Document:

exhibit41seniorunsecured

                                    EXECUTION VERSION                                                                                                                                                 INDENTURE         Dated as of March 5, 2019                                    Between                    FEDNAT HOLDING COMPANY,                as Issuer                                      and                  THE BANK OF NEW YORK MELLON,               as Trustee                                          SENIOR UNSECURED NOTES DUE 2029                                                                                                                                              

 

                                     TABLE OF CONTENTS                                                                                              Page                                                                          ARTICLE I.      Definitions and Incorporation by Reference            1                                                                          SECTION 1.1.    Definitions                                           1  SECTION 1.2.    Rules of Construction                                 18                                                                          ARTICLE II.     The Notes                                             19                                                                          SECTION 2.1.    Form and Dating                                       19  SECTION 2.2.    Form of Execution and Authentication                  20  SECTION 2.3.    Registrar and Paying Agent                            21  SECTION 2.4.    Paying Agent to Hold Money in Trust                   22  SECTION 2.5.    Lists of Holders of the Notes                         22  SECTION 2.6.    Transfer and Exchange                                 22  SECTION 2.7.    Replacement Notes                                     30  SECTION 2.8.    Outstanding Notes                                     31  SECTION 2.9.    Treasury Notes                                        31  SECTION 2.10.   Temporary Notes                                       31  SECTION 2.11.   Cancellation                                          31  SECTION 2.12.   Payment of Interest and Defaulted Interest            32  SECTION 2.13.   CUSIP and ISIN Numbers                                32  SECTION 2.14.   Paying Agent Provisions                               33  SECTION 2.15.   Agents’ Interest                                      33                                                                          ARTICLE III.    Covenants                                             33                                                                          SECTION 3.1.    Payment of Notes                                      33  SECTION 3.2.    Reports                                               34  SECTION 3.3.    Limitations on Indebtedness                           36  SECTION 3.4.    Limitation on Restricted Payments                     38  SECTION 3.5.    Limitation on Liens                                   38  SECTION 3.6.    Maintenance of Reinsurance Coverage                   38  SECTION 3.7.    Maintenance of Insurance Subsidiaries                 39  SECTION 3.8.    Change of Control                                     39  SECTION 3.9.    Access to Books and Records                           41  SECTION 3.10.   Compliance Certificate                                41  SECTION 3.11.   Statement by Officers as to Default                   42  SECTION 3.12.   Material Defaults                                     42  SECTION 3.13.   Payment for Consents                                  42  SECTION 3.14.   Limitation on Dispositions of Capital Stock of Significant 42                  Subsidiaries  SECTION 3.15    Ratings                                               42                                                                                                                  i    

 

   ARTICLE IV.     Successor Company                                     43                                                                          SECTION 4.1.    When Company May Merge or Otherwise Dispose Assets    43                                                                          ARTICLE V.      Redemption                                            44                                                                          SECTION 5.1.    Optional Redemption                                   44  SECTION 5.2.    Election to Redeem; Notice to Trustee of Optional Redemptions 44  SECTION 5.3.    Selection by Registrar of Notes to be Redeemed        44  SECTION 5.4.    Notice of Redemption                                  45  SECTION 5.5.    Deposit of Redemption Price                           45  SECTION 5.6.    Notes Payable on Redemption Date                      46  SECTION 5.7.    Notes Redeemed in Part                                46  SECTION 5.8.    Special Mandatory Redemption                          46                                                                          ARTICLE VI.     Defaults and Remedies                                 47                                                                          SECTION 6.1.    Events of Default                                     47  SECTION 6.2.    Acceleration                                          49  SECTION 6.3.    Other Remedies                                        49  SECTION 6.4.    Waiver of Past Defaults                               49  SECTION 6.5.    Control by Majority                                   49  SECTION 6.6.    Limitation on Suits                                   50  SECTION 6.7.    Rights of Holders to Receive Payment                  50  SECTION 6.8.    Collection Suit by Trustee                            50  SECTION 6.9.    Trustee May File Proofs of Claim                      50  SECTION 6.10.   Priorities                                            51  SECTION 6.11.   Undertaking for Costs                                 51                                                                          ARTICLE VII.    Trustee                                               51                                                                          SECTION 7.1.    Duties of Trustee                                     51  SECTION 7.2.    Rights of Trustee                                     52  SECTION 7.3.    Individual Rights of Trustee                          54  SECTION 7.4.    Disclaimer                                            54  SECTION 7.5.    Notice of Defaults                                    54  SECTION 7.6.    Compensation and Indemnity                            55  SECTION 7.7.    Replacement of Trustee                                55  SECTION 7.8.    Successor Trustee by Merger                           56  SECTION 7.9.    Agents                                                56                                                                          ARTICLE VIII.   Discharge of Indenture; Defeasance                    57                                                                          SECTION 8.1.    Discharge of Liability on Notes; Defeasance           57  SECTION 8.2.    Conditions to Defeasance                              58  SECTION 8.3.    Application of Trust Money                            59                                         ii    

 

   SECTION 8.4.    Repayment to Company                                  59  SECTION 8.5.    Indemnity for U.S. Government Obligations             59  SECTION 8.6.    Reinstatement                                         59                                                                          ARTICLE IX.     Amendments                                            59                                                                          SECTION 9.1.    Without Consent of Holders                            59  SECTION 9.2.    With Consent of Holders                               60  SECTION 9.3.    Effect of Consents and Waivers                        61  SECTION 9.4.    Notation on or Exchange of Notes                      61  SECTION 9.5.    Trustee to Sign Amendments                            61                                                                          ARTICLE X.      Miscellaneous                                         62                                                                          SECTION 10.1.   Notices                                               62  SECTION 10.2.   Certificate and Opinion as to Condition Precedent     63  SECTION 10.3.   Statements Required in Certificate or Opinion         63  SECTION 10.4.   When Notes Disregarded                                63  SECTION 10.5.   Rules by Trustee, Paying Agent and Registrar          64  SECTION 10.6.   Days Other than Business Days                         64  SECTION 10.7.   Governing Law; Submission to Jurisdiction             64  SECTION 10.8.   Waiver of Jury Trial                                  64  SECTION 10.9.   No Recourse Against Others                            64  SECTION 10.10.  Successors                                            64  SECTION 10.11.  Multiple Originals                                    64  SECTION 10.12.  Table of Contents; Headings                           65  SECTION 10.13.  Force Majeure                                         65  SECTION 10.14   Tax Matters                                           65  SECTION 10.15   Complaints                                            65                                        EXHIBITS                                                                                                  EXHIBIT A       Form of 144A Note                                       EXHIBIT B       Form of IAI Note                                        EXHIBIT C       Form of Certificate of Transfer                         EXHIBIT D       Form of Certificate of Exchange                         EXHIBIT E       Form of Certificate from Acquiring Institutional Accredited                   Investor                                                        iii    

 

           INDENTURE, dated as of March 5, 2019 (as originally executed or amended, supplemented or  otherwise modified from time to time by one or more indentures supplemental hereto, entered into  pursuant to the applicable provisions hereof, this “Indenture”), between FedNat Holding Company, a  corporation organized under the laws of Florida (together with its successors and assigns, the  “Company”), and The Bank of New York Mellon, a New York banking corporation, as trustee (together  with its successors and assigns, in such capacity, the “Trustee”).                                       Recitals of the Company                                                 Each party agrees as follows for the benefit of the other parties and for the equal and ratable  benefit of the Holders of the Notes:                                            ARTICLE I.                          Definitions and Incorporation by Reference                                           SECTION 1.1.    Definitions.          “Acquired Indebtedness” means, with respect to any Person, Indebtedness (1) of a Person or any  of its Subsidiaries existing at the time such Person is merged or consolidated with the Company or a  Subsidiary or becomes a Subsidiary or (2) assumed in connection with the acquisition of assets from such  Person, in each case whether or not Incurred by such Person in connection with, or in anticipation or  contemplation of, such Person becoming a Subsidiary or such acquisition, and Indebtedness secured by a  Lien encumbering any asset acquired by such specified Person. Acquired Indebtedness shall be deemed to  have been Incurred, with respect to clause (1) of the preceding sentence, on the date such Person is  merged or consolidated with the Company or a Subsidiary or becomes a Subsidiary and, with respect to  clause (2) of the preceding sentence, on the date of consummation of such acquisition of assets.                “Acquisition Agreement” has the meaning assigned to such term in Section 5.8.                “Affiliate” of any specified Person means any other Person, directly or indirectly, controlling or  controlled by or under direct or indirect common control with such specified Person. For the purposes of  this definition “control” when used with respect to any Person means the power to direct the management  and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by  contract or otherwise; and the terms “controlling” and “controlled” have meanings correlative to the  foregoing.                “Agent” means any Registrar or Paying Agent.                “Annual Statement” means the annual statutory financial statement of any Insurance Subsidiary  required to be filed with the insurance commissioner (or similar authority) of its jurisdiction of  incorporation, which statement shall be in the form required by such Insurance Subsidiary’s jurisdiction  of incorporation or, if no specific form is so required, in the form of financial statements permitted by  such insurance commissioner (or such similar authority) to be used for filing annual statutory financial  statements and shall contain the type of information permitted or required by such insurance  commissioner (or such similar authority) to be disclosed therein, together with all exhibits or schedules  filed therewith.                                                  1  

 

         “Applicable Premium” means, with respect to any Note on any applicable redemption date, the  greater of (1) 1.0% of the then outstanding principal amount of such Note and (2) the excess (if any) of:                (A) the present value at such redemption date of (i) the redemption price of such Note at March  15, 2024 (such redemption price being set forth in the table in Section 5.1(b) hereof) (excluding any  accrued but unpaid interest), plus (ii) all required interest payments due on such Note through March 15,  2024 (excluding accrued but unpaid interest), computed using a discount rate equal to the Treasury Rate  on such redemption date plus 50 basis points; over                 (B) the then outstanding principal amount of such Note.                 The Company will calculate the Applicable Premium and the Trustee will not be responsible for  such calculation.          “Applicable Procedures” means, with respect to any transfer or exchange of or for beneficial  interests in any Global Note, the rules and procedures of the Depositary that apply to such transfer or  exchange or for other procedural matters.                “Applicable Rating Agency” means one of the following Rating Agencies at any given time: (i)  in the case that there is only one Rating Agency rating the Notes, such Rating Agency, (ii) in the case that  there are two Rating Agencies rating the Notes, such Rating Agency providing the lower rating, or (iii) in  the case that there are three or more Rating Agencies rating the Notes, such Rating Agency providing the  second lowest rating.  The initial Rating Agency shall be Egan Jones.                “Attributable Indebtedness” in respect of a Sale/Leaseback Transaction means, as at the time of  determination, (1) if such Sale/Leaseback Transaction does not constitute a Capitalized Lease Obligation,  the present value (discounted at the interest rate implicit in the transaction) of the total obligations of the  lessee for rental payments during the remaining term of the lease included in such Sale/Leaseback  Transaction (including any period for which such lease has been extended), determined in accordance  with GAAP or (2) if such Sale/Leaseback Transaction constitutes a Capitalized Lease Obligation, the  amount of Indebtedness represented thereby will be determined in accordance with the definition of  “Capitalized Lease Obligations.”                      “Average Life” means, as of the date of determination, with respect to any Indebtedness or  Preferred Stock, the quotient obtained by dividing (1) the sum of the products of the numbers of years  from the date of determination to the dates of each successive scheduled principal payment of such  Indebtedness or redemption or similar payment with respect to such Preferred Stock multiplied by the  amount of such payment by (2) the sum of all such payments.                “Board of Directors” means:                            (1)    with respect to a corporation, the Board of Directors of the corporation or (other  than for purposes of determining Change of Control) any committee thereof duly authorized to act on  behalf of the Board of Directors with respect to the relevant matter; and                            (2)    with respect to any other Person, the board or committee of such Person serving a  similar function.                “Board Resolution” means a copy of a resolution certified by the Secretary or an Assistant  Secretary of a company to have been duly adopted by the Board of Directors of such company and to be  in full force and effect on the date of such certification, and delivered to the Trustee.                                         2  

 

           “Business Day” means each day that is not a Saturday, Sunday or other day on which commercial  banking institutions in New York, New York are authorized or required by law to close.                “Capital and Surplus” means, as to any Insurance Subsidiary, as of any date, the total amount of  “Surplus as regards policyholders” as reflected on the annual statutory financial statements filed by such  Insurance Subsidiary on the NAIC.                “Capital Stock” of any Person means (1) with respect to any Person that is a corporation, any and  all shares, interests, rights to purchase, warrants, options, participations or other equivalents of or interests  in (however designated) equity of such Person, including any Common Stock or Preferred Stock, and (2)  with respect to any Person that is not a corporation, any and all partnership, limited liability company,  membership or other equity interests of such Person, but in each case excluding any debt securities  convertible into any of the foregoing.                “Capitalized Lease Obligation” means an obligation that is required to be classified and  accounted for as a capitalized lease for financial reporting purposes in accordance with GAAP, and the  amount of Indebtedness represented by such obligation will be the capitalized amount of such obligation  at the time any determination thereof is to be made as determined in accordance with GAAP, and the  Stated Maturity thereof will be the date of the last payment of rent or any other amount due under such  lease prior to the first date such lease may be terminated without penalty.                “Cash Equivalents” means:                            (1)   U.S. dollars;                            (2)    securities issued or directly and fully guaranteed or insured by the United States  Government or issued by any agency or instrumentality of the United States (provided that the full faith  and credit of the United States is pledged in support thereof), having maturities of not more than one year  from the date of acquisition;                            (3)    marketable general obligations issued by any state of the United States of America  or any political subdivision of any such state or any public instrumentality thereof maturing within one  year from the date of acquisition and, at the time of acquisition, having a credit rating of “A” or better  from S&P or “A2” or better from Moody’s;                            (4)    certificates of deposit, demand deposits, time deposits, eurodollar time deposits,  overnight bank deposits or bankers’ acceptances having maturities of not more than one year from the  date of acquisition thereof issued by any commercial bank (x) the long-term debt of which is rated at the  time of acquisition thereof at least “A” or the equivalent thereof by S&P, or “A” or the equivalent thereof  by Moody’s or (y) the short-term commercial paper of such commercial bank or its parent company is  rated at the time of acquisition thereof at least “A-1” or the equivalent thereof by S&P or “P-1” or the  equivalent thereof by Moody’s, and having combined capital and surplus in excess of $500 million;                            (5)    repurchase obligations with a term of not more than seven days for underlying  securities of the types described in clauses (2), (3) and (4) above, entered into with any bank meeting the  qualifications specified in clause (4) above;                            (6)    commercial paper rated at the time of acquisition thereof at least “A-1” or the  equivalent thereof by S&P or “P-1” or the equivalent thereof by Moody’s, or carrying an equivalent rating                                          3  

 

   by a nationally recognized Rating Agency, if both of the two named Rating Agencies cease publishing  ratings of investments, and in any case maturing within one year after the date of acquisition thereof;                            (7)    instruments equivalent to those referred to in clauses (1) through (6) above  denominated in Euros or any foreign currency comparable in credit quality and tenor to those referred to  in such clauses and customarily used by corporations for cash management purposes in any jurisdiction  outside the United States to the extent reasonably required in connection with any business conducted by  any Subsidiary organized in such jurisdiction;                            (8)    interests in any investment company or money market fund that invests 95% or  more of its assets in instruments of the type specified in clauses (1) through (7) above;                            (9)    money market funds that (i) comply with the criteria set forth in Rule 2A-7 of the  Investment Company Act of 1940, as amended, (ii) are rated at the time of acquisition thereof “AAA” or  the equivalent by S&P or “Aaa” or the equivalent thereof by Moody’s and (iii) have portfolio assets of at  least $5.0 billion; and                            (10)    securities with maturities of one year or less from the date of acquisition backed by  standby letters of credit issued by any commercial bank satisfying the requirements of clause (4) of this  definition.                      “Catastrophe Event” means a single incident or series of closely related incidents that result in  $25,000,000 or more in United States industry-wide direct insured losses to property, as reported by  Property Claims Services, and that affect a significant number of policyholders and insurers.          “Change of Control” means:                            (1)    any “person” or “group” of related persons (as such terms are used in Sections 13(d)  and 14(d) of the Exchange Act) becomes the beneficial owner (as defined in Rules 13d-3 and 13d-5 under  the Exchange Act), directly or indirectly, of a majority of the total voting power of the Voting Stock of  the Company (or its successors by merger, consolidation or purchase of all or substantially all of its  assets);                            (2)    during any period of twelve consecutive months, a majority of the members of the  Board of Directors of the Company are not Continuing Directors;                            (3)    the sale, assignment, lease, transfer, conveyance or other disposition (other than by  way of merger or consolidation), in one or a series of related transactions, of all or substantially all of the  assets of the Company and its Subsidiaries taken as a whole to any “person” (as such term is used in  Sections 13(d) and 14(d) of the Exchange Act); or                            (4)    the adoption by the stockholders of the Company of a plan or proposal for the  liquidation or dissolution of the Company;                “Code” means the Internal Revenue Code of 1986, as amended.                “Commodity Agreement” means any commodity futures contract, commodity option, commodity  swap agreement, commodity collar agreement, commodity cap agreement or other similar agreement or  arrangement entered into by the Company or any Subsidiary.                                                  4  

 

         “Common Stock” means with respect to any Person, any and all shares, interest or other  participations in, and other equivalents (however designated and whether voting or nonvoting) of such  Person’s common stock whether or not outstanding on the Issue Date, and includes, without limitation, all  series and classes of such common stock.                “Consolidated Capital” means, as of any date, the total shareholders’ equity of the Company and  its Subsidiaries on such date determined on a consolidated basis in accordance with GAAP plus the  Indebtedness of the Company and its Subsidiaries on a consolidated basis outstanding as of such date.                “Consolidated EBIT” means, with respect to any Person for any period, the Consolidated Net  Income of such Person for such period:                            (1)    increased (without duplication) by the following items to the extent deducted in  calculating such Consolidated Net Income:                            (a) Consolidated Interest Expense; plus                                           (b)    Consolidated Income Taxes.                            (2)    decreased (without duplication) by non-cash items increasing Consolidated Net  Income of such Person for such period (excluding any items which represent the reversal of any accrual  of, or reserve for, anticipated cash charges that reduced Consolidated EBIT in any prior period); and                      (3)    increased or decreased (without duplication) to eliminate the following items  reflected in Consolidated Net Income:                            (a)   any non-ordinary course net gain or loss resulting in such period from  Hedging Obligations and the application of FASB ASC 815;                                        (b)   all unrealized gains and losses relating to financial instruments or  liabilities to which fair market value accounting is applied;                                        (c)   any net gain or loss resulting in such period from currency translation  gains or losses related to currency remeasurements of Indebtedness (including any net loss or gain  resulting from Hedging Obligations for currency exchange risk); and                      (d)    effects of adjustments (including the effects of such adjustments pushed  down to the Company and its Subsidiaries) in any line item in such Person’s consolidated financial  statements pursuant to GAAP resulting from the application of purchase accounting in relation to any  completed acquisition.                “Consolidated Income Taxes” means, with respect to any Person for any period, taxes imposed  upon such Person or other payments required to be made by such Person by any Governmental Authority  which taxes or other payments are calculated by reference to the income or profits or capital of such  Person or such Person and its Subsidiaries (to the extent such income or profits were included in  computing Consolidated Net Income for such period), including, without limitation, state, franchise and  similar taxes and foreign withholding taxes regardless of whether such taxes or payments are required to  be remitted to any Governmental Authority.                “Consolidated Indebtedness” means, as of any date, the Indebtedness of the Company and its  Subsidiaries on such date determined on a consolidated basis in accordance with GAAP.                                         5  

 

                 “Consolidated Interest Expense” means, for any period, the interest expense of the Company and  its Subsidiaries for such period determined on a consolidated basis in accordance with GAAP, including  but not limited to the portion of any payments or accruals with respect to Capitalized Lease Obligations  that are allocable to interest expense, excluding (x) any write-offs of capitalized fees under a Debt Facility  and all amendments thereto, (y) all non-cash charges for the amortization of deferred financing fees and  debt issuance costs, and (z) any interest on tax reserves to the extent the Company has elected to treat  such interest as an interest expense under FASB ASC 450 since its adoption.                “Consolidated Net Income” means the consolidated net income (loss) as shown in the Company’s  and its consolidated Subsidiaries’ financial statements prepared in accordance with GAAP (before  preferred stock dividends, if applicable).                 “Continuing Directors” means, as of any date of determination, any member of the Board of  Directors of the Company who: (1) was a member of such Board of Directors on the Issue Date; or (2)  was nominated for election or elected to such Board of Directors with the approval of a majority of the  Continuing Directors who were members of the Board of Directors at the time of such nomination or  election either by a specific vote or by approval of a proxy statement issued by the Company on behalf of  its entire Board of Directors in which such individual is named as a nominee for director.                “Corporate Trust Office” shall be at the address of the Trustee specified in Section 10.1 or such  other address as to which the Trustee may give notice to the Company or Holders pursuant to the  procedures set forth in Section 10.1.                “Currency Agreement” means, in respect of a Person, any foreign exchange contract, currency  swap agreement, futures contract, option contract or other similar agreement as to which such Person is a  party or a beneficiary.                “Debt Facility” or “Debt Facilities” means, with respect to the Company, one or more financing  arrangements providing for revolving credit loans, term loans, letters of credit or other long-term  indebtedness or issuances of debt securities evidenced by notes, debentures, bonds or similar instruments,  in each case, as amended, restated, supplemented, modified, renewed, refunded, replaced or refinanced  (including by means of sales of debt securities) in whole or in part from time to time (and whether or not  with the original trustee, administrative agent, holders and lenders or another trustee, administrative agent  or agents), including, without limitation, any agreement extending the maturity thereof or increasing the  amount of available borrowings thereunder pursuant to incremental facilities or adding Subsidiaries of the  Company as additional guarantors thereunder, and whether or not increasing the amount of Indebtedness  that may be issued thereunder.                “Debt to Capital Ratio” means, as of any date, the ratio (expressed as a percentage) equal to  Consolidated Indebtedness of the Company as of such date divided by the Consolidated Capital of the  Company as of such date.                “Default” means any event or condition that is, or after notice or passage of time or both would  be, an Event of Default.                “Definitive Note” means a certificated Note registered in the name of the Holder thereof and  issued in accordance with Section 2.6, substantially in the form of Exhibit A hereto (as to any Holder that  is a QIB) or substantially in the form of Exhibit B hereto (as to any Holder that is an Institutional  Accredited Investor but not a QIB) except that, in each case, such Note shall not bear the Global Note  Legend and shall not have the “Schedule of Exchanges of Interests in the Global Note” attached thereto.                                         6  

 

                 “Department” means, with respect to any Insurance Subsidiary, the Governmental Authority of  such Insurance Subsidiary’s state of domicile with which such Insurance Subsidiary is required to file its  Annual Statement.                “Depositary” means, with respect to each Global Note, the Person specified in Section 2.1(b) as  the Depositary with respect to such Notes, until a successor shall have been appointed and become such  pursuant to the applicable provisions of this Indenture, and thereafter, “Depositary” shall mean or include  such successor.                “Disqualified Stock” means, with respect to any Person, any Capital Stock of such Person that by  its terms (or by the terms of any security into which it is convertible or for which it is exchangeable) or  upon the happening of any event: (1) matures or is mandatorily redeemable pursuant to a sinking fund  obligation or otherwise; (2) is convertible into or exchangeable for Indebtedness or Disqualified Stock  (excluding Capital Stock which is convertible or exchangeable solely at the option of the Company or a  Subsidiary (it being understood that upon such conversion or exchange it shall be an Incurrence of such  Indebtedness or Disqualified Stock)); or (3) is redeemable at the option of the holder of the Capital Stock  in whole or in part in each case on or prior to the date 91 days after the earlier of the final maturity date of  any Notes and the date on which no Notes are outstanding; provided, however, that only the portion of  Capital Stock that so matures or is mandatorily redeemable, is so convertible or exchangeable or is so  redeemable at the option of the holder thereof prior to such date will be deemed to be Disqualified Stock;  provided, further, that any Capital Stock that would constitute Disqualified Stock solely because the  holders thereof have the right to require the Company to repurchase such Capital Stock upon the  occurrence of a Change of Control (defined in a substantially identical manner to the corresponding  definition in this Indenture) shall not constitute Disqualified Stock if the terms of such Capital Stock (and  all such securities into which it is convertible or for which it is ratable or exchangeable) provide that the  Company may not repurchase or redeem any such Capital Stock (and all such securities into which it is  convertible or for which it is ratable or exchangeable) pursuant to such provision unless such repurchase  or redemption complies with Section 3.4.                “Egan Jones” means Egan Jones Rating Company, or any successor thereto.                “Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and  regulations of the SEC promulgated thereunder.                “Excluded Taxes” means any of the following taxes imposed on or with respect to a Holder, or  required to be withheld and deducted from a payment to or in respect of the Holder or the Paying Agent,  in respect of amounts payable to the Holders, (1) Taxes imposed on or measured by net income (however  denominated), franchise Taxes, and branch profits Taxes, in each case, (i) imposed as a result of a Holder  being organized under the laws of, or having its principal office or its applicable lending office located in,  the jurisdiction imposing such Tax (or any political subdivision thereof) or (ii) that are Taxes imposed as  a result of a present or former connection between a Holder and the jurisdiction imposing such Tax (other  than connections arising from a Holder having executed, delivered, become a party to, performed its  obligations under, received payments under, received or perfected a security interest under, engaged in  any other transaction pursuant to or enforced by any Indenture, or sold or assigned an interest in any  Note), (2) in the case of a Holder, U.S. federal withholding Taxes imposed on amounts payable to or for  the account of such Holder with respect to an applicable interest in the Notes pursuant to a law in effect  on the date on which (i) such Holder acquires such interest in the Notes or (ii) such Holder changes its  lending office, except in each case to the extent that, pursuant to Section 3.1, amounts with respect to such  Taxes were payable either to such Holder’s assignor immediately before such Holder became a party  hereto or to such Holder immediately before it changed its lending office, (3) Taxes attributable to such                                         7  

 

   Holder’s failure to timely provide a properly completed IRS Form W-8 or W-9, as applicable, or any  other relevant form necessary to demonstrate Holder’s entitlement to an exemption from or reduction of  withholding Tax with respect to payments made to the Paying Agent and (4) any U.S. federal withholding  Taxes imposed under FATCA.                “Fair Market Value” means, with respect to any property, the price that would reasonably be  expected to be paid in an arm’s-length free market transaction, for cash, between a willing seller and a  willing buyer, neither of whom is under undue pressure or compulsion to complete the transaction. Fair  Market Value shall be determined, except as otherwise provided, by (x) if such decision involves a  determination of Fair Market Value equal or less than $100,000, in Good Faith by the Company, and (y)  if such decision involves the determination of Fair Market Value in excess of $100,000, in good faith by  the Board of Directors of the Company.                “FATCA” means Sections 1471 through 1474 of the Code, as of the date of this Indenture (or any  amended or successor version that is substantively comparable and not materially more onerous to  comply with), any current or future regulations or official interpretations thereof and any agreements  entered into pursuant to Section 1471(b)(1) of the Code.          “GAAP” means generally accepted accounting principles in the United States as in effect from  time to time, including those set forth in the opinions and pronouncements of the Accounting Principles  Board of the American Institute of Certified Public Accountants and statements and pronouncements of  the Financial Accounting Standards Board or in such other statements by such other entity as approved by  a significant segment of the accounting profession; provided that, except as otherwise provided in this  Indenture, all calculations made for purposes of determining compliance with the terms of this Indenture  shall use GAAP as in effect on the Issue Date. All ratios and computations based on GAAP contained in  this Indenture shall be computed in conformity with GAAP, except that in the event the Company is  acquired in a transaction that is accounted for using purchase accounting, the effects of the application of  purchase accounting shall be disregarded in the calculation of such ratios and other computations  contained in this Indenture.                “Global Note Legend” means the legend set forth in Section 2.1(b), which is required to be placed  on all Global Notes issued under this Indenture.                “Global Notes” means, individually and collectively, each of the Restricted Global Notes and the  Unrestricted Global Notes, substantially in the forms of Exhibit A and Exhibit B hereto issued in  accordance with Sections 2.1 or 2.6.                “Good Faith by the Company” means the decision in good faith by a responsible financial or  accounting officer of the Company.                “Governmental Authority” means any nation, sovereign or government, any state or other  political subdivision thereof, any agency, authority or instrumentality thereof and any entity or authority  exercising executive, legislative, taxing, judicial, regulatory or administrative functions of or pertaining to  government, including any central bank, stock exchange, regulatory body (including any state insurance  department), arbitrator, public sector entity, supra-national entity (including the European Union and the  European Central Bank) and any self-regulatory organization (including the National Association of  Insurance Commissioners).                “Guarantee” means any obligation, contingent or otherwise, of any Person, directly or indirectly,  guaranteeing any Indebtedness or other financial obligations of any other Person and any obligation,  direct or indirect, contingent or otherwise, of such Person:                                         8  

 

                             (1)    to purchase or pay (or advance or supply funds for the purchase or payment of) such  Indebtedness of such other Person (whether arising by virtue of partnership arrangements, or by  agreement to keep-well, to purchase assets, goods, securities or services, to take-or-pay, or to maintain  financial statement conditions or otherwise); or                            (2)    entered into for purposes of assuring in any other manner the obligee of such  Indebtedness or other financial obligation of the payment thereof or to protect such obligee against loss in  respect thereof (in whole or in part); provided, however, that the term “Guarantee” will not include  endorsements for collection or deposit in the ordinary course of business. The term “Guarantee” used as a  verb has a corresponding meaning.                      “Hedging Obligations” of any Person means the obligations of such Person pursuant to any  Interest Rate Agreement, Currency Agreement or Commodity Agreement.                “Holder” means a Person in whose name a Note is registered on the Registrar’s books.                “IAI Global Note” means a Global Note in the form of Exhibit B hereto bearing the Private  Placement Legend and deposited with or on behalf of the Depositary and registered in the name of the  Depositary or its nominee, that may be held by Institutional Accredited Investors.                “Incur” means to issue, create, assume, Guarantee, incur or otherwise become liable for;  provided, however, that any Indebtedness or Capital Stock of a Person existing at the time such Person  becomes a Subsidiary (whether by merger, consolidation, acquisition or otherwise) will be deemed to be  Incurred by such Person at the time it becomes a Subsidiary; and the terms “Incurred” and “Incurrence”  have meanings correlative to the foregoing. Any Indebtedness issued at a discount (including  Indebtedness on which interest is payable through the issuance of additional Indebtedness) shall be  deemed incurred at the time of original issuance of the Indebtedness at the initial accreted amount thereof.                “Indebtedness” means, with respect to any Person on any date of determination (without  duplication):                            (1)    the principal of and premium (if any) in respect of indebtedness of such Person for  borrowed money;                            (2)    the principal of and premium (if any) in respect of obligations of such Person  evidenced by bonds, debentures, notes or other similar instruments;                            (3)    the principal component of all obligations of such Person in respect of letters of  credit, bankers’ acceptances or other similar instruments (including reimbursement obligations with  respect thereto, except to the extent such reimbursement obligation relates to a Trade Payable or similar  obligation to a trade creditor in each case Incurred in the ordinary course of business) other than  obligations with respect to letters of credit, bankers’ acceptances or similar instruments securing  obligations (other than obligations described in clauses (1) and (2) above and clause (5) below) entered  into in the ordinary course of business of such Person to the extent such letters of credit, bankers’  acceptances or similar instruments are not drawn upon or, to the extent drawn upon, such drawing is  reimbursed no later than the fifth Business Day following receipt by such Person of a demand for  reimbursement following payment on the letter of credit, bankers’ acceptance or similar instrument;                            (4)    the principal component of all obligations of such Person to pay the deferred and  unpaid purchase price of property (except Trade Payables), which purchase price is due more than six                                         9  

 

   months after the date of placing such property in service or taking delivery and title thereto, except (i) any  such balance that constitutes a Trade Payable, accrued liability or similar obligation to a trade creditor, in  each case accrued in the ordinary course of business, and (ii) any earn-out obligation until the amount of  such obligation becomes a liability on the balance sheet of such Person in accordance with GAAP;                            (5)    Capitalized Lease Obligations and all Attributable Indebtedness of such Person  (whether or not such items would appear on the balance sheet of the guarantor or obligor);                            (6)    the principal component or liquidation preference of all obligations of such Person  with respect to the redemption, repayment or other repurchase of any Disqualified Stock (but excluding  any accrued dividends);                            (7)    the principal component of all Indebtedness of other Persons for the type described  in items (1) through (6) above that is secured by a Lien on any asset of such Person, whether or not such  Indebtedness is assumed by such Person; provided, however, that the amount of such Indebtedness will be  the lesser of (a) the Fair Market Value of such asset at such date of determination and (b) the amount of  such indebtedness of such other Persons;                            (8)    the principal component of Indebtedness of other Persons to the extent Guaranteed  by such Person (whether or not such items would appear on the balance sheet of the guarantor or obligor);  and                            (9)    to the extent not otherwise included in this definition, net Hedging Obligations of  such Person (the amount of any such obligations to be equal at any time to the termination value of such  agreement or arrangement giving rise to such Hedging Obligation that would be payable by such Person  at such time).                In no event shall the term “Indebtedness” include (i) any indebtedness under any overdraft or  cash management facilities so long as any such indebtedness is repaid in full no later than five Business  Days following the date on which it was incurred or in the case of such indebtedness in respect of credit  or purchase cards, within 60 days of its incurrence, (ii) obligations in respect of performance, appeal or  other surety bonds or completion guarantees incurred in the ordinary course of business, (iii) except as  provided in clause (5) above, any obligations in respect of a lease properly classified as an operating lease  in accordance with GAAP, (iv) any liability for federal, state, local or other taxes not yet delinquent or  being contested in good faith and for which adequate reserves have been established to the extent required  by GAAP, (v) any Obligations to any residual market funds, guaranty fund assessment, state residual  market mechanisms or similar government-mandated programs applicable to the Company or its  Subsidiaries, including without limitation Obligations to the Florida State Board of Administration in  connection with the Florida Hurricane Catastrophe Fund, (vi) any customer deposits or advance payments  received in the ordinary course of business, (vii) indebtedness owed by the Company to any Subsidiary or  by any Subsidiary to the Company or any other Subsidiary, (viii) payables under Reinsurance  Agreements, and (ix) obligations under repurchase agreements and securities lending arrangements  entered into for investment purposes.                      The amount of Indebtedness of any Person at any date will be the outstanding balance at such  date of all unconditional obligations as described above and the maximum liability, upon the occurrence  of the contingency giving rise to the obligation, of any contingent obligations at such date; provided that  (x) contingent obligations arising in the ordinary course of business and not with respect to borrowed  money of such Person or other Persons and (y) the obligations of any Person under Reinsurance  Agreements shall not be deemed to constitute Indebtedness. Notwithstanding the foregoing, money  borrowed and set aside at the time of the Incurrence of any Indebtedness in order to prefund the payment                                         10  

 

   of interest on such Indebtedness shall not be deemed to be “Indebtedness,” provided that such money is  held to secure the payment of such interest.                      “Indemnified Taxes” means (a) Taxes, other than Excluded Taxes, imposed on or with respect to  any payment made by or on account of any obligation of the Company under this Indenture and (b) to the  extent not otherwise described in (a), Other Taxes. For the avoidance of doubt, Indemnified Taxes shall  include any withholding taxes imposed on any payments under the Notes which result from the  recharacterization of the Notes as equity for U.S. federal income tax purposes.                “Indenture” means this instrument as originally executed or, if amended or supplemented as  herein provided, as so amended or supplemented.                 “Indirect Participant” means a Person who holds a beneficial interest in a Global Note through a  Participant.                “Institutional Accredited Investor” means an institution that is an “accredited investor” as defined  in Rule 501(a)(1), (2), (3) or (7) under the Securities Act.                “Insurance Subsidiary” means any Subsidiary of the Company that is required by applicable law  to be licensed as an insurer or reinsurer to transact its business.                “Interest Accrual Period” means, for each Payment Date, the period beginning from and  including the immediately preceding Payment Date (or the Issue Date, in the case of the first Payment  Date) to, but excluding, such Payment Date.                “Interest Rate” means a per annum rate equal to (a) 7.50% for each Interest Accrual Period for  which a Step-up Event is not in effect at all times during such Interest Accrual Period; or (b) for each  Interest Accrual Period for which a Step-up Event is in effect at any point during such Interest Accrual  Period, 7.50% plus an additional 50 basis points for each notch downgrade of the Company below   “BBB-” (or its equivalent rating) by the Applicable Rating Agency.          “Interest Rate Agreement” means with respect to any Person any interest rate protection  agreement, interest rate future agreement, interest rate option agreement, interest rate swap agreement,  interest rate cap agreement, interest rate collar agreement, interest rate hedge agreement or other similar  agreement or arrangement as to which such Person is party or a beneficiary.                “Investment” in any Person means any direct or indirect advance, loan (other than advances or  extensions of credit in the ordinary course of business that are in conformity with GAAP recorded as  accounts receivable on the balance sheet of the Company or its Subsidiaries) or other extensions of credit  (including by way of Guarantee or similar arrangement, but excluding any debt or extension of credit  represented by a bank deposit other than a time deposit) or capital contribution to (by means of any  transfer of cash or other property to others or any payment for property or services for the account or use  of others), or any purchase or acquisition of Capital Stock, Indebtedness or other similar instruments  issued by, such Person and all other items that are or would be classified as investments on a balance  sheet prepared in accordance with GAAP; provided that none of the following will be deemed to be an  Investment:                            (1)    Hedging Obligations entered into in the ordinary course of business and in  compliance with this Indenture;                                                        11  

 

               (2)    endorsements of negotiable instruments and documents in the ordinary course of  business;                            (3)    an acquisition of assets, Capital Stock or other securities by the Company or a  Subsidiary for consideration to the extent such consideration consists of Common Stock of the Company;                            (4)    a deposit of funds in connection with an acquisition; provided that either such  acquisition is consummated by or through a Subsidiary or such deposit is returned to the Person who  made it;                            (5)    an account receivable arising, or prepaid expenses or deposits made, in the ordinary  course of business; and                            (6)    licensing or transfer of know-how or intellectual property or the providing of  services in the ordinary course of business.                “Issue Date” means March 5, 2019.                      “Lien” means, with respect to any asset, any mortgage, lien (statutory or otherwise), pledge,  hypothecation, charge, security interest or encumbrance of any kind in respect of such asset, whether or  not filed, recorded or otherwise perfected under applicable law, including any conditional sale or other  title retention agreement, any lease in the nature thereof, any option or other agreement to sell or give a  security interest in and any filing of or agreement to give any financing statement under the Uniform  Commercial Code (or equivalent statutes) of any jurisdiction; provided that in no event shall an operating  lease (or any filing or agreement to give any financing statement in connection therewith) be deemed to  constitute a Lien.                “Losses” means any net losses, net loss reserves or allocated loss adjustment expenses of the  Insurance Subsidiaries of the Company.                “Moody’s” means Moody’s Investors Service, Inc. and any successor thereto.                “NAIC” means the National Association of Insurance Commissioners or any successor thereto, or  in the absence of the National Association of Insurance Commissioners or such successor, any other  association, agency or other organization performing advisory, coordination or other like functions among  insurance departments, insurance commissioners and similar Governmental Authorities of the various  states of the United States toward the promotion of uniformity in the practices of such Governmental  Authorities.                “Notes” means the $100,000,000 in aggregate principal amount of Senior Unsecured Notes due  2029 of the Company issued under this Indenture on the Issue Date.                 “NRSRO” means a nationally recognized statistical ratings organization within the meaning of  Section 15E of the Exchange Act.                “Obligations” means any principal, interest (including any interest accruing subsequent to the  filing of a petition in bankruptcy, reorganization or similar proceeding at the rate provided for in the  documentation with respect thereto, whether or not such interest is an allowed claim under applicable  state, federal or foregoing law), penalties, fees, indemnifications, reimbursements (including, without  limitation, reimbursement obligations with respect to letters of credit and bankers’ acceptances), damages  and other liabilities, and guarantees of payment of such principal, interest, penalties, fees,                                         12  

