respects the first Settlement Date); plus

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b. the Annual Deposit Premium due during the Contract Quarter; plus

c. premium adjustments associated with the Final Annual Premium calculation, if any; less

d. the Reinsurer’s Annual Margin due during the Contract Quarter, if any; less

e. the Ultimate Net Loss paid for the Contract Quarter.

C. Within 45 days after the end of each Contract Quarter, the Company shall report to the Reinsurer the Company’s, as respects Policies written in states other than Connecticut, New Jersey, Road Island and the Commonwealth of Massachusetts, the number Polices issued in each state, the written premiums for such Policies and Total Insured Value for each state.

D. The Company shall also periodically update and furnish to the Reinsurer such other reports, experience account statements, aggregates or information as may be reasonably required by the Reinsurer and reasonably available to the Company, the format of which shall be agreed between the parties.

ARTICLE 11

DEFINITIONS

A.        1. “Ultimate Net Loss” means the actual loss paid by the Company or which the Company becomes liable to pay, such loss to include Loss Adjustment Expense, 100% of any Extra Contractual Obligation and 100% of any Loss in Excess of Policy Limits as defined in the Extra Contractual Obligations/Excess of Policy Limits Article.

2. Salvages and all recoveries (including amounts due from all reinsurances that inure to the benefit of this Contract, whether recovered or not), shall be first deducted from such loss to arrive at the amount of liability attaching hereunder.

3. All salvages, recoveries or payments recovered or received subsequent to loss settlement hereunder shall be applied as if recovered or received prior to the aforesaid settlement, and all necessary adjustments shall be made by the parties hereto.

4. The Company shall be deemed to be “liable to pay” a loss when a judgment has been rendered that the Company does not plan to appeal, and/or the Company has obtained a release, and/or the Company has accepted a proof of loss, and/or the Company has made a commitment to pay, and/or the Company has scheduled the payment of a loss.

5. Nothing in this clause shall be construed to mean that losses are not recoverable hereunder until the Company’s “Ultimate Net Loss” has been ascertained.

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B. “Loss Adjustment Expense” means costs and expenses incurred by the Company in connection with the investigation, appraisal, adjustment, settlement, litigation, defense or appeal of a specific claim or loss, or alleged loss, including but not limited to:

1. court costs;

2. costs of supersedeas and appeal bonds;

3. monitoring counsel expenses;

4. legal expenses and costs incurred in connection with coverage questions and legal actions connected thereto, including but not limited to declaratory judgment actions;

5. post-judgment interest;

6. pre-judgment interest, unless included as part of an award or judgment;

7. a pro rata share of salaries and expenses of Company field employees, calculated in accordance with the time occupied in adjusting such loss, and expenses of other Company employees who have been temporarily diverted from their normal and customary duties and assigned to the field adjustment of losses covered by this Contract; and

8. subrogation, salvage and recovery expenses.

“Loss Adjustment Expense” does not include salaries and expenses of the Company’s employees, except as provided in subparagraph (7) above, and office and other overhead expenses.

C.        1. “Loss Occurrence” means the sum of all individual losses directly occasioned by any one disaster, accident or loss or series of disasters, accidents or losses arising out of one event. However, the duration and extent of any one “Loss Occurrence” shall be limited to all individual losses sustained by the Company occurring during any period of 168 consecutive hours arising out of and directly occasioned by the same event except that the term “Loss Occurrence” shall be further defined as follows:

a. As regards any “Named Storm,” all individual losses sustained by the Company arising out of and directly occasioned by such “Named Storm,” without regard to the limitations of duration and extent set forth above. “Named Storm” means any storm or storm system declared by the US National Hurricane Center, US Central Pacific Hurricane Center, US Weather Prediction Center, or their successor organizations, all being divisions of the US National Weather Service to be a tropical storm or hurricane, and any successors thereof. A storm or storm system that merges with a “Named Storm” shall be considered part of that “Named Storm,” once it has merged. A “Named Storm” shall be deemed to begin at the effective time and date of the first watch, warning or other official advisory applicable to such tropical storm or hurricane issued by the above

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referenced governmental meteorological agencies. A “Named Storm” shall be deemed to end 72 hours after the cancellation of the last watch, warning or other official advisory applicable to such tropical storm, hurricane or successor, issued by the above referenced governmental meteorological agencies irrespective of the duration of the timing or spacing between such watches, warnings or other official advisories. If two or more storms are assigned different names by the above referenced governmental meteorological agencies, each of those storms shall constitute a separate event for purposes of this definition.

b. As regards windstorm, hail, tornado, cyclone, including ensuing collapse and water damage other than “Named Storm,” all individual losses sustained by the Company occurring during any period of 96 consecutive hours arising out of and directly occasioned by the same event.

c. As regards riot, riot attending a strike, civil commotion, vandalism and malicious mischief, all individual losses sustained by the Company occurring during any period of 96 consecutive hours arising out of and directly occasioned by the same event. The maximum duration of 96 consecutive hours may be extended in respect of individual losses that occur beyond such 96 consecutive hours during the continued occupation of an assured’s premises by strikers, provided such occupation commenced during the aforesaid period.

d. As regards earthquake and fire following directly occasioned by the earthquake, those earthquake losses and individual fire losses that commence during the period of 168 consecutive hours may be included in the Company’s “Loss Occurrence.”

e. As regards any related weather conditions involving snow, sleet, freezing rain, freeze, ice, winter weather, and wind losses related to such conditions, all individual losses sustained by the Company, that occur during any period of 168 consecutive hours arising out of and directly occasioned by the same event.

f. As regards firestorms, brush fires and other fires or series of fires, irrespective of origin (except for fires covered in subparagraphs (c) and (d) above) which spread through trees, grassland or other vegetation, all individual losses sustained by the Company occurring during any period of 168 consecutive hours within a 150-mile radius of any fixed point selected by the Company may be included in the Company’s “Loss Occurrence.” However, an individual loss subject to this subparagraph cannot be included in more than one “Loss Occurrence.”

2. Except as provided in subparagraph (1)(a) above:

a. The Company may choose the date and time when any such period of consecutive hours commences provided that it is not earlier than the date and time of the occurrence of the first recorded individual loss sustained by the Company arising out of that disaster, accident or loss.

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b. Only one period of consecutive hours shall apply with respect to one event, except that, as respects those “Loss Occurrences” referred to in subparagraph (1)(c) above, if the disaster, accident or loss occasioned by the event is of greater duration than 96 consecutive hours, then the Company may divide that disaster, accident or loss into two or more “Loss Occurrences” provided no two periods overlap and no individual loss is included in more than one such period and provided that no period commences earlier than the date and time of the occurrence of the first recorded individual loss sustained by the Company arising out of that disaster, accident or loss.

3. Losses arising from a combination of two or more perils as a result of the same event shall be considered as having arisen from one “Loss Occurrence.” Furthermore, all losses arising from an event involving a combination of losses described in subparagraphs (1)(a) and (1)(b) may be considered as having arisen from one “Loss Occurrence.” Notwithstanding the foregoing, the hourly limitations as stated above shall not be exceeded as respects the applicable perils, and, except as respects those “Loss Occurrences” involving a “Named Storm” referred to in subparagraph (1)(a) above, no single “Loss Occurrence” shall encompass a time period greater than 168 consecutive hours.

D. “Policy” means any binder, policy, or contract of insurance or reinsurance issued, accepted or held covered provisionally or otherwise, by or on behalf of the Company.

E. “Term” means the time between 12:01 a.m., Standard Time, June 1, 2021, and 12:01 a.m., Standard Time, June 1, 2024. However, in the event this Contract is terminated or commuted, “Term” shall mean the time between 12:01 a.m., Standard Time, June 1, 2021, and the effective time and date of termination or commutation of this Contract.

F. “Contract Year” means each of the consecutive 12-month period (or portion thereof) commencing 12:01 a.m., Standard Time, on any June 1 and ending at the following year at 12:01 a.m., Standard Time, on June 1 during the Term. In the event this Contract is terminated or commuted, the final “Contract Year” shall be from the beginning of the then current “Contract Year” through the effective date of termination or commutation.

G. “Contract Quarter” means each of the three-month period commencing June 1, September 1, December 1 and March 1 during the Term of this Contract or thereafter. In the event this Contract is terminated, the final “Contract Quarter” shall be from the beginning of the then current “Contract Quarter” through the effective date of termination or commutation.

H. “Settlement Dates” shall be the first business day on or after 45 days following the end of each Contract Quarter or within 10 business days after the Reinsurer has received the Company reports under the Reports Article, whichever is later.

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ARTICLE 12

EXTRA CONTRACTUAL OBLIGATIONS/EXCESS OF POLICY LIMITS

A. This Contract shall cover Extra Contractual Obligations, as provided in the definition of Ultimate Net Loss. “Extra Contractual Obligations” shall be defined as those liabilities not covered under any other provision of this Contract and that arise from the handling of any claim on business covered hereunder, such liabilities arising because of, but not limited to, the following: failure by the Company to settle within the Policy limit, or by reason of alleged or actual negligence, fraud or bad faith in rejecting an offer of settlement or in the preparation of the defense or in the trial of any action against its insured or reinsured or in the preparation or prosecution of an appeal consequent upon such action.

B. This Contract shall cover Loss in Excess of Policy Limits, as provided in the definition of Ultimate Net Loss. “Loss in Excess of Policy Limits” shall be defined as Loss in excess of the Policy limit, having been incurred because of, but not limited to, failure by the Company to settle within the Policy limit or by reason of alleged or actual negligence, fraud or bad faith in rejecting an offer of settlement or in the preparation of the defense or in the trial of any action against its insured or reinsured or in the preparation or prosecution of an appeal consequent upon such action.

C. An Extra Contractual Obligation and/or Loss in Excess of Policy Limits shall be deemed to have occurred on the same date as the loss covered under the Company’s Policy, and shall constitute part of the original loss.

D. For the purposes of the Loss in Excess of Policy Limits coverage hereunder, the word “Loss” shall mean any amounts for which the Company would have been contractually liable to pay had it not been for the limit of the original Policy.

E. Loss Adjustment Expense in respect of Extra Contractual Obligations and/or Loss in Excess of Policy Limits shall be covered hereunder in the same manner as other Loss Adjustment Expense.

F. However, this Article shall not apply where the loss has been incurred due to final legal adjudication of fraud of a member of the Board of Directors or a corporate officer of the Company acting individually or collectively or in collusion with any individual or corporation or any other organization or party involved in the presentation, defense or settlement of any claim covered hereunder.

G. In no event shall coverage be provided to the extent not permitted under law.

ARTICLE 13

NET RETAINED LIABILITY

A. This Contract applies only to that portion of any loss that the Company retains net for its own account (prior to deduction of any reinsurance that inures solely to the benefit of the Company).

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B. The amount of the Reinsurer’s liability hereunder in respect of any loss or losses shall not be increased by reason of the inability of the Company to collect from any other reinsurer(s), whether specific or general, any amounts that may have become due from such reinsurer(s), whether such inability arises from the insolvency of such other reinsurer(s) or otherwise.

ARTICLE 14

OTHER REINSURANCE

The Company shall be permitted to carry in force other reinsurance, recoveries under which shall inure to the benefit of this Contract.

ARTICLE 15

ORIGINAL CONDITIONS

All reinsurance under this Contract shall be subject to the same terms, conditions, waivers and interpretations, and to the same modifications and alterations as the respective Policies of the Company. However, in no event shall this be construed in any way to provide coverage outside the terms and conditions set forth in this Contract.

ARTICLE 16

NO THIRD PARTY RIGHTS

This Contract is solely between the Company and the Reinsurer, and in no instance shall any insured, claimant or other third party have any rights under this Contract except as may be expressly provided otherwise herein.

ARTICLE 17

NOTICE OF LOSS AND LOSS SETTLEMENTS

A. The Company shall advise the Reinsurer promptly if paid and estimated Ultimate Net Loss is in excess of 75% of the Company’s retention, or if, in the opinion of the Company, such Ultimate Net Loss may result in a claim hereunder. Thereafter, the Company shall advise the Reinsurer, at least monthly, of all subsequent developments thereto that may materially affect the position of the Reinsurer.

B. The Company alone and at its full discretion shall adjust, settle or compromise all claims and losses.

C. As respects losses subject to this Contract, all loss settlements made by the Company, whether under strict Policy terms or by way of compromise, and any Extra Contractual Obligations and/or Loss in Excess of Policy Limits, shall be binding upon the Reinsurer. The Reinsurer agrees to pay or allow, as the case may be, its share of each such settlement immediately upon receipt of reasonable evidence of the amount paid by the Company or that the Company estimates it will pay within the next 14 days. Within 30 days after receipt of the Reinsurer’s payment, the Company shall report to the Reinsurer the Reinsurer’s payment, minus the Reinsurer’s share of losses subject to this Contract that the Company has paid, or become liable to pay, as of the date of the report. Any positive difference shall be remitted to the Reinsurer with the Company’s report.

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ARTICLE 18

LATE PAYMENTS

A. In the event any payment due either party is not received by the Intermediary by the payment due date, the party to whom payment is due may, by notifying the Intermediary in writing, require the debtor party to pay, and the debtor party agrees to pay, an interest penalty on the amount past due calculated for each such payment on the last business day of each month as follows:

1. The number of full days that have expired since the overdue date or the last monthly calculation, whichever the lesser; times

2. 1/365th of the sum of the six-month United States Treasury Bill rate as quoted in The Wall Street Journal on the first business day of the month for which the calculation is made, plus 1%; times

3. The amount past due, including accrued interest.

Interest shall accumulate until payment of the original amount due plus interest penalties have been received by the Intermediary.

B. The due date shall, for purposes of this Article, be determined as follows:

1. Payments from the Reinsurer to the Company shall be due on the date on which the demand for payment (including delivery of bordereaux or quarterly or monthly reports) is received by the Reinsurer, and shall be overdue 30 days thereafter.

