Document:

Portions of this agreement have been omitted based upon a request for confidential treatment.  This agreement, including the non-public information, has been filed separately with the Securities and Exchange Commission. "[****]" designates portions of this document that have been redacted pursuant to the request for confidential treatment filed with the Securities and Exchange Commission.

 

	 	 

 

 

 

Exhibit 10.43

Reinstatement Premium Protection

Reinsurance Contract

Effective:  April 1, 2015

Homeowners of America Insurance Company

Irving, Texas

	
15\H00H1048

 

	

	
Portions of this agreement have been omitted based upon a request for confidential treatment.  This agreement, including the non-public information, has been filed separately with the Securities and Exchange Commission. "[****]" designates portions of this document that have been redacted pursuant to the request for confidential treatment filed with the Securities and Exchange Commission.

 

	 	 

Reinstatement Premium Protection

 Reinsurance Contract

Effective:  April 1, 2015

Homeowners of America Insurance Company

Irving, Texas

	
Reinsurer(s)

	
Participation(s)

	 	 
	
Everest Reinsurance Company

	
100.0%

	
Total

	
100.0%

	
15\H00H1048

 

	

	
Portions of this agreement have been omitted based upon a request for confidential treatment.  This agreement, including the non-public information, has been filed separately with the Securities and Exchange Commission. "[****]" designates portions of this document that have been redacted pursuant to the request for confidential treatment filed with the Securities and Exchange Commission.

 

	 	 

Table of Contents

	
Article

	 	
Page

	 	 	 
	 	
Preamble

	
1

	
1

	
Coverage

	
1

	
2

	
Commencement and Termination

	
2

	
3

	
Concurrency of Conditions

	
3

	
4

	
Premium

	
4

	
5

	
Loss Notices and Settlements

	
4

	
6

	
Sanctions

	
4

	
7

	
Late Payments

	
5

	
8

	
Offset (BRMA 36C)

	
6

	
9

	
Access to Records

	
6

	
10

	
Errors and Omissions

	
7

	
11

	
Currency (BRMA 12A)

	
7

	
12

	
Taxes (BRMA 50B)

	
7

	
13

	
Federal Excise Tax (BRMA 17D)

	
7

	
14

	
Foreign Account Tax Compliance Act

	
7

	
15

	
Reserves

	
8

	
16

	
Insolvency

	
10

	
17

	
Arbitration

	
10

	
18

	
Service of Suit (BRMA 49G)

	
11

	
19

	
Confidentiality

	
12

	
20

	
Agency Agreement

	
13

	
21

	
Governing Law (BRMA 71B)

	
13

	
22

	
Severability (BRMA 72E)

	
13

	
23

	
Entire Agreement

	
13

	
24

	
Notices and Contract Execution

	
13

	
25

	
Intermediary

	
14

	 	
Schedule A

	 

 

 

	
15\H00H1048

 

	

	
Portions of this agreement have been omitted based upon a request for confidential treatment.  This agreement, including the non-public information, has been filed separately with the Securities and Exchange Commission. "[****]" designates portions of this document that have been redacted pursuant to the request for confidential treatment filed with the Securities and Exchange Commission.

 

	 	 

Reinstatement Premium Protection

Reinsurance Contract

Effective:  April 1, 2015

entered into by and between

Homeowners of America Insurance Company

Irving, Texas

and

The Subscribing Reinsurer(s) Executing the

Interests and Liabilities Agreement(s)

Attached Hereto

(hereinafter referred to as the "Reinsurer")

Preamble

Whenever the word "Company" is used in this Contract, such term shall be held to include any or all of the affiliated insurance companies of Homeowners of America Insurance Company, which are or may hereafter be under common control, provided that notice be given to the Reinsurer of any such newly affiliated insurance companies which may hereafter come under common control as soon as practicable with full particulars as to how such affiliation is likely to affect this Contract.  In the event of either party maintaining that such affiliation calls for alteration in existing terms, and an agreement for alteration not being arrived at, then the business of such newly affiliated insurance company is covered at existing terms only for a period of 45 days after notice by either party that it does not wish to cover such business.

	
Article 1 -

	
Coverage

	A.	By this Contract the Reinsurer agrees to indemnify the Company for 100% of any net reinstatement premium calculated under each excess layer of the Company's Two-Year Property Catastrophe Excess of Loss Reinsurance Contract, effective April 1, 2015 (hereinafter referred to as the "Original Contract" and described in Schedule A attached to and forming part of this Contract) as a result of loss occurrences commencing during any contract year of this Contract, subject to the terms, conditions and limitations set forth herein.

	B.	For purposes of the coverage provided under this Contract, each excess layer of the Original Contract shall be deemed to be placed at the following percentages:

		1.	First Excess Layer:  10.0%;

		2.	Second Excess Layer:  50.0%;

		3.	Third Excess Layer:  50.0%.

	
Article 2 -

	
Commencement and Termination

	A.	This Contract shall become effective at 12:01 a.m., Central Standard Time, April 1, 2015, with respect to reinstatement premium calculated under the provisions of the Original Contract as a result of losses arising out of loss occurrences commencing at or after that time and date, and shall remain in force until 12:01 a.m., Central Standard Time, April 1, 2017.

	B.	Notwithstanding the provisions of paragraph A above, the Company may terminate a Subscribing Reinsurer's percentage share in this Contract in the event any of the following circumstances occur as clarified by public announcement or upon discovery:

		1.	The Subscribing Reinsurer's policyholders' surplus (or its equivalent under the Subscribing Reinsurer's accounting system) after the earlier of:  (a) the inception of this Contract, or (b) the date lines are bound for this Contract, has been reduced by more than 20.0% of the amount of surplus (or the applicable equivalent) 12 months prior to that date; or

		2.	The Subscribing Reinsurer's policyholders' surplus (or its equivalent under the Subscribing Reinsurer's accounting system) at any time between the earlier of:  (a) the inception of this Contract, or (b) the date lines are bound for this Contract, and the date of termination of this Contract has been reduced by more than 20.0% of the amount of surplus (or the applicable equivalent) at the date of the Subscribing Reinsurer's most recent financial statement filed with regulatory authorities and available to the public as of the date lines are bound; or

		3.	A State Insurance Department or other legal authority has ordered the Subscribing Reinsurer to cease assuming business; or

		4.	The Subscribing Reinsurer has become insolvent or has been placed into liquidation, receivership, supervision, administration, winding-up or under a scheme of arrangement, or similar proceedings (whether voluntary or involuntary) or proceedings have been instituted against the Subscribing Reinsurer for the appointment of a receiver, liquidator, rehabilitator, supervisor, administrator, conservator or trustee in bankruptcy, or other agent known by whatever name, to take possession of its assets or control of its operations; or

		5.	The Subscribing Reinsurer has reinsured its entire liability under this Contract without the Company's prior written consent; or

		6.	The A.M. Best's rating for the Subscribing Reinsurer has been assigned or downgraded below A- (inclusive of "Not Rated" ratings), or the published rating issued by Standard & Poor's has been downgraded below BBB+ (inclusive of "Not Rated" ratings); or

		7.	The Subscribing Reinsurer has become merged with, acquired by or controlled by any other entity or individual(s) not controlling the Subscribing Reinsurer's operations previously; or

		8.	The Subscribing Reinsurer has ceased assuming new or renewal property or casualty treaty reinsurance business.

	C.	In the event a Subscribing Reinsurer experiences one or more of the circumstances specified in paragraph B above, the Subscribing Reinsurer shall notify the Company as promptly as possible and shall hereinafter be referred to as a "Special Circumstance Reinsurer."  To terminate a Special Circumstance Reinsurer's percentage share in this Contract, the Company must provide the Special Circumstance Reinsurer with written notice as set forth in the Notices and Contract Execution Article.  Such notice shall include the effective date of termination as selected by the Company and shall be one of the following:

		1.	The date of written notice provided by the Special Circumstance Reinsurer; or

		2.	The last day of the month prior to the date of written notice provided by the Special Circumstance Reinsurer; or

		3.	The last day of any month after the date of written notice provided by the Special Circumstance Reinsurer; or

		4.	The date of the Company's written notice to the Special Circumstance Reinsurer advising of the termination.

In the event the Subscribing Reinsurer fails to immediately provide written notice to the Company of any event outlined in subparagraphs 1 through 8 of paragraph B above, the Company may elect to substitute the date of public announcement or discovery as the equivalent of written notice.

	D.	If any Subscribing Reinsurer's percentage share in this Contract is terminated or if this Contract expires while a loss occurrence covered hereunder is in progress, the Reinsurer's liability hereunder shall, subject to the other terms and conditions of this Contract, be determined as if the entire loss occurrence had occurred prior to the termination or expiration of this Contract, provided that no part of such loss occurrence is claimed against any renewal or replacement of this Contract.