 

   indemnifications, reimbursements, damages and other liabilities, payable under the documentation  governing any Indebtedness.                “Officer” means the Chief Executive Officer, the President, the Chief Financial Officer, the Chief  Accounting Officer, any Vice President, the Treasurer or the Secretary of the Company.                “Officers’ Certificate” means a certificate signed by two Officers or by an Officer and either an  Assistant Treasurer or an Assistant Secretary of the Company.                “Opinion of Counsel” means a written opinion from legal counsel who is reasonably acceptable  to the Trustee. The counsel may be an employee of or outside counsel to the Company.                “Participant” means, with respect to the Depositary, a Person who has an account with the  Depositary.                “Paying Agent” has the meaning assigned to such term in Section 2.3.                “Payment Date” means March 15 and September 15 of each year, commencing on September 15,  2019 and ending on March 15, 2029, or if any such day is not a Business Day, the next succeeding day  that is a Business Day.                “Permitted Liens” means, with respect to any Person:                            (1)   (x) pledges or deposits by such Person under workers’ compensation laws,  unemployment, general insurance and other insurance laws and old age pensions and other social security  or retirement benefits or similar legislation, or good faith deposits in connection with bids, tenders,  contracts (other than for the payment of Indebtedness) or leases to which such Person is a party, or  deposits to secure public or statutory obligations of such Person or deposits of cash or United States  government bonds to secure surety or appeal bonds to which such Person is a party, or deposits as  security for contested taxes or import or customs duties or for the payment of rent in each case Incurred in  the ordinary course of business and (y) collateral consisting of Cash Equivalents securing letters of credit  issued in respect of obligations to insurers in an aggregate amount not to exceed $1,000,000 at any time  outstanding;                            (2)   Liens imposed by law and carriers’, warehousemen’s, mechanics’, material- men’s, repairmen’s and other like Liens, in each case Incurred in the ordinary course of business;                            (3)   Liens for taxes, assessments or other governmental charges or levies not yet  subject to penalties for non-payment or that are being contested in good faith by appropriate proceedings,  provided that appropriate reserves required pursuant to GAAP have been made in respect thereof;                            (4)   Liens in favor of issuers of surety, appeal or performance bonds or letters of  credit or bankers’ acceptances or similar obligations issued pursuant to the request of and for the account  of such Person in the ordinary course of its business;                            (5)   Liens securing Hedging Obligations relating to Indebtedness so long as the  related Indebtedness is, and is permitted to be under this Indenture, secured by a Lien on the same  property securing such Hedging Obligation;                            (6)   judgment Liens not giving rise to an Event of Default, and Liens securing appeal  or surety bonds related to such judgment, so long as any appropriate legal proceedings that may have been                                         13  

 

   duly initiated for the review of such judgment have not been finally terminated or the period within which  such proceedings may be initiated has not expired;                            (7)   Liens that constitute banker’s Liens, rights of set-off or similar rights and  remedies as to deposit accounts or other funds maintained with a bank, depositary or other financial  institution, whether arising by operation of law or pursuant to contract;                            (8)   Liens arising from Uniform Commercial Code financing statement filings  regarding operating leases entered into by the Company and its Subsidiaries in the ordinary course of  business;                            (9)   Liens existing on the Issue Date and any Liens arising from any Refinancing  Indebtedness of the Company Incurred to Refinance any Indebtedness of the Company existing on the  Issue Date;                            (10)  Liens on property at the time the Company or a Subsidiary acquired the property,  including any acquisition by means of a merger or consolidation with or into the Company or any  Subsidiary; provided, however, that such Liens are not created, Incurred or assumed in connection with,  or in contemplation of, such acquisition; provided further, that such Liens may not extend to any other  property owned by the Company or any Subsidiary;                            (11)  Liens securing Indebtedness or other obligations of a Subsidiary owing to the  Company or another Subsidiary;                            (12)  deposits as security for contested taxes or contested import to customs duties;                            (13)  any interest or title of a lessor under any operating lease;                            (14)  Liens on funds of the Company or any Subsidiary held in deposit accounts with  third-party providers of payment services securing credit card charge-back reimbursement and similar  cash management obligations of the Company or the Subsidiaries;                            (15)  Liens of a collecting bank arising in the ordinary course of business under  Section 4-208 of the Uniform Commercial Code in effect in the relevant jurisdiction covering only the  items being collected upon;                            (16)  Liens arising by operation of law or contract on insurance policies and the  proceeds thereof to secure premiums thereunder;                            (17)  Liens arising in connection with Cash Equivalents described in clause (5) of the  definition of Cash Equivalents;                             (18)  Liens securing cash management obligations incurred in the ordinary course of  business; and                            (19)  customary Liens granted in favor of a trustee to secure fees and other amounts  owing to such trustee under an indenture or other agreement pursuant to which Indebtedness permitted  under Section 3.3 is Incurred.                                                  14  

 

         “Person” means any individual, corporation, limited liability company, partnership, joint venture,  association, joint-stock company, trust, unincorporated organization, government or any agency or  political subdivision hereof or any other entity.                “Preferred Stock” means, as applied to the Capital Stock of any corporation, Capital Stock of any  class or classes (however designated) that is preferred as to the payment of dividends, or as to the  distribution of assets upon any voluntary or involuntary liquidation or dissolution of such Person, over  shares of Capital Stock of any other class of such Person.                “Private Placement Legend” means the legend set forth in Section 2.1(c) to be placed on all Notes  issued under this Indenture except where otherwise permitted by the provisions hereof.                 “QIB” means any “qualified institutional buyer” (as defined in Rule 144A).                “Rating Agency” means any NRSRO.  The Company may replace any Rating Agency with  another.                “Record Date” for the interest payable on any applicable Payment Date means 15 calendar days  immediately preceding such Payment Date.                “Refinance” means, in respect of any Indebtedness, to refinance, extend, renew, refund, replace,  repay, prepay, purchase, redeem, defease or retire, or to issue other Indebtedness in exchange or  replacement for or to consolidate, such Indebtedness. “Refinanced” and “Refinancing” shall have  correlative meanings.                “Refinancing Indebtedness” means any Indebtedness that Refinances any other Indebtedness,  including any successive Refinancings, so long as:                            (1)   such Indebtedness is in an aggregate principal amount (or if Incurred with  original issue discount, an aggregate issue price) not in excess of the sum of:                                  (a)   the aggregate principal amount (or if Incurred with original issue  discount, the aggregate accreted value) then outstanding of the Indebtedness being Refinanced, and                                        (b)   an amount necessary to pay any fees and expenses, including accrued  and unpaid interest, premiums, transaction costs and defeasance costs, related to such Refinancing,                                  (2)   the Average Life of such Indebtedness is equal to or greater than the Average  Life of the Indebtedness being Refinanced,                            (3)   the stated maturity of such Indebtedness is no earlier than the stated maturity of  the Indebtedness being Refinanced, and                            (4)   if the Indebtedness being Refinanced was subordinated to the Notes, the new  Indebtedness shall be subordinated to the Notes at least to the same extent as such Indebtedness being  Refinanced.                “Registrar” has the meaning assigned to such term in Section 2.3.                “Registration Rights Agreement” means that certain Registration Rights Agreement dated as of  the date hereof between the Company and the Holder or Holders party thereto.                                         15  

 

                 “Reinsurance Agreements” means any agreement, contract, treaty, certificate or other  arrangement by which any Insurance Subsidiary agrees to transfer or cede to another insurer all or part of  the liability assumed or assets held by it under one or more insurance, annuity, reinsurance or retrocession  policies, agreements, contracts, treaties, certificates or similar arrangements. Reinsurance Agreements  shall include, but not be limited to, any agreement, contract, treaty, certificate or other arrangement that is  treated as such by the applicable Department.                “Restricted Definitive Note” means a Definitive Note bearing the Private Placement Legend.                “Restricted Global Note” means a Global Note bearing the Private Placement Legend.                “Restricted Payment” has the meaning assigned to such term in Section 3.4(b).                “Rule 144” means Rule 144 promulgated under the Securities Act.                “Rule 144A” means Rule 144A promulgated under the Securities Act.                “S&P” means Standard & Poor’s Ratings Group, Inc. and any successor thereto.                “Sale/Leaseback Transaction” means any direct or indirect arrangement relating to property now  owned or hereafter acquired by the Company or a Subsidiary whereby the Company or such Subsidiary  transfers such property to a Person (other than the Company or any of its Subsidiaries) and the Company  or such Subsidiary leases it from such Person.                “SEC” means the United States Securities and Exchange Commission.                “Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations of  the SEC promulgated thereunder.                “Significant Subsidiary” with respect to any Person, means any Subsidiary of such Person that  satisfies the criteria for a “significant subsidiary” set forth in Rule 1-02 of Regulation S-X under the  Exchange Act, as such regulation is in effect on the Issue Date.                 “Special Mandatory Redemption Date” has the meaning assigned to such term in Section 5.8.                “Special Mandatory Redemption Trigger Date” has the meaning assigned to such term in Section  5.8.                “Stated Maturity” means, with respect to any security, the date specified in the agreement  governing or certificate relating to such security as the fixed date on which the final payment of principal  of such security is due and payable, including pursuant to any mandatory redemption provision, but shall  not include any contingent obligations to repay, redeem or repurchase any such principal prior to the date  originally scheduled for the payment thereof.                “Step-up Event" shall occur and be in effect for any Interest Accrual Period or part thereof for  which the Notes are rated “BB+” or lower by the Applicable Rating Agency. The Company shall notify  the Trustee in writing of any Step-up Event within three Business Days following such Step-up Event.  The Trustee shall not be charged with knowledge of a Step-up Event unless and until a Trust Officer of  the Trustee has received written notice at its Corporate Trust Office of such Step-up from either (i) the  Company or (ii) Holders representing a majority of the outstanding principal amount of the Notes.                                         16  

 

                 “Subsidiary” means any corporation, association or other business entity of which more than 50%  of the total voting power of shares of Capital Stock entitled (without regard to the occurrence of any  contingency) to vote in the election of directors, managers or trustees thereof is at the time owned or  controlled, directly or indirectly, by the Company or one or more of the other Subsidiaries of the  Company (or a combination thereof), or any partnership (a) the sole general partner or the managing  general partner of which is the Company or a Subsidiary of the Company or (b) the only general partners  of which are the Company or one or more Subsidiaries of the Company (or any combination thereof).  Unless otherwise specified herein, each reference to a Subsidiary will refer to a Subsidiary of the  Company.                “Taxes” means all taxes, charges, fees, levies or other assessments imposed by any federal, state,  local or foreign taxing authority, including, without limitation, income, gross receipts, excise, real or  personal property, sales, occupation, use, service, leasing, environmental, value-added, transfer, payroll,  and franchise taxes (and including any interest, penalties, or additions to tax attributable to or imposed  with respect to any such assessment).                “Trade Payables” means, with respect to any Person, any accounts payable to trade creditors  created, assumed or Guaranteed by such Person arising in the ordinary course of business in connection  with the acquisition of goods or services.                “Treasury Rate” means, as of any redemption date, the yield to maturity as of such redemption  date of United States Treasury securities with a constant maturity (as compiled and published in the most  recent Federal Reserve Statistical Release H.15 (519) that has become publicly available at least two  business days prior to the redemption date (or, if such Statistical Release is no longer published, any  publicly available source of similar market data)) most nearly equal to the period from the redemption  date to March 15, 2024; provided that if the period from the redemption date to such date is not equal to  the constant maturity of a United States Treasury security for which a yield is given, the Treasury yield  will be obtained by linear interpolation (calculated to the nearest one-twelfth of a year) from the yields of  the nearest United States Treasury securities for which such yields are given, except that if the period  from the redemption date to such date is less than one year, the weekly average yield on actually traded  United States securities adjusted to a constant maturity of one year will be used.                 “Trust Officer” means, when used with respect to the Trustee, any officer within the corporate  trust department of the Trustee, including any vice president, assistant vice president, assistant secretary,  assistant treasurer, trust officer or any other officer of the Trustee who customarily performs functions  similar to those performed by the Persons who at the time shall be such officers, respectively, or to whom  any corporate trust matter is referred because of such person’s knowledge of and familiarity with the  particular subject and who shall, in each case, have direct responsibility for the administration of this  Indenture.                      “Trustee” has the meaning assigned to such term in the preamble to this Indenture or any  successor pursuant to Section 7.7 or Section 7.8.                “Uniform Commercial Code” means the New York Uniform Commercial Code as in effect from  time to time.                “Unrestricted Definitive Note” means one or more Definitive Notes that do not bear and are not  required to bear the Private Placement Legend.                                                  17  

 

         “Unrestricted Global Note” means a permanent Global Note substantially in the forms of Exhibit  A or Exhibit B attached hereto that bears the Global Note Legend and that has the “Schedule of  Exchanges of Interests in the Global Note” attached thereto, and that is deposited with or on behalf of the  Depositary and is registered in the name of the Depositary or its nominee representing Notes that do not  bear the Private Placement Legend.                “U.S. Government Obligations” means securities that are (1) direct obligations of the United  States of America for the timely payment of which its full faith and credit is pledged or (2) obligations of  a Person controlled or supervised by and acting as an agency or instrumentality of the United States of  America the timely payment of which is unconditionally guaranteed as a full faith and credit obligation of  the United States of America, which, in either case, are not callable or redeemable at the option of the  issuer thereof, and shall also include a depositary receipt issued by a bank (as defined in Section 3(a)(2)  of the Securities Act), as custodian with respect to any such U.S. Government Obligations or a specific  payment of principal of or interest on any such U.S. Government Obligations held by such custodian for  the account of the holder of such depositary receipt; provided that (except as required by law) such  custodian is not authorized to make any deduction from the amount payable to the Holder of such  depositary receipt from any amount received by the custodian in respect of the U.S. Government  Obligations or the specific payment of principal of or interest on the U.S. Government Obligations  evidenced by such depositary receipt.                “Voting Stock” of a Person means all classes of Capital Stock of such Person then outstanding  and normally entitled to vote in the election of directors, general partners, managers or trustees, as  applicable, of such Person.                 SECTION 1.2.    Rules of Construction. Unless the context otherwise requires:          (a) a term has the meaning assigned to it;                   (b)    an accounting term not otherwise defined has the meaning assigned to it in accordance with  GAAP;        (c)    “or” is not exclusive;                (d)    “including” means including without limitation;                (e)    words in the singular include the plural and words in the plural include the singular;                (f)    unsecured Indebtedness shall not be deemed to be subordinate or junior to secured  Indebtedness merely by virtue of its nature as unsecured Indebtedness;                (g)    references to sections of, or rules under, the Securities Act or Exchange Act shall be deemed  to include substitute, replacement or successor sections or rules adopted by the SEC from time to time;                (h)    unless the context otherwise requires, any reference to an “Article,” “Section” or “clause”  refers to an Article, Section or clause, as the case may be, of this Indenture; and                (i)    the words “herein,” “hereof” and “hereunder” and any other words of similar import refer to  this Indenture as a whole and not any particular Article, Section, clause or other subdivision.                                            18  

 

                                     ARTICLE II.                                       The Notes                                           SECTION 2.1.    Form and Dating.          (a)    The Notes and the Trustee’s certificate of authentication shall be substantially in the forms  of Exhibit A or Exhibit B, as applicable, hereto, the terms of which are incorporated in and made a part  hereof. The Notes may have notations, legends or endorsements approved as to form by the Company,  and required by law, stock exchange rule, agreements to which the Company is subject or usage. Each  Note shall be dated the date of its authentication. The Notes shall be issuable only in minimum  denominations of $100,000 principal amount and integral multiples of $10,000 thereafter.                (b)    The Notes shall initially be issued in the form of one or more Global Notes and The  Depository Trust Company, a New York Corporation (“DTC”), and its respective successors, shall act as  the Depositary with respect thereto. Each Global Note (i) shall be registered in the name of the Depositary  for such Global Note or its nominee, (ii) shall be delivered by the Registrar to such Depositary, and (iii)  shall bear a Global Note Legend in substantially the following form:          UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE        OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), TO        THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR        PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE        & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED        REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO.), ANY        TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR        TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF,        CEDE & CO., HAS AN INTEREST HEREIN.                THIS NOTE IS A GLOBAL NOTE WITHIN THE MEANING OF THE INDENTURE AND IS        HELD BY THE DEPOSITARY (AS DEFINED IN THE INDENTURE GOVERNING THIS        NOTE) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE BENEFICIAL        OWNERS HEREOF. UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART        FOR NOTES IN DEFINITIVE FORM, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT        AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A        NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF        THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A        SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY.                   (c)    Except as permitted by Section 2.6(g)(ii), any Note not registered under the Securities Act  shall bear the following Private Placement Legend on the face thereof:          THE NOTES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE        U.S. SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND,        ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT AS SET FORTH BELOW.        BY ITS ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS THAT IT IS A        “QUALIFIED INSTITUTIONAL BUYER” (AS DEFINED IN RULE 144A UNDER THE        SECURITIES ACT) OR AN INSTITUTIONAL ACCREDITED INVESTOR (UNDER RULE        501(a)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT), (2) AGREES THAT IT WILL        NOT RESELL OR OTHERWISE TRANSFER ANY OF THE NOTES REPRESENTED        HEREBY EXCEPT (A) TO THE COMPANY OR ANY SUBSIDIARY THEREOF, (B) TO A        QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE                                         19  

 

         SECURITIES ACT, (C) TO AN INSTITUTIONAL “ACCREDITED INVESTOR” WITHIN        THE MEANING OF RULE 501(a)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT THAT        IS NOT A QUALIFIED INSTITUTIONAL BUYER AND THAT IS ACQUIRING THE        SECURITY FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF ANOTHER        INSTITUTIONAL ACCREDITED INVESTOR FOR INVESTMENT PURPOSES AND NOT        WITH A VIEW TO OR FOR OFFER OR SALE IN CONNECTION WITH ANY        DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT, (D) PURSUANT TO THE        EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE        SECURITIES ACT OR (E) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE        REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (AND BASED UPON AN        OPINION OF COUNSEL IF THE COMPANY SO REQUESTS) AND (3) AGREES THAT IT        WILL GIVE TO EACH PERSON TO WHOM ANY OF THE NOTES REPRESENTED        HEREBY ARE TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS        LEGEND.                 Members of, or participants in, the Depositary (“Agent Members”) shall have no rights under this  Indenture with respect to any Global Note held on their behalf by the Depositary and the Depositary may  be treated by the Company, the Trustee, the Agents and any agent of the Company, the Trustee or the  Agents as the absolute owner of the Global Note for all purposes whatsoever, including but not limited to  notices and payments due under the Global Notes. Notwithstanding the foregoing, nothing herein shall (a)  prevent the Company, the Trustee, the Agents or any agent of the Company, the Trustee or the Agents  from giving effect to any written certification, proxy or other authorization furnished by the Depositary or  (b) impair, as between the Depositary and its Agent Members, the operation of customary practices  governing the exercise of the rights of a Holder of any Note. Any notice to be delivered to DTC, as  applicable, may be delivered electronically by the Trustee, any Agent or the Company in accordance with  the Applicable Procedures.                 (d)    The Notes and the interest payments due thereunder are intended to qualify for the portfolio  interest tax exemption provided for under the Code and applicable treasury regulations for U.S. income  tax, withholding and tax reporting purposes.          SECTION 2.2.    Form of Execution and Authentication. An Officer shall sign the Notes for the Company  by manual or facsimile signature.                If an Officer whose signature is on a Note no longer holds that office at the time the Note is  authenticated, the Note shall nevertheless be valid.                A Note shall not be valid until authenticated by the manual signature of the Trustee. The  signature of the Trustee shall be conclusive evidence that the Note has been authenticated under this  Indenture.                The Trustee shall authenticate the Notes for original issue on the Issue Date in an aggregate  principal amount of $100,000,000 upon receipt of a written order of the Company, (an “Authentication  Order”). In addition, such Authentication Order shall specify the amount of Notes to be authenticated, the  date on which the Notes are to be authenticated and the aggregate principal amount of Notes outstanding  on the date of authentication, and shall further specify the amount of such Notes to be issued as Global  Notes or Definitive Notes. Such Notes shall initially be in the form of one or more Global Notes, which  (i) shall represent, and shall be denominated in an amount equal to the aggregate principal amount of, the  Notes to be issued or (ii) shall be registered in the name of the Depositary or its nominee.                                                   20  

 

         The Trustee may appoint an authenticating agent acceptable to the Company in writing to  authenticate Notes. Unless limited by the terms of such appointment, an authenticating agent may  authenticate Notes whenever the Trustee may do so. Each reference in this Indenture to authentication by  the Trustee includes authentication by such agent. An authenticating agent has the same rights as an  Agent to deal with the Company or any Affiliate of the Company.          SECTION 2.3.    Registrar and Paying Agent. The Company shall maintain (i) an office or agency where  Notes may be presented for registration of transfer or for exchange (including any co-registrar, the  “Registrar”) and (ii) an office or agency where Notes may be presented for payment (“Paying Agent”).  The Paying Agent shall be responsible for paying sums due on the Notes and arranging on behalf of and  at the expense of the Company for notices to be communicated to Holders in accordance with the terms of  this Indenture. The Registrar shall keep a register of the Notes and of their transfer and exchange and  facilitate any transfers or exchanges of Notes or beneficial interests in the Global Notes.  No transfer may  be effected unless the Note is surrendered to the Registrar and either (i) the Registrar reissues the  surrendered Note to the Transferee Holder or (ii) the Registrar issues a new Note to the Transferee  Holder.                             The Company may appoint one or more co-registrars and one or more additional paying agents.  The term “Paying Agent” includes any additional paying agent. The Company may change any Paying  Agent, Registrar or co-registrar without prior notice to any Holder of a Note. The Company shall notify  the Trustee in writing and the Trustee shall notify the Holders of the Notes of the name and address of any  Agent not a party to this Indenture. The Company may act as Paying Agent, Registrar or co-registrar. The  Company shall enter into an appropriate agency agreement with any Agent not a party to this Indenture.  The agreement shall implement the provisions hereof that relate to such Agent. The Company shall notify  the Trustee and the Agents in writing of the name and address of any such Agent. If the Company fails to  maintain a Registrar or Paying Agent, or fails to give the foregoing notice, the Company shall direct the  Trustee to act as such, and shall be entitled to appropriate compensation in accordance with Section 7.6.                Notwithstanding anything to the contrary herein, if in the Paying Agent’s opinion, acting  reasonably, it deems it appropriate to delegate any of its roles, duties or obligations created hereunder or  under any other agreement to a third party, the Company hereby acknowledges the potential for, and  acquiesces to, such delegation.                 The Depositary shall be a clearing agency registered under the Exchange Act. The Company  initially appoints The Depository Trust Company to act as Depositary with respect to each Global Note.  Initially, each Global Note shall be issued to the Depositary, registered in the name of Cede & Co., as the  nominee of the Depositary, and deposited with the Trustee as custodian for Cede & Co.                The Company initially appoints the Trustee to act as the Paying Agent and Registrar for the Notes  and to act as custodian with respect to the Global Notes.                In the event that Definitive Notes are issued (and no Global Notes remain outstanding) and the  Paying Agent informs the Company that it is unable to perform its obligations under this Indenture, the  Company shall forthwith appoint an additional agent who shall provide written notice of such to the  Trustee. Such additional Agent shall become the Paying Agent hereunder upon written acceptance of the  duties and obligations set forth herein. Subject to the payment by the Company to the Paying Agent of  any fees, costs, expenses or other obligations owed and outstanding to the Paying Agent, the costs and  expenses (including its counsels’ fees and expenses) incurred by the additional Agent in connection with  such proceeding shall be paid by the Company. Upon receipt of the identity of the additional Agent, the  Paying Agent shall deliver any funds then held hereunder to the additional Agent. Upon its resignation                                          21  

 

   and delivery of any funds, the Agent shall be discharged of and from any and all further obligations  arising in connection with this Indenture, but shall continue to enjoy the benefit of Section 7.6.                The Paying Agent shall collect all forms from the relevant Depositary that are required to exempt  payments under the Notes from United States federal income tax withholding.  In connection therewith,  the Paying Agent shall provide the Company with a properly completed Internal Revenue Service Form  W-8IMY, and the aforementioned forms shall provide that the Paying Agent is acting in its capacity as  intermediary with respect to all payments made under any Notes.          SECTION 2.4. Paying Agent to Hold Money in Trust.           (a) The Company shall require each Paying Agent other than the Trustee to agree in writing that  the Paying Agent shall hold in trust for the benefit of Holders or the Trustee all money held by the Paying  Agent for the payment of principal, premium, if any, or interest, on the Notes, and will notify the Trustee  of any default by the Company in making any such payment. While any such default continues, the  Trustee may require a Paying Agent to pay all money held by it to the Trustee. The Company at any time  may require a Paying Agent to pay all money held by it to the Trustee. Upon payment over to the Trustee,  the Paying Agent (if other than the Company or its Subsidiary) shall have no further liability for the  money. If the Company or a Subsidiary acts as Paying Agent, it shall segregate and hold in a separate  trust fund for the benefit of the Holders all money held by it as Paying Agent. Upon any bankruptcy or  reorganization proceedings relating to the Company, the Trustee shall serve as Paying Agent for the  Notes.                (b)   The Paying Agent shall hold for the benefit of the Holders of the Notes or the Trustee all  money held by the Paying Agent for the payment of principal of, premium, if any, and interest on the  Notes, and shall notify the Trustee in writing of any Default by the Company in making any such  payment. While any such Default continues, the Trustee may require the Paying Agent to pay all money  held by it to the Trustee for further payment to Holders of the Notes as and when due. The Company at  any time may require the Paying Agent to pay all money held by the Paying Agent to the Trustee. Upon  payment over to the Trustee, the Paying Agent shall have no further liability for the money delivered to  the Trustee. If the Company acts the Paying Agent, it shall segregate and hold in a separate trust fund for  the benefit of the Holders of the Notes all money held by it the Paying Agent.                 (c)   The Paying Agent shall not be liable for any interest on any money held by it hereunder.          SECTION 2.5. Lists of Holders of the Notes. The Registrar shall preserve in as current a form as is  reasonably practicable the most recent list available to it of the names and addresses of Holders of the  Notes. If the Paying Agent is not the Registrar, the Company shall furnish to the Paying Agent at least  three Business Days before each Payment Date and at such other times as the Paying Agent may request  in writing a list in such form and as of such date as the Paying Agent may reasonably require of the names  and addresses of Holders of the Notes as of the record date, including the aggregate principal amount of  the Notes held by each thereof.                      SECTION 2.6. Transfer and Exchange.                            (a)   Transfer and Exchange of Global Notes. A Global Note may not be transferred as a  whole except by the Depositary to a nominee of the Depositary, by a nominee of the Depositary to the  Depositary or to another nominee of the Depositary, or by the Depositary or any such nominee to a  successor Depositary or a nominee of such successor Depositary (but in no event shall such transfer be  less than all of a Global Note). Global Notes will be exchanged by the Company for Definitive Notes,  subject to any applicable laws, only (i) if the Company delivers to the Trustee notice from the Depositary                                         22  

 

   that the Depositary is unwilling or unable to continue to act as a depositary for the Global Notes and the  Company fails to appoint a successor depositary within 90 days after the date of such notice from the  Depositary or (ii) upon request of the Holders or the Trustee at the written direction of Holders of a  majority of the aggregate principal amount of the then outstanding Notes if there shall have occurred and  be continuing an Event of Default with respect to the Notes. In any such case, the Company will notify  the Trustee in writing that, upon surrender by the Participants and Indirect Participants of their interests in  such Global Note, Definitive Notes will be issued to each Person that such Participants, Indirect  Participants and DTC, as applicable, jointly identify as being the beneficial owner of the related Notes.  Global Notes also may be exchanged or replaced, in whole or in part, as provided in Sections 2.7 and  2.10. Every Note authenticated and delivered in exchange for, or in lieu of, a Global Note or any portion  thereof, pursuant to this Section 2.6 or Sections 2.7 or 2.10, shall be authenticated and delivered in the  form of, and shall be, a Global Note. A Global Note may not be exchanged for another Note other than as  provided in this Section 2.6. However, beneficial interests in a Global Note may be transferred and  exchanged as provided in paragraph (b) or (c) below.                (b)   Transfer and Exchange of Beneficial Interests in the Global Notes. The transfer and  exchange of beneficial interests in the Global Notes shall be effected through the Depositary, in  accordance with the provisions hereof and the Applicable Procedures. Beneficial interests in the  Restricted Global Notes shall be subject to restrictions on transfer comparable to those set forth in this  Indenture to the extent required by the Securities Act. Transfers of beneficial interests in the Global Notes  also shall require compliance with the applicable subparagraphs below.                      (i)   Transfer of Beneficial Interests in the Same Global Note. Beneficial interests in  any Restricted Global Note may be transferred to Persons who take delivery thereof in the form of a  beneficial interest in the same Restricted Global Note in accordance with the transfer restrictions set forth  in the Private Placement Legend. Beneficial interests in any Unrestricted Global Note may be transferred  to Persons who take delivery thereof in the form of a beneficial interest in an Unrestricted Global Note.  No written orders or instructions shall be required to be delivered to the Registrar to effect the transfers  described in this subparagraph (i) unless specifically stated above.                      (ii)  All Other Transfers and Exchanges of Beneficial Interests in Global Notes. In  connection with all transfers and exchanges of beneficial interests that are not subject to Section 2.6(b)(i)  above, the transferor of such beneficial interest must deliver to the Registrar either:                            (A) (1) a written order from a Participant or an Indirect Participant given to the  Depositary in accordance with the Applicable Procedures directing the Depositary to credit or cause to be  credited a beneficial interest in another Global Note in an amount equal to the beneficial interest to be  transferred or exchanged; and                         (2) instructions given in accordance with the Applicable Procedures  containing information regarding the Participant account to be credited with such increase; or                      (B) (1) a written order from a Participant or an Indirect Participant given to the  Depositary in accordance with the Applicable Procedures directing the Depositary to cause to be issued a  Definitive Note in an amount equal to the beneficial interest to be transferred or exchanged; and                                           (2) instructions given by the Depositary to the Registrar containing  information regarding the Person in whose name such Definitive Note shall be registered to effect the  transfer or exchange referred to in (B)(1) above.                                            23  

 

         Upon satisfaction of all of the requirements for transfer or exchange of beneficial interests in  Global Notes contained in this Indenture and the Notes or otherwise applicable under the Securities Act,  the Registrar shall adjust the principal amount of the relevant Global Note(s) pursuant to Section 2.6(i).                      (iii) Transfer of Beneficial Interests to Another Restricted Global Note. A beneficial  interest in any Restricted Global Note may be transferred to a Person who takes delivery thereof in the  form of a beneficial interest in another Restricted Global Note if the transfer complies with the  requirements of subparagraph (ii) above and the Registrar receives the following:                            (A)   if the transferee will take delivery in the form of a beneficial interest in a  Rule 144A Global Note, then the transferor must deliver a certificate in the form of Exhibit C hereto,  including the certifications in item (1) thereof; and                                        (B)   if the transferee will take delivery in the form of an IAI Global Note,  then the transferor must deliver a certificate in the form of Exhibit C hereto, including the certifications in  item (2)(d) thereof.                      (iv)  Transfer and Exchange of Beneficial Interests in a Restricted Global Note for  Beneficial Interests in an Unrestricted Global Note. A beneficial interest in any Restricted Global Note  may be exchanged by any Holder thereof for a beneficial interest in an Unrestricted Global Note or  transferred to a Person who takes delivery thereof in the form of a beneficial interest in an Unrestricted  Global Note if the exchange or transfer complies with the requirements of Section 2.6(b)(ii) above and:                            (A)   such transfer is effected pursuant to an effective registration statement  under the Securities Act; or                                        (B)   the Registrar receives the following:                                (x)     if the holder of such beneficial interest in a Restricted Global  Note proposes to exchange such beneficial interest for a beneficial interest in an Unrestricted Global  Note, a certificate from such holder in the form of Exhibit D hereto, including the certifications in item  (1)(a) thereof; or                        (y)     if the holder of such beneficial interest in a Restricted Global  Note proposes to transfer such beneficial interest to a Person who shall take delivery thereof in the form  of a beneficial interest in an Unrestricted Global Note, a certificate from such holder in the form of  Exhibit C hereto, including the certifications in item (3) thereof;    and, in each such case set forth in this subparagraph (B), if the Company so requests or if the Applicable  Procedures so require, an Opinion of Counsel in form reasonably acceptable to the Company to the effect  that such exchange or transfer is in compliance with the Securities Act and that the restrictions on transfer  contained herein and in the Private Placement Legend are no longer required in order to maintain  compliance with the Securities Act.    If any such transfer is effected pursuant to subparagraph (A) or (B) above at a time when an Unrestricted  Global Note has not yet been issued, the Company shall issue and, upon receipt of an Authentication  Order in accordance with Section 2.2, the Trustee shall authenticate one or more Unrestricted Global  Notes in an aggregate principal amount equal to the aggregate principal amount of beneficial interests  exchanged or transferred pursuant to subparagraph (A) or (B) above.          Beneficial interests in an Unrestricted Global Note cannot be exchanged for, or transferred to  Persons who take delivery thereof in the form of, a beneficial interest in a Restricted Global Note.                                         24  

 

                 (c)   Transfer and Exchange of Beneficial Interests for Definitive Notes. Transfers of  beneficial interests in the Definitive Notes shall require compliance with the applicable subparagraphs  below.                      (i)   Transfer and Exchange of Beneficial Interests in Restricted Global Notes for  Restricted Definitive Notes. Subject to Section 2.6(a) if any holder of a beneficial interest in a Restricted  Global Note proposes to exchange such beneficial interest for a Restricted Definitive Note or to transfer  such beneficial interest to a Person who takes delivery thereof in the form of a Restricted Definitive Note,  then upon receipt by the Registrar of the following documentation:                             (A)   if the holder of such beneficial interest in a Restricted Global Note  proposes to exchange such beneficial interest for a Restricted Definitive Note, a certificate from such  holder in the form of Exhibit D hereto, including the certifications in item (2)(a) thereof;                                        (B)   if such beneficial interest is being transferred to a QIB in accordance  with Rule 144A under the Securities Act, a certificate to the effect set forth in Exhibit C hereto, including  the certifications in item (1) thereof;                                         (C)   if such beneficial interest is being transferred to an Institutional  Accredited Investor in reliance on an exemption from the registration requirements of the Securities Act  other than in accordance with Rule 144A, a certificate to the effect set forth in Exhibit C hereto, including  the certifications in item (2)(d) thereof; and                                        (D)   if such beneficial interest is being transferred to the Company or any of  its Subsidiaries, a certificate to the effect set forth in Exhibit C hereto, including the certifications in item  (2)(b) thereof; or                      the Registrar shall cause the aggregate principal amount of the applicable Global Note to be reduced  accordingly pursuant to paragraph 2.6(i) below, and the Company shall execute and, upon receipt of an  Authentication Order the Trustee shall authenticate and deliver to the Person designated in the certificate  a Restricted Definitive Note in the appropriate principal amount. Any Restricted Definitive Note issued in  exchange for a beneficial interest in a Restricted Global Note pursuant to this paragraph (c) shall be  registered in such name or names and in such authorized denomination or denominations as the holder of  such beneficial interest shall instruct the Registrar through instructions from the Depositary and the  Participant or Indirect Participant. The Registrar shall deliver such Restricted Definitive Notes to the  Persons in whose names such Notes are so registered. Any Restricted Definitive Note issued in exchange  for a beneficial interest in a Restricted Global Note pursuant to this subparagraph (i) shall bear the Private  Placement Legend and shall be subject to all restrictions on transfer contained therein.                (ii)  Transfer and Exchange of Beneficial Interests in Restricted Global Notes for  Unrestricted Definitive Notes. Subject to Section 2.6(a) a holder of a beneficial interest in a Restricted  Global Note may exchange such beneficial interest for an Unrestricted Definitive Note or may transfer  such beneficial interest to a Person who takes delivery thereof in the form of an Unrestricted Definitive  Note only if:                            (A)   such transfer is effected pursuant to an effective registration statement  under the Securities Act; or                                        (B)   the Registrar receives the following:                                                             25  

 

                           (1)   if the holder of such beneficial interest in a Restricted Global  Note proposes to exchange such beneficial interest for an Unrestricted Definitive Note, a certificate from  such holder in the form of Exhibit D hereto, including the certifications in item (1)(b) thereof; or                                                    (2)   if the holder of such beneficial interest in a Restricted Global  Note proposes to transfer such beneficial interest to a Person who shall take delivery thereof in the form  of an Unrestricted Definitive Note, a certificate from such holder in the form of Exhibit C hereto,  including the certifications in item (3) thereof;         and, in each such case set forth in this subparagraph (B), if the Company so requests or if the Applicable  Procedures so require, an Opinion of Counsel in form reasonably acceptable to the Company to the effect  that such exchange or transfer is in compliance with the Securities Act and that the restrictions on transfer  contained herein and in the Private Placement Legend are no longer required in order to maintain  compliance with the Securities Act.                (iii) Transfer and Exchange of Beneficial Interests in Unrestricted Global Notes for  Unrestricted Definitive Notes. Subject to Section 2.6(a) if any holder of a beneficial interest in an  Unrestricted Global Note proposes to exchange such beneficial interest for a Definitive Note or to transfer  such beneficial interest to a Person who takes delivery thereof in the form of a Definitive Note, then, upon  satisfaction of the conditions set forth in subparagraph (b)(ii) above, the Registrar shall cause the  aggregate principal amount of the applicable Global Note to be reduced accordingly pursuant to  paragraph 2.6(i) below, and the Company shall execute and, upon receipt of an Authentication Order the  Trustee shall authenticate and deliver to the Person designated in the certificate a Definitive Note in the  appropriate principal amount. Any Definitive Note issued in exchange for a beneficial interest pursuant to  this subparagraph (c)(iii) shall be registered in such name or names and in such authorized denomination  or denominations as the holder of such beneficial interest shall instruct the Registrar through instructions  from the Depositary and the Participant or Indirect Participant. The Trustee shall deliver such Definitive  Notes to the Persons in whose names such Notes are so registered. Any Definitive Note issued in  exchange for a beneficial interest pursuant to this subparagraph (c)(iii) shall not bear the Private  Placement Legend.                      (iv)  Transfer and Exchange of Restricted Definitive Notes for Beneficial Interests in  Restricted Global Notes. If any Holder of a Restricted Definitive Note proposes to exchange such Note  for a beneficial interest in a Restricted Global Note or to transfer such Restricted Definitive Notes to a  Person who takes delivery thereof in the form of a beneficial interest in a Restricted Global Note, then,  upon receipt by the Registrar of the following documentation:                            (A)   if the Holder of such Restricted Definitive Note proposes to exchange  such Note for a beneficial interest in a Restricted Global Note, a certificate from such Holder in the form  of Exhibit D hereto, including the certifications in item (2)(b) thereof;                                         (B)   if such Restricted Definitive Note is being transferred to a QIB in  accordance with Rule 144A under the Securities Act, a certificate to the effect set forth in Exhibit C  hereto, including the certifications in item (1) thereof; or                                        (C)   if such Restricted Definitive Note is being transferred to an Institutional  Accredited Investor in reliance on an exemption from the registration requirements of the Securities Act  other than in accordance with Rule 144A, a certificate to the effect set forth in Exhibit C hereto, including  the certifications in item (2)(d) thereof;                                                  26  

 

   the Registrar shall cancel the Restricted Definitive Note, increase or cause to be increased the aggregate  principal amount of, in the case of clause (A) above, the appropriate Restricted Global Note, in the case of  clause (B) above, the Rule 144A Global Note, and in the case of clause (C) above, the IAI Global Note.                (v)   Transfer and Exchange of Restricted Definitive Notes for Beneficial Interests in  Unrestricted Global Notes. A Holder of a Restricted Definitive Note may exchange such Note for a  beneficial interest in an Unrestricted Global Note or transfer such Restricted Definitive Note to a Person  who takes delivery thereof in the form of a beneficial interest in an Unrestricted Global Note only if the  Registrar receives the following:                            (A)   if the Holder of such Definitive Notes proposes to exchange such Notes  for a beneficial interest in an Unrestricted Global Note, a certificate from such Holder in the form of  Exhibit D hereto, including the certifications in item (1)(c) thereof; or                            (B)   if the Holder of such Definitive Notes proposes to transfer such Notes to  a Person who shall take delivery thereof in the form of a beneficial interest in an Unrestricted Global  Note, a certificate from such Holder in the form of Exhibit C hereto, including the applicable  certifications in item (3) thereof;          and, in each such case set forth in this Section 2.6(c)(v) if the Company so requests or if the Applicable  Procedures so require, an Opinion of Counsel in form reasonably acceptable to the Company to the effect  that such exchange or transfer is in compliance with the Securities Act and that the restrictions on transfer  contained in this Indenture and in the Private Placement Legend are no longer required in order to  maintain compliance with the Securities Act.          Upon satisfaction of the conditions of any of the subparagraphs in this subparagraph (c)(v), the  Registrar shall cancel the Definitive Notes and increase or cause to be increased the aggregate principal  amount of the Unrestricted Global Note.                (d)   Transfer and Exchange of Unrestricted Definitive Notes for Beneficial Interests in  Unrestricted Global Notes. A Holder of an Unrestricted Definitive Note may exchange such Note for a  beneficial interest in an Unrestricted Global Note or transfer such Unrestricted Definitive Notes to a  Person who takes delivery thereof in the form of a beneficial interest in an Unrestricted Global Note at  any time. Upon receipt of a request for such an exchange or transfer, the Registrar shall cancel the  applicable Unrestricted Definitive Note and increase or cause to be increased the aggregate principal  amount of one of the Unrestricted Global Notes.                If any such exchange or transfer from an Unrestricted Definitive Note or a Restricted Definitive  Note, as the case may be, to a beneficial interest is effected at a time when an Unrestricted Global Note  has not yet been issued, the Company shall issue and, upon receipt of an Authentication Order in  accordance with Section 2.2 the Registrar shall authenticate one or more Unrestricted Global Notes in an  aggregate principal amount equal to the principal amount of Unrestricted Definitive Notes or Restricted  Definitive Notes, as the case may be, so transferred.                (e)   Transfer and Exchange of Definitive Notes for Definitive Notes. Upon request by a  Holder of Definitive Notes and such Holder’s compliance with the provisions of this paragraph (e), the  Registrar shall register the transfer or exchange of Definitive Notes. Prior to such registration of transfer  or exchange, the requesting Holder shall present or surrender to the Registrar the Definitive Notes duly  endorsed or accompanied by a written instruction of transfer in form satisfactory to the Registrar duly  executed by such Holder or its attorney, duly authorized in writing. In addition, the requesting Holder                                          27  

