FORM OF REVERSE OF GLOBAL NOTE
Senior Unsecured Notes due 2029
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 March 15, 2020 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.
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