	E.	"Contract year" as used herein shall mean the period from 12:01 a.m., Central Standard Time, April 1, 2015, to 12:01 a.m., Central Standard Time, April 1, 2016, and each respective 12‐month period thereafter that this Contract continues in force shall be a separate contract year.  However, if this Contract or the participation of a Subscribing Reinsurer is terminated, the final contract year shall be from the beginning of the current contract year until the effective time and date of termination.

	
Article 3 -

	
Concurrency of Conditions

	A.	It is agreed that this Contract will follow the terms, conditions, exclusions, definitions, warranties and settlements of the Company under the Original Contract, which are not inconsistent with the provisions of this Contract.

	B.	The Company shall advise the Reinsurer of any material changes in the Original Contract which may affect the liability of the Reinsurer under this Contract.

	
Article 4 -

	
Premium

	A.	As premium for the reinsurance coverage provided hereunder during each contract year, the Company shall pay the Reinsurer [****] of the Company's net earned premium (as defined in the Original Contract) for the contract year, subject to a minimum premium of [****] for each contract year.

	B.	The Company shall pay the Reinsurer an annual deposit premium of [****] for each contract year in four equal installments of [****], on April 1, July 1, October 1 and January 1 of each contract year.

	C.	Within 45 days after the expiration of each contract year, the Company shall provide a report to the Reinsurer setting forth the premium due hereunder, computed in accordance with paragraph A above, and any additional premium due the Reinsurer or return premium due the Company shall be remitted promptly.

	D.	In the event a Subscribing Reinsurer's participation in this Contract is terminated under the provisions of paragraph C of the Commencement and Termination Article, no deposit premium shall be due after the effective date of termination, the minimum premium shall be waived, and the reinsurance premium for the contract year shall be calculated as the number of days the Subscribing Reinsurer participates on this Contract for the contract year divided by the number of days of the original contract year of this Contract and the quotient thereof shall be multiplied by the Subscribing Reinsurer's percentage share of the final adjusted premium for the contract year reported in accordance with paragraph C above.

	
Article 5 -

	
Loss Notices and Settlements

	A.	The Company shall notify the Reinsurer of all settlements made by the Company arising from loss occurrences subject to the Original Contract.  The Company will advise the Reinsurer of all subsequent developments relating to such claims that, in the opinion of the Company, may materially affect the position of the Reinsurer.

	B.	All reinstatement premium calculations made by the Company under the Original Contract, provided they are based on the terms of the Original Contract and are within the terms of this Contract, shall be binding upon the Reinsurer, and the Reinsurer agrees to pay all amounts for which it may be liable as promptly as possible upon receipt of reasonable evidence of the amount paid (or scheduled to be paid) by the Company for loss occurrences covered under the Original Contract.

	
Article 6 -

	
Sanctions

Neither the Company nor any Subscribing Reinsurer shall be liable for premium or loss under this Contract if it would result in a violation of any mandatory sanction, prohibition or restriction under United Nations resolutions or the trade or economic sanctions, laws or regulations of the European Union, United Kingdom or United States of America that are applicable to either party.

	
Article 7 -

	
Late Payments

	A.	The provisions of this Article shall not be implemented unless specifically invoked, in writing, by one of the parties to this Contract.

	B.	In the event any premium, loss or other payment due either party is not received by the intermediary named in the Intermediary Article (hereinafter referred to as the "Intermediary") by the payment due date, the party to which payment is due may, by notifying the Intermediary in writing, require the debtor party to pay, and the debtor party agrees to pay, an interest charge on the amount past due calculated for each such payment on the last business day of each month as follows:

		1.	The number of full days which have expired since the due date or the last monthly calculation, whichever the lesser; times

		2.	1/365th of the sum of 4.0% and the U.S. prime rate as quoted in The Wall Street Journal on the first business day of the month for which the calculation is made; times

		3.	The amount past due, including accrued interest.

It is agreed that interest shall accumulate until payment of the original amount due plus interest charges have been received by the Intermediary.

Notwithstanding the provisions of subparagraph 2 above and the immediately preceding sentence, the interest rate for a Special Circumstance Reinsurer will increase by 1.0% for every month that payment of the claim is past due, subject to a maximum annual interest rate of 10.0%.

	C.	If the interest rate provided under this Article exceeds the maximum interest rate allowed by any applicable law or is held unenforceable by a court of competent jurisdiction, such interest rate shall be modified to the highest rate permitted by the applicable law, and all remaining provisions of this Article and Contract shall remain in full force and effect without being impaired or invalidated in any way.

	D.	The establishment of the due date shall, for purposes of this Article, be determined as follows:

		1.	As respects the payment of routine deposits and premiums due the Reinsurer, the due date shall be as provided for in the applicable section of this Contract.  In the event a due date is not specifically stated for a given payment, it shall be deemed due 30 days after the date of transmittal by the Intermediary of the initial billing for each such payment.

		2.	Any claim or loss payment due the Company hereunder shall be deemed due 30 days after the proof of loss or demand for payment is transmitted to the Reinsurer.  If such loss or claim payment is not received within the 30 days, interest will accrue on the payment or amount overdue in accordance with paragraph B above, from the date the proof of loss or demand for payment was transmitted to the Reinsurer.

		3.	As respects any payment, adjustment or return due either party not otherwise provided for in subparagraphs 1 and 2 of this paragraph, the due date shall be as provided for in the applicable section of this Contract.  In the event a due date is not specifically stated for a given payment, it shall be deemed due 30 days following transmittal of written notification that the provisions of this Article have been invoked.

For purposes of interest calculations only, amounts due hereunder shall be deemed paid upon receipt by the Intermediary.

	E.	Nothing herein shall be construed as limiting or prohibiting a Subscribing Reinsurer from contesting the validity of any claim, or from participating in the defense of any claim or suit, or prohibiting either party from contesting the validity of any payment or from initiating any arbitration or other proceeding in accordance with the provisions of this Contract.  If the debtor party prevails in an arbitration or other proceeding, then any interest charges due hereunder on the amount in dispute shall be null and void.  If the debtor party loses in such proceeding, then the interest charge on the amount determined to be due hereunder shall be calculated in accordance with the provisions set forth above unless otherwise determined by such proceedings.  If a debtor party advances payment of any amount it is contesting, and proves to be correct in its contestation, either in whole or in part, the other party shall reimburse the debtor party for any such excess payment made plus interest on the excess amount calculated in accordance with this Article.

	F.	Interest charges arising out of the application of this Article that are $250 or less from any party shall be waived unless there is a pattern of late payments consisting of three or more items over the course of any 12-month period.

	
Article 8 -

	
Offset (BRMA 36C)

The Company and the Reinsurer shall have the right to offset any balance or amounts due from one party to the other under the terms of this Contract.  The party asserting the right of offset may exercise such right any time whether the balances due are on account of premiums or losses or otherwise.

	
Article 9 -

	
Access to Records

	A.	Provided the Company has received at least 60 days prior notice, the Reinsurer or its designated representatives shall have access during regular business hours to all records of the Company which pertain in any way to this reinsurance.  However:

		1.	A Special Circumstance Reinsurer shall not have any right of access to the records of the Company without the Company's prior consent; and

		2.	A Subscribing Reinsurer or its designated representatives shall not have any right of access to the records of the Company if it is not current in all undisputed payments due the Company.  "Undisputed" as used herein shall mean any amount that the Subscribing Reinsurer has not contested in writing to the Company specifying the reason(s) why the payments are disputed.

	B.	The provisions of this Article shall extend beyond the expiration or invalidation of this Contract, or the termination of a Subscribing Reinsurer's percentage share in this Contract, until all claims and losses hereunder are settled.

	
Article 10 -

	
Errors and Omissions

Inadvertent delays, errors or omissions made in complying with this Contract or any transaction hereunder shall not relieve either party from any liability which would have attached had such delay, error or omission not occurred, provided always that such error or omission is rectified as soon as possible after discovery.

	
Article 11 -

	
Currency (BRMA 12A)

	A.	Whenever the word "Dollars" or the "$" sign appears in this Contract, they shall be construed to mean United States Dollars and all transactions under this Contract shall be in United States Dollars.

	B.	Amounts paid or received by the Company in any other currency shall be converted to United States Dollars at the rate of exchange at the date such transaction is entered on the books of the Company.

	
Article 12 -

	
Taxes (BRMA 50B)

In consideration of the terms under which this Contract is issued, the Company will not claim a deduction in respect of the premium hereon when making tax returns, other than income or profits tax returns, to any state or territory of the United States of America or the District of Columbia.