 

   shall provide any additional certifications, documents and information, as applicable, required pursuant to  the following provisions of this paragraph (e).                      (i)   Any Restricted Definitive Note may be transferred to and registered in the name  of Persons who take delivery thereof in the form of a Restricted Definitive Note if the Registrar receives  the following:                      (A)   if the transfer will be made pursuant to Rule 144A under the Securities  Act, then the transferor must deliver a certificate in the form of Exhibit C hereto, including the  certifications in item (1) thereof;                                        (B)   if the transfer will be made to an Institutional Accredited Investor in  reliance on an exemption from the registration requirements of the Securities Act other than in accordance  with Rule 144A, then the transferor must deliver a certificate in the form of Exhibit C hereto, including  the certifications in item (2)(d) thereof; and                                        (C)   if the transfer will be made pursuant to any other exemption from the  registration requirements of the Securities Act, then the transferor must deliver a certificate in the form of  Exhibit C hereto, including, if the Company so requests, a certification or Opinion of Counsel in form  reasonably acceptable to the Company to the effect that such transfer is in compliance with the Securities  Act.                      (ii)  Transfer and Exchange of Restricted Definitive Notes for Unrestricted Definitive  Notes. Any Restricted Definitive Note may be exchanged by the Holder thereof for an Unrestricted  Definitive Note or transferred to a Person or Persons who take delivery thereof in the form of an  Unrestricted Definitive Note if:                           (A)   any such transfer is effected pursuant to an effective registration  statement under the Securities Act; or                                        (B)   the Registrar receives the following:                                  (x)   if the Holder of such Restricted Definitive Notes proposes to  exchange such Notes for an Unrestricted Definitive Note, a certificate from such Holder in the form of  Exhibit D hereto, including the certifications in item (1)(d) thereof; or                                                    (y)   if the Holder of such Restricted Definitive Notes proposes to  transfer such Notes to a Person who shall take delivery thereof in the form of an Unrestricted Definitive  Note, a certificate from such Holder in the form of Exhibit C hereto, including the certifications in item  (3) thereof;                            and, in each such case set forth in this subparagraph (B), if the Company so requests, an Opinion of  Counsel in form reasonably acceptable to the Company to the effect that such exchange or transfer is in  compliance with the Securities Act and that the restrictions on transfer contained herein and in the Private  Placement Legend are no longer required in order to maintain compliance with the Securities Act.          (f)   Transfer of Unrestricted Definitive Notes to Unrestricted Definitive Notes. A Holder of  Unrestricted Definitive Notes may transfer such Notes to a Person who takes delivery thereof in the form  of an Unrestricted Definitive Note. Upon receipt of a request to register such a transfer, the Registrar shall  register the Unrestricted Definitive Notes pursuant to the instructions from the Holder thereof.                                                 28  

 

         (g)   Private Placement Legend.                      (i)   Except as permitted by subparagraph (ii) below, each Global Note (other than an  Unrestricted Global Note) and each Definitive Note (and all Notes issued in exchange therefor or  substitution thereof) shall bear the Private Placement Legend.                            (ii)  Notwithstanding the foregoing, any Global Note or Definitive Note issued  pursuant to subparagraph (b)(iv), (c)(ii), (c)(iii), (d) or (e)(ii) or (f) of this Section 2.6 (and all Notes  issued in exchange therefor or substitution thereof) shall not bear the Private Placement Legend.                (h)   Global Note Legend. Each Global Note shall bear the Global Note Legend.                (i)   Cancellation and/or Adjustment of Global Notes. At such time as all beneficial interests  in a particular Global Note have been exchanged for Definitive Notes or a particular Global Note has  been redeemed, repurchased or canceled in whole and not in part, each such Global Note shall be returned  to or retained and canceled by the Registrar in accordance with Section 2.11. At any time prior to such  cancellation, if any beneficial interest in a Global Note is exchanged for or transferred to a Person who  will take delivery thereof in the form of a beneficial interest in another Global Note or for Definitive  Notes, the principal amount of Notes represented by such Global Note shall be reduced accordingly and  an endorsement shall be made on such Global Note by the Paying Agent or by the Depositary at the  direction of the Paying Agent to reflect such reduction; and if the beneficial interest is being exchanged  for or transferred to a Person who will take delivery thereof in the form of a beneficial interest in another  Global Note, such other Global Note shall be increased accordingly and an endorsement shall be made on  such Global Note by the Paying Agent or by the Depositary at the direction of the Paying Agent to reflect  such increase.                (j)   General Provisions Relating to Transfers and Exchanges.                      (i)   To permit registrations of transfers and exchanges, the Company shall execute  and the Registrar shall authenticate Global Notes and Definitive Notes upon receipt of an Authentication  Order.                            (ii)  No service charge shall be made to a holder of a beneficial interest in a Global  Note or to a Holder of a Definitive Note for any registration of transfer or exchange, but the Company  may require payment of a sum sufficient to cover any transfer tax or similar governmental charge payable  in connection therewith (other than any such transfer taxes or similar governmental charge payable upon  exchange or transfer pursuant to Sections 2.2, 2.6, and 2.10).                            (iii) Neither the Registrar nor the Trustee shall be required to register the transfer of  or exchange any Note selected for redemption in whole or in part, except for the unredeemed portion of  any Note being redeemed in part.                            (iv)  All Global Notes and Definitive Notes issued upon any registration of transfer or  exchange of Global Notes or Definitive Notes shall be the valid obligations of the Company, evidencing  the same debt, and entitled to the same benefits hereof, as the Global Notes or Definitive Notes  surrendered upon such registration of transfer or exchange.                            (v)   Neither the Trustee, the Registrar nor the Company shall be required (A) to issue,  to register the transfer of or to exchange any Notes during a period beginning at the opening of business  on a Business Day 1 day before the mailing of a notice of redemption of Notes and ending at the close of                                          29  

 

   business on the day of such mailing or (B) to register the transfer of or to exchange any Note so selected  for redemption in whole or in part, except the unredeemed portion of any Note being redeemed in part.                            (vi)  Prior to due presentment for the registration of a transfer of any Note, the  Trustee, any Agent and the Company may deem and treat the Person in whose name any Note is  registered as the absolute owner of such Note for the purpose of receiving payment of principal of and  interest on such Notes and for all other purposes, and none of the Trustee, any Agent or the Company  shall be affected by notice to the contrary.                            (vii) The Registrar shall authenticate Global Notes and Definitive Notes in accordance  with the provisions of Section 2.2.                            (viii) All certifications, certificates and Opinions of Counsel required to be submitted  to the Registrar pursuant to this Section 2.6 to effect a registration of transfer or exchange may be  submitted by facsimile or electronic mail.                            (ix)  Neither the Trustee nor any Agent shall have any obligation or duty to monitor,  determine or inquire as to compliance with any restrictions on transfer imposed under this Indenture or  under applicable law with respect to any transfer of any interest in any Note (including any transfers  between or among Participants or Indirect Participants) other than to require delivery of such certificates  and other documentation or evidence as are expressly required by, and to do so if and when expressly  required by the terms of, this Indenture, and to examine the same to determine substantial compliance as  to form with the express requirements hereof.                            (x)   Neither the Trustee nor any Agent shall have any responsibility for any actions  taken or not taken by the Depositary.                            (xi)    Neither the Trustee nor any Agent shall have any responsibility or obligation to any  Participant or Indirect Participant or any other Person with respect to the accuracy of the books or records,  or the acts or omissions, of the Depositary or of any participant or member thereof, with respect to any  ownership interest in the Notes or with respect to the delivery to any Participant or Indirect Participant or  other Person (other than the Depositary) of any notice or the payment of any amount, under or with  respect to such Notes. All notices and communications to be given to the Holders and all payments to be  made to Holders under the Notes shall be given or made only to or upon the order of the registered  Holders (which shall be the Depositary or its nominee in the case of a Global Note). The rights of  beneficial owners in any Global Note shall be exercised only through the Depositary subject to the  customary procedures of the Depositary. The Trustee and the Agents may rely and shall be fully protected  in relying upon information furnished by the Depositary with respect to its Participants or Indirect  Participants.          SECTION 2.7.    Replacement Notes. If any mutilated Note is surrendered to the Registrar, or the  Company and the Registrar receives evidence to its satisfaction of the destruction, loss or theft of any  Note, the Company shall issue and the Trustee, upon receipt of an Authentication Order, shall  authenticate a replacement Note if the Trustee’s requirements for replacements of Notes are met;  provided, however, that the Registrar shall not deliver any Note as a replacement for a Note that has been  mutilated or defaced otherwise than against surrender of the same and shall not issue any replacement  Note until the Holder has furnished the Registrar with such evidence and indemnity as the Company  and/or the Registrar may reasonably require. The Registrar shall cancel each mutilated or defaced Note  surrendered to it in respect of which a replacement has been delivered. The Holder must supply indemnity  or security sufficient in the judgment of the Trustee and the Company to protect the Company, the  Trustee, the Registrar, any Agent or any authenticating agent from any loss that any of them may suffer if                                         30  

 

   a Note is replaced. The Company and the Trustee may charge the Holder for their cost and expenses in  replacing a Note including amounts to cover any tax, assessment, fee or other governmental charge that  may be imposed in relation thereto.                            Every replacement Note is an obligation of the Company and shall be entitled to all of the  benefits of this Indenture equally and proportionately with all other Notes duly issued hereunder.           SECTION 2.8.    Outstanding Notes. The Notes outstanding at any time are all the Notes authenticated by  the Trustee except for those canceled by it, those delivered to it for cancellation and those described in  this Section 2.8 as not outstanding.                            If a Note is replaced pursuant to Section 2.7 it ceases to be outstanding unless the Trustee  receives proof satisfactory to it that the replaced Note is held by a protected purchaser in due course.                If the principal amount of any Note is considered paid under Section 3.1, it shall cease to be  outstanding and interest on it shall cease to accrue.                Subject to Section 2.9 a Note does not cease to be outstanding because the Company, a  Subsidiary of the Company or an Affiliate of the Company holds the Note.          SECTION 2.9.    Treasury Notes. In determining whether the Holders of the required principal amount of  Notes have concurred in any direction, waiver or consent, Notes owned by the Company, any Subsidiary  or any Affiliate of the Company shall be considered as though not outstanding, except that for purposes of  determining whether the Trustee shall be protected in relying on any such direction, waiver or consent,  only Notes that a Trust Officer actually knows to be so owned shall be so considered. Notwithstanding  the foregoing, Notes that are to be acquired by the Company, any Subsidiary or an Affiliate of the  Company pursuant to an exchange offer, tender offer or other agreement shall not be deemed to be owned  by the Company, a Subsidiary or an Affiliate of the Company until legal title to such Notes passes to the  Company, such Subsidiary or such Affiliate, as the case may be. Upon request of the Trustee, the  Company shall promptly furnish to the Trustee an Officers’ Certificate listing and identifying all Notes, if  any known by the Company to be owned or held by or for the account of any of the Company or any  Affiliate of the Company, and the Trustee shall be entitled to accept and rely upon such Officers’  Certificate as conclusive evidence of the facts therein set forth and of the fact that all Notes not listed  therein are outstanding for the purpose of any determination.                      SECTION 2.10.    Temporary Notes. Until Definitive Notes are ready for delivery, the Company may  prepare and, upon receipt of an Authentication Order the Trustee shall authenticate temporary Notes.  Temporary Notes shall be substantially in the form of Definitive Notes but may have variations that the  Company and the Trustee consider appropriate for temporary Notes. Without unreasonable delay, the  Company shall prepare and the Trustee, upon receipt of an Authentication Order, shall authenticate  Definitive Notes in exchange for temporary Notes. Until such exchange, temporary Notes shall be entitled  to the same rights, benefits and privileges as Definitive Notes.                      SECTION 2.11.    Cancellation. The Company at any time may deliver Notes to the Registrar for  cancellation along with a written order of the Company to cancel the Notes. The Trustee and Paying  Agent shall forward to the Registrar any Notes surrendered to them for registration of transfer, exchange  or payment. The Registrar shall cancel all Notes surrendered for registration of transfer, exchange,  payment, replacement or cancellation and shall dispose of all canceled Notes in its customary manner.  The Company may not issue new Notes to replace Notes that it has redeemed or paid or that have been  delivered to the Registrar for cancellation.                                                             31  

 

   SECTION 2.12.    Payment of Interest and Defaulted Interest. Interest on any Note that is payable, and is  punctually paid or duly provided for, on any Payment Date shall be paid by the Paying Agent to the  Person in whose name such Note (or one or more predecessor Notes) is registered at the close of business  on the regular Record Date for such interest at the office or agency of the Company maintained for such  purpose pursuant to Section 2.3.                            Any interest on any Note that is payable, but is not paid when the same becomes due and payable  and such nonpayment continues for a period of five days shall forthwith cease to be payable to the Holder  on the regular Record Date by virtue of having been such Holder, and any defaulted interest and (to the  extent lawful) interest on such defaulted interest at the rate borne by the Notes (such defaulted interest  and interest thereon herein collectively called “Defaulted Interest”) shall be paid by the Company in any  lawful manner not inconsistent with the requirements of any securities exchange on which the Notes may  be listed, and upon such notice as may be required by such exchange, if, after notice given by the  Company to the Trustee of the proposed payment pursuant to this clause, such manner of payment shall  be deemed practicable by the Trustee. The Defaulted Interest shall be paid by the Company, at its election  in each case, as provided in clause (a) or (b) below:                (a)    The Company may elect to make payment of any Defaulted Interest to the Persons in whose  names the Notes (or their respective predecessor Notes) are registered at the close of business on a  Special Record Date (as defined below) for the payment of such Defaulted Interest, which shall be fixed  in the following manner. The Company shall notify the Trustee in writing of the amount of Defaulted  Interest proposed to be paid on each Note and the date (not less than 30 days after such notice unless a  shorter period shall be acceptable to the Trustee) of the proposed payment (the “Special Interest Payment  Date”), and at the same time the Company shall deposit with the Trustee an amount of money equal to the  aggregate amount proposed to be paid in respect of such Defaulted Interest or shall make arrangements  satisfactory to the Trustee for such deposit prior to the date of the proposed payment, such money when  deposited shall be held in trust for the benefit of the Persons entitled to such Defaulted Interest as  provided in this clause. Thereupon the Company shall fix a record (the “Special Record Date”) for the  payment of such Defaulted Interest, which shall be not more than five days and not less than 10 days prior  to the Special Interest Payment Date and not less than 10 days after the receipt by the Trustee of the  notice of the proposed payment. The Company shall promptly notify the Trustee in writing of such  Special Record Date and, at the written request and in the name and at the expense of the Company, the  Trustee shall cause notice of the proposed payment of such Defaulted Interest and the Special Record  Date and Special Interest Payment Date therefore to be given in the manner provided for in Section 10.1,  not less than 10 days prior to such Special Record Date. Such Defaulted Interest shall be paid on the  Special Interest Payment Date of the Persons in whose names the Notes (or their respective predecessor  Notes) are registered at the close of business on such Special Record Date and shall no longer be payable  pursuant to the following clause (b).                (b)    The Company may make payment of any Defaulted Interest in any other lawful manner not  inconsistent with the requirements of any security exchange on which the Notes may be listed, and upon  such notice as may be required by such exchange, if, after notice given by the Company to the Trustee of  the proposed payment pursuant to this clause (b), such manner of payment shall be deemed practicable by  the Trustee.                Subject to the foregoing provisions of this Section 2.12, each Note delivered under this Indenture  upon registration of transfer of or in exchange for or in lieu of any other Note shall carry the rights to  interest accrued and unpaid, and to accrue, which were carried by such other Note.          SECTION 2.13.    CUSIP and ISIN Numbers. The Company in issuing the Notes may use one or more  “CUSIP” and/or “ISIN” numbers (if then generally in use). The Trustee and the Agents shall not be                                         32  

 

   responsible for the use of CUSIP or ISIN numbers, and neither the Trustee nor any Agent makes any  representation as to their correctness as printed on any Note or notice to Holders. The Company shall  promptly notify the Trustee and the Agents in writing of any change in the CUSIP or ISIN numbers.                      SECTION 2.14. Paying Agent Provisions. The Company shall not later than 10:00 a.m. (New York time)  on the second Business Day prior to the day on which the Paying Agent is to receive payment, procure  that the bank effecting payment for it confirms via fax or tested SWIFT MT100 message to the Paying  Agent the payment instructions relating to such payment. Prior to 10:00 a.m. (New York time) on the  Business Day prior to each Payment Date, the Stated Maturity and each payment date relating to a  Change of Control Offer, and on the Business Day immediately following any acceleration of the Notes  pursuant to Section 6.2, the Company shall deposit with the Paying Agent in immediately available freely  transferable funds money in dollars sufficient to make cash payments, if any, due on such day or date, as  the case may be. Subject to actual receipt of such funds as provided by this Section 2.14 by the Paying  Agent, the Paying Agent shall make payments on the Notes to the Holders on such day or date, as the case  may be, to the Persons and in accordance with the provisions of this Indenture and the Notes. All  payments made by the Paying Agent shall be made net of any withholding that is required by applicable  law to be made.  Backup withholding will apply to payments of interest on the Notes and the proceeds of  a sale (including retirement or redemption) of the Notes within the United States or conducted through  certain United States-related persons, unless a beneficial owner of a Note qualifies for an exemption and  has provided the Depositary with a properly executed IRS Form W-9, W-8BEN-E (or other applicable  form).                      SECTION 2.15. Agents’ Interest.           (a)   The rights, powers, duties and obligations and actions of each Agent under this Indenture  are several and not joint or joint and several. Each Agent shall only be obligated to perform the duties set  forth in this Indenture and the Notes and shall have no implied duties.                (b)   The Agents shall act solely as agents of the Company and in no event shall be agents of  the Holders.                (c)   Any obligation the Agents may have to publish a notice to Holders of Global Notes on  behalf of the Company shall have been met upon delivery of the notice to the relevant clearing system.                (d)   The Company shall provide the Agents with a certified list of authorized signatories.                                     ARTICLE III.                                      Covenants                                           SECTION 3.1. Payment of Notes.                             (a)   The Company shall promptly pay the principal of, premium, if any, and interest on the  Notes at the Interest Rate (subject to adjustment if a Step-up Event shall occur) on the dates and in the  manner provided in the Notes and in this Indenture. Principal, premium, if any, and interest shall be  considered paid on the date due if by 10:00 a.m. (New York time) on the Business Day prior to such date  the Trustee or the Paying Agent holds in accordance with this Indenture money sufficient to pay all  principal, premium, if any, and interest then due and the Trustee or the Paying Agent, as the case may be,  is not prohibited from paying such money to the Holders on that date pursuant to the terms of this  Indenture.                The Company shall pay interest on overdue principal at the rate specified therefor in the Notes.                                         33  

 

                 (b)   Any and all payments by or on behalf of the Company hereunder shall be made free and  clear of and without deduction for any and all present or future Taxes, unless withholding is required by  law. If the Company shall be required by law to deduct any Taxes from or in respect of any sum payable  hereunder to, or in respect of, the Holders (i) if such Tax is an Indemnified Tax, the sum payable to each  Holder shall be increased by the amount necessary so that after making all required deductions (including  deductions applicable to additional sums payable under this Section 3.1(b)), such Holder shall receive an  amount equal to the sum it would have received had no such deductions been made, (ii) the Company  shall make such deductions, and (iii) the Company shall pay the full amount deducted to the relevant  taxing authority or other Governmental Authority in accordance with applicable law.                (c)   In addition, the Company agrees to pay any present or future stamp or documentary taxes  or any other excise or property taxes, charges or similar levies that arise from any payment made  hereunder or from the execution, delivery or registration of, or otherwise with respect to, this Indenture  (hereinafter referred to as “Other Taxes”).                (d)   The Company hereby indemnifies each Holder, within 10 days after demand therefor, for  the full amount of any Indemnified Taxes (including Indemnified Taxes imposed or asserted on or  attributable to amounts payable under this Section 3.1) payable or paid by such Holder or in respect of  such Holder, or required to be withheld or deducted from a payment to such Holder and any reasonable  expenses arising therefrom or with respect thereto, whether or not such Indemnified Taxes were correctly  or legally imposed or asserted by the relevant Governmental Authority. A certificate as to the amount of  such payment or liability delivered to the Company by a Holder shall be conclusive absent manifest error.                (e)   Within 30 days after the date of any payment of Taxes or Other Taxes withheld by the  Company in respect of any payment to any Holder, the Company will furnish to the Holder the original or  a certified copy of a receipt evidencing payment thereof.                (f)   If  a  Holder  shall  become  aware  that  it  is  entitled  to  receive  a  refund  in  respect  of  Indemnified  Taxes,  it  shall  promptly  notify  the  Company  of  the  availability  of  such  refund  and  shall,  within 30 days after receipt of a request by the Company, apply for such refund. If any Holder receives a  refund  or  claims  a  credit  or  other  tax  benefit  as  a  result  of  the  payment  of  as  to  which  it  has  been  indemnified pursuant to this Section 3.1 by the Company, then the Holder shall promptly repay to the  Company an amount equal to such refund, credit or other tax benefit. Notwithstanding anything to the  contrary in this paragraph (f), in no event will the indemnified party be required to pay any amount to an  indemnifying party pursuant to this paragraph (f) the payment of which would place the indemnified party  in a less favorable net after-Tax position than the indemnified party would have been in if the Tax subject  to indemnification and giving rise to such refund had not been deducted, withheld or otherwise imposed  and the indemnification payments or additional amounts with respect to such Tax had never been paid.  This paragraph shall not be construed to require any indemnified party to make available its tax returns  (or any other information relating to its Taxes that it deems confidential) to the indemnifying party or any  other Person.          SECTION 3.2. Reports.         (a)   Reports. Notwithstanding that the Company may not be subject to the reporting  requirements of Section 13 or 15(d) of the Exchange Act, the Company shall provide to the Trustee and  the registered Holders of the Notes, within 15 days of the applicable time periods specified in the relevant  forms:                                          34  

 

               (i)   all quarterly and annual financial information that would be required to be  contained in a filing with the SEC on Forms 10-Q and 10-K if the Company were required to file such  Forms (but without any requirement to provide separate financial statements of any Subsidiary of the  Company), including a “Management’s Discussion and Analysis of Financial Condition and Results of  Operations” and, with respect to the annual information only, a report on the annual financial statements  by the Company’s independent registered public accounting firm; and               (ii)  all current reports that would be required to be filed with the SEC on Form 8-K if  the Company were required to file such reports; provided, however, that to the extent such reports  described in clauses (i) or (ii) are filed with the SEC and publicly available, such reports shall have been  deemed to have been provided to the Holders and no additional copies need to be provided to the Holders;  however, copies will still be delivered to the Trustee.         In addition, the Company shall furnish or otherwise make available to the Holders and to  prospective purchasers of the Notes designated by such Holders, upon request, the information required to  be delivered pursuant to Rule 144A(d)(4) under the Securities Act to the extent such Notes constitute  “restricted securities” within the meaning of the Securities Act.         The Company shall maintain a website to which all of the reports and press releases required by  this Section 3.2(a) are posted (unless such reports are otherwise filed with the SEC).         (b)   So long as any Notes are outstanding, the Company will also:               (i)   within 15 Business Days after providing the annual and quarterly information  required pursuant to Section 3.2(a) (or such earlier time as the Company determines), hold a conference  call (the “Company Conference Call”) to discuss the results of operations for the relevant reporting  period; and               (ii)  issue a press release to an internationally recognized wire service no fewer than  three Business Days prior to the proposed date of the Company Conference Call, announcing the time and  date of the Company Conference Call and either including all information necessary to access the call or  directing Holders, prospective investors that certify that they are qualified institutional buyers, securities  analysts and market makers to contact the appropriate person at the Company to obtain such information.  The Company Conference Call may be part of or separate from any earnings or similar conference call  relating to the financial results of the Company or any of its Subsidiaries as long as such call otherwise  meets the requirements of the foregoing clauses (i) and (ii).         (c)   The Company shall furnish or otherwise make available, in the manner and subject to the  limitations contained in the immediately succeeding paragraph, to the Holders and to prospective  purchasers of the Notes designated by such Holders, true and complete copies of; (1) each Annual  Statement and Quarterly Statement of each Insurance Subsidiary, filed with the respective Department,  within five days of such filing; (2) the information required to be filed annually with the respective  Department by each Insurance Subsidiary relating to such Insurance Subsidiary’s reinsurance program  within 10 days of filing such information; (3) the Company’s required annual filing to Demotech, Inc.  (“Demotech”) within 10 days of such filing with Demotech; (4) summary information regarding any  material changes to the reinsurance program(s) of the Company’s Insurance Subsidiaries to enable  Holders to assess the risk from catastrophic and non-catastrophic events within 10 days of implementing  such material changes; and (5) such other information about the Company and its Subsidiaries as any of  the Holders may reasonably request from time to time.                                          35  

 

         The foregoing information in this Section 3.2(c) shall be furnished or otherwise made available  by the Company in electronic format by email or by posting to a password protected website, as  determined by the Company, to Holders and prospective purchasers designated by Holders.         Delivery of any reports, information and documents to the Trustee, including pursuant to this  Section 3.2, is for informational purposes only and the Trustee’s receipt of such shall not constitute actual  or constructive notice or knowledge of any information contained therein or determinable from  information contained therein, including the Company’s compliance with any of its covenants pursuant to  Article III (as to which the Trustee is entitled to rely exclusively on Officers’ Certificates).                      SECTION 3.3. Limitation on Indebtedness.                            (a)   The Company shall not, and shall not permit any of its Subsidiaries to, directly or  indirectly, Incur any Indebtedness (including Acquired Indebtedness) unless (a) no Event of Default is  continuing and (b) the Debt to Capital Ratio of the Company as of the balance sheet date immediately  preceding the date on which such additional Indebtedness is incurred would have been no greater than  35%, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom)  as if the additional Indebtedness and all other Indebtedness incurred since the immediately preceding  balance sheet date had been incurred, except to the extent such Indebtedness is used to prepay other  Indebtedness and the proceeds therefrom applied as of such day.          (b)   The provisions of Section 3.3(a) shall not apply to the Incurrence of the following  Indebtedness:               (i)   Indebtedness of the Company evidenced by the Notes, and any exchange notes  issued in exchange for such Notes pursuant to the Registration Rights Agreement;                             (ii)  any Indebtedness outstanding on the Issue Date and any Refinancing  Indebtedness Incurred in respect of such Indebtedness, and any Indebtedness Incurred that is used to  redeem the Notes in accordance with the terms hereof;                             (iii) Indebtedness arising from the honoring by a bank or other financial institution of  a check, draft or similar instrument, including, but not limited to, electronic transfers, wire transfers and  commercial card payments drawn against insufficient funds in the ordinary course of business (except in  the form of committed or uncommitted lines of credit); provided, however, that such Indebtedness is  extinguished within 10 Business Days of Incurrence;                            (iv)  Indebtedness owed to banks and other financial institutions Incurred in the  ordinary course of business of the Company and its Subsidiaries with such banks or financial institutions  that arise in connection with ordinary banking arrangements to provide treasury services or to manage  cash balances of the Company and its Subsidiaries;                             (v)   Indebtedness owed by the Company to any Subsidiary or owed by any Subsidiary  to the Company or another Subsidiary;                             (vi)  Indebtedness of the Company or any Subsidiary in a total maximum not to  exceed $10,000,000 outstanding at any time, provided that on the date any such Indebtedness is incurred,  and after giving effect thereto on a pro forma basis, no Default has occurred and is continuing (or would  result therefrom), including pro forma compliance with any financial covenant ratios applicable to the  Notes;                                                        36  

 

               (vii) Indebtedness of the Company or any Subsidiary to the extent that the net  proceeds thereof are promptly deposited to defease all of the Notes in accordance with Article VIII,  provided that (1) such Indebtedness (x) is subordinate to any Notes not so defeased and (y) has a maturity  date subsequent to any Notes not so defeased and (2) unless all of the Notes are defeased, such  Indebtedness shall not be issued by any Subsidiary of the Company.                (c)   For purposes of determining compliance with, and the outstanding principal amount of  any particular Indebtedness Incurred pursuant to and in compliance with, this Section 3.3:                       (i)   in the event that Indebtedness meets the criteria of more than one of the types of  Indebtedness described in Section 3.3(b) or could be Incurred pursuant to Section 3.3(a) the Company, in  its sole discretion, may divide and classify such item of Indebtedness (or any portion thereof) on the date  of Incurrence and may later reclassify such item of Indebtedness (or any portion thereof) in any manner  that complies with this Section 3.3 and only be required to include the amount and type of such  Indebtedness once;                            (ii)  Guarantees of, or obligations in respect of letters of credit relating to,  Indebtedness that is otherwise included in the determination of a particular amount of Indebtedness shall  not be included;                            (iii) Indebtedness permitted by this Section 3.3 need not be permitted solely by  reference to one provision permitting such Indebtedness but may be permitted in part by one such  provision and in part by one or more other provisions of this Section 3.3 permitting such Indebtedness;  and                            (iv)  the amount of Indebtedness issued at a price that is less than the principal amount  thereof shall be equal to the amount of the liability in respect thereof determined in accordance with  GAAP.                Accrual of interest, accrual of dividends, the accretion of accreted value or the amortization of debt  discount, the payment of interest in the form of additional Indebtedness and the payment of dividends in  the form of additional shares of Preferred Stock or Disqualified Stock shall not be deemed to be an  Incurrence of Indebtedness for purposes of this Section 3.3. The amount of any Indebtedness outstanding  as of any date shall be (i) the accreted value thereof in the case of any Indebtedness issued with original  issue discount or the aggregate principal amount outstanding in the case of Indebtedness issued with  interest payable-in-kind, (ii) the principal amount or liquidation preference thereof, together with any  interest thereon that is more than five days past due, in the case of any other Indebtedness, (iii) in the case  of the guarantee by a specified Person of Indebtedness of another Person, the maximum liability to which  the specified Person may be subject upon the occurrence of the contingency giving rise to the obligation  and (iv) in the case of Indebtedness of others guaranteed solely by means of a Lien on any asset or  property of the Company or any Subsidiary (and not to their other assets or properties generally), the  lesser of (x) the Fair Market Value of such asset or property on the date on which such Indebtedness is  Incurred and (y) the amount of the Indebtedness so secured.          (d)   For purposes of determining compliance with any U.S. dollar-denominated restriction on  the Incurrence of Indebtedness, the U.S. dollar-equivalent principal amount of Indebtedness denominated  in a foreign currency shall be calculated based on the relevant currency exchange rate in effect on the date  such Indebtedness was Incurred, in the case of term Indebtedness, or first committed, in the case of  revolving credit Indebtedness; provided that if such Indebtedness is Incurred to Refinance other  Indebtedness denominated in a foreign currency, and such Refinancing would cause the applicable U.S.                                         37  

 

   dollar-denominated restriction to be exceeded if calculated at the relevant currency exchange rate in effect  on the date of such refinancing, such U.S. dollar-denominated restriction shall be deemed not to have  been exceeded so long as the principal amount of such Refinancing Indebtedness does not exceed the  principal amount of such Indebtedness being Refinanced plus the amount of any reasonable premium  (including reasonable tender premiums), defeasance costs and any reasonable fees and expenses incurred  in connection with the issuance of such new Indebtedness. Notwithstanding any other provision of this  Section 3.3 the maximum amount of Indebtedness that the Company and its Subsidiaries may Incur  pursuant to this Section 3.3 shall not be deemed to be exceeded solely as a result of fluctuations in the  exchange rate of currencies. The principal amount of any Indebtedness Incurred to Refinance other  Indebtedness, if Incurred in a different currency from the Indebtedness being Refinanced, shall be  calculated based on the currency exchange rate applicable to the currencies in which such Refinancing  Indebtedness is denominated that is in effect on the date of such Refinancing.   SECTION 3.4.    Limitation on Restricted Payments.  The Company shall not, and shall not permit any of  its Subsidiaries to, directly or indirectly:                (a)   declare or pay any dividend on or in respect of, its Capital Stock or purchase, redeem,  retire or otherwise acquire for value any Capital Stock of the Company (other than wholly in exchange for  Capital Stock of the Company (other than Disqualified Stock)); or          (b)   make any payment or other distribution on any other securities of the Company or any of  its Subsidiaries that rank junior to or pari passu with the Notes, including on any Indebtedness of the  Company or any of its Subsidiaries (all such payments and other actions under (a) and (b), a “Restricted  PaymentError! Bookmark not defined.”); unless, with respect to either clause (a) or clause (b), at the  time of, and after giving effect to such Restricted Payment on a pro forma basis,               (i)   no Default shall have occurred and be continuing (or would reasonably be  expected to result therefrom); and               (ii)  the Company’s Debt to Capital Ratio would be less than 35%.    SECTION 3.5.    Limitation on Liens. The Company shall not, and shall not permit any of its Subsidiaries  to create, assume, incur or permit to exist any Indebtedness (including any Guarantee of Indebtedness)  that is secured by a Lien (other than Permitted Liens) on (a) the Capital Stock of any Significant  Subsidiary or (b) the Capital Stock of a Subsidiary that owns, directly or indirectly, the Capital Stock of  any of the Significant Subsidiaries, without, in either case, providing that the Notes will be secured  equally and ratably with the Indebtedness so secured for so long as such Indebtedness shall be so secured;  provided that this limitation  shall not apply to (i) Liens on Capital Stock of a Subsidiary existing as of the  Issue Date if such Subsidiary shall thereafter become a Significant Subsidiary, or any renewal or  extension of such existing Liens, or (ii) Liens on Capital Stock or other securities of Subsidiaries that are  not Significant Subsidiaries.           SECTION 3.6.    Maintenance of Reinsurance Coverage.  The Company shall, and shall cause each of its  Insurance Subsidiaries to purchase and maintain through to, and including while any Notes are  outstanding, reinsurance from reinsurers with a minimum financial strength rating of “A-” by A.M. Best  Company or “A-” by Standard and Poor’s, unless such reinsurance limits have been fully collateralized by  the applicable reinsurer. Additionally, the Company’s Insurance Subsidiaries shall purchase and maintain  through to, and including while any Notes are outstanding, reinsurance coverage on the business each of  them has underwritten that satisfies each of the following:                                               38  

 

         (a)   such reinsurance coverage shall at least equal that determined to be adequate by the  Department with jurisdiction over its business and such other jurisdictions in which it is licensed as an  insurer;           (b)   such reinsurance coverage, with respect to catastrophe coverage for first event losses,  shall provide full coverage to a level equal to or greater than a 1:100 probable maximum loss (“PML”)  from the occurrence exceedance probability curve projected to September 30th for the current reinsurance  treaty year determined by a 50/50 blend of the U.S. hurricane models of AIR Worldwide Corporation  (“AIR”) and Risk Management Solutions, Inc. (“RMS”) publicly available at the date of inception of the  relevant reinsurance renewal term based on the long-term modeling output and excluding demand and  storm surge subject to the maximum retention specified in paragraph (d), provided that the amount of  such first event limit shall be based on Florida exposure only, except if the combined PML for the United  States and other jurisdictions in which any Insurance Subsidiary writes property business exceeds the  PML for the Company’s Florida-only exposure at the 1 in 100 year blended return period by 10% or  more, in which case the Company will purchase excess of loss reinsurance to such combined PML  (except that the combined PML will exclude states, other than Florida, where the Company purchases  separate excess of loss reinsurance coverage up to the 1 in 100 year return period);           (c)   such reinsurance, with respect to catastrophe coverage for second event losses, shall  provide full coverage to a level equal to or greater than a 1:50 PML from the occurrence exceedance  probability curve determined by AIR or RMS, using the long-term modeling output and excluding  demand and storm surge subject to the maximum retention specified in paragraph (d) below; and           (d)   the Company’s catastrophe reinsurance program shall have a U.S. dollar maximum  retention per catastrophe event, in connection with the 1:100 and 1:50 levels specified in paragraph (b)  and (c) above, of no greater than 15% of the Company’s Consolidated Capital at the preceding March 31.                      SECTION 3.7.    Maintenance of Insurance Subsidiaries.  The Company shall cause each of its Insurance  Subsidiaries to (i) be duly organized and licensed or otherwise eligible to conduct an insurance or a  reinsurance business, as the case may be, under the insurance statutes and regulations as applied by the  relevant insurance regulatory authorities in each jurisdiction in which the conduct of its business requires  such licensing or eligibility, (ii) have all other necessary authorizations, approvals, orders, consents,  certificates, permits, registrations and qualifications of and from all insurance regulatory authorities  necessary to conduct their respective businesses and (iii) comply with all applicable insurance laws, rules  and regulations applicable to the Insurance Subsidiaries, except in the case of this clause (iii) where such  non-compliance would not reasonably be expected, individually or in the aggregate, to have a material  adverse effect on the Company and its Subsidiaries, taken together.                      SECTION 3.8.    Change of Control.                            (a)   If a Change of Control occurs, each Holder shall have the right to require the Company to  repurchase all or any part (in integral multiples of $10,000) of such Holder’s Notes at a purchase price in  cash equal to 101% of the then principal amount of the Notes plus accrued and unpaid interest, if any, to,  but excluding, the date of purchase (subject to the right of Holders of record on the relevant Record Date  to receive interest due on the relevant Payment Date).                                                    39  

 

         (b)   Within 15 days following any Change of Control the Company shall mail or  electronically deliver a notice (the “Change of Control Offer”) to each Holder at the address appearing in  the note register, with a copy to the Trustee, stating:                (i)   that a Change of Control Offer is being made and that such Holder has the right  to require the Company to purchase such Holder’s Notes at a purchase price in cash equal to 101% of the  principal amount of such Notes plus accrued and unpaid interest, if any, to, but excluding, the date of  purchase (subject to the right of Holders of record on the relevant Record Date to receive interest due on  the relevant Payment Date) (the “Change of Control Payment”);               (ii)  the repurchase date (which shall be no earlier than 15 days nor later than 45 days  from the date such notice is mailed or delivered) (the “Change of Control Payment Date”);                             (iii) the procedures determined by the Company, consistent with this Indenture, that a  Holder must follow in order to have its Notes repurchased;               (iv)  that any Notes not tendered will continue to accrue interest in accordance with  the terms of the applicable Note and this Indenture;               (v)   that, unless the Company defaults in the payment of the Change of Control  Payment, all Notes accepted for payment pursuant to the Change of Control Offer will cease to accrue  interest on the Change of Control Payment Date;               (vi)  that Holders will be entitled to withdraw their election if the Paying Agent  receives, not later than the close of business on the second Business Day preceding the Change of Control  Payment Date, a facsimile transmission or letter setting forth the name of the Holder, the principal amount  of the Notes delivered for purchase and a statement that such Holder is unconditionally withdrawing its  election to have such Notes purchased; and               (vii) that Holders whose Notes are being purchased only in part will be issued new  Notes equal in principal amount to the unpurchased portion of the Notes surrendered, which unpurchased  portion must be equal to the then remaining balance of principal amount per Note.         (c)   On the Change of Control Payment Date, the Company shall, to the extent lawful:               (i)   accept for payment all Notes or portions of Notes properly tendered pursuant to  the Change of Control Offer;               (ii)  deposit with the Paying Agent or tender agent for such Change of Control Offer  an amount equal to the Change of Control Payment in respect of all Notes or portions of Notes so  tendered; and               (iii) deliver or cause to be delivered to the Trustee the Notes so accepted together  with an Officers’ Certificate stating the aggregate principal amount of Notes or portions of Notes being  purchased by the Company.         (d)   The Paying Agent or tender agent for such Change of Control Offer shall promptly pay to  each Holder of Notes so tendered the Change of Control Payment for such Notes, and upon receipt of an  Authentication Order the Trustee shall promptly authenticate and mail (or cause to be transferred by book  entry) to each Holder a new note equal in principal amount to any unpurchased portion of the Notes                                         40  