2. Payments from the Company to the Reinsurer shall be due on the dates specified within this Contract. Payments shall be overdue 30 days thereafter except for the first installment of premium, if applicable, which shall be overdue 60 days from inception or 30 days from final line-signing, whichever the later. Reinstatement premium, if applicable, shall have as a due date the date when the Company receives payment for the claim giving rise to such reinstatement premium, and payment shall be overdue 30 days thereafter. In the event a due date is not specifically stated for a given payment, the overdue date shall be 30 days following the date of billing.

C. If the information contained in the Company’s demand for payment is insufficient or not in accordance with the conditions of this Contract, then within 30 days the Reinsurer shall request from the Company all additional information necessary to validate its claim and the payment due date as defined in paragraph B shall be deemed to be the date upon which the Reinsurer received the requested additional information. This paragraph is only for the purpose of establishing when a payment is overdue, and shall not alter the provisions of the Notice of Loss and Loss Settlements Article or other pertinent contractual stipulations.

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D. In the event arbitration is necessary to settle a dispute, the panel shall have the authority to make a determination awarding interest to the prevailing party. Interest, if any, awarded by the panel shall supersede the interest amounts outlined herein.

E. Any interest owed pursuant to this Article may be waived by the party to which it is owed. Waiver of such interest, however, shall not affect the waiving party’s rights to other interest amounts due as a result of this Article.

ARTICLE 19

OFFSET

Each party hereto shall have, and may exercise at any time and from time to time, the right to offset any and all balances due from a party to the other arising under this Contract. In the event of the insolvency of a party hereto, offsets shall only be allowed in accordance with the provisions of any applicable law governing offset entitlement.

ARTICLE 20

CURRENCY

A. Where the word “Dollars” and/or the sign “$” appear in this Contract, they shall mean United States Dollars, and all payments hereunder shall be in United States Dollars.

B. For purposes of this Contract, where the Company receives premiums or pays losses in currencies other than United States Dollars, such premiums or losses shall be converted into United States Dollars at the actual rates of exchange at which these premiums or losses are entered in the Company’s books.

ARTICLE 21

UNAUTHORIZED REINSURANCE

A. This Article applies only to the extent a Subscribing Reinsurer does not qualify for credit with any insurance regulatory authority having jurisdiction over the Company’s reserves.

B. The Company agrees, in respect of its Policies or bonds falling within the scope of this Contract, that when it files with its insurance regulatory authority, or sets up on its books liabilities as required by law, it shall forward to the Reinsurer a statement showing the proportion of such liabilities applicable to the Reinsurer. The “Reinsurer’s Obligations” shall be defined as follows:

1. unearned premium (if applicable);

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2. known outstanding losses that have been reported to the Reinsurer and Loss Adjustment Expense relating thereto;

3. losses and Loss Adjustment Expense paid by the Company but not recovered from the Reinsurer;

4. losses incurred but not reported and Loss Adjustment Expense relating thereto;

5. all other amounts for which the Company cannot take credit on its financial statements unless funding is provided by the Reinsurer.

C. The Reinsurer’s Obligations shall be funded by funds withheld, cash advances, Trust Agreement or a Letter of Credit (LOC). The Reinsurer shall have the option of determining the method of funding provided it is acceptable to the insurance regulatory authorities having jurisdiction over the Company’s reserves.

D. When funding by Trust Agreement, the Reinsurer shall ensure that the Trust Agreement complies with the provisions of the “Trust Agreement Requirements Clause” attached hereto. When funding by an LOC, the Reinsurer agrees to apply for and secure timely delivery to the Company of a clean, irrevocable and unconditional LOC issued by a bank and containing provisions acceptable to the insurance regulatory authorities having jurisdiction over the Company’s reserves in an amount equal to the Reinsurer’s Obligations. Such LOC shall be issued for a period of not less than one year, and shall be automatically extended for one year from its date of expiration or any future expiration date unless 30 days (or such other time period as may be required by insurance regulatory authorities), prior to any expiration date the issuing bank shall notify the Company by certified or registered mail that the issuing bank elects not to consider the LOC extended for any additional period.

E. The Reinsurer and the Company agree that any funding provided by the Reinsurer pursuant to the provisions of this Contract may be drawn upon at any time, notwithstanding any other provision of this Contract, and be utilized by the Company or any successor, by operation of law, of the Company including, without limitation, any liquidator, rehabilitator, receiver or conservator of the Company, for the following purposes, unless otherwise provided for in a separate Trust Agreement:

1. to reimburse the Company for the Reinsurer’s Obligations, the payment of which is due under the terms of this Contract and that has not been otherwise paid;

2. to make refund of any sum that is in excess of the actual amount required to pay the Reinsurer’s Obligations under this Contract (or in excess of 102% of the Reinsurer’s Obligations, if funding is provided by a Trust Agreement);

3. to fund an account with the Company for the Reinsurer’s Obligations. Such cash deposit shall be held in an interest bearing account separate from the Company’s other assets, and interest thereon not in excess of the prime rate shall accrue to the benefit of the Reinsurer. Any taxes payable on accrued interest shall be paid out of the assets in the account that are in excess of the Reinsurer’s Obligations (or in excess of 102% of the Reinsurer’s Obligations, if funding is provided by a Trust Agreement).

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If the assets are inadequate to pay taxes, any taxes due shall be paid or reimbursed by the Reinsurer;

4. to pay the Reinsurer’s share of any other amounts the Company claims are due under this Contract.

F. If the amount drawn by the Company is in excess of the actual amount required for E(1) or E(3), or in the case of E(4), the actual amount determined to be due, the Company shall promptly return to the Reinsurer the excess amount so drawn. All of the foregoing shall be applied without diminution because of insolvency on the part of the Company or the Reinsurer.

G. The issuing bank shall have no responsibility whatsoever in connection with the propriety of withdrawals made by the Company or the disposition of funds withdrawn, except to ensure that withdrawals are made only upon the order of properly authorized representatives of the Company.

H. At annual intervals, or more frequently at the discretion of the Company, but never more frequently than quarterly, the Company shall prepare a specific statement of the Reinsurer’s Obligations for the sole purpose of amending the LOC or other method of funding, in the following manner:

1. If the statement shows that the Reinsurer’s Obligations exceed the balance of the LOC as of the statement date, the Reinsurer shall, within 30 days after receipt of the statement, secure delivery to the Company of an amendment to the LOC increasing the amount of credit by the amount of such difference. Should another method of funding be used, the Reinsurer shall, within the time period outlined above, increase such funding by the amount of such difference.

2. If, however, the statement shows that the Reinsurer’s Obligations are less than the balance of the LOC (or that 102% of the Reinsurer’s Obligations are less than the trust account balance if funding is provided by a Trust Agreement), as of the statement date, the Company shall, within 30 days after receipt of written request from the Reinsurer, release such excess credit by agreeing to secure an amendment to the LOC reducing the amount of credit available by the amount of such excess credit. Should another method of funding be used, the Company shall, within the time period outlined above, decrease such funding by the amount of such excess.

ARTICLE 22

TAXES

A. In consideration of the terms under which this Contract is issued, the Company undertakes not to claim any deduction of the premium hereon when making Canadian tax returns or when making tax returns, other than Income or Profits Tax returns, to any state or territory of the United States of America or to the District of Columbia.

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B.        1. Each Subscribing Reinsurer has agreed to allow, for the purpose of paying the Federal Excise Tax, the applicable percentage of the premium payable hereon (as imposed under the Internal Revenue Code) to the extent such premium is subject to Federal Excise Tax.

2. In the event of any return of premium becoming due hereunder, the Subscribing Reinsurer shall deduct the applicable percentage of the premium from the amount of the return, and the Company or its agent should take steps to recover the Tax from the U.S. Government.

ARTICLE 23

ACCESS TO RECORDS

A. The Reinsurer or its duly authorized representatives shall have the right to visit the offices of the Company to inspect, examine, audit, and verify any of the policy, accounting or claim files (“Records”) relating to business reinsured under this Contract during regular business hours after giving five working days’ prior notice. This right shall be exercisable during the term of this Contract or after the expiration of this Contract. Notwithstanding the above, the Reinsurer shall not have any right of access to the Records of the Company if it is not current in all undisputed payments due the Company.

B. Notwithstanding the above, the Company reserves the right to withhold from the Reinsurer any Privileged Documents. However, the Company shall permit and not object to the Reinsurer’s access to Privileged Documents in connection with the underlying claim reinsured hereunder following final settlement or final adjudication of the case or cases involving such claim, with prejudice against all claimants and all parties to such adjudications; the Company may defer release of such Privileged Documents if there are subrogation, contribution, or other third party actions with respect to that claim or case, and the Company’s defense might be jeopardized by release of such Privileged Documents. In the event that the Company seeks to defer release of such Privileged Documents, it shall, in consultation with the Reinsurer, take other steps as reasonably necessary to provide the Reinsurer with the information it reasonably requires to indemnify the Company without causing a loss of such privileges or protections. The Reinsurer shall not have access to Privileged Documents relating to any dispute between the Company and the Reinsurer.

C. For purposes of this Article:

1. “Privileged Documents” means any documents that are Attorney-Client Privilege Documents and/or Work Product Privilege Documents.

2. “Attorney-Client Privilege Documents” means communications of a confidential nature between (a) the Company, or anyone retained by or at the direction of the Company, or its in-house or outside legal counsel, or anyone in the control of such legal counsel, and (b) any in-house or outside legal counsel, if such communications relate to legal advice being sought by the Company and/or contain legal advice being provided to the Company.

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3. “Work Product Privilege Documents” means communications, written materials and tangible things prepared by or for in-house or outside counsel, or prepared by or for the Company, in anticipation of or in connection with litigation, arbitration, or other dispute resolution proceedings.

ARTICLE 24

CONFIDENTIALITY

A. The Reinsurer hereby acknowledges that the documents, information and data provided to it by the Company, whether directly or through an authorized agent, in connection with the placement and execution of this Contract (“Confidential Information”) are proprietary and confidential to the Company. Confidential Information shall not include documents, information or data that the Reinsurer can show:

1. are publicly known or have become publicly known through no unauthorized act of the Reinsurer;

2. have been rightfully received from a third person without obligation of confidentiality; or

3. were known by the Reinsurer prior to the placement of this Contract without an obligation of confidentiality.

B. Absent the written consent of the Company, the Reinsurer shall not disclose any Confidential Information to any third parties, including any affiliated companies (except to the extent necessary to enable affiliated companies or third parties engaged by the Reinsurer to perform services related to this Contract on behalf of the Reinsurer), except:

1. when required by retrocessionaires as respects business ceded to this Contract;

2. when required by regulators performing an audit of the Reinsurer’s records and/or financial condition; or

3. when required by external auditors performing an audit of the Reinsurer’s records in the normal course of business.

Further, the Reinsurer agrees not to use any Confidential Information for any purpose not related to the performance of its obligations or enforcement of its rights under this Contract.

C. Notwithstanding the above, in the event that the Reinsurer is required by court order, other legal process or any regulatory authority to release or disclose any or all of the Confidential Information, the Reinsurer agrees to provide the Company with written notice of same at least 10 days prior to such release or disclosure and to use its best efforts to assist the Company in maintaining the confidentiality provided for in this Article.

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D. The provisions of this Article shall extend to the officers, directors and employees of the Reinsurer and its affiliates, and shall be binding upon their successors and assigns.

ARTICLE 25

INDEMNIFICATION AND ERRORS AND OMISSIONS

A. The Reinsurer is reinsuring, subject to the terms and conditions of this Contract, the obligations of the Company under any Policy. The Company shall be the sole judge as to:

1. what shall constitute a claim or loss covered under any Policy;

2. the Company’s liability thereunder; and

3. the amount or amounts that it shall be proper for the Company to pay thereunder.

B. The Reinsurer shall be bound by the judgment of the Company as to the obligation(s) and liability(ies) of the Company under any Policy.

C. Any inadvertent error, omission or delay in complying with the terms and conditions of this Contract shall not be held to relieve either party hereto from any liability that would attach to it hereunder if such error, omission or delay had not been made, provided such error, omission or delay is rectified immediately upon discovery.

D. Nothing in this Article shall be construed to override any of the other terms and conditions of this Contract.

ARTICLE 26

INSOLVENCY

A. If more than one reinsured company is referenced within the definition of “Company” in the Preamble to this Contract, this Article shall apply severally to each such company. Further, this Article and the laws of the domiciliary state shall apply in the event of the insolvency of any company covered hereunder. In the event of a conflict between any provision of this Article and the laws of the domiciliary state of any company covered hereunder, that domiciliary state’s laws shall prevail.

B. In the event of the insolvency of the Company, this reinsurance (or the portion of any risk or obligation assumed by the Reinsurer, if required by applicable law) shall be payable directly to the Company, or to its liquidator, receiver, conservator or statutory successor, either: (1) on the basis of the liability of the Company, or (2) on the basis of claims filed and allowed in the liquidation proceeding, whichever may be required by applicable statute, without diminution because of the insolvency of the Company or because the liquidator, receiver, conservator or statutory successor of the Company has failed to pay all or a portion

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of any claim. It is agreed, however, that the liquidator, receiver, conservator or statutory successor of the Company shall give written notice to the Reinsurer of the pendency of a claim against the Company indicating the Policy or bond reinsured, which claim would involve a possible liability on the part of the Reinsurer within a reasonable time after such claim is filed in the conservation or liquidation proceeding or in the receivership, and that during the pendency of such claim, the Reinsurer may investigate such claim and interpose, at its own expense, in the proceeding where such claim is to be adjudicated any defense or defenses that it may deem available to the Company or its liquidator, receiver, conservator or statutory successor. The expense thus incurred by the Reinsurer shall be chargeable, subject to the approval of the court, against the Company as part of the expense of conservation or liquidation to the extent of a pro rata share of the benefit that may accrue to the Company solely as a result of the defense undertaken by the Reinsurer.

C. Where two or more reinsurers are involved in the same claim and a majority in interest elect to interpose defense to such claim, the expense shall be apportioned in accordance with the terms of this reinsurance Contract as though such expense had been incurred by the Company.