	
Article 13 -

	
Federal Excise Tax (BRMA 17D)

	A.	The Reinsurer has agreed to allow for the purpose of paying the Federal Excise Tax the applicable percentage of the premium payable hereon (as imposed under Section 4371 of the Internal Revenue Code) to the extent such premium is subject to the Federal Excise Tax.

	B.	In the event of any return of premium becoming due hereunder the Reinsurer will deduct the applicable percentage from the return premium payable hereon and the Company or its agent should take steps to recover the tax from the United States Government.

	
Article 14 -

	
Foreign Account Tax Compliance Act

	
A.

	
To the extent the Reinsurer is subject to the deduction and withholding of premium payable hereon as set forth in the Foreign Account Tax Compliance Act (Sections 1471-1474 of the Internal Revenue Code), the Reinsurer shall allow such deduction and withholding from the premium payable under this Contract.

	
B.

	
In the event of any return of premium becoming due hereunder, the return premium will be determined and paid in full without regard to any amounts deducted or withheld under paragraph A of this Article.  In the event the Company or its agent recovers such premium deductions and withholdings on the return premium from the United States Government, the Company or its agent will reimburse the Reinsurer for such amounts.

	
Article 15 -

	
Reserves

	A.	The Reinsurer agrees to fund its share of the Company's ceded outstanding loss reserves (being the sum of all reinstatement premiums calculated by the Company under the Original Contract but not yet recovered from the Reinsurer, plus the Company's reserves for reinstatement premiums calculated under the Original Contract, if any), and any other outstanding balances which it shall be required by applicable regulation or law to set up under this Contract (the "funding obligation") by:

		1.	Clean, irrevocable and unconditional letters of credit issued and confirmed, if confirmation is required by the insurance regulatory authorities involved, by a bank or banks meeting the NAIC Securities Valuation Office credit standards for issuers of letters of credit and acceptable to said insurance regulatory authorities; and/or

		2.	Escrow accounts for the benefit of the Company; and/or

		3.	Cash advances;

if the Reinsurer:

		1.	Is unauthorized in any state of the United States of America or the District of Columbia and if, without such funding, a penalty would accrue to the Company on any financial statement it is required to file with the insurance regulatory authorities involved; or

		2.	Is a Special Circumstance Reinsurer.

The Reinsurer, at its sole option, may fund in other than cash if its method and form of funding are acceptable to the insurance regulatory authorities involved.

Notwithstanding the provisions of the Arbitration Article, if a Special Circumstance Reinsurer fails to fund its share of the funding obligation as set forth above, the Company retains its right to apply to a court of competent jurisdiction for equitable or interim relief.

	B.	With regard to funding in whole or in part by letters of credit, it is agreed that each letter of credit will be in a form acceptable to insurance regulatory authorities involved, will be issued for a term of at least one year and will include an "evergreen clause," which automatically extends the term for at least one additional year at each expiration date unless written notice of non-renewal is given to the Company not less than 30 days prior to said expiration date.  The Company and the Reinsurer further agree, notwithstanding anything to the contrary in this Contract, that said letters of credit may be drawn upon by the Company or its successors in interest at any time, without diminution because of the insolvency of the Company or the Reinsurer, but only for one or more of the following purposes:

		1.	To reimburse itself for the Reinsurer's share of reinstatement premiums calculated by the Company under the terms of the Original Contract, unless paid in cash by the Reinsurer;

		2.	To reimburse itself for the Reinsurer's share of any other amounts claimed to be due hereunder, unless paid in cash by the Reinsurer;

		3.	To fund a cash account in an amount equal to the Reinsurer's funding obligation funded by means of a letter of credit which is under non-renewal notice, if said letter of credit has not been renewed or replaced by the Reinsurer 10 days prior to its expiration date;

		4.	To refund to the Reinsurer any sum in excess of the actual amount required to fund the Reinsurer's funding obligation, if so requested by the Reinsurer.

In the event the amount drawn by the Company on any letter of credit is in excess of the actual amount required for B(1) or B(3), or in the case of B(2), the actual amount determined to be due, the Company shall promptly return to the Reinsurer the excess amount so drawn.

	C.	If a Subscribing Reinsurer fails to fulfill its funding obligation (if any) under this Article, the Company may, at its option, require the Subscribing Reinsurer to pay, and the Subscribing Reinsurer agrees to pay, an interest charge on the funding obligation calculated on the last business day of each month as follows:

		1.	The number of full days that have expired since the earliest of the applicable following dates:

	a.	As respects a Subscribing Reinsurer that is unauthorized in any state of the United States of America or District of Columbia having jurisdiction over the Company, December 31 of the calendar year in which the funding was required; or

	b.	As respects a Special Circumstance Reinsurer, the first date such reinsurer becomes a Special Circumstance Reinsurer;

times:

		2.	1/365th of the sum of 4.0% and the U.S. prime rate as quoted in The Wall Street Journal on the first business day of the month for which the calculation is made; times

		3.	The greater of (a) the funding obligation, less the amount, if any, funded by the Subscribing Reinsurer prior to the applicable date determined in subparagraph 1 above or (b) $100,000.

It is agreed that interest shall accumulate until the full interest charge amount as provided for in this paragraph and the funding obligation are paid.

If the interest rate provided under this Article exceeds the maximum interest rate allowed by any applicable law or is held unenforceable by an arbitrator or a court of competent jurisdiction, such interest rate shall be modified to the highest rate permitted by the applicable law, and all remaining provisions of this Article and Contract shall remain in full force and effect without being impaired or invalidated in any way.

	
Article 16 -

	
Insolvency

	A.	In the event of the insolvency of one or more of the reinsured companies, this reinsurance shall be payable directly to the company or to its liquidator, receiver, conservator or statutory successor on the basis of the liability of the company without diminution because of the insolvency of the company or because the liquidator, receiver, conservator or statutory successor of the company has failed to pay all or a portion of any claim.  It is agreed, however, that the liquidator, receiver, conservator or statutory successor of the company shall give written notice to the Reinsurer of the pendency of a claim against the company indicating the policy or bond reinsured which claim would involve a possible liability on the part of the Reinsurer within a reasonable time after such claim is filed in the conservation or liquidation proceeding or in the receivership, and that during the pendency of such claim, the Reinsurer may investigate such claim and interpose, at its own expense, in the proceeding where such claim is to be adjudicated, any defense or defenses that it may deem available to the company or its liquidator, receiver, conservator or statutory successor.  The expense thus incurred by the Reinsurer shall be chargeable, subject to the approval of the Court, against the company as part of the expense of conservation or liquidation to the extent of a pro rata share of the benefit which may accrue to the company solely as a result of the defense undertaken by the Reinsurer.

	B.	Where two or more reinsurers are involved in the same claim and a majority in interest elect to interpose defense to such claim, the expense shall be apportioned in accordance with the terms of this Contract as though such expense had been incurred by the company.

	C.	It is further understood and agreed that, in the event of the insolvency of one or more of the reinsured companies, the reinsurance under this Contract shall be payable directly by the Reinsurer to the company or to its liquidator, receiver or statutory successor, except as provided by Section 4118(a) of the New York Insurance Law or except (1) where this Contract specifically provides another payee of such reinsurance in the event of the insolvency of the company or (2) where the Reinsurer with the consent of the direct insured or insureds has assumed such policy obligations of the company as direct obligations of the Reinsurer to the payees under such policies and in substitution for the obligations of the company to such payees.

	
Article 17 -

	
Arbitration

	A.	As a condition precedent to any right of action hereunder, in the event of any dispute or difference of opinion hereafter arising with respect to this Contract, it is hereby mutually agreed that such dispute or difference of opinion shall be submitted to arbitration.  One Arbiter shall be chosen by the Company, the other by the Reinsurer, and an Umpire shall be chosen by the two Arbiters before they enter upon arbitration, all of whom shall be active or retired disinterested executive officers of insurance or reinsurance companies or Lloyd's London Underwriters.  In the event that either party should fail to choose an Arbiter within 30 days following a written request by the other party to do so, the requesting party may choose two Arbiters who shall in turn choose an Umpire before entering upon arbitration.  If the two Arbiters fail to agree upon the selection of an Umpire within 30 days following their appointment, each Arbiter shall nominate three candidates within 10 days thereafter, two of whom the other shall decline, and the decision shall be made by drawing lots.  Notwithstanding the above, in the event the dispute or difference of opinion involves a Special Circumstance Reinsurer, the Company may, at its option, choose to forego arbitration and may bring an action in any court of competent jurisdiction.

	B.	Each party shall present its case to the Arbiters within 30 days following the date of appointment of the Umpire.  The Arbiters shall consider this Contract as an honorable engagement rather than merely as a legal obligation and they are relieved of all judicial formalities and may abstain from following the strict rules of law.  The decision of the Arbiters shall be final and binding on both parties; but failing to agree, they shall call in the Umpire and the decision of the majority shall be final and binding upon both parties.  Judgment upon the final decision of the Arbiters may be entered in any court of competent jurisdiction and the Arbiters are empowered to grant interim relief as they may deem appropriate.