 

   surrendered, if any; provided that each such new note will be in a minimum principal amount of  $100,000.         (e)   The Change of Control provisions described above shall be applicable whether or not any  other provisions of this Indenture are applicable.         (f)   The Company shall not be required to make a Change of Control Offer upon a Change of  Control if (i) a third party makes the Change of Control Offer in the manner, at the times and otherwise in  compliance with the requirements set forth in this Indenture applicable to a Change of Control Offer made  by the Company and purchases all Notes validly tendered and not withdrawn under such Change of  Control Offer or (ii) a notice of redemption for all of the outstanding Notes has been given pursuant to  this Indenture unless and until there is a default in payment of the applicable redemption price, plus  accrued and unpaid interest to, but excluding, the proposed Redemption Date.   Notwithstanding anything  to the contrary herein, a Change of Control Offer may be made in advance of a Change of Control,  conditional upon such Change of Control, if a definitive agreement is in place for the Change of Control  at the time of making the Change of Control Offer.         (g)   The Company shall comply, to the extent applicable, with the requirements of Rule 14e-1  under the Exchange Act and any other securities laws or regulations thereunder in connection with the  repurchase of Notes pursuant to a Change of Control Offer.  To the extent that the provisions of any  securities laws or regulations conflict with provisions of this Indenture, the Company shall comply with  the applicable securities laws and regulations and shall not be deemed to have breached its obligations  described in this Indenture by virtue of the conflict.         (h)   Upon a Change of Control Offer, the Company shall deliver to the Trustee an Officers’  Certificate and an Opinion of Counsel in compliance with Sections 10.2 and 10.3 hereof.   SECTION 3.9.    Access to Books and Records.          (a)   The Company shall, and shall cause each of its Subsidiaries to, keep proper books of  records and account in which full, true and correct entries in conformity with GAAP and/or SAP, as  applicable, and all requirements of applicable law shall be made of all dealings and transactions in  relation to its business and activities.                                                    (b)   Upon the occurrence and during the continuance of a dispute between the Company and  any Holders, a Default or an Event of Default, the Company shall make available to the Trustee or any  Holder, at the Company’s relevant facilities during normal business hours, upon reasonable notice by the  Trustee or any Holder, its books and records and the books and records of any of its Subsidiaries. If a  Default or an Event of Default shall have occurred and be continuing, promptly upon request therefor, the  Company shall provide access to the Trustee, any of its agents or designees or any Holder, to books and  records reflecting activity relating to the Notes though the close of business on the immediately preceding  Business Day. Any such inspection shall be at the expense of the Company. In addition, at reasonable  times during business hours and upon reasonable prior notice, the Company shall make available to the  Holders or one or more representatives appointed by such Holders, by teleconference call, members of  senior management and the independent auditor of the Company and its Subsidiaries to discuss the  business, operations, properties and financial and other condition of the Company and its Subsidiaries as  reasonably requested.                      SECTION 3.10.    Compliance Certificate. The Company shall deliver to the Trustee within 30 days after  the end of each fiscal quarter of the Company (commencing with the fiscal quarter ending March 31,  2019) an Officers’ Certificate stating whether or not the signers know of any Default or Event of Default                                         41  

 

   that occurred during such period. If they do, the certificate shall describe the Default or Event of Default,  its status and what action the Company took, is taking or proposes to take with respect thereto.                      SECTION 3.11.    Statement by Officers as to Default. The Company shall deliver to the Trustee, within  10 days after the knowledge thereof if such event is still continuing, written notice in the form of an  Officers’ Certificate of any Event of Default or any event which, with notice or the lapse of time or both,  would constitute an Event of Default under Section 6.1(a)(i), (ii), (iii), (iv), (v), (vi), (viii), (ix) or (x)  which shall include their status and what action the Company is taking or proposing to take in respect  thereof.                      SECTION 3.12    Material Defaults.  The Company and each of its Subsidiaries shall not have failed to  perform (and not cured within the applicable grace or cure period) any material payment or other  obligation that arises under any agreement or instrument that is material to conduct of business of the  Company and its Subsidiaries taken as a whole, except for any obligation disputed by the Company or its  Subsidiaries in good faith (provided that the Holders are not materially adversely affected by any such  dispute).                      SECTION 3.13.    Payment for Consents. The Company shall not, and shall not permit any of its  Subsidiaries to pay or cause to be paid any consideration to or for the benefit of any Holder of any Notes  for or as an inducement to any consent, waiver or amendment of any of the terms or provisions of this  Indenture or the Notes unless such consideration is offered to be paid and is paid to all Holders of the  Notes that consent, waive or agree to amend in the time frame set forth in the solicitation documents  relating to such consent, waiver or amendment.   SECTION 3.14.  Limitation on Dispositions of Capital Stock of Significant Subsidiaries.           The Company shall not, and shall not permit any of its Subsidiaries to, issue, sell, assign, transfer  or otherwise dispose of, directly or indirectly, any Capital Stock of any Significant Subsidiary of the  Company existing as of the Issue Date, except to the Company or one of its other Subsidiaries, or for the  purpose of  qualifying directors or as may be required by law of regulation, unless (1) such issuance, sale,  assignment, transfer or other disposition is required to comply with the order of a court or regulatory  authority of competent jurisdiction, other than an order issued at the Company’s request or at the request  of any of its Subsidiaries, (2) the Company or its Subsidiary sells, assigns, transfers or otherwise disposes  of the entire Capital Stock of the Significant Subsidiary at the same time in one transaction or in a series  of related transactions, for consideration consisting of cash, property or a combination thereof that is at  least equal to the Fair Market Value of the Capital Stock or (3) the Company sells, assigns, transfers, or  otherwise disposes of any Capital Stock of a Significant Subsidiary for at least Fair Market Value and,  after giving effect thereto, the Company and its Subsidiaries would own, directly or indirectly, more than  80% of the issued and outstanding Voting Stock of such Significant Subsidiary.  For purposes of the  foregoing, Fair Market Value shall be as determined by the Company or the Board of Directors of the  Company, as set forth in the definition of Fair Market Value.   SECTION 3.15.  Ratings.  The Company shall (i) use its best efforts to maintain a rating of the Notes      by the Applicable Rating Agency of not less than BBB+ (or its equivalent)  and (ii) ensure that the Notes  are rated at least  “BB-” (or its equivalent) by the Applicable Rating Agency (it being understood that this  clause (ii) will be breached regardless of whether the Company has used its best efforts to maintain such  rating).                                                   42  

 

                                    ARTICLE IV.                                  Successor Company                                           SECTION 4.1.    When Company May Merge or Otherwise Dispose of Assets.                            (a)   The Company shall not consolidate with or merge with or into (whether or not the  Company is the surviving corporation), or sell, assign, convey, transfer, lease or otherwise dispose  (including by means of a reinsurance transaction) of all or substantially all of the properties and assets of  the Company and its Subsidiaries, taken as a whole, in one or more related transactions, to, any Person  unless:                (i)   if other than the Company, the resulting, surviving or transferee Person (the  “Successor Company”) shall be a corporation, partnership or limited liability company organized and  existing under the laws of the United States of America, any State of the United States, the District of  Columbia or any territory thereof;                             (ii)  the Successor Company shall expressly assume by an indenture supplemental  hereto, executed and delivered to the Trustee, Paying Agent and Registrar, in form satisfactory to the  Trustee, Paying Agent and Registrar, all the obligations of the Company under the Notes and this  Indenture, unless such obligation to assume is waived by Holders representing a majority of the principal  amount of the Notes; and                (iii) immediately after giving effect to such transaction (and treating any Indebtedness  that becomes an obligation of the Company, the Successor Company or any Subsidiary as a result of such  transaction as having been Incurred by the Company, the Successor Company or such Subsidiary at the  time of such transaction), no Default or Event of Default shall have occurred and be continuing (or would  reasonably be expected to result therefrom).                      (b)   Without compliance with Section 4.1(a)(iii):                      (i)   any Subsidiary may consolidate with, merge with or into or to the Company or  another Subsidiary so long as no Capital Stock of the Subsidiary is distributed to any Person other than  the Company or such other Subsidiary, as applicable, and                            (ii)  the Company may merge with an Affiliate of the Company solely for the purpose  of reincorporating the Company in another jurisdiction to realize tax or other benefits, so long as the  amount of Indebtedness of the Company and its Subsidiaries is not increased thereby; provided that, in  the case of a Subsidiary that merges into the Company, the Company shall not be required to comply with  the preceding Section 4.1(a)(iv).                (c)   Notwithstanding the provisions of Section 4.1(a), each Holder shall have the right, within  20 Business Days following a Change of Control of the Company, to require the successor to the  Company to repurchase all or any part of such Holder’s Notes, for cash, at a purchase price equal to 101%  of the then-outstanding principal balance of the Notes to be repurchased, plus accrued and unpaid interest  on such Notes, if any, to the applicable repurchase date.                (d)   Upon satisfaction of the conditions set forth in Section 4.1(a) or 4.1(b) as applicable, and  subject to the rights of the Holders pursuant to Section 4.1(d), the Company shall be released from its  obligations under this Indenture and the Successor Company shall succeed to, and be substituted for, and  may exercise every right and power of, the Company under this Indenture.                                           43  

 

                                     ARTICLE V.                                     Redemption                                           SECTION 5.1.    Optional Redemption. (a) At any time prior to March 15, 2024, the Company may, at its  option, redeem all or, from time to time, any part of the Notes, at a redemption price equal to 100.00% of  the principal amount of the Notes redeemed, plus the Applicable Premium, plus accrued and unpaid  interest and principal on such Notes, if any, on the Notes redeemed, to the applicable redemption date  (subject to the right of Holders of record on the relevant Record Date to receive principal and interest due  on the relevant Payment Date that is on or prior to the applicable redemption date).          (b) On or after March 15, 2024, the Company may, at its option, redeem all or, from time to time,  any part of the Notes, at the following redemption prices (expressed as a percentage of outstanding  principal amount of the Notes to be redeemed) plus accrued and unpaid interest and principal on such  Notes, if any, to the applicable redemption date, if redeemed during the twelve-month period beginning  on March 15 of the years indicated below (subject to the rights of Holders of record on the relevant  Record Date to receive principal and interest due on the relevant Payment Date that is on or prior to the  applicable redemption date):                               Year                            Redemption Price        2024                                103.750%        2025                                101.875%        2026 and thereafter                 100.00%          SECTION 5.2.    Election to Redeem; Notice to Trustee of Optional Redemptions. If the Company elects  to redeem Notes pursuant to Section 5.1 the Company shall furnish to the Trustee, at least 5 Business  Days before notice of redemption is required to be mailed or caused to be mailed to Holders pursuant to  Section 5.4 an Officers’ Certificate setting forth (a) the paragraph or subparagraph of such Note and/or  Section of this Indenture pursuant to which the redemption shall occur, (b) the Redemption Date (as  defined below), (c) the principal amount of the Notes to be redeemed and (d) the redemption price. The  Company shall deliver to the Trustee such documentation and records as shall enable the Trustee to select  the Notes to be redeemed pursuant to Section 5.3.          SECTION 5.3.    Selection by Registrar of Notes to Be Redeemed. In the case of any partial redemption,  selection of the Notes for redemption will be made, in the case of Global Notes, in accordance with  Applicable Procedures, and in the case of definitive notes by the Trustee in compliance with the  requirements of the applicable depository and the principal national securities exchange, if any, on which  the Notes are listed (as advised by the Company to the Registrar) or, if the Notes are not listed, then on as  nearly a pro rata basis as possible or by lot or such other similar method in accordance with the  Applicable Procedures (subject to such rounding as may be necessary so that Notes are redeemed in  integral multiples of the then remaining balance of principal amount per Note or less if redeemed in part).  If any Note is to be redeemed in part only, the notice of redemption relating to such Note shall state the  portion of the principal amount thereof to be redeemed. A new Note in principal amount equal to the  unredeemed portion thereof shall be issued in the name of the Holder thereof upon cancellation of the  original Note in accordance with Section 5.7.                The Registrar shall promptly notify the Company in writing of the Notes selected for redemption  and, in the case of any Notes selected for partial redemption, the principal amount thereof to be redeemed.                For all purposes of this Indenture, unless the context otherwise requires, all provisions relating to  redemption of Notes shall relate, in the case of any Note redeemed or to be redeemed only in part, to the  portion of the principal amount of such Note which has been or is to be redeemed.                                         44  

 

           SECTION 5.4.    Notice of Redemption. The Company shall mail or cause to be mailed by a recognized  international mail carrier or otherwise electronically deliver or cause to be delivered, a notice of  redemption to each Holder whose Notes are to be redeemed at its registered address not less than 30 nor  more than 60 days prior to a date fixed for redemption (a “Redemption Date”); provided, however, that  redemption notices may be mailed or delivered more than 60 days prior to a Redemption Date if the  notice is issued in connection with Article VIII. At the Company’s written request, the Trustee shall give  notice of redemption in the Company’s name and at the Company’s expense; provided that the Company  shall have delivered to the Trustee, at least five Business Days before notice of redemption is required to  be mailed or caused to be mailed or otherwise electronically deliver or cause to be delivered to Holders  pursuant to this Section 5.4 (unless a shorter notice shall be agreed to by the Trustee), an Officers’  Certificate requesting that the Trustee give such notice and setting forth the information to be stated in  such notice as provided in the following paragraph.                All notices of redemption shall be prepared by the Company and shall state:                 (a) the Redemption Date,                    (b)   the redemption price and the amount of accrued interest, if any, to, but excluding, the  Redemption Date payable as provided in Section 5.6 if any,                (c)    if less than all outstanding Notes are to be redeemed, the identification of the particular  Notes (or portion thereof) to be redeemed, as well as the aggregate principal amount of Notes to be  redeemed and the aggregate principal amount of Notes to be outstanding after such partial redemption,                (d)    in case any Note is to be redeemed in part only, the notice which relates to such Note shall  state that on and after the Redemption Date, upon surrender of such Note, the Holder shall receive,  without charge, a new Note or Notes of authorized denominations for the principal amount thereof  remaining unredeemed,                (e)    that on the Redemption Date the redemption price (and accrued interest, if any, to, but  excluding, the Redemption Date payable as provided in Section 5.6) shall become due and payable upon  each such Note, or the portion thereof, to be redeemed, and, unless the Company defaults in making the  redemption payment, that interest on Notes called for redemption (or the portion thereof) shall cease to  accrue on and after said date,                (f)    the place or places where such Notes are to be surrendered for payment of the redemption  price and accrued interest, if any,                (g)    the name and address of the Paying Agent,                (h)    that Notes called for redemption must be surrendered to the Paying Agent to collect the  redemption price,                (i)    the number, and that no representation is made as to the accuracy or correctness of the   number, if any, listed in such notice or printed on the Notes, and                (j)    the Section of this Indenture pursuant to which the Notes are to be redeemed.          SECTION 5.5.    Deposit of Redemption Price. Prior to 10:00 a.m. (New York time) on the Business Day  prior to any Redemption Date, the Company shall deposit with the Trustee or with a Paying Agent (or, if                                         45  

 

   the Company is acting as its own Paying Agent, segregate and hold in trust as provided in Section 2.4) an  amount of money sufficient to pay the redemption price of, and accrued interest on, all the Notes which  are to be redeemed on that date.          SECTION 5.6.    Notes Payable on Redemption Date. Notice of redemption having been given as  aforesaid, the Notes so to be redeemed shall, on the Redemption Date, become due and payable at the  redemption price therein specified (together with accrued interest, if any, to, but excluding, the  Redemption Date) and such Notes shall cease to bear interest. Upon surrender of any such Note for  redemption in accordance with said notice, such Note shall be paid by the Company at the redemption  price, together with accrued interest, if any, to, but excluding, the Redemption Date (subject to the rights  of Holders of record on the relevant Record Date to receive interest due on the relevant Payment Date).                If any Note called for redemption shall not be so paid upon surrender thereof for redemption, the  principal (and premium, if any) shall, until paid, bear interest from the Redemption Date at the rate borne  by the Notes.                If a Redemption Date is on or after a Record Date and on or before the related Payment Date, the  accrued and unpaid interest, if any, shall be paid to the Person in whose name the Note is registered at the  close of business on such Record Date, and no additional interest shall be payable to Holders whose Notes  shall be subject to redemption by the Company.          SECTION 5.7.    Notes Redeemed in Part. Any Note which is to be redeemed only in part (pursuant to the  provisions of this Article) shall be surrendered at the office or agency of the Company maintained for  such purpose pursuant to Section 2.3 (with, if the Company so requires, due endorsement by, or a written  instrument of transfer in form satisfactory to the Company duly executed by, the Holder thereof or such  Holder’s attorney duly authorized in writing), and the Company shall execute, and, upon receipt of an  Authentication Order, the Trustee shall authenticate and make available for delivery to the Holder of such  Note at the expense of the Company, a new Note or Notes, of any authorized denomination as requested  by such Holder, in an aggregate principal amount equal to and in exchange for the unredeemed portion of  the principal of the Note so surrendered, provided that each such new Note shall be in a minimum  principal amount of the Notes not subject to redemption.    SECTION 5.8.    Special Mandatory Redemption.  In the event that the transaction contemplated by that  certain Equity Purchase Agreement dated as of February 25, 2019 by and between the Company, 1347  Property Insurance Holdings, Inc., a Delaware corporation, Maison Managers, Inc., a Delaware  corporation, Maison Insurance Company, a Louisiana corporation, and Claimcor, LLC, a Florida limited  liability company (the “Acquisition Agreement”), is not consummated on or prior to December 31, 2019,  or if prior to December 31, 2019 the Acquisition Agreement is terminated, or if the Company otherwise  publicly announces that the transaction contemplated by the Acquisition Agreement will not be  consummated (the earlier of (i) such date of termination or announcement or (ii) December 31, 2019 is  referred to herein as the “Special Mandatory Redemption Trigger Date”), then, except as set forth in a  Holder’s related Note Purchase Agreement, the Company shall redeem such Holders’ Notes at a  redemption price equal to 101% of the principal amount of the Notes to be redeemed, plus accrued and  unpaid interest on such Notes, if any, to but excluding the applicable redemption date.  Such redemption  shall be effected in accordance with Sections 5.4, 5.5 and 5.6 hereof, except that: (a) the notice provided  for in Section 5.4 shall be sent or mailed to such Holder not later than 15 days following the Special  Mandatory Redemption Trigger Date and no less than 10 days prior to the date fixed for such redemption  by the Company (the “Special Mandatory Redemption Date”), and (b) the Special Mandatory Redemption  Date shall be not later than 30 days following the Special Mandatory Redemption Trigger Date.                                            46  

 

                                    ARTICLE VI.                                 Defaults and Remedies     SECTION 6.1.    Events of Default.                            (a)   “Event of Default” with respect to the Notes, wherever used herein, means each of the  following:                        (i)   default in any payment of interest on any Note when the same becomes due and  payable and continues for 10 consecutive Business Days;                             (ii)  default in the payment of principal of or premium, if any, on any Note when the  same becomes due at its Stated Maturity, upon optional redemption, upon required repurchase, upon  declaration of acceleration or otherwise;                            (iii) failure by the Company to comply with its obligations under Article IV;                            (iv)  failure by the Company to comply with any of its obligations under any covenant  as set forth in the applicable supplemental indenture or under Sections 3.2, 3.3 (subject to (v) below), 3.4,  3.5, 3.6, 3.7, 3.8, 3.9, 3.12 or 3.14 (in each case, other than matters that would constitute an Event of  Default under Section 6.1(a)(iii)) for 45 days after (i) the Company has actual knowledge of such failure  to comply or (ii) the Company receives written notice as provided below ;                            (v)   failure by the Company to comply for 30 days after written notice as provided  below with its other agreements (except as provided in clauses (a)(i) through (a)(iv) of this Section 6.1)  contained in this Indenture or the Notes;                            (vi)  the Company or any of its Subsidiaries defaults under any arrangement,  mortgage, indenture or instrument under which there is issued or by which there is secured or evidenced  any payment obligations of the Company (or the payment of which is guaranteed by the Company), other  than Indebtedness owed to the Company, whether such payment obligation or Guarantee now exists, or is  created after the Issue Date, which default:                             (A)   is caused by a failure to pay amounts due, principal of, or interest or  premium on Indebtedness on a due date within any grace period provided in the agreements or  instruments governing such payment obligation (“payment default”); or                                        (B)   results in the acceleration of such Indebtedness prior to its stated final  maturity;                    in each case, together with fees, interest and expenses, aggregates to a payment  obligation of $1,000,000 or more.                                  (vii) the occurrence of any of the following events with respect to the Company or a  Subsidiary, and, in each case, such event remains undischarged or unstayed for a period of 60 days:                                  (A)   commences a voluntary case or proceeding with respect to itself;                                        (B)   is subject to delinquency proceedings or similar regulatory intervention  by the applicable Department in connection with the supervision of such Insurance Subsidiaries business;                                                              47  

 

                     (C)   an Insurance Subsidiary fails to maintain minimum capital and surplus as  required by the applicable Department with jurisdiction over the Insurance Subsidiary’s business;                                        (D)   consents to the entry of an order for relief against it in an involuntary  case or proceeding;                                        (E)   consents to the appointment of a Receiver (as defined below) of it or for  substantially all of its property; or                                        (F)   makes a general assignment for the benefit of its creditors; or takes any  comparable action under any foreign laws relating to insolvency;                                  (viii) a court of competent jurisdiction enters an order or decree under any Bankruptcy  Law that:                            (A)    is for relief against the Company or any Subsidiary in an involuntary case;                                        (B)    appoints a Receiver of the Company or any Subsidiary for any substantial  part of its property; or                                        (C)    orders the winding up or liquidation of the Company or any Subsidiary;                      (ix)  failure by the Company or any Subsidiary to pay final and non-appealable  judgments aggregating in excess of $1,000,000 (net of any amounts that are covered by insurance,  pursuant to which the insurer has not contested coverage), which judgments remain unsatisfied or  undischarged for any period of 30 consecutive days during which a stay of enforcement of such  judgments shall not be in effect; or                      (x)   breach by the Company in any material respect any representation, warranty or  covenant made to the Holders by the Company in the Note Purchase Agreement, and in the case of any  such covenant such breach shall continue unremedied for a period of 30 days after the earlier of (i) written  notice to the Company from any Holder of Notes and (ii) the date on which the Board of Directors of the  Company obtains actual knowledge of such breach.                The foregoing shall constitute Events of Default whatever the reason for any such Event of  Default and whether it is voluntary or involuntary or is effected by operation of law or pursuant to any  judgment, decree or order of any court or any order, rule or regulation of any administrative or  governmental body.                Notwithstanding the foregoing, a default under clauses (iv), (v) or (x) of this Section 6.1(a) shall  not constitute an Event of Default until the Trustee or the Holders of at least 25% in principal amount of  the outstanding Notes notify the Company in writing of the default and the Company does not cure such  default within the time specified in clause (iv), (v) or (x) of this paragraph after receipt of such notice.  Such notice must specify the Default, demand that it be remedied and state that such notice is a “Notice of  Default.”                The term “Bankruptcy Law” means Title 11, United States Code, or any similar federal or state  law for the relief of debtors. The term “Receiver” means any receiver, trustee, assignee, liquidator,  custodian or similar official under any Bankruptcy Law.                                            48  

 

   SECTION 6.2.    Acceleration. If an Event of Default (other than an Event of Default specified in Section  6.1(a)(i), (ii), (vii) or (viii) with respect to the Company) occurs and is continuing, the Holders of at least  a majority in principal amount of the outstanding Notes, by notice in writing to the Company and the  Trustee specifying the Event of Default and that it is a “notice,” and the Trustee at the request of such  Holders shall, declare the principal of, premium, if any, and accrued and unpaid interest, if any, on all the  Notes to be due and payable. If an Event of Default pursuant to Section 6.1(a)(i) or (ii) occurs and is  continuing, the Holder as to which such Event of Default occurred may make such declaration with  respect to such Holder’s Notes. Upon such a declaration, such principal, premium and accrued and unpaid  interest due on such Notes shall, subject to Section 6.4, be immediately due and payable. In the event of a  declaration of acceleration because an Event of Default set forth in Section 6.1(a)(vi) above has occurred  and is continuing, such declaration of acceleration of Notes shall be automatically rescinded and annulled  if the default triggering such Event of Default pursuant to Section 6.1(a)(vi) shall be remedied or cured by  the Company or a Subsidiary or waived by the holders of the relevant Indebtedness within 15 days after  the declaration of acceleration with respect thereto and if (1) the rescission and annulment of the  acceleration of the Notes would not conflict with any judgment or decree of a court of competent  jurisdiction and (2) all existing Events of Default, except nonpayment of principal, premium or interest on  the Notes that became due solely because of the acceleration of such Notes, have been cured or waived. If  an Event of Default specified in Section 6.1(a)(vii) or (viii) with respect to the Company occurs and is  continuing, the principal of, premium, if any, and accrued and unpaid interest on all the Notes shall  become and be immediately due and payable without any declaration or other act on the part of the  Trustee or any Holders.     SECTION 6.3.    Other Remedies. If an Event of Default occurs and is continuing, the Trustee, acting at  the direction of the Holders of at least a majority of the principal amount of the Notes then outstanding,  may pursue any available remedy to collect the payment of principal of or interest on the Notes or to  enforce the performance of any provision relating to the Notes and this Indenture (including sums owed to  the Trustee, the Agents, and their agents and counsel).                            The Trustee may maintain a proceeding even if it does not possess any of the Notes or does not  produce any of them in the proceeding, provided the Trustee provides evidence of the Holders’ direction.  A delay or omission by the Trustee or any Holder in exercising any right or remedy accruing upon an  Event of Default shall not impair the right or remedy or constitute a waiver of or acquiescence in the  Event of Default. No remedy is exclusive of any other remedy. All available remedies are cumulative.    SECTION 6.4.    Waiver of Past Defaults. The Holders of a majority in principal amount of the Notes  then outstanding (including, without limitation, consents obtained in connection with a purchase of, or  tender offer or exchange offer for, Notes) by notice to the Trustee may waive an existing Default or Event  of Default and its consequences (except a Default or Event of Default in the payment of the principal of,  premium or interest on a Note) and rescind any such acceleration and its consequences if (1) rescission  would not conflict with any judgment or decree of a court of competent jurisdiction and (2) all existing  Events of Default, other than the nonpayment of the principal of, premium, if any, and interest on the  Notes that have become due solely by such declaration of acceleration, have been cured or waived;  provided, however, that with respect to a Default or Event of Default pursuant to Section 6.1(a)(i) or (ii),  the Holder as to which such Event of Default occurred may waive such Default or Event of Default with  respect to such Holder’s Notes.                      SECTION 6.5.    Control by Majority. The Holders of a majority in principal amount of the Notes then  outstanding may direct the time, method and place of conducting any proceeding for exercising any  remedy available to the Trustee or of exercising any trust or power conferred on the Trustee with respect  to the Notes. However, the Trustee, as the case may be, may refuse to follow any direction that conflicts  with law or this Indenture, the Notes, or, subject to Sections 7.1 and 7.2, that the Trustee determines is                                         49  

 

   unduly prejudicial to the rights of other Holders or would involve the Trustee in personal liability;  provided, however, that the Trustee may take any other action deemed proper by the Trustee that is not  inconsistent with such direction. Prior to taking any action under this Indenture, the Trustee shall be  entitled to indemnity, security and/or prefunding satisfactory to it in its sole discretion against all losses,  liabilities and expenses caused by taking or not taking such action.                      SECTION 6.6.    Limitation on Suits. Except to enforce the right to receive payment of principal,  premium, if any, or interest when due, no Holder may pursue any remedy with respect to this Indenture or  the Notes unless:                            (a)   the Holder has previously given to the Trustee written notice stating that an Event of  Default has occurred and is continuing;                (b)   the Holders of at least a majority in principal amount of the Notes outstanding have made  a written request to the Trustee to pursue the remedy;                (c)   such Holder or Holders have offered to the Trustee security, indemnity and/or prefunding  satisfactory to it against any loss, liability or expense; and                (d)   the Trustee has not complied with the request within 15 days after receipt of the request  and the offer of security and/or indemnity.                No Holder may use this Indenture to prejudice the rights of another Holder or to obtain a  preference or priority over another Holder.          SECTION 6.7.    Rights of Holders to Receive Payment. Notwithstanding any other provision of this  Indenture, the right of any Holder to receive payment of principal of, premium (if any) or interest on the  Notes held by such Holder, on or after the respective due dates expressed in the Notes, or to bring suit for  the enforcement of any such payment on or after such respective dates, shall not be impaired or affected  without the consent of such Holder.    SECTION 6.8.    Collection Suit by Trustee. If an Event of Default specified in Section 6.1(a)(i) or (ii)  occurs and is continuing, the Trustee, at the written direction of the Holders of a majority in aggregate  principal amounts of the Notes then outstanding, may recover judgment in its own name and as trustee of  an express trust against the Company for the whole amount then due and owing (together with interest on  any unpaid interest to the extent lawful) and the amounts provided for in Section 7.6.    SECTION 6.9.    Trustee May File Proofs of Claim. The Trustee may file such proofs of claim and other  papers or documents as may be necessary or advisable in order to have the claims of the Trustee and the  Agents (including any claim for the compensation, expenses, disbursements and advances of the Trustee,  the Agents and their agents and counsel) and the Holders allowed in any judicial proceedings relative to  the Company, its Subsidiaries or their respective creditors or properties and, unless prohibited by law or  applicable regulations, may vote on behalf of the Holders in any election of a trustee in bankruptcy or  other Person performing similar functions, and any custodian in any such judicial proceeding is hereby  authorized by each Holder to make payments to the Trustee and the Agents and, in the event that the  Trustee shall consent to the making of such payments directly to the Holders, to pay to the Trustee and the  Agents any amount due it for the compensation, expenses, disbursements and advances of the Trustee, the  Agent, their agents and counsel, and any other amounts due the Trustee and the Agents under Section 7.6.  To the extent that the payment of any such compensation, expenses, disbursements and advances of the  Trustee, the Agents, their agents and counsel, and any other amounts due to the Trustee and the Agents  under Section 7.6 out of the estate in any proceeding shall be denied for any reason, payment of the same                                         50  

 

   shall be secured by a Lien on, and shall be paid out of, any and all distributions, dividends, money,  securities and other properties that the Holder may be entitled to receive in such proceeding whether in  liquidation or under any plan of reorganization or arrangement or otherwise. Nothing herein contained  shall be deemed to authorize the Trustee to authorize or consent to or accept or adopt on behalf of any  Holder any plan or reorganization, arrangement, adjustment or composition affecting the Notes or the  rights of any Holder thereof, or to authorize the Trustee to vote in respect of the claim of any Holder in  such proceeding.    SECTION 6.10.    Priorities. The Trustee shall pay out any money or property received by it in the  following order:                            First: to the Trustee and the Agents for amounts due to each of them under Section 7.6; and                Second: to Holders for amounts due and unpaid on the Notes for principal, premium, if any, and  interest, ratably, without preference or priority of any kind, according to the amounts due and payable on  the Notes for principal, premium, if any, and interest, respectively.                The Trustee may fix a record date and payment date for any payment to Holders pursuant to this  Section 6.10. At least 15 days before such record date, the Company shall mail to each Holder and the  Trustee a notice that states the record date, the payment date and the amount to be paid.    SECTION 6.11.    Undertaking for Costs. In any suit for the enforcement of any right or remedy under  this Indenture or in any suit against the Trustee for any action taken or omitted by it as Trustee, a court in  its discretion may require the filing by any party litigant in the suit of an undertaking to pay the costs of  the suit, and the court in its discretion may assess reasonable costs, including reasonable attorneys’ fees  and expenses, against any party litigant in the suit, having due regard to the merits and good faith of the  claims or defenses made by the party litigant. This Section does not apply to a suit by the Trustee, a suit  by the Company, a suit by a Holder pursuant to Section 6.7 or a suit by Holders of more than 10% in  outstanding principal amount of the Notes.                                     ARTICLE VII.                                       Trustee    SECTION 7.1.    Duties of Trustee.                            (a)   If an Event of Default occurs and is continuing, the Trustee shall only exercise any of its  rights and powers under this Indenture and the Notes to the extent it has received from the Holders of a  majority of the principal amount of the Notes then outstanding written direction to do so; and provided  further that the Trustee shall be under no obligation to exercise any of the rights or powers under this  Indenture at the request or direction of any of the Holders unless such Holders have provided the Trustee  indemnity, security and/or prefunding satisfactory to the Trustee in its sole discretion, as applicable,  against loss, liability or expense.                (b)   Subject to subsection (a) above:                      (i)   the Trustee and the Agents undertake to perform such duties and only such duties  as are specifically set forth in this Indenture and no implied covenants or obligations shall be read into  this Indenture against the Trustee or the Agents; and                            (ii)  in the absence of gross negligence or bad faith on its part, each of the Trustee or  the Agents may conclusively rely, as to the truth of the statements and the correctness of the opinions                                         51  

 

   expressed therein, upon certificates or opinions furnished to the Trustee under this Indenture and the  Notes, as applicable. However, in the case of any such certificates or opinions which by any provisions  hereof are specifically required to be furnished to the Trustee, the Trustee shall examine the form of such  certificates and opinions to determine whether or not they conform to the requirements of this Indenture  and the Notes, as the case may be (but need not confirm or investigate the accuracy of mathematical  calculations or other facts stated therein).                (c)   The Trustee may not be relieved from liability for its grossly negligent action, its own  grossly negligent failure to act or its own willful misconduct, except that:                      (i)   this paragraph does not limit the effect of paragraph (b) of this Section 7.1;                            (ii)  the Trustee shall not be liable for any error of judgment made in good faith by a  Trust Officer or Trust Officers unless it is proved in a final and non-appealable decision of a court of  competent jurisdiction that the Trustee was grossly negligent in ascertaining the pertinent facts; and                            (iii) the Trustee shall not be liable with respect to any action it takes or omits to take  in good faith in accordance with a direction received by it pursuant to Section 6.5.                (d)   The Trustee shall not be liable for interest on any money received by it except as the  Trustee may expressly agree in writing with the Company.                (e)   Money held by the Trustee need not be segregated from other funds except to the extent  required by law.                (f)   No provision of this Indenture or the Notes shall require the Trustee to expend or risk its  own funds or otherwise incur any financial liability in the performance of any of its duties hereunder or  thereunder or in the exercise of any of its rights or powers, if it shall have reasonable grounds to believe  that repayment of such funds or adequate indemnity against such risk or liability is not reasonably assured  to it.                (g)   Every provision of this Indenture relating to the conduct or affecting the liability of or  affording protection to the Trustee shall be subject to the provisions of this Section 7.1, Section 7.2 and  Section 7.6.                (h)   The Trustee shall be under no obligation to exercise any of the rights or powers vested in  it by this Indenture at the request or direction of any of the Holders unless (i) so directed in writing by the  Holders of a majority in the principal amount of the outstanding Notes and (ii) such Holders shall have  provided to the Trustee, security, prefunding and/or indemnity satisfactory to the Trustee against the  costs, expenses (including attorneys’ fees and expenses) and liabilities that might be incurred by it in  compliance with such request or direction.    SECTION 7.2.    Rights of Trustee.                            (a)   The Trustee may conclusively rely and shall be protected in acting upon any resolution,  certificate, statement, instrument, opinion, notice, request, direction, consent, order, bond or any other  paper or documents believed by it to be genuine and to have been signed or presented by the proper  Person or Persons. The Trustee need not investigate any fact or matter stated in the document.                                                  52  

 

         (b)   The Trustee may refer any question relating to the ownership of a Note or the adequacy  or sufficiency of any evidence supplied in connection with the replacement of a Note to the Company for  determination by the Company and rely upon any determination so made.                (c)   Before the Trustee acts or refrains from acting, it may require an Officers’ Certificate or  an Opinion of Counsel or both. The Trustee shall not be liable for any action it takes or omits to take in  good faith in reliance on an Officers’ Certificate or Opinion of Counsel.                (d)   The Trustee may act through its attorneys and agents and shall not be responsible for the  misconduct or negligence of any agent or attorney appointed with due care.                (e)   The Trustee shall not be liable for any action it takes or omits to take in good faith which  it believes to be authorized or within its rights or powers; provided, however, that the Trustee’s conduct,  respectively, does not constitute willful misconduct or gross negligence as determined in a final and non- appealable decision of a court of competent jurisdiction.                (f)   The Trustee may consult with professional advisors of its selection, and the advice or  opinion of any such advisor with respect to matters relating to this Indenture or the Notes shall be full and  complete authorization and protection from liability in respect to any action taken, omitted or suffered by  it hereunder or thereunder in good faith and in accordance with the advice or opinion of any such advisor.                (g)   The Trustee may engage or be interested in any financial or other transaction with the  Company and/or any of their Affiliates and may act as freely as if it were not appointed under this  Indenture.                (h)   The Trustee shall not be bound to make any investigation into any statement, warranty or  representation, or the facts or matters stated in any resolution, certificate, statement, instrument, opinion,  notice, request, direction, consent, order, bond or other paper or document made or in connection with  this Indenture; moreover, the Trustee shall not be bound to make any investigation into (i) the  performance or observance of any of the covenants, agreements or other terms or conditions set forth  herein, (ii) the occurrence of any default, or the validity, enforceability, effectiveness or genuineness of  this Indenture or any other agreement, instrument or document, or (iii) the facts or matters stated in any  resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order,  bond, debenture, note or other evidence of indebtedness or other paper or document, but the Trustee, in its  discretion, may make such further inquiry or investigation into such facts or matters as it may see fit, and,  if the Trustee shall determine to make such further inquiry or investigation, it shall be entitled to examine  the books, records and premises of the Company, personally or by agent or attorney and shall incur no  liability or additional liability of any kind by reason of such inquiry or investigation. The recitals  contained herein and in the Notes, except the Trustee's certificates of authentication, shall be taken as the  statements of the Company, and the Trustee assumes no responsibility for their correctness. The Trustee  makes no representations as to the validity, sufficiency or adequacy of this Indenture or of the Notes. The  Trustee shall not be accountable for the use or application by the Company of Notes or the proceeds  thereof. The Trustee shall not be responsible to make any calculation with respect to any matter under this  Indenture. The Trustee shall have no duty to monitor or investigate the Company's compliance with or the  breach of, or cause to be performed or observed, any representation, warranty or covenant made in this  Indenture.                (i)   The Trustee shall not be deemed to have knowledge of any matter including any Default  or Event of Default except any Default or Event of Default of which a Trust Officer shall have received  written notification from the Company or Holders at the Corporate Trust Office of the Trustee and such  notice references the Notes and this Indenture.                                         53  

 

                 (j)   In no event shall the Trustee be responsible or liable for special, punitive, indirect, or  consequential loss or damage of any kind whatsoever (including, but not limited to, loss of profit)  irrespective of whether the Trustee has been advised of the likelihood of such loss or damage and  regardless of the form of action.                (k)   The rights, privileges, protections, immunities and benefits given to the Trustee,  including, without limitation, its right to be indemnified, are extended to, and shall be enforceable by, the  Trustee, the Registrar and each Agent in each of its capacities hereunder.                (l)   The Trustee may request that the Company deliver a certificate setting forth the names of  individuals and/or titles of officers authorized at such time to take specified actions pursuant to this  Indenture.                (m)   The permissive rights of the Trustee enumerated herein shall not be construed as duties.                (n)   The Company shall provide prompt written notice to the Trustee of any change to its  fiscal year.                (o)   The Trustee shall have no duty to inquire as to the performance, or monitor the  compliance of the Company with respect to the covenants contained in Article III (as may be further  amended by any supplemental indenture hereto).                 (p)   The Trustee shall not be required to give any bond or surety with respect to the  performance of its duties or the exercise of its powers under this Indenture.                 (q)   No provision of this Indenture shall require the Trustee to do anything which, in its  opinion, may be illegal or contrary to applicable law or regulation.           SECTION 7.3.    Individual Rights of Trustee. The Trustee in its individual or any other capacity may  become the owner or pledgee of Notes, in accordance with the provisions of this Indenture, and may  otherwise deal with the Company, the Subsidiaries or their Affiliates with the same rights it would have if  it were not Trustee. Any Paying Agent, Registrar, co-registrar or co-paying agent may do the same with  like rights. In addition, the Trustee shall be permitted to engage in transactions with the Company;  provided, however, that if the Trustee acquires any conflicting interest the Trustee must (i) eliminate such  conflict within 90 days of acquiring such conflicting interest or (ii) resign.                      SECTION 7.4.    Disclaimer. The Trustee shall not be responsible for and makes no representation as to  the validity or adequacy of this Indenture or the Notes, it shall not be accountable for the Company’s use  of the Notes or the proceeds from the Notes, and it shall not be responsible for any statement of the  Company in this Indenture or in any document issued in connection with the sale of the Notes or in the  Notes other than the Trustee’s certificate of authentication or for the use or application of any funds  received by any Paying Agent.    SECTION 7.5.    Notice of Defaults. If a Default occurs and is continuing and is known to the Trustee, the  Trustee shall cause to be provided to the Company and each Holder a written Notice of Default within 15  days after the Trustee obtains such knowledge. Except in the case of a Default in payment of principal of,  premium, if any, or interest on any Note, the Trustee may withhold the notice if and so long as a  committee of Trust Officers of the Trustee in good faith determines that withholding the notice is in the  interests of Holders.                                                             54  