D. As to all reinsurance made, ceded, renewed or otherwise becoming effective under this Contract, the reinsurance shall be payable as set forth above by the Reinsurer to the Company or to its liquidator, receiver, conservator or statutory successor, (except as provided by Section 4118(a)(1)(A) of the New York Insurance Law, provided the conditions of 1114(c) of such law have been met, if New York law applies) or except (1) where the Contract specifically provides another payee in the event of the insolvency of the Company, or (2) where the Reinsurer, with the consent of the direct insured or insureds, has assumed such Policy obligations of the Company as direct obligations of the Reinsurer to the payees under such Policies and in substitution for the obligations of the Company to such payees. Then, and in that event only, the Company, with the prior approval of the certificate of assumption on New York risks by the Superintendent of Financial Services of the State of New York, or with the prior approval of such other regulatory authority as may be applicable, is entirely released from its obligation and the Reinsurer shall pay any loss directly to payees under such Policy.

ARTICLE 27

RUN-OFF REINSURER

A. “Run-off Reinsurer” means any Subscribing Reinsurer that:

1. has been ordered by a state insurance department or other legal authority to cease writing business, or has been placed under regulatory supervision or in rehabilitation; or

2. has ceased reinsurance underwriting operations; or

3. has transferred its claims-paying authority to an unaffiliated entity; or

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4. engages in a process of Scheme of Arrangement or similar procedure related to this Contract, including but not limited to an insurance business transfer scheme pursuant to Part VII of the Financial Services and Markets Act 2000 (U.K.), as may be amended from time to time; or

5. in any other way has assigned its interests or delegated its obligations under this Contract to an unaffiliated entity.

Notwithstanding the foregoing, agreement by a Lloyd’s syndicate to follow claim settlements procedures under Lloyd’s Claims Scheme (Combined) shall not constitute a transfer of its claims-paying authority, for purposes of subparagraphs (3) and (5) of this paragraph.

B. Notwithstanding any other provision of this Contract, in the event that a Subscribing Reinsurer becomes a Run-off Reinsurer at any time, the Company may elect, by giving written notice to the Run-off Reinsurer at any time thereafter, that all or any of the following shall apply to the Run-off Reinsurer’s participation hereunder:

1. Should the Run-off Reinsurer fail to pay amounts due hereunder, the interest penalty specified in the Late Payments Article shall be increased by 0.5% for each 30 days that a payment is past due, subject to a maximum increase of 7.0%.

2. The Run-off Reinsurer’s liability for losses for Policies covered by this Contract shall be commuted. In the event the Company and the Run-off Reinsurer cannot agree on the commutation amount of the Run-off Reinsurer’s liability under such Policies, they shall appoint an actuary and/or appraiser to assess such liability and shall share equally any expense of the actuary and/or appraiser. If the Company and the Run-off Reinsurer cannot agree on an actuary and/or appraiser, the Company and the Run-off Reinsurer each shall nominate three individuals, of whom the other shall decline two, and the final appointment shall be made by drawing lots. Payment by the Run-off Reinsurer of the amount of liability ascertained shall constitute a complete and final release of both parties under this Contract.

3. The Run-off Reinsurer shall have no right of access to the Records of the Company if the Run-off Reinsurer has denied payment of any claim hereunder or there is a pending arbitration between the Company and the Run-off Reinsurer regarding any claim hereunder. A reservation of rights shall be considered a denial of a claim. Notwithstanding the above, the Run-off Reinsurer shall continue to have access to Records of the Company for any claim for which it has raised a query within 30 days of its receipt of a billing, but any inspection of Records must be completed within 90 days of receipt of billing or access will be deemed waived.

4. The provisions of the Arbitration Article shall not apply.

C. The Company’s waiver of any rights provided in this Article is not a waiver of that right or other rights at a later date.

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ARTICLE 28

ARBITRATION

A. Any dispute arising out of the interpretation, performance or breach of this Contract, including the formation or validity thereof, shall be submitted for decision to a panel of three arbitrators. Notice requesting arbitration shall be in writing and sent certified or registered mail, return receipt requested.

B. One arbitrator shall be chosen by each party and the two arbitrators shall then choose an impartial third arbitrator who shall preside at the hearing. If either party fails to appoint its arbitrator within 30 days after being requested to do so by the other party, the latter, after 10 days’ prior notice by certified or registered mail of its intention to do so, may appoint the second arbitrator.

C. If the two arbitrators do not agree on a third arbitrator within 60 days of their appointment, the third arbitrator shall be chosen in accordance with the procedures for selecting the third arbitrator in force on the date the arbitration is demanded, established by the AIDA Reinsurance and Insurance Arbitration Society - U.S. (ARIAS). The arbitrators shall be persons knowledgeable about insurance and reinsurance who have no personal or financial interest in the result of the arbitration. If a member of the panel dies, becomes disabled or is otherwise unwilling or unable to serve, a substitute shall be selected in the same manner as the departing member was chosen and the arbitration shall continue.

D. Within 30 days after all arbitrators have been appointed, the panel shall meet and determine timely periods for briefs, discovery procedures and schedules of hearings.

E. The panel shall be relieved of all judicial formality and shall not be bound by the strict rules of procedure and evidence. Notwithstanding anything to the contrary in this Contract, the arbitrators may at their discretion, consider underwriting and placement information provided by the Company to the Reinsurer, as well as any correspondence exchanged by the parties that is related to this Contract. The arbitration shall take place in Tampa, Florida, or at such other place as the parties shall agree. The decision of any two arbitrators shall be in writing and shall be final and binding. The panel is empowered to grant interim relief as it may deem appropriate.

F. The panel shall interpret this Contract as an honorable engagement rather than as merely a legal obligation and shall make its decision considering the custom and practice of the applicable insurance and reinsurance business as promptly as possible after the hearings. Judgment upon an award may be entered in any court having jurisdiction thereof.

G. Each party shall bear the expense of its own arbitrator and shall jointly and equally bear with the other party the cost of the third arbitrator. The remaining costs of the arbitration shall be allocated by the panel. The panel may, at its discretion, award such further costs and expenses as it considers appropriate, including but not limited to attorneys’ fees, to the extent permitted by law.

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ARTICLE 29

EXPEDITED ARBITRATION

A. Notwithstanding the provisions of the Arbitration Article, in the event an amount in dispute hereunder $1,000,000 or less, the parties will submit to an expedited arbitration process with the use of a single arbitrator. The arbitrator will be chosen in accordance with the procedures for selecting an arbitrator in force on the date the arbitration is demanded, established by the AIDA Reinsurance and Insurance Arbitration Society - U.S. (ARIAS).

B. Each party’s case will be submitted to the arbitrator within 100 calendar days of the date of determination of the arbitrator. Discovery will be limited to exchanging only those documents directly relating to the issue in dispute, subject to a limit of two discovery depositions from each party, unless otherwise authorized by the arbitrator upon a showing of good cause.

C. Within 120 calendar days of the date of determination of the arbitrator, the hearing will be completed and a written award will be issued by the arbitrator. As the parties agree that time is of the essence, the sole arbitrator does not have the authority to lengthen the schedule, absent agreement of both parties. The arbitrator will have all the powers conferred on the arbitration panel as provided in the Arbitration Article, and said Article will apply to all matters not specifically addressed above.

ARTICLE 30

SERVICE OF SUIT

A. This Article applies only to those Subscribing Reinsurers not domiciled in the United States of America, and/or not authorized in any state, territory and/or district of the United States of America where authorization is required by insurance regulatory authorities.

B. This Article shall not be read to conflict with or override the obligations of the parties to arbitrate their disputes as provided for in the Arbitration Article. This Article is intended as an aid to compelling arbitration or enforcing such arbitration or arbitral award, not as an alternative to the Arbitration Article for resolving disputes arising out of this Contract.

C. In the event of the failure of the Reinsurer to perform its obligations hereunder, the Reinsurer, at the request of the Company, shall submit to the jurisdiction of a court of competent jurisdiction within the United States. Nothing in this Article constitutes or should be understood to constitute a waiver of the Reinsurer’s rights to commence an action in any court of competent jurisdiction in the United States, to remove an action to a United States District Court, or to seek a transfer of a case to another court as permitted by the laws of the United States or of any state in the United States. The Reinsurer, once the appropriate court is selected, whether such court is the one originally chosen by the Company and accepted by the Reinsurer or is determined by removal, transfer, or otherwise, as provided for above, shall comply with all requirements necessary to give said court jurisdiction and, in any suit instituted against the Reinsurer upon this Contract, shall abide by the final decision of such court or of any appellate court in the event of an appeal.

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D. Service of process in such suit may be made upon:

1. as respects Underwriting Members of Lloyd’s, London: Lloyd’s America, Inc., Attention: Legal Department, 280 Park Avenue, East Tower, 25^th Floor, New York, New York 10017;

2. as respects any other Subscribing Reinsurer: Messrs. Mendes and Mount, 750 Seventh Avenue, New York, New York 10019-6829, or another party specifically designated in the Subscribing Reinsurer’s Interests and Liabilities Agreement attached hereto.

The above-named are authorized and directed to accept service of process on behalf of the Reinsurer in any such suit.

E. Further, pursuant to any statute of any state, territory or district of the United States that makes provision therefor, the Reinsurer hereby designates the Superintendent, Commissioner or Director of Insurance, or other officer specified for that purpose in the statute, or his successor or successors in office, as its true and lawful attorney upon whom may be served any lawful process in any action, suit or proceeding instituted by or on behalf of the Company or any beneficiary hereunder arising out of this Contract, and hereby designates the above-named as the person to whom the said officer is authorized to mail such process or a true copy thereof.

ARTICLE 31

GOVERNING LAW

This Contract shall be governed as to performance, administration and interpretation by the laws of the State of Florida, exclusive of conflict of law rules. However, with respect to credit for reinsurance, the rules of all applicable states shall apply.

ARTICLE 32

ENTIRE AGREEMENT

This Contract sets forth all of the duties and obligations between the Company and the Reinsurer and supersedes any and all prior or contemporaneous written agreements with respect to matters referred to in this Contract. This Contract may not be modified or changed except by an amendment to this Contract in writing signed by both parties. However, this Article shall not be construed as limiting the admissibility of evidence regarding the formation, interpretation, purpose or intent of this Contract.

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ARTICLE 33

NON-WAIVER

The failure of the Company or the Reinsurer to insist on compliance with this Contract or to exercise any right or remedy hereunder shall not constitute a waiver of any rights contained in this Contract nor prevent either party from thereafter demanding full and complete compliance nor prevent either party from exercising such remedy in the future.

ARTICLE 34

AGENCY

For purposes of sending and receiving notices and payments required by this Contract, the reinsured company that is set forth first in the Preamble to this Contract shall be deemed the agent of all other reinsured companies referenced in the Preamble. In no event, however, shall any reinsured company be deemed the agent of another with respect to the terms of the Insolvency Article.

ARTICLE 35

INTERMEDIARY

Guy Carpenter & Company, LLC, is hereby recognized as the Intermediary negotiating this Contract for all business hereunder. All communications (including notices, statements, premiums, return premiums, commissions, taxes, losses, Loss Adjustment Expenses, salvages, and loss settlements) relating thereto shall be transmitted to the Company or the Reinsurer through the Intermediary. Payments by the Company to the Intermediary shall be deemed payment to the Reinsurer. Payments by the Reinsurer to the Intermediary shall be deemed payment to the Company only to the extent that such payments are actually received by the Company.

ARTICLE 36

MODE OF EXECUTION

A. This Contract may be executed by:

1. an original written ink signature of paper documents;

2. an exchange of facsimile copies showing the original written ink signature of paper documents;

3. electronic signature technology employing computer software and a digital signature or digitizer pen pad to capture a person’s handwritten signature in such a manner that the signature is unique to the person signing, is under the sole control of the person signing, is capable of verification to authenticate the signature and is linked to the document signed in such a manner that if the data is changed, such signature is invalidated.

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B. The use of any one or a combination of these methods of execution shall constitute a legally binding and valid signing of this Contract. This Contract may be executed in one or more counterparts, each of which, when duly executed, shall be deemed an original.

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IN WITNESS WHEREOF, the Company has caused this Contract to be executed by its duly authorized representative(s), who also confirms the Company’s review of and agreement to be bound by the terms and conditions of the Interests and Liabilities Agreements attached to and forming part of this Contract;

On this         day of         , in the year of 2021.

TYPTAP INSURANCE COMPANY

Signature:	Title:
Print Name:

MULTI-YEAR NON-FLORIDA PROPERTY CATASTROPHE

EXCESS OF LOSS REINSURANCE CONTRACT

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and on this                      day of                                  , in the year 2021.

HOMEOWNERS CHOICE PROPERTY & CASUALTY INSURANCE COMPANY, INC.

Signature:	Title:
Print Name:

MULTI-YEAR NON-FLORIDA PROPERTY CATASTROPHE

EXCESS OF LOSS REINSURANCE CONTRACT

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POOLS, ASSOCIATIONS & SYNDICATES EXCLUSIONS CLAUSE Section A:

This Contract excludes:

a. All business derived directly or indirectly from any Pool, Association or Syndicate which maintains its own reinsurance facilities.

b. Any Pool or Scheme (whether voluntary or mandatory) formed after March 1, 1968 for the purpose of insuring property, whether on a country-wide basis or in respect of designated areas. This exclusion shall not apply to so-called Automobile Insurance Plans or other Pools formed to provide coverage for Automobile Physical Damage.

Section B:

1. This Contract excludes business written by the Company for the same perils, which is known at the time to be insured by, or in excess of underlying amounts placed in, any Pool, Association or Syndicate, whether by way of insurance or reinsurance, formed for the purpose of writing any of the following:

Oil, Gas or Petro-Chemical Plants

Oil or Gas Drilling Rigs and/or

Aviation Risks

2. The exclusion under paragraph 1 of this Section B does not apply:

a. Where the Total Insured Value over all interests of the risk in question is less than $250,000,000.

b. To interests traditionally underwritten as Inland Marine and/or Stock and/or Contents written on a Blanket basis.

c. To Contingent Business Interruption, except when the Company is aware that the key location is known at the time to be insured in any Pool, Association or Syndicate named above, other than as provided for under subparagraph (a).