	C.	If more than one reinsurer is involved in the same dispute, all such reinsurers shall, at the option of the Company, constitute and act as one party for purposes of this Article and communications shall be made by the Company to each of the reinsurers constituting one party, provided, however, that nothing herein shall impair the rights of such reinsurers to assert several, rather than joint, defenses or claims, nor be construed as changing the liability of the reinsurers participating under the terms of this Contract from several to joint.

	D.	Each party shall bear the expense of its own Arbiter, and shall jointly and equally bear with the other the expense of the Umpire and of the arbitration.  In the event that the two Arbiters are chosen by one party, as above provided, the expense of the Arbiters, the Umpire and the arbitration shall be equally divided between the two parties.

	E.	Any arbitration proceedings shall take place in Irving, Texas, or at a location mutually agreed upon by the parties to this Contract, but notwithstanding the location of the arbitration, all proceedings pursuant hereto shall be governed by the law of the State of Texas.

	
Article 18 -

	
Service of Suit (BRMA 49G)

(Applicable if the Reinsurer is not domiciled in the United States of America, and/or is not authorized in any State, Territory or District of the United States where authorization is required by insurance regulatory authorities)

	A.	This Article will not be read to conflict with or override the obligations of the parties to arbitrate their disputes as provided for in the Arbitration Article.  This Article is intended as an aid to compelling arbitration or enforcing such arbitration or arbitral award, not as an alternative to the Arbitration Article for resolving disputes arising out of this Contract.

	B.	In the event the Reinsurer fails to pay any amount claimed to be due hereunder, the Reinsurer, at the request of the Company, will submit to the jurisdiction of a court of competent jurisdiction within the United States.  Nothing in this Article constitutes or should be understood to constitute a waiver of the Reinsurer's rights to commence an action in any court of competent jurisdiction in the United States, to remove an action to a United States District Court, or to seek a transfer of a case to another court as permitted by the laws of the United States or of any state in the United States.  The Reinsurer, once the appropriate Court is accepted by the Reinsurer or is determined by removal, transfer or otherwise, as provided for above, will comply with all requirements necessary to give said Court jurisdiction and, in any suit instituted against any of the Subscribing Reinsurers upon this Contract, will abide by the final decision of such Court or of any Appellate Court in the event of an appeal.

	C.	Further, pursuant to any statute of any state, territory or district of the United States which makes provision therefor, the Reinsurer hereby designates the party named in its Interests and Liabilities Agreement, or if no party is named therein, the Superintendent, Commissioner or Director of Insurance or other officer specified for that purpose in the statute, or his or her successor or successors in office, as its true and lawful attorney upon whom may be served any lawful process in any action, suit or proceeding instituted by or on behalf of the Company or any beneficiary hereunder arising out of this Contract.

	
Article 19 -

	
Confidentiality

	A.	The Reinsurer hereby acknowledges that the documents, information and data provided to it by the Company, whether directly or through an authorized agent, in connection with the placement and execution of this Contract ("Confidential Information") are proprietary and confidential to the Company.  Confidential Information shall not include documents, information or data that the Reinsurer can show:

		1.	Are publicly known or have become publicly known through no unauthorized act of the Reinsurer;

		2.	Have been rightfully received from a third person without obligation of confidentiality; or

		3.	Were known by the Reinsurer prior to the placement of this Contract without an obligation of confidentiality.

	B.	Absent the written consent of the Company, the Reinsurer shall not disclose any Confidential Information to any third parties, excluding any affiliated companies, except:

		1.	When required by retrocessionaires subject to the business ceded to this Contract;

		2.	When required by state regulators performing an audit of the Reinsurer's records and/or financial condition;

		3.	When required by external auditors performing an audit of the Reinsurer's records in the normal course of business; or

		4.	When required by attorneys or arbitrators in connection with an actual or potential dispute hereunder.

Further, the Reinsurer agrees not to use any Confidential Information for any purpose not related to the performance of its obligations or enforcement of its rights under this Contract.

	C.	Notwithstanding the above, in the event that the Reinsurer is required by court order, other legal process or any regulatory authority to release or disclose any or all of the Confidential Information, the Reinsurer agrees to provide the Company with written notice of same at least 10 days prior to such release or disclosure and to use its best efforts to assist the Company in maintaining the confidentiality provided for in this Article.

	D.	The provisions of this Article shall extend to the officers, directors and employees of the Reinsurer and its affiliates, and shall be binding upon their successors and assigns.

	
Article 20 -

	
Agency Agreement

If more than one reinsured company is named as a party to this Contract, the first named company shall be deemed the agent of the other reinsured companies for purposes of sending or receiving notices required by the terms and conditions of this Contract, and for purposes of remitting or receiving any monies due any party.

	
Article 21 -

	
Governing Law (BRMA 71B)

This Contract shall be governed by and construed in accordance with the laws of the State of Texas.

	
Article 22 -

	
Severability (BRMA 72E)

If any provision of this Contract shall be rendered illegal or unenforceable by the laws, regulations or public policy of any state, such provision shall be considered void in such state, but this shall not affect the validity or enforceability of any other provision of this Contract or the enforceability of such provision in any other jurisdiction.

	
Article 23 -

	
Entire Agreement

This written Contract constitutes the entire agreement between the parties hereto with respect to the business being reinsured hereunder, and there are no understandings between the parties hereto other than as expressed in this Contract.  Any change or modification to this Contract will be made by amendment to this Contract and signed by the parties hereto.

	
Article 24 -

	
Notices and Contract Execution

	A.	Whenever a notice, statement, report or any other written communication is required by this Contract, unless otherwise specified, such notice, statement, report or other written communication may be transmitted by certified or registered mail, nationally or internationally recognized express delivery service, personal delivery, electronic mail, or facsimile.  With the exception of notices of termination, first class mail is also acceptable.

	B.	The use of any of the following shall constitute a valid execution of this Contract or any amendments thereto:

		1.	Paper documents with an original ink signature;

		2.	Facsimile or electronic copies of paper documents showing an original ink signature; and/or

		3.	Electronic records with an electronic signature made via an electronic agent.  For the purposes of this Contract, the terms "electronic record," "electronic signature" and "electronic agent" shall have the meanings set forth in the Electronic Signatures in Global and National Commerce Act of 2000 or any amendments thereto.

	C.	This Contract may be executed in one or more counterparts, each of which, when duly executed, shall be deemed an original.

	
Article 25 -

	
Intermediary

Aon Benfield Inc., or one of its affiliated corporations duly licensed as a reinsurance intermediary, is hereby recognized as the Intermediary negotiating this Contract for all business hereunder.  All communications (including but not limited to notices, statements, premiums, return premiums, commissions, taxes, losses, loss adjustment expense, salvages and loss settlements) relating to this Contract will be transmitted to the Company or the Reinsurer through the Intermediary.  Payments by the Company to the Intermediary will be deemed payment to the Reinsurer.  Payments by the Reinsurer to the Intermediary will be deemed payment to the Company only to the extent that such payments are actually received by the Company.

In Witness Whereof, the Company by its duly authorized representative has executed this Contract as of the date specified below:

This ________________ day of ____________________________ in the year ____________.

Homeowners of America Insurance Company (for and on behalf of the "Company")

_______________________________________________________

	
15\H00H1048

 

	

	
Portions of this agreement have been omitted based upon a request for confidential treatment.  This agreement, including the non-public information, has been filed separately with the Securities and Exchange Commission. "[****]" designates portions of this document that have been redacted pursuant to the request for confidential treatment filed with the Securities and Exchange Commission.

 

	 	 

Schedule A

Reinstatement Premium Protection

Reinsurance Contract

Effective:  April 1, 2015

Homeowners of America Insurance Company

Irving, Texas

	 	 	

First Excess

	 	 	

 Second Excess

	 	 	

 Third

Excess

	 
	
Original Contract Retention

	 	
$

	
5,000,000

	 	 	
$

	
20,000,000

	 	 	
$

	
50,000,000

	 
	
Original Contract Reinsurer's

Per Occurrence Limit

	 	
$

	
15,000,000

	 	 	
$

	
30,000,000

	 	 	
$

	
100,000,000

	 
	
Original Contract Reinsurer's Contract Year Limit

	 	
$

	
30,000,000

	 	 	
$

	
60,000,000

	 	 	
$

	
200,000,000

	 
	
Original Contract Year Minimum Premium

	 	 	
[****]

	
 

	 	 	
[****]

	
 

	 	 	
[****]

	
 

	
Original Contract Premium Rate

	 	 	
[****]

	
 

	 	 	
[****]

	
 

	 	 	
[****]

	
 

	
Original Contract Year Deposit Premium

	 	 	
[****]

	
 

	 	 	
[****]

	
 

	 	 	
[****]

	
 

	
15\H00H1048

 

	

	
Portions of this agreement have been omitted based upon a request for confidential treatment.  This agreement, including the non-public information, has been filed separately with the Securities and Exchange Commission. "[****]" designates portions of this document that have been redacted pursuant to the request for confidential treatment filed with the Securities and Exchange Commission.