 

   SECTION 7.6.    Compensation and Indemnity. The Company shall pay to the Trustee and each Agent  from time to time such compensation for its services as the parties shall agree in writing from time to  time. Neither the Trustee’s compensation nor any Agent’s compensation shall be limited by any law on  compensation, including with respect to the Trustee, any law of a trustee of an express trust. The  Company shall reimburse the Trustee and each Agent upon request for all reasonable out-of-pocket  expenses properly incurred or made by it, including, but not limited to, costs of collection, costs of  preparing and reviewing reports, certificates and other documents, costs of preparation and mailing of  notices to Holders and reasonable costs of counsel, in addition to the compensation for its services. Such  expenses shall include the compensation and expenses, disbursements and advances of the Trustee’s or  any Agent’s agents, counsel, accountants and experts. The Company shall indemnify the Trustee and each  Agent or any of their predecessors in each of their capacities hereunder, and each of their officers,  directors, employees, counsel and agents, against any and all loss, liability or expense (including, but not  limited to, reasonable attorneys’ fees and expenses) incurred by it in connection with the administration of  the Notes and this Indenture and the performance of their duties hereunder and thereunder, including the  costs and expenses of enforcing this Indenture (including this Section 7.6) and the Notes and of defending  itself against any claims (whether asserted by any Holder, the Company or otherwise). The Trustee and  each Agent shall notify the Company promptly of any claim for which it may seek indemnity. Failure by  the Trustee or any Agent to so notify the Company shall not relieve the Company of its obligations  hereunder. The Company shall defend the claim and the Trustee or Agent may have separate counsel and  the Company shall pay the reasonable fees and expenses of such counsel. The Company need not  reimburse any expense or indemnify against any loss, liability or expense incurred by the Trustee or any  Agent through its own willful misconduct or gross negligence as determined in a final and non-appealable  decision of a court of competent jurisdiction.                            To secure the Company’s payment obligations in this Section 7.6, the Trustee shall have a lien  prior to the Notes on all money or property held or collected by the Trustee other than money or property  held in trust to pay principal of and interest on particular Notes. The right of the Trustee or an Agent to  receive payment of any amounts due under this Section 7.6 shall not be subordinate to any other liability  or indebtedness of the Company.                The Company’s payment obligations pursuant to this Section and any lien arising hereunder shall  survive the discharge of this Indenture and the resignation or removal of the Trustee. When the Trustee  incurs expenses after the occurrence of an Event of Default specified in Section 6.1(a)(vii) or (viii) with  respect to the Company, the expenses are intended to constitute expenses of administration under any  Bankruptcy Law.                The obligation of the Company under this Section 7.6 shall survive satisfaction and discharge of  this Indenture or the earlier resignation or removal of the Trustee or an Agent.          SECTION 7.7.    Replacement of Trustee. The Trustee may resign at any time by so notifying the  Company with at least 30 days’ prior written notice. The Holders of a majority in principal amount of the  Notes the then outstanding may remove the Trustee by so notifying the Company and the Trustee in  writing 30 days in advance and may appoint a successor Trustee. The Company may remove the Trustee  by so notifying the Trustee in writing 30 days in advance if:                            (a)   the Trustee is adjudged bankrupt or insolvent;                (b)   a receiver or other public officer takes charge of the Trustee or its property;                 (c)   the Trustee otherwise becomes incapable of acting; or                                                 55  

 

         (d)   the Trustee breaches this Indenture.                If the Trustee resigns or is removed by the Company or by the Holders of a majority in principal  amount of the Notes then outstanding and such Holders do not reasonably promptly appoint a successor  Trustee, or if a vacancy exists in the office of Trustee for any reason (the Trustee in such event being  referred to herein as the retiring Trustee), the Company shall promptly appoint a successor Trustee.                A successor Trustee shall deliver a written acceptance of its appointment to the retiring Trustee  and to the Company. Thereupon the resignation or removal of the retiring Trustee shall become effective,  and the successor Trustee shall have all the rights, powers and duties of the Trustee under this Indenture.  The successor Trustee shall mail a notice of its succession to Holders. The retiring Trustee shall promptly  transfer all property held by it as Trustee to the successor Trustee, subject to the lien provided for in  Section 7.6.                If a successor Trustee does not take office within 30 days after the retiring Trustee resigns or is  removed, the retiring Trustee or the Holders of at least 10% in principal amount of the Notes may  petition, at the Company’s expense, any court of competent jurisdiction for the appointment of a  successor Trustee.                Notwithstanding the replacement of the Trustee pursuant to this Section 7.7 the Company’s  obligations under Section 7.6 shall continue for the benefit of the retiring Trustee.          SECTION 7.8.    Successor Trustee by Merger. If the Trustee consolidates with, merges or converts into,  or transfers all or substantially all its corporate trust business or assets to, another corporation or banking  association, the resulting, surviving or transferee corporation without any further act shall be the  successor Trustee.                            In case at the time such successor or successors by merger, conversion or consolidation to the  Trustee shall succeed to the trusts created by this Indenture, any of the Notes shall have been  authenticated but not delivered, any such successor to the Trustee may adopt the certificate of  authentication of any predecessor trustee, and deliver such Notes so authenticated; and in case at that time  any of the Notes shall not have been authenticated, any successor to the Trustee may authenticate such  Notes either in the name of any predecessor hereunder or in the name of the successor to the Trustee; and  in all such cases such certificates shall have the full force which it is anywhere in the Notes or in this  Indenture provided that the certificate of the Trustee shall have.          SECTION 7.9.    Agents. Any Agent may resign, without any liability for doing so, and be discharged  from its duties under this Indenture at any time by giving 30 days’ prior written notice of such resignation  to the Trustee and the Company. The Trustee or Company may remove any Agent at any time by giving  30 days’ prior written notice to any Agent. Upon such notice, a successor Agent shall be appointed by the  Company, who shall provide written notice of such to the Trustee. Such successor Agent shall become the  Agent hereunder upon the resignation or removal date specified in such notice. If the Company is unable  to replace the resigning Agent within 30 days after such notice, the Agent may, in its sole discretion,  deliver any funds then held hereunder in its possession to the Trustee (or its designee for such purposes)  or may apply to a court of competent jurisdiction for the appointment of a successor Agent or for other  appropriate relief. The costs and expenses (including its reasonable attorneys’ fees and expenses) incurred  by the Agent in connection with such proceeding shall be paid by the Company. Upon receipt of the  identity of the successor Agent, the Agent shall deliver any funds then held hereunder to the successor  Agent, less the Agent’s fees, costs and expenses or other obligations owed to the Agent. Upon its  resignation and delivery of any funds, the Agent shall be discharged of and from any and all further                                          56  

 

   obligations arising in connection with this Indenture, but shall continue to enjoy the benefit of Section  7.6.                                                                            ARTICLE VIII.                            Discharge of Indenture; Defeasance                                            SECTION 8.1.    Discharge of Liability on Notes; Defeasance.                            (a)   When (i) (x) the Company delivers to the Registrar all outstanding Notes (other than  Notes replaced pursuant to Section 2.7) for cancellation or (y) all outstanding Notes not theretofore  delivered to the Registrar for cancellation have become due and payable by reason of making a notice of  redemption pursuant to Section 5.4 or otherwise, or will become due and payable within one year or may  be called for redemption within one year under arrangements pursuant to Article V and the Company  irrevocably deposits or causes to be deposited with the Trustee or another entity designated by the Trustee  for such purpose as trust funds in trust solely for the benefit of the Holders in U.S. dollars, U.S.  Government Obligations which mature prior to the Payment Date, or a combination thereof, in such  amounts as shall be sufficient without consideration of any reinvestment of interest to pay and discharge  the entire Indebtedness on such Notes not theretofore delivered to the Registrar for cancellation for  principal, premium, if any, and accrued interest to, but excluding, the date of maturity or redemption; (ii)  no Default or Event of Default shall have occurred and be continuing on the date of such deposit or shall  occur as a result of such deposit (other than a default resulting from borrowing of funds to be applied to  such deposit and the grant of any Lien securing such borrowing) and such deposit shall not result in a  breach or violation of, or constitute a default under, any material instrument (other than this Indenture) to  which the Company is a party or by which the Company is bound; (iii) the Company has paid or caused  to be paid all sums payable on the date of deposit to the Trustee under this Indenture; and (iv) the  Company has delivered irrevocable instructions to the Trustee under this Indenture to apply the deposited  money toward the payment of such Notes at maturity or the Redemption Date, as the case may be, then  this Indenture shall, subject to Section 8.1(c) cease to be of further effect.                (b)   Subject to Sections 8.1(c) and 8.2 the Company at its option and at any time may  terminate (i) all the obligations of the Company under the Notes and this Indenture (“legal defeasance”)  or (ii) the obligations of the Company under Sections 3.2, 3.3, 3.4, 3.5, 3.6, 3.7, 3.8 and 3.9, and the  Company may omit to comply with and shall have no liability in respect of any term, condition or  limitation set forth in any such covenant or provision, whether directly or indirectly, by reason of any  reference elsewhere herein to any such covenant or provision or by reason of any reference in any such  covenant to any other provision herein or in any other document and such omission to comply with such  covenants or provisions shall no longer constitute a Default or an Event of Default under Section  6.1(a)(iii), 6.1(a)(iv), 6.1(a)(v), 6.1(a)(vi), 6.1(a)(vii) (only with respect to its Subsidiaries), 6.1(a)(viii)  (only with respect to its Subsidiaries) and 6.1(a)(ix) (clause (ii) being referred to as the “covenant  defeasance option”) but except as specified above, the remainder of this Indenture and the Notes shall be  unaffected thereby. The Company may exercise its legal defeasance option notwithstanding its prior  exercise of its covenant defeasance option.                If the Company exercises its legal defeasance option, payment of the Notes may not be  accelerated because of an Event of Default. If the Company exercises its covenant defeasance option,  payment of the Notes may not be accelerated because of an Event of Default specified in Section  6.1(a)(iii), 6.1(a)(iv), 6.1(a)(v) (only with respect to the covenants subject to such covenant defeasance),  6.1(a)(vi), 6.1(a)(vii) (only with respect to its Subsidiaries), 6.1(a)(viii) (only with respect to its  Subsidiaries) or 6.1(a)(ix).                                                  57  

 

         Upon satisfaction of the conditions set forth herein and upon request of the Company, the Trustee  shall acknowledge in writing the discharge of those obligations that the Company terminates.                (c)   Notwithstanding the provisions of Sections 8.1(a) and (b), the Company’s obligations in  Sections 2.2, 2.3, 2.4, 2.5, 2.6, 2.10, 2.12, 3.1, 6.7, 7.1, 7.2, 7.6, 7.7, 8.1(b) (with respect to legal  defeasance), 8.3, 8.4, 8.5 and 8.6 shall survive until the Notes have been paid in full. Thereafter, the  Company’s obligations in Sections 6.7, 7.6, 8.4 and 8.5 shall survive.          SECTION 8.2.    Conditions to Defeasance. The Company may exercise its legal defeasance option or its  covenant defeasance option only if:                            (a)   the Company shall irrevocably deposit with the Trustee or another entity designated by  the Trustee for such purpose, in trust, for the benefit of the Holders, U.S. dollars or U.S. Government  Obligations, or a combination of U.S. dollars and U.S. Government Obligations, in such amounts as shall  be sufficient, in the opinion of a nationally recognized firm of independent public accountants, to pay the  principal of, or interest and premium, if any, on the outstanding Notes issued hereunder on the Stated  Maturity or on the applicable Redemption Date, as the case may be, and the Company must specify  whether the Notes are being defeased to maturity or to a particular Redemption Date;                (b)   in the case of legal defeasance, the Company has delivered to the Trustee an Opinion of  Counsel reasonably acceptable to the Trustee confirming that, subject to customary assumptions and  exclusions, (i) the Company has received from, or there has been published by, the Internal Revenue  Service a ruling or (ii) since the Issue Date, there has been a change in the applicable federal income tax  law, in either case to the effect that, and based thereon such Opinion of Counsel shall confirm that, the  Holders shall not recognize income, gain or loss for federal income tax purposes as a result of such legal  defeasance and shall be subject to federal income tax on the same amounts, in the same manner and at the  same times as would have been the case if such legal defeasance had not occurred;                (c)   in the case of covenant defeasance, the Company has delivered to the Trustee an Opinion  of Counsel reasonably acceptable to the Trustee confirming that, subject to customary assumptions and  exclusions, the Holders of the respective outstanding Notes shall not recognize income, gain or loss for  federal income tax purposes as a result of such covenant defeasance and shall be subject to federal income  tax on the same amounts, in the same manner and at the same times as would have been the case if such  covenant defeasance had not occurred;                (d)   such legal defeasance or covenant defeasance shall not result in a breach or violation of,  or constitute a default under, any material agreement or instrument (other than this Indenture) to which  the Company or any of its Subsidiaries is a party or by which the Company or any of its Subsidiaries is  bound;                (e)   no Default or Event of Default has occurred and is continuing on the date of such deposit  (other than a Default or Event of Default resulting from the borrowing of funds to be applied to such  deposit and the grant of any Lien securing such borrowings);                (f)   the Company shall deliver to the Trustee an Opinion of Counsel to the effect that,  assuming, among other things, no intervening bankruptcy of the Company between the date of deposit  and the 91st day following the deposit and assuming that no Holder is an “insider” of the Company under  applicable bankruptcy law, after the 91st day following the deposit, the trust funds shall not be subject to  the effect of Section 547 of Title 11 of the United States Code;                                                  58  

 

         (g)   the Company shall deliver to the Trustee an Officers’ Certificate stating that the deposit  was not made by the Company with the intent of defeating, hindering, delaying or defrauding creditors of  the Company or others; and                (h)   the Company shall deliver to the Trustee an Officers’ Certificate and an Opinion of  Counsel (which Opinion of Counsel may be subject to customary assumptions and exclusions), each  stating that all conditions precedent relating to the legal defeasance or the covenant defeasance have been  complied with.          SECTION 8.3.    Application of Trust Money. The Trustee, or other entity, as applicable, shall hold in  trust money or U.S. Government Obligations deposited with it pursuant to this Article VIII. It shall apply  the deposited money and the money from U.S. Government Obligations through the Paying Agent and in  accordance with this Indenture to the payment of principal of and interest on the Notes.                      SECTION 8.4.    Repayment to Company. Anything herein to the contrary notwithstanding, the Trustee  shall deliver or pay to the Company from time to time upon receipt of an Officers’ Certificate any money  or U.S. Government Obligations held by it as provided in this Article VIII that are in excess of the  amount thereof which would then be required to be deposited to effect legal defeasance or covenant  defeasance, as applicable.                            Subject to any applicable abandoned property law, the Trustee and the Paying Agent shall pay to  the Company upon written request any money held by them for the payment of principal of or interest on  the Notes that remains unclaimed for two years, and, thereafter, Holders entitled to the money must look  to the Company for payment as general creditors.          SECTION 8.5.    Indemnity for U.S. Government Obligations. The Company shall pay and shall  indemnify the Trustee or other entity, as applicable, against any tax, fee or other charge imposed on or  assessed against deposited U.S. Government Obligations or the principal and interest received on such  U.S. Government Obligations.                      SECTION 8.6.    Reinstatement. If the Trustee or Paying Agent is unable to apply any money or U.S.  Government Obligations in accordance with this Article VIII by reason of any legal proceeding or by  reason of any order or judgment of any court or Governmental Authority enjoining, restraining or  otherwise prohibiting such application, the obligations of the Company under this Indenture and the  Notes, shall be revived and reinstated as though no deposit had occurred pursuant to this Article VIII until  such time as the Trustee or Paying Agent is permitted to apply all such money or U.S. Government  Obligations in accordance with this Article VIII; provided, however, that, if the Company have made any  payment of interest on or principal of any Notes because of the reinstatement of its obligations, the  Company, as the case may be, shall be subrogated to the rights of the Holders of such Notes to receive  such payment from the money or U.S. Government Obligations held by the Trustee or Paying Agent.                                                                                     ARTICLE IX.                                    Amendments                                           SECTION 9.1.    Without Consent of Holders. This Indenture and the Notes may be amended or  supplemented without notice to or consent of any Holder:                            (a)   to cure any ambiguity, omission, defect or inconsistency;                (b)   to comply with Article IV in respect of the assumption by a Successor Company of an  obligation of the Company under this Indenture and the Notes;                                         59  

 

                    (c)   to provide for uncertificated Notes in addition to or in place of certificated Notes;                (d)   to add Guarantees with respect to the Notes;                (e)   to add to the covenants of the Company for the benefit of the Holders, add Events of  Default or to surrender any right or power herein conferred upon the Company;                (f)   to comply with any requirement of the SEC in connection with the qualification of this  Indenture under the Trust Indenture Act of 1939, as amended, if applicable; or                (g)   to provide for the appointment of a successor trustee; provided that the successor trustee  is otherwise qualified and eligible to act as such under the terms of this Indenture.                After an amendment under this Section 9.1 becomes effective, the Company shall mail to Holders  a notice briefly describing such amendment. The failure to give such notice to all Holders, or any defect  therein, shall not impair or affect the validity of an amendment under this Section. A consent to any  amendment, supplement or waiver under this Indenture by any Holder given in connection with a tender  of such Holder’s Note shall not be rendered invalid by such tender.                Upon the request of the Company accompanied by a Board Resolution authorizing the execution  of any such amended or supplemental indenture, and upon receipt by the Trustee of the documents  described in Sections 7.2 and 10.2, the Trustee shall join with the Company in the execution of any  amended or supplemental indenture authorized or permitted by the terms of this Indenture and to make  any further appropriate agreements and stipulations that may be therein contained, but the Trustee shall  not be obligated to enter into such amended or supplemental indenture that affects its own rights, duties or  immunities under this Indenture or otherwise.          SECTION 9.2.    With Consent of Holders. This Indenture and the Notes may be amended or  supplemented with the written consent of the Holders of a majority in principal amount of the Notes then  outstanding (including without limitation, consents obtained in connection with a purchase of, or tender  offer or exchange offer for, Notes). Any past default or non-compliance with the provisions of this  Indenture and the Notes may be waived with the written consent of the Holders of at least a majority in  principal amount of the Notes then outstanding (including, without limitation, consents obtained in  connection with a purchase of, or tender offer or exchange offer for, Notes). However, without the written  consent of each Holder of an outstanding Note affected thereby, no amendment, supplement or waiver  may:                            (a)   reduce the principal amount of Notes whose Holders must consent to an amendment;                (b)   reduce the rate of or extend the time for payment of interest on any Note;                (c)   reduce the principal of or extend the Stated Maturity of any Note;                (d)   waive a Default or Event of Default in the payment of principal of, or interest or  premium, if any, on the Notes issued hereunder (except a rescission of acceleration of Notes issued  hereunder by the Holders of at least a majority in aggregate principal amount of the Notes with respect to  a nonpayment default and a waiver of the payment default that resulted from such acceleration);                (e)   change the time at which any Note may be redeemed in accordance with Article V  whether through an amendment or waiver of provisions in the covenants or otherwise;                                         60  

 

                 (f)   make any Note payable in a currency other than that stated in the Note;                (g)   impair the right of any Holder to receive payment of principal, premium, if any, and  interest on such Holder’s Notes on or after the due dates therefor or to institute suit for the enforcement of  any payment on or with respect to such Holder’s Notes;                (h)   make any change in the amendment provisions in this Section 9.2; or                (i)   make the Notes subordinated in right of payment to any other obligations.                It shall not be necessary for the consent of the Holders under this Section 9.2 to approve the  particular form of any proposed amendment or supplement, but it shall be sufficient if such consent  approves the substance thereof. A consent to any amendment, supplement or waiver under this Indenture  by any Holder given in connection with a tender of such Holder’s Note shall not be rendered invalid by  such tender.          SECTION 9.3.    Effect of Consents and Waivers. A consent to an amendment, supplement or a waiver by  a Holder of a Note shall bind the Holder and every subsequent Holder of that Note or portion of the Note  that evidences the same debt as the consenting Holder’s Note, even if notation of the consent or waiver is  not made on the Note. After an amendment or waiver becomes effective, it shall bind every Holder. An  amendment or waiver made pursuant to Section 9.2 shall become effective upon receipt by the Trustee of  the requisite number of written consents.                            The Company may, but shall not be obligated to, fix a record date for the purpose of determining  the Holders entitled to give their consent or take any other action described above or required or permitted  to be taken pursuant to this Indenture. If a record date is fixed (and notice of such date shall have been  provided to the Trustee), then notwithstanding the immediately preceding paragraph, those Persons who  were Holders at such record date (or their duly designated proxies), and only those Persons, shall be  entitled to give such consent or revoke such consent or to take any such action, whether or not such  Persons continue to be Holders after such record date.    SECTION 9.4.    Notation on or Exchange of Notes. If an amendment changes the terms of a Note, the  Trustee may require the Holder of the Note to deliver it to the Trustee. The Trustee may place an  appropriate notation on the Note regarding the changed terms and return it to the Holder. Alternatively, if  the Company or the Trustee so determines, the Company in exchange for the Note shall issue, and upon  receipt of an Authentication Order the Registrar shall authenticate a new Note that reflects the changed  terms. Failure to make the appropriate notation or to issue a new Note shall not affect the validity of such  amendment.    SECTION 9.5.    Trustee to Sign Amendments. Upon the request of the Company accompanied by a  Board Resolution authorizing the execution of any such amended or supplemental indenture, and upon  receipt by the Trustee of the documents described in Sections 7.2 and 10.2, the Trustee shall sign any  amendment, supplement or waiver authorized pursuant to this Article IX if the amendment, supplement or  waiver does not, in the sole determination of the Trustee, adversely affect the rights, duties, liabilities or  immunities of the Trustee. In signing any amendment, supplement or waiver pursuant to this Article IX  the Trustee shall be entitled to receive, and (subject to Sections 7.1 and 7.2) shall be fully protected in  relying upon, an Officers’ Certificate and an Opinion of Counsel stating that such amendment,  supplement or waiver is authorized or permitted by or complies with this Indenture and that such  amendment, supplement or waiver is the legal, valid and binding obligation of the Company, enforceable  against the Company in accordance with its terms, subject to customary exceptions.                                          61  

 

                                       ARTICLE X.                                    Miscellaneous    SECTION 10.1.    Notices. Notices given by publication shall be deemed given on the first date on which  publication is made. Notices given by facsimile shall be deemed given on the date the facsimile is  transmitted and notices delivered by an internationally recognized mail carrier, postage prepaid, shall be  deemed given two Business Day after mailing. Any notice or communication shall be in writing and  delivered by publication, facsimile, electronic mail, or by mail carrier addressed as follows:                      if to the Company:                FedNat Holding Company               14050 N.W. 14th Street              Suite 180              Sunrise, FL 33323              Phone:               Email:              Facsimile:    if to the Trustee, Registrar and Paying Agent:                The Bank of New York Mellon              240 Greenwich Street, Floor 7E              New York, New York 10286              Attention:  Corporate Trust Administration              Fax: 212-815-5595              Email: dimple.gandhi@bnymellon.com                      The Company, the Trustee or any of the Agents by notice to the others may designate additional  or different addresses for subsequent notices or communications. Where this Indenture provides for notice  in any manner, such notice may be waived in writing by the Person entitled to receive such notice, either  before or after the event, and such waiver shall be the equivalent of such notice.                Any notice or communication mailed to a Holder shall be mailed to the Holder at the Holder’s  address as it appears on the registration books of the Registrar and shall be sufficiently given if so mailed  within the time prescribed.                 Failure to mail a notice or communication to a Holder or any defect in it shall not affect its  sufficiency with respect to other Holders. If a notice or communication is mailed in the manner provided  above, it is duly given, whether or not the addressee receives it.                Each of the Trustee and the Agents agrees to accept and act upon instructions or directions  pursuant to this Indenture sent by unsecured email, facsimile transmission or other similar unsecured  electronic methods; provided, however, that the Trustee or the Agents shall have received an incumbency  certificate listing persons designated to give such instructions or directions and containing specimen  signatures of such designated persons, which such incumbency certificate shall be amended and replaced  whenever a person is to be added or deleted from the listing. If the party elects to give the Trustee or an  Agent email or facsimile instructions (or instructions by a similar electronic method) and the Trustee or  such Agent in its discretion elects to act upon such instructions, the Trustee’s or such Agent’s  understanding of such instructions shall be deemed controlling. Neither the Trustee nor any Agent shall                                         62  

 

   be liable for any losses, costs or expenses arising directly or indirectly from the Trustee’s or an Agent’s,  as applicable, reliance upon and compliance with such instructions notwithstanding such instructions  conflict or are inconsistent with a subsequent written instruction. The party providing electronic  instructions agrees to assume all risks arising out of the use of such electronic methods to submit  instructions and directions to the Trustee or an Agent, as applicable, including without limitation the risk  of the Trustee or an Agent acting on unauthorized instructions, and the risk or interception and misuse by  third parties.                Whenever a note or other communication to the Holder is required under this Indenture, unless  and until Definitive Notes shall have been issued to the Holders pursuant to Section 2.6, the Trustee and  the Paying Agent shall give all notices and communications specified herein to the relevant Depositary.           SECTION 10.2.    Certificate and Opinion as to Conditions Precedent. Upon any request or application by  the Company to the Trustee to take or refrain from taking any action under this Indenture (except in  connection with the original issuance of Notes on the date hereof), the Company shall furnish to the  Trustee:                            (a)   an Officers’ Certificate in form and substance reasonably satisfactory to the Trustee  stating that, in the opinion of the signers, all conditions precedent, if any, provided for in this Indenture  relating to the proposed action have been complied with; and                (b)   an Opinion of Counsel in form and substance reasonably satisfactory to the Trustee  stating that, in the opinion of such counsel, all such conditions precedent have been complied with.    SECTION 10.3.    Statements Required in Certificate or Opinion. Each certificate or opinion with respect  to compliance with a covenant or condition provided for in this Indenture shall include:                            (a)   a statement that the individual making such certificate or opinion has read such covenant  or condition;                (b)   a brief statement as to the nature and scope of the examination or investigation upon  which the statements or opinions contained in such certificate or opinion are based;                (c)   a statement that, in the opinion of such individual, he has made such examination or  investigation as is necessary to enable him to express an informed opinion as to whether or not such  covenant or condition has been complied with; and                (d)   a statement as to whether or not, in the opinion of such individual, such covenant or  condition has been complied with.                In giving any such Opinion of Counsel, counsel may rely as to factual matters on an Officers’  Certificate or on certificates of public officials.    SECTION 10.4.    When Notes Disregarded. In determining whether the Holders of the required principal  amount of Notes have concurred in any direction, waiver or consent, Notes owned by the Company or by  any Person directly or indirectly controlling or controlled by or under direct or indirect common control  with the Company shall be disregarded and deemed not to be outstanding, except that, for the purpose of  determining whether the Trustee shall be protected in relying on any such direction, waiver or consent,  only Notes that a Trust Officer of the Trustee knows are so owned shall be so disregarded. Also, subject  to the foregoing, only Notes outstanding at the time shall be considered in any such determination.                                           63  

 

   SECTION 10.5.    Rules by Trustee, Paying Agent and Registrar. The Trustee may make reasonable rules  for action by, or a meeting of, Holders, such rules not to be inconsistent with this Indenture. The Registrar  and the Paying Agent may make reasonable rules for their functions, such rules not to be inconsistent with  this Indenture.    SECTION 10.6.    Days Other than Business Days. If a payment date is not a Business Day, payment  shall be made on the next succeeding day that is a Business Day, and no interest shall accrue for the  intervening period. If a regular record date is not a Business Day, the record date shall not be affected.    SECTION 10.7.    Governing Law; Submission to Jurisdiction. This Indenture and the Notes shall be  governed by, and construed in accordance with, the laws of the State of New York.                            The Company, Holders, Trustee, Paying Agent and Registrar irrevocably consent and agree, from  time to time for the benefit of the Holders of the Notes and the Trustee, that any legal action, suit or  proceeding against them with respect to obligations, liabilities or any other matter arising out of or in  connection with this Indenture or the Notes may be brought in the courts of the State of New York or the  courts of the United States located in the Borough of Manhattan, New York City, New York and, until  amounts due and to become due in respect of the Notes have been paid, hereby irrevocably consent and  submit to the jurisdiction of each such court in personam, generally and unconditionally with respect to  any action, suit or proceeding for itself in respect of its properties, assets and revenues.                The Company, Holders, Trustee, Paying Agent and Registrar irrevocably and unconditionally  waive, to the fullest extent permitted by law, any objection that they may now or hereafter have to the  laying of venue of any of the aforesaid actions, suits or proceedings arising out of or in connection with  this Indenture brought in the courts of the State of New York or the courts of the United States located in  the State of New York and hereby further irrevocably and unconditionally waive and agree not to plead or  claim in any such court that any such action, suit or proceeding brought in any such court has been  brought in an inconvenient forum.          SECTION 10.8.    Waiver of Jury Trial. EACH OF THE COMPANY AND THE TRUSTEE HEREBY  IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW,  ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF  OR RELATING TO THIS INDENTURE, THE NOTES OR THE TRANSACTIONS  CONTEMPLATED HEREBY.    SECTION 10.9.    No Recourse Against Others. An incorporator, director, officer, employee, stockholder  or controlling Person, as such, of the Company or any Subsidiary shall not have any liability for any  obligations of the Company or any Subsidiary under the Notes or this Indenture or for any claim based  on, in respect of or by reason of such obligations or their creation. By accepting a Note, each Holder shall  waive and release all such liability. The waiver and release shall be part of the consideration for the issue  of the Notes.                      SECTION 10.10.    Successors. All agreements of the Company in this Indenture and the Notes shall bind  its respective successors. All agreements of the Trustee and the Agents in this Indenture shall bind their  respective successors.                      SECTION 10.11.    Multiple Originals. The parties may sign any number of copies of this Indenture. Each  signed copy shall be an original, but all of them together represent the same agreement. One signed copy  is enough to prove this Indenture.                                                              64  

 

   SECTION 10.12.    Table of Contents; Headings. The table of contents, cross-reference sheet and  headings of the Articles and Sections of this Indenture have been inserted for convenience of reference  only, are not intended to be considered a part hereof and shall not modify or restrict any of the terms or  provisions hereof.                      SECTION 10.13.    Force Majeure. In no event shall any party to this Indenture be responsible or liable  for any failure or delay in the performance of its obligations hereunder arising out of or caused by,  directly or indirectly, forces beyond its control, including, without limitation, strikes, work stoppages,  accidents, acts of war or terrorism, civil or military disturbances, nuclear or natural catastrophes or acts of  God, and interruptions, loss or malfunctions of utilities, communications or computer (software and  hardware) services; it being understood that such party shall use reasonable efforts that are consistent with  accepted practices in the banking industry to resume performance as soon as practicable under the  circumstances.    Section 10.14 Tax Matters.  Each of the Holders, the Company, the Paying Agent and the Trustee agree  (i) to cooperate and to provide the other with such reasonable information as each may have in its  possession to enable the determination of whether any payments pursuant to the Indenture are subject to  the withholding requirements described in Section 1471(b) of the Code or otherwise imposed pursuant to  Sections 1471 through 1474 of the Code and any regulations, or agreements thereunder or official  interpretations thereof (“Applicable Law”), and (ii) that each of the Paying Agent and the Trustee shall be  entitled to make any withholding or deduction from payments under the Indenture to the extent necessary  to comply with Applicable Law, for which the Paying Agent and the Trustee shall not have any liability.   SECTION 10.15     Complaints.  All complaints to the Paying Agent should be directed to the relevant  relationship manager. The Paying Agent may reply to any such complaint on paper or by electronic mail.                            [Remainder of Page Intentionally Left Blank]                                          65  

 

         IN WITNESS WHEREOF, the parties have caused this Indenture to be duly executed as of the  date first written above.                                              FedNat Holding Company                                                                            By:  /s/ Ronald A. Jordan                                           Name:   Ronald A. Jordan                                      Title:     CFO                                                                             The Bank of New York Mellon,                                      as Trustee, Paying Agent and Registrar                                                                            By: /s/ Francine Kincaid                                            Name:     Francine Kincaid                                      Title:       Vice President                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              [Signature Page to Indenture]                                            

 

                                                                       EXHIBIT A                                                                     FORM OF 144A GLOBAL NOTE    UNLESS  THIS  CERTIFICATE  IS  PRESENTED  BY  AN  AUTHORIZED  REPRESENTATIVE  OF  THE  DEPOSITORY  TRUST  COMPANY,  A  NEW  YORK  CORPORATION   (“DTC”),  TO  THE  COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT,  AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH  OTHER  NAME  AS  IS  REQUESTED  BY  AN  AUTHORIZED  REPRESENTATIVE  OF  DTC  (AND  ANY  PAYMENT  IS  MADE TO  CEDE  &  CO.),  ANY  TRANSFER,  PLEDGE  OR  OTHER  USE  HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH  AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.    THIS NOTE IS A GLOBAL NOTE WITHIN THE MEANING OF THE INDENTURE AND IS HELD  BY THE DEPOSITARY (AS DEFINED IN THE INDENTURE GOVERNING THIS NOTE) OR ITS  NOMINEE IN CUSTODY FOR THE BENEFIT OF THE BENEFICIAL OWNERS HEREOF. UNLESS  AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN DEFINITIVE FORM,  THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A  NOMINEE  OF  THE  DEPOSITARY  OR  BY  A  NOMINEE  OF  THE  DEPOSITARY  TO  THE  DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR  ANY  SUCH  NOMINEE  TO  A  SUCCESSOR  DEPOSITARY  OR  A  NOMINEE  OF  SUCH  SUCCESSOR DEPOSITARY.    THE  NOTES  REPRESENTED  HEREBY  HAVE  NOT  BEEN  REGISTERED  UNDER  THE  U.S.  SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY,  MAY  NOT  BE  OFFERED  OR  SOLD  EXCEPT  AS  SET  FORTH  BELOW.  BY  ITS  ACQUISITION  HEREOF,  THE  HOLDER  (1)  REPRESENTS  THAT  IT  IS  A  “QUALIFIED  INSTITUTIONAL  BUYER” (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT), (2) AGREES THAT IT  WILL  NOT  RESELL  OR  OTHERWISE  TRANSFER  ANY  OF  THE  NOTES  REPRESENTED  HEREBY  EXCEPT  (A)  TO  THE  COMPANY  OR  ANY  SUBSIDIARY  THEREOF,  (B)  TO  A  QUALIFIED  INSTITUTIONAL  BUYER  IN  COMPLIANCE  WITH  RULE  144A  UNDER  THE  SECURITIES  ACT,  (C)  TO  AN  INSTITUTIONAL  “ACCREDITED  INVESTOR”  WITHIN  THE  MEANING OF RULE 501(a)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT THAT IS NOT A  QUALIFIED  INSTITUTIONAL  BUYER  AND  THAT  IS  ACQUIRING  THE  SECURITY  FOR  ITS  OWN  ACCOUNT  OR  FOR  THE  ACCOUNT  OF  ANOTHER  INSTITUTIONAL  ACCREDITED  INVESTOR FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO OR FOR OFFER OR  SALE IN CONNECTION WITH ANY DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT,  (D)  PURSUANT  TO  THE  EXEMPTION  FROM  REGISTRATION  PROVIDED  BY  RULE  144  UNDER THE SECURITIES ACT OR (E) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM  THE  REGISTRATION  REQUIREMENTS  OF  THE  SECURITIES  ACT  (AND  BASED  UPON  AN  OPINION OF COUNSEL IF THE COMPANY SO REQUESTS) AND (3) AGREES THAT IT WILL  GIVE  TO  EACH  PERSON  TO  WHOM  ANY  OF  THE  NOTES  REPRESENTED  HEREBY  ARE  TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND.                                                                                                                   No. [   ]                                                       Principal Amount $[                     ]                                                    as revised by the Schedule of Increases                                             or Decreases in the Global Note attached hereto                                                                CUSIP: 31431B AA7                                                              ISIN: US31431BAA70                                                                                                                        A-1                                           

 

                             FEDNAT HOLDING COMPANY                            Senior Unsecured Notes due 2029                                                 FedNat Holding Company, a corporation organized under the laws of Florida, for value received,  hereby  promises  to  pay  to  CEDE  &  CO.,  or  registered  assigns  in  accordance  with  the  terms  and  conditions hereof, the initial principal amount set forth on the Schedule of Increases or Decreases in the  Global Note attached hereto, as revised by the  Schedule  of Increases or Decreases in the  Global Note  attached hereto, on March 15, 2029, together with interest on the then outstanding principal amount of the  Notes on each Payment Date at the rate per annum and terms specified herein.                Payment Dates: March 15 and September 15 of each year, commencing on September 15, 2019  and ending on March 15, 2029, or if any such day is not a Business Day, the next succeeding day that is a  Business Day.                 Record Dates: 15 calendar days immediately preceding such Payment Date.          Additional provisions of this Note are set forth on the reverse side of this Note. Capitalized terms  used and not otherwise defined herein are defined in the Indenture dated as of March 5, 2019 (as hereafter  amended, supplemented or otherwise modified and in effect from time to time, the “Indenture”), between  the Company and The Bank of New York Mellon, as Trustee (in such capacity, the “Trustee”).                Unless  the  certificate  of  authentication  hereon  has  been  executed  by  the  Trustee  whose  name  appears  below  by  manual  signature,  this  Note  shall  not  be  entitled  to  any  benefit  under  the  Indenture  referred to above and on the reverse side hereof, or be valid or obligatory for any purpose.                                        FEDNAT HOLDING COMPANY                                                                                                                  By:                                                                                Name:                                          Title:                                                                                                                                                     [Rule 144A Note]                                          A-2                                           

 

                     TRUSTEE’S CERTIFICATE OF AUTHENTICATION          This is one of the Notes designated as the Senior Unsecured Notes due 2029 referred to in the  Indenture.                                                                                                                            THE BANK OF NEW YORK MELLON,                                                                        as Trustee,                                                                                                                            By:                                                                                   Authorized Signatory                Date:                                                                                                                        [Rule 144A Note]                                                             A-3                                           

 

                       FORM OF REVERSE OF 144A GLOBAL NOTE                                                                     Senior Unsecured Notes due 2029                                              1. Principal and Interest                FedNat Holding Company, a corporation organized under the laws of Florida (such corporation,  and  its successors  and  assigns  under  the  Indenture  hereinafter  referred  to,  being  herein  called  the  “Company”), for value received, promises to pay (a) the outstanding principal amount of the Notes on  March 15, 2029 and (b) interest on the then outstanding principal amount of the Notes on each Payment  Date at the fixed rate per annum specified below.          The Company shall pay interest in arrears on the then-outstanding principal amount of Notes at a  fixed rate per annum equal to the Interest Rate on March 15 and September 15 of each year, commencing  on September 15, 2019 and ending on March 15, 2029 (each, a “Payment Date”). Interest on the Notes  shall accrue from the most recent date to which interest has been paid on the Notes or, if no interest has  been paid, from March 5, 2019 (each, an “Interest Accrual Period”). The Company shall pay interest on  overdue principal or premium, if any (plus interest on such interest to the extent lawful), at the rate borne  by the Notes to the extent lawful. Interest shall be computed on the basis of a 360-day year of twelve 30- day months.                “Interest Rate” means a per annum rate equal to (a) 7.5% for each Interest Accrual Period for  which a Step-up Event is not in effect at all times during such Interest Accrual Period; or (b) for each  Interest Accrual Period for which a Step-up Event is in effect at any point during such Interest Accrual  Period, 7.5% plus an additional 50 basis points for each notch downgrade of the Company below  “BBB-”  (or its equivalent rating) by the Applicable Rating Agency.                “Step-up Event” shall occur and be in effect for any Interest Accrual Period or part thereof for  which the Notes are rated “BB+” or lower by the Applicable Rating Agency. The Company shall notify  the Trustee in writing of any Step-up Event within three Business Days following such Step-up Event.  The  Trustee  shall  not  be  charged  with  knowledge  of  a  Step-up  Event  unless  and  until  it  has  received  written notice of such Step-up from either (i) the Company or (ii) Holders representing a majority of the  outstanding principal amount of the Notes.                “Applicable Rating Agency” means one of the following Rating Agencies at any given time: (i)  in the case that there is only one Rating Agency rating the Notes, such Rating Agency, (ii) in the case that  there are two Rating Agencies rating the Notes, such Rating Agency providing the lower rating, or (iii) in  the case that there are three or more Rating Agencies rating the Notes, such Rating Agency providing the  second lowest rating.  The initial Rating Agency shall be Egan Jones.          2.    Method of Payment                  By no later than 10:00 a.m. (New York time) on the Business Day prior to which any principal of,  premium, if any, or interest on any Note is due and payable, the Company shall irrevocably deposit with  the  Paying  Agent  money  sufficient  to  pay  such  principal,  premium,  if  any,  and/or  interest  (other  than  Definitive Notes). Interest (except Defaulted Interest) shall be due and payable to the Persons who are  registered  Holders  of  Notes  at  the  close  of  business  on  one  Business  Day  immediately  preceding  the  Record  Date  for  such  Payment  Date  unless  Notes  are  cancelled,  repurchased,  or  redeemed  after  the  Record Date and before the Payment Date. Holders must surrender Notes to a Paying Agent to collect  principal  payments.  The  Company  shall  pay  principal,  premium,  if  any,  and  interest  in  money  of  the  United  States  that  at  the  time  of  payment  is  legal  tender  for  payment  of  public  and  private  debts.                                        A-4                                           

