UNIVERSAL INSURANCE HOLDINGS, INC.
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NOTE PURCHASE AGREEMENT
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UNIVERSAL INSURANCE HOLDINGS, INC.
NOTE PURCHASE AGREEMENT
THIS NOTE PURCHASE AGREEMENT (the "AGREEMENT") is made as of the 3rd day
of November, 2006 (the "EFFECTIVE DATE") by and among Universal Insurance
Holdings, Inc., a Delaware corporation (the "COMPANY"), and Xxxxxxxx Xxxxx
(Holdings), Inc., a New York Corporation (the "PURCHASER").
RECITALS
WHEREAS, the Company is authorized to issue a secured promissory note in
the aggregate principal amount of $12,000,000 (the "NOTE"), on the terms and
subject to the conditions set forth in this Agreement;
WHEREAS, the Company desires to issue the Note, in favor of the Purchaser;
and
WHEREAS, the Purchaser desires to purchase the Note, on the terms and
subject to the conditions set forth in this Agreement.
AGREEMENTS
NOW, THEREFORE, in consideration of the premises and mutual covenants
contained herein, the parties, intending to be legally bound, agree as follows:
1. AMOUNT AND TERMS OF THE LOAN
1.1 THE LOAN. Subject to the terms of this Agreement, a security
agreement (the "Security Agreement") between the parties attached hereto as
EXHIBIT A, and a Broker Authorization Contract, a Services Agreement and a
Brokerage Sharing Agreement (the "Broker Agreements") between the parties or an
affiliate of the parties, the Purchaser agrees to lend to the Company an
aggregate of Twelve Million Dollars ($12,000,000) (the "LOAN AMOUNT") against
the issuance and delivery by the Company of the Note in substantially the form
attached hereto as EXHIBIT B. The Loan Amount is hereinafter referred to
collectively as the "LOAN."
2. THE CLOSING
2.1 CLOSING DATE. The closing of the purchase and sale of the Note (the
"CLOSING") shall be held on the Effective Date, or at such other time as the
Company and the Purchaser shall agree (the "CLOSING DATE").
2.2 DELIVERIES. At the Closing: (i) the Purchaser will deliver to the
Company in the form of immediately available funds by either a bank or certified
check or wire transfer of funds in the principal amount of the Loan Amount; and
(ii) the Company shall issue and deliver to the Purchaser a Note in the
principal amount of the Loan Amount along with the signed Security Agreement and
signed Broker Agreements. The Company shall deliver to the Purchaser such other
documents as the Purchaser may reasonably request and which are agreed to by
Company prior to the Closing in connection with the transactions contemplated
hereby.
3. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE COMPANY
The Company hereby represents and warrants to the Purchaser that, as of
the date of this Agreement and as of the date of the Loan to be made by the
Purchaser pursuant to this Agreement, except as set forth on a Disclosure
Schedule to be provided by the Company to the Purchaser, as follows:
3.1 ORGANIZATION, GOOD STANDING AND QUALIFICATION, CORPORATE POWER. The
Company is a corporation duly organized, validly existing and in good standing
under the laws of the State of Delaware and has all requisite corporate power
and authority to carry on its business as now 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 nature of its activities and of its
properties (both owned and leased) makes such qualification necessary, except
for those jurisdictions in which the failure to do so would not have a material
adverse effect on the Company or its business. On the Closing Date, the Company
will have all requisite corporate power to execute and deliver this Agreement
and the Note and to carry out and perform its obligations under the terms of
this Agreement and the Note.
3.2 AUTHORIZATION. All corporate action on the part of the Company, its
officers, directors and its stockholders necessary for the authorization,
execution, delivery and performance of this Agreement and the Note by the
Company and the performance of the Company's obligations hereunder and
thereunder, including the issuance and delivery of the Note, have been taken or
will be taken prior to the Closing. This Agreement, the Note, the Security
Agreement and the Broker Agreements when executed and delivered by the Company
or its named affiliates, as the case may be, shall constitute valid and binding
obligations of the Company or its affiliates enforceable in accordance with
their terms except (a) as limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other laws of general application affecting
enforcement of creditors' rights, and (b) as limited by general principles of
equity that restrict the availability of equitable remedies. The issuance of
the Note pursuant to the provisions of this Agreement will be issued (a) in
compliance with all applicable federal and state securities laws, and (b) free
of any liens or encumbrances, other than any liens or encumbrances created by or
imposed upon the holders through no action of the Company (other than
restrictions on transfer under state and/or federal securities laws).