 

	 	 

Interests and Liabilities Agreement

attached to and forming part of the

Reinstatement Premium Protection

 Reinsurance Contract

Effective:  April 1, 2015

entered into by and between

Homeowners of America Insurance Company

Irving, Texas

and

Everest Reinsurance Company

A Delaware Corporation

(hereinafter referred to as the "Subscribing Reinsurer")

The Subscribing Reinsurer hereby accepts a 100% share in the interests and liabilities of the "Reinsurer" as set forth in the attached Contract captioned above.

This Agreement shall become effective at 12:01 a.m., Central Standard Time, April 1, 2015, and shall continue in force until 12:01 a.m., Central Standard Time, April 1, 2017, unless earlier terminated in accordance with the provisions of the attached Contract.

The Subscribing Reinsurer's share in the attached Contract shall be separate and apart from the shares of the other reinsurers, and shall not be joint with the shares of the other reinsurers, it being understood that the Subscribing Reinsurer shall in no event participate in the interests and liabilities of the other reinsurers.

In Witness Whereof, the Subscribing Reinsurer by its duly authorized representative has executed this Agreement as of the date specified below:

This ________________ day of ___________________________ in the year ____________.

Everest Reinsurance Company

_______________________________________________________

	
15\H00H1048\03REX-4.2

 Exhibit 4.2 

NAVIENT CORPORATION, 

as Company, 
 and

 THE BANK OF NEW YORK MELLON, 

as Trustee 
  

 
 SECOND
SUPPLEMENTAL INDENTURE 
 Dated as of March 27, 2015 

to 
 INDENTURE 

Dated as of July 18, 2014 
  

 
 5.875% Senior
Notes due 2021 

 TABLE OF CONTENTS 

 

							
	 	 	 	  	Page	 
	
	ARTICLE 1.	  
	
	DEFINITIONS	  
			
	Section 1.1.	 	Definition of Terms	  	 	2	  
	
	ARTICLE 2.	  
	
	GENERAL TERMS AND CONDITIONS OF THE SENIOR NOTES	  
			
	Section 2.1.	 	Designation and Principal Amount	  	 	4	  
	Section 2.2.	 	Maturity	  	 	4	  
	Section 2.3.	 	Further Issues	  	 	4	  
	Section 2.4.	 	Form of Payment	  	 	4	  
	Section 2.5.	 	Global Securities	  	 	5	  
	Section 2.6.	 	Interest	  	 	5	  
	Section 2.7.	 	Authorized Denominations	  	 	5	  
	Section 2.8.	 	Redemption	  	 	5	  
	Section 2.9.	 	Repurchase Upon Change of Control	  	 	5	  
	Section 2.10.	 	Appointment of Agents	  	 	7	  
	
	ARTICLE 3.	  
	
	FORM OF NOTES	  
			
	Section 3.1.	 	Form of Senior Notes	  	 	7	  
	
	ARTICLE 4.	  
	
	ORIGINAL ISSUE OF NOTES	  
			
	Section 4.1.	 	Original Issue of Senior Notes	  	 	8	  
	
	ARTICLE 5.	  
	
	MISCELLANEOUS	  
			
	Section 5.1.	 	Ratification of Indenture	  	 	8	  
	Section 5.2.	 	Trustee Not Responsible for Recitals	  	 	8	  
	Section 5.3.	 	Governing Law	  	 	8	  
	Section 5.4.	 	Separability	  	 	8	  
	Section 5.5.	 	Counterparts	  	 	8	  
		
	EXHIBIT A – Form of 2021 Senior Notes	  	 	A-1	  

  
 i 

 SECOND SUPPLEMENTAL INDENTURE, dated as of March 27, 2015 (this “Supplemental
Indenture”), between Navient Corporation, a Delaware corporation (the “Company”), and The Bank of New York Mellon, a New York banking corporation, as trustee (the “Trustee”). 

WHEREAS, the Company and the Trustee executed and delivered the base indenture, dated as of July 18, 2014 (the “Base
Indenture”, as supplemented by this Supplemental Indenture, the “Indenture”), to provide for the issuance of the Company’s debt securities (the “Securities”), to be issued in one or more series; 

WHEREAS, the Company and the Trustee executed and delivered the first supplemental indenture, dated as of November 6, 2014 (the
“First Supplemental Indenture”), to provide for the establishment of two series of its notes under the Base Indenture known as its “5.000% Senior Notes due 2020” and its “5.875% Senior Notes due 2024”; 

WHEREAS, pursuant to the terms of the Base Indenture, the Company desires to provide for the establishment of a new series of its notes
under the Base Indenture to be known as its “5.875% Senior Notes due 2021” (the “Senior Notes”), the form and substance and the terms, provisions and conditions thereof to be set forth as provided in the Base Indenture and this
Supplemental Indenture; 
 WHEREAS, the Board of Directors of the Company pursuant to resolutions duly adopted on
July 10, 2014 and December 10, 2014, have duly authorized the issuance of the Senior Notes and has authorized the proper officers of the Company to execute any and all appropriate documents necessary or appropriate to effect each such
issuance; 
 WHEREAS, the Company and Navient, LLC, entered into an Agreement and Plan of Merger on October 16, 2014,
pursuant to which Navient, LLC merged with and into the Company, with the Company as the surviving corporation (the “Merger”); 

WHEREAS, as a result of the Merger, the Company assumed Navient, LLC’s obligations under an indenture, dated October 1, 2000
and an amended and restated indenture, dated April 25, 2006; 
 WHEREAS, this Supplemental Indenture is being entered
into pursuant to the provisions of Section 14.01 of the Base Indenture; 
 WHEREAS, the Company has requested and hereby
requests that the Trustee execute and deliver this Supplemental Indenture; and 
 WHEREAS, all things necessary to make this
Supplemental Indenture a valid and legally binding agreement of the Company, in accordance with its terms, and to make the Senior Notes, when executed by the Company and authenticated and delivered by the Trustee, the valid and legally binding
obligations of the Company, have been performed, and the execution and delivery of this Supplemental Indenture has been duly authorized in all respects. 

NOW THEREFORE, in consideration of the premises and the purchase and acceptance of the Senior Notes by the Holders thereof, and for the
purpose of setting forth, as provided in the Base Indenture, the forms and terms of the Senior Notes, the Company covenants and agrees, with the Trustee, as follows: 

 ARTICLE 1. 

DEFINITIONS 

Section 1.1. Definition of Terms. Unless the context otherwise requires: 

(a) each term defined in the Base Indenture has the same meaning when used in this Supplemental Indenture; 

(b) the singular includes the plural and vice versa; and 

(c) headings are for convenience of reference only and do not affect interpretation. 

(d) a reference to a Section or Article is to a Section or Article of this Supplemental Indenture unless otherwise indicated. 

(e) The following terms have the meanings given to them in this Section 1.1(e): 

(i) “Board of Directors” means the board of directors or comparable governing body of the Company; provided that if
the Company is a wholly-owned subsidiary of another person, the Board of Directors means the board of directors or comparable governing body of such person. 

(ii) “Change of Control” means the occurrence of any of the following: (1) direct or indirect sale, 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 properties or assets of the Company and its subsidiaries taken as a whole to any
“person” (as that term is used in Section 13(d)(3) of the Exchange Act) other than to the Company or one of its subsidiaries; (2) the consummation of any transaction (including, without limitation, any merger or consolidation)
the result of which is that any “person” (as that term is used in Section 13(d)(3) of the Exchange Act) other than the Company or one of its subsidiaries becomes the beneficial owner, directly or indirectly, of more than 50% of the
then-outstanding number of shares of the Company’s voting stock; (3) the Company consolidates with, or merges with or into, any “person” (as that term is used in Section 13(d)(3) of the Exchange Act), or any
“person” (as that term is used in Section 13(d)(3) of the Exchange Act) consolidates with, or merges with or into, the Company, in any such event pursuant to a transaction in which any of the outstanding voting stock of the Company or
such other “person” (as that term is used in Section 13(d)(3) of the Exchange Act) is converted into or exchanged for cash, securities or other property, other than any such transaction where the shares of the voting stock of the
Company outstanding immediately prior to such transaction constitute, or are converted into or exchanged for, a majority of the voting stock of the surviving “person” (as that term is used in Section 13(d)(3) of the Exchange Act)
immediately after giving effect to such 

  
 2 

 
transaction; (4) the first day on which a majority of the members of the Company’s Board of Directors are not Continuing Directors; or (5) the adoption of a plan relating to the
liquidation or dissolution of the Company; provided, however, that a transaction will not be deemed to involve a Change of Control if (A) the Company becomes a wholly owned subsidiary of a holding company and (B) the holders of the voting
stock of such holding company immediately following that transaction are substantially the same as the holders of the Company’s voting stock immediately prior to that transaction. For purposes of this definition, “voting stock” means
capital stock or other equity interests of any class or kind the holders of which are ordinarily, in the absence of contingencies, entitled to vote for the election of directors (or persons performing similar functions) of the Company, even if the
right to vote has been suspended by the happening of such a contingency. 
 (iii) “Change of Control Triggering
Event” means the occurrence of both (i) a Change of Control and (ii) a Ratings Downgrade Event. 
 (iv)
“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 the Board of Directors of the Company on the date of the issuance of the Senior Notes; or
(2) was nominated for election or elected to the Board of Directors of the Company with the approval of a majority of the Continuing Directors who were members of such Board of Directors of the Company at the time of such nomination or election
(either by specific vote or by approval of the Company’s proxy statement in which such member was named as a nominee for election as a director). 