 

   Payments in respect of Notes represented by a  Global Note (including principal, premium, if any, and  interest) shall be made by the Company by the transfer of immediately available funds to the accounts  specified  by  the  Depositary.  The  Company  shall  make  all  payments  in  respect  of  a  Definitive  Note  (including principal, premium, if any, and interest) by mailing a check to the registered address of each  Holder thereof.          3.    Paying Agent and Registrar                Initially, The Bank of New York Mellon shall act as Paying Agent and Registrar.  The Company  may appoint and change any Paying Agent, Registrar or co-registrar without notice to the Holders. The  Company may act as Paying Agent, Registrar or co-registrar.          4.    Indenture                The Company issued the Notes under the Indenture. The terms of the Notes include those stated  in  the  Indenture,  and  all  capitalized  terms  used  herein  without  definition  shall  have  the  respective  meanings  ascribed  to them  in  the  Indenture.  The  Notes  are  subject to  all such terms,  and  Holders  are  referred to the Indenture and the Securities Act for a statement of those terms. To the extent any provision  of this Note conflicts with the express provisions of the Indenture, the provisions of the Indenture shall  govern and be controlling.                The  Notes  are  senior  unsecured  obligations  of  the  Company.  This  Note  is  one  of  the  Senior  Unsecured  Notes due  2029 referred to in the  Indenture  (herein called “Notes”). The  Indenture,  among  other things, imposes certain covenants including as specified in Article III. The Indenture also imposes  requirements with respect to the provision of financial information. The Indenture also contains certain  exceptions to the foregoing, and this description is qualified in its entirety by reference to the Indenture.          5.    Repurchase upon Change of Control. The Notes may be the subject of a Change of Control Offer,  as further described in the Indenture. The Company shall not be required to make sinking fund payments  with respect to the Notes.          6.    Denominations; Transfer; Exchange                The Notes are in registered form without coupons in initial denominations of $100,000 principal  amount  and  integral  multiples  of  $10,000  thereafter.  A  Holder  may  transfer  or  exchange  Notes  in  accordance with the Indenture. The Trustee and the Registrar may require a Holder, among other things,  to furnish appropriate endorsements or transfer documents and to pay any taxes and fees required by law  or permitted by the Indenture. The Registrar need not register the transfer of or exchange any Notes for a  period beginning three Business Days before a Payment Date and ending on such Payment Date.          7.    Optional Redemption          (a)   At any time prior to March 15, 2024, the Company may, at its option, redeem all or, from  time to time, any part of the Notes, at a redemption price equal to 100.00% of the principal amount of the  Notes redeemed, plus the Applicable Premium, plus accrued and unpaid interest and principal on such  Notes, if any, on the Notes redeemed, to the applicable redemption date (subject to the right of Holders of  record on the relevant Record Date to receive principal and interest due on the relevant Payment Date that  is on or prior to the applicable redemption date).                (b)   On or after March 15, 2024, the Company may, at its option, redeem all or, from time to  time, any part of the Notes, at the following redemption prices (expressed as a percentage of outstanding                                        A-5                                           

 

   principal amount of the Notes to be redeemed) plus accrued and unpaid interest and principal on such  Notes, if any, to the applicable redemption date, if redeemed during the twelve-month period beginning  on  March  15  of  the  years  indicated  below  (subject  to  the  rights of  Holders  of  record  on  the  relevant  Record Date to receive principal and interest due on the relevant Payment Date that is on or prior to the  applicable redemption date):                               Year                            Redemption Price        2024                                103.750%        2025                                101.875%        2026 and thereafter                 100.00%                (c)   Any redemption pursuant to this Paragraph 7 shall be made pursuant to the provisions of  Article V of the Indenture.                “Applicable Premium” means, with respect to any Note on any applicable redemption date, the  greater of (1) 1.0% of the then outstanding principal amount of such Note and (2) the excess (if any) of:                      (A) the present value at such redemption date of (i) the redemption price of such Note at  March 15, 2024 (such redemption price being set forth in the table in Section 7(b) hereof) (excluding any  accrued but unpaid interest), plus (ii) all required interest payments due on such Note through March 15,  2024 (excluding accrued but unpaid interest), computed using a discount rate equal to the Treasury Rate  on such redemption date plus 50 basis points; over                       (B) the then outstanding principal amount of such Note.                 The Company will calculate the Applicable Premium and the Trustee will not be responsible for        such calculation.                “Treasury Rate” means, as of any redemption date, the yield to maturity as of such redemption  date of United States Treasury securities with a constant maturity (as compiled and published in the most  recent  Federal  Reserve  Statistical  Release  H.15  (519)  that  has  become  publicly  available  at  least  two  business  days  prior  to  the  redemption  date  (or,  if  such  Statistical  Release  is  no  longer  published,  any  publicly available source of similar market data)) most nearly equal to the period from the redemption  date to March 15, 2024; provided that if the period from the redemption date to such date is not equal to  the constant maturity of a United States Treasury security for which a yield is given, the Treasury yield  will be obtained by linear interpolation (calculated to the nearest one-twelfth of a year) from the yields of  the nearest United  States Treasury securities for which  such  yields are  given, except that if the  period  from the redemption date to such date is less than one year, the weekly average yield on actually traded  United States securities adjusted to a constant maturity of one year will be used.           8.    Persons Deemed Owners                The registered Holder of this Note may be treated as the owner of it for all purposes.          9.    Unclaimed Money                If money for the payment of the principal of or premium, if any, or interest remains unclaimed for  two years, the Paying Agent shall pay the money back to the Company at its request unless an abandoned  property law designates another Person. After any such payment, Holders entitled to the money must look  only to the Company and not to the Trustee for payment.                                        A-6                                           

 

           10.   Discharge and Defeasance                Subject to certain conditions set forth in the Indenture, the Company at any time may terminate  some or all of its obligations under the Notes and the Indenture if the Company deposits with the Trustee  money or U.S. Government Obligations sufficient for the payment of principal and interest on the Notes  to redemption or maturity, as the case may be.    11.   Amendment, Waiver                Subject to certain exceptions set forth in the Indenture, (i) the Indenture and the Notes may be  amended  or  supplemented  with  the  written  consent  of  the  Holders  of  at  least  a  majority  in  principal  amount of the Notes then outstanding (including without limitation, consents obtained in connection with  a purchase of, or tender offer or exchange offer for Notes) and (ii) any default (other than (x) with respect  to nonpayment or (y) in respect of a provision that cannot be amended without the written consent of each  Holder affected) or noncompliance  with any provision may be  waived  with the  written  consent of the  Holders  of a majority in principal amount of the  Notes then outstanding (including without limitation,  consents obtained in connection with a purchase of, or tender offer or exchange offer for, Notes). Subject  to certain exceptions set forth in the Indenture, without the consent of any Holder, the Company and the  Trustee may amend the Indenture or the Notes to cure any ambiguity, omission, defect or inconsistency,  or to comply with Article IV of the Indenture in respect of the assumption by a Successor Company of an  obligation of the Company under the Indenture and the Notes, or to provide for uncertificated Notes in  addition to or in place of certificated Notes, or to add Guarantees with respect to the Notes, or to add to  the covenants of the Company for the benefit of the Holders, add Events of Default or to surrender any  right or power conferred by the Indenture upon the Company, or to comply with any requirement of the  SEC  in  connection  with  the  qualification  of  the  Indenture  under  the  Trust  Indenture  Act  of  1939,  as  amended,  if  applicable,  or  to  provide  for  the  appointment  of  a  successor  trustee;  provided  that  the  successor trustee is otherwise qualified and eligible to act as such under the terms of the Indenture.          12.   Defaults and Remedies                Under the Indenture, and subject to the terms and provisions of the Indenture, Events of Default  include, without limitation: (i) default in payment of interest when due on the Notes continuing for 10  consecutive Business Days; (ii) default in payment of the principal of or premium, if any, on the Notes at  its Stated Maturity, upon optional redemption, upon required repurchase, upon declaration of acceleration  or  otherwise;  (iii)  failure  by  the  Company  to  comply  with  its  obligations  under  certain  provisions  of  Article  III of  the  Indenture,  (iv)  failure  by  the  Company  to  comply  with  certain  other  provisions  or  agreements in the Indenture and the Notes, in certain cases subject to notice and lapse of time; (v) default  in other payment obligations of the Company or any of its Subsidiaries; (vi) certain events of bankruptcy  or insolvency with respect to the Company or any Subsidiary; (vii) certain final judgments or decrees for  the payment of money in excess of $1,000,000; and (viii) breach by the Company in any material respect  of any representation or covenant made to the Holders in the Note Purchase Agreement, each subject to  any applicable grace periods as set forth in the Indenture or Note Purchase Agreement, as applicable.                If an  Event of Default occurs  and is  continuing, the Trustee or Holders  of at least majority in  aggregate principal amount of the outstanding Notes then outstanding may declare all the Notes to be due  and payable immediately. Certain events of bankruptcy or insolvency with respect to the Company are  Events of Default, which shall result in the Notes being due and payable immediately upon the occurrence  of such Events of Default.                                                A-7                                           

 

         Holders  may  not  enforce  the  Indenture  or  the  Notes  except  as  provided  in  the  Indenture.  The  Trustee may refuse to enforce the Indenture or the Notes unless the Trustee receives indemnity and/or  security  satisfactory  to  the  Trustee.  Subject  to  certain  limitations,  Holders  of  a  majority  in  principal  amount of the then outstanding Notes may direct the Trustee in its exercise of any trust or power.           13.   Trustee Dealings with the Company                Subject to certain limitations  set forth in the  Indenture,  the Trustee  under the  Indenture,  in  its  individual or any other capacity, may become the owner or pledgee of Notes, subject to the terms and  conditions  of  the  Indenture.  Additionally,  the  Trustee  may  otherwise  deal  with  and  collect  obligations  owed to it by the Company or its Affiliates and may otherwise deal with the Company or its Affiliates  with the same rights it would have if it were not Trustee.          14.   No Recourse Against Others                An incorporator, director, officer, employee, stockholder or controlling Person of the Company or  any Subsidiary shall not have any liability for any obligations of the Company or any Subsidiary under  the Notes or the Indenture, or for any claim based on, in respect of, or by reason of, such obligations or  their creation. By accepting a Note, each Holder waives and releases all such liability. The waiver and  release shall be part of the consideration for the issuance of the Notes.    15.   Authentication                This  Note  shall  not be  valid  until  an  authorized  signatory  of the  Trustee (or an  authenticating  agent acting on its behalf) manually signs the certificate of authentication on the other side of this Note.          16.   Abbreviations                Customary abbreviations may be used in the name of a Holder or an assignee, such as TEN COM  (=tenants  in  common),  TEN  ENT  (=tenants  by  the  entirety),  JT  TEN  (=joint  tenants  with  rights  of  survivorship and not as tenants in common), CUST (=custodian) and U/G/M/A (=Uniform Gift to Minors  Act).          17.   CUSIP and ISIN Numbers                The Company may cause one or more CUSIP and/or ISIN numbers to be printed on the Notes.  No representation is made as to the accuracy of such numbers as printed on the Notes and reliance may be  placed only on the other identification numbers placed thereon.          18.   Successor Entity                When  a  successor  entity  assumes,  in  accordance  with  the  Indenture,  all  the  obligations  of  its  predecessor under the Notes and the Indenture, and immediately before and thereafter no Default or Event  of  Default  exists  and  all  other  conditions  of  the  Indenture  are  satisfied,  the  predecessor  entity  will  be  released from those obligations.          19.   Governing Law; Request for Indenture                This Note shall be governed by, and construed in accordance with, the laws of the State of New  York.                                                A-8                                           

 

         The Company shall furnish to any Holder upon written request and without charge to the Holder a  copy of the Indenture. Requests may be made to:          FedNat Holding Company         14050 N.W. 14th Street        Suite 180        Sunrise, FL 33323        Attention:  Chief Financial Officer                                                                   A-9                                           

 

               SCHEDULE OF INCREASES OR DECREASES IN GLOBAL NOTE                                                 The initial principal amount of the Note shall be $ [                       ]. The following increases or  decreases in this Global Note have been made:             Amount  of  Decrease              Principal  Amount  of Signature  of             in               Amount of Increase in this  Global  Note authorized             Principal  Amount  of Principal  Amount  of Following signatory  of  Date of    this             this             such Decrease or Registrar or  Exchange   Global Note      Global Note      Increase        Depositary                                                                                                                                     A-10                                           

 

                                 ASSIGNMENT FORM                                           To assign this Note, fill in the form below:    I or we assign and transfer this Note to                                                                                                       (Print or type assignee’s name, address and zip code)                                                                                                           (Insert assignee’s soc. sec. or tax I.D.. No.)                                           and irrevocably appoint                    as agent to transfer this Note on the books of the Company. The agent  may substitute another to act for him.    Date:                         Your Signature:                                     Signature Guarantee:                          (Signature must be guaranteed)                                                                                    Sign exactly as your name appears on the other side of this Note.                                         A-11                                           

 

                                                                       EXHIBIT B                                                                     FORM OF IAI GLOBAL NOTE    UNLESS  THIS  CERTIFICATE  IS  PRESENTED  BY  AN  AUTHORIZED  REPRESENTATIVE  OF  THE  DEPOSITORY  TRUST  COMPANY,  A  NEW  YORK  CORPORATION  (“DTC”),  TO  THE  COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT,  AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH  OTHER  NAME  AS  IS  REQUESTED  BY  AN  AUTHORIZED  REPRESENTATIVE  OF  DTC  (AND  ANY  PAYMENT  IS  MADE  TO  CEDE  &  CO.),  ANY  TRANSFER,  PLEDGE  OR  OTHER  USE  HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH  AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.    THIS NOTE IS A GLOBAL NOTE WITHIN THE MEANING OF THE INDENTURE AND IS HELD  BY THE DEPOSITARY (AS DEFINED IN THE INDENTURE GOVERNING THIS NOTE) OR ITS  NOMINEE IN CUSTODY FOR THE BENEFIT OF THE BENEFICIAL OWNERS HEREOF. UNLESS  AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN DEFINITIVE FORM,  THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A  NOMINEE  OF  THE  DEPOSITARY  OR  BY  A  NOMINEE  OF  THE  DEPOSITARY  TO  THE  DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR  ANY  SUCH  NOMINEE  TO  A  SUCCESSOR  DEPOSITARY  OR  A  NOMINEE  OF  SUCH  SUCCESSOR DEPOSITARY.    THE  NOTES  REPRESENTED  HEREBY  HAVE  NOT  BEEN  REGISTERED  UNDER  THE  U.S.  SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY,  MAY  NOT  BE  OFFERED  OR  SOLD  EXCEPT  AS  SET  FORTH  BELOW.  BY  ITS  ACQUISITION  HEREOF,  THE  HOLDER  (1)  REPRESENTS  THAT  IT  IS  AN  INSTITUTIONAL  ACCREDITED  INVESTOR (UNDER RULE 501(a)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT), (2) AGREES  THAT  IT  WILL  NOT  RESELL  OR  OTHERWISE  TRANSFER  ANY  OF  THE  NOTES  REPRESENTED HEREBY EXCEPT (A) TO THE COMPANY OR  ANY SUBSIDIARY THEREOF,  (B)  TO  A  QUALIFIED  INSTITUTIONAL  BUYER  IN  COMPLIANCE  WITH  RULE  144A  UNDER  THE SECURITIES ACT, (C) TO AN INSTITUTIONAL “ACCREDITED INVESTOR” WITHIN THE  MEANING OF RULE 501(a)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT THAT IS NOT A  QUALIFIED  INSTITUTIONAL  BUYER  AND  THAT  IS  ACQUIRING  THE  SECURITY  FOR  ITS  OWN  ACCOUNT  OR  FOR  THE  ACCOUNT  OF  ANOTHER  INSTITUTIONAL  ACCREDITED  INVESTOR FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO OR FOR OFFER OR  SALE IN CONNECTION WITH ANY DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT,  (D)  PURSUANT  TO  THE  EXEMPTION  FROM  REGISTRATION  PROVIDED  BY  RULE  144  UNDER THE SECURITIES ACT OR (E) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM  THE  REGISTRATION  REQUIREMENTS  OF  THE  SECURITIES  ACT  (AND  BASED  UPON  AN  OPINION OF COUNSEL IF THE COMPANY SO REQUESTS) AND (3) AGREES THAT IT WILL  GIVE  TO  EACH  PERSON  TO  WHOM ANY  OF  THE  NOTES  REPRESENTED  HEREBY  ARE  TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND.                                                                                                                   No. [   ]                                                       Principal Amount $[                     ]                                                    as revised by the Schedule of Increases                                             or Decreases in the Global Note attached hereto                                                                CUSIP: 31431B AB5                                                              ISIN: US31431BAB53                                                                                                                        B-1                                           

 

                             FEDNAT HOLDING COMPANY                            Senior Unsecured Notes due 2029                                                 FedNat Holding Company, a corporation organized under the laws of Florida, for value received,  hereby  promises  to  pay  to  CEDE  &  CO.,  or  registered  assigns  in  accordance with  the  terms  and  conditions hereof, the initial principal amount set forth on the Schedule of Increases or Decreases in the  Global Note attached hereto, as revised by the  Schedule  of Increases or Decreases in the  Global Note  attached hereto, on March 15, 2029, together with interest on the then outstanding principal amount of the  Notes on each Payment Date at the rate per annum and terms specified herein.                Payment Dates: March 15 and September 15 of each year, commencing on September 15, 2019  and ending on March 15, 2029, or if any such day is not a Business Day, the next succeeding day that is a  Business Day.                 Record Dates: Fifteen calendar days immediately preceding such Payment Date.          Additional provisions of this Note are set forth on the reverse side of this Note. Capitalized terms  used and not otherwise defined herein are defined in the Indenture dated as of March 5, 2019 (as hereafter  amended, supplemented or otherwise modified and in effect from time to time, the “Indenture”), between  the Company and The Bank of New York Mellon, as Trustee (in such capacity, the “Trustee”).                Unless  the  certificate  of  authentication  hereon  has  been  executed  by  the  Trustee  whose  name  appears  below  by  manual  signature,  this  Note  shall  not  be  entitled  to  any  benefit  under  the  Indenture  referred to above and on the reverse side hereof, or be valid or obligatory for any purpose.                                        FEDNAT HOLDING COMPANY                                                                                                                  By:                                                                                Name:                                          Title:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        [IAI Note]                                                                  B-2                                           

 

                     TRUSTEE’S CERTIFICATE OF AUTHENTICATION          This is one of the Notes designated as the Senior Unsecured Notes due 2029 referred to in the  Indenture.                                                                                                                                     THE BANK OF NEW YORK MELLON,                                                                        as Trustee,                                                                                                                            By:                                                                                   Authorized Signatory                Date:                                                                                                                         [IAI Note]                                                                  B-3                                           

 

                        FORM OF REVERSE OF IAI GLOBAL NOTE                                                                     Senior Unsecured Notes due 2029                                              1. Principal and Interest                FedNat Holding Company, a corporation organized under the laws of Florida (such corporation,  and  its  successors  and  assigns  under  the  Indenture  hereinafter  referred  to,  being  herein called  the  “Company”), for value received, promises to pay (a) the outstanding principal amount of the Notes on  March 15, 2029 and (b) interest on the then outstanding principal amount of the Notes on each Payment  Date at the fixed rate per annum specified below.          The Company shall pay interest in arrears on the then-outstanding principal amount of Notes at a  fixed rate per annum equal to the Interest Rate on March 15 and September 15 of each year, commencing  on September 15, 2019 and ending on March 15, 2029 (each, a “Payment Date”). Interest on the Notes  shall accrue from the most recent date to which interest has been paid on the Notes or, if no interest has  been paid, from March 5, 2019 (each, an “Interest Accrual Period”). The Company shall pay interest on  overdue principal or premium, if any (plus interest on such interest to the extent lawful), at the rate borne  by the Notes to the extent lawful. Interest shall be computed on the basis of a 360-day year of twelve 30- day months.                 “Interest Rate” means a per annum rate equal to (a) 7.5% for each Interest Accrual Period for  which a Step-up Event is not in effect at all times during such Interest Accrual Period; or (b) for each  Interest Accrual Period for which a Step-up Event is in effect at any point during such Interest Accrual  Period, 7.5% plus an additional 50 basis points for each notch downgrade of the Company below  “BBB-”  (or its equivalent rating) by the Applicable Rating Agency.                “Step-up Event” shall occur and be in effect for any Interest Accrual Period or part thereof for  which the Notes are rated “BB+” or lower by the Applicable Rating Agency. The Company shall notify  the Trustee in writing of any Step-up Event within three Business Days following such Step-up Event.  The  Trustee  shall  not  be  charged  with  knowledge  of  a  Step-up  Event  unless  and  until  it  has  received  written notice of such Step-up from either (i) the Company or (ii) Holders representing a majority of the  outstanding principal amount of the Notes.                “Applicable Rating Agency” means one of the following Rating Agencies at any given time: (i)  in the case that there is only one Rating Agency rating the Notes, such Rating Agency, (ii) in the case that  there are two Rating Agencies rating the Notes, such Rating Agency providing the lower rating, or (iii) in  the case that there are three or more Rating Agencies rating the Notes, such Rating Agency providing the  second lowest rating.  The initial Rating Agency shall be Egan Jones.          2.    Method of Payment                  By no later than 10:00 a.m. (New York time) on the Business Day prior to which any principal of,  premium, if any, or interest on any Note is due and payable, the Company shall irrevocably deposit with  the  Paying  Agent  money  sufficient  to  pay  such  principal,  premium,  if  any,  and/or  interest  (other  than  Definitive Notes). Interest (except Defaulted Interest) shall be due and payable to the Persons who are  registered  Holders  of  Notes  at  the  close  of  business  on  one  Business  Day  immediately  preceding  the  Record Date  for  such  Payment  Date  unless  Notes  are  cancelled,  repurchased,  or  redeemed  after  the  Record Date and before the Payment Date. Holders must surrender Notes to a Paying Agent to collect  principal  payments.  The  Company  shall  pay  principal,  premium,  if  any,  and  interest  in  money  of  the  United  States  that  at  the  time  of  payment  is  legal  tender  for  payment  of  public  and  private  debts.                                        B-4                                           

 

   Payments in respect of Notes represented by a  Global Note (including principal, premium, if any, and  interest) shall be made by the Company by the transfer of immediately available funds to the accounts  specified  by  the  Depositary.  The  Company  shall  make  all  payments  in  respect  of  a  Definitive  Note  (including principal, premium, if any, and interest) by mailing a check to the registered address of each  Holder thereof.          3.    Paying Agent and Registrar                Initially, The Bank of New York Mellon shall act as Paying Agent and Registrar.  The Company  may appoint and change any Paying Agent, Registrar or co-registrar without notice to the Holders. The  Company may act as Paying Agent, Registrar or co-registrar.          4.    Indenture                The Company issued the Notes under the Indenture. The terms of the Notes include those stated  in  the  Indenture,  and  all  capitalized  terms  used  herein  without  definition  shall have  the  respective  meanings  ascribed  to them  in  the  Indenture.  The  Notes  are  subject to  all such terms,  and  Holders  are  referred to the Indenture and the Securities Act for a statement of those terms. To the extent any provision  of this Note conflicts with the express provisions of the Indenture, the provisions of the Indenture shall  govern and be controlling.                The  Notes  are  senior  unsecured  obligations  of  the  Company.  This  Note  is  one  of  the  Senior  Unsecured  Notes due  2029 referred to in the  Indenture (herein called “Notes”). The  Indenture,  among  other things, imposes certain covenants including as specified in Article III. The Indenture also imposes  requirements with respect to the provision of financial information. The Indenture also contains certain  exceptions to the foregoing, and this description is qualified in its entirety by reference to the Indenture.          5.    Repurchase upon Change of Control. The Notes may be the subject of a Change of Control Offer,  as further described in the Indenture. The Company shall not be required to make sinking fund payments  with respect to the Notes.          6.    Denominations; Transfer; Exchange                The Notes are in registered form without coupons in initial denominations of $100,000 principal  amount  and  integral  multiples  of  $10,000  thereafter.  A  Holder  may  transfer  or  exchange  Notes  in  accordance with the Indenture. The Trustee and the Registrar may require a Holder, among other things,  to furnish appropriate endorsements or transfer documents and to pay any taxes and fees required by law  or permitted by the Indenture. The Registrar need not register the transfer of or exchange any Notes for a  period beginning three Business Days before a Payment Date and ending on such Payment Date.          7.    Optional Redemption          (a)   At any time prior to March 15, 2024, the Company may, at its option, redeem all or, from  time to time, any part of the Notes, at a redemption price equal to 100.00% of the principal amount of the  Notes redeemed, plus the Applicable Premium, plus accrued and unpaid interest and principal on such  Notes, if any, on the Notes redeemed, to the applicable redemption date (subject to the right of Holders of  record on the relevant Record Date to receive principal and interest due on the relevant Payment Date that  is on or prior to the applicable redemption date).                (b)   On or after March 15, 2024, the Company may, at its option, redeem all or, from time to  time, any part of the Notes, at the following redemption prices (expressed as a percentage of outstanding                                        B-5                                           

 

   principal amount of the Notes to be redeemed) plus accrued and unpaid interest and principal on such  Notes, if any, to the applicable redemption date, if redeemed during the twelve-month period beginning  on  March  15  of  the  years  indicated  below  (subject  to  the  rights  of  Holders  of  record  on  the  relevant  Record Date to receive principal and interest due on the relevant Payment Date that is on or prior to the  applicable redemption date):                               Year                            Redemption Price        2024                                103.750%        2025                                101.875%        2026 and thereafter                 100.00%                (c)   Any redemption pursuant to this Paragraph 7 shall be made pursuant to the provisions of  Article V of the Indenture.          “Applicable Premium” means, with respect to any Note on any applicable redemption date, the  greater of (1) 1.0% of the then outstanding principal amount of such Note and (2) the excess (if any) of:                      (A) the present value at such redemption date of (i) the redemption price of such Note at  March 15, 2024 (such redemption price being set forth in the table in Section 7(b) hereof) (excluding any  accrued but unpaid interest), plus (ii) all required interest payments due on such Note through March 15,  2024 (excluding accrued but unpaid interest), computed using a discount rate equal to the Treasury Rate  on such redemption date plus 50 basis points; over                       (B) the then outstanding principal amount of such Note.                 The Company will calculate the Applicable Premium and the Trustee will not be responsible for        such calculation.                “Treasury Rate” means, as of any redemption date, the yield to maturity as of such redemption  date of United States Treasury securities with a constant maturity (as compiled and published in the most  recent  Federal  Reserve  Statistical  Release  H.15  (519)  that  has  become  publicly  available  at  least  two  business  days  prior  to  the  redemption  date  (or,  if  such  Statistical  Release  is  no  longer  published,  any  publicly available source of similar market data)) most nearly equal to the period from the redemption  date to March 15, 2024; provided that if the period from the redemption date to such date is not equal to  the constant maturity of a United States Treasury security for which a yield is given, the Treasury yield  will be obtained by linear interpolation (calculated to the nearest one-twelfth of a year) from the yields of  the nearest United  States Treasury securities for which  such  yields are  given, except that if the  period  from the redemption date to such date is less than one year, the weekly average yield on actually traded  United States securities adjusted to a constant maturity of one year will be used.     8.    Persons Deemed Owners                The registered Holder of this Note may be treated as the owner of it for all purposes.          9.    Unclaimed Money                If money for the payment of the principal of or premium, if any, or interest remains unclaimed for  two years, the Paying Agent shall pay the money back to the Company at its request unless an abandoned  property law designates another Person. After any such payment, Holders entitled to the money must look  only to the Company and not to the Trustee for payment.                                        B-6                                           

 

           10.   Discharge and Defeasance                Subject to certain conditions set forth in the Indenture, the Company at any time may terminate  some or all of its obligations under the Notes and the Indenture if the Company deposits with the Trustee  money or U.S. Government Obligations sufficient for the payment of principal and interest on the Notes  to redemption or maturity, as the case may be.    11.   Amendment, Waiver                Subject to certain exceptions set forth in the Indenture, (i) the Indenture and the Notes may be  amended  or  supplemented  with  the  written  consent  of  the  Holders  of  at  least  a  majority  in  principal  amount of the Notes then outstanding (including without limitation, consents obtained in connection with  a purchase of, or tender offer or exchange offer for Notes) and (ii) any default (other than (x) with respect  to nonpayment or (y) in respect of a provision that cannot be amended without the written consent of each  Holder affected) or noncompliance  with any provision may be  waived  with the  written  consent of the  Holders  of a majority in principal amount of the  Notes then outstanding (including without limitation,  consents obtained in connection with a purchase of, or tender offer or exchange offer for, Notes). Subject  to certain exceptions set forth in the Indenture, without the consent of any Holder, the Company and the  Trustee may amend the Indenture or the Notes to cure any ambiguity, omission, defect or inconsistency,  or to comply with Article IV of the Indenture in respect of the assumption by a Successor Company of an  obligation of the Company under the Indenture and the Notes, or to provide for uncertificated Notes in  addition to or in place of certificated Notes, or to add Guarantees with respect to the Notes, or to add to  the covenants of the Company for the benefit of the Holders, add Events of Default or to surrender any  right or power conferred by the Indenture upon the Company, or to comply with any requirement of the  SEC  in  connection  with  the  qualification  of  the  Indenture  under  the  Trust  Indenture  Act  of  1939,  as  amended,  if  applicable,  or  to  provide  for  the  appointment  of  a  successor  trustee;  provided  that  the  successor trustee is otherwise qualified and eligible to act as such under the terms of the Indenture.          12.   Defaults and Remedies                Under the Indenture, and subject to the terms and provisions of the Indenture, Events of Default  include, without limitation: (i) default in payment of interest when due on the Notes continuing for 10  consecutive Business Days; (ii) default in payment of the principal of or premium, if any, on the Notes at  its Stated Maturity, upon optional redemption, upon required repurchase, upon declaration of acceleration  or  otherwise;  (iii)  failure  by  the  Company  to  comply  with  its  obligations  under  certain  provisions  of  Article  III of  the  Indenture,  (iv)  failure  by  the  Company  to  comply  with  certain  other  provisions  or  agreements in the Indenture and the Notes, in certain cases subject to notice and lapse of time; (v) default  in other payment obligations of the Company or any of its Subsidiaries; (vi) certain events of bankruptcy  or insolvency with respect to the Company or any Subsidiary; (vii) certain final judgments or decrees for  the payment of money in excess of $1,000,000; and (viii) breach by the Company in any material respect  of any representation or covenant made to the Holders in the Note Purchase Agreement, each subject to  any applicable grace periods as set forth in the Indenture or Note Purchase Agreement, as applicable.                If an  Event of Default occurs  and is  continuing, the Trustee or Holders  of at least majority in  aggregate principal amount of the outstanding Notes then outstanding may declare all the Notes to be due  and payable immediately. Certain events of bankruptcy or insolvency with respect to the Company are  Events of Default, which shall result in the Notes being due and payable immediately upon the occurrence  of such Events of Default.                                                B-7                                           

 

         Holders  may  not  enforce the  Indenture  or  the  Notes  except  as  provided  in  the  Indenture.  The  Trustee may refuse to enforce the Indenture or the Notes unless the Trustee receives indemnity and/or  security  satisfactory  to  the  Trustee.  Subject  to  certain  limitations,  Holders  of  a  majority  in  principal  amount of the then outstanding Notes may direct the Trustee in its exercise of any trust or power.           13.   Trustee Dealings with the Company                Subject to certain limitations  set forth in the  Indenture,  the Trustee  under  the  Indenture,  in  its  individual or any other capacity, may become the owner or pledgee of Notes, subject to the terms and  conditions  of  the  Indenture.  Additionally,  the  Trustee  may  otherwise  deal  with  and  collect  obligations  owed to it by the Company or its Affiliates and may otherwise deal with the Company or its Affiliates  with the same rights it would have if it were not Trustee.          14.   No Recourse Against Others                An incorporator, director, officer, employee, stockholder or controlling Person of the Company or  any Subsidiary shall not have any liability for any obligations of the Company or any Subsidiary under  the Notes or the Indenture, or for any claim based on, in respect of, or by reason of, such obligations or  their creation. By accepting a Note, each Holder waives and releases all such liability. The waiver and  release shall be part of the consideration for the issuance of the Notes.    15.   Authentication                This  Note  shall  not be  valid  until  an  authorized  signatory  of the  Trustee (or an  authenticating  agent acting on its behalf) manually signs the certificate of authentication on the other side of this Note.          16.   Abbreviations                Customary abbreviations may be used in the name of a Holder or an assignee, such as TEN COM  (=tenants  in  common),  TEN  ENT  (=tenants  by  the  entirety),  JT  TEN (=joint  tenants  with  rights  of  survivorship and not as tenants in common), CUST (=custodian) and U/G/M/A (=Uniform Gift to Minors  Act).          17.   CUSIP and ISIN Numbers                The Company may cause one or more CUSIP and/or ISIN numbers to be printed on the Notes.  No representation is made as to the accuracy of such numbers as printed on the Notes and reliance may be  placed only on the other identification numbers placed thereon.          18.   Successor Entity                When  a  successor  entity  assumes,  in  accordance  with  the  Indenture,  all  the obligations  of  its  predecessor under the Notes and the Indenture, and immediately before and thereafter no Default or Event  of  Default  exists  and  all  other  conditions  of  the  Indenture  are  satisfied,  the  predecessor  entity  will  be  released from those obligations.          19.   Governing Law; Request for Indenture                This Note shall be governed by, and construed in accordance with, the laws of the State of New  York.                                                B-8                                           

 

         The Company shall furnish to any Holder upon written request and without charge to the Holder a  copy of the Indenture. Requests may be made to:          FedNat Holding Company         14050 N.W. 14th Street        Suite 180        Sunrise, FL 33323        Attention:  Chief Financial Officer                                                                   B-9                                           

 

               SCHEDULE OF INCREASES OR DECREASES IN GLOBAL NOTE                                                 The initial principal amount of the Note shall be $ [                       ]. The following increases or  decreases in this Global Note have been made:             Amount  of  Decrease              Principal Amount  of Signature  of             in               Amount of Increase in this  Global  Note authorized             Principal  Amount  of Principal  Amount  of Following signatory  of  Date of    this             this             such Decrease or Registrar or  Exchange   Global Note      Global Note      Increase        Depositary                                                                                                                                     B-10                                           

 

                                 ASSIGNMENT FORM                                           To assign this Note, fill in the form below:    I or we assign and transfer this Note to                                                                                                       (Print or type assignee’s name, address and zip code)                                                                                                           (Insert assignee’s soc. sec. or tax I.D.. No.)                                           and irrevocably appoint                    as agent to transfer this Note on the books of the Company. The agent  may substitute another to act for him.    Date:                         Your Signature:                                     Signature Guarantee:                          (Signature must be guaranteed)                                                                                    Sign exactly as your name appears on the other side of this Note.                                           B-11                                           

 

                                                                       EXHIBIT C                          FORM OF CERTIFICATE OF TRANSFER                                           FedNat Holding Company   14050 N.W. 14th Street  Suite 180  Sunrise, FL 33323  Attention:  Chief Financial Officer    The Bank of New York Mellon, as Trustee and Registrar  240 Greenwich Street, Floor 7E  New York, New York 10286  Attention:  Corporate Trust Administration    Re: Senior Unsecured Notes due 2029          Reference  is  hereby  made  to  the  Indenture  dated  as  of  March  5,  2019  (as  hereafter  amended,  supplemented  or  otherwise  modified  and  in  effect  from  time  to  time,  the  “Indenture”),  between  the  Company and The Bank of New York Mellon, as Trustee (in such capacity, the “Trustee”).  Capitalized  terms used but not defined herein shall have the meanings given to them in the Indenture.                                               (the  “Transferor”)  owns  and  proposes  to  transfer  the  Note[s] or interest in such Note[s] specified in Annex A hereto, in the principal amount of $          in such Note[s] or interests (the “Transfer”), to           (the  “Transferee”), as further specified in Annex A hereto.. In connection with the Transfer, the Transferor  hereby certifies that:                                     [CHECK ALL THAT APPLY]  1.       Check if Transferee will take delivery of a beneficial interest in the 144A Global Note           or a Definitive Note pursuant to Rule 144A. The Transfer is being effected pursuant to           and  in accordance  with  Rule  144A  under  the  United  States  Securities  Act  of  1933,  as           amended (the “Securities Act”), and, accordingly, the Transferor hereby further certifies that           the beneficial interest or Definitive Note is being transferred to a Person that the Transferor           reasonably believed and believes is purchasing the beneficial interest or Definitive Note for           its own account, or for one or more accounts with respect to which such Person exercises           sole  investment  discretion,  and  such  Person  and  each  such  account  is  a  “qualified           institutional  buyer”  within  the  meaning  of  Rule  144A  in  a  transaction  meeting  the           requirements of Rule 144A and such Transfer is in compliance with any applicable blue sky           securities  laws  of  any  state  of  the  United  States.  Upon  consummation  of  the  proposed           Transfer in accordance with the terms of the Indenture, the transferred beneficial interest or           Definitive  Note  will  be  subject  to  the  restrictions  on  transfer  enumerated  in  the  Private           Placement Legend printed on the 144A Global Note and/or the Definitive Note and in the           Indenture and the Securities Act.                         2.       Check  and  complete  if  Transferee  will  take  delivery  of  a  beneficial  interest  in  an           Unrestricted Global Note pursuant to any provision of the Securities Act other than           Rule  144A.  The  Transfer  is  being  effected  in  compliance  with  the  transfer  restrictions           applicable to beneficial interests in Restricted Global Notes and Restricted Definitive Notes                                        C-1                                           

 

            and  pursuant  to  and  in  accordance  with  the  Securities  Act  and  any  applicable  blue  sky           securities  laws  of  any  state  of  the  United  States,  and  accordingly  the  Transferor  hereby           further certifies that (check one):                       (a)      such  Transfer  is  being  effected  pursuant  to  and  in  accordance  with  Rule  144                    under the Securities Act;                       Or           (b)      or such Transfer is being effected to the Company or a subsidiary thereof;                       Or           (c)      such  Transfer  is  being  effected  pursuant  to  an  effective  registration  statement                    under  the  Securities  Act  and  in  compliance  with  the prospectus  delivery                    requirements of the Securities Act.                       Or           (d)      such  Transfer  is  being  effected  to  an  Institutional  Accredited  Investor  and                    pursuant  to  an  exemption  from  the  registration  requirements  of  the  Securities                    Act  other  than  Rule  144A  or  Rule  144,  and  the  Transferor  hereby  further                    certifies that it has not engaged in any general solicitation within the meaning of                    Regulation  D  under  the  Securities  Act  and  the  Transfer  complies  with  the                    transfer restrictions applicable to beneficial interests in a Restricted Global Note                    or Restricted Definitive Notes and the requirements of the exemption claimed,                    which certification is supported by a certificate executed by the Transferee in the                    form of Exhibit E to the Indenture. Upon consummation of the proposed transfer                    in accordance with the terms of the Indenture, the transferred beneficial interest                    or Definitive Note will be subject to the restrictions on transfer enumerated in                    the Private Placement Legend printed on the Global Note and/or the Definitive                    Notes and in the Indenture and the Securities Act.                       3.       Check if Transferee will take delivery of a beneficial interest in an Unrestricted Global           Note or of an Unrestricted Definitive Note.                                (a)      Check if Transfer is pursuant to Rule 144. (i) The Transfer is being effected                    pursuant  to  and  in  accordance with  Rule  144  under  the  Securities  Act  and  in                    compliance  with  the  transfer  restrictions  contained  in  the  Indenture  and  any                    applicable blue sky securities laws of any state of the United States and (ii) the                    restrictions  on  transfer  contained  in  the  Indenture  and  the  Private  Placement                    Legend are not required in order to maintain compliance with the Securities Act.                    Upon consummation of the proposed Transfer in accordance with the terms of                    the Indenture, the transferred beneficial interest or Definitive Note will no longer                    be  subject  to  the  restrictions  on  transfer  enumerated  in  the  Private  Placement                    Legend  printed on the  Restricted  Global Notes,  or Restricted Definitive  Notes                    and in the Indenture.                                (b)      Check if Transfer is pursuant to other exemption. (i) The Transfer is being                    effected pursuant to and in compliance with an exemption from the registration                    requirements of the Securities Act other than Rule 144 and in compliance with                    the transfer restrictions contained in the Indenture and any applicable blue sky                    securities  laws  of  any  State  of  the  United  States  and  (ii)  the  restrictions  on                                        C-2                                           