3.3 COMPLIANCE WITH OTHER INSTRUMENTS. Neither the authorization,
execution and delivery of this Agreement, the Security Agreement or the Broker
Agreements, nor the issuance and delivery of the Note, will constitute or result
in a material default or violation of any law or regulation applicable to the
Company or any material term or provision of the Company's current Certificate
of Incorporation or bylaws or any material agreement or instrument by which it
is bound or to which its properties or assets are subject.
3.4 OFFERING. Assuming the accuracy of the representations and
warranties of the Purchaser contained in Section 4 hereof, the offer, issue, and
sale of the Note are and will be exempt from the registration and prospectus
delivery requirements of the Securities Act of 1933, as amended (the "SECURITIES
ACT"), and are exempt from registration and qualification under the
registration, permit, or qualification requirements of all applicable state
securities laws.
4. REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
The Purchaser hereby represents and warrants to the Company as follows:
4.1 REQUISITE POWER AND AUTHORITY. The Purchaser has all necessary
power and authority under all applicable provisions of law to execute and
deliver this Agreement and the Note and to carry out their provisions. All
action on the Purchaser's part required for the lawful execution and delivery of
this Agreement and the Note have been or will be effectively taken prior to the
Closing. Upon their execution and delivery, this Agreement and the Note will be
valid and binding obligations of the Purchaser, enforceable in accordance with
their terms, except (a) as limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other laws of general application affecting
enforcement of creditors' rights, and (b) as limited by general principles of
equity that restrict the availability of equitable remedies.
4.2 PURCHASE FOR OWN ACCOUNT. The Purchaser represents that it is
acquiring the Note solely for its own account and beneficial interest for
investment and not for sale or with a view to distribution of the Note or any
part thereof and has no present intention of selling (in connection with a
distribution or otherwise), granting any participation in, or otherwise
distributing the same.
4.3 INFORMATION AND SOPHISTICATION. Without lessening or obviating the
representations and warranties of the Company set forth in Section 3, the
Purchaser hereby: (a) represents that it has had an opportunity to ask questions
and receive answers from the Company regarding the terms and conditions of the
offering of the Note and to obtain any additional information necessary to
verify the accuracy of the information given the Purchaser; and (b) further
represents that it has such knowledge and experience in financial and business
matters that it is capable of evaluating the merits and risk of this investment.
4.4 FURTHER LIMITATIONS ON DISPOSITION. Without in any way limiting the
representations set forth above, the Purchaser further agrees not to make any
disposition of all or any portion of the Note unless and until:
(a) There is then in effect a registration statement under the
Securities Act covering such proposed disposition and such disposition is made
in accordance with such Registration Statement; or
(b) The Purchaser shall have notified the Company of the proposed
disposition and shall have furnished the Company with a detailed statement of
the circumstances surrounding the proposed disposition, and if reasonably
requested by the Company, the Purchaser shall have furnished the Company with an
opinion of counsel, reasonably satisfactory to the Company, that such
disposition will not require registration under the Securities Act or any
applicable state securities laws, provided that no such opinion shall be
required for dispositions in compliance with Rule 144 of the Securities Act,
except in extraordinary circumstances.
(c) Notwithstanding the provisions of paragraphs (a) and (b)
above, no such registration statement or opinion of counsel shall be necessary
for a transfer by the Purchaser to a shareholder, member, partner (or retired
member or retired partner) or affiliate of the Purchaser, if all transferees
agree in writing to be subject to the terms hereof to the same extent as if they
were a Purchaser hereunder.