(v) “DTC” shall have the meaning assigned to it in Section 2.5. 

(vi) “Fitch” means Fitch, Inc., also known as Fitch Ratings. 

(vii) “Investment Grade Rating” means a rating by Moody’s equal to or higher than Baa3 (or the equivalent under
a successor rating category of Moody’s), a rating by S&P equal to or higher than BBB- (or the equivalent under any successor rating category of S&P), a rating by Fitch equal to or higher than BBB- (or the equivalent under any successor
rating category of Fitch), and the equivalent investment grade credit rating from any replacement rating agency or rating agencies selected by the Company under the circumstances permitting the Company to select a replacement agency and in the
manner for selecting a replacement agency, in each case as set forth in the definition of “Rating Agencies”. 

(viii) “Moody’s” means Moody’s Investors Service, Inc. 

(ix) “Rating Agencies” means (1) Moody’s, S&P and Fitch; and (2) if any or all of Moody’s,
S&P or Fitch ceases to rate the Senior Notes or fails to make a rating of the Senior Notes publicly available for reasons outside of the Company’s control, a “nationally recognized statistical rating organization” within the
meaning of Section 3(a)(62) under the Exchange Act, that the Company selects (pursuant to a resolution of the Company’s Board of Directors) as a replacement agency for any of Moody’s, S&P or Fitch, or all of them, as the case may
be. 

  
 3 

 (x) “Ratings Downgrade Event” means, on any date during the Trigger
Period, the Senior Notes being downgraded by at least one modifier (a modifier being plus, neutral or minus for S&P or Fitch, 1, 2 or 3 for Moody’s and a similar modifier by any other Rating Agency) by any two of the three Rating Agencies
from the rating on the Senior Notes by each such Rating Agency on the date prior to the first day of the Trigger Period; provided that no Ratings Downgrade Event shall be deemed to occur, if either (i) the rating on the Senior Notes by each
Rating Agency that downgraded its rating is an Investment Grade Rating after the downgrade or (ii) in respect of a particular Change of Control, the Rating Agency or Agencies (as applicable) that downgraded the Senior Notes announce or confirm
or inform the Trustee in writing that the reduction was not the result, in whole or in part, of any event or circumstance comprised of, or arising as a result of, or in respect of, the applicable Change of Control. 

(xi) “S&P” means Standard & Poor’s Ratings Services, a Standard & Poor’s Financial
Services LLC business. 
 (xii) “Trigger Period” means the period commencing one day prior to the first public
announcement by the Company of a Change of Control or an arrangement that could result in a Change of Control and ending 60 days following consummation of the Change of Control (which period will be extended following consummation of a Change of
Control for so long as the rating of the Senior Notes is under announced consideration for possible downgrade by any of the Rating Agencies as the result, in whole or in part, of any event or circumstance comprised of, or arising as a result of, or
in respect of, the applicable Change of Control). 
 ARTICLE 2. 

GENERAL TERMS AND CONDITIONS OF THE SENIOR NOTES 

Section 2.1. Designation and Principal Amount. There is hereby authorized and established a new series of Securities under the
Base Indenture, designated as the “5.875% Senior Notes due 2021”, which is not limited in aggregate principal amount. The initial aggregate principal amount of the Senior Notes to be issued under this Supplemental Indenture shall be
limited to $500,000,000. Any additional amounts of the series to be issued shall be set forth in a Company Order. 
 Section 2.2.
Maturity. The stated maturity of principal for the Senior Notes will be March 25, 2021. 
 Section 2.3. Further
Issues. The Company may from time to time, without the consent of the Holders of the series of Senior Notes, issue additional notes of such series. Any such additional notes will have the same ranking, interest rate, maturity date and other
terms as the series of Senior Notes. Any such additional notes, together with the series of Senior Notes herein provided for, will constitute a single series of Securities under the Indenture. 

Section 2.4. Form of Payment. Principal of, premium, if any, and interest on the Senior Notes shall be payable in U.S. dollars.

  
 4 

 Section 2.5. Global Securities. Upon the original issuance, the Senior Notes will be
represented by one or more Global Securities. The Company will issue the Senior Notes in denominations of $2,000 and in integral multiples of $1,000 in excess thereof and will deposit the Global Securities with the Trustee as custodian for The
Depository Trust Company (“DTC”), in New York, New York, and register the Global Securities in the name of DTC or its nominee. 

Section 2.6. Interest. 

The Senior Notes will bear interest (computed on the basis of a 360-day year consisting of twelve 30-day months) from March 27, 2015 at
the rate of 5.875% per annum, payable semiannually in arrears; interest payable on each Interest Payment Date will include interest accrued from March 27, 2015, or from the most recent Interest Payment Date to which interest has been paid
or duly provided for; the Interest Payment Dates on which such interest shall be payable are March 25 and September 25, commencing on September 25, 2015; and the record date for the interest payable on any Interest Payment Date is the
close of business on the Business Day immediately preceding the relevant Interest Payment Date. 
 Section 2.7. Authorized
Denominations. The Senior Notes shall be issuable in denominations of $2,000 and in integral multiples of $1,000 in excess thereof. 

Section 2.8. Redemption. The Senior Notes are subject to redemption at the option of the Company as set forth in the forms of
Senior Notes attached hereto as Exhibit A. 
 Section 2.9. Repurchase Upon Change of Control. 

(a) If a Change of Control Triggering Event occurs, unless the Company has exercised its right, if any, to redeem the Senior Notes in full,
the Company shall offer (the “Change of Control Offer”) to repurchase any and all of each Holder’s Senior Notes (equal to $2,000 or an integral multiple of $1,000 above that amount) at a repurchase price in cash equal to 101% of the
aggregate principal amount of the Senior Notes repurchased plus accrued and unpaid interest, if any, to, but not including, the date of repurchase (the “Change of Control Payment”). Within 30 days following any Change of Control Triggering
Event, the Company shall be required to mail a notice to each Holder of the Senior Notes to the address of such Holder appearing in the Registrar, with a copy to the Trustee or otherwise in accordance with the procedures of DTC, describing the
transaction or transactions that constitute the Change of Control Triggering Event and offering to repurchase such Senior Notes on the date specified in the notice, which date will be no less than 30 days and no more than 60 days from the date such
notice is mailed (the “Change of Control Payment Date”), with the following information: 
 (i) a Change of Control
Offer is being made pursuant to this Section 2.9 and that all Senior Notes properly tendered pursuant to such Change of Control Offer will be accepted for payment; 

(ii) the repurchase price and the Change of Control Payment Date; 

(iii) any Senior Note not properly tendered will remain outstanding and continue to accrue interest; 

  
 5 

 (iv) unless the Company defaults in the payment of the Change of Control Payment,
all Senior Notes accepted for payment pursuant to the Change of Control Offer will cease to accrue interest on, but not including, the Change of Control Payment Date; 