 

                     transfer  contained  in  the  Indenture  and  the  Private  Placement  Legend  are  not                    required  in  order  to  maintain  compliance  with  the  Securities  Act.  Upon                    consummation  of  the  proposed  Transfer  in  accordance  with  the  terms  of  the                    Indenture,  the  transferred  beneficial  interest  or  Definitive  Note  will  not  be                    subject  to  the  restrictions  on  transfer  enumerated  in  the  Private  Placement                    Legend  printed  on  the  Restricted  Global  Notes  or  Restricted  Definitive  Notes                    and in the Indenture.          This certificate and the statements contained herein are made for your benefit and the benefit of  the Company.                                                                                                                                    [Insert Name of Transferor]                                                                                                                                                                                 By:                                                                                Name:                                                   Title:                                                                                                           Dated:                                                     C-3                                           

 

                                                                       EXHIBIT D                                                                 FORM OF CERTIFICATE OF EXCHANGE                                           FedNat Holding Company   14050 N.W. 14th Street  Suite 180  Sunrise, FL 33323  Attention:  Chief Financial Officer    The Bank of New York Mellon, as Trustee and Registrar  240 Greenwich Street, Floor 7E  New York, New York 10286  Attention:  Corporate Trust Administration    Re: Senior Unsecured Notes due 2029          Reference  is  hereby  made  to  the  Indenture  dated  as  of  March  5,  2019  (as  hereafter  amended,  supplemented  or  otherwise  modified  and  in  effect  from  time  to time,  the  “Indenture”),  between  the  Company and The Bank of New York Mellon, as Trustee (in such capacity, the “Trustee”).  Capitalized  terms used but not defined herein shall have the meanings given to them in the Indenture.                                               (the  “Owner”)  owns  and proposes  to  exchange  the  Note[s] or interest in such Note[s] specified herein, in the principal amount of $    in  such  Note[s] or interests (the “Exchange”).  In connection with the Exchange, the Transferor hereby certifies  that:              1.  Exchange  of Restricted  Definitive  Notes  or  Beneficial  Interests  in  a  Restricted  Global          Note for Unrestricted Definitive Notes or Beneficial Interests in an Unrestricted Global          Note.          (a)      Check if Exchange is from beneficial interest in a Restricted Global Note to                   beneficial  interest  in  an  Unrestricted  Global  Note.  In  connection  with  the                   Exchange  of  the  Owner’s  beneficial  interest  in  a  Restricted  Global  Note  for  a                   beneficial interest in an Unrestricted Global Note in an equal principal amount,                   the  Owner  hereby  certifies  (i)  the  beneficial  interest  is  being  acquired  for  the                   Owner’s own account without transfer, (ii) such Exchange has been effected in                   compliance  with  the  transfer  restrictions  applicable  to  the  Global  Notes  and                   pursuant to and in accordance with the United States Securities Act of 1933, as                   amended (the “Securities Act”), (iii) the restrictions on transfer contained in the                   Indenture and the Private Placement Legend are not required in order to maintain                   compliance  with  the  Securities  Act  and  (iv) the  beneficial  interest  in  an                   Unrestricted  Global  Note  is  being  acquired  in  compliance  with  any  applicable                   blue sky securities laws of any state of the United States.                              (b)      Check if Exchange is from a beneficial interest in a Restricted Global Note to                   an  Unrestricted  Definitive  Note. In  connection  with  the  Exchange  of  the                   Owner’s  beneficial  interest  in  a  Restricted  Global  Note  for  an  Unrestricted                   Definitive  Note,  the  Owner  hereby  certifies  (i)  the  Definitive  Note  is  being                   acquired for the Owner’s own account without transfer, (ii) such Exchange has                   been  effected  in  compliance  with  the  transfer  restrictions  applicable  to  the                                        D-1                                           

 

                             Restricted  Global  Notes  and  pursuant  to  and  in  accordance  with  the  Securities               Act,  (iii)  the  restrictions  on  transfer  contained  in  the  Indenture  and  the  Private               Placement  Legend  are  not  required  in  order  to  maintain  compliance  with  the               Securities Act and (iv) the Definitive Note is being acquired in compliance with               any applicable blue sky securities laws of any state of the United States.                      (c)      Check  if  Exchange  is  from  a  Restricted  Definitive  Note  to  a  beneficial               interest  in  an  Unrestricted  Global  Note.  In  connection  with  the  Owner’s               Exchange  of a  Restricted  Definitive  Note  for  a  beneficial  interest  in  an               Unrestricted Global Note, the Owner hereby certifies (i) the beneficial interest is               being acquired for the Owner’s own account without transfer, (ii) such Exchange               has  been  effected  in  compliance  with  the  transfer  restrictions  applicable  to               Restricted Definitive Notes and pursuant to and in accordance with the Securities               Act,  (iii)  the  restrictions  on  transfer  contained  in  the  Indenture  and  the  Private               Placement  Legend  are  not  required  in  order  to  maintain  compliance  with  the               Securities Act and (iv) the beneficial interest is being acquired in compliance with               any applicable blue sky securities laws of any state of the United States.      (d)      Check  if  Exchange  is  from  a  Restricted  Definitive Note  to  an  Unrestricted               Definitive  Note.  In  connection  with  the  Owner’s  Exchange  of  a  Restricted               Definitive Note for an Unrestricted Definitive Note, the Owner hereby certifies (i)               the Unrestricted Definitive Note is being acquired for the Owner’s own account               without  transfer,  (ii)  such  Exchange  has  been  effected  in  compliance  with  the               transfer restrictions applicable to Restricted Definitive Notes and pursuant to and               in accordance with the Securities Act, (iii) the restrictions on transfer contained in               the  Indenture  and  the  Private  Placement  Legend  are  not  required  in  order  to               maintain compliance with the Securities Act and (iv) the Unrestricted Definitive               Note is being acquired in compliance with any applicable blue sky securities laws               of any state of the United States.                  2.  Exchange  of  Restricted  Definitive  Notes  or  Beneficial  Interests  in  Restricted  Global      Notes for Restricted Definitive Notes or Beneficial Interests in Restricted Global Notes.             (a)      Check if Exchange is from a beneficial interest in a Restricted Global Note to               an Restricted Definitive Note.  In connection with the Exchange of the Owner’s               beneficial  interest  in  a  Restricted  Global  Note  for  a  Restricted  Definitive  Note               with  an  equal  principal  amount,  the  Owner  hereby  certifies  that  the  Restricted               Definitive Note is being acquired for the Owner’s own account without transfer.               Upon consummation of the proposed Exchange in accordance with the terms of               the Indenture, the Restricted Definitive Note issued will continue to be subject to               the restrictions on transfer enumerated in the Private Placement Legend printed               on the Restricted Definitive Note and in the Indenture and the Securities Act.                      (b)      Check  if  Exchange  is  from  a  Restricted  Definitive  Note  to  a  beneficial               interest in a Restricted Global Note.  In connection with the Exchange of the               Owner’s Restricted Definitive Note for a beneficial interest in the [CHECK ONE]               _  144A  Global  Note,  _  IAI  Global  Note  with  an  equal  principal  amount,  the               Owner hereby certifies (i) the beneficial interest is being acquired for the Owner’s               own  account  without  transfer  and  (ii)  such  Exchange  has  been  effected  in                                    D-2                                       

 

                    compliance with the transfer restrictions applicable to the Restricted Global Notes                   and pursuant to and in accordance with the Securities Act, and in compliance with                   any applicable blue sky securities laws  of any state of the United States.  Upon                   consummation  of  the  proposed  Exchange  in  accordance  with  the  terms  of  the                   Indenture,  the  beneficial  interest  issued  will  be subject  to  the  restrictions  on                   transfer  enumerated  in  the  Private  Placement  Legend  printed  on  the  relevant                   Restricted Global Note and in the Indenture and the Securities Act.                   This certificate and the statements contained herein are made for your benefit and the benefit of  the Company.                                                                                                                                                                                                                   [Insert Name of Owner]                                                                                                                                                                                  By:                                                                                  Name:                                                      Title:                                                                       Dated:                                                       D-3                                           

 

                                                                       EXHIBIT E                                                                           FORM OF CERTIFICATE FROM                    ACQUIRING INSTITUTIONAL ACCREDITED INVESTOR          FedNat Holding Company   14050 N.W. 14th Street  Suite 180  Sunrise, FL 33323  Attention:  Chief Financial Officer    The Bank of New York Mellon, as Trustee and Registrar  240 Greenwich Street, Floor 7E  New York, New York 10286  Attention:  Corporate Trust Administration    Re: Senior Unsecured Notes due 2029          Reference  is  hereby  made  to  the  Indenture  dated  as  of  March  5,  2019  (as  hereafter  amended,  supplemented  or  otherwise  modified  and  in  effect  from  time  to  time,  the  “Indenture”),  between  the  Company and The Bank of New York Mellon, as Trustee (in such capacity, the “Trustee”).  Capitalized  terms used but not defined herein shall have the meanings given to them in the Indenture.                  In connection with our proposed purchase of ____________ aggregate principal amount of:           (a) ☐ a beneficial interest in a Global Note, or           (b) ☐ a Definitive Note,    we confirm that:          1. We understand that any subsequent transfer of the Notes or any interest therein is subject to  certain restrictions and conditions set forth in the Indenture and the undersigned agrees to be bound by,  and not to resell, pledge or otherwise transfer the Notes or any interest therein except in compliance with,  such restrictions and conditions and the United States Securities Act of 1933, as amended (the “Securities  Act”).                  2. We understand that the offer and sale of the Notes have not been registered under the Securities  Act, and that the  Notes and any interest therein may  not be offered or sold except as permitted in the  following sentence. We agree, on our own behalf and on behalf of any accounts for which we are acting  as hereinafter stated, that if we should sell the Notes or any interest therein, we will do so only (A) to the  Company  or  any  Subsidiary  thereof,  (B) in  accordance  with  Rule  144A  under  the  Securities  Act  to  a  “qualified institutional buyer” (as defined therein), (C) to an institutional “accredited investor” (as defined  below) that, prior to such transfer, furnishes (or has furnished on its behalf by a U.S. broker-dealer) to you  and to the Company a signed letter substantially in the form of this letter or (D) pursuant to an effective  registration statement under the Securities Act, and we further agree to provide to any person purchasing  the  Definitive  Note  or  beneficial  interest  in  a  Global  Note  from  us  in  a  transaction  meeting  the  requirements of clauses (A) through (D) of this paragraph a notice advising such purchaser that resales  thereof are restricted as stated herein.                                           E-1                                           

 

         3. We understand that, on any proposed resale of the Notes or beneficial interest therein, we will  be required to furnish to you and the Company such certifications, legal opinions and other information as  you  and  the  Company  may  reasonably  require  to  confirm  that  the  proposed  sale  complies  with  the  foregoing restrictions. We further understand that the Notes purchased  by us  will bear a legend to the  foregoing effect.                  4. We are an institutional “accredited investor” (as defined in Rule 501(a)(1), (2), (3) or (7) of  Regulation D under the Securities Act) and have such knowledge and experience in financial and business  matters as to be capable of evaluating the merits and risks of our investment in the Notes, and we and any  accounts for which we are acting are each able to bear the economic risk of our or its investment.                  5. We are acquiring the Notes or beneficial interest therein purchased by us for our own account  or for one or more accounts (each of which is an institutional “accredited investor”) as to each of which  we exercise sole investment discretion.                  You  and  the  Company  are  entitled  to  rely  upon  this  letter  and  are  irrevocably  authorized  to  produce this letter or a copy hereof to any interested party in any administrative or legal proceedings or  official inquiry with respect to the matters covered hereby.                                                                                                                                            [Insert Name of Accredited Owner]                                                                                                                                                                                 By:                                                                                   Name:                                                      Title:                                                                       Dated:                                                                 E-2exhibit101registrationri

                                                                                                   FORM OF REGISTRATION RIGHTS AGREEMENT         This REGISTRATION RIGHTS AGREEMENT (the “Agreement”) is dated as of March 5, 2019 and  is made by and among FedNat Holding Company, a Florida corporation (the “Company”), and the purchaser  or purchasers identified on the signature page hereto (individually or collectively, the “Purchaser”).         This Agreement is made pursuant to the Note Purchase Agreement dated February 25, 2019 (the  “Purchase Agreement) by and between the Company and the Purchaser, which provides for the sale by the  Company to the Purchaser of an aggregate principal amount of the Company’s 7.5% Senior Unsecured Notes  due 2029, to be issued on March 5, 2019 (the “Notes”) as specified in Schedule I to the Purchase Agreement.   In order to induce the Purchaser to enter into the Purchase Agreement and in satisfaction of a condition to the  Purchaser’s obligations thereunder, the Company has agreed to provide to the Purchaser and its respective  direct and indirect transferees and assigns the registration rights set forth in this Agreement.  The execution  and  delivery  of  this  Agreement,  and  of  other  Registration  Rights  Agreements  in  form  identical  to  this  Agreement (the “Other Registration Rights Agreements”) with  purchasers other than the Purchaser (the  “Other Purchasers”), are conditions to the closing under the Purchase Agreement. The rights of each Purchaser  hereunder shall be pari passu with each Other Purchaser under the Other Registration Rights Agreements.         In consideration of the foregoing, the parties hereto agree as follows:         1.    Definitions.  As used in this Agreement, the following capitalized defined terms shall have  the following meanings:               “1933 Act” shall mean the Securities Act of 1933, as amended from time to time, and the        rules and regulations of the SEC promulgated thereunder.               “1934 Act” shall mean the Securities Exchange Act of 1934, as amended from time to time,        and the rules and regulations of the SEC promulgated thereunder.               “Acquisition Agreement” shall mean the Equity Purchase Agreement, dated February 25,        2019 among Maison Insurance Company, Maison Managers, Inc., ClaimCor, LLC, 1347 Property        Insurance Holdings, Inc. and the Company.                “Agreement” shall have the meaning set forth in the preamble to this Agreement.                “Applicable  Procedures”  shall  mean,  with  respect  to  any  transfer  or  exchange  of  or  for        beneficial interests in any Note represented by a global certificate, the rules and procedures of the        Depositary that apply to such transfer or exchange.               “Company” shall have the meaning set forth in the preamble to this Agreement and also        includes the Company’s successors.               “Depositary” shall mean The Depository Trust Company, or any other depositary appointed        by the Company, including any agent thereof; provided, however, that any such depositary must at        all times have an address in the Borough of Manhattan, The City of New York.               “Exchange Offer” shall mean the exchange offer by the Company of Exchange Securities for        Registrable Securities pursuant to Section 2(a) hereof.               “Exchange Offer Registration” shall mean a registration under the 1933 Act effected pursuant        to Section 2(a) hereof.       

 

      “Exchange  Offer  Registration  Statement”  shall  mean  an  exchange  offer  registration  statement  on  Form  S-4  (or,  if  applicable,  on  another appropriate  form)  covering  the  Registrable  Securities, and all amendments and supplements to such registration statement, in each case including  the Prospectus contained therein, all exhibits thereto and all material incorporated or deemed to be  incorporated by reference therein.         “Exchange Securities” shall mean the 7.5% Senior Unsecured Notes due 2029 issued by the  Company under the Indenture containing terms identical to the Notes (except that (i) interest thereon  shall accrue from the last date to which interest has been paid or duly provided for on the Notes or, if  no such interest has been paid or duly provided for, from the Interest Accrual Date, (ii) the transfer  restrictions and legends relating to restrictions on ownership and transfer thereof as a result of the  issuance  of  the  Notes  without  registration  under  the  1933  Act  shall  be  eliminated,  (iii)  the  denominations thereof shall be $1,000 and integral multiples of $1,000 and (iv) all of the Exchange  Securities will be represented by one or more global Exchange Securities in book-entry form unless  exchanged for Exchange Securities in definitive certificated form under the circumstances provided  in  the  Indenture  to  be  offered  to  Holders  of  Registrable  Securities in  exchange  for  Registrable  Securities pursuant to the Exchange Offer).         “FINRA” shall mean the Financial Industry Regulatory Authority, Inc.         “Holder” shall mean (i) the Purchaser, for so long as it owns any Registrable Securities, and  each of its successors, assigns and direct and indirect transferees who become registered owners of  Registrable  Securities  under  the  Indenture  and  (ii)  each  Participating  Broker-Dealer  that  holds  Exchange Securities for so long as such Participating Broker-Dealer is required to deliver a prospectus  meeting the requirements of the 1933 Act in connection with any resale of such Exchange Securities.         “Indenture”  shall  mean  the  indenture,  dated  as  of  March  5,  2019,  by  and  between  the  Company  and  the  Bank  of  New  York  Mellon, as  trustee,  as  the  same  may  be  amended  or  supplemented from time to time in accordance with the terms thereof.         “Interest Accrual Date” means March 5, 2019.         “Majority Holders” shall mean the Holders of a majority of the aggregate principal amount  of Registrable Securities outstanding, excluding Exchange Securities referred to in clause (ii) of the  definition  of  “Holders”  above; provided that  whenever  the  consent  or  approval  of  Holders  of  a  specified  percentage  of  Registrable  Securities  or  Exchange  Securities  is  required  hereunder,  Registrable Securities and Exchange Securities held by the Company or any of its affiliates (as such  term is defined in Rule 405 under the 1933 Act) shall be disregarded in determining whether such  consent or approval was given by the Holders of such required percentage.         “Notes” shall have the meaning set forth in the preamble to this Agreement.         “Notifying Broker-Dealer” shall have the meaning set forth in Section 3(f).         “Participating Broker-Dealer” shall have the meaning set forth in Section 3(f).         “Person”  shall  mean  an  individual,  partnership,  joint  venture,  limited  liability  company,  corporation, trust or unincorporated organization, or a government or agency or political subdivision  thereof.                                    2                 

 

      “Prospectus” shall mean the prospectus included in a Registration Statement, including any  preliminary prospectus, and any such prospectus as amended or supplemented by any prospectus  supplement, including a prospectus supplement with respect to the terms of the offering of any portion  of the Registrable Securities covered by a Shelf Registration Statement, and by all other amendments  and supplements to a prospectus, including post-effective amendments, and in each case including all  material incorporated or deemed to be incorporated by reference therein.         “Purchase Agreement” shall have the meaning set forth in the preamble to this Agreement.         “Purchaser” shall have the meaning set forth in the preamble of this Agreement.         “Registrable Securities” shall mean the Notes; provided, however, that any Notes shall cease  to be Registrable Securities when (i) a Registration Statement with respect to such Notes shall have  been declared effective under the 1933 Act and such Notes shall have been disposed of pursuant to  such Registration Statement, (ii) such Notes shall have ceased to be outstanding, or (iii) such Notes  have been exchanged for Exchange Securities which have been registered pursuant to the Exchange  Offer Registration Statement upon consummation of the Exchange Offer unless, in the case of any  Exchange Securities referred to in this clause (iii), such Exchange Securities are held by Participating  Broker-Dealers or otherwise are freely tradable without any limitations or restrictions under the 1933  Act (in which case such Exchange Securities will be deemed to be Registrable Securities until such  time as such Exchange Securities are sold to a purchaser in whose hands such Exchange Securities  are freely tradeable without any limitations or restrictions under the 1933 Act).         “Registration  Expenses”  shall  mean  any  and  all  expenses  incident  to  performance  of  or  compliance by the Company with this Agreement, including without limitation: (i) all SEC, stock  exchange or FINRA registration and filing fees, (ii) all fees and expenses incurred in connection with  compliance with state or other securities or blue sky laws and compliance with the rules of FINRA  (including  reasonable  fees  and  disbursements  of  counsel  for  any  underwriters  or  Holders  in  connection with qualification of any of the Exchange Securities or Registrable Securities under state  or other securities or blue sky laws and any filing with and review by FINRA), (iii) all expenses of  any Persons in preparing, printing and distributing any Registration Statement, any Prospectus, any  amendments  or  supplements  thereto,  any  underwriting  agreements,  securities  sales  agreements,  certificates  representing  the  Notes  or  Exchange  Securities  and  other  documents  relating  to  the  performance of and compliance with this Agreement, (iv) all rating agency fees, (v) all fees and  expenses incurred in connection with the listing, if any, of any of the Notes or Exchange Securities  on any securities exchange or exchanges or on any quotation system, (vi) all fees and disbursements  relating  to  the  qualification  of  the  Indenture  under  applicable  securities  laws,  (vii)  the  fees  and  disbursements  of  counsel  for  the  Company  and  the  fees  and  expenses  of  independent  public  accountants for the Company or for any other Person, business or assets whose financial statements  are included in any Registration Statement or Prospectus, including the expenses of any special audits  or “cold comfort” letters required by or incident to such performance and compliance, (viii) the fees  and expenses of a “qualified independent underwriter” as defined by FINRA Rule 5121 (if required  by FINRA rules) and the fees and disbursements of its counsel, (ix) the fees and expenses of the  Trustee, any registrar, any depositary, any paying agent, any escrow agent or any custodian, in each  case  including  fees  and disbursements  of  their  respective  counsel,  and  (x)  in  the  case  of  an  underwritten offering, any fees and disbursements of the underwriters customarily paid by issuers or  sellers of securities and the fees and expenses of any special experts retained by the Company in  connection with any Registration Statement but excluding (except as otherwise provided herein) fees  of  counsel  to  the  underwriters  or  the  Holders  and  underwriting  discounts  and  commissions  and  transfer taxes, if any, relating to the sale or disposition of Registrable Securities by a Holder.                                     3                 

 

            “Registration Statement” shall mean any registration statement of the Company relating to        any offering of the Exchange Securities or Registrable Securities pursuant to the provisions of this        Agreement (including, without limitation, any Exchange Offer Registration Statement and any Shelf        Registration Statement), and all amendments and supplements to any such Registration Statement,        including post-effective amendments, in each case including the Prospectus contained therein, all        exhibits thereto and all material incorporated or deemed to be incorporated by reference therein.               “SEC” shall mean the United States Securities and Exchange Commission or any successor        thereto.               “Shelf Registration” shall mean a registration effected pursuant to Section 2(b) hereof.               “Shelf Registration Statement” shall mean a “shelf” registration statement of the Company        pursuant to the provisions of Section 2(b) of this Agreement which covers all of the Registrable        Securities, as the case may be, on an appropriate form under Rule 415 under the 1933 Act, or any        similar rule that may be adopted by the SEC, and all amendments and supplements to such Shelf        Registration Statement, including post-effective amendments, in each case including the Prospectus        contained therein, all exhibits thereto and all material incorporated or deemed to be incorporated by        reference therein.               “Specified Date” shall mean:               (i)  if  the  transactions  contemplated  by  the  Acquisition  Agreement  are  consummated        (“Acquisition Closing”) on or prior to December 31, 2019, the date of such Acquisition Closing; and               (ii) if the Acquisition Closing does not occur on or prior to December 31, 2019, or if the        Acquisition  Agreement  is  terminated  prior  to  December  31,  2019,  or  if  the  Company  publicly        announces  that  the  transactions  contemplated  by  the  Acquisition  Agreement will  not  be        consummated, the Special Mandatory Redemption Date (as defined in the Indenture), which is the        date the Company completes its redemption of up to $49,500,000 in aggregate principal amount of        the Notes pursuant to Section 5.8 of the Indenture.                 “TIA” shall mean the Trust Indenture Act of 1939, as amended from time to time, and the        rules and regulations of the SEC promulgated thereunder.               “Trustee” shall mean the trustee with respect to the Notes and the Exchange Securities under        the Indenture.               “Underwriters” shall have the meaning set forth in Section 5(a).                For purposes of this Agreement, (i) all references in this Agreement to any Registration  Statement, preliminary prospectus or Prospectus or any amendment or supplement to any of the foregoing  shall be deemed to include the copy filed with the SEC pursuant to its Electronic Data Gathering, Analysis  and Retrieval system; (ii) all references in this Agreement to financial statements and schedules and other  information  which  is  “contained,”  “included”  or  “stated”  in  any  Registration  Statement,  preliminary  prospectus or Prospectus (or other references of like import) shall be deemed to mean and include all such  financial statements and schedules and other information which is incorporated or deemed to be incorporated  by reference in such Registration Statement, preliminary prospectus or Prospectus, as the case may be; (iii)  all references in this Agreement to amendments or supplements to any Registration Statement, preliminary  prospectus or Prospectus shall be deemed to mean and include the filing of any document under the 1934 Act  which is incorporated or deemed to be incorporated by reference in such Registration Statement, preliminary                                         4    

 

prospectus or Prospectus, as the case may be; (iv) all references in this Agreement to Rule 144, Rule 144A,  Rule 405 or Rule 415 under the 1933 Act, and all references to any sections or subsections thereof or terms  defined therein, shall in each case include any successor provisions thereto; and (v) all references in this  Agreement to days (but not to business days) shall mean calendar days.         2.    Registration Under the 1933 Act.               (a)   Exchange Offer Registration.  The Company shall (A) file with the SEC on or prior        to the 45th day after the Specified Date an Exchange Offer Registration Statement covering the offer        by the Company to the Holders to exchange all of the Registrable Securities for a like aggregate        principal amount of Exchange Securities, (B) use its reasonable best efforts to cause such Exchange        Offer Registration Statement to be declared effective by the SEC no later than the  30th day after it is        filed with the SEC, (C) use its reasonable best efforts to cause such Registration Statement to remain        effective until the closing of the Exchange Offer and (D) use its reasonable best efforts to consummate        the Exchange Offer no later than 45 days after the effective date of the Exchange Offer Registration        Statement.  Upon the effectiveness of the Exchange Offer Registration Statement, the Company shall        promptly commence the Exchange Offer, it being the objective of such Exchange Offer to enable        each Holder eligible  and  electing  to  exchange Registrable  Securities for Exchange  Securities        (assuming that such Holder is not an affiliate of the Company within the meaning of Rule 405 under        the 1933 Act, acquires the Exchange Securities in the ordinary course of such Holder’s business and        has no arrangements or understandings with any Person to participate in the Exchange Offer for the        purpose of distributing such Exchange Securities) to trade such Exchange Securities from and after        their receipt without any limitations or restrictions under the 1933 Act or under the securities or blue        sky laws of the states of the United States.                       In connection with the Exchange Offer, the Company shall:                      (i)   promptly mail to each Holder a copy of the Prospectus forming part of the        Exchange Offer Registration Statement, together with an appropriate letter of transmittal and related        documents;                      (ii)  keep the Exchange Offer open for not less than 20 business days and not        more than 40 business days (or longer if required by applicable law) after the date notice thereof is        mailed  to  the  Holders  (or,  to  the  extent  permitted  or  required  by  Applicable  Procedures,  sent        electronically)  and,  during  the  Exchange  Offer,  offer  to all  Holders  who  are  legally  eligible  to        participate  in  the  Exchange  Offer  the  opportunity  to  exchange  their  Registrable  Securities  for        Exchange Securities;                      (iii) use the services of a depositary with an address in the United States, which        may be the Trustee or an affiliate of the Trustee, for the Exchange Offer;                      (iv)  permit Holders to withdraw tendered Registrable Securities at any time prior        to the close of business, Sunrise, Florida time, on the last business day on which the Exchange Offer        shall remain open, by sending to the institution specified in the Prospectus or the related letter of        transmittal or related documents a telegram, telex, facsimile transmission, letter or other method        permitted or required by Applicable Procedures setting forth the name of such Holder, the principal        amount  of  Registrable  Securities  delivered  for  exchange,  and  a  statement  that  such  Holder  is        withdrawing its election to have such Notes exchanged;                                           5    

 

            (v)   notify each Holder that any Registrable Security not tendered will remain  outstanding and continue to accrue interest, but will not retain any rights under this Agreement (except  in the case of Participating Broker-Dealers as provided herein); and               (vi)  otherwise comply in all material respects with all applicable laws relating to  the Exchange Offer.               The Exchange Securities shall be issued under the Indenture, which shall be qualified  under the TIA.  The Indenture shall provide that the Exchange Securities and the Notes shall vote and  consent together on all matters as a single class and shall constitute a single series of debt securities  issued under the Indenture.               As soon as practicable after the close of the Exchange Offer, the Company shall:               (i)   accept for exchange all Registrable Securities duly tendered and not validly  withdrawn  pursuant  to  the Exchange  Offer  in  accordance  with  the terms  of  the Exchange  Offer  Registration Statement and the letter of transmittal which is an exhibit thereto;               (ii)  deliver,  or  cause  to  be  delivered,  to  the  Trustee  for  cancellation  all  Registrable Securities so accepted for exchange by the Company; and               (iii) cause the Trustee promptly to authenticate and deliver Exchange Securities  to each Holder of Registrable Securities so accepted for exchange equal in principal amount to the  principal amount of the Registrable Securities of such Holder so accepted for exchange.               Interest on each Exchange Security will accrue from the last date on which interest  was paid or duly provided for on the Notes surrendered in exchange therefor or, if no interest has  been paid or duly provided for on such Notes, from the Interest Accrual Date.  The Exchange Offer  shall not be subject to any conditions, other than (i) that the Exchange Offer, or the making of any  exchange by a Holder, does not violate any applicable law or any applicable interpretation of the staff  of the SEC, (ii) that no action or proceeding shall have been instituted or threatened in any court or  by or before any governmental agency with respect to the Exchange Offer which, in the Company’s  judgment, would reasonably be expected to impair the ability of the Company to proceed with the  Exchange  Offer,  and  (iii)  that  the  Holders  tender  the  Registrable  Securities  to  the  Company  in  accordance with the Exchange Offer.  Each Holder of Registrable Securities (other than Participating  Broker-Dealers) who wishes to exchange such Registrable Securities for Exchange Securities in the  Exchange Offer will be required to represent that (i) it is not an affiliate (as defined in Rule 405 under  the 1933 Act) of the Company, (ii) any Exchange Securities to be received by it will be acquired in  the ordinary course of business and (iii) it has no arrangement with any Person to participate in the  distribution (within the meaning of the 1933 Act) of the Exchange Securities, and shall be required  to make such other representations as may be reasonably necessary under applicable SEC rules,  regulations or interpretations to render the use of Form S-4 or another appropriate form under the  1933 Act available.                 Each Holder hereby acknowledges and agrees that any broker-dealer and any such  Holder  using  the  Exchange  Offer  Registration  to  participate  in  a  distribution  of  the  Exchange  Securities (x) could not under SEC policy as in effect on the date of this Agreement rely on the  position of the SEC in Morgan Stanley and Co., Inc. (pub. avail. June 5, 1991) and Exxon Capital  Holdings Corporation (pub. avail. May 13, 1988), as interpreted in the SEC’s letter to Shearman &  Sterling dated July 2, 1993 and similar no-action letters and (y) must comply with the registration and  prospectus delivery requirements of the 1933 Act in connection with any secondary resale transaction                                   6                 

 

and must be covered by an effective registration statement containing the selling security holder  information required by Items 507 and 508, of Regulation S-K, as applicable, under the 1933 Act if  the resales are of Exchange Securities obtained by such Holder in exchange for Notes acquired by  such Holder directly from the Company or one of its affiliates. Accordingly, each Holder participating  in the Exchange Offer Registration shall be required to represent to the Company that, at the time of  the consummation of the Exchange Offer Registration:               (i)   any Exchange Securities received by such Holder will be acquired in the  ordinary course of business;                             (ii)  such Holder will have no arrangement or understanding with any Person to  participate in the distribution of the Notes or the Exchange Securities within the meaning of the  1933 Act;                             (iii)  such Holder is not an affiliate of the Company; and                             (iv)  such Holder is not acting on behalf of any Person who could not truthfully  make the statements set forth in clauses (i), (ii) and (iii) immediately above.                (b)   Shelf Registration.                 (i)   If, because of any change in law or applicable interpretations thereof by the  staff of the SEC, the Company is not permitted to effect the Exchange Offer as contemplated by  Section 2(a) hereof, or                (ii)  if for any other reason (A) the Exchange Offer Registration Statement is not  declared effective within 30 days following the date it is filed with the SEC or (B) the Exchange Offer  is not consummated within 45 days after effectiveness of the Exchange Offer Registration Statement  (provided that if the Exchange Offer Registration Statement shall be declared effective after such 30- day  period  or  if  the Exchange  Offer shall  be  consummated  after  such  45-day  period,  then  the  Company’s  obligations  under  this  clause (ii) arising  from  the  failure of  the Exchange  Offer  Registration  Statement to  be  declared  effective  within  such  30-day  period  or  the  failure  of  the  Exchange Offer to be consummated within such 45-day period, respectively, shall terminate), or                (iii) if any Holder is not eligible to participate in the Exchange Offer or elects to  participate in the Exchange Offer but does not receive Exchange Securities which are freely tradeable  without any limitations or restrictions under the 1933 Act, the Company shall, at its cost:                     (A)   as promptly as practicable, but no later than (a) the 150th day after        the Specified Date or (b) the 60th day after any such filing obligation arises, whichever is        later, file with the SEC a Shelf Registration Statement relating to the offer and sale of the        Registrable Securities by the Holders from time to time in accordance with the methods of        distribution elected by the Majority Holders of such Registrable Securities and set forth in        such Shelf Registration Statement;                     (B)   use  its  reasonable  best  efforts  to  cause such Shelf  Registration        Statement to be declared effective by the SEC as promptly as practicable, but in no event        later than (a) the 195th day after the Specified Date or (b) the 105th day after an obligation to        file with the SEC a Shelf Registration Statement arises, whichever is later.  In the event that        the Company is required to file a Shelf Registration Statement pursuant to clause (iii) above,        the Company shall file and use its reasonable best efforts to have declared effective by the                                   7                 

 

      SEC both an Exchange Offer Registration Statement pursuant to Section 2(a) with respect to        all Registrable Securities and a Shelf Registration Statement (which may be a combined        Registration  Statement with  the Exchange  Offer  Registration  Statement)  with  respect  to        offers and sales of Registrable Securities held by such Holder described in clause (iii) above;                     (C)   use  its  reasonable  best  efforts  to  keep the Shelf  Registration        Statement continuously effective, supplemented and amended as required, in order to permit        the Prospectus forming part thereof to be usable by Holders for a period of two years after        the latest date on which any Notes are originally issued by the Company (subject to extension        pursuant to the last paragraph of Section 3) or, if earlier, when all of the Registrable Securities        covered  by  such Shelf  Registration  Statement (i)  have  been  sold  pursuant  to  the Shelf        Registration Statement in accordance with the intended method of distribution thereunder, or        (ii) cease to be Registrable Securities; and                     (D)   notwithstanding any other provisions hereof, use its best efforts to        ensure that  (i)  any Shelf  Registration  Statement and  any  amendment  thereto  and  any        Prospectus forming a part thereof and any supplements thereto comply in all material respects        with the 1933 Act, (ii) any Shelf Registration Statement and any amendment thereto does        not, when it becomes effective, contain an untrue statement of a material fact or omit to state        a material fact required to be stated therein or necessary to make the statements therein not        misleading and (iii) any Prospectus forming part of any Shelf Registration Statement and any        amendment or supplement to such Prospectus does not include an untrue statement of a        material fact or omit to state a material fact necessary in order to make the statements therein,        in the light of the circumstances under which they were made, not misleading; provided,        however, clauses (ii) and (iii) shall not apply to any statement in or omission from a Shelf        Registration  Statement or  a Prospectus made  in  reliance  upon  and  conformity  with        information relating to any Holder, Participating Broker-Dealer or underwriter of Registrable        Securities furnished to the Company in writing by such Holder, Participating Broker-Dealer        or underwriter,  respectively,  expressly  for  use  in  such Shelf  Registration  Statement or        Prospectus.                     The Company further agrees, if necessary, to supplement or amend the Shelf  Registration Statement if reasonably requested by the Majority Holders with respect to information  relating to the Holders and otherwise as required by Section 3(b) below, to use its reasonable best  efforts to cause any such amendment to become effective and such Shelf Registration Statement to  become usable as soon as practicable thereafter and to furnish to the Holders of Registrable Securities  copies of any such supplement or amendment promptly after its being used or filed with the SEC.         (c)   Expenses.  The Company shall pay all Registration Expenses in connection with the  registration pursuant to Section 2(a) and 2(b) and, in the case of any Shelf Registration Statement,  will reimburse the Holders for the reasonable fees and disbursements of one counsel (in addition to  any local counsel) designated in writing by the Majority Holders to act as counsel for the Holders of  the Registrable Securities in connection therewith.  Each Holder shall pay all fees and disbursements  of its counsel other than as set forth in the preceding sentence or in the definition of Registration  Expenses and all underwriting discounts and commissions and transfer taxes, if any, relating to the  sale or disposition of such Holder’s Registrable Securities pursuant to a Shelf Registration Statement.         (d)   Effective Registration Statement.               (i)   The Company shall be deemed not to have used its reasonable best efforts  to cause the Exchange Offer Registration Statement or any Shelf Registration Statement, as the case                                   8                 

 

      may be, to become, or to remain, effective during the requisite periods set forth herein if the Company        voluntarily takes any action that could reasonably be expected to result in any such Registration        Statement not  being  declared  effective  or  remaining  effective  or  in  the Holders of Registrable        Securities (including,  under  the  circumstances  contemplated  by Section 3(f) hereof, Exchange        Securities) covered thereby not being able to exchange or offer and sell such Registrable Securities        during that period unless (A) such action is required by applicable law or (B) such action is taken by        the Company in  good  faith  and  for  valid  business  reasons  (but  not  including  avoidance  of  the        Company’s obligations hereunder), including the acquisition or divestiture of assets or a material        corporate  transaction  or  event  so  long  as  the Company promptly  complies  with  the  notification        requirements of Section 3(k) hereof, if applicable.                     (ii)  An Exchange Offer Registration Statement pursuant to Section 2(a) hereof        or a Shelf Registration Statement pursuant to Section 2(b) hereof shall not be deemed to have become        effective unless it has been declared effective by the SEC; provided, however, that if, after such        Registration Statement has been declared effective, the offering of Registrable Securities pursuant to        a Registration Statement is interfered with by any stop order, injunction or other order or requirement        of the SEC or any other governmental agency or court, such Registration Statement shall be deemed        not to have been effective during the period of such interference until the offering of Registrable        Securities pursuant to such Registration Statement may legally resume.                     (iii) During any 365-day period, the Company may, by notice as described in        Section 3(e), suspend the availability of a Shelf Registration Statement (and, if the Exchange Offer        Registration  Statement is  being  used  in  connection  with  the  resale  of Exchange  Securities by        Participating  Broker-Dealers as  contemplated  by Section 3(f),  the Exchange  Offer  Registration        Statement) and the use of the related Prospectus for up to two periods of up to 45 consecutive days        each (except for the consecutive 45-day period immediately prior to final maturity of the Notes), but        no more than an aggregate of 90 days during any 365-day period, upon the happening of any event        or the discovery of any fact referred to in Section 3(e)(vi), but subject to compliance by the Company        with its obligations under the last paragraph of Section 3.         (e)   Specific  Enforcement.   Without  limiting  the  remedies  available  to  the Holders  or  any  Participating Broker-Dealer, the Company acknowledges that any failure by the Company to comply with its  obligations under Sections 2(a) and 2(b) hereof may result in material irreparable injury to the Holders or the  Participating Broker-Dealers for which there is no adequate remedy at law, that it will not be possible to  measure damages for such injuries precisely and that, in the event of any such failure, any Holder and any  Participating Broker-Dealer may obtain such relief as may be required to specifically enforce the Company’s  obligations under Sections 2(a) and 2(b).         3.    Registration Procedures.  In connection with the obligations of the Company with respect  to the Registration Statements pursuant to Sections 2(a) and 2(b) hereof, the Company shall:               (a)   prepare and file with the SEC a Registration Statement or, if required, Registration        Statements, within the time periods specified in Section 2, on the appropriate form under the 1933        Act, which form (i) shall be selected by the Company, (ii) shall, in the case of a Shelf Registration        Statement, be available for the sale of the Registrable Securities by the selling Holders thereof and        (iii) shall comply as to form in all material respects with the requirements of the applicable form and        include or incorporate by reference all financial statements required by the SEC to be filed therewith,        and use its reasonable best efforts to cause such Registration Statement to become effective and        remain effective in accordance with Section 2 hereof;                                          9    

