SECOND SUPPLEMENTAL INDENTURE
THIS SECOND SUPPLEMENTAL INDENTURE (this “Second Supplemental Indenture”), dated as of April 19, 2021 (the “Second Supplemental Indenture Effective Date”), is between FedNat Holding Company, a Florida corporation (the “Company”), and The Bank of New York Mellon, as trustee (the “Trustee”).
RECITALS OF THE COMPANY
WHEREAS, the Company and the Trustee have executed and delivered an Indenture, dated as of March 5, 2019, as amended by the First Supplemental Indenture dated as of March 5, 2020 (together, the “Indenture”), pursuant to which the Company issued its Senior Unsecured Notes due 2029 (the “Notes”);
WHEREAS, pursuant to Section 9.2 of the Indenture, the Company may, with the written consent of the Holders of a majority in principal amount of the Notes then outstanding (the “Requisite Holders”), enter into a supplemental indenture to amend the terms of the Indenture in a manner permitted by such Section 9.2;
WHEREAS, the Company desires to amend the Indenture to permit the Company to issue additional debt securities and, accordingly, desires to amend Sections 3.3 and 3.4 as set forth herein;
WHEREAS, in consideration of the approval by the Requisite Holders of the amendments to the Indenture as set forth in this Second Supplemental Indenture, the Company has agreed that the Interest Rate on the Notes shall be increased from 7.50% to 7.75% per annum, effective beginning on March 15, 2021;
WHEREAS, pursuant to Sections 9.2 and 9.5 of the Indenture, the parties hereto, having the approval of the Requisite Holders (as evidenced by that certain Confirmation of Consents Certificate of Global Bondholder Services, as tabulation agent, dated April 19, 2021), are authorized to execute and deliver this Second Supplemental Indenture to amend the Indenture; and
WHEREAS, the Company has duly authorized the execution and delivery of this Second Supplemental Indenture, and all acts and things necessary to make this Second Supplemental Indenture a valid, binding and legal obligation of the Company and to constitute a valid agreement of the Company, in accordance with its terms, have been done and performed.
NOW, THEREFORE, in consideration of the foregoing and for other good and valuable consideration, the receipt of which is hereby acknowledged, the Company and the Trustee mutually covenant and agree for the benefit of the Holders of the Notes as follows:
1. Defined Terms. As used in this Second Supplemental Indenture, terms defined in the Indenture or in the preamble or recitals hereto are used herein as so defined.
2. Amendments to the Indenture. The Indenture is hereby amended as follows.
The defined term “Interest Rate” is hereby replaced in its entirety with the following:
“Interest Rate” means, beginning on March 15, 2021, a per annum rate equal to (a) 7.75% 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, 7.75% plus an additional 50 basis points for each notch downgrade of the Company below “BBB-” (or its equivalent rating) by the Applicable Rating Agency.
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