(v) Holders electing to have any Senior Notes repurchased pursuant to a Change of Control Offer will be required to surrender
such Senior Notes, in the form set forth in Exhibit A entitled “Option of Holder to Elect Purchase”, on the reverse of such Senior Notes completed, to the Paying Agent specified in the notice at the address specified in the notice prior to
the close of business on the third business day preceding the Change of Control Payment Date; 
 (vi) Holders will be
entitled to withdraw their tendered Senior Notes and their election to require the Company to repurchase such Senior Notes, provided that the Paying Agent receives, not later than the close of business on the last day of the Change of Control Offer
period, a facsimile transmission, an email or a letter setting forth the name of the Holder of Senior Notes, the principal amount of Senior Notes tendered for repurchase, and a statement that such Holder is withdrawing his tendered Senior Notes and
his election to have such Senior Notes repurchased; 
 (vii) if such notice is mailed prior to the occurrence of a Change of
Control, stating that the Change of Control Offer is conditional on the occurrence of such Change of Control; and 
 (viii)
that Holders whose Senior Notes are being repurchased only in part will be issued new Senior Notes equal in principal amount to the unpurchased portion of the Senior Notes surrendered, which unpurchased portion must be equal to $2,000 in principal
amount or an integral multiple of $1,000 in excess thereof. 
 (b) While the Senior Notes are in global form and the Company makes an offer
to repurchase all of the Senior Notes pursuant to the Change of Control Offer, a Holder may exercise its option to elect for the repurchase of the Senior Notes through the facilities of DTC, Euroclear and Clearstream, subject to their rules and
regulations. 
 (c) The Company shall not be required to make a Change of Control Offer upon the occurrence of a Change of Control
Triggering Event if (1) 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 Supplemental Indenture applicable to a Change of Control Offer made by the
Company and the third party repurchases on the applicable date all Senior Notes properly tendered and not withdrawn under such Change of Control Offer, provided that a failure by such third party to comply with the requirements of such Change of
Control Offer and to complete such Change of Control Offer shall be treated as a failure by the Company to comply with its obligations to offer to repurchase the Senior Notes unless the Company promptly makes an offer to repurchase the Senior Notes
at 101% of the principal amount thereof plus accrued and unpaid interest, if any, to, but not including the date of repurchase, which shall be no later than 30 days after the third party’s scheduled Change of Control Payment Date, or (2) a
notice of redemption has been given pursuant to the Indenture as described under Section 4.03 of the Base 

  
 6 

 
Indenture, unless and until there is a default in payment of the applicable redemption price. 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. 
 (d) The Company shall comply with the requirements of Rule 14e-1 under the
Exchange Act and any other securities laws and regulations thereunder to the extent such laws and regulations are applicable in connection with the repurchase of Senior Notes as a result of a Change of Control Triggering Event. To the extent that
the provisions of any securities laws or regulations conflict with the Change of Control repurchase provisions of this Supplemental Indenture, the Company shall comply with the applicable securities laws and regulations and shall not be deemed to
have breached its obligations under Section 2.9 of this Supplemental Indenture by virtue thereof. 
 (e) On the Change of Control
Payment Date, the Company shall, to the extent permitted by law, 
 (i) accept or cause a third party to accept for payment
all Senior Notes properly tendered pursuant to the Change of Control Offer; 
 (ii) deposit or cause a third party to deposit
with the Paying Agent an amount equal to the Change of Control Payment in respect of all Senior Notes properly tendered; and 

(iii) deliver or cause to be delivered to the Trustee the Senior Notes properly accepted, together with an Officers’
Certificate stating the principal amount of Senior Notes being repurchased. 
 (f) The Paying Agent shall promptly deliver to each Holder of
Senior Notes the Change of Control Payment for such Senior Notes. The Company shall publicly announce the results of the Change of Control Offer on or as soon as practicable after the Change of Control Payment Date. 

Section 2.10. Appointment of Agents. The Trustee will initially be the Security Registrar and Paying Agent for the Senior Notes.

 ARTICLE 3. 

FORM OF NOTES 

Section 3.1. Form of Senior Notes. The Senior Notes and the Trustee’s Certificate of Authentication to be endorsed thereon,
are to be substantially in the form set forth in Exhibit A hereto. 

  
 7 

 ARTICLE 4. 

ORIGINAL ISSUE OF NOTES 

Section 4.1. Original Issue of Senior Notes. The Senior Notes may, upon execution of this Supplemental Indenture, be executed by
the Company and delivered to the Trustee for authentication, and the Trustee shall, upon Company order, authenticate and deliver such Senior Notes as in such Company order provided. 

ARTICLE 5. 

MISCELLANEOUS 

Section 5.1. Ratification of Indenture. The Base Indenture, as supplemented by this Supplemental Indenture, is in all respects
ratified and confirmed, and this Supplemental Indenture shall be deemed part of the Base Indenture in the manner and to the extent herein and therein provided; provided that the provisions of this Supplemental Indenture apply solely with respect to
the Senior Notes. 
 Section 5.2. Trustee Not Responsible for Recitals. The recitals and statements herein contained are made by
the Company and not by the Trustee, and the Trustee assumes no responsibility for the correctness thereof. The Trustee makes no representation as to the validity or sufficiency of this Supplemental Indenture. 

Section 5.3. Governing Law. This Supplemental Indenture and each Senior Note shall be deemed to be contracts made under the law of
the State of New York, and for all purposes shall be governed by and construed in accordance with the law of said State. 

Section 5.4. Separability. In case any provision in the Indenture or in the Senior Notes shall be invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby. 

Section 5.5. Counterparts. This Supplemental Indenture may be executed in any number of counterparts each of which shall be an
original; but such counterparts shall together constitute but one and the same instrument. The exchange of copies of this Supplemental Indenture and of signature pages by facsimile or PDF transmission shall constitute effective execution and
delivery of this Supplemental Indenture as to the parties hereto and may be used in lieu of the original Supplemental Indenture and signature pages for all purposes. 

  
 8 

 IN WITNESS WHEREOF, the parties hereto have caused this Supplemental Indenture to be duly
executed, all as of the day and year first above written. 
  

			
	NAVIENT CORPORATION, as Company
		
	By:		 /s/ Stephen J. O’Connell

			Name: Stephen J. O’Connell
			Title: Senior Vice President & Treasurer
	
	THE BANK OF NEW YORK MELLON, as Trustee
		
	By:		 /s/ Laurence J. O’Brien

			Name: Laurence J. O’Brien
			Title: Vice President

	A	[Do not delete - this paragraph generates the automatic page number] 

 EXHIBIT A 

[FORM OF FACE OF SECURITY] 

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. UNLESS
THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW YORK) (“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 SUCH OTHER NAME AS MAY BE REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR SUCH OTHER ENTITY AS MAY BE REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), 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. 

  
 A-1 

 CUSIP No. 63938C AC2 

NAVIENT CORPORATION 

5.875% SENIOR NOTES DUE 2021 
  

			
	No.		$        
			As revised by the Schedule of Increases or Decreases in Global Security attached hereto

 Interest. Navient Corporation, a Delaware corporation (herein called the “Company”, which
term includes any successor Person under the Indenture hereinafter referred to), for value received, hereby promises to pay to Cede & Co. or registered assigns, the principal sum of
                                         dollars
($         ), as revised by the Schedule of Increases or Decreases in Global Security attached hereto, on March 25, 2021 and to pay interest thereon from March 27, 2015 or from the most recent
Interest Payment Date to which interest has been paid or duly provided for, semi-annually in arrears on March 25 and September 25 in each year, commencing September 25, 2015 at the rate of 5.875% per annum, until the principal
hereof is paid or made available for payment. 
 Method of Payment. The interest so payable, and punctually paid or duly
provided for, on any Interest Payment Date will, as provided in such Indenture, be paid to the Person in whose name this Security (or one or more Predecessor Securities) is registered at the close of business on the Record Date for such interest,
which shall be the Business Day immediately preceding the relevant Interest Payment Date. Any such interest not so punctually paid or duly provided for will forthwith cease to be payable to the Holder on such Regular Record Date and may either be
paid to the Person in whose name this Security (or one or more Predecessor Securities) is registered at the close of business on a Special Record Date for the payment of such Defaulted Interest to be fixed by the Trustee, notice thereof having been
given to Holders of Securities of this series not less than 10 days prior to such Special Record Date, all as more fully provided in said Indenture. Payment of the principal of (and premium, if any) and any such interest on this Security will be
made at the Corporate Trust Office in U.S. Dollars. 
 Reference is hereby made to the further provisions of this Security set forth
on the reverse hereof, which further provisions shall for all purposes have the same effect as if set forth at this place. 

Authentication. Unless the certificate of authentication hereon has been executed by the Trustee referred to on the reverse hereof by
manual signature, this Security shall not be entitled to any benefit under the Indenture or be valid or obligatory for any purpose.  

  
 A-2 

 IN WITNESS WHEREOF, the Company has caused this instrument to be executed by its duly authorized
officer. 
             , 2015 

 

			
	NAVIENT CORPORATION
		
	By:		  

			Name:
			Title:

  

			
	TRUSTEE’S CERTIFICATE OF AUTHENTICATION
	
	Dated:
	
	THE BANK OF NEW YORK MELLON
		
			as Trustee, certifies that this is one of the Securities referred to in the Indenture.
		