 

      (b)   prepare and file with the SEC such amendments and post-effective amendments to  each Registration Statement as may be necessary under applicable law to keep such Registration  Statement effective  for  the  applicable  period; cause  each Prospectus to  be  supplemented  by  any  required prospectus supplement, and as so supplemented to be filed pursuant to Rule 424 under the  1933 Act; and comply with the provisions of the 1933 Act and the 1934 Act with respect to the  disposition of all Registrable Securities covered by each Registration Statement during the applicable  period in accordance with the intended method or methods of distribution by the selling Holders  thereof;         (c)   in the case of a Shelf Registration, (i) notify each Holder of Registrable Securities,  at  least  ten  business  days  prior  to  filing,  that  a Shelf  Registration  Statement with  respect  to  the  Registrable Securities is being filed and advising such Holders that the distribution of Registrable  Securities will be made in accordance with the method elected by the Majority Holders; (ii) furnish  to each Holder of Registrable Securities, to counsel for the Holders and to each underwriter of an  underwritten  offering  of Registrable  Securities,  if  any,  without  charge,  as  many  copies  of  each  Prospectus, including each preliminary Prospectus, and any amendment or supplement thereto and  such other documents as such Holder, counsel or underwriter may reasonably request, including  financial statements and schedules and, if such Holder, counsel or underwriter so requests, all exhibits  (including those incorporated by reference) in order to facilitate the public sale or other disposition  of the Registrable Securities; and (iii) subject to the penultimate paragraph of this Section 3, the  Company hereby consents to the use of the Prospectus, including each preliminary Prospectus, or any  amendment or supplement thereto by each of the Holders and underwriters of Registrable Securities  in connection with the offering and sale of the Registrable Securities covered by any Prospectus or  any amendment or supplement thereto;         (d)   use its reasonable best efforts to register or qualify the Registrable Securities under  all applicable state securities or “blue sky” laws of such jurisdictions as any Holder of Registrable  Securities covered by a Registration Statement and each underwriter of an underwritten offering of  Registrable Securities shall reasonably request, to cooperate with the Holders and the underwriters of  any Registrable Securities in connection with any filings required to be made with FINRA, to keep  each  such registration  or  qualification  effective  during  the  period  such Registration  Statement is  required to be effective and do any and all other acts and things which may be reasonably necessary  or advisable to enable such Holder to consummate the disposition in each such jurisdiction of such  Registrable Securities owned by such Holder; provided, however, that the Company shall not be  required to (i) qualify as a foreign corporation or as a dealer in securities in any jurisdiction where it  would not otherwise be required to qualify but for this Section 3(d) or (ii) take any action which  would subject it to general service of process or taxation in any such jurisdiction if it is not then so  subject;         (e)   in the case of a Shelf Registration, notify each Holder of Registrable Securities and  counsel for such Holders promptly and, if requested by such Holder or counsel, confirm such advice  in writing promptly (i) when a Registration Statement has become effective and when any post- effective amendments and supplements thereto become effective, (ii) of any request by the SEC or  any  state securities authority  for  post-effective  amendments  or  supplements  to  a Registration  Statement or Prospectus or for additional information after a Registration Statement has become  effective, (iii) of the issuance by the SEC or any state securities authority of any stop order suspending  the effectiveness of a Registration Statement or the initiation of any proceedings for that purpose, (iv)  if between the effective date of a Registration Statement and the closing of any sale of Registrable  Securities covered  thereby  the  representations  and  warranties  of  the Company contained  in  any  underwriting agreement, securities sales agreement or other similar agreement, if any, relating to such  offering cease to be true and correct, (v) of the receipt by the Company of any notification with respect                                   10                 

 

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, (vi) of the happening of any event or the  discovery  of  any  facts  during  the  period  a Shelf  Registration  Statement is  effective  which  is  contemplated  in Section 2(d)(i) or  which  makes  any  statement  made  in  such Shelf  Registration  Statement or the related Prospectus untrue in any material respect or which constitutes an omission  to  state a  material  fact  in  such Shelf  Registration  Statement or Prospectus and (vii) of  any  determination by the Company that a post-effective amendment to a Registration Statement would  be appropriate.  Without limitation to any other provisions of this Agreement, the Company agrees  that this Section 3(e) shall also be applicable, mutatis mutandis, with respect to the Exchange Offer  Registration Statement and the Prospectus included therein to the extent that such Prospectus is being  used by Participating Broker-Dealers as contemplated by Section 3(f);         (f)   (A) in the case of an Exchange Offer, (i) include in the Exchange Offer Registration  Statement (1) a “Plan of Distribution” section covering the use of the Prospectus included in the  Exchange  Offer  Registration  Statement by  broker-dealers  who  have  exchanged  their Registrable  Securities for Exchange Securities for the resale of such Exchange Securities and (2) a statement to  the effect that any such broker-dealers who wish to use the related Prospectus in connection with the  resale of Exchange Securities acquired as a result of market-making or other trading activities will be  required to notify the Company to that effect, together with instructions for giving such notice (which  instructions shall include a provision for giving such notice by checking a box or making another  appropriate notation on the related letter of transmittal) (each such broker-dealer who gives notice to  the Company as aforesaid being hereinafter called a “Notifying Broker-Dealer”), (ii) furnish to each  Notifying Broker-Dealer who desires to participate in the Exchange Offer, without charge, as many  copies of each Prospectus included in the Exchange Offer Registration Statement, including any  preliminary prospectus,  and  any  amendment  or  supplement  thereto,  as  such  broker-dealer  may  reasonably request, (iii) include in the Exchange Offer Registration Statement a statement that any  broker-dealer who holds Registrable Securities acquired for its own account as a result of market- making  activities  or  other  trading  activities  (a  “Participating  Broker-Dealer”),  and  who  receives  Exchange Securities for Registrable Securities pursuant to the Exchange Offer, may be a statutory  underwriter and must deliver a prospectus meeting the requirements of the 1933 Act in connection  with  any  resale  of  such Exchange  Securities,  (iv)  subject  to  the  penultimate  paragraph  of  this  Section 3, the Company hereby consents to the use of the Prospectus forming part of the Exchange  Offer Registration Statement or any amendment or supplement thereto by any Notifying Broker- Dealer in connection with the sale or transfer of Exchange Securities, and (v) include in the transmittal  letter or similar documentation to be executed by an exchange offeree in order to participate in the  Exchange Offer the following provision:               If the undersigned is not a broker-dealer, the undersigned represents              that  it  is  not  engaged  in,  and  does  not  intend  to  engage  in,  a              distribution of Exchange Securities.  If the undersigned is a broker-             dealer that will receive Exchange Securities for its own account in              exchange  for  Registrable  Securities,  it  represents  that  the              Registrable  Securities  to  be  exchanged  for  Exchange  Securities              were acquired by it as a result of market-making activities or other              trading activities and acknowledges that it will deliver a prospectus              meeting the requirements of the 1933 Act in connection with any              resale of such Exchange Securities pursuant to the Exchange Offer;              however, by so acknowledging and by delivering a prospectus, the              undersigned will not be deemed to admit that it is an “underwriter”              within the meaning of the 1933 Act;                                    11                 

 

            (B)   to  the  extent  any  Notifying  Broker-Dealer  participates  in  the Exchange        Offer, (i) the Company shall use its reasonable best efforts to maintain the effectiveness of        the Exchange Offer Registration Statement for a period of 180 days (subject to extension        pursuant to the last paragraph of this Section 3) following the last date on which exchanges        are accepted pursuant to the Exchange Offer, and (ii) the Company will comply, insofar as        relates to the Exchange Offer Registration Statement, the Prospectus included therein and the        offering  and  sale  of Exchange  Securities pursuant  thereto,  with  its  obligations  under        Section 2(b)(iii)(C), the last paragraph of Section 2(b), Section 3(c), 3(d), 3(e), 3(g), 3(i), 3(j),        3(k), 3(n), 3(o), 3(p), 3(q) and 3(r), and the last three paragraphs of this Section 3 as if all        references therein to a Shelf Registration Statement, the Prospectus included therein and the        Holders of Registrable  Securities referred,  mutatis  mutandis,  to  the Exchange  Offer        Registration Statement, the Prospectus included therein and the applicable Notifying Broker-       Dealers  and,  for  purposes  of  this Section 3(f),  all references  in  any  such  paragraphs  or        sections to the “Majority Holders” shall be deemed to mean, solely insofar as relates to this        Section 3(f), the Notifying Broker-Dealers who are the Holders of the majority in aggregate        principal amount of the Exchange Securities which are Registrable Securities; and               (C)   the Company shall not be required to amend or supplement the Prospectus        contained in the Exchange Offer Registration Statement as would otherwise be contemplated        by Section 3(b) or 3(k) hereof, or take any other action as a result of this Section 3(f), for a        period  exceeding  180  days  (subject  to  extension  pursuant  to  the  last  paragraph  of  this        Section 3) after the last date on which exchanges are accepted pursuant to the Exchange Offer        and Notifying Broker-Dealers shall not be authorized by the Company to, and shall not,        deliver such Prospectus after such period in connection with resales contemplated by this        Section 3;         (g)   in the case of a Shelf Registration, furnish counsel for the Holders of Registrable  Securities and counsel for any underwriters of Registrable Securities copies of any request by the  SEC or any state securities authority for amendments or supplements to a Registration Statement or  Prospectus or for additional information;         (h)   use its reasonable best effort to obtain the withdrawal of any order suspending the  effectiveness of a Registration Statement as soon as practicable and provide immediate notice to each  Holder of the withdrawal of any such order;         (i)   in the case of a Shelf Registration, upon request furnish to each Holder of Registrable  Securities, without charge, at least one conformed copy of each Registration Statement and any post- effective amendments thereto (without documents incorporated or deemed to be incorporated therein  by reference or exhibits thereto, unless requested);         (j)   in the case of a Shelf Registration, cooperate with the selling Holders of Registrable  Securities to facilitate the timely preparation and delivery of certificates representing Registrable  Securities to be sold and not bearing any restrictive legends; and cause such Registrable Securities to  be in such denominations (consistent with the provisions of the Indenture) and in a form eligible for  deposit with the Depositary and registered in such names as the selling Holders or the underwriters,  if any, may reasonably request in writing at least two business days prior to the closing of any sale of  Registrable Securities;         (k)   in the case of a Shelf Registration, upon the occurrence of any event or the discovery  of any facts as contemplated by Section 3(e)(vi) hereof, use its best efforts to prepare a supplement  or post-effective amendment to a Registration Statement or the related Prospectus or any document                                   12                 

 

incorporated or deemed to be incorporated therein by reference or file any other required document  so that, as thereafter delivered to the purchasers of the Registrable Securities, such Prospectus will  not contain at the time of such delivery any untrue statement of a material fact or omit to state a  material fact necessary in order to make the statements therein, in light of the circumstances under  which they were made, not misleading.  The Company agrees to notify each Holder to suspend use  of the Prospectus as promptly as practicable after the occurrence of such an event, and each Holder  hereby agrees to suspend use of the Prospectus until the Company has amended or supplemented the  Prospectus to correct such misstatement or omission.  At such time as  such public disclosure is  otherwise made or the Company determines that such disclosure is not necessary, in each case to  correct any misstatement of a material fact or to include any omitted material fact, the Company  agrees promptly to notify each Holder of such determination and to furnish each Holder such number  of copies of the Prospectus, as amended or supplemented, as such Holder may reasonably request;         (l)   obtain  CUSIP  and  ISIN  numbers  for  all Exchange  Securities or Registrable  Securities, as the case may be, not later than the effective date of a Registration Statement, and provide  the Trustee with printed or word-processed certificates for the Exchange Securities or Registrable  Securities, as the case may be, in a form eligible for deposit with the Depositary;         (m)   (i) cause  the Indenture to  be  qualified  under  the TIA in  connection  with  the  registration of the Exchange Securities or Registrable Securities, as the case may be, (ii) cooperate  with the Trustee and the Holders to effect such changes, if any, to the Indenture as may be required  for the Indenture to be so qualified in accordance with the terms of the TIA and (iii) execute, and use  its reasonable best efforts to cause the Trustee to execute, all documents as may be required to effect  such changes, if any, and all other forms and documents required to be filed with the SEC to enable  the Indenture to be so qualified in a timely manner;         (n)   in the case of a Shelf Registration, the holders of a majority in principal amount of  the Registrable Securities registered pursuant to such Shelf Registration Statement shall have the right  to direct the Company to effect not more than one underwritten registration and, in connection with  such  underwritten  registration,  the Company shall  enter  into  agreements  (including  underwriting  agreements or similar agreements) and take all other customary and appropriate actions (including  those  reasonably  requested  by  the holders of  a majority  in  principal  amount of  the Registrable  Securities being sold) in order to expedite or facilitate the disposition of such Registrable Securities  and in such connection, in a manner that is reasonable and customary:               (i)   make such representations and warranties to the Holders of such Registrable  Securities and the underwriters, in form, substance and scope as are customarily made by issuers to  underwriters in similar underwritten offerings as may be reasonably requested by such Holders and  underwriters;               (ii)  obtain opinions of counsel to the Company (which counsel and opinions (in  form, scope and substance) shall be reasonably satisfactory to the managing underwriters, and the  Holders of a majority in principal amount of the Registrable Securities being sold) addressed to each  selling Holder and the underwriters, covering the matters customarily covered in opinions requested  in sales of securities or underwritten offerings and such other matters as may be reasonably requested  by such Holders and underwriters;               (iii) obtain “cold comfort” letters and updates thereof with respect to such Shelf  Registration Statement and the Prospectus included therein, all amendments and supplements thereto  and all  documents  incorporated  or  deemed  to  be  incorporated  by  reference  therein from  the  Company’s  independent  certified  public  accountants  and  from  the  independent  certified  public                                   13                 

 

accountants for any other Person or any business or assets whose financial statements are included or  incorporated by reference in the Shelf Registration Statement, each addressed to the underwriters,  and use reasonable best efforts to have such letters addressed to the selling Holders of Registrable  Securities, such letters to be in customary form and covering matters of the type customarily covered  in “cold comfort” letters to underwriters in connection with similar underwritten offerings and such  letters to be delivered at the time of the pricing of such underwritten registration with an update to  such letter to be delivered at the time of closing of such underwritten registration;               (iv)  if  an  underwriting agreement or  other similar agreement is  entered into,  cause the same to set forth indemnification and contributions provisions and procedures substantially  equivalent to the indemnification and contributions provisions and procedures set forth in Section 5  hereof with respect to the underwriters and all other parties to be indemnified pursuant to Section 5  hereof or such other indemnification and contributions as shall be satisfactory to the Company, the  applicable  underwriters  and  the Holders of  the majority  in  principal  amount of  the Registrable  Securities being sold; and               (v)   deliver  such  other  documents  and  certificates  as  may  be  reasonably  requested and as are customarily delivered in similar offerings.   The documents referred to in Sections 3(n)(ii) and 3(n)(v) shall be delivered at the closing under any  underwriting or similar agreement as and to the extent required thereunder.  In the case of any such  underwritten offering, the Company shall provide written notice to the Holders of all Registrable  Securities of such underwritten offering at least 30 days prior to the filing of a prospectus supplement  for such underwritten offering.  Such notice shall (x) offer each such Holder the right to participate  in such underwritten offering, (y) specify a date, which shall be no earlier than 15 days following the  date of such notice, by which such Holder must inform the Company of its intent to participate in  such  underwritten  offering  and  (z)  include  the  instructions  such  Holder  must  follow  in  order  to  participate in such underwritten offering;         (o)   in the case of a Shelf Registration, upon request make available for inspection by  representatives of the Holders of the Registrable Securities and any underwriters participating in any  disposition pursuant to a Shelf Registration Statement and any counsel or accountant retained by such  Holders or underwriters, all financial statements and other records, documents and properties of the  Company reasonably requested by any such Persons, and cause the respective officers, directors,  employees, and any other agents of the Company to supply all information reasonably requested by  any such Persons in connection with a Shelf Registration Statement;         (p)   in  the  case  of  a Shelf  Registration,  a  reasonable  time  prior  to  filing  any Shelf  Registration  Statement,  any Prospectus forming  a  part  thereof,  any  amendment  to  such Shelf  Registration  Statement or  amendment  or  supplement  to  such Prospectus,  provide  copies  of  such  document  to  the Holders of Registrable  Securities,  to  the underwriter or  underwriters,  of  an  underwritten offering of Registrable Securities, and to counsel for any such Holders, or underwriters,  and make such changes in any such document prior to the filing thereof as the Holders of Registrable  Securities, any such underwriter or underwriters or any of their respective counsel may reasonably  request;  and  cause  the  representatives  of  the Company to  be  available  for  discussion  of  such  documents  as  shall  be  reasonably  requested  by  the Holders of Registrable  Securities,  or  any  underwriter, and shall not at any time make any filing of any such document of which such Holders,  their counsel or any underwriter shall not have previously been advised and furnished a copy or to  which such Holders, their counsel or any underwriter shall reasonably object within a reasonable time  period;                                    14                 

 

      (q)   in  the  case  of  a Shelf  Registration, use  its  reasonable  best  efforts  to  cause all  Registrable Securities to be listed on any securities exchange on which similar debt securities issued  by  the Company are  then  listed  if  requested  by  the Majority  Holders or  by  the underwriter or  underwriters of an underwritten offering of Registrable Securities, if any;         (r)   otherwise use its reasonable best efforts to comply with all applicable rules and  regulations  of  the SEC and,  with  respect to  each Registration  Statement and  each  post-effective  amendment, if any, thereto and each filing by the Company of an Annual Report on Form 10-K, make  available to its security holders, as soon as reasonably practicable, an earnings statement covering at  least twelve months which shall satisfy the provisions of Section 11(a) of the 1933 Act and Rule 158  thereunder; and         (s)   cooperate  and  assist  in  any  filings  required  to  be  made  with FINRA and  in  the  performance of any due diligence investigation by any underwriter and its counsel.               In the case of a Shelf Registration Statement, the Company may (as a condition to  such Holder’s participation in the Shelf Registration) require each Holder of Registrable Securities to  furnish to the Company such information regarding such Holder and the proposed distribution by  such Holder of such Registrable Securities as the Company may from time to time reasonably request  in writing and require such Holder to agree in writing to be bound by all provisions of this Agreement  applicable to such Holder.               In the case of a Shelf Registration Statement, each Holder agrees and, in the event  that  any  Participating  Broker-Dealer  is  using  the  Prospectus  included  in  the  Exchange  Offer  Registration Statement in connection with the sale of Exchange Securities pursuant to Section 3(f),  each such Participating Broker-Dealer agrees that, upon receipt of any notice from the Company of  the happening of any event or the discovery of any facts of the kind described in Section 3(e)(ii),  3(e)(iii) or 3(e)(v) through 3(e)(vii) hereof, such Holder or Participating Broker-Dealer, as the case  may be, will forthwith discontinue disposition of Registrable Securities pursuant to a Registration  Statement until receipt by such Holder or Participating Broker-Dealer, as the case may be, of (i) the  copies of the supplemented or amended Prospectus contemplated by Section 3(k) hereof or (ii) written  notice from the Company that the Shelf Registration Statement or the Exchange Offer Registration  Statement, respectively, are once again effective or that no supplement or amendment is required.  If  so directed by the Company, such Holder or Participating Broker-Dealer, as the case may be, will  deliver to the Company (at the Company’s expense) all copies in its possession, other than permanent  file copies then in its possession, of the Prospectus covering such Registrable Securities current at the  time of receipt of such notice.               If the Company shall give any such notice to suspend the disposition of Registrable  Securities pursuant to the immediately preceding paragraph, the Company shall be deemed to have  used its reasonable best efforts to keep the Shelf Registration Statement or, in the case of Section 3(f),  the  Exchange  Offer  Registration  Statement,  as  the  case  may  be,  effective  during  such  period  of  suspension; provided that (i) such period of suspension shall not exceed the time periods provided in  Section 2(d)(iii) hereof and (ii) the Company shall use its reasonable best efforts to file and have  declared effective (if an amendment) as soon as practicable thereafter an amendment or supplement  to the Shelf Registration Statement or the Exchange Offer Registration Statement or both, as the case  may  be,  or  the  Prospectus  included  therein  and  shall  extend  the  period  during  which  the  Shelf  Registration Statement or the Exchange Offer Registration Statement or both, as the case may be,  shall be maintained effective pursuant to this Agreement (and, if applicable, the period during which  Participating Broker-Dealers may use the Prospectus included in the Exchange Offer Registration  Statement  pursuant  to Section 3(f) hereof)  by  the  number  of  days  during  the  period  from  and                                   15                 

 

      including the date of the giving of such notice to and including the earlier of the date when the Holders        or  Participating  Broker-Dealers,  respectively,  shall  have  received  copies  of  the  supplemented  or        amended Prospectus necessary to resume such dispositions and the effective date of written notice        from  the  Company  to  the  Holders  or  Participating  Broker-Dealers,  respectively,  that  the  Shelf        Registration Statement or the Exchange Offer Registration Statement, respectively, are once again        effective or that no supplement or amendment is required.         4.    Underwritten Registrations.  If any of the Registrable Securities covered by any Shelf  Registration are to be sold in an underwritten offering, the investment banker or investment bankers and  manager  or  managers  that  will  manage  the  offering  will  be  selected  by  the  Majority  Holders  of  such  Registrable Securities included in such offering and shall be reasonably acceptable to the Company.               No  Holder  of  Registrable  Securities  may  participate  in  any  underwritten  registration  hereunder unless such Holder (a) agrees to sell such Holder’s Registrable Securities on the basis provided in  any underwriting arrangements approved by the Persons entitled hereunder to approve such arrangements and  (b) completes and executes all questionnaires, powers of attorney, indemnities, underwriting agreements and  other documents required under the terms of such underwriting arrangements.         5.    Indemnification and Contribution.               (a)   The Company agrees  to  indemnify  and  hold  harmless  each Holder,  each        Participating  Broker-Dealer,  each  underwriter  who  participates  in  an  offering  of Registrable        Securities (each, an “Underwriter”) and each Person, if any, who controls any Holder, Participating        Broker-Dealer or Underwriter within the meaning of either Section 15 of the 1933 Act or Section 20        of the 1934 Act, as follows:                     (i)   against any and all loss, liability, claim, damage and expense whatsoever, as        incurred, arising out of any untrue statement or alleged untrue statement of a material fact contained        in any Registration Statement (or any amendment thereto) pursuant to which Exchange Securities or        Registrable  Securities were  registered  under  the 1933  Act,  including  all  documents incorporated        therein by reference, or any omission or alleged omission therefrom of a material fact required to be        stated therein or necessary to make the statements therein not misleading, or arising out of any untrue        statement or alleged untrue statement of a material fact contained in any preliminary prospectus or        Prospectus (or any amendment or supplement thereto) or any omission or alleged omission therefrom        of a material fact necessary in order to make the statements therein, in the light of the circumstances        under which they were made, not misleading;                     (ii)  against any and all loss, liability, claim, damage and expense whatsoever, as        incurred, to the extent of the aggregate amount paid in settlement of any litigation, or any investigation        or proceeding by any  governmental agency or body,  commenced or threatened, or of any claim        whatsoever based upon any such untrue statement or omission, or any such alleged untrue statement        or omission described in subparagraph (i) above; provided that (subject to Section 5(d) below) any        such settlement is effected with the written consent of the Company; and                     (iii) against any and all expense whatsoever, as incurred (including, subject to        Section 5(c) below,  the  fees  and  disbursements  of  counsel  chosen  by  any  indemnified  party),        reasonably  incurred  in  investigating,  preparing  or  defending  against  any  litigation,  or  any        investigation or proceeding by any governmental agency or body, commenced or threatened, or any        claim whatsoever based upon any such untrue statement or omission, or any such alleged untrue        statement or omission described in subparagraph (i) above, to the extent that any such expense is not        paid under subparagraph (i) or (ii) above;                                         16    

 

provided, however, that this indemnity agreement shall not apply to any loss, liability, claim, damage  or expense to the extent arising out of any untrue statement or omission or alleged untrue statement  or  omission  made  in  reliance  upon  and  in  conformity  with  written  information  furnished  to  the  Company by any Holder, Participating Broker-Dealer or Underwriter with respect to such Holder,  Participating Broker-Dealer or Underwriter, as the case may be, expressly for use in the Registration  Statement (or any amendment thereto) or the Prospectus (or any amendment or supplement thereto).         (b)   Each Holder, severally but not jointly, agrees to indemnify and hold harmless the  Company, each director of the Company, each officer of the Company who signed the Registration  Statement, each Participating Broker-Dealer, each Underwriter and each other selling Holder and  each Person, if any, who controls the Company, any Underwriter, any Participating Broker-Dealer or  any other selling Holder within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934  Act against any and all loss, liability, claim, damage and expense described in the indemnity contained  in Section 5(a) hereof, as incurred, but only with respect to untrue statements or omissions, or alleged  untrue statements or omissions, made in the Shelf Registration Statement (or any amendment thereto)  or any Prospectus included therein (or any amendment or supplement thereto) in reliance upon and  in conformity with written information with respect to such Holder furnished to the Company by such  Holder expressly for use in the Shelf Registration Statement (or any amendment thereto) or such  Prospectus (or any amendment or supplement thereto); provided, however, that no such Holder shall  be liable for any claims hereunder in excess of the amount of net proceeds received by such Holder  from the sale of Registrable Securities pursuant to such Shelf Registration Statement.         (c)   Each indemnified party shall give notice as promptly as reasonably practicable to  each indemnifying party of any action commenced against it in respect of which indemnity may be  sought hereunder, but failure so to notify an indemnifying party shall not relieve such indemnifying  party from any liability hereunder to the extent it is not materially prejudiced as a result thereof and  in any event shall not relieve it from any liability which it may have otherwise than on account of this  indemnity agreement.  Counsel to the respective indemnified parties shall be selected as follows: (i)  counsel to the Company, its directors, each of its officers who signed the Registration Statement and  all Persons, if any, who control the Company within the meaning of Section 15 of the 1933 Act or  Section 20 of the 1934 Act shall be selected by the Company; (ii) counsel to the Holders (other than  Participating  Broker-Dealers)  and  all Persons,  if  any,  who  control  any Holders (other  than  any  Participating Broker-Dealers) within the meaning of Section 15 of the 1933 Act or Section 20 of the  1934 Act shall be selected by the Holders who held or hold, as the case may be, a majority in aggregate  principal  amount of  the Registrable  Securities held  by  all  such Holders; (iii) counsel  to  the  Underwriters of any particular offering of Registrable Securities and all Persons, if any, who control  any such Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934  Act shall be selected by such Underwriters; and (iv) counsel to the Participating Broker-Dealers and  all  Persons,  if  any,  who  control  any  such Participating  Broker-Dealer within  the  meaning  of  Section 15 of the 1933 Act or Section 20 of the 1934 Act shall be selected by the Participating Broker- Dealers who  held  or  hold,  as  the  case  may  be,  a majority  in  aggregate  principal  amount of  the  Exchange Securities referred to in Section 3(f) hereof held by all such Participating Broker-Dealers.   An indemnifying party may participate at its own expense in the defense of any such action; provided,  however, that counsel to the indemnifying party shall not (except with the consent of the indemnified  party) also be counsel to the indemnified party.  In no event shall the indemnifying party or parties  be liable for (A) the fees and expenses of more than one counsel (in addition to any local counsel)  separate from the indemnifying parties’ own counsel for the Company and all other Persons referred  to in clause (i) of this paragraph, (B) the fees and expenses of more than one counsel (in addition to  any local counsel) separate from the indemnifying parties’ own counsel for all Holders (other than  Participating Broker-Dealers) and all other Persons referred to in clause (ii) of this paragraph, (C) the  fees and expenses of more than one counsel (in addition to any local counsel) separate from the                                   17                 

 

indemnifying  parties’  own  counsel  for  all Underwriters of  any  particular  offering  of Registrable  Securities and all other Persons referred to in clause (iii) of this paragraph, and (D) the fees and  expenses of more than one counsel (in addition to any local counsel) separate from the indemnifying  parties’ own counsel for all Participating Broker-Dealers and all other Persons referred to in clause  (iv) of this paragraph, in each case in connection with any one action or separate but similar or related  actions in the same jurisdiction arising out of the same general allegations or circumstances.  No  indemnifying  party  shall,  without  the  prior  written  consent  of  the  indemnified  parties,  settle  or  compromise or consent to the entry of any judgment with respect to any litigation, or any investigation  or  proceeding  by  any  governmental  agency  or  body, commenced  or  threatened,  or  any  claim  whatsoever in respect of which indemnification or contribution could be sought under this Section 5  (whether or not the indemnified parties are actual or potential parties thereto), unless such settlement,  compromise  or  consent (i) includes  an  unconditional  release  of  each  indemnified  party  from  all  liability arising out of such litigation, investigation, proceeding or claim and (ii) does not include a  statement  as  to  or  an  admission  of  fault,  culpability  or  a  failure  to  act  by  or  on  behalf  of  any  indemnified party.         (d)   If at any time an indemnified party shall have requested an indemnifying party to  reimburse the indemnified party for fees and expenses of counsel, such indemnifying party agrees  that it shall be liable for any settlement of the nature contemplated by Section 5(a)(ii) effected without  its written consent if (i) such settlement is entered into  more than 45 days after receipt by such  indemnifying party of the aforesaid request, (ii) such indemnifying party shall have received notice  of the terms of such settlement at least 30 days prior to such settlement being entered into and (iii)  such indemnifying party shall not have reimbursed such indemnified party in accordance with such  request prior to the date of such settlement.  Notwithstanding the immediately preceding sentence, if  at  any  time  an  indemnified  party  shall  have  requested  an  indemnifying  party  to  reimburse  the  indemnified party for fees and expenses of counsel, such indemnifying party shall not be liable for  any settlement of the nature contemplated by Section 5(a)(ii) effected without its written consent if  such indemnifying party (x) reimburses such indemnified party in accordance with such request to  the extent that the indemnifying party in its judgment considers such request to be reasonable and (y)  provides  written  notice  to  the  indemnified  party  stating  the  reason  it  deems  the  unpaid  balance  unreasonable, in each case no later than 45 days after receipt by such indemnifying party of the  aforesaid request from the indemnified party.         (e)   If the indemnification provided for in this Section 5 is for any reason unavailable to  or insufficient to hold harmless an indemnified party in respect of any losses, liabilities, claims,  damages  or  expenses  referred  to  therein,  then  each  indemnifying  party  shall  contribute  to  the  aggregate  amount  of  such  losses,  liabilities,  claims,  damages  and  expenses  incurred  by  such  indemnified party, as incurred, in such proportion as is appropriate to reflect the relative fault of the  indemnifying party or parties on the one hand and of the indemnified party or parties on the other  hand in connection with the statements or omissions that resulted in such losses, liabilities, claims,  damages or expenses, as well as any other relevant equitable considerations.  The relative fault of  such indemnifying party or parties on the one hand and the indemnified party or parties on the other  hand shall be determined by reference to, among other things, whether the untrue or alleged untrue  statement  of  a  material  fact  or  omission  or  alleged  omission  to  state  a  material  fact  relates  to  information supplied by such indemnifying party or parties or such indemnified party or parties, and  the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent  such statement or omission.         (f)   The Company  and the Holders agree  that  it  would  not  be  just  or  equitable  if  contribution pursuant to this Section 5 were determined by pro rata allocation or by any other method  of allocation that does not take account of the equitable considerations referred to in Section 5(e)                                   18                 

 

above.  The aggregate amount of losses, liabilities, claims, damages and expenses incurred by an  indemnified party and referred to above in this Section 5 shall be deemed to include any legal or other  expenses reasonably incurred by such indemnified party in investigating, preparing or defending  against  any  litigation,  or  any  investigation  or  proceeding  by  any  governmental  agency  or  body,  commenced or threatened, or any claim whatsoever based upon any such untrue or alleged untrue  statement or omission or alleged omission.               Notwithstanding the provisions of this Section 5, no Holder, Participating Broker- Dealer or Underwriter shall be required to contribute any amount in excess of the amount by which  the total price at which Registrable Securities sold by it were offered exceeds the amount of any  damages that such Holder, Participating Broker-Dealer or Underwriter has otherwise been required  to pay by reason of any such untrue or alleged untrue statement or omission or alleged omission.               No  Person  guilty  of  fraudulent  misrepresentation  (within  the  meaning  of  Section 11(f) of the 1933 Act) shall be entitled to contribution from any Person who was not guilty  of such fraudulent misrepresentation.               For  purposes  of  this Section 5,  each  Person,  if  any,  who  controls  a  Holder,  Participating Broker-Dealer or Underwriter within the meaning of Section 15 of the 1933 Act or  Section 20 of the 1934 Act shall have the same rights to contribution as such Holder, Participating  Broker-Dealer or Underwriter, as the case may be, and each director of the Company, each officer of  the  Company  who  signed  the  Registration  Statement  and  each  Person,  if  any,  who  controls  the  Company within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act shall have  the same rights to contribution as the Company.               The  respective  obligations  of  the  Holders,  Participating  Broker-Dealers  and  Underwriters to contribute pursuant to this Section 5 are several in proportion to the principal amount  of Notes purchased by them and not joint.               The indemnity and contribution provisions contained in this Section 5 shall remain  operative and in full force and effect regardless of (i) any termination of this Agreement, (ii) any  investigation made by or on behalf of any Holder, Participating Broker-Dealer or Underwriter or any  Person controlling any Holder, Participating Broker-Dealer or Underwriter, or by or on behalf of the  Company, its officers or directors or any Person controlling the Company, (iii) acceptance of any of  the Exchange Securities and (iv) any sale of Registrable Securities or Exchange Securities pursuant  to a Shelf Registration Statement.   6.    Miscellaneous.         (a)   Rule 144 and Rule 144A.  For so long as the Company is subject to the reporting  requirements of Section 13 or 15 of the 1934 Act, the Company covenants that it will file all reports  required to be filed by it under Section 13(a) or 15(d) of the 1934 Act and the rules and regulations  adopted by the SEC thereunder, that if it ceases to be so required to file such reports, it will upon the  request of any Holder or beneficial owner of Registrable Securities (i) make publicly available such  information (including, without limitation, the information specified in Rule 144(c)(2) under the 1933  Act) as is necessary to permit sales pursuant to Rule 144 under the 1933 Act, (ii) deliver or cause to  be  delivered,  promptly  following  a  request  by any Holder or  beneficial  owner  of Registrable  Securities or any prospective purchaser or transferee designated by such Holder or beneficial owner,  such information (including, without limitation, the information specified in Rule 144A(d)(4) under  the 1933 Act) as is necessary to permit sales pursuant to Rule 144A under the 1933 Act, and (iii) take  such further action that is reasonable in the circumstances, in each case to the extent required from                                   19                 

 

time to time to enable such Holder to sell its Registrable Securities without registration under the  1933 Act within the limitation of the exemptions provided by (x) Rule 144 under the 1933 Act, as  such Rule may be amended from time to time, (y) Rule 144A under the 1933 Act, as such Rule may  be amended from time to time, or (z) any similar rules or regulations hereafter adopted by the SEC.   Upon the request of any Holder or beneficial owner of Registrable Securities, the Company will  deliver to such Holder a written statement as to whether it has complied with such requirements.         (b)   No  Inconsistent  Agreements.   The Company has  not  entered  into  nor  will  the  Company on or after the date of this Agreement enter into any agreement which is inconsistent with  the rights granted to the Holders of Registrable Securities in this Agreement or otherwise conflicts  with the provisions hereof.  The rights granted to the Holders hereunder do not and will not in any  way conflict with and are not and will not be inconsistent with the rights granted to the holders of any  of the Company’s other issued and outstanding securities under any other agreements entered into by  the Company or any of its subsidiaries.         (c)   Amendments  and  Waivers.   The  provisions  of  this Agreement,  including  the  provisions of this sentence, may not be amended, modified or supplemented, and waivers or consents  to departures from the provisions hereof may not be given, unless the Company has obtained the  written consent of Holders of at least a majority in aggregate principal amount of the outstanding  Registrable Securities affected by such amendment, modification, supplement, waiver or departure.         (d)   Notices.  All notices and other communications provided for or permitted hereunder  shall be made in writing by hand-delivery, registered first-class mail, electronic mail, or any courier  guaranteeing overnight delivery (i) if to a Holder or Participating Broker-Dealer at the most current  address set forth on the records of the registrar under the Indenture, (ii) if to the Company, initially at  the address set forth in the Purchase Agreement and thereafter at such other address, notice of which  is given in accordance with the provisions of this Section 6(d) and (iii) if to any Underwriter, at the  most current address given by such Underwriter to the Company by  means of a notice given in  accordance with the provisions of this Section 6(d), which address initially shall be the address set  forth in the applicable underwriting agreement.               All such notices and communications shall be deemed to have been duly given: at  the time delivered by hand, if personally delivered; five business days after being deposited in the  mail, postage prepaid, if mailed; when receipt is acknowledged, if sent via electronic mail; and on the  next business day if timely delivered to an air courier guaranteeing overnight delivery.               Copies of all such notices, demands or other communications shall be concurrently  delivered by the Person giving the same to the Trustee, at the address specified in the Indenture.         (e)   Successors and Assigns.  This Agreement shall inure to the benefit of and be binding  upon the successors, assigns and transferees of each of the parties, including, without limitation and  without the need for an express assignment, subsequent Holders; provided that nothing herein shall  be  deemed to  permit  any  assignment,  transfer  or  other  disposition  of Registrable  Securities in  violation of the terms hereof or of the Purchase Agreement or the Indenture.  If any transferee of any  Holder shall acquire Registrable Securities, in any manner, whether by operation of law or otherwise,  such Registrable Securities shall be held subject to all of the terms of this Agreement, and by taking  and holding such Registrable Securities, such Person shall be conclusively deemed to have agreed to  be  bound  by  and  to perform  all  of  the  terms  and  provisions  of  this Agreement,  including  the  restrictions on resale set forth in this Agreement and, if applicable, the Purchase Agreement, and such  Person shall be entitled to receive the benefits hereof.                                    20                 

 

      (f)   Third Party Beneficiary.  Each Holder and Participating Broker-Dealer shall be a  third party beneficiary of the agreements made hereunder and shall have the right to enforce such  agreements directly to the extent it deems such enforcement necessary or advisable to protect its rights  or the rights of other Holders hereunder.  Each Holder, by its acquisition of Notes, shall be deemed  to have agreed to the provisions of Section 5(b) hereof.         (g)   Counterparts.  This Agreement may be executed in any number of counterparts and  by the parties hereto in separate counterparts, each of which when so executed shall be deemed to be  an original and all of which taken together shall constitute one and the same agreement.         (h)   Headings.  The headings in this Agreement are for convenience of reference only  and shall not limit or otherwise affect the meaning hereof.         (i)   Restriction on Resales.  If the Company or any of its subsidiaries or affiliates (as  defined in Rule 144 under the 1933 Act) shall redeem, purchase or otherwise acquire any Registrable  Security or any Exchange Security which is a “restricted security” within the meaning of Rule 144  under the 1933 Act, the Company will deliver or cause to be delivered such Registrable Security or  Exchange Security, as the case may be, to the Trustee for cancellation and neither the Company nor  any of its subsidiaries or affiliates will hold or resell such Registrable Security or Exchange Security  or issue any new Security or Exchange Security to replace the same.         (j)   GOVERNING  LAW.   THIS AGREEMENT    SHALL  BE  GOVERNED  BY  AND  CONSTRUED  IN  ACCORDANCE  WITH  THE  LAWS  OF  THE STATE  OF  NEW  YORK, WITHOUT REGARD TO ANY CONFLICTS OF LAW PROVISIONS.         (k)   Severability.  In the event that any one or more of the provisions contained herein,  or the application thereof in any circumstance, is held invalid, illegal or unenforceable, the validity,  legality  and  enforceability  of  any  such  provision  in  every  other  respect  and  of  the  remaining  provisions contained herein shall not be affected or impaired thereby.                       [SIGNATURE PAGE FOLLOWS]                                    21                 

 

         IN WITNESS WHEREOF, Company has caused this Registration Rights Agreement to be executed  by its duly authorized representative as of the date first above written.                                     COMPANY:                                     FEDNAT HOLDING COMPANY                                                                         By:                                                                          Name:                                           Title:                                                                     [Signature Page to Registration Rights Agreement]    

 

      IN WITNESS WHEREOF, the Purchaser has caused this Registration Rights Agreement to be  executed by its duly authorized representative as of the date first above written.                                                                             PURCHASER:                                   [Purchaser ]                                                                      By:                                                                        Name:                                         Title:                                                                            [Signature Page to Registration Rights Agreement]

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