Section C:

1. Nevertheless the Reinsurer specifically agrees that liability accruing to the Company from its participation in Residual Market Mechanisms, including but not limited to the following, for all perils otherwise protected hereunder shall not be excluded herefrom:

a. So-called “Beach and Windstorm Plans” and so-called “Coastal Pools”;

b. All “FAIR Plan” and “Rural Risk Plan” business;

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c. Louisiana Citizens Property Insurance Corporation;

d. California Earthquake Authority (“CEA”) or any similar entity.

Notwithstanding the above, assessments related to the Florida Hurricane Catastrophe Fund and Citizens Property Insurance Corporation (Florida) shall be excluded hereunder.

2. However, this reinsurance does not include any increase in such liability resulting from:

a. The inability of any other participant in such Residual Market Mechanisms to meet its liability;

b. Any claim against a Residual Market Mechanism or any participant therein, including the Company, whether by way of subrogation or otherwise, brought by or on behalf of any insolvency fund (as defined in the Exclusions Article);

c. Any assessment or surcharge levied on the policyholder and therefore not a liability of the Company;

d. The Company’s initial capital contribution to the CEA;

e. Any assessments, other than interim and regular assessments, from a Residual Market Mechanism included in subparagraph 1(c) above;

f. Any expenditure to purchase or retire bonds.

3. The Company may include in Ultimate Net Loss for any Loss Occurrence covered hereunder only the liability attributable to that Loss Occurrence. If the relevant entity does not specify what portion of an assessment is attributable to each Loss Occurrence, the Company may include in Ultimate Net Loss in respect of each Loss Occurrence a percentage of the Company’s assessments from the relevant entity related to the calendar year in which the Loss Occurrence commenced, regardless of when assessed, such percentage to be determined by dividing the relevant entity’s losses arising from the Loss Occurrence by its total losses for the calendar year.

4. The Company will deduct from Ultimate Net Loss amounts received as recoupment of any assessment that has been included in the Ultimate Net Loss, provided the recoupment is directly allocable to the assessment (“itemized recoupment”). The Company shall use commercially reasonable efforts to recoup such assessment. Any amount received as an itemized recoupment of any assessment (whether under this Contract or any predecessor contract), and therefore deductible from Ultimate Net Loss, shall not be included in the subject premium of this Contract.

However, if a state levies assessments but does not allow itemized recoupment from policyholders, instead allowing the Company to file an overall increased rate, any such premium increased thereby shall not be deemed to be a recoupment that is deductible from Ultimate Net Loss. Any recoupment received as part of a general premium rate increase, not specifically itemized, shall be included as part of the subject premium of this Contract or a successor contract, as applicable.

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NOTES: Wherever used herein the terms:

“Company”	shall be understood to mean “Company”, “Reinsured”, “Reassured” or whatever other term is used in the attached reinsurance document to designate the reinsured company or companies.
“Contract”	shall be understood to mean “Agreement,” “Contract,” “Policy” or whatever other term is used to designate the attached reinsurance document.
“Reinsurer”	shall be understood to mean “Reinsurer,” “Reinsurers,” “Underwriters” or whatever other term is used in the attached reinsurance document to designate the reinsurer or reinsurers.

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NUCLEAR INCIDENT EXCLUSION CLAUSE - PHYSICAL DAMAGE -

REINSURANCE - U.S.A.

1. This Reinsurance does not cover any loss or liability accruing to the Reassured, directly or indirectly, and whether as Insurer or Reinsurer, from any Pool of Insurers or Reinsurers formed for the purpose of covering Atomic or Nuclear Energy risks.

2. Without in any way restricting the operation of paragraph (1) of this clause, this Reinsurance does not cover any loss or liability accruing to the Reassured, directly or indirectly and whether as Insurer or Reinsurer, from any insurance against Physical Damage (including business interruption or consequential loss arising out of such Physical Damage) to:

I. Nuclear reactor power plants including all auxiliary property on the site, or

II. Any other nuclear reactor installation, including laboratories handling radioactive materials in connection with reactor installations, and “critical facilities” as such, or

III. Installations for fabricating complete fuel elements or for processing substantial quantities of “special nuclear material”, and for reprocessing, salvaging, chemically separating, storing or disposing of “spent” nuclear fuel or waste materials, or

IV. Installations other than those listed in paragraph (2) III above using substantial quantities of radioactive isotopes or other products of nuclear fission.

3. Without in any way restricting the operations of paragraphs (1) and (2) hereof, this Reinsurance does not cover any loss or liability by radioactive contamination accruing to the Reassured, directly or indirectly, and whether as Insurer or Reinsurer, from any insurance on property which is on the same site as a nuclear reactor power plant or other nuclear installation and which normally would be insured therewith except that this paragraph (3) shall not operate

(a) where Reassured does not have knowledge of such nuclear reactor power plant or nuclear installation, or

(b) where said insurance contains a provision excluding coverage for damage to property caused by or resulting from radioactive contamination, however caused. However on and after 1st January 1960 this sub-paragraph (b) shall only apply provided the said radioactive contamination exclusion provision has been approved by the Governmental Authority having jurisdiction thereof.

4. Without in any way restricting the operations of paragraphs (1), (2) and (3) hereof, this Reinsurance does not cover any loss or liability by radioactive contamination accruing to the Reassured, directly or indirectly, and whether as Insurer or Reinsurer, when such radioactive contamination is a named hazard specifically insured against.

5. It is understood and agreed that this clause shall not extend to risks using radioactive isotopes in any form where the nuclear exposure is not considered by the Reassured to be the primary hazard.

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6. The term “special nuclear material” shall have the meaning given it in the Atomic Energy Act of 1954 or by any law amendatory thereof.

7. Reassured to be sole judge of what constitutes:

(a) substantial quantities, and

(b) the extent of installation, plant or site.

Note: Without in any way restricting the operation of paragraph (1) hereof, it is understood and agreed that

(a) all policies issued by the Reassured on or before 31st December 1957 shall be free from the application of the other provisions of this Clause until expiry date or 31st December 1960 whichever first occurs whereupon all the provisions of this Clause shall apply.

(b) with respect to any risk located in Canada policies issued by the Reassured on or before 31st December 1958 shall be free from the application of the other provisions of this Clause until expiry date or 31st December 1960 whichever first occurs whereupon all the provisions of this Clause shall apply.

12/12/57

NMA 1119

NOTES: Wherever used herein the terms:

“Reassured”	shall be understood to mean “Company”, “Reinsured”, “Reassured” or whatever other term is used in the attached reinsurance document to designate the reinsured company or companies.
“Agreement”	shall be understood to mean “Agreement”, “Contract”, “Policy” or whatever other term is used to designate the attached reinsurance document.
“Reinsurers”	shall be understood to mean “Reinsurers”, “Underwriters” or whatever other term is used in the attached reinsurance document to designate the reinsurer or reinsurers.

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TERRORISM EXCLUSION

A. Notwithstanding any provision to the contrary within this Contract or any endorsement thereto, it is agreed that this Contract excludes loss, damage, cost, or expense directly or indirectly caused by, contributed to by, resulting from, or arising out of or in connection with any Act of Terrorism, as defined herein, regardless of any other cause or event contributing concurrently or in any other sequence to the loss.

B. An “Act of Terrorism” includes any act, or preparation in respect of action, or threat of action designed to influence the government de jure or de facto of any nation or any political division thereof, or in pursuit of political, religious, ideological, or similar purposes to intimidate the public or a section of the public of any nation by any person or group(s) of persons whether acting alone or on behalf of or in connection with any organization(s) or government(s) de jure or de facto, and which:

a. involves violence against one or more persons; or

b. involves damage to property; or

c. endangers life other than that of the person committing the action; or

d. creates a risk to health or safety of the public or a section of the public; or

e. is designed to interfere with or to disrupt an electronic system.

C. This Contract also excludes loss, damage, cost, or expense directly or indirectly caused by, contributed to by, resulting from, or arising out of or in connection with any action in controlling, preventing, suppressing, retaliating against, or responding to any Act of Terrorism.

D. Notwithstanding the above and subject otherwise to the terms, conditions, and limitations of this Contract, in respect only of personal lines, this Contract shall pay actual loss or damage (but not related cost or expense) caused by any Act of Terrorism, provided such act is not directly or indirectly caused by, contributed to by, resulting from, or arising out of or in connection with biological, chemical, radiological or nuclear pollution or contamination.

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COMMUNICABLE DISEASE EXCLUSION (PROPERTY REINSURANCE)

A. This Contract excludes any loss, damage, liability, claim, cost or expense of whatsoever nature, directly or indirectly caused by, contributed to by, resulting from, arising out of, or in connection with a Communicable Disease or the fear or threat (whether actual or perceived) of a Communicable Disease regardless of any other cause or event contributing concurrently or in any other sequence thereto.

B. As used herein, a Communicable Disease means any disease which can be transmitted by means of any substance or agent from any organism to another organism where:

1. the substance or agent includes, but is not limited to, a virus, bacterium, parasite or other organism or any variation thereof, whether deemed living or not, and

2. the method of transmission, whether direct or indirect, includes but is not limited to, airborne transmission, bodily fluid transmission, transmission from or to any surface or object, solid, liquid or gas or between organisms, and

3. the disease, substance or agent can cause or threaten damage to human health or human welfare or can cause or threaten damage to, deterioration of, loss of value of, marketability of or loss of use of property.

C. Notwithstanding the foregoing, losses directly or indirectly caused by, contributed to by, resulting from, arising out of, or in connection with any otherwise covered peril under subject Policies and not otherwise excluded under this Contract shall be covered.

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CYBER LOSS LIMITED EXCLUSION CLAUSE (PROPERTY TREATY

REINSURANCE)

1. Notwithstanding any provision to the contrary within this reinsurance agreement or any endorsement thereto, this reinsurance agreement excludes all loss, damage, liability, cost or expense of whatsoever nature directly or indirectly caused by, contributed to by, resulting from, arising out of or in connection with:

1.2. any loss of, alteration of, or damage to or a reduction in the functionality, availability or operation of a Computer System, unless subject to the provisions of paragraph 2;

1.3. any loss of use, reduction in functionality, repair, replacement, restoration or reproduction of any Data, including any amount pertaining to the value of such Data.

2. Subject to the other terms, conditions and exclusions contained in this reinsurance agreement, this reinsurance agreement will cover physical damage to property insured under the original policies and any Time Element Loss directly resulting therefrom where such physical damage is directly occasioned by any of the following perils:

fire, lightning, explosion, aircraft or vehicle impact, falling objects, windstorm, hail, tornado, cyclone, hurricane, earthquake, volcano, tsunami, flood, freeze or weight of snow

Definitions

3. Computer System means any computer, hardware, software, communications system, electronic device (including, but not limited to, smart phone, laptop, tablet, wearable device), server, cloud or microcontroller including any similar system or any configuration of the aforementioned and including any associated input, output, data storage device, networking equipment or back up facility.

4. Data means information, facts, concepts, code or any other information of any kind that is recorded or transmitted in a form to be used, accessed, processed, transmitted or stored by a Computer System.

5. Time Element Loss means business interruption, contingent business interruption or any other consequential losses.

LMA5410

06 March 2020

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TRUST AGREEMENT REQUIREMENTS CLAUSE

A. Except as provided in paragraph B of this Clause, if the Reinsurer satisfies its funding obligations under the Unauthorized Reinsurance Article by providing a Trust Agreement, the Reinsurer shall ensure that the Trust Agreement:

1. Requires the Reinsurer to establish a trust account for the benefit of the Company, and specifies what the Trust Agreement is to cover;

2. Stipulates that assets deposited in the trust account shall be valued according to their current fair market value and shall consist only of cash (United States legal tender), and certificates of deposit (issued by a United States bank and payable in United States legal tender), or any combination of the two, provided that the investments are issued by an institution that is not the parent, subsidiary or affiliate of either the Reinsurer or the Company;

3. Requires the Reinsurer, prior to depositing assets with the trustee, to execute assignments or endorsements in blank, or to transfer legal title to the trustee of all shares, obligations or any other assets requiring assignments, in order that the Company, or the trustee upon the direction of the Company, may whenever necessary negotiate these assets without consent or signature from the Reinsurer or any other entity;

4. Requires that all settlements of account between the Company and the Reinsurer be made in cash or its equivalent; and

5. Provides that assets in the trust account shall be withdrawn only as permitted in this Contract, without diminution because of the insolvency of the Company or the Reinsurer.

B. If a ceding insurer is domiciled in California and the Reinsurer satisfies its funding obligations under the Unauthorized Reinsurance Article by providing a Trust Agreement, the Reinsurer shall ensure that the Trust Agreement:

1. Provides that assets deposited in the trust account shall be valued according to their current fair market value and shall consist only of cash in United States dollars, certificates of deposit issued by a United States financial institution as defined in California Insurance Code Section 922.7(a) and payable in United States dollars, and investments permitted by the California Insurance Code, or any combination of the above.

2. Provides that investments in or issued by an entity controlling, controlled by or under common control with either the grantor or the beneficiary of the trust shall not exceed 5% of total investments.

Effective: June 1, 2021		DOC: August 4, 2021
UBWP000C	43 of 44

3. Requires the Reinsurer, prior to depositing assets with the trustee, to execute assignments or endorsements in blank, or to transfer legal title to the trustee of all shares, obligations or any other assets requiring assignments, in order that the ceding insurer, or the trustee upon the direction of the ceding insurer, may, whenever necessary, negotiate these assets without consent or signature from the Reinsurer or any other entity.

4. Provides that assets in the trust account shall be withdrawn only as permitted in this Contract, without diminution because of the insolvency of the ceding insurer or the Reinsurer.

C. If there are multiple ceding insurers that collectively comprise the Company, “regulatory authorities” as referenced in subparagraph A(2) above, shall mean the individual ceding insurer’s domestic regulator.