4.5 ACCREDITED INVESTOR STATUS. The Purchaser is an "ACCREDITED
INVESTOR" as such term is defined in Rule 501 under the Securities Act.
5. COVENANTS
5.1 SEC INFORMATION.
(a) For so long as the Loan is outstanding, the Company shall
furnish the Purchaser, as soon as practicably available, copies of its Annual
Report of Form 10-KSB and each Quarterly Report on 10-QSB filed with the
Securities and Exchange Commission.
6. MISCELLANEOUS
6.1 BINDING AGREEMENT. The terms and conditions of this Agreement shall
inure to the benefit of and be binding upon the respective successors and
assigns of the Company and the Purchaser. Nothing in this Agreement, express or
implied, is intended to confer upon any third party any rights, remedies,
obligations, or liabilities under or by reason of this Agreement, except as
expressly provided in this Agreement.
6.2 GOVERNING LAW. This Agreement shall be governed by and construed
under the laws of the State of Delaware as applied to agreements among Delaware
residents, made and to be performed entirely within the State of Delaware,
without giving any effect to the principle of conflicts of law.
6.3 COUNTERPARTS. This Agreement may be executed 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.
6.4 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.
6.5 NOTICES.
All notices required or permitted hereunder shall be in
writing and shall be deemed effectively given: (a) upon personal delivery to the
President of the party to be notified, (b) when sent by facsimile to the
President of the party to be notified at the recipient's fax number set forth on
the signature page hereof, if sent during normal business hours of the
recipient, if not, then on the next business day, so long as the sender also
sends the notice (i) by Certified Mail, Return Receipt Requested and is
delivered and signed for by the recipient, or (ii) by Federal Express and is
delivered, with written verification of receipt. All notices shall be sent to
the President of Company at the address as set forth on the signature page
hereof and to the President of Purchaser at the address set forth on the
signature page hereof, or at such other address as the Company or the Purchaser
may designate by ten (10) days advance written notice to the other parties
hereto, with copies of all such notices to the parties respective counsel (i)
for Company to Xxxxxx X. Xxxxx, III, Esq., Xxxxxxxxxxx & Xxxxxxxx Xxxxxxxxx
Xxxxxx, LLP, 0000 X Xxxxxx XX, Xxxxxxxxxx, XX 00000; Fax No. (000) 000-0000 and
(ii) for Purchaser to Legal Department, Attn: General Counsel, Xxxxxxxx Holdings
Inc., 0000 Xxxxxxxx Xxxx Xxxx - Xxxxx 000, Xxxxxxxxxxx, XX 00000; Fax No. (952)
000-0000.
6.6 MODIFICATION; WAIVER. No modification or waiver of any provision of
this Agreement or consent to departure therefrom shall be effective unless in
writing and approved by the President of the Company and the President of the
Purchaser.
6.7 ENTIRE AGREEMENT. This Agreement and the exhibit hereto constitute
the full and entire understanding and agreement between the parties with regard
to the subjects hereof and no party shall be liable or bound to any other in any
manner by any representations, warranties, covenants and agreements except as
specifically set forth herein.
IN WITNESS WHEREOF, the parties have executed this NOTE PURCHASE AGREEMENT
as of the date first written above.
COMPANY: PURCHASER:
UNIVERSAL INSURANCE HOLDINGS, INC., XXXXXXXX XXXXX (HOLDINGS), INC.,
a Delaware corporation a New York corporation
By: /s/ Xxxxxxx X. Xxxxx By: /s/ J. Xxxxxx Xxxxxxx
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Name: Xxxxxxx X. Xxxxx Name: J. Xxxxxx Xxxxxxx
Title: President Title: President
Address: Address:
0000 Xxxx Xxxxxxxxxx Xxxxxxxxx 3600 American Blvd West
Suite 100 Suite 700
Fort Lauderdale, Florida 33309 Xxxxxxxxxxx, XX 00000
Facsimile: (000) 000-0000 Facsimile: (000) 000-0000
Attn: Xxxxxxx X. Xxxxx Attn: Xxxxxx Xxxxxxx, President