	By:		  

			Authorized Signatory

  
 A-3 

 [FORM OF REVERSE OF SECURITY] 

Indenture. This Security is one of a duly authorized issue of securities of the Company (herein called the “Securities”),
issued and to be issued in one or more series under an Indenture, dated as of July 18, 2014, among Navient Corporation (the “Company”) and The Bank of New York Mellon, as trustee (herein called the “Trustee”, which term
includes any successor trustee under the Indenture), as supplemented and amended by the Second Supplemental Indenture, dated March 27, 2015 (as so supplemented, herein called the “Indenture”), between the Company and the Trustee, to
which Indenture and all indentures supplemental thereto reference is hereby made for a statement of the respective rights, limitations of rights, duties and immunities thereunder of the Company, the Trustee and the Holders of the Securities and of
the terms upon which the Securities are, and are to be, authenticated and delivered. This Security is one of the series designated on the face hereof, initially limited in aggregate principal amount to
$            . 
 Optional Redemption. The Securities of this
series are subject to redemption at the Company’s option, at any time and from time to time, in whole or in part, at a Redemption Price equal to the greater of (i) 100% of the principal amount to be redeemed plus accrued and unpaid
interest thereon to the Redemption Date, and (ii) the sum of the present values of the remaining scheduled payments of principal and interest on the Securities to be redeemed (exclusive of interest accrued to the Redemption Date) discounted to
the Redemption Date on a semiannual basis (assuming a 360-day year consisting of twelve 30 day months) at the applicable Treasury Rate (as defined below) plus 50 basis points plus accrued and unpaid interest on the principal amount being redeemed to
the Redemption Date. 
 For purposes of determining the optional redemption price, the following definitions are applicable: 

“Treasury Rate” means, with respect to any Redemption Date for the Securities, the rate per annum equal to the semi-annual
equivalent yield to maturity or interpolated (on a day count basis) of the Comparable Treasury Issue, calculated using a price for the Comparable Treasury Issue (expressed as a percentage of its principal amount) equal to the Comparable Treasury
Price for such Redemption Date. 
 The Treasury Rate will be calculated on the third business day preceding the Redemption Date. 

“Comparable Treasury Issue” means the U.S. Treasury security or securities selected by an Independent Investment Banker as having an
actual or interpolated maturity comparable to the remaining term of the Securities that would be utilized, at the time of selection and in accordance with customary financial practice, in pricing new issues of corporate debt securities of comparable
maturity to the remaining terms of the Securities. 
 “Comparable Treasury Price” means, with respect to any Redemption Date: 

(a) the average of the Reference Treasury Dealer Quotations for such Redemption Date, after excluding the highest and lowest Reference
Treasury Dealer Quotations, or 
 (b) if the Independent Investment Banker is unable to obtain at least four such Reference Treasury Dealer
Quotations, the average of all Reference Treasury Dealer Quotations obtained by the Independent Investment Banker. 

  
 A-4 

 “Independent Investment Banker” means J.P. Morgan Securities LLC and Credit Suisse
Securities (USA) LLC, as specified by the Company, or if these firms are unwilling or unable to select the applicable Comparable Treasury Issue, an independent investment banking institution of national standing appointed by the Company. 

“Reference Treasury Dealer” means J.P. Morgan Securities LLC and Credit Suisse Securities (USA) LLC (and their respective
successors) plus two others or their affiliates which are primary U.S. government securities dealers (each a “Primary Treasury Dealer”), provided however, that if any of the foregoing shall cease to be a Primary Treasury Dealer, the
Company will substitute therefor another Primary Treasury Dealer. 
 “Reference Treasury Dealer Quotations” means, with respect to
each Reference Treasury Dealer and any Redemption Date for the Securities, an average, as determined by the Independent Investment Banker, of the bid and asked prices for the Comparable Treasury Issue for the Securities (expressed in each case as a
percentage of its principal amount) quoted in writing to the Independent Investment Banker at 5:00 p.m., New York City time, on the third business day preceding such redemption date. 

Notice of any redemption will be sent at least 30 days but not more than 60 days before the redemption date to each registered holder of
Securities to be redeemed. Unless the Company defaults in payment of the redemption price, on and after the redemption date, interest will cease to accrue on the Securities or portions of the Securities called for redemption. If fewer than all of
the Securities are to be redeemed, the Trustee will select, not more than 60 days prior to the redemption date, the particular Securities or portions thereof for redemption from the outstanding Securities not previously called by such method as the
Trustee deems fair and appropriate. 
 Defaults and Remedies. If an Event of Default with respect to Securities of this series shall
occur and be continuing, the principal of the Securities of this series may be declared due and payable in the manner and with the effect provided in the Indenture. 

Repurchase Upon a Change of Control. Upon the occurrence of a Change of Control Triggering Event, the Holders of the Securities will
have the right to require that the Company purchase such Holder’s outstanding Securities, in whole or in part, at a purchase price of 101% of the principal amount thereof, plus accrued and unpaid interest, if any, to, but not including, the
date of purchase. 
 Amendment, Modification and Waiver. The Indenture permits, with certain exceptions as therein provided,
the amendment thereof and the modification of the rights and obligations of the Company and the rights of the Holders of the Securities of each series to be affected under the Indenture at any time by the Company and the Trustee with the consent of
the Holders of a majority in aggregate principal amount of the Securities at the time Outstanding of each series to be affected. The Indenture also contains provisions permitting the Holders of a 

  
 A-5 

 
majority in aggregate principal amount of the Securities of each series at the time Outstanding, on behalf of the Holders of all Securities of such series, to waive compliance by the Company
with certain provisions of the Indenture and certain past defaults under the Indenture and their consequences. Any such consent or waiver by the Holder of this Security shall be conclusive and binding upon such Holder and upon all future Holders of
this Security and of any Security issued upon the registration of transfer hereof or in exchange herefor or in lieu hereof, whether or not notation of such consent or waiver is made upon this Security. 

Restrictive Covenants. The Indenture does not limit the issuance of debt of the Company or any of its Subsidiaries. 

Denominations, Transfer and Exchange. The Securities of this series are issuable only in registered form without coupons in
denominations of $2,000 and in integral multiples of $1,000 in excess thereof. As provided in the Indenture and subject to certain limitations therein set forth, Securities of this series are exchangeable for a like aggregate principal amount of
Securities of like tenor of a different authorized denomination, as requested by the Holder surrendering the same. 
 As provided in
the Indenture and subject to certain limitations therein set forth, the transfer of this Security is registrable in the Security Register, upon surrender of this Security for registration of transfer at the Registrar accompanied by a written request
for transfer in form satisfactory to the Company and the Registrar duly executed by, the Holder hereof or his attorney duly authorized in writing, and thereupon one or more new Securities of this series and of like tenor, of authorized denominations
and for the same aggregate principal amount, will be issued to the designated transferee or transferees. 
 No service charge shall be made
for any such registration of transfer or exchange, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith. 

Persons Deemed Owners. Prior to due presentment of this Security for registration of transfer, the Company, the Trustee and any agent
of the Company or the Trustee may treat the Person in whose name this Security is registered as the owner hereof for all purposes, whether or not this Security be overdue, and neither the Company, the Trustee nor any such agent shall be affected by
notice to the contrary. 
 Miscellaneous. The Indenture and this Security shall be governed by and construed in accordance
with the laws of the State of New York, without regard to the conflicts of law rules of said State. 
 All terms used in this
Security and not defined herein shall have the meanings assigned to them in the Indenture. 

  
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 OPTION OF HOLDER TO ELECT PURCHASE 

If you want to elect to have this Security repurchased by the Company pursuant to Section 2.9 of the Supplemental Indenture, check the
box below: 
  ̈ Section 2.9 

If you want to elect to have only part of the Security purchased by the Company pursuant to Section 2.9 of the Supplemental Indenture,
state the amount you elect to have repurchased: 
 $             

 

			
	Date:		  

  

			
	Your Signature:		  

			(Sign exactly as your name appears on the face of this Note)

 
			
		
	Tax Identification No.:		  

  

			
	Signature Guarantee*:		  

  
  

	*	Participant in a recognized Signature Guarantee Medallion Program (or other signature guarantor acceptable to the Trustee). 

  
 A-7 

 SCHEDULE OF INCREASES OR DECREASES IN GLOBAL SECURITY 

The following increases or decreases in this Global Security have been made: 

 

									
	 Date of Exchange
	 	Amount of increase in
Principal Amount of
this Global Security	 	Amount of decrease
in Principal Amount
of this Global
Security	 	Principal Amount of
this Global Security
following each
decrease or increase	 	Signature of
authorized signatory
of Trustee
		 		 		 		 	
		 		 		 		 	
		 		 		 		 	

  

	B	[Do not delete - this paragraph generates the automatic page number] 

	C	

  
 A-8

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