Effective: June 1, 2021		DOC: August 4, 2021
UBWP000C	44 of 44

EX-10.25

Exhibit 10.25

COST APPORTIONMENT CONTRACT

This contract, dated January 4, 2016, is between and among HCI Group, Inc., a Florida corporation (“HCI”), and HCI’s subsidiary corporations and entities (“Affiliated Entities”).

BACKGROUND STATEMENT

HCI and its Affiliated Entities may from time to time share personnel, facilities and third party services. The purpose of this contract is to apportion shared costs and expenses to the entity incurring the costs and expenses as if the cost or expense had been paid solely by the incurring entity and to comply with Statement of Statutory Accounting Principles No. 70 as published by the National Association of Insurance Commissioners.

TERMS AND CONDITIONS

In reliance upon the foregoing background statement, HCI and the Affiliated Entities agree to the following terms and conditions.

1. Shared Costs and Expenses. This contract applies only to situations where the benefits of personnel, facilities or third party services are shared by HCI and one or more Affiliated Entities or when one entity makes expenditures on behalf of another entity. To the extent feasible and convenient, the incurring entity will pay its own costs and expenses directly.

2. Apportionment. In general, the apportionment of costs and expenses between and among HCI and the Affiliated Entities will be based upon specific identification to the incurring entity. Where specific identification is not feasible, apportionment will be as described elsewhere in this contract or based upon pertinent factors and ratios adopted by HCI’s management which in the opinion of management yield the most accurate results. Premium taxes, state income taxes, filing fees, actuarial fees and costs or expenses that relate solely to the operations of a regulated insurance company, such as costs associated with adjusting and paying claims, will be borne solely by the applicable insurance company and not by HCI or another Affiliated Entity. HCI’s management may forego apportionment when in management’s opinion the costs or expenses are insignificant and the absence of apportionment does not materially misrepresent the financial results of HCI or an Affiliated Entity. Charges or fees for services performed will be reasonable and in conformity with Statutory Accounting Principles consistently applied. The book, accounts and records will be maintained to clearly and accurately disclose the nature and details of the transactions including such accounting information as is necessary to support the reasonableness of the charges or fees to the respective parties.

3. Reimbursements. HCI and the Affiliated Entities will maintain intercompany accounts for maintaining balances associated with apportioned costs and expenses. If the incurring entity is a regulated insurance company, the incurring entity will reimburse the other entity for apportioned costs and expenses within 30 days after receiving a request for payment which in no event will be later than 30 days after the end of each calendar quarter.

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4. Other Contracts. This contract does not supersede any management contracts, rental contracts, or other agreements or understandings among between or among HCI and any of Affiliated Entities.

5. Ownership of Access to Books and Records. Each party will own its general corporate books and records. Each party to this contract will retain the right of continuing access to the books and records of the other parties sufficient to permit the parties to fulfill all of their contractual obligations under this contract. The parties agree that the appropriate insurance regulatory authorities will have access to books and records associated with this contract and any regulated insurance company during normal business hours and upon reasonable advance notice.

6. Term and Termination. This contract will commence on the date set forth above and continue for one year unless sooner terminated as provided below. The initial term and thereafter each renewal term will automatically renew for an additional one year period unless a party delivers notice of non-renewal to the other parties at least 20 days before a term expires. Any party may terminate this contract any time, with or without cause, and without any liability to the other parties by reason of such termination, by delivery of 30 days written notice to the other parties. Non-renewal or termination by an Affiliated Entity will apply solely to that Affiliated Entity and not to any other party to this contract. Non-renewal or termination by HCI will apply to all the parties to this contract.

7. Confidentiality. Except as required by applicable law, rule or regulation or judicial process, the parties will maintain the confidentiality of the other parties’ financial and policyholder information.

8. No Third Party Beneficiaries. No individual, association or entity except HCI and the Affiliated Entities has nor will have any direct, indirect or beneficial rights in connection with this contract.

9. Contract Non-Assignable. This contract is non-assignable without the express written consent of the other party.

10. Binding Effect. This contract will be binding upon and inure to the benefit of the respective successors and permitted assigns of the parties to this contract.

11. Saturday, Sunday or Legal Holiday. When the last day of a period during which an act may be performed under this contract falls on a Saturday, Sunday, or legal holiday that period will be deemed to end on the next succeeding day which is not a Saturday, Sunday or legal holiday.

12. Governing Law. This contract will be construed in accordance with the laws of the State of Florida, without reference to its conflicts of law principles.

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13. Amendments. This contract will be amended or modified only by written instrument signed by all parties.

14. Effectiveness. This contract will not be effective unless and until approved by the Florida Office of Insurance Regulation.

 Executed as of the date first set forth above.

HCI GROUP, INC.
By:	/s/ Paresh Patel
	Paresh Patel, as Chief Executive Officer
Each of Affiliated Entities Set forth Below
By:	/s/ Richard R. Allen
	Richard R. Allen, as Chief Financial Officer

Homeowners Choice Property & Casualty Insurance Company, Inc.

Homeowners Choice Assurance Company, Inc.

Homeowners Choice Managers, Inc.

Cypress Property Management Services, Inc.

Cypress Claims Services, Inc.

Southern Administration, Inc.

Claddaugh Casualty Insurance Company, Ltd.

HCI Technical Resources, Inc.

Omega Insurance Agency, Inc.

Exzeo USA, Inc.

Cypress Tech Development Company, Inc.

Treasure Island Restaurant Company, Inc.

TI Marina Company, Inc.

3

TypTap Insurance Company

TypTap Management Company

TV Investment Holdings, LLC

Greenleaf Capital, LLC

HCPCI Holdings, LLC

Gators on the Pass Holdings, LLC

John’s Pass Marina Investment Holdings, LLC

JP Beach Holdings, LLC

Pass Investment Holdings, LLC

Silver Springs Property Investments, LLC

Melbourne FMA, LLC

Greenleaf Essence LLC

4

EX-10.26

Exhibit 10.26

Agreement to Allocate United States Federal Income Tax Liability

This Tax Allocation Agreement is made and entered into by and among HCI Group, Inc. (“Parent”) and each of the subsidiaries listed below (referred to herein individually as a “Subsidiary” and the group of subsidiaries is collectively referred to herein as the “Subsidiaries”).

RECITALS

A. Parent is the parent of an affiliated group of corporations (within the meaning of Section 1504(a) of the Internal Revenue Code of 1986, as amended (the “Code”)) and each of the Subsidiaries are included as corporations in such affiliated group (the “Group”).

B. The Subsidiaries are included in the Group’s consolidated federal income tax returns for the taxable year ended December 31, 2019, and for all future taxable years for which they are eligible to be so included (the “Consolidated Period”).

C. Parent and each Subsidiary wish to allocate the consolidated federal income tax liability of the Group among the members of the Group as provided herein.

NOW THEREFORE, in consideration of the covenants and agreements contained herein, the parties agree that the recitals set forth above are adopted and made part of this Agreement and further agree as follows:

AGREEMENT

1. Consolidated Return Election and Preparation

Parent and the Subsidiaries will file consolidated federal income tax returns so long as they are eligible to file such returns. Parent and the Subsidiaries agree to file such consents, elections and other documents and take such other actions as may be necessary or appropriate to carry out the purposes of this Item 1. For any taxable year for which a consolidated federal income tax return is filed, Parent agrees to prepare or cause to be prepared and to file such returns and other appropriate documents as may be necessary on behalf of the Group.

2. Subsidiary Tax Payments

(a) Each of the Subsidiaries shall compute a separate return liability for each taxable year and pay an amount equal to such separate return tax liability to Parent. Each Subsidiary’s separate return tax liability for any taxable year shall be equal to the tax liability (Including any alternative minimum tax) such Subsidiary would have incurred had it not been included in a consolidated federal income tax return with Parent, as the common parent, and had it

filed a federal income tax return on a separate basis for each such year that it was a member of the Group. The separate return tax liability of each of the Subsidiaries shall be determined in a manner consistent with the methods of accounting and with any elections made in computing the consolidated income tax liability of the Group.

(b) If a Subsidiary incurs a tax loss, or generates a tax credit, that cannot be utilized to offset the current year separate return tax liability, the Subsidiary shall be entitled to the following:

(i) The Subsidiary shall first be entitled to a tax benefit from the Parent to the extent that the separate company loss or credit, or any portion thereof, could be carried back on a separate company basis and generate a refund as if the Subsidiary had filed separate returns in the carryback period.

(ii) To the extent that the Subsidiary is not able to fully utilize its separate company loss or credit through carryback to prior years on a separate company basis, it shall be entitled to a tax benefit from Parent to the extent such loss or credit that is not utilized pursuant to 2(b)i) reduces the current or prior year consolidated tax of the Group.

(iii) To the extent that the Subsidiary is not able to fully utilize its separate company loss or credit through carryback to a prior year on a separate company basis pursuant to 2(b)(i), or against the current or prior year consolidated tax of the Group pursuant to 2(b)(ii), it shall be entitled to carry forward such unutilized loss or credit on a separate company basis to offset its future separate company tax, or the consolidated tax of the Group.

(iv) Appropriate adjustments shall be made to avoid a duplication or omission as a result of the differences between this agreement and prior Tax Allocation Agreements of the Group.

3. Timing and Method of Payment

Payments under Item 2 by each Subsidiary to Parent may, at Parent’s discretion, be made on a quarterly basis (within 30 days of the date on which instalments of estimated tax would have been due had each Subsidiary filed its federal income tax return on a separate basis) based on estimates of each Subsidiary’s separate return tax liability for the period. If a Subsidiary’s separate return liability as finally determined for the taxable year exceeds the payments made for such year, the remainder of the separate return liability shall be paid to Parent within 60 days after the statutory due date for the consolidated federal return. However, if the sum of all payments for any year exceeds a Subsidiary’s separate return tax liability as finally determined for the year, Parent shall pay the excess to such Subsidiary within 60 days after the statutory due date for the consolidated federal income tax return.

4. Subsequent Adjustment

If any item of income, gain, loss, deduction or credit of any Subsidiary is changed or adjusted for any taxable year, then the amount of the payment made under this Agreement shall be adjusted, in accordance with the principles of this Agreement, to conform with the final determined item of income, gain, loss, deduction or credit. Any interest and penalties paid or received with respect to such adjustments shall be paid or received by Parent, and not allocated to the Subsidiaries. All payments under this Item 4 shall be made within 30 days after the latter of (i) final resolution of any matters with either the internal Revenue Service or in court or (ii) receipt of refunds/payment of taxes due. However, in the event that advance payments of tax deficiencies due or contested are deemed appropriate by Parent, payments under this Item 4 attributable to such advance payments shall be made with 30 days of when such advance payments are paid to the government.

5. Termination

This Agreement shall terminate between parent and any Subsidiary if:

(a) Parent and such Subsidiary agree in writing to such termination: or

(b) The Subsidiary’s membership in the Group ceases or is terminated.

In the event that a Subsidiary ceases to be included within the Group (a “Deconsolidation”), the rights and obligations of such Subsidiary under this Agreement shall survive for any period for which such Subsidiary was a member of the Group. The termination of this Agreement as to any Subsidiary in accordance with the provisions of this Item 5 hereof shall not affect this Agreement in regard to Parent and any other Subsidiary.

6. Assignability

This Agreement shall not be assignable by Parent or any Subsidiary without the written consent of the other parties and any such assignment shall be void and without effect.

7. Effective Date

This Agreement shall be effective for each of the undersigned Subsidiaries as applicable, for all taxable years ending on or after December 31, 2019.

8. New Members

This Agreement shall apply to any corporation which becomes a member of the Group effective as on the date such corporation became a member of the Group upon (a) the receipt of any required regulatory approval or non-approval and (b) the execution and delivery of a joiner agreement under which such corporation agrees to be bound by this Agreement.

9. Miscellaneous Provisions

(a) This Agreement has been made in and shall be construed and enforced in accordance with the laws of the State of Florida.

(b) This Agreement shall be binding upon and inure to the benefit of each party hereto and their respective successors and assigns.

(c) This Agreement may be executed simultaneously in two or more counterparts each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

(d) The parties hereto hereby agree that the terms of this Agreement are fair and reasonable.

IN WITNESS WHEREOF, the parties hereto have caused the Agreement to be duly executed as of the day and year first above written.

HCI Group, Inc.
By:	/s/ James Mark Harmsworth
	James Mark Harmsworth
Title:	Chief Financial Officer
Date:	2/13/2020

SUBSIDIARIES

Homeowners Choice Property & Casualty Insurance Company, Inc. 20-8490865

Homeowners Choice Managers, Inc. 20-5961438

TypTap Insurance Company 81-0922384

TypTap Management Company 81-0691479

Cypress Property Management Services, Inc. 45-1824621

Cypress Claims Services, Inc. 27-3299614

Southern Administration, Inc. 26-1094827

Claddaugh Casualty Insurance Company, Ltd. 98-0607268

HCI Technical Resources, Inc. 45-4280748

Omega Insurance Agency, Inc. 45-5011464

Exzeo USA, Inc. 46-0932198

Cypress Tech Development Company, Inc. 45-5565379

Treasure Island Restaurant Company, Inc. 45-4917580

TI Marina Company, Inc. 45-4929616

Enclave Services, Inc. 82-2085342

Griston Claim Services, Inc. 83-1614364

HCI Ins Administration Services, Inc. 35-2646744

The following subsidiaries are single member limited liability companies (SMLLC’s) which are disregarded for federal income tax purposes. The activity of each of these entities is reported on the federal income tax return of HCI Group, Inc. and each is considered a subsidiary for purposes of complying with this Agreement to Allocate the United States Federal Income Tax Liability.

TV Investment Holdings, LLC 45-1746038 (SMLLC 100% owned by HCI Group, Inc.)

Greenleaf Capital, LLC 45-1292300 (SMLLC 100% owned by HCI Group, Inc.)

HCPCI Holdings, LLC 27-2292362 (SMLLC 100% owned by Greenleaf Capital, LLC)

Gators on the Pass Holdings, LLC 45-4804547 (SMLLC 100% owned by Greenleaf Capital, LLC)

John’s Pass Marina Investment Holdings, LLC 45-4804727 (SMLLC 100% owned by Greenleaf Capital, LLC)

JP Beach Holdings, LLC 45-4804435 (SMLL 100% owned by Greenleaf Capital, LLC)

Pass Investment Holdings, LLC 45-4804890 (SMLLC 100% owned by Greenleaf Capital, LLC)

Silver Springs Property Investments, LLC 37-1714125 (SMLLC 100% owned by Greenleaf Capital, LLC)

Melbourne FMA, LLC 47-1886333 (SMLLC 100% owned by Greenleaf Capital, LLC)

Sorrento PBX, LLC 61-1776369 (SMLLC 100% owned by Greenleaf Capital, LLC)

Century Park Holdings, LLC 38-4049380 (SMLLC 100% owned by Greenleaf Capital, LLC)

Gulf to Bay LM, LLC 32-0568867 (SMLLC 100% Owned by Greenleaf Capital, LLC)

Greenleaf Essence LLC 47-3742220 (SMLLC 100% owned by Greenleaf Capital, LLC)

Green Street JV, LLC 47-3742531 (SMLLC 100% owned by Greenleaf Essence, LLC)

Big Bend Lincoln SWC, LLC 47-3742946 (SMLLC 100% owned by Green Street JV, LLC)

FMKT Mel Owner LLC 47-1864004 (SMLLC 100% owned by Melbourne FMA, LLC)

Westview Holdings, LLC 36-4931002 (SMLLC 100% owned by Greenleaf Capital, LLC)

Miramar Property Holdings, LLC 84-2142828 (SMLLC 100% owned by Greenleaf Capital, LLC)

EX-10.27

Exhibit 10.27

INTERESTS AND LIABILITIES AGREEMENT

(the “Agreement”)

of

TYPTAP INSURANCE COMPANY

Tampa, FL

(NAIC: 15885)

(the “Subscribing Reinsurer”)

with respect to the

PROPERTY QUOTA SHARE REINSURANCE CONTRACT

(the “Contract”)

issued to

UNITED PROPERTY & CASUALTY INSURANCE COMPANY

St. Petersburg, Florida

(the “Company”)

The Subscribing Reinsurer shall have a 50.0% share in the interests and liabilities of the “Reinsurer” as set forth in the Contract attached hereto and executed by the Company.

This Agreement shall commence at 12:01 a.m., Eastern Time, June 1, 2021 and shall continue in force until 12:01 a.m., Eastern Time, June 1, 2022.

The share of the Subscribing Reinsurer in the interests and liabilities of the “Reinsurer” shall be several and not joint with the share of any other subscribing reinsurer. In no event shall the Subscribing Reinsurer participate in the interests and liabilities of the other subscribing reinsurers.

IN WITNESS WHEREOF, the Subscribing Reinsurer by its duly authorized representative has executed this Agreement as of the date specified below:

Signed this 16th day of June, 2021.
TYPTAP INSURANCE COMPANY
By	/s/ Kevin A. Mitchell
Printed Name	Kevin A. Mitchell
Title	President

EX-10.30

Exhibit 10.30

CLAIMS SERVICES

AGREEMENT

THIS CLAIMS SERVICES AGREEMENT (together with all exhibits and other attachments hereto, the “Agreement”) is executed on this 1^st day of March, 2021 with an effective date of March 1, 2021 (“Effective Date”), by and between Griston Claim Management, Inc. (“Griston”) and TypTap Management Company (“TMC”)(each a “Party” and collectively the “Parties”).

Background Statement

TMC is the managing general agent for TypTap Insurance Company, a Florida-domestic property and casualty insurance company (the “Company”). By this Agreement, TMC desires to obtain from Griston services in insurance claims management for policies of insurance written by or through the Company and for which TMC has ultimate responsibility to the customers of its insurance business (the “Claims Services”); and Griston desires to provide the Claims Services to TMC upon the terms and conditions set forth in this Agreement. In reliance upon the foregoing background statement and in consideration for the representations, warranties and performance of the obligations contained herein, Griston and TMC mutually agree to the following terms and conditions.

Terms and Conditions

1. Services. TMC grants Griston the authority to investigate, evaluate, handle, adjust and settle each claim assigned according to applicable state law, the terms and conditions of the policy and any written standards that may be provided by TMC in addition to the provisions of this Agreement. During the term of this Agreement, Griston shall be the exclusive provider of Claims Services for all reported and assigned claims of TMC for policies of insurance written by or through the Company. Griston will provide the services and general management of these Claims Services described herein for subject claims as follows:

a. Griston will utilize and enter TMC claims data into a claims administration system as directed by TMC in a timely manner. Griston will provide TMC with access, at no cost to TMC, to the claims administration system on a 24 hours a day, seven days a week basis.

b. Loss reporting will be by Internet, fax, or phone. Losses may be reported 24 hours a day. The Internet, fax and phone reporting will be checked for new losses every two hours from 8:00 AM until 11:00 PM.

c. Coverage will be verified on all cases through TMC by procedures mutually agreed upon, in writing, by the parties. Contact will be made with claimant or insured within 24 hours of loss reporting, excluding catastrophic events.

d. Griston will administer the appraisal/assessment process and will use in this endeavor a combination of staff, adjusters, and appraisers. The Claims Services shall use only licensed adjusters, and licensed private investigators, or catastrophic adjusters, where applicable.

e. Griston will perform all reasonable, necessary and customary administrative and clerical work in connection with claim or loss reports.

f. Griston will establish and maintain a claim file for each reported claim or loss with a copy of the policy for each reported claim. The claim file will have an activity log which shall be reviewable at any and all reasonable times by TMC. Catastrophe claims will not require an activity log.

g. Griston will provide TMC with litigation management. Griston will work with counsel to determine the best course of action within a reasonable budget within the scope of authority granted by TMC. The selection and retention of legal counsel shall be TMC’s sole prerogative.

h. For non-catastrophic claims, Griston will enter in its claims administration system each claim and a recommended reserve within 48 hours which initial reserves will be a statistical reserve and adjusted within 14 days based upon adjuster’s inspection of damages. TMC shall have the ultimate authority in establishing all reserves and all component aspects thereof. Griston shall consult with TMC and provide written notice to TMC in a timely manner with respect to any of the following:

(1) Any loss or claim resulting in legal action being instituted against Griston, TMC or the Company;

(2) Any loss or claim causing a complaint to be filed with any regulatory authority;

(3) Any inquiry from any regulatory authority, including but not limited to, any insurance department, with respect to any claim or claims.

(4) Any claim Griston deems appropriate to deny policy coverage or involves a coverage dispute;

(5) Any claim which might ultimately result in the payment(s) in excess of $25,000. Griston shall forward a copy of such claim file to TMC at its request. TMC grants Griston claims settlement authority up to $25,000;

(6) Any open claim that involves an allegation of extra-contractual obligations;

(7) Any claim involving a fatality, amputation, spinal cord or brain damage, loss of eyesight, extensive burns, poisoning, or multiple fractures;

(8) Any claim involving a minor; or

(9) any claim involving a claim of bad faith or seeking class action certification.

i. Griston will perform periodic review (at least semi-annually) at mutually agreed upon intervals of outstanding claim reserves, and recommend changes to outstanding claim reserves.

j. Griston will order checks and vouchers from TMC and will prepare all compromises, releases, agreements and any other documents reasonably necessary to finalize and close claims. For settlements of less than $25,000, Griston will issue payments of claims and allocated loss adjustment expenses only on checks of, and as authorized by, TMC or the Company. A check in payment of a claim shall be issued within 48 hours after claim is determined payable by Griston, except in the event of a catastrophic event.

For purposes of settling claims and paying claim-related expenses for claims of $25,000 or less, TMC has agreed to establish, maintain and fund a separate bank account from which Griston may draw against as hereinafter set forth (the “Claim Account”). Griston shall not retain more than 60 days of estimated claims payments and allocated loss adjustment expenses in the Claim Account. The Claim Account will be held in a fiduciary capacity in a bank mutually agreed upon by Griston and TMC. The bank must be a member of the Federal Reserve System whose accounts are insured by the Federal Deposit Insurance Corporation.

TMC agrees to deposit additional funds into the Claim Account on a weekly basis if necessary to maintain it at a level sufficient to allow Griston to carry out its obligations under this Agreement. TMC shall provide to Griston such information as is necessary for Griston to draw checks on the Claim Account.

GRISTON AND TMC WILL PREPARE PROCEDURES FOR THE PAYMENT OF CLAIMS IN EXCESS OF $25,000 WHICH WRITTEN PROCEDURES SHALL BE ATTACHED TO THIS AGREEMENT AND BE DEEMED INCORPORATED HEREIN BY REFERENCE.

Griston hereby agrees to prepare, sign and issue checks in accordance with the procedures adopted by TMC. Any check prepared by Griston on the Claim Account must be signed by authorized individuals.

Griston shall have a duty of fiduciary responsibility to TMC as to all money of TMC coming into the possession or control of Griston.

k. Service standards and claims documentation will be in compliance with all state regulations dealing with the adjusting and handling of claims. Griston will periodically review the development of the claims handling procedure with TMC to identify problems and recommend corrective action.

l. Griston will diligently pursue and prosecute TMC’s salvage and subrogation rights relating to any losses. Griston will use reasonable efforts to collect funds arising from the enforcement of such rights.

2. Payment Terms.

2.1 Fees. TMC agrees to pay Claim Services fees as specified in Exhibit A and Exhibit B of this Agreement. Exhibit A shall govern the service fees payable to Griston by TMC for the provision and administration of non-catastrophic Claims Services. Exhibit B shall govern the services fees payable to Griston by TMC for the provision and administration of catastrophic Claims Services. TMC may amend or replace the Exhibits at any time by delivery of written notice to Griston. In that event, the amended or replacement Exhibit will govern as to all claims received after the date of delivery of the amended or replaced Exhibit.

2.2 Allocated Loss Adjustment Expenses. In addition to the fees described in Section 2.1 of this Agreement, all Allocated Loss Adjustment Expenses will be paid by TMC. For purposes of this Agreement, Allocated Loss Adjustment Expense(s) shall mean any expense which is chargeable or attributable to the investigation, coverage analysis, adjustment, negotiation, settlement, defense or general handling of any claim(s) or action(s) related thereto, or to the protection and/or perfection of TMC or the Company’s and/or its insured’s right of subrogation, contribution or indemnification. Allocated Loss Adjustment Expense(s) includes, but is not limited to, the following:

a. Attorney’s fees and disbursements incurred (including plaintiff’s fees when awarded and not included as a portion of the loss or indemnity paid by TMC or the Company) in connection with the determination of coverage and/or the adjustment, defense, negotiation or settlement of any claim; attorney’s fees incurred for representation at depositions, hearings, pretrial conferences and/or trials;

b. Costs incurred in handling any Alternative Dispute resolution proceeding (“ADR”), legal actions, including trials or appeals, or in pursuing any declaratory judgment action, including deposition fees, cost of appeal bonds, court reporter or stenographic service fees, filing fees, and other court costs, fees and expenses, transcript or printing costs and all discovery expenses; fees for service of process; fees for witnesses’ testimony, opinions, or attendance at hearings or trial;

c. Statutory fines or penalties; pre- and post-judgment interest paid as a result of litigation, unless legal requirements define such interest as indemnity payments;

d. Fees and travel expenses of independent and Griston adjusters, automobile and property appraisers, to the extent that same are incurred in the adjustment, negotiation, settlement or defense of any claim;

e. Experts’ fees including reconstruction experts, engineers, cause and origin reports, photographers, accountants, economists, metallurgists, cartographers, architects, handwriting experts, physicians, appraisers and other natural and physical science experts, plus the costs associated with preparation of expert reports, depositions, and testimony;

f. Fees for surveillance, undercover operative and detective services or any other investigations;

g. Costs for medical examinations, or autopsies, including diagnostic services, and related transportation costs, fees for medical reports and rehabilitation evaluations;

h. Costs for any public records, medical records, credit bureau reports, and other like reports;

i. Costs and expenses incurred where Griston determines it is reasonable to pursue the rights of contribution, indemnification or subrogation of TMC or the Company and/or its insured, including attorney and collection agency fees and/or expenses;

j. Medical or vocational rehabilitation expenses, and all other medical cost containment services, including, but not limited to, utilization review, pre-audit admission authorization, hospital bill audit or adjudication, provider bill audit or adjudication, and review of medical case management;

k. Extraordinary travel and related expenses incurred by Griston at the express written request and approval of a TMC officer, which are not otherwise payable under this Agreement; and

l. With respect to Griston’s determination that an expense(s) incurred pursuant to this Agreement is an Allocated Loss Adjustment Expense, Griston makes no representation or warranty and assumes no responsibility that such determination (i) is in compliance with or meets the requirements of any statistical plan filing, statutory, regulatory, or insurance industry reporting scheme or the definition of the Allocated Loss Adjustment Expense thereunder; (ii) is or could be characterized as payment of loss or indemnity; or (iii) is or is not subject to insurance or reinsurance coverage or limits. TMC agrees that it is responsible for making all such judgments and for complying with any and all such requirements.

3. Term and Termination

3.1. Term. The term of this Agreement will commence on the Effective Date and will expire five years thereafter (the “Term”). The Term will automatically renew for additional one-year periods upon the expiration of the initial term and each renewal term, unless terminated in accordance herewith.

3.2. Termination by Notice. TMC may terminate this Agreement upon six months written notice.

3.3. Termination for Non-Performance. In the event that either Party breaches any of the terms hereof, then either Party (whether in breach or not) may terminate this Agreement upon thirty days written notice.

3.5. Return of TMC Materials after Termination. After termination or expiration of this Agreement, Griston will use reasonable efforts to assist TMC with copying TMC’s policyholder information or other materials from Griston’s systems prior to deletion of any such materials.

3.6 Survival of Expiration or Termination. Sections 2 (Fees), 4 (Confidentiality), 5 (Indemnity Obligations), and any other provisions expressly or implicitly intended to survive termination or expiration of this Agreement will survive any termination or expiration of this Agreement.

4. Confidentiality.

4.1. Confidential Information. For the purposes of this Agreement, “Confidential Information” means information about the disclosing Party’s (or its Affiliates’ or suppliers’) business or activities that is proprietary and confidential, which will include all policyholder information, agent information, and all business, financial, technical and other information of a Party which is either marked or designated by such Party as “confidential” or “proprietary” or which, by the nature of the circumstances surrounding the disclosure, ought in good faith to be treated as confidential, and the terms of and performance under this Agreement.

4.2. Not Confidential Information. Confidential Information will not include information that (i) is in or enters the public domain without breach of this Agreement, (ii) the receiving Party lawfully receives from a third party without restriction on disclosure and without breach of a nondisclosure obligation, (iii) the receiving Party knew prior to receiving such information from the disclosing Party, or (iv) the receiving Party develops independently without use of or reference to any Confidential Information of the other Party.

4.3. Obligations. Each Party agrees (i) that it and its employees will not (a) disclose Confidential Information of the other Party to, and will prevent disclosure to, any other individual, association or legal entity or (b) use any Confidential Information disclosed to it by the other Party except as expressly permitted in this Agreement and (ii) that it will take all reasonable measures to maintain the confidentiality of all Confidential Information of the other Party in its possession or control, which will in no event be less than the measures it uses to maintain the confidentiality of its own information of similar importance.

4.4. Exceptions. Notwithstanding the foregoing, each Party may disclose Confidential Information (i) to the extent required by a court of competent jurisdiction or other governmental authority or otherwise as required by law; provided, however that the Party required to so disclose Confidential Information of the other Party will use commercially reasonable efforts to minimize such disclosure and will provide written notice of such disclosure and consult with and assist the other Party, at the other Party’s expense, in obtaining a protective order prior to such disclosure or (ii) on a “need-to-know” basis under an obligation of confidentiality to its legal counsel, accountants, banks and other financing sources and their advisors.

5. Indemnity Obligations.

5.1. Indemnity. Each Party will indemnify, defend and hold harmless the other Party hereto and its Affiliates and the respective officers, directors, consultants, agents and employees of each from and against any and all claims, suits, liability, damages and/or costs (including but not limited to, attorneys’ fees) arising from the first Party’s breach of any warranty, representation or obligation under this Agreement. In order for any to be indemnified hereunder for any claim, such Party must notify the other Party within twelve months of the earlier of: (i) the date the first Party first became aware of the claim: or (ii) the date such Party should have become aware of the claim using reasonable due diligence.

5.2. Adequate Remedy. The Parties agree that any breach of either of the Parties’ obligations regarding confidentiality may result in irreparable injury for which there is no adequate remedy at law. Therefore, in the event of any breach or threatened breach of a Party’s obligations regarding the other Party’s confidentiality, the aggrieved Party will be entitled to seek injunctive relief, in addition to any other remedies to which it may be entitled.

6. General.

6.1. Relationship. This Agreement is not intended to create, and will not be deemed or treated as creating, a partnership, franchise, joint venture, employment contract or any other relationship between the Parties other than the independent contractor relationship expressly provided for in this Agreement.

6.2. Governing Law and Venue. This Agreement will be governed by the laws of the State of Florida, without giving effect to applicable conflict of laws provisions. With respect to any litigation arising out of or relating to this Agreement, each Party agrees that it will be filed in and heard by the Circuit Court in and for Hillsborough County, Florida or the United States District Court for the Middle District of Florida, Tampa Division.

6.3. Entire Agreement; Amendments. This Agreement, including any exhibits and other attachments thereto, constitutes the entire understanding and agreement with respect to the subject matter, and supersedes any and all prior or contemporaneous representations, understandings and agreements whether oral or written between the Parties relating to the subject matter of this Agreement, all of which are merged in this Agreement.

6.4. Construction. This Agreement will be construed without regard to which Party was responsible for its preparation. Wherever from the context it appears appropriate, each term stated in either the singular or the plural will include the singular and the plural, and pronouns stated in the masculine, feminine or neuter gender will include the other genders. The words “Agreement,” “hereof,” “herein” and “hereunder” and words of similar import referring to this Agreement refer to this contract as a whole, including documents incorporated by reference, and not to any particular provision of this contract. Whenever the word “include,” “includes” or “including” is used in this Agreement, it will be deemed to be followed by the words “without limitation.” The various headings contained in this Agreement are inserted solely for convenience of reference and in no way define, limit or extend the scope or intent of any of the provisions of this Agreement.

6.5. Severability. If any provision of this Agreement is found to be invalid or unenforceable, the remaining provisions will remain effective and such term will be replaced with another term consistent with the purpose and intent of this Agreement.

6.6. Counterparts. This Agreement may be executed in one or more counterparts, each of which will be deemed an original of this Agreement, and all of which together will be deemed the same Agreement.

6.7. Assignment. Griston may not assign this Agreement or transfer any of Griston’s rights or obligations under this Agreement to any third party.

6.8. Notice. Notices required or permitted by this Agreement will be provided to the other Party in writing. Electronic mail (email) is acceptable for written notice except that the Parties must provide any written communications related to Section 5 or any legal dispute between Griston and TMC by certified mail to the other Party.

6.9. Force Majeure. Neither Party will be responsible to the other Party for any failure or breach of this Agreement caused by an act of God; astronomical event; disease or pandemic; war, hostility, insurrection, or other widespread violence; riot or political instability; work stoppage; government action or change in applicable law; or any other circumstance outside the reasonable control of the affected Party. If any force majeure event continues for more than 30 days and the affected Party is unable to remedy the failure or breach of this Agreement caused by the force majeure event, the Party affected by the force majeure event may terminate this Agreement immediately upon written notice to the other Party.

The Parties have duly executed this Agreement by the authorized signatures below.

Griston Claim Management, Inc.
By:	/s/ Mark Harmsworth
Name:	Mark Harmsworth
Title:	Chief Financial Officer
TypTap Management Company
By:	/s/ Paresh Patel
Name:	Paresh Patel
Title:	Chief Executive Officer

EXHIBIT A

FEES FOR NON-CATASTROPHE CLAIMS SERVICES

For non-catastrophe Claims Services described in this Agreement, TMC will pay to Griston (i) $1,200 per claim handled by Griston; and (ii) $5,000 per litigated claim handled by Griston. These fees shall accrue when a claim or litigated claim is received by Griston and will be payable on the 15th day of each month during the term of the Agreement. The above fees do not include Allocated Loss Adjustment Expenses as defined in Section 2.2 of this Agreement. The above fees do not apply to class action suits or catastrophic events.

EXHIBIT B

FEES FOR CATASTROPHE CLAIMS SERVICES

For catastrophe Claims Services described in this Agreement, TMC will pay to Griston $1,200 plus 4% of the amount expended for indemnification of the loss per catastrophe claim handled by Griston. These fees shall accrue when a catastrophe claim is received by Griston and will be payable on the 15th day of each month during the term of the Agreement.

EX-10.31

Exhibit 10.31

SOFTWARE LICENSE

AND SERVICES

AGREEMENT

THIS SOFTWARE LICENSE AND SERVICES AGREEMENT (together with all exhibits and other attachments hereto, the “Agreement”) is executed on this March 1, 2021 with an effective date of March 1, 2021 (“Effective Date”), by and between Homeowners Choice Managers, Inc. (“HCM”) and Exzeo USA, Inc. (“Exzeo”)(each a “Party” and collectively the “Parties”).

Background Statement

HCM desires to obtain a license from Exzeo to certain software used in insurance policy administration and claims management (the “Licensed Software”) and certain services related to the Licensed Software (the “Software Services”) and Exzeo is willing to license the Licensed Software to HCM upon the terms and conditions set forth in this Agreement. In reliance upon the foregoing background statement and in consideration for the representations, warranties and performance of the obligations contained herein, HCM and Exzeo mutually agree to the following terms and conditions.

Terms and Conditions

1. Definitions. When used in this Agreement, the following capitalized terms will have the respective meanings set forth below:

1.1. “Affiliate” means any entity that directly or indirectly controls, is controlled by, or is under common control with any subject entity. “Control,” for purposes of this definition, means direct or indirect ownership or control of more than 50% of the voting interests of the subject entity.

1.2. “Derivative Works” means a work consisting of any correction, modification, update, upgrade, enhancement, improvement, translation, adaptation, release or other change relating to the Licensed Software.

1.3. “Licensed Software” means the Source Code and Object Code for the software, programming, and other applications described in Exhibits A-E and all enhancements, updates, bug fixes, corrections, and new releases and versions thereto.

1.4. “Software Services” means commercially reasonable efforts to maintain and operate the Licensed Software on HCM’s behalf so that it performs the contemplated portion of all services listed on the applicable Exhibit(s) in a commercially reasonable manner. Software Services will include bug fixes and corrections. Software Services will also include maintenance and operation of HCM’s webpage as described in Exhibit F.

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1.5. “Object Code” means computer programs assembled or compiled, which are readable and usable by machines, but not generally readable by humans without reverse-assembly, reverse compiling, or reverse-engineering.

1.6. “Source Code” will mean, with respect to the Licensed Software, the source code of such software and all related compiler command files, build scripts, scripts relating to the operation and maintenance of such application, application programming interface (API), graphical user interface (GUI), object libraries, all relevant instructions on building the object code of such application, and all documentation relating to the foregoing, such that collectively the foregoing will be sufficient to enable a person possessing reasonable skill and expertise in computer software and information technology to build, load and operate the machine-executable object code of such application, to maintain and support such application and to effectively use all functions and features of such software. All written documentation provided in support of the Source Code will be in English.

2. License Grant. In exchange for the consideration set forth in Section 3, Exzeo hereby grants HCM during the Term a non-exclusive, nontransferable, worldwide license to use the Licensed Software in connection with policy administration and claims management services performed with regards to insurance policies issued by or on behalf of HCM or its Affiliates. HCM will not have the right to and will not use the Licensed Software in connection with insurance policies issued by any third party other than HCM or its Affiliates. HCM will not have the right to transfer or license the Licensed Software to any third party, except that HCM may sub-license the Licensed software to its Affiliate(s) during a run-off period in the event that HCM’s appointment as managing general agent of the Affiliate is terminated.

3. Consideration. HCM will pay to Exzeo consideration described in each Exhibit to this Agreement identifying the corresponding portion of the Licensed Software.

These fees will accrue on a quarterly basis to Exzeo with each payment due 30 days after the end of the previous calendar quarter. The total Policies in Force will be calculated on a quarterly basis and HCM will provide exact information about current Policies in Force of HCPCI with the payment of the quarterly fees.

4. Ownership of Derivative Works. To the extent HCM or its agents conceive or create Derivative Works of the Licensed Software, HCM acknowledges that such Derivative Works will be solely and exclusively owned by Exzeo. HCM will receive the same license rights in Derivative Works as conveyed with regard to Licensed Software pursuant to this Agreement. Otherwise, HCM will have no right to use or otherwise exploit such Derivative Works.

5. Updates and Enhancements. During the Term and in addition to the Maintenance services, Exzeo may create enhancements, updates, and new releases and versions of the Licensed Software from time to time. Exzeo may offer these updates and enhancements to HCM as additional licenses or services, and all fees for such updates and enhancements will be negotiated as a separate agreement between the Parties upon the creation of each such update or enhancement.

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6. Exclusivity. The license granted to HCM under this Agreement is non-exclusive, and nothing in this Agreement will prevent Exzeo from offering similar licenses to any other individuals, associations or legal entities.

7. Term and Termination.

7.1. Term. The term of this Agreement will commence on the Effective Date and will expire five years from the Effective Date (“Term”). The Term will automatically renew for additional five year periods upon the expiration of the initial term and each renewal term, unless terminated in accordance herewith.

7.2. Termination by Notice. HCM may terminate this Agreement upon six months written notice.

7.3. Termination for Non-Performance. In the event that either Party breaches any of the terms hereof, then either Party (whether in breach or not) may terminate this Agreement upon thirty days written notice.

7.4. Termination upon Change of Control. Exzeo will have the right to terminate this Agreement upon ninety days written notice to HCM given at any time within three months following the occurrence of a change of control of HCM. For purposes hereof, a change of control of HCM will mean any of the following:

(A) any person, entity, or group, other than an Affiliate or subsidiary of HCM or an employee benefit plan established or maintained by HCM, acquires more than 50% of the combined voting power of HCM in one transaction or in a series of related transactions;

(B) a sale or disposition of all or substantially all of HCM’s assets; or

(C) individuals who on the date hereof constitute the board of directors of HCM cease for any reason to constitute at least a majority thereof.

7.5. Return of HCM Materials after Termination. After termination or expiration of this Agreement, Exzeo will use reasonable efforts to assist HCM with copying HCM’s data, content or other materials from the Licensed Software prior to deletion of any such materials.

7.6 Survival of Expiration or Termination. Sections 3 (Consideration), 9 (Confidentiality), 10 (Warranty), 12 (Indemnity Obligations), 13 (Limitation of Liability) and any other provisions expressly or implicitly intended to survive termination or expiration of this Agreement will survive any termination or expiration of this Agreement.

8. Taxes. HCM will pay any sales taxes payable with respect to payments made to Exzeo hereunder.

9. Confidentiality.

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9.1. Confidential Information. For the purposes of this Agreement, “Confidential Information” means information about the disclosing Party’s (or its Affiliates’ or suppliers’) business or activities that is proprietary and confidential, which will include (i) all policyholder information, agent information, and all business, financial, technical and other information of a Party which is either marked or designated by such Party as “confidential” or “proprietary” or which, by the nature of the circumstances surrounding the disclosure, ought in good faith to be treated as confidential; (ii) the terms of and performance under this Agreement; and (iii) the Source Code and Object Code to the Licensed Software.

9.2. Not Confidential Information. Confidential Information will not include information that (i) is in or enters the public domain without breach of this Agreement, (ii) the receiving Party lawfully receives from a third party without restriction on disclosure and without breach of a nondisclosure obligation, (iii) the receiving Party knew prior to receiving such information from the disclosing Party, or (iv) the receiving Party develops independently without use of or reference to any Confidential Information of the other Party.

9.3. Obligations. Each Party agrees (i) that it and its employees will not (a) disclose Confidential Information of the other Party to, and will prevent disclosure to, any other individual, association or legal entity or (b) use any Confidential Information disclosed to it by the other Party except as expressly permitted in this Agreement and (ii) that it will take all reasonable measures to maintain the confidentiality of all Confidential Information of the other Party in its possession or control, which will in no event be less than the measures it uses to maintain the confidentiality of its own information of similar importance.

9.4. Exceptions. Notwithstanding the foregoing, each Party may disclose Confidential Information (i) to the extent required by a court of competent jurisdiction or other governmental authority or otherwise as required by law; provided, however that the Party required to so disclose Confidential Information of the other Party will use commercially reasonable efforts to minimize such disclosure and will provide written notice of such disclosure and consult with and assist the other Party, at the other Party’s expense, in obtaining a protective order prior to such disclosure or (ii) on a “need-to-know” basis under an obligation of confidentiality to its legal counsel, accountants, banks and other financing sources and their advisors.

10. Warranty. Each Party warrants and represents to the other Party that it has full power and authority to enter into this Agreement and to carry out its obligations hereunder. Exzeo warrants and represents to HCM that Exzeo has and will have during the Term, sufficient rights in the Licensed Software to grant HCM the rights set forth in this Agreement, including any necessary approval, consent, authorization, release, clearance or license of any third party and any release related to any rights of privacy or publicity, as may be necessary for Exzeo to enter into this Agreement. Exzeo warrants that the Licensed Software will perform the contemplated portion of all services listed on Exhibit A in a commercially reasonable manner. Exzeo warrants that the Licensed Software will not: (i) infringe on any third party’s intellectual property rights; (ii) violate any law, statute, ordinance or regulation, including without limitation the laws and regulations governing export control; (iii) be defamatory or trade libelous; (iv) be pornographic or obscene; or (v) contain viruses, Trojan horses, worms, time bombs, spyware or other similar harmful or deleterious programming routines.

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11. Warranty Disclaimer. EXCEPT AS EXPRESSLY SET FORTH IN SECTION 10, NEITHER PARTY MAKES, AND EACH PARTY SPECIFICALLY DISCLAIMS, ANY REPRESENTATIONS OR WARRANTIES, EXPRESS OR IMPLIED, INCLUDING ANY IMPLIED WARRANTY OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, QUIET ENJOYMENT, QUALITY OF INFORMATION, TITLE AND NON-INFRINGEMENT, AND IMPLIED WARRANTIES ARISING FROM COURSE OF DEALING OR PERFORMANCE. NEITHER PARTY MAKES ANY REPRESENTATION OR WARRANTY TO THE OTHER REGARDING THE EFFECT THIS AGREEMENT AND THE CONSUMMATION OF THE TRANSACTIONS CONTEMPLATED HEREBY MAY HAVE UPON THE FOREIGN, FEDERAL, STATE OR LOCAL TAX LIABILITY OF THE OTHER.

12. Indemnity Obligations.

12.1. Indemnity. Each Party will indemnify, defend and hold harmless the other Party hereto and its Affiliates and the respective officers, directors, consultants, agents and employees of each from and against any and all claims, suits, liability, damages and/or costs (including but not limited to, attorneys’ fees) arising from the first Party’s breach of any warranty, representation or obligation under this Agreement. In order for any to be indemnified hereunder for any claim, such Party must notify the other Party within twelve months of the earlier of: (i) the date the first Party first became aware of the claim: or (ii) the date such Party should have become aware of the claim using reasonable due diligence.

12.2. Adequate Remedy. The Parties agree that any breach of either of the Parties’ obligations regarding confidentiality may result in irreparable injury for which there is no adequate remedy at law. Therefore, in the event of any breach or threatened breach of a Party’s obligations regarding the other Party’s confidentiality, the aggrieved Party will be entitled to seek injunctive relief, in addition to any other remedies to which it may be entitled.

13. Limitation of Liability. THE AGGREGATE LIABILITY OF EXZEO FOR ANY AND ALL LOSSES, CLAIMS, SUITS, CONTROVERSIES, BREACHES OR DAMAGES FOR ANY CAUSE WHATSOEVER (INCLUDING, BUT NOT LIMITED TO, THOSE ARISING OUT OF OR RELATED TO THIS AGREEMENT) AND REGARDLESS OF THE FORM OF ACTION OR LEGAL THEORY, WILL BE LIMITED TO THE ACTUAL DIRECT OUT-OF-POCKET EXPENSES THAT ARE REASONABLY INCURRED BY HCM AND WILL NOT EXCEED THE AGGREGATE AMOUNTS PAID BY HCM TO EXZEO UNDER THIS AGREEMENT IN THE TWELVE MONTH PERIOD PRECEEDING HCM NOTIFYING EXZEO OF THE CLAIM. IN NO EVENT WILL EITHER PARTY BE LIABLE TO THE OTHER FOR ANY INDIRECT, SPECIAL, INCIDENTAL, PUNITIVE OR CONSEQUENTIAL DAMAGES, WHETHER BASED ON BREACH OF CONTRACT, TORT (INCLUDING NEGLIGENCE), OR OTHERWISE, AND WHETHER OR NOT THAT PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGE.

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14. General.

14.1. Relationship. This Agreement is not intended to create, and will not be deemed or treated as creating, a partnership, franchise, joint venture, employment contract or any other relationship between the Parties other than the independent contractor relationship expressly provided for in this Agreement.

14.2. Governing Law and Venue. This Agreement will be governed by the laws of the State of Florida, without giving effect to applicable conflict of laws provisions. With respect to any litigation arising out of or relating to this Agreement, each Party agrees that it will be filed in and heard by the Circuit Court in and for Hillsborough County, Florida or the United States District Court for the Middle District of Florida, Tampa Division.

14.3. Entire Agreement; Amendments. This Agreement, including any exhibits and other attachments thereto, constitutes the entire understanding and agreement with respect to the subject matter, and supersedes any and all prior or contemporaneous representations, understandings and agreements whether oral or written between the Parties relating to the subject matter of this Agreement, all of which are merged in this Agreement.

14.4. Construction. This Agreement will be construed without regard to which Party was responsible for its preparation. Wherever from the context it appears appropriate, each term stated in either the singular or the plural will include the singular and the plural, and pronouns stated in the masculine, feminine or neuter gender will include the other genders. The words “Agreement,” “hereof,” “herein” and “hereunder” and words of similar import referring to this Agreement refer to this contract as a whole, including documents incorporated by reference, and not to any particular provision of this contract. Whenever the word “include,” “includes” or “including” is used in this Agreement, it will be deemed to be followed by the words “without limitation.” The various headings contained in this Agreement are inserted solely for convenience of reference and in no way define, limit or extend the scope or intent of any of the provisions of this Agreement.

14.5. Severability. If any provision of this Agreement is found to be invalid or unenforceable, the remaining provisions will remain effective and such term will be replaced with another term consistent with the purpose and intent of this Agreement.

14.6. Counterparts. This Agreement may be executed in one or more counterparts, each of which will be deemed an original of this Agreement, and all of which together will be deemed the same Agreement.

14.7. Assignment. HCM may not assign this Agreement or transfer any of HCM’s rights or obligations under this Agreement to any third party.

14.8. Notice. Notices required or permitted by this Agreement will be provided to the other Party in writing. Electronic mail (email) is acceptable for written notice except that the Parties must provide any written communications related to Section 12 or any legal dispute between HCM and Exzeo by certified mail to the other Party.

14.9. Force Majeure. Neither Party will be responsible to the other Party for any failure or breach of this Agreement caused by an act of God; astronomical event; disease or

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pandemic; war, hostility, insurrection, or other widespread violence; riot or political instability; work stoppage; government action or change in applicable law; or any other circumstance outside the reasonable control of the affected Party. If any force majeure event continues for more than 30 days and the affected Party is unable to remedy the failure or breach of this Agreement caused by the force majeure event, the Party affected by the force majeure event may terminate this Agreement immediately upon written notice to the other Party.

The Parties have duly executed this Agreement by the authorized signatures below.

Homeowners Choice Managers, Inc.
By:	/s/ Mark Harmsworth
Name:	Mark Harmsworth
Title:	Chief Financial Officer
Exzeo USA, Inc.
By:	/s/ Paresh Patel
Name:	Paresh Patel
Title:	Chief Executive Officer

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EXHIBIT A

TO SOFTWARE LICENSE

AND SERVICES AGREEMENT

SAMS SOFTWARE

The Licensed Software will include the SAMS Software, which will perform the contemplated portion of the following insurance policy administration and claims management services:

A)	Policy support;
B)	Reserving;
C)	Revenue calculations;
D)	Financial reporting;
E)	Policy quoting;
F)	Policy binding;
G)	Issuance of policy renewals;
H)	Issuance of late payment notices;
I)	Issuance of cancellation notices;
J)	Issuance of reinstatements;
K)	Change of mortgages;
L)	Addition of insureds;
M)	Coverage endorsements;
N)	Calculation of commissions;
O)	Subrogation;
P)	First notice of loss;
Q)	Cash receipts;
R)	Cash disbursements;
S)	Management reports; and
T)	Collection reports.

For use of the SAMS Software, HCM will pay to Exzeo a quarterly SAMS license fee based upon the total policies in force of Homeowners Choice Property & Casualty Insurance Company, Inc. (“HCPCI”), for which HCM is the managing general agent, administered using the SAMS Software, from the Effective Date until termination of this Agreement, calculated in accordance with the following schedule:

License Fee	Policies Administered by SAMS
$125,000	0-100,000
$362,500	100,001-200,000
$575,000	200,001-300,000
$762,500	300,001-400,000
$900,000	400,001-500,000

The SAMS policy administration license fee will include an additional $100,000 for each 100,000 policies administered using the SAMS software above 500,000.

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EXHIBIT B

TO SOFTWARE LICENSE

AND SERVICES AGREEMENT

CASACLUE^TM PROPERTY DATABASE SYSTEM

The Licensed Software will include the CasaClue^TM property database system, which provides, maintains and updates a database of property information and documents for use in quoting policies, binding coverage and claims handling.

For use of the CasaClue software, HCM will pay to Exzeo a CasaClue license fee of $1 per quote generated using the CasaClue software. If a single property is quoted more than one time per calendar year, such additional quotes will be included at no cost to HCM.

EXHIBIT C

TO SOFTWARE LICENSE

AND SERVICES AGREEMENT

ATLASVIEWER^® ONLINE MAPPING AND DATA VISUALIZATION PLATFORM

The Licensed Software will include the AtlasViewer^® online mapping and data visualization platform. For use of the AtlasViewer software, HCM will pay to Exzeo a quarterly AtlasViewer license fee of $12,000 per quarter.

EXHIBIT D

TO SOFTWARE LICENSE

AND SERVICES AGREEMENT

CLAIMCOLONY^TM ONLINE CLAIM MANAGEMENT SOFTWARE SUITE

The Licensed Software will include the ClaimColony^TM online claim management software suite.

For use of the ClaimColony software suite, HCM will pay to Exzeo a ClaimColony license fee of $6 per claim handled by use of the ClaimColony software.

EXHIBIT E

TO SOFTWARE LICENSE

AND SERVICES AGREEMENT

HARMONY^TM ONLINE POLICY AND CLAIMS MANAGEMENT AND ADMINISTRATION SYSTEM

The Licensed Software will include the Harmony^TM online policy and claims management and administration system.

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For use of the Harmony Software, HCM will pay to Exzeo:

(i) A quarterly Harmony policy administration license fee based upon the total policies in force of Homeowners Choice Property & Casualty Insurance Company, Inc. (“HCPCI”), for which HCM is the managing general agent, administered using the Harmony Software, from the Effective Date until termination of this Agreement, calculated in accordance with the following schedule:

License Fee	Policies Administered by Harmony
$30,000	0-10,000
$60,000	10,001-25,000
$100,000	25,001-50,000
$200,000	50,001-75,000
$300,000	75,001-100,000
$875,000	100,001-200,000
$1,400,000	200,001-300,000
$1,875,000	300,001-400,000
$2,300,000	400,001-500,000

The SAMS policy administration license fee will include an additional $300,000 for each 100,000 policies administered using the Harmony software above 500,000.

EXHIBIT F

TO SOFTWARE LICENSE

AND SERVICES AGREEMENT

SOFTWARE SERVICES

Exzeo will provide the Software Services described in Section 1.4 of this Agreement, along with the following services in connection with maintaining, supporting, and developing HCM’s website:

(A) Ensuring adequate hosting for functionality of the website;

(B) Ensuring the website is in proper working condition;

(C) From time to time, updating the layout of the website;

(D) From time to time, updating information displayed on the website, in accordance with HCM’s current policies;

(E) Managing search engine optimization (SEO) activities for the website; and

(F) Monitoring and assuring security of the website, and notifying HCM of any potential security breach or other technical or security issue.

For the Software Services, HCM will pay to Exzeo a quarterly fee for Software Services of $30,000 per quarter.

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EX-21

Exhibit 21

Subsidiaries of TypTap Insurance Group, Inc. (Florida)

Name	Jurisdiction of Incorporation
Cypress Tech Development Company, Inc.	Florida
Exzeo Software Private Limited	India
Exzeo USA, Inc.	Florida
TypTap Insurance Company	Florida
TypTap Management Company	Florida

EX-23.1

Exhibit 23.1

Consent of Independent Registered Public Accounting Firm

We consent to the use in this Registration Statement on Form S-1 of TypTap Insurance Group, Inc. of our report dated February 15, 2021, except for Notes 13, 16, 17, and 23, as to which the date is August 3, 2021, with respect to the consolidated and combined financial statements of TypTap Insurance Group, Inc. and Subsidiaries, and to the reference to our firm under the heading “Experts” in the Registration Statement.

/s/ Dixon Hughes Goodman LLP

Tampa, Florida

November 8